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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PART C

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As filed with the Securities and Exchange Commission on August 8, 2018

Registration No. 333-223482


U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM N-2

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ý PRE-EFFECTIVE AMENDMENT NO. 1
o POST-EFFECTIVE AMENDMENT NO.

ARES CAPITAL CORPORATION
(Exact Name of Registrant as Specified in Charter)

245 Park Avenue, 44th Floor
New York, New York 10167

(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (212) 750-7300

Joshua M. Bloomstein
General Counsel
Ares Capital Corporation
245 Park Avenue, 44th Floor
New York, New York 10167
(212) 750-7300

(Name and Address of Agent for Service)

Copies of information to:

Monica J. Shilling
Christopher J. Wu
Proskauer Rose LLP
2049 Century Park East, 32nd Floor
Los Angeles, CA 90067-3206
(310) 557-2900

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

                    If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box. ý

                    It is proposed that this filing will become effective (check appropriate box):

                    o when declared effective pursuant to section 8(c).

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

               
 
Title of Securities Being Registered
  Amount Being
Registered

  Proposed Maximum
Offering Price
Per Unit

  Proposed Maximum
Aggregate Offering
Price(1)

  Amount of
Registration
Fee

 

Common Stock, $0.001 par value per share(2)(3)

               
 

Preferred Stock, $0.001 par value per share(2)

               
 

Subscription Rights(2)

               
 

Warrants(4)

               
 

Debt Securities(5)

               
 

Units(6)

               
 

Total

          $3,000,000,000(7)   $373,500(8)

 

(1)
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.

(2)
Subject to Note 7 below, there is being registered hereunder an indeterminate number of shares of common stock or preferred stock, or subscription rights to purchase shares of common stock as may be sold, from time to time separately or as units in combination with other securities registered hereunder.

(3)
Includes such indeterminate number of shares of common stock as may, from time to time, 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.

(4)
Subject to Note 7 below, there is being registered hereunder an indeterminate number of warrants as 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.

(5)
Subject to Note 7 below, there is being registered hereunder an indeterminate principal amount of debt securities as may be sold, from time to time separately or as units in combination with other securities registered hereunder. If any debt securities are issued at an original issue discount, then the offering price shall be in such greater principal amount as shall result in an aggregate price to investors not to exceed $3,000,000,000.

(6)
Subject to Note 7 below, there is being registered hereunder an indeterminate number of units. Each unit 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.

(7)
In no event will the aggregate offering price of all securities issued from time to time pursuant to this registration statement exceed $3,000,000,000.

(8)
Previously paid.

                    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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE 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. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. 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, dated August 8, 2018

PROSPECTUS

$3,000,000,000

LOGO

Common Stock
Preferred Stock
Debt Securities
Subscription Rights
Warrants
Units


              Ares Capital Corporation is a specialty finance company that is a closed-end, non-diversified management investment company incorporated in Maryland. We have elected to be regulated as a business development company under the Investment Company Act of 1940. Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in first lien senior secured loans (including "unitranche" loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, we also make preferred and/or common equity investments.

              We are externally managed by our investment adviser, Ares Capital Management LLC, a subsidiary of Ares Management, L.P., a publicly traded, leading global asset manager. Ares Operations LLC, a subsidiary of Ares Management, L.P., provides certain administrative and other services necessary for us to operate.

              Our common stock is traded on The NASDAQ Global Select Market under the symbol "ARCC." On August 6, 2018 the last reported sales price of our common stock on The NASDAQ Global Select Market was $17.38 per share. The net asset value per share of our common stock at June 30, 2018 (the last date prior to the date of this prospectus on which we determined net asset value) was $17.05.

              Investing in our securities involves risks that are described in the "Risk Factors" section beginning on page 22 of this prospectus, including the risk of leverage.

              We may offer, from time to time, in one or more offerings or series, up to $3,000,000,000 of 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 the majority of our common stockholders or (c) under such circumstances as the SEC may permit. This prospectus and the accompanying prospectus supplement concisely provide important information about us that you should know before investing in our securities. Please read this prospectus and the accompanying prospectus supplement before you invest and keep it 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) 201-4200 or on our website at www.arescapitalcorp.com. The SEC also maintains a website at www.sec.gov that contains such information.


              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                        , 2018.


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              You should rely only on the information contained in this prospectus and the accompanying prospectus supplement. 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 this prospectus and the accompanying prospectus supplement is accurate only as of the date on the front cover of this prospectus and the accompanying prospectus supplement, as applicable. Our business, financial condition, results of operations and prospects may have changed since that date.


TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

The Company

  1

Offerings

  10

Fees and Expenses

  13

Selected Condensed Consolidated Financial Data of Ares Capital

  18

Risk Factors

  22

Forward-Looking Statements

  52

Use of Proceeds

  54

Price Range of Common Stock and Distributions

  56

Ratios of Earnings to Fixed Charges

  58

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

  59

Senior Securities

  103

Business

  107

Portfolio Companies

  124

Management

  155

Certain Relationships and Related Transactions

  185

Control Persons and Principal Stockholders

  187

Determination of Net Asset Value

  189

Dividend Reinvestment Plan

  191

Certain Material U.S. Federal Income Tax Considerations

  193

Description of Securities

  204

Description of Our Capital Stock

  205

Description of Our Preferred Stock

  212

Description of Our Subscription Rights

  213

Description of Our Warrants

  215

Description of Our Debt Securities

  217

Description of Our Units

  229

Sales of Common Stock Below Net Asset Value

  230

Issuance of Warrants or Securities to Subscribe For or Convertible Into Shares of Our Common Stock

  235

Regulation

  236

Custodian, Transfer and Dividend Paying Agent and Registrar

  243

Brokerage Allocation and Other Practices

  244

Plan of Distribution

  245

Legal Matters

  247

Independent Registered Public Accounting Firm

  248

Available Information

  249

Financial Statements

  F-1

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ABOUT THIS PROSPECTUS

              This prospectus is part of a registration statement that we have filed with the U.S. Securities and Exchange Commission (the "SEC"), using the "shelf" registration process. Under the shelf registration process, we may offer, from time to time, in one or more offerings or series, up to $3,000,000,000 of 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. The prospectus supplement may also add, update or change information contained in this prospectus. Please carefully read this prospectus and the prospectus supplement together with any exhibits and the additional information described under the headings "Available Information" 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 in this prospectus and the accompanying prospectus supplement. Except where the context suggests otherwise, the terms "we," "us," "our," "the Company" and "Ares Capital" refer to Ares Capital Corporation and its consolidated subsidiaries; "Ares Capital Management" and "our investment adviser" refer to Ares Capital Management LLC; "Ares Operations" and "our administrator" refer to Ares Operations LLC; and "Ares" and "Ares Management" refer to Ares Management, L.P. (NYSE: ARES) and its affiliated companies (other than portfolio companies of its affiliated funds).


THE COMPANY

Overview

              Ares Capital, a Maryland corporation, is a specialty finance company that is a closed-end, non-diversified management investment company. We have elected to be regulated as a business development company, or a "BDC," under the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder or the "Investment Company Act." We were founded on April 16, 2004, were initially funded on June 23, 2004 and completed our initial public offering ("IPO") on October 8, 2004. As of June 30, 2018, we were the largest BDC in the United States with approximately $12.3 billion of total assets.

              We are externally managed by our investment adviser, Ares Capital Management, a subsidiary of Ares Management, a publicly traded, leading global alternative asset manager, pursuant to our investment advisory and management agreement. Our administrator, Ares Operations, a subsidiary of Ares Management, provides certain administrative and other services necessary for us to operate.

              Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in U.S. middle-market companies, where we believe the supply of primary capital is limited and the investment opportunities are most attractive. However, we may from time to time invest in larger or smaller companies. We generally use the term "middle-market" to refer to companies with annual EBITDA between $10 million and $250 million. As used herein, EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization.

              We invest primarily in first lien senior secured loans (including "unitranche" loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component. First and second lien senior secured loans generally are senior debt instruments that rank ahead of subordinated debt of a given portfolio company. Mezzanine debt is subordinated to senior loans and is generally unsecured. Our investments in corporate borrowers generally range between $30 million and $500 million each and investments in project finance/power generation projects generally range between $10 million and $200 million. However, the investment sizes may be more or less than these ranges and may vary based on, among other things, our capital availability, the composition of our portfolio and general micro-and macro-economic factors.

              To a lesser extent, we also make preferred and/or common equity investments, which have generally been non-control equity investments of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments.

              The proportion of these types of investments will change over time given our views on, among other things, the economic and credit environment in which we are operating. In connection with our

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investing activities, we may make commitments with respect to indebtedness or securities of a potential portfolio company substantially in excess of our final investment. In such situations, while we may initially agree to fund up to a certain dollar amount of an investment, we may subsequently syndicate or sell a portion of such amount (including, without limitation, to vehicles managed by our portfolio company, Ivy Hill Asset Management, L.P. ("IHAM")), such that we are left with a smaller investment than what was reflected in our original commitment. In addition to originating investments, we may also acquire investments in the secondary market (including purchases of a portfolio of investments).

              The first and second lien senior secured loans in which we invest generally have stated terms of three to 10 years and the mezzanine debt investments in which we invest generally have stated terms of up to 10 years, but the expected average life of such first and second lien loans and mezzanine debt is generally between three and seven years. However, we may invest in loans and securities with any maturity or duration. The instruments in which we invest typically are not rated by any rating agency, but we believe that if such instruments were rated, they would be below investment grade (rated lower than "Baa3" by Moody's Investors Service, lower than "BBB–" by Fitch Ratings or lower than "BBB–" by Standard & Poor's Ratings Services), which, under the guidelines established by these entities, is an indication of having predominantly speculative characteristics with respect to the issuer's capacity to pay interest and repay principal. Bonds that are rated below investment grade are sometimes referred to as "high yield bonds" or "junk bonds." We may invest without limit in debt or other securities of any rating, as well as debt or other securities that have not been rated by any nationally recognized statistical rating organization.

              We believe that our investment adviser, Ares Capital Management, is able to leverage the current investment platform, resources and existing relationships of Ares Management with financial sponsors, financial institutions, hedge funds and other investment firms to provide us with attractive investment opportunities. In addition to deal flow, the Ares investment platform assists our investment adviser in analyzing, structuring and monitoring investments. Ares has been in existence for over 20 years and its partners have an average of approximately 23 years of experience in leveraged finance, private equity, distressed debt, commercial real estate finance, investment banking and capital markets. We have access to Ares' investment professionals and administrative professionals, who provide assistance in accounting, finance, legal, compliance, operations, information technology and investor relations. As of June 30, 2018, Ares had approximately 405 investment professionals and approximately 640 administrative professionals.

              While our primary focus is to generate current income and capital appreciation through investments in first and second lien senior secured loans and mezzanine debt and, to a lesser extent, equity securities of eligible portfolio companies, we also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. See "Regulation." Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.

Senior Direct Lending Program

              We have established a joint venture with Varagon Capital Partners ("Varagon") to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle-market companies. Varagon was formed in 2013 as a lending platform by American International Group, Inc. and other partners. The joint venture is called the Senior Direct Lending Program (the "SDLP"). In July 2016, the Company and Varagon and its clients completed the initial funding of the SDLP. The SDLP may generally commit and hold individual loans of up to $300 million. We may directly co-invest with the SDLP to accommodate larger transactions. The SDLP is capitalized

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as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required).

              We provide capital to the SDLP in the form of subordinated certificates (the "SDLP Certificates"), and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. As of June 30, 2018, we and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates. The SDLP Certificates pay a coupon of the London Interbank Offered Rate ("LIBOR") plus a stated spread and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

              As of June 30, 2018, we and Varagon and its clients had agreed to make capital available to the SDLP of $6.4 billion in the aggregate, of which $1.4 billion is to be made available from us. We will continue to provide capital to the SDLP in the form of SDLP Certificates, and Varagon and its clients will provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. Investment of any unfunded amount must be approved by the investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required).

              For more information on the SDLP, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity—Co-Investment Programs—Senior Direct Lending Program."

Ivy Hill Asset Management, L.P.

              As of June 30, 2018, our portfolio company, IHAM, an SEC-registered investment adviser, managed 23 vehicles and served as the sub-manager/sub-servicer for two other vehicles (such vehicles, the "IHAM Vehicles"). As of June 30, 2018, IHAM had assets under management of approximately $5.0 billion. As of June 30, 2018, the amortized cost and fair value of our investment in IHAM was $444 million and $521 million, respectively. In connection with IHAM's registration as a registered investment adviser, on March 30, 2012, we received exemptive relief from the SEC allowing us to, subject to certain conditions, own directly or indirectly up to 100% of IHAM's outstanding equity interests and make additional investments in IHAM. From time to time, IHAM or certain IHAM Vehicles may purchase investments from us or sell investments to us, in each case for a price equal to the fair market value of such investments determined at the time of such transactions.

Ares Capital Management LLC

              Ares Capital Management, our investment adviser, is served by an origination, investment and portfolio management team of approximately 95 U.S.-based investment professionals as of June 30, 2018, and led by certain partners of the Ares Credit Group: Kipp deVeer, Mitchell Goldstein and Michael Smith. Ares Capital Management leverages off of Ares' investment platform and benefits from the significant capital markets, trading and research expertise of Ares' investment professionals. Ares Capital Management's investment committee has eight members primarily comprised of certain of the U.S.-based partners of the Ares Credit Group.

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MARKET OPPORTUNITY

              We believe that current market conditions present attractive opportunities for us to invest in middle-market companies, specifically:

COMPETITIVE ADVANTAGES

              We believe that we have the following competitive advantages over other capital providers to middle-market companies:

The Ares Platform

              Ares operates three distinct but complementary investment groups, including the Ares Credit Group, the Ares Private Equity Group and the Ares Real Estate Group. We believe our affiliation with Ares provides a distinct competitive advantage through Ares' originations, due diligence, and marketing activities. In particular, we believe that the Ares platform provides us with an advantage through its deal flow generation and investment evaluation process. Ares' asset management platform also provides additional market information, company knowledge and industry insight that benefit our investment

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and due diligence process. Ares' professionals maintain extensive financial sponsor and intermediary relationships, which provide valuable insight and access to transactions and information.

Seasoned Management Team

              The investment professionals in the Ares Credit Group and members of our investment adviser's investment committee also have significant experience investing across market cycles. This experience also provides us with a competitive advantage in identifying, originating, investing in and managing a portfolio of investments in middle-market companies.

Broad Origination Strategy

              We focus on self-originating most of our investments by pursuing a broad array of investment opportunities in middle-market companies and power generation projects across multiple channels. We also leverage off of the extensive relationships of the broader Ares platform, including relationships with the portfolio companies in the IHAM Vehicles, to identify investment opportunities. We believe that this allows for asset selectivity and that there is a significant relationship between proprietary deal origination and credit performance. We believe that our focus on generating proprietary deal flow and lead investing also gives us greater control over capital structure, deal terms, pricing and documentation and enables us to actively manage our portfolio investments. Moreover, by leading the investment process, we are often able to secure controlling positions in credit tranches, thereby providing additional control in investment outcomes. We also have originated substantial proprietary deal flow from middle-market intermediaries, which often allows us to act as the sole or principal source of institutional capital to the borrower.

Scale and Flexible Transaction Structuring

              We believe that being one of the largest BDCs makes us a more desirable and flexible capital provider, especially in competitive markets. We are flexible with the types of investments we make and the terms associated with those investments. We believe this approach and experience enables our investment adviser to identify attractive investment opportunities throughout economic cycles and across a company's capital structure so we can make investments consistent with our stated investment objective and preserve principal while seeking appropriate risk adjusted returns. In addition, we have the flexibility to provide "one stop" financing with the ability to invest capital across the balance sheet and syndicate and hold larger investments than many of our competitors. We believe that the ability to underwrite, syndicate and hold larger investments benefits our stockholders by (a) potentially increasing net income and earnings through syndication, (b) increasing originated deal flow flexibility, (c) broadening market relationships and deal flow, (d) allowing us to optimize our portfolio composition and (e) allowing us to provide capital to a broader spectrum of middle-market companies, which we believe currently have limited access to capital from traditional lending sources. In addition, we believe that the ability to provide capital at every level of the balance sheet provides a strong value proposition to middle-market borrowers and our senior debt capabilities provide superior deal origination and relative value analysis capabilities compared to junior capital focused lenders.

Experience with and Focus on Middle-Market Companies

              Ares has historically focused on investments in middle-market companies and we benefit from this experience. In sourcing and analyzing deals, our investment adviser benefits from Ares' extensive network of relationships focused on middle-market companies, including management teams, members of the investment banking community, private equity groups and other investment firms with whom Ares has had long-term relationships. We believe this network enables us to identify well-positioned prospective portfolio company investments. The Ares Credit Group works closely with Ares' other investment professionals. As of June 30, 2018, Ares oversaw a portfolio of investments in over 1,500

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companies, over 500 structured assets and over 170 properties across approximately 60 industries, which provides access to an extensive network of relationships and insights into industry trends and the state of the capital markets.

Disciplined Investment Philosophy

              In making its investment decisions, our investment adviser has adopted Ares' long-standing, consistent, credit-based investment approach that was developed over 20 years ago by its founders. Specifically, our investment adviser's investment philosophy, portfolio construction and portfolio management involve an assessment of the overall macroeconomic environment and financial markets and company-specific research and analysis. Its investment approach emphasizes capital preservation, low volatility and minimization of downside risk. In addition to engaging in extensive due diligence from the perspective of a long-term investor, our investment adviser's approach seeks to reduce risk in investments by focusing on:

Extensive Industry Focus

              We seek to concentrate our investing activities in industries with a history of predictable and dependable cash flows and in which the Ares investment professionals have had extensive investment experience. Ares investment professionals have developed long-term relationships with management teams and management consultants in approximately 60 industries, and have accumulated substantial information and identified potential trends within these industries. In turn, we benefit from these relationships, information and identification of potential trends in making investments.

OPERATING AND REGULATORY STRUCTURE

              Our investment activities are managed by our investment adviser, Ares Capital Management, which is a subsidiary of Ares, and supervised by our board of directors, a majority of whom are independent of Ares and its affiliates. Ares Capital Management is registered under the Investment Advisers Act of 1940, or the "Advisers Act." Under our Amended and Restated Investment Advisory and Management Agreement with Ares Capital Management, referred to herein as our "investment advisory and management agreement," we have agreed to pay Ares Capital Management base management fees based on our total assets, as defined under the Investment Company Act (other than cash and cash equivalents, but including assets purchased with borrowed funds) ("base management fees"), fees based on our net investment income ("income based fees") and fees based on our net capital gains ("capital gains incentive fees"). See "Management—Investment Advisory and Management Agreement." Ares Operations provides us with certain administrative and other services necessary for us to operate pursuant to an Amended and Restated Administration Agreement, referred to herein as our "administration agreement." See "Management—Administration Agreement."

              As a BDC, we are required to comply with certain regulatory requirements. For example, we are not generally permitted to co-invest in any portfolio company in which a fund managed by Ares or

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any of its downstream affiliates (other than us and our downstream affiliates) is also co-investing. On January 18, 2017, we received an order from the SEC that permits us and other BDCs and registered closed-end management investment companies managed by Ares to co-invest in portfolio companies with each other and with affiliated investment funds (the "Co-investment Exemptive Order"). Co-investments made under the Co-investment Exemptive Order are subject to compliance with certain conditions and other requirements, which could limit our ability to participate in a co-investment transaction. We may also otherwise co-invest with funds managed by Ares or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our allocation procedures.

              Also, while we may borrow funds to make investments, our ability to use debt is limited in certain significant aspects. See "Business—Operating and Regulatory Structure" and "Regulation." In particular, under the provisions of the Investment Company Act, BDCs must have at least 200% asset coverage calculated pursuant to the Investment Company Act (i.e., we are permitted to borrow one dollar for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us) in order to incur debt or issue preferred stock (which we refer to collectively as "senior securities"), unless the BDC obtains approval (either stockholder approval or approval of a "required majority" (as defined in Section 57(o) of the Investment Company Act) of its board of directors) to apply the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act, as amended by the Small Business Credit Availability Act (the "SBCAA"), reducing the required asset coverage ratio applicable to the BDC from 200% to 150%.

              Currently, our asset coverage requirement applicable to senior securities is 200%. On June 21, 2018, our board of directors, including a "required majority" of our board of directors, approved the application of the modified asset coverage requirement set forth in Section 61(a)(2) of the Investment Company Act, as amended by the SBCAA. As a result, effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. In order to incur this additional leverage, we intend to enter into certain amendments for our Revolving Credit Facility (as defined below) and Revolving Funding Facility (as defined below) to reduce the current asset coverage requirements specified therein. See "Risk Factors—Risks Relating to Our Business—Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement will reduce from 200% to 150%, which may increase the risk of investing with us" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources."

              As of June 30, 2018, our asset coverage was 255%.

              In addition, as a consequence of us being a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), for U.S. federal income tax purposes, our asset growth is dependent on our ability to raise equity capital through the issuance of common stock. RICs generally must distribute substantially all of their investment company taxable income (as defined under the Code) to stockholders as dividends in order to preserve their status as a RIC and not to be subject to additional U.S. federal corporate-level income taxes. This requirement, in turn, generally prevents us from using our earnings to support our operations, including making new investments. See "Certain Material U.S. Federal Income Tax Considerations."

ACQUISITION OPPORTUNITIES

              We believe that there may be opportunity for further consolidation in our industry. From time to time, we evaluate potential strategic opportunities, including acquisitions of:

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              We have been in, and from time to time may engage in, discussions with counterparties in respect of various potential strategic acquisition and investment transactions, including potential acquisitions of other finance companies, business development companies and asset managers. Some of these transactions could be material to our business and, if completed, could be difficult to integrate, result in increased leverage or dilution and/or subject us to unexpected liabilities. However, none of these discussions has progressed to the point at which the completion of any such transaction could be deemed to be probable or reasonably certain as of the date of this prospectus. Completion of any such transaction would be subject to completion of due diligence, finalization of key business and financial terms (including price) and negotiation of final definitive documentation as well as a number of other factors and conditions including, without limitation, the approval of our board of directors, any required third party consents and, in certain cases, the approval of our stockholders. We cannot predict how quickly the terms of any such transaction could be finalized, if at all. Accordingly, there can be no assurance that such transaction would be completed. In connection with evaluating potential strategic acquisition and investment transactions, we may incur significant expenses for the evaluation and due diligence investigation of these potential transactions.

INDEBTEDNESS

              As of June 30, 2018, we had approximately $4.6 billion in aggregate principal amount of total outstanding indebtedness, approximately $4.2 billion aggregate principal amount of which was unsecured indebtedness of Ares Capital and approximately $414 million aggregate principal amount of which was secured indebtedness at the Ares Capital level.

              For more information on our debt, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources."

RISK FACTORS

              Investing in Ares 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 22 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.

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OUR CORPORATE INFORMATION

              Our administrative offices are located at 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067, telephone number (310) 201-4200, and our principal executive offices are located at 245 Park Avenue, 44th Floor, New York, New York 10167, telephone number (212) 750-7300.

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OFFERINGS

              We may offer, from time to time, in one or more offerings or series, up to $3,000,000,000 of 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 the majority of our common stockholders 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 Offerings Pursuant to this Prospectus."

              Pursuant to approval granted at a special meeting of stockholders held on May 14, 2018, we currently are permitted to sell or otherwise issue shares of our common stock at a price below net asset value, subject to certain limitations and determinations that must be made by our board of directors. Such stockholder approval expires on May 14, 2019.

              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." 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."

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 of directors. For more information, see "Price Range of Common Stock and Distributions."

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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 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—We may be subject to additional corporate-level income taxes if we fail to maintain our status as a RIC" and "Price Range of Common Stock and Distributions."

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."

The NASDAQ Global Select Market symbol

 

"ARCC"

Anti-takeover provisions

 

Our board of directors 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 of directors also may serve to deter hostile takeovers or proxy contests, as may certain other measures adopted by us. See "Description of Our Capital Stock."

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." We are currently allowed to borrow amounts such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 200% after such borrowing. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources." The amount of leverage that we employ at any particular time will depend on our investment adviser's and our board of directors' assessments of market and other factors at the time of any proposed borrowing.

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Management arrangements

 

Ares Capital Management serves as our investment adviser. Ares Operations serves as our administrator. For a description of Ares Capital Management, Ares Operations, Ares and our contractual arrangements with these companies, see "Management—Investment Advisory and Management 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) 201-4200 or on our website at www.arescapitalcorp.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.

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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. 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 such fees or expenses as investors in Ares Capital.

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

     

Sales load

       (1)

Offering expenses

       (2)

Dividend reinvestment plan expenses

  Up to $15
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

  2.60% (6)

Income based fees and capital gains incentive fees (excluding the Fee Waiver (as defined below))

  2.72% (7)

Fee Waiver

  (0.56)% (8)

Interest payments on borrowed funds

  3.41% (9)

Other expenses

  0.97% (10)

Acquired fund fees and expenses

  1.34% (11)

Total annual expenses

  10.48% (12)

(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 $0.12 per share fee from the proceeds. See "Dividend Reinvestment Plan" 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 average net assets of $7.2 billion for the six months ended June 30, 2018.

(6)
Our base management fee is currently 1.5% of our total assets (other than cash and cash equivalents) (which includes assets purchased with borrowed amounts). Our base management fee has been estimated by multiplying our average total assets (assuming we maintain no cash or cash

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(7)
This item represents our investment adviser's income based fees and capital gains incentive fees estimated by annualizing income based fees for the six months ended June 30, 2018 without taking into account the Fee Waiver, and the capital gains incentive fee expense accrued in accordance with U.S. generally accepted accounting principles ("GAAP") for the six months ended June 30, 2018, even though no capital gains incentive fee was actually payable under the investment advisory and management agreement as of June 30, 2018.


GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Company Act or the investment advisory and management agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee actually payable under the investment advisory and management agreement plus the aggregate cumulative unrealized capital appreciation. If such amount is positive at the end of a period, then GAAP requires us to record a capital gains incentive fee equal to 20% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future or that the amount accrued for will ultimately be paid.


For purposes of this table, we have assumed that these fees will be payable (in the case of the capital gains incentive fee) and that they will remain constant, although they are based on our performance and will not be paid unless we achieve certain goals. We expect to invest or otherwise utilize all of the net proceeds from securities registered under the registration statement of which this prospectus is a part pursuant to a particular prospectus supplement within three months of the date of the offering pursuant to such prospectus supplement and may have capital gains and interest income that could result in the payment of these fees to our investment adviser in the first year after completion of offerings pursuant to this prospectus. Since our IPO through June 30, 2018, the average quarterly fees accrued related to income based fees and capital gains incentive fees (including capital gains incentive fees accrued under GAAP even though they may not be payable) have been approximately 0.66% of our weighted average net assets for such period (2.64% on an annualized basis). For more detailed information on the calculation of our income based fees and capital gains incentive fees, please see below. For more detailed information about income based fees and capital gains incentive fees previously incurred by us, please see Note 3 to our consolidated financial statements for the year ended December 31, 2017 and the three and six months ended June 30, 2018.


Income based fees are payable quarterly in arrears in an amount equal to 20% of our pre-incentive fee net investment income (including interest that is accrued but not yet received in cash), subject to a 1.75% quarterly (7.0% annualized) hurdle rate and a "catch-up" provision measured as of the end of each calendar quarter. Under this provision, in any calendar quarter, our investment adviser receives no income based fees until our net investment income equals the hurdle rate of 1.75% but then receives, as a "catch-up," 100% of our pre-incentive fee net investment income with respect

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Capital gains incentive fees are payable annually in arrears in an amount equal to 20% of our realized capital gains on a cumulative basis from inception through the end of the year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of capital gains incentive fees paid in all prior years.


We will defer cash payment of any income based fees and capital gains incentive fees otherwise earned by our investment adviser if, during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made, the sum of (a) our aggregate distributions to our stockholders and (b) our change in 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) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. Any deferred income based fees and capital gains incentive fees are carried over for payment in subsequent calculation periods to the extent such payment is payable under the investment advisory and management agreement.


These calculations will be adjusted for any share issuances or repurchases.


See "Management—Investment Advisory and Management Agreement."

(8)
In connection with our acquisition of American Capital, Ltd. ("American Capital") (the "American Capital Acquisition"), our investment adviser has agreed to waive up to $100 million in income based fees from us for the first ten calendar quarters beginning with the second quarter of 2017 and ending with the third quarter of 2019, in an amount equal to the lesser of (1) $10 million of income based fees and (2) the amount of income based fees for each such quarter, in each case, to the extent earned and payable by us in such quarter pursuant to and as calculated under our investment advisory and management agreement (the "Fee Waiver").


This item represents the estimated adjustment of $40 million on an annualized basis to our investment adviser's income based fees to take into account the Fee Waiver.

(9)
"Interest payments on borrowed funds" represents our interest expenses estimated by annualizing our actual interest and credit facility expenses incurred for the six months ended June 30, 2018. During the six months ended June 30, 2018, our average outstanding borrowings were approximately $5.0 billion and cash paid for interest expense was $97 million. We had outstanding borrowings of approximately $4.6 billion (with a carrying value of approximately $4.5 billion) as of June 30, 2018. This item is based on the assumption that our borrowings and interest costs after an offering will remain similar to those prior to such offering. The amount of leverage that we may employ at any particular time will depend on, among other things, our investment adviser's and our board of directors' assessment of market and other factors at the time of any proposed borrowing. See "Risk Factors—Risks Relating to Our Business—We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing with us." We are currently allowed to borrow amounts such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 200% after such borrowing. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. See "Risk Factors—Risks Relating to Our Business—Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement will reduce from 200% to 150%, which may increase the risk of investing with us."

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(10)
Includes our overhead expenses, including payments under our administration agreement based on our allocable portion of overhead and other expenses incurred by Ares Operations in performing its obligations under the administration agreement, and income taxes. Such expenses are estimated by annualizing "Other expenses" for the six months ended June 30, 2018. The holders of shares of our common stock (and not the holders of our debt securities or preferred stock, if any) indirectly bear the cost associated with our annual expenses. See "Management—Administration Agreement."

(11)
Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles that would be investment companies under section 3(a) of the Investment Company Act but for the exceptions to that definition provided for in sections 3(c)(1) and 3(c)(7) of the Investment Company Act ("Acquired Funds") in which we invest. Such underlying funds or other investment vehicles are referred to in this prospectus as "Acquired Funds." This amount includes the estimated annual fees and operating expenses of Acquired Funds in which the Company is invested as of June 30, 2018. Certain of these Acquired Funds are subject to management fees, which generally range from 1% to 2.5% of total net assets, or incentive fees, which generally range between 15% and 25% of net profits. When applicable, fees and operating expenses estimates are based on historic fees and operating expenses for the Acquired Funds. For those Acquired Funds with little or no operating history, fees and operating expenses are estimates based on expected fees and operating expenses stated in the Acquired Funds' offering memorandum, private placement memorandum or other similar communication without giving effect to any performance. Future fees and operating expenses for these Acquired Funds may be substantially higher or lower because certain fees and operating expenses are based on the performance of the Acquired Funds, which may fluctuate over time. Also included with the amount is an estimate of the annual fees and operating expenses of the SDLP. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity—Co-Investment Programs—Senior Direct Lending Program" and Note 4 to our consolidated financial statements for the year ended December 31, 2017 for more information on the SDLP. The annual fees and operating expenses of the SDLP were estimated based on the funded portfolio of the SDLP as of June 30, 2018 and include interest payments on the senior notes and intermediate funding notes provided by Varagon and its clients, which represent 91% of such expenses.

(12)
"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.

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. In calculating the following expense amounts, we have assumed that we would have no additional leverage, that none of our assets are cash or cash equivalents and that our annual operating expenses would remain at the levels set forth in the table above. Income based fees and the capital gains incentive fees under the investment advisory and management agreement, which, assuming a 5% annual return, would either not be payable or have an insignificant impact on the expense amounts shown below, are not included in the example, except as specifically set forth below. Transaction expenses are not included in the following example. In the event that shares to which this prospectus relates are sold to or through

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underwriters, a corresponding prospectus supplement will restate this example to reflect the applicable sales load.

 
  1 year   3 years   5 years   10 years  

You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return (none of which is subject to the capital gains incentive fee)(1)

  $ 85   $ 247   $ 398   $ 730  

You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return resulting entirely from net realized capital gains (all of which is subject to the capital gains incentive fee)(2)

  $ 95   $ 275   $ 441   $ 800  

(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 not otherwise deferrable under the terms of the investment advisory and management agreement and therefore subject to the capital gains incentive fee.

              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%. If we were to achieve sufficient returns on our investments, including through the realization of capital gains, to trigger income based fees or capital gains incentive fees 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, if our board of directors authorizes and we declare a cash dividend, participants in our dividend reinvestment plan who have not otherwise elected to receive cash will receive a number of shares of our common stock determined by dividing the total dollar amount of the dividend payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the dividend. See "Dividend Reinvestment Plan" for additional information regarding our dividend reinvestment plan.

              This example and the expenses in the table above should not be considered a representation of our future expenses as 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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SELECTED CONDENSED CONSOLIDATED FINANCIAL DATA OF ARES CAPITAL

              The following selected financial and other data as of and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 are derived from our consolidated financial statements, which have been audited by KPMG LLP, an independent registered public accounting firm whose report thereon is included elsewhere in this prospectus. The selected financial and other data as of and for the six months ended June 30, 2018 and June 30, 2017 and other quarterly financial information is derived from our unaudited financial statements, but in the opinion of management, reflects all adjustments (consisting only of normal recurring adjustments) that are necessary to present fairly the results of such interim periods. Interim results as of and for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The data should be read in conjunction with our consolidated financial statements and notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Senior Securities," which are included elsewhere in this prospectus or the accompanying prospectus supplement.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA
As of and For the Six Months Ended June 30, 2018 and June 30, 2017 and
As of and For the Years Ended December 31, 2017, 2016, 2015, 2014 and 2013
(dollar amounts in millions, except per share data and as otherwise indicated)

 
  As of and For the
Six Months Ended
June 30,
  As of and For the Year Ended December 31,  
 
  2018   2017   2017   2016   2015   2014   2013  
 
  (unaudited)
  (unaudited)
   
   
   
   
   
 

Total Investment Income

  $ 650   $ 559   $ 1,160   $ 1,012   $ 1,025   $ 989   $ 882  

Total Expenses, Net of Waiver of Income Based Fees

    333     332     630     497     499     533     437  

Net Investment Income Before Income Taxes

    317     227     530     515     526     456     445  

Income Tax Expense, Including Excise Tax

    11     9     19     21     18     18     14  

Net Investment Income

    306     218     511     494     508     438     431  

Net Realized and Unrealized Gains (Losses) on Investments, Foreign Currencies, Extinguishment of Debt and Other Assets

    190     78     156     (20 )   (129 )   153     58  

Net Increase in Stockholders' Equity Resulting from Operations

  $ 496   $ 296   $ 667   $ 474   $ 379   $ 591   $ 489  

Per Share Data:

                                           

Net Increase in Stockholder's Equity Resulting from Operations:

                                           

Basic

  $ 1.16   $ 0.70   $ 1.57   $ 1.51   $ 1.20   $ 1.94   $ 1.83  

Diluted

  $ 1.16   $ 0.70   $ 1.57   $ 1.51   $ 1.20   $ 1.94   $ 1.83  

Cash Dividends Declared and Payable(1)

  $ 0.76   $ 0.76   $ 1.52   $ 1.52   $ 1.57   $ 1.57   $ 1.57  

Net Asset Value

  $ 17.05   $ 16.54   $ 16.65   $ 16.45   $ 16.46   $ 16.82   $ 16.46  

Total Assets(2)

  $ 12,297   $ 12,328   $ 12,347   $ 9,245   $ 9,507   $ 9,454   $ 8,094  

Total Debt (Carrying Value)(2)

  $ 4,542   $ 4,838   $ 4,854   $ 3,874   $ 4,114   $ 3,881   $ 2,939  

Total Debt (Principal Amount)

  $ 4,632   $ 4,928   $ 4,943   $ 3,951   $ 4,197   $ 3,999   $ 3,079  

Total Stockholders' Equity

  $ 7,270   $ 7,051   $ 7,098   $ 5,165   $ 5,173   $ 5,284   $ 4,904  

Other Data:

                                           

Number of Portfolio Companies at Period End(3)

    346     319     314     218     218     205     193  

Principal Amount of Investments Purchased(4)

  $ 2,994   $ 2,811   $ 7,263   $ 3,490   $ 3,905   $ 4,534   $ 3,493  

Principal Amount of Investments Acquired as part of the American Capital Acquisition on January 3, 2017

      $ 2,543   $ 2,543                  

Principal Amount of Investments Sold and Repayments

  $ 3,508   $ 2,710   $ 7,107   $ 3,655   $ 3,651   $ 3,213   $ 1,801  

Total Return Based on Market Value(5)

    9.5 %   3.9 %   4.5 %   26.4 %   1.3 %   (3.3 )%   10.5 %

Total Return Based on Net Asset Value(6)

    7.0 %   5.5 %   10.5 %   9.2 %   7.2 %   11.8 %   11.4 %

Weighted Average Yield of Debt and Other Income Producing Securities at Fair Value(7):

    10.5 %   9.5 %   9.8 %   9.4 %   10.3 %   10.1 %   10.4 %

Weighted Average Yield of Debt and Other Income Producing Securities at Amortized Cost(7):

    10.4 %   9.4 %   9.7 %   9.3 %   10.1 %   10.1 %   10.4 %

Weighted Average Yield of Total Investments at Fair Value(8):

    9.0 %   8.3 %   8.7 %   8.5 %   9.2 %   9.1 %   9.3 %

Weighted Average Yield of Total Investments at Amortized Cost(8):

    9.1 %   8.2 %   8.7 %   8.3 %   9.1 %   9.3 %   9.4 %

(1)
Includes an additional dividend of $0.05 per share paid in the year ended December 31, 2015, an additional dividend of $0.05 per share paid in the year ended December 31, 2014 and an additional dividend of $0.05 per share paid in the year ended December 31, 2013.

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(2)
Certain prior year amounts have been reclassified to conform to the 2017 and 2016 presentation. In particular, unamortized debt issuance costs were previously included in other assets and were reclassified to long-term debt as a result of the adoption of Accounting Standards Update ("ASU") 2015-03, Interest—Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs during the first quarter of 2016.

(3)
Includes commitments to portfolio companies for which funding had yet to occur.

(4)
Excludes $2.5 billion of investments acquired as part of the American Capital Acquisition on January 3, 2017.

(5)
For the six months ended June 30, 2018, the total return based on market value equaled the increase of the ending market value at June 30, 2018 of $16.45 per share from the ending market value at December 31, 2017 of $15.72 per share plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2018, divided by the market value at December 31, 2017. For the six months ended June 30, 2017, the total return based on market value equaled the decrease of the ending market value at June 30, 2017 of $16.38 per share from the ending market value at December 31, 2016 of $16.49 per share plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2017, divided by the market value at December 31, 2016. For the year ended December 31, 2017, the total return based on market value equaled the decrease of the ending market value at December 31, 2017 of $15.72 per share from the ending market value at December 31, 2016 of $16.49 per share plus the declared and payable dividends of $1.52 per share for the year ended December 31, 2017, divided by the market value at December 31, 2016. For the year ended December 31, 2016, the total return based on market value equaled the increase of the ending market value at December 31, 2016 of $16.49 per share from the ending market value at December 31, 2015 of $14.25 per share plus the declared and payable dividends of $1.52 per share for the year ended December 31, 2016, divided by the market value at December 31, 2015. For the year ended December 31, 2015, the total return based on market value equaled the decrease of the ending market value at December 31, 2015 of $14.25 per share from the ending market value at December 31, 2014 of $15.61 per share plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2015, divided by the market value at December 31, 2014. For the year ended December 31, 2014, the total return based on market value equaled the decrease of the ending market value at December 31, 2014 of $15.61 per share from the ending market value at December 31, 2013 of $17.77 per share plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2014, divided by the market value at December 31, 2013. For the year ended December 31, 2013, the total return based on market value equaled the increase of the ending market value at December 31, 2013 of $17.77 per share from the ending market value at December 31, 2012 of $17.50 per share plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2013, divided by the market value at December 31, 2012. Our shares fluctuate in value. Our performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.

(6)
For the six months ended June 30, 2018, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2018, divided by the beginning net asset value for the period. For the six months ended June 30, 2017, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2017, divided by the beginning net asset value for the period. For the year ended December 31, 2017, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $1.52 per share for the year ended December 31, 2017, divided by the beginning net asset value for the period. For the year ended December 31, 2016, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $1.52 per share for the year ended December 31, 2016, divided by the beginning net asset value for the period. For the year ended December 31, 2015, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2015, divided by the beginning net asset value for the period. For the year ended December 31, 2014, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2014, divided by the beginning net asset value for the period. For the year ended December 31, 2013, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2013, divided by the beginning net asset value for the period. These calculations are adjusted for shares issued in connection with the dividend reinvestment plan and the issuance of common stock in connection with any equity offerings and the equity components of any convertible notes issued during the period. Our performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.

(7)
"Weighted average yield of debt and other income producing securities" is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities, divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value, as applicable.

(8)
"Weighted average yield on total investments" is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities, divided by (b) the total investments at amortized cost or at fair value, as applicable.

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SELECTED QUARTERLY DATA (Unaudited)
(dollar amounts in millions, except per share data)

 
  2018  
 
  Q4   Q3   Q2   Q1  

Total investment income

          $ 333   $ 317  

Net investment income before net realized and unrealized gains and income based fees and capital gains incentive fees, net of waiver of income based fees

          $ 210   $ 192  

Income based fees, and capital gains incentive fees, net of waiver of income based fees

          $ 48   $ 48  

Net investment income before net realized and unrealized gains

          $ 162   $ 144  

Net realized and unrealized gains

          $ 92   $ 98  

Net increase in stockholders' equity resulting from operations

          $ 254   $ 242  

Basic and diluted earnings per common share

          $ 0.60   $ 0.57  

Net asset value per share as of the end of the quarter

          $ 17.05   $ 16.84  

 

 
  2017  
 
  Q4   Q3   Q2   Q1  

Total investment income

  $ 307   $ 294   $ 284   $ 275  

Net investment income before net realized and unrealized gains and income based fees and capital gains incentive fees, net of waiver of income based fees

  $ 185   $ 175   $ 154   $ 142  

Income based fees, and capital gains incentive fees, net of waiver of income based fees

  $ 45   $ 22   $ 30   $ 48  

Net investment income before net realized and unrealized gains

  $ 140   $ 153   $ 124   $ 94  

Net realized and unrealized gains

  $ 92   $ (14 ) $ 54   $ 24  

Net increase in stockholders' equity resulting from operations

  $ 232   $ 139   $ 178   $ 118  

Basic and diluted earnings per common share

  $ 0.54   $ 0.33   $ 0.42   $ 0.28  

Net asset value per share as of the end of the quarter

  $ 16.65   $ 16.49   $ 16.54   $ 16.50  

 

 
  2016  
 
  Q4   Q3   Q2   Q1  

Total investment income

  $ 261   $ 258   $ 245   $ 248  

Net investment income before net realized and unrealized gains (losses) and income based fees and capital gains incentive fees

  $ 157   $ 164   $ 144   $ 147  

Income based fees and capital gains incentive fees

  $ 19   $ 27   $ 39   $ 33  

Net investment income before net realized and unrealized gains (losses)

  $ 138   $ 137   $ 105   $ 114  

Net realized and unrealized gains (losses)

  $ (63 ) $ (28 ) $ 53   $ 18  

Net increase in stockholders' equity resulting from operations

  $ 75   $ 109   $ 158   $ 132  

Basic and diluted earnings per common share

  $ 0.24   $ 0.35   $ 0.50   $ 0.42  

Net asset value per share as of the end of the quarter

  $ 16.45   $ 16.59   $ 16.62   $ 16.50  

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RISK FACTORS

              You should carefully consider the risk factors described below, together with all of the other information included in this prospectus and the accompanying prospectus supplement, 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 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.

RISKS RELATING TO OUR BUSINESS

The capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on our business and operations.

              From time to time, capital markets may experience periods of disruption and instability. For example, between 2008 and 2009, the global capital markets were unstable as evidenced by periodic disruptions in liquidity in the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of the U.S. federal government and foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular. While market conditions have largely recovered from the events of 2008 and 2009, there have been continuing periods of volatility, some lasting longer than others. For example, the referendum by British voters to exit the European Union ("Brexit") in June 2016 led to further disruption and instability in the global markets. There can be no assurance these market conditions will not repeat themselves or worsen in the future.

              Equity capital may be difficult to raise during periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less than net asset value without first obtaining approval for such issuance from our stockholders and our independent directors. We generally seek approval from our stockholders so that we have the flexibility to issue up to 25% of our then outstanding shares of our common stock at a price below net asset value. Pursuant to approval granted at a special meeting of stockholders held on May 14, 2018, we currently are permitted to sell or otherwise issue shares of our common stock at a price below net asset value, subject to certain limitations and determinations that must be made by our board of directors. Such stockholder approval expires on May 14, 2019.

              Volatility and dislocation in the capital markets can also create a challenging environment in which to raise or access debt capital. The reappearance of market conditions similar to those experienced from 2008 through 2009 for any substantial length of time could make it difficult to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms and any failure to do so could have a material adverse effect on our business. The debt capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what we currently experience, including being at a higher cost due to a rising rate environment. If we are unable to raise or refinance debt, then our equity investors may not benefit from the potential for increased returns on equity resulting from leverage and we may be limited in our ability to make new commitments or to fund existing commitments to our portfolio companies.

              Significant changes or volatility in the capital markets may also have a negative effect on the valuations of our investments. While most of our investments are not publicly traded, applicable

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accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). Significant changes in the capital markets may also affect the pace of our investment activity and the potential for liquidity events involving our investments. Thus, the illiquidity of our investments may make it difficult for us to sell such investments to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes. An inability to raise or access capital could have a material adverse effect on our business, financial condition or results of operations.

Uncertainty about the financial stability of the United States, China and several countries in Europe could have a significant adverse effect on our business, financial condition and results of operations.

              Due to federal budget deficit concerns, Standard & Poor's Financial Services LLC ("S&P") downgraded the federal government's credit rating from AAA to AA+ for the first time in history on August 5, 2011. Further, Moody's Investor Services, Inc. ("Moody's") and Fitch Ratings, Inc. ("Fitch") had warned that they may downgrade the federal government's credit rating under certain circumstances. Further downgrades or warnings by S&P or other rating agencies, and the United States government's credit and deficit concerns in general, could cause interest rates and borrowing costs to rise, which may negatively impact both the perception of credit risk associated with our debt portfolio and our ability to access the debt markets on favorable terms. In addition, a decreased U.S. government credit rating could create broader financial turmoil and uncertainty, which may weigh heavily on our financial performance and the value of our common stock.

              Deterioration in the economic conditions in the Eurozone and globally, including instability in financial markets, may pose a risk to our business. In recent years, financial markets have been affected at times by a number of global macroeconomic and political events, including the following: large sovereign debts and fiscal deficits of several countries in Europe and in emerging markets jurisdictions, levels of non-performing loans on the balance sheets of European banks, the potential effect of any European country leaving the Eurozone, the potential effect of the United Kingdom leaving the European Union, the potential effect of Scotland leaving the United Kingdom, and market volatility and loss of investor confidence driven by political events, including the general elections in the United Kingdom in June 2017 and in Germany in September 2017 and referenda in the United Kingdom in June 2016 and Italy in December 2016. Market and economic disruptions have affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. We cannot assure you that market disruptions in Europe, including the increased cost of funding for certain governments and financial institutions, will not impact the global economy, and we cannot assure you that assistance packages will be available, or if available, be sufficient to stabilize countries and markets in Europe or elsewhere affected by a financial crisis. To the extent uncertainty regarding any economic recovery in Europe negatively impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be significantly and adversely affected.

              In the second quarter of 2015, stock prices in China experienced a significant drop, resulting primarily from continued sell-off of shares trading in Chinese markets. In addition, in August 2015, Chinese authorities sharply devalued China's currency. Since then, the Chinese capital markets have continued to experience periods of instability. These market and economic disruptions have affected, and may in the future affect, the U.S. capital markets, which could adversely affect our business, financial condition or results of operations.

              The Federal Reserve has raised the Federal Funds Rate seven times during the period between December 2015 and June 2018, and has announced its intention to continue to raise the federal funds rate over time. These developments, along with the United States government's credit and deficit concerns, the European sovereign debt crisis and the economic slowdown in China, could cause interest

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rates to be volatile, which may negatively impact our ability to access the debt markets on favorable terms.

A failure on our part to maintain our status as a BDC may significantly reduce our operating flexibility.

              If we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company that is required to register under the Investment Company Act, which would subject us to additional regulatory restrictions and significantly decrease our operating flexibility. In addition, any such failure could cause an event of default under our outstanding indebtedness, which could have a material adverse effect on our business, financial condition or results of operations.

We are dependent upon certain key personnel of Ares for our future success and upon their access to other Ares investment professionals.

              We depend on the diligence, skill and network of business contacts of certain key personnel of the Ares Credit Group. We also depend, to a significant extent, on access to the investment professionals of other groups within Ares and the information and deal flow generated by Ares' investment professionals in the course of their investment and portfolio management activities. Our future success depends on the continued service of certain key personnel of the Ares Credit Group. The departure of any of these individuals, or of a significant number of the investment professionals or partners of Ares, could have a material adverse effect on our business, financial condition or results of operations. In addition, we cannot assure you that Ares Capital Management will remain our investment adviser or that we will continue to have access to Ares' investment professionals or its information and deal flow. Further, there can be no assurance that Ares Capital will replicate its own or Ares' historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Ares-managed funds.

Our financial condition and results of operations depend on our ability to manage future growth effectively.

              Our ability to achieve our investment objective depends on our ability to acquire suitable investments and monitor and administer those investments, which depends, in turn, on our investment adviser's ability to identify, invest in and monitor companies that meet our investment criteria.

              Accomplishing this result on a cost-effective basis is largely a function of the structuring of our investment process and the ability of our investment adviser to provide competent, attentive and efficient services to us. Our executive officers and the members of our investment adviser's investment committee have substantial responsibilities in connection with their roles at Ares and with the other Ares funds, as well as responsibilities under the investment advisory and management agreement. They may also be called upon to provide significant managerial assistance to certain of our portfolio companies. These demands on their time, which will increase as the number of investments grow, may distract them or slow the rate of investment. In order to grow, Ares will need to hire, train, supervise, manage and retain new employees. However, we cannot assure you that Ares will be able to do so effectively. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.

              In addition, as we grow, we may open up new offices in new geographic regions that may increase our direct operating expenses without corresponding revenue growth.

Our ability to grow depends on our ability to raise capital.

              We will need to periodically access the capital markets to raise cash to fund new investments in excess of our repayments, and we may also need to access the capital markets to refinance existing debt

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obligations to the extent such maturing obligations are not repaid with availability under our revolving credit facilities or cash flows from operations. We have elected to be treated as a RIC and operate in a manner so as to qualify for the U.S. federal income tax treatment applicable to RICs. Among other things, in order to maintain our RIC status, we must distribute to our stockholders on a timely basis generally an amount equal to at least 90% of our investment company taxable income, and, as a result, such distributions will not be available to fund investment originations or repay maturing debt. We must continue to borrow from financial institutions and issue additional securities to fund our growth. Unfavorable economic or capital market conditions may increase our funding costs, limit our access to the capital markets or could result in a decision by lenders not to extend credit to us. An inability to successfully access the capital markets may limit our ability to refinance our existing debt obligations as they come due and/or to fully execute our business strategy and could limit our ability to grow or cause us to have to shrink the size of our business, which could decrease our earnings, if any.

              In addition, we are currently allowed to borrow amounts or issue debt securities or preferred stock, which we refer to collectively as "senior securities," such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 200% immediately after such borrowing. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. Such requirement, in certain circumstances, may restrict our ability to borrow or issue debt securities or preferred stock. The amount of leverage that we employ will depend on our investment adviser's and our board of directors' assessments of market and other factors at the time of any proposed borrowing or issuance of senior securities. We cannot assure you that we will be able to maintain our current Facilities (as defined below), obtain other lines of credit or issue senior securities at all or on terms acceptable to us.

Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital.

              We may issue senior securities or borrow money from banks or other financial institutions, up to the maximum amount permitted by the Investment Company Act. Under the provisions of the Investment Company Act, we are currently permitted, as a BDC, to incur indebtedness or issue senior securities only in amounts such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 200% after each such incurrence or issuance. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. If the value of our assets declines, we may be unable to satisfy this test, which may prohibit us from paying dividends and could prevent us from maintaining our status as a RIC or may prohibit us from repurchasing shares of our common stock. In addition, our inability to satisfy this test could cause an event of default under our existing indebtedness. If we cannot satisfy this test, we may be required to sell a portion of our investments at a time when such sales may be disadvantageous and, depending on the nature of our leverage, repay a portion of our indebtedness. Accordingly, any failure to satisfy this test could have a material adverse effect on our business, financial condition or results of operations. As of June 30, 2018, our asset coverage calculated in accordance with the Investment Company Act was 255%. Also, to generate cash for funding new investments, we may in the future seek to issue additional debt or to securitize certain of our loans. The Investment Company Act may impose restrictions on the structure of any such securitization.

              We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the current net asset value per share of our common stock if our board of directors determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. Any such sale would be dilutive to the net asset value per share of our common stock. 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 of directors, closely

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approximates the market value of such securities (less any commission or discount). If our common stock trades at a discount to net asset value, this restriction could adversely affect our ability to raise capital.

              Pursuant to approval granted at a special meeting of stockholders held on May 14, 2018, we currently are permitted to sell or otherwise issue shares of our common stock at a price below net asset value, subject to certain limitations and determinations that must be made by our board of directors. Such stockholder approval expires on May 14, 2019.

We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing with us.

              Borrowings, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities. We currently borrow under the Facilities and have issued or assumed other senior securities, and in the future may borrow from, or issue additional senior securities to, banks, insurance companies, funds, institutional investors and other lenders and investors. Lenders and holders of such senior securities have fixed dollar claims on our consolidated assets that are superior to the claims of our common stockholders or any preferred stockholders. If the value of our consolidated assets increases, then leveraging would cause the net asset value per share of our common stock to increase more sharply than it would have had we not incurred leverage.

              Conversely, if the value of our consolidated assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not incurred leverage. Similarly, any increase in our consolidated income in excess of consolidated interest payable on the borrowed funds would cause our net income to increase more than it would had we not incurred leverage, while any decrease in our consolidated income would cause net income to decline more sharply than it would have had we not incurred leverage. Such a decline could negatively affect our ability to make common stock dividend payments. There can be no assurance that a leveraging strategy will be successful.

              As of June 30, 2018, we had approximately $414 million of outstanding borrowings under the Facilities, approximately $688 million in aggregate principal amount outstanding of the Convertible Unsecured Notes (as defined below) and approximately $3.5 billion in aggregate principal amount outstanding of the Unsecured Notes. In order for us to cover our annual interest payments on our outstanding indebtedness at June 30, 2018, we must achieve annual returns on our June 30, 2018 total assets of at least 1.6%. The weighted average stated interest rate charged on our principal amount of outstanding indebtedness as of June 30, 2018 was 4.2%. We intend to continue borrowing under the Facilities in the future and we may increase the size of the Facilities or issue additional debt securities or other evidences of indebtedness (although there can be no assurance that we will be successful in doing so). For more information on our indebtedness, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources." Our ability to service our debt depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. The amount of leverage that we employ at any particular time will depend on our investment adviser's and our board of directors' assessments of market and other factors at the time of any proposed borrowing. We are currently allowed to borrow amounts such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 200% after such borrowing. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced from 200% to 150%. Accordingly, our interest expenses as a percentage of our total assets will be higher if we use increased leverage permitted under our modified asset coverage requirement applicable to senior securities.

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              The Facilities, the Convertible Unsecured Notes and the Unsecured Notes impose financial and operating covenants that restrict our business activities, including limitations that could hinder our ability to finance additional loans and investments or to make the distributions required to maintain our status as a RIC. A failure to renew the Facilities or to add new or replacement debt facilities or to issue additional debt securities or other evidences of indebtedness could have a material adverse effect on our business, financial condition and results of operations.

              The following table illustrates the effect on return to a holder of our common stock of the leverage created by our use of borrowing at the weighted average stated interest rate of 4.2% as of June 30, 2018, together with (a) our total value of net assets as of June 30, 2018; (b) approximately $4.6 billion in aggregate principal amount of indebtedness outstanding as of June 30, 2018 and (c) hypothetical annual returns on our portfolio of minus 15% to plus 15%.

Assumed Return on Portfolio (Net of Expenses)(1)

    –15.00 %   –10.00 %   –5.00 %   %   5.00 %   10.00 %   15.00 %

Corresponding Return to Common Stockholders(2)

    –28.02 %   –19.56 %   –11.11 %   –2.65 %   5.81 %   14.27 %   22.72 %

(1)
The assumed portfolio return is required by SEC regulations and is not a prediction of, and does not represent, our projected or actual performance. Actual returns may be greater or less than those appearing in the table. Pursuant to SEC regulations, this table is calculated as of June 30, 2018. As a result, it has not been updated to take into account any changes in assets or leverage since June 30, 2018.

(2)
In order to compute the "Corresponding Return to Common Stockholders," the "Assumed Return on Portfolio" is multiplied by the total value of our assets at June 30, 2018 to obtain an assumed return to us. From this amount, the interest expense (calculated by multiplying the weighted average stated interest rate of 4.2% by the approximately $4.6 billion of principal debt outstanding) is subtracted to determine the return available to stockholders. The return available to stockholders is then divided by the total value of our net assets as of June 30, 2018 to determine the "Corresponding Return to Common Stockholders."

Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement will reduce from 200% to 150%, which may increase the risk of investing with us.

              On June 21, 2018, our board of directors, including a "required majority" of our board of directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act, as amended by the SBCAA. As a result, effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced from 200% to 150%, and the risks associated with an investment in us may increase.

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In addition to regulatory requirements that restrict our ability to raise capital, the Facilities, the Convertible Unsecured Notes and the Unsecured Notes contain various covenants that, if not complied with, could accelerate repayment under the Facilities, the Convertible Unsecured Notes and the Unsecured Notes, thereby materially and adversely affecting our liquidity, financial condition and results of operations.

              The agreements governing the Facilities, the Convertible Unsecured Notes and the Unsecured Notes require us to comply with certain financial and operational covenants. These covenants may include, among other things:

              As of the date of this prospectus, we are in compliance in all material respects with the covenants of the Facilities, the Convertible Unsecured Notes and the Unsecured Notes. However, our continued compliance with these covenants depends on many factors, some of which are beyond our control. For example, depending on the condition of the public debt and equity markets and pricing levels, unrealized depreciation in our portfolio may increase in the future. Any such increase could result in our inability to comply with our obligation to restrict the level of indebtedness that we are able to incur in relation to the value of our assets or to maintain a minimum level of stockholders' equity.

              Accordingly, although we believe we will continue to be in compliance, there are no assurances that we will continue to comply with the covenants in the Facilities, the Convertible Unsecured Notes and the Unsecured Notes. Failure to comply with these covenants could result in a default under the Facilities, the Convertible Unsecured Notes or the Unsecured Notes, that, if we were unable to obtain a waiver from the lenders or holders of such indebtedness, as applicable, such lenders or holders could accelerate repayment under such indebtedness and thereby have a material adverse impact on our business, financial condition and results of operations.

We operate in a highly competitive market for investment opportunities.

              A number of entities compete with us to make the types of investments that we make in middle-market companies. We compete with other BDCs, public and private funds, commercial and investment banks, commercial financing companies, insurance companies, hedge funds, and, to the extent they provide an alternative form of financing, private equity funds. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act imposes on us as a BDC and that the Code imposes on us as a RIC. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to pursue attractive investment opportunities from time to time.

              We do not seek to compete primarily based on the interest rates we offer and we believe that some of our competitors may make loans with interest rates that are comparable to or lower than the rates we offer. Rather, we compete with our competitors based on our existing investment platform, seasoned investment professionals, experience and focus on middle-market companies, disciplined

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investment philosophy, extensive industry focus and flexible transaction structuring. For a more detailed discussion of these competitive advantages, see "Business—Competitive Advantages."

              We may lose investment opportunities if we do not match our competitors' pricing, terms and structure. The loss of such investment opportunities may limit our ability to grow or cause us to have to shrink the size of our portfolio, which could decrease our earnings. If we match our competitors' pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss. As a result of operating in such a competitive environment, we may make investments that are on less favorable terms than what we may have originally anticipated, which may impact our return on these investments.

We may be subject to additional corporate-level income taxes if we fail to maintain our status as a RIC.

              We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the U.S. federal income tax treatment applicable to RICs. As a RIC, we generally will not pay U.S. federal corporate-level income taxes on our income and net capital gains that we distribute to our stockholders as dividends on a timely basis. We will be subject to U.S. federal corporate-level income tax on any undistributed income and/or gains. To maintain our status as a RIC, we must meet certain source of income, asset diversification and annual distribution requirements. We may also be subject to certain U.S. federal excise taxes, as well as state, local and foreign taxes.

              To maintain our RIC status, we must timely distribute an amount equal to at least 90% of our investment company taxable income (as defined by the Code, which generally includes net ordinary income and net short term capital gains) to our stockholders (the "Annual Distribution Requirement"). We have the ability to pay a large portion of our dividends in shares of our stock, and as long as a portion of such dividend is paid in cash and other requirements are met, such stock dividends will be taxable as a dividend for U.S. federal income tax purposes. This may result in our U.S. stockholders having to pay tax on such dividends, even if no cash is received, and may result in our non-U.S. stockholders being subject to withholding tax in respect of amounts distributed in our stock. Because we use debt financing, we are subject to certain asset coverage ratio requirements under the Investment Company Act and financial covenants under our indebtedness that could, under certain circumstances, restrict us from making distributions necessary to qualify as a RIC. If we are unable to obtain cash from other sources, we may fail to maintain our status as a RIC and, thus, may be subject to corporate-level income tax on all of our income and/or gains.

              To maintain our status as a RIC, in addition to the Annual Distribution Requirement, we must also meet certain annual source of income requirements at the end of each taxable year and asset diversification requirements at the end of each calendar quarter. Failure to meet these requirements may result in our having to (a) dispose of certain investments quickly or (b) raise additional capital to prevent the loss of RIC status. Because most of our investments are in private companies and are generally illiquid, any such dispositions may be at disadvantageous prices and may result in losses. Also, the rules applicable to our qualification as a RIC are complex with many areas of uncertainty. Accordingly, no assurance can be given that we have qualified or will continue to qualify as a RIC. If we fail to maintain our status as a RIC for any reason and become subject to regular "C" corporation income tax, the resulting corporate-level income taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would have a material adverse effect on us and on any investment in us. Certain provisions of the Code provide some relief from RIC disqualification due to failures of the source of income and asset diversification requirements, although there may be additional taxes due in such cases. We cannot assure you that we would qualify for any such relief should we fail the source of income or asset diversification requirements.

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We may have difficulty paying our required distributions under applicable tax rules if we recognize income before or without receiving cash representing such income.

              For U.S. federal income tax purposes, we generally are required to include in income certain amounts that we have not yet received in cash, such as original issue discount, which may arise, for example, if we receive warrants in connection with the making of a loan or payment in kind ("PIK") interest representing contractual interest added to the loan principal balance and due at the end of the loan term. Such original issue discount or PIK interest is included in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that we will not receive in cash, including, for example, amounts attributable to hedging and foreign currency transactions.

              Since, in certain cases, we may recognize income before or without receiving cash in respect of such income, we may have difficulty meeting the U.S. federal income tax requirement to distribute generally an amount equal to at least 90% of our investment company taxable income to maintain our status as a RIC. Accordingly, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these distribution requirements. If we are not able to obtain cash from other sources, we may fail to qualify as a RIC and thus be subject to additional corporate-level income taxes. Such a failure could have a material adverse effect on us and on any investment in us. See "Certain Material U.S. Federal Income Tax Considerations—Taxation as a RIC."

We are exposed to risks associated with changes in interest rates.

              General interest rate fluctuations may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our investment objective and rate of return on invested capital. Because we borrow money and may issue debt securities or preferred stock to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds or pay interest or dividends on such debt securities or preferred stock and the rate at which we invest these funds. From time to time, we may also enter into certain hedging transactions to mitigate our exposure to rising borrowing costs. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

              Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise. Trading prices tend to fluctuate more for fixed-rate securities that have longer maturities. In the past, we have entered into certain hedging transactions, such as interest rate swap agreements, to mitigate our exposure to adverse fluctuations in interest rates, and we may do so again in the future. In addition, we may increase our floating rate investments to position the portfolio for rate increases. However, we cannot assure you that such transactions will be successful in mitigating our exposure to interest rate risk. Hedging transactions may also limit our ability to participate in the benefits of lower interest rates with respect to our indebtedness.

              Although we have no policy governing the maturities of our investments, under current market conditions we expect that we will invest in a portfolio of debt generally having maturities of up to 10 years. This means that we are subject to greater risk (other things being equal) than a fund invested solely in shorter-term securities. A decline in the prices of the debt we own could adversely affect the trading price of our common stock. Also, an increase in interest rates available to investors could make an investment in our common stock less attractive if we are not able to increase our dividend rate, which could reduce the value of our common stock.

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Most of our portfolio investments are not publicly traded and, as a result, the fair value of these investments may not be readily determinable.

              A large percentage of our portfolio investments are not publicly traded. The fair value of investments that are not publicly traded may not be readily determinable. We value these investments quarterly at fair value as determined in good faith by our board of directors based on, among other things, the input of our management and audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing 12-month period (with certain de minimis exceptions). The valuation process is conducted at the end of each fiscal quarter, with a portion (based on value) of our valuations of portfolio companies without readily available market quotations subject to review by an independent valuation firm each quarter. However, we may use these independent valuation firms to review the value of our investments more frequently, including in connection with the occurrence of significant events or changes in value affecting a particular investment. In addition, our independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, our investment valuation process within the context of performing the integrated audit.

              The types of factors that may be considered in valuing our investments include the enterprise value of the portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to similar publicly traded securities, changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation. Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these investments existed and may differ materially from the values that we may ultimately realize. Our net asset value per share could be adversely affected if our determinations regarding the fair value of these investments are higher than the values that we realize upon disposition of such investments.

The lack of liquidity in our investments may adversely affect our business.

              As we generally make investments in private companies, substantially all of these investments are subject to legal and other restrictions on resale or are otherwise less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we could realize significantly less than the value at which we have recorded our investments or could be unable to dispose of our investments in a timely manner. In addition, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we or an affiliated manager of Ares has material non-public information regarding such portfolio company.

We may experience fluctuations in our quarterly results.

              We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rates payable on the debt investments we make, the default rates on such investments, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general

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economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

Our financial condition and results of operations could be negatively affected if a significant investment fails to perform as expected.

              Our investment portfolio includes investments that may be significant individually or in the aggregate. If a significant investment in one or more companies fails to perform as expected, such a failure could have a material adverse effect on our financial condition and results of operations, and the magnitude of such effect could be more significant than if we had further diversified our portfolio.

There are significant potential conflicts of interest that could impact our investment returns.

              Certain of our executive officers and directors, and members of the investment committee of our investment adviser, serve or may serve as officers, directors or principals of other entities and affiliates of our investment adviser and investment funds managed by our investment adviser or its affiliates. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in our or our stockholders' best interests or may require them to devote time to services for other entities, which could interfere with the time available to provide services to us. Members of our investment adviser's investment committee may have significant responsibilities for other Ares funds. Similarly, although the professional staff of our investment adviser will devote as much time to the management of us as appropriate to enable our investment adviser to perform its duties in accordance with the investment advisory and management agreement, the investment professionals of our investment adviser may have conflicts in allocating their time and services among us, on the one hand, and investment vehicles managed by our investment adviser or one or more of its affiliates, on the other hand. These activities could be viewed as creating a conflict of interest insofar as the time and effort of the professional staff of our investment adviser and its officers and employees will not be devoted exclusively to our business but will instead be allocated between our business and the management of these other investment vehicles.

              In addition, certain Ares funds may have investment objectives that compete or overlap with, and may from time to time invest in asset classes similar to those targeted by, Ares Capital. Consequently, we, on the one hand, and these other entities, on the other hand, may from time to time pursue the same or similar capital and investment opportunities. Ares and our investment adviser endeavor to allocate investment opportunities in a fair and equitable manner, and in any event consistent with any fiduciary duties owed to Ares Capital. Nevertheless, it is possible that we may not be given the opportunity to participate in certain investments made by investment funds managed by investment managers affiliated with Ares (including our investment adviser). In addition, there may be conflicts in the allocation of investments among us and the funds managed by investment managers affiliated with Ares (including our investment adviser) or one or more of our controlled affiliates or among the funds they manage, including investments made pursuant to the Co-investment Exemptive Order. Further, such other Ares-managed funds may hold positions in portfolio companies in which Ares Capital has also invested. Such investments may raise potential conflicts of interest between Ares Capital and such other Ares-managed funds, particularly if Ares Capital and such other Ares-managed funds invest in different classes or types of securities or investments of the same underlying portfolio company. In that regard, actions may be taken by such other Ares-managed funds that are adverse to Ares Capital's interests, including, but not limited to, during a restructuring, bankruptcy or other insolvency proceeding or similar matter occurring at the underlying portfolio company.

              We have from time to time sold assets to IHAM and certain of the IHAM Vehicles and, as part of our investment strategy, we may offer to sell additional assets to vehicles managed by one or more of our affiliates (including IHAM) or we may purchase assets from vehicles managed by one or more of our affiliates (including IHAM). In addition, vehicles managed by one or more of our affiliates

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(including IHAM) may offer assets to or may purchase assets from one another. While assets may be sold or purchased at prices that are consistent with those that could be obtained from third parties in the marketplace, and although these types of transactions generally require approval of one or more independent parties, there may be an inherent conflict of interest in such transactions between us and funds managed by one of our affiliates.

              We pay a base management fee, an income based fee and a capital gains incentive fee to our investment adviser, and reimburse our investment adviser for certain expenses it incurs. In addition, investors in our common stock will invest on a gross basis and receive distributions on a net basis after expenses, resulting in, among other things, a lower rate of return than one might achieve if distributions were made on a gross basis.

              Our investment adviser's base management fee is based on a percentage of our total assets (other than cash or cash equivalents but including assets purchased with borrowed funds) and, consequently, our investment adviser may have conflicts of interest in connection with decisions that could affect our total assets, such as decisions as to whether to incur indebtedness or to make future investments. We are currently allowed to borrow amounts such that our asset coverage, as calculated pursuant to the Investment Company Act, equals at least 200% after such borrowing. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced from 200% to 150%. Accordingly, our investment adviser may have conflicts of interest in connection with decisions to use increased leverage permitted under our modified asset coverage requirement applicable to senior securities, as the incurrence of such additional indebtedness would result in an increase in the base management fees payable to our investment adviser and may also result in an increase in the income based fees and capital gains incentive fees payable to our investment adviser.

              The income based fees payable by us to our investment adviser that relate to our pre-incentive fee net investment income is computed and paid on income that may include interest that is accrued but not yet received in cash. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously used in the calculation of such fee will become uncollectible. Our investment adviser is not under any obligation to reimburse us for any part of the income based fees it received that were based on accrued interest that we never actually receive.

              Our investment advisory and management agreement renews for successive annual periods if approved by our board of directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not "interested persons" of us as defined in Section 2(a)(19) of the Investment Company Act. However, both we and our investment adviser have the right to terminate the agreement without penalty upon 60 days' written notice to the other party. Moreover, conflicts of interest may arise if our investment adviser seeks to change the terms of our investment advisory and management agreement, including, for example, the terms for compensation to our investment adviser. While any material change to the investment advisory and management agreement must be submitted to stockholders for approval under the Investment Company Act, we may from time to time decide it is appropriate to seek stockholder approval to change the terms of the agreement.

              We are party to an administration agreement with our administrator, Ares Operations, a subsidiary of Ares Management, pursuant to which our administrator furnishes us with administrative services and we pay our administrator at cost our allocable portion of overhead and other expenses (including travel expenses) incurred by our administrator in performing its obligations under our administration agreement, including our allocable portion of the compensation, rent and other expenses of certain of our officers (including our chief compliance officer, chief financial officer, chief accounting officer, general counsel, secretary, treasurer and assistant treasurer) and their respective staffs, but not investment professionals.

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              Our portfolio company, IHAM, is party to an administration agreement, referred to herein as the "IHAM administration agreement," with Ares Operations. Pursuant to the IHAM administration agreement, our administrator provides IHAM with administrative services and IHAM reimburses our administrator for all of the actual costs associated with such services, including its allocable portion of our administrator's overhead and the cost of our administrator's officers and respective staff in performing its obligations under the IHAM administration agreement. Prior to entering into the IHAM administration agreement, IHAM was party to a services agreement with our investment adviser, pursuant to which our investment adviser provided similar services.

              As a result of the arrangements described above, there may be times when the management team of Ares Management (including those members of management focused primarily on managing Ares Capital) has interests that differ from those of yours, giving rise to a conflict.

              Our stockholders may have conflicting investment, tax and other objectives with respect to their investments in us. The conflicting interests of individual stockholders may relate to or arise from, among other things, the nature of our investments, the structure or the acquisition of our investments, and the timing of dispositions of our investments. As a consequence, conflicts of interest may arise in connection with decisions made by our investment adviser, including with respect to the nature or structuring of our investments, that may be more beneficial for one stockholder than for another stockholder, especially with respect to stockholders' individual tax situations. In selecting and structuring investments appropriate for us, our investment adviser will consider the investment and tax objectives of the Company and our stockholders, as a whole, not the investment, tax or other objectives of any stockholder individually.

We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect our liquidity, financial condition or results of operations.

              Our business is dependent on our and third parties' communications and information systems. Further, in the ordinary course of our business we or our investment adviser may engage certain third party service providers to provide us with services necessary for our business. Any failure or interruption of those systems or services, including as a result of the termination or suspension of an agreement with any third-party service providers, could cause delays or other problems in our business activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:

              These events, in turn, could have a material adverse effect on our business, financial condition and operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.

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Cybersecurity risks and cyber incidents may adversely affect our business or the business of our portfolio companies by causing a disruption to our operations or the operations of our portfolio companies, a compromise or corruption of our confidential information or the confidential information of our portfolio companies and/or damage to our business relationships or the business relationships of our portfolio companies, all of which could negatively impact the business, financial condition and operating results of us or our portfolio companies.

              A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of the information resources of us or our portfolio companies. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems or those of our portfolio companies for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to business relationships. As our and our portfolio companies' reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by Ares Management and third-party service providers, and the information systems of our portfolio companies. Ares Management has implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident.

Ineffective internal controls could impact our business and operating results.

              Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations.

Changes in laws or regulations governing our operations or the operations of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, such as the Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), Public Law No. 115-97 (the "Tax Cuts and Jobs Act") and the SBCAA, could require changes to certain business practices of us or our portfolio companies, negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.

              We and our portfolio companies are subject to regulation by laws and regulations at the local, state, federal and, in some cases, foreign levels. These laws and regulations, as well as their interpretation, may be changed from time to time, and new laws and regulations may be enacted. Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations could require changes to certain business practices of us or our portfolio companies, negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.

              On July 21, 2010, President Obama signed into law the Dodd-Frank Act. Many of the provisions of the Dodd-Frank Act have had extended implementation periods and delayed effective dates and have required extensive rulemaking by regulatory authorities. While many of the rules

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required to be written have been promulgated, some have not yet been implemented. Although the full impact of the Dodd-Frank Act on us and our portfolio companies may not be known for an extended period of time, the Dodd-Frank Act, including the rules implementing its provisions and the interpretation of those rules relating to capital, margin, trading and clearance and settlement of derivatives, may negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, intensify the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.

              Over the last several years, there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively impact our operating results or financial condition, impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business.

              On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, which significantly changed the Code, including, a reduction in the corporate income tax rate, a new limitation on the deductibility of interest expense, and significant changes to the taxation of income earned from foreign sources and foreign subsidiaries. The Tax Cuts and Jobs Act also authorizes the IRS to issue regulations with respect to the new provisions. We cannot predict how the changes in the Tax Cuts and Jobs Act, or regulations or other guidance issued under it, might affect us, our business or the business of our portfolio companies.

              On February 3, 2017, President Trump signed Executive Order 13772 announcing the new Administration's policy to regulate the U.S. financial system in a manner consistent with certain "Core Principles," including regulation that is efficient, effective and appropriately tailored. The Executive Order directed the Secretary of the Treasury, in consultation with the heads of the member agencies of the Financial Stability Oversight Council, to report to the President on the extent to which existing laws, regulations and other government policies promote the Core Principles and to identify any laws, regulations or other government policies that inhibit federal regulation of the U.S. financial system. On June 12, 2017, the U.S. Department of the Treasury published the first of several reports in response to the Executive Order on the depository system covering banks and other savings institutions. On October 6, 2017, the Treasury released a second report outlining ways to streamline and reform the U.S. regulatory system for capital markets, followed by a third report, on October 26, 2017, examining the current regulatory framework for the asset management and insurance industries. Subsequent reports are expected to address: retail and institutional investment products and vehicles; as well as non-bank financial institutions, financial technology, and financial innovation.

              On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, which increased from $50 billion to $250 billion the asset threshold for designation of "systemically important financial institutions" or "SIFIs" subject to enhanced prudential standards set by the Federal Reserve, staggering application of this change based on the size and risk of the covered bank holding company. On May 30th, the Federal Reserve voted to consider changes to the Volcker Rule that would loosen compliance requirements for all banks. On July 17, 2018, the House of Representatives passed the JOBS and Investor Confidence Act, which includes 32 pieces of legislation intended to help small businesses, entrepreneurs and investors by reforming capital markets. The proposed legislation includes provisions to expand the definition of "accredited investors," extend on-ramp exemptions for emerging growth companies (EGCs) and ease securities regulations on initial public offerings. The legislation was forwarded to the Senate for consideration, where it may be approved, amended or set aside with no further action. At this time it is not possible to determine the potential impact of these new laws and proposals on us.

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              On March 23, 2018, the SBCAA was signed into law. The SBCAA, among other things, modifies the applicable provisions of the Investment Company Act to reduce the required asset coverage ratio applicable to BDCs from 200% to 150% subject to certain approval, time and disclosure requirements (including either stockholder approval or approval of a "required majority" of its board of directors). On June 21, 2018, our board of directors, including a "required majority" of our board of directors, approved the application of the modified asset coverage requirement set forth in Section 61(a)(2) of the Investment Company Act, as amended by the SBCAA. As a result, effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%, and the risks associated with an investment in us may increase.

Changes to United States tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.

              There has been ongoing discussion and commentary regarding potential significant changes to United States trade policies, treaties and tariffs. The current administration, along with Congress, has created significant uncertainty about the future relationship between the United States and other countries with respect to the trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our portfolio companies' access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.

Uncertainty relating to the LIBOR calculation process may adversely affect the value of our portfolio of the LIBOR-indexed, floating-rate debt securities or the cost of our borrowings.

              Concerns have been publicized that some of the member banks surveyed by the British Bankers' Association ("BBA") in connection with the calculation of LIBOR across a range of maturities and currencies may have been under-reporting or otherwise manipulating the inter-bank lending rate applicable to them in order to profit on their derivatives positions or to avoid an appearance of capital insufficiency or adverse reputational or other consequences that may have resulted from reporting inter-bank lending rates higher than those they actually submitted. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to alleged manipulation of LIBOR, and investigations by regulators and governmental authorities in various jurisdictions are ongoing.

              On July 27, 2017, the United Kingdom's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that time whether or not LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities. The future of LIBOR at this time is uncertain. Potential changes, or uncertainty related to such potential changes, may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities, or the cost of our borrowings. In addition, changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based securities, including the value of our portfolio of LIBOR-indexed, floating-rate debt securities, or the cost of our borrowings. Additionally, if LIBOR ceases to exist, we may need to renegotiate the credit agreements extending beyond 2021 with our portfolio

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companies that utilize LIBOR as a factor in determining the interest rate and certain of our existing credit facilities to replace LIBOR with the new standard that is established.

Our investment adviser's liability is limited under the investment advisory and management agreement, and we are required to indemnify our investment adviser against certain liabilities, which may lead our investment adviser to act in a riskier manner on our behalf than it would when acting for its own account.

              Our investment adviser has not assumed any responsibility to us other than to render the services described in the investment advisory and management agreement, and it will not be responsible for any action of our board of directors in declining to follow our investment adviser's advice or recommendations. Pursuant to the investment advisory and management agreement, our investment adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other persons or entities affiliated with it will not be liable to us for their acts under the investment advisory and management agreement, absent willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. We have agreed to indemnify, defend and protect our investment adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other persons or entities affiliated with it with respect to all damages, liabilities, costs and expenses arising out of or otherwise based upon the performance of any of our investment adviser's duties or obligations under the investment advisory and management agreement or otherwise as an investment adviser for us, and not arising out of willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties under the investment advisory and management agreement. These protections may lead our investment adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account. See "Risk Factors—Risks Relating to Our Investments—Our investment adviser's fee structure may induce it to make certain investments on our behalf, including speculative investments."

We may be obligated to pay our investment adviser certain fees even if we incur a loss.

              Our investment adviser is entitled to income based fees for each fiscal quarter in an amount equal to a percentage of the excess of our pre-incentive fee net investment income for that quarter (before deducting any income based fee and capital gains incentive fees and certain other items) above a threshold return for that quarter. Our pre-incentive fee net investment income for income based fee purposes excludes realized and unrealized capital losses or depreciation and income taxes related to realized gains that we may incur in the fiscal quarter, even if such capital losses or depreciation and income taxes related to realized gains result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay our investment adviser income based fees for a fiscal quarter even if there is a decline in the value of our portfolio or the net asset value of our common stock or we incur a net loss for that quarter.

              Under the investment advisory and management agreement, we will defer cash payment of any income based fee and the capital gains incentive fee otherwise earned by our investment adviser if, during the most recent four full calendar quarter periods ending on or prior to the date such payment is to be made, the sum of (a) our aggregate distributions to our stockholders and (b) our change in 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) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations will be adjusted for any share issuances or repurchases. Any such deferred fees will be carried over for payment in subsequent calculation periods to the extent such payment can then be made under the investment advisory and management agreement.

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              If a portfolio company defaults on a loan that is structured to provide interest, it is possible that accrued and unpaid interest previously used in the calculation of income based fees will become uncollectible. Our investment adviser is not under any obligation to reimburse us for any part of income based fees it received that was based on accrued income that we never receive.

RISKS RELATING TO OUR INVESTMENTS

Declines in market prices and liquidity in the corporate debt markets can result in significant net unrealized depreciation of our portfolio, which in turn would reduce our net asset value.

              As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by or under the direction of our board of directors. We may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to similar publicly traded securities, changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate our valuation. While most of our investments are not publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can also adversely affect our investment valuations. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. The effect of all of these factors on our portfolio can reduce our net asset value (and, as a result our asset coverage calculation) by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer unrealized losses, which could have a material adverse effect on our business, financial condition or results of operations.

Economic recessions or downturns could impair our portfolio companies and harm our operating results.

              Many of our portfolio companies may be susceptible to economic downturns or recessions and may be unable to repay our loans during these periods. Therefore, during these periods our non-performing assets may increase and the value of our portfolio may decrease if we are required to write down the values of our investments. Adverse economic conditions may also decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing investments and harm our operating results. We experienced to some extent such effects as a result of the economic downturn that occurred from 2008 through 2009 and may experience such effects again in any future downturn or recession.

              A portfolio company's failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its assets representing collateral for its obligations, which could trigger cross defaults under other agreements and jeopardize our portfolio company's ability to meet its obligations under the debt that we hold and the value of any equity securities we own. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company.

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Investments in privately held middle-market companies involve significant risks.

              We primarily invest in privately held U.S. middle-market companies. Investments in privately held middle-market companies involve a number of significant risks, including the following:

Our debt investments may be risky and we could lose all or part of our investment.

              The debt that we invest in is typically not initially rated by any rating agency, but we believe that if such investments were rated, they would be below investment grade (rated lower than "Baa3" by Moody's Investors Service, lower than "BBB–" by Fitch Ratings or lower than "BBB–" by Standard & Poor's Ratings Services), which under the guidelines established by these entities is an indication of having predominantly speculative characteristics with respect to the issuer's capacity to pay interest and repay principal. Bonds that are rated below investment grade are sometimes referred to as "high yield bonds" or "junk bonds." Therefore, our investments may result in an above average amount of risk and volatility or loss of principal. While the debt we invest in is often secured, such security does not guarantee that we will receive principal and interest payments according to the terms of the loan, or that the value of any collateral will be sufficient to allow us to recover all or a portion of the outstanding amount of the loan should we be forced to enforce our remedies.

              We also may invest in assets other than first and second lien and mezzanine debt investments, including high-yield securities, U.S. government securities, credit derivatives and other structured securities and certain direct equity investments. These investments entail additional risks that could adversely affect our investment returns.

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Investments in equity securities, many of which are illiquid with no readily available market, involve a substantial degree of risk.

              We may purchase common and other equity securities. Although common stock has historically generated higher average total returns than fixed income securities over the long-term, common stock also has experienced significantly more volatility in those returns. The equity securities we acquire may fail to appreciate and may decline in value or become worthless and our ability to recover our investment will depend on the underlying portfolio company's success. Investments in equity securities involve a number of significant risks, including:

              There are special risks associated with investing in preferred securities, including:

              Additionally, when we invest in first lien senior secured loans (including unitranche loans), second lien senior secured loans or mezzanine debt, we may acquire warrants or other equity securities as well. Our goal is ultimately to dispose of such equity interests and realize gains upon our disposition of such interests. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

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              We may invest, to the extent permitted by law, in the equity securities of investment funds that are operating pursuant to certain exceptions to the Investment Company Act and in advisers to similar investment funds and, to the extent we so invest, will bear our ratable share of any such company's expenses, including management and performance fees. We will also remain obligated to pay the base management fee, income based fee and capital gains incentive fee to our investment adviser with respect to the assets invested in the securities and instruments of such companies. With respect to each of these investments, each of our common stockholders will bear his or her share of the base management fee, income based fee and capital gains incentive fee due to our investment adviser as well as indirectly bearing the management and performance fees and other expenses of any such investment funds or advisers.

There may be circumstances in which our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.

              If one of our portfolio companies were to go bankrupt, even though we may have structured our interest as senior debt, depending on the facts and circumstances, a bankruptcy court might recharacterize our debt holding as an equity investment and subordinate all or a portion of our claim to that of other creditors. In addition, lenders can be subject to lender liability claims for actions taken by them where they become too involved in the borrower's business or exercise control over the borrower. For example, we could become subject to a lender's liability claim, if, among other things, we actually render significant managerial assistance.

Our portfolio companies may incur debt or issue equity securities that rank equally with, or senior to, our investments in such companies.

              Our portfolio companies may have, or may be permitted to incur, other debt, or issue other equity securities, that rank equally with, or senior to, our investments. By their terms, such instruments may provide that the holders are entitled to receive payment of dividends, interest or principal on or before the dates on which we are entitled to receive payments in respect of our investments. These debt instruments would usually prohibit the portfolio companies from paying interest on or repaying our investments in the event and during the continuance of a default under such debt. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of securities ranking senior to our investment in that portfolio company typically are entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying such holders, the portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of securities ranking equally with our investments, we would have to share on an equal basis any distributions with other security holders in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

              The rights we may have with respect to the collateral securing any junior priority loans we make to our portfolio companies may also be limited pursuant to the terms of one or more intercreditor agreements (including agreements governing "first out" and "last out" structures) that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that senior obligations are outstanding, we may forfeit certain rights with respect to the collateral to the holders of the senior obligations. These rights may include the right to commence enforcement proceedings against the collateral, the right to control the conduct of such enforcement proceedings, the right to approve amendments to collateral documents, the right to release liens on the collateral and the right to waive past defaults under collateral documents. We may not have the ability to control or direct such actions, even if as a result our rights as junior lenders are adversely affected.

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When we are a debt or minority equity investor in a portfolio company, we are often not in a position to exert influence on the entity, and other equity holders and management of the company may make decisions that could decrease the value of our investment in such portfolio company.

              When we make debt or minority equity investments, we are subject to the risk that a portfolio company may make business decisions with which we disagree and the other equity holders and management of such company may take risks or otherwise act in ways that do not serve our interests. As a result, a portfolio company may make decisions that could decrease the value of our investment.

Our portfolio companies may be highly leveraged.

              Some of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies' ability to finance their future operations and capital needs. As a result, these companies' flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company's income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

Our investment adviser's fee structure may induce it to make certain investments on our behalf, including speculative investments.

              The fees payable by us to our investment adviser may create an incentive for our investment adviser to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The way in which income based fees payable to our investment adviser are determined, which are calculated as a percentage of the return on invested capital, may encourage our investment adviser to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor the holders of our common stock and the holders of securities convertible into our common stock. In addition, our investment adviser will receive the capital gains incentive fee based, in part, upon net capital gains realized on our investments. Unlike income based fees, there is no hurdle rate applicable to the capital gains incentive fee. As a result, our investment adviser may have a tendency to invest more in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

              The income based fees will be computed and paid on income that has been accrued but not yet received in cash, including as a result of investments with a deferred interest feature such as debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously used in the calculation of the income based fee will become uncollectible. Our investment adviser is not under any obligation to reimburse us for any part of the fees it received that were based on such accrued interest that we never actually received.

              Because of the structure of the income based fees, it is possible that we may have to pay income based fees in a quarter during which we incur a loss. For example, if we receive pre-incentive fee net investment income in excess of the hurdle rate for a quarter, we will pay the applicable income based fees even if we have incurred a loss in that quarter due to realized and/or unrealized capital losses. In addition, if market interest rates rise, our investment adviser may be able to invest our funds in debt instruments that provide for a higher return, which would increase our pre-incentive fee net investment income and make it easier for our investment adviser to surpass the fixed hurdle rate and receive income based fees.

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Our investments in foreign companies may involve significant risks in addition to the risks inherent in U.S. investments.

              Our investment strategy contemplates potential investments in foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes (potentially at confiscatory levels), less liquid markets, less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.

              Although we expect most of our investments will be U.S. dollar denominated, our investments that are denominated in a foreign currency will be subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us.

We may expose ourselves to risks if we engage in hedging transactions.

              We have and may in the future enter into hedging transactions, which may expose us to risks associated with such transactions. We may utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates. Use of these hedging instruments may include counter-party credit risk.

              Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price.

              The success of our hedging transactions will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to (or be able to) establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations. See also "Risk Factors—Risks Relating to Our Business—We are exposed to risks associated with changes in interest rates."

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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 first and second lien senior secured loans and mezzanine debt.

              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.

RISKS RELATING TO OFFERINGS PURSUANT TO THIS PROSPECTUS

Our shares of common stock have traded at a discount from net asset value and may do so again, which could limit our ability to raise additional equity capital.

              Shares of closed-end investment companies frequently trade at a market price that is less than the net asset value that is attributable to those shares. This characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per share may decline. It is not possible to accurately predict whether any shares of our common stock will trade at, above, or below net asset value. In the recent past, the stocks of BDCs as an industry, including at times shares of our common stock, have traded below net asset value and during much of 2009 traded at near historic lows as a result of concerns over liquidity, leverage restrictions and distribution requirements. See "Risk Factors—Risks Relating to Our Business—The capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on our business and operations." When our common stock is trading below its net asset value per share, we will generally not be able to issue additional shares of our common stock at its market price without first obtaining approval for such issuance from our stockholders and our independent directors. Pursuant to approval granted at a special meeting of stockholders held on May 14, 2018, we currently are permitted to sell or otherwise issue shares of our common stock at a price below net asset value, subject to certain limitations and determinations that must be made by our board of directors. Such stockholder approval expires on May 14, 2019.

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.

              We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. If we declare a dividend and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash dividend payments.

              In addition, due to the asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions. Certain of the Facilities may also limit our ability to declare dividends if we default under certain provisions. Further, if we invest a greater amount of assets in non-income producing securities, it could reduce the amount available for distribution and may also inhibit our ability to make required interest payments to holders of our debt, which may cause a default under the

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terms of our debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements. See "Price Range of Common Stock and Distributions."

Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse effect on the price of our common stock.

              The Maryland General Corporation Law, our charter and our bylaws contain provisions that may discourage, delay or make more difficult a change in control of Ares Capital or the removal of our directors. We are subject to the Maryland Business Combination Act (the "Business Combination Act"), subject to any applicable requirements of the Investment Company Act. Our board of directors has adopted a resolution exempting from the Business Combination Act any business combination between us and any other person, subject to prior approval of such business combination by our board, including approval by a majority of our disinterested directors. If the resolution exempting business combinations is repealed or our board or disinterested directors do not approve a business combination, the Business Combination Act may discourage third parties from trying to acquire control of us and may increase the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act (the "Control Share Acquisition Act") acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Acquisition Act, subject to any applicable requirements of the Investment Company Act, the Control Share Acquisition Act also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer.

              We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our board of directors into three classes serving staggered three-year terms, and provisions of our charter authorizing our board of directors to classify or reclassify shares of our stock into one or more classes or series, to cause the issuance of additional shares of our stock, and to amend our charter from time to time, without stockholder approval, to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may discourage, delay, defer, make more difficult or prevent a transaction or a change in control that might otherwise be in your best interest.

Investing in our common stock may involve an above average degree of risk.

              The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive and, therefore, an investment in our securities may not be suitable for someone with lower risk tolerance.

The market price of our common stock may fluctuate significantly.

              The capital and credit markets have experienced periods of extreme volatility and disruption over the past several years. The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:

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              In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been brought against that company. If our stock price fluctuates significantly, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management's attention and resources from our business.

We may in the future determine to issue preferred stock, which could adversely affect the market value of our common stock.

              The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive. In addition, the dividends on any preferred stock we issue must be cumulative. Payment of dividends and repayment of the liquidation preference of preferred stock must take preference over any dividends or other payments to our common stockholders, and holders of preferred stock are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference (other than convertible preferred stock that converts into common stock). In addition, under the Investment Company Act, preferred stock constitutes a "senior security" for purposes of the asset coverage test.

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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.

              At a special meeting of stockholders held on May 14, 2018, subject to certain determinations required to be made by our board of directors, our stockholders approved our ability to sell or otherwise issue shares of our common stock, in an amount not exceeding 25% of our then outstanding common stock, at a price below the then current net asset value per share during a period that began on May 14, 2018 and expires on May 14, 2019.

              In addition, at our 2009 annual stockholders meeting, our stockholders approved a proposal authorizing us to sell or otherwise issue warrants or securities to subscribe for or convertible into shares of our common stock subject to certain limitations (including, without limitation, that the number of shares issuable does not exceed 25% of our then outstanding common stock and that the exercise or conversion price thereof is not, at the date of issuance, less than the greater of the market value per share and the net asset value per share of our common stock). The authorization granted to sell or issue warrants or securities to subscribe for or convertible into shares of our common stock has no expiration.

              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 of directors 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 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 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, regardless of whether such offering is above or below the then current net asset value per share, their voting power will be diluted. For additional information and hypothetical examples of these risks, see "Sales of Common Stock Below Net Asset Value" and the prospectus supplement pursuant to which such sale is made.

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

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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—Risks Relating to Offerings Pursuant to this Prospectus—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."

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.

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

              All dividends declared in cash payable to stockholders that are participants in our dividend reinvestment plan are automatically reinvested in shares of our common stock. As a result, our stockholders that opt out of our dividend reinvestment plan will experience dilution in their ownership percentage of our common stock over time.

Our stockholders may experience dilution upon the conversion of the Convertible Unsecured Notes.

              The 2019 Convertible Notes (as defined below) are convertible into shares of our common stock. The 2022 Convertible Notes (as defined below) are convertible into shares of our common stock beginning on August 1, 2021 or, under certain circumstances, earlier. To the extent the 2019 Convertible Notes are converted, the 2019 Convertible Notes will settle with a combination of cash and shares of our common stock. Upon conversion of the 2022 Convertible Unsecured Notes, we have the choice to pay or deliver, as the case may be, at our election, cash, shares of our common stock or a combination of cash and shares of our common stock. As of June 30, 2018, the conversion price of the 2019 Convertible Notes was effectively $19.99 per share and the conversion price of the 2022 Convertible Notes was effectively $19.39 per share, in each case taking into account certain de minimis adjustments that will be made on the conversion date and subject to further adjustment in certain circumstances. If we elect to deliver shares of common stock upon a conversion at the time our tangible book value per share exceeds the conversion price in effect at such time, our stockholders may incur dilution. In addition, our stockholders will experience dilution in their ownership percentage of common stock upon our issuance of common stock in connection with the conversion of the Convertible Unsecured Notes and any dividends paid on our common stock will also be paid on shares issued in connection with such conversion after such issuance.

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Our stockholders may receive shares of our common stock as dividends, which could result in adverse cash flow consequences to them.

              In order to satisfy the Annual Distribution Requirement applicable to RICs, we have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash (which portion could be as low as 20%) and certain requirements are met, the entire distribution would be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder would be taxed on 100% of the fair market value of the shares received as part of the dividend on the date a stockholder received it in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock.

Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.

              Sales of substantial amounts of our common stock, or the availability of such common stock for sale (including as a result of the conversion of our Convertible Unsecured Notes into common stock), could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

The trading market or market value of our publicly issued debt securities may fluctuate.

              Our publicly issued debt securities may or may not have an established trading market. We cannot assure you that a trading market for our publicly issued debt securities will ever develop or be maintained if developed. In addition to our creditworthiness, many factors may materially adversely affect the trading market for, and market value of, our publicly issued debt securities. These factors include, but are not limited to, the following:

              You should also be aware that there may be a limited number of buyers if and when you decide to sell your debt securities. This too may materially adversely affect the market value of the debt securities or the trading market for the debt securities.

Terms relating to redemption may materially adversely affect your return on any debt securities that we may issue.

              If your debt securities are redeemable at our option, we may choose to redeem your debt securities at times when prevailing interest rates are lower than the interest rate paid on your debt securities. In addition, if your debt securities are subject to mandatory redemption, we may be required to redeem your debt securities also at times when prevailing interest rates are lower than the interest rate paid on your debt securities. In this circumstance, you may not be able to reinvest the redemption

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proceeds in a comparable security at an effective interest rate as high as your debt securities being redeemed.

Our credit ratings may not reflect all risks of an investment in our debt securities.

              Our credit ratings are an assessment by third parties of our ability to pay our obligations. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of our debt securities. Our credit ratings, however, may not reflect the potential impact of risks related to market conditions generally or other factors discussed above on the market value of or trading market for the publicly issued debt securities.

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FORWARD-LOOKING STATEMENTS

              Some of the statements in this prospectus constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this prospectus involve a number of risks and uncertainties, including statements concerning:

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              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.

              We have based the forward-looking statements included in this prospectus on information available to us on the date of this prospectus, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.

              The forward-looking statements in this prospectus are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

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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, which may include indebtedness (approximately $4.6 billion aggregate principal amount outstanding as of June 30, 2018) under (a) the Revolving Credit Facility ($414 million outstanding as of June 30, 2018), (b) the Revolving Funding Facility (no amounts outstanding as of June 30, 2018), (c) the SMBC Funding Facility (no amounts outstanding as of June 30, 2018), (d) the 2019 Convertible Notes (approximately $300 million aggregate principal amount outstanding as of June 30, 2018), (e) the 2022 Convertible Notes (approximately $388 million aggregate principal amount outstanding as of June 30, 2018), (f) the 2018 Notes (as defined below) (approximately $750 million aggregate principal amount outstanding as of June 30, 2018), (g) the 2020 Notes (as defined below) (approximately $600 million aggregate principal amount outstanding as of June 30, 2018), (h) the January 2022 Notes (as defined below) (approximately $600 million aggregate principal amount outstanding as of June 30, 2018), (i) the 2023 Notes (as defined below) (approximately $750 million aggregate principal amount outstanding as of June 30, 2018), (j) the 2025 Notes (as defined below) (approximately $600 million aggregate principal amount outstanding as of June 30, 2018) and (k) the 2047 Notes (as defined below) (approximately $230 million aggregate principal amount outstanding as of June 30, 2018).

              The interest charged on the indebtedness incurred under the Revolving Credit Facility is based on LIBOR (one-, two-, three- or six-month) plus an applicable spread of either 1.75% or 1.875% or an "alternate base rate" (as defined in the agreements governing the Revolving Credit Facility) plus an applicable spread of either 0.75% or 0.875%, in each case, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of June 30, 2018, the one, two, three and six month LIBOR was 2.09%, 2.17%, 2.34% and 2.50%, respectively. As of June 30, 2018, for $1.6 billion of the total Revolving Credit Facility capacity, the expiration date is March 30, 2023, for $50 million of the Revolving Credit Facility capacity, the expiration date is January 4, 2022 and for the remaining $45 million, the expiration date is May 4, 2020. The interest charged on the indebtedness incurred under the Revolving Funding Facility is based on LIBOR plus 2.15% per annum or a "base rate" (as defined in the agreements governing the Revolving Funding Facility) of 1.15% per annum. The Revolving Funding Facility is scheduled to expire on January 3, 2022 (subject to extension exercisable upon mutual consent). The interest rate charged on the indebtedness incurred under the SMBC Funding Facility is based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over a "base rate" (as defined in the agreements governing the SMBC Funding Facility), in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. The SMBC Funding Facility is scheduled to expire on September 14, 2023 (subject to two one-year extension options exercisable upon mutual consent).

              The interest charged on the Convertible Unsecured Notes and the Unsecured Notes is as follows: (a) 4.375% in the case of the 2019 Convertible Notes, (b) 3.75% in the case of the 2022 Convertible Notes, (c) 4.875% in the case of the 2018 Notes, (d) 3.875% in the case of the 2020 Notes, (e) 3.625% in the case of the January 2022 Notes, (f) 3.500% in the case of the 2023 Notes, (g) 4.250% in the case of the 2025 Notes and (h) 6.875% in the case of the 2047 Notes. The 2019 Convertible Notes and the 2022 Convertible Notes mature on January 15, 2019 and February 1, 2022, respectively. The 2018 Notes, the 2020 Notes, the January 2022 Notes, the 2023 Notes, the 2025 Notes and the 2047 Notes mature on November 30, 2018, January 15, 2020, January 19, 2022, February 10, 2023, March 1, 2025 and April 15, 2047, respectively. The supplement to this prospectus relating to an offering may more fully identify the use of the proceeds from such offering.

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              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.

              While our primary focus is to generate current income and capital appreciation through investments in first and second lien senior secured loans and mezzanine debt and, to a lesser extent, equity securities of eligible portfolio companies, we also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. See "Regulation." Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company 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" 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 Select Market under the symbol "ARCC." Our common stock has historically traded at prices both above and 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 Offerings Pursuant to this Prospectus—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."

              The following table sets forth, for the first three quarters of the year ended December 31, 2018 and each fiscal quarter for the fiscal years ended December 31, 2017 and 2016, 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 distributions declared by us. On August 6, 2018, the last reported closing sales price of our common stock on The NASDAQ Global Select Market was $17.38 per share, which represented a premium of approximately 1.9% to the net asset value per share reported by us as of June 30, 2018.

 
   
   
   
  High
Sales Price
Premium
(Discount)
to Net Asset
Value(2)
  Low
Sales Price
Premium
(Discount)
to Net Asset
Value(2)
   
 
 
   
  Price Range   Cash
Dividend
Per
Share(3)
 
 
  Net
Asset
Value(1)
 
 
  High   Low  

Year ended December 31, 2016

                                     

First Quarter

  $ 16.50   $ 14.84   $ 12.54     (10.06 )%   (24.00 )% $ 0.38  

Second Quarter

  $ 16.62   $ 15.38   $ 13.87     (7.46 )%   (16.55 )% $ 0.38  

Third Quarter

  $ 16.59   $ 16.40   $ 13.96     (1.15 )%   (15.85 )% $ 0.38  

Fourth Quarter

  $ 16.45   $ 16.86   $ 15.16     2.49 %   (7.84 )% $ 0.38  

Year ending December 31, 2017

                                     

First Quarter

  $ 16.50   $ 17.81   $ 16.42     7.94 %   (0.48 )% $ 0.38  

Second Quarter

  $ 16.54   $ 17.64   $ 16.18     6.65 %   (2.18 )% $ 0.38  

Third Quarter

  $ 16.49   $ 16.52   $ 15.67     (0.18 )%   (5.07 )% $ 0.38  

Fourth Quarter

  $ 16.65   $ 16.61   $ 15.69     (0.24 )%   (5.77 )% $ 0.38  

Year ending December 31, 2018

                                     

First Quarter

  $ 16.84   $ 16.28   $ 15.25     (3.33 )%   (9.44 )% $ 0.38  

Second Quarter

  $ 17.05   $ 17.09   $ 15.90     0.23 %   (6.75 )% $ 0.38  

Third Quarter (through August 6, 2018)

    *   $ 17.38   $ 16.45     *     *   $ 0.39  

(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 distribution declared in the relevant quarter.

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

              We currently intend to distribute dividends or make distributions to our stockholders on a quarterly basis out of assets legally available for distribution. We may also distribute 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 of directors.

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              The following table summarizes our dividends or distributions declared and payable for the fiscal years ended December 31, 2016, 2017 and 2018:

Date Declared
  Record Date   Payment Date   Amount  

February 24, 2016

  March 15, 2016   March 31, 2016   $ 0.38  

May 4, 2016

  June 15, 2016   June 30, 2016   $ 0.38  

August 3, 2016

  September 15, 2016   September 30, 2016   $ 0.38  

November 2, 2016

  December 15, 2016   December 30, 2016   $ 0.38  

Total declared and payable for 2016

          $ 1.52  

February 22, 2017

  March 15, 2017   March 31, 2017   $ 0.38  

May 3, 2017

  June 15, 2017   June 30, 2017   $ 0.38  

August 2, 2017

  September 15, 2017   September 29, 2017   $ 0.38  

November 2, 2017

  December 15, 2017   December 29, 2017   $ 0.38  

Total declared and payable for 2017

          $ 1.52  

February 13, 2018

  March 15, 2018   March 30, 2018   $ 0.38  

May 2, 2018

  June 15, 2018   June 29, 2018   $ 0.38  

August 1, 2018

  September 14, 2018   September 28, 2018   $ 0.39  

Total declared and payable for 2018

          $ 1.15  

              Of the $1.52 per share in dividends declared and payable for the year ended December 31, 2017, $1.45 per share was comprised of ordinary income and $0.07 was comprised of long-term capital gains. Of the $1.52 per share in dividends declared and payable for the year ended December 31, 2016, $1.26 per share was comprised of ordinary income and $0.26 was comprised of long-term capital gains.

              To maintain our RIC status under the Code, we must timely distribute an amount equal to at least 90% of our investment company taxable income (as defined by the Code, which generally includes net ordinary income and net short term capital gains) to our stockholders. In addition, we generally will be required to pay an excise tax equal to 4% on certain undistributed taxable income unless we distribute in a timely manner an amount at least equal to the sum of (i) 98% of our ordinary income recognized during a calendar year, (ii) 98.2% of our capital gain net income, as defined by the Code, recognized for the one year period ending October 31st in that calendar year, and (iii) any income recognized, but not distributed, in preceding years (to the extent that income tax was not imposed on such amounts). The taxable income on which we pay excise tax is generally distributed to our stockholders in the next tax year. Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income for distribution in the following year, and pay any applicable excise tax. For the six months ended June 30, 2018, we recorded an excise tax expense of $7 million. For the years ended December 31, 2017 and 2016, we recorded a net excise tax expense of $12 million and $12 million, respectively. The net expense for the years ended December 31, 2017 and 2016 each included a net reduction in expense related to the recording of a requested refund resulting from the overpayment of the prior year's excise tax of $1 million and $1 million, respectively. 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."

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RATIOS OF EARNINGS TO FIXED CHARGES

              For the six months ended June 30, 2018 and years ended December 31, 2017, 2016, 2015, 2014 and 2013, the ratios of earnings to fixed charges of the Company, computed as set forth below, were as follows:

 
  For the Six
Months Ended
June 30,
2018
  For the
Year Ended
December 31,
2017
  For the
Year Ended
December 31,
2016
  For the
Year Ended
December 31,
2015
  For the
Year Ended
December 31,
2014
  For the
Year Ended
December 31,
2013
 

Earnings to Fixed Charges(1)

    5.2     4.0 (2)   3.7     2.7 (3)   3.8 (4)   3.9  

              For purposes of computing the ratios of earnings to fixed charges, earnings represent net increase in stockholders' equity resulting from operations plus (or minus) income tax expense (benefit) including excise tax expense plus fixed charges. Fixed charges include interest and credit facility fees expense and amortization of debt issuance costs.

(1)
Earnings include net realized and unrealized gains or losses and the capital gains incentive fee expense accrued in accordance with GAAP. Net realized and unrealized gains or losses and the capital gains incentive fee expense accrued in accordance with GAAP can vary substantially from period to period.

      Excluding the net realized and unrealized gains or losses and the capital gains incentive fee expense accrued in accordance with GAAP, the earnings to fixed charges ratio would be 3.9 for the six months ended June 30, 2018, 3.5 for the year ended December 31, 2017, 3.7 for the year ended December 31, 2016, 3.2 for the year ended December 31, 2015, 3.2 for the year ended December 31, 2014 and 3.7 for the year ended December 31, 2013.

(2)
Earnings for the year ended December 31, 2017 included a net realized loss on the extinguishment of debt of $4.2 million.

(3)
Earnings for the year ended December 31, 2015 included a net realized loss on the extinguishment of debt of $10.4 million.

(4)
Earnings for the year ended December 31, 2014 included a net realized loss on the extinguishment of debt of $0.1 million.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

              The information contained in this section should be read in conjunction with the "Selected Condensed Consolidated Financial Data of Ares Capital" and our financial statements and notes thereto appearing elsewhere in this prospectus or the accompanying prospectus supplement.

OVERVIEW

              We are a specialty finance company that is a closed-end, non-diversified management investment company incorporated in Maryland. We have elected to be regulated as a BDC under the Investment Company Act.

              We are externally managed by Ares Capital Management, a subsidiary of Ares Management, a publicly traded, leading global alternative asset manager, pursuant to our investment advisory and management agreement. Our administrator provides certain administrative and other services necessary for us to operate.

              Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in first lien senior secured loans (including unitranche loans), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component like warrants.

              To a lesser extent, we also make preferred and/or common equity investments, which have generally been non-control equity investments, of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments.

              Since our IPO on October 8, 2004 through June 30, 2018, our exited investments resulted in an asset level realized gross internal rate of return to us of approximately 14% (based on original cash invested, net of syndications, of approximately $23.1 billion and total proceeds from such exited investments of approximately $29.3 billion). Internal rate of return is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. Internal rate of return is gross of expenses related to investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized. Approximately 63% of these exited investments resulted in an asset level realized gross internal rate of return to us of 10% or greater.

              Additionally, since our IPO on October 8, 2004 through June 30, 2018, our realized gains have exceeded our realized losses by approximately $629 million (excluding a one-time gain on the acquisition of Allied Capital Corporation ("Allied Capital") and realized gains/losses from the extinguishment of debt and other assets). For this same time period, our average annualized net realized gain rate was approximately 1.0% (excluding a one-time gain on the acquisition of Allied Capital and realized gains/losses from the extinguishment of debt and other assets). Net realized gain/loss rates for a particular period are the amount of net realized gains/losses during such period divided by the average quarterly investments at amortized cost in such period.

              Information included herein regarding internal rates of return, realized gains and losses and annualized net realized gain rates are historical results relating to our past performance and are not necessarily indicative of future results, the achievement of which cannot be assured.

              As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in "qualifying assets," including securities and

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indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. See "Regulation." Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.

              We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders generally at least 90% of our investment company taxable income, as defined by the Code, for each year. Pursuant to this election, we generally will not have to pay U.S. federal corporate-level taxes on any income that we distribute to our stockholders provided that we satisfy those requirements.

American Capital Acquisition

              On May 23, 2016, we entered into the Agreement and Plan of Merger, dated May 23, 2016 (the "Merger Agreement") to acquire American Capital, a Delaware corporation, in a cash and stock transaction valued at approximately $4.2 billion. Pursuant to the Merger Agreement, American Capital shareholders received total consideration of approximately $18.06 per share comprised of: (i) $14.41 per share from us consisting of approximately $6.48 per share of cash (including a make-up dividend in the amount of $0.07 per share) and 0.483 shares of our common stock for each American Capital share at a value of $7.93 per American Capital share (based on the closing price per share of our common stock on January 3, 2017), (ii) $2.45 per share of cash from American Capital's sale of American Capital Mortgage Management, LLC, and (iii) approximately $1.20 per share of cash as transaction support provided by Ares Capital Management acting solely on its own behalf. As of January 3, 2017, the transaction was valued at approximately $4.2 billion. The total cash and stock consideration paid by us was $3.3 billion. In connection with the stock consideration, we issued approximately 112 million shares of our common stock to American Capital's then-existing stockholders (including holders of outstanding in-the-money American Capital stock options), thereby resulting in our then-existing stockholders owning approximately 73.7% of the combined company and then-existing American Capital stockholders owning approximately 26.3% of the combined company. As a result of the American Capital Acquisition, Ares Capital acquired $3.6 billion of assets, including $2.5 billion of investments, and assumed $226 million of liabilities.

              In connection with the American Capital Acquisition, Ares Capital Management also agreed to waive, for each of the first 10 calendar quarters beginning with the second quarter of 2017 and ending with the third quarter of 2019, the lesser of (x) $10 million of income based fees and (y) the amount of income based fees for such quarter, in each case, to the extent earned and payable by us in such quarter pursuant to and as calculated under our investment advisory and management agreement. See Notes 3 and 16 to our consolidated financial statements for the year ended December 31, 2017 and Notes 3 and 14 for the three and six months ended June 30, 2018 for additional information regarding the American Capital Acquisition.

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PORTFOLIO AND INVESTMENT ACTIVITY

              Our investment activity for the six months ended June 30, 2018 and 2017 and for the years ended December 31, 2017, 2016 and 2015 is presented below (information presented herein is at amortized cost unless otherwise indicated).

 
  For the Six Months
Ended June 30,
  For the Years Ended
December 31,
 
(dollar amounts in millions)
  2018   2017   2017   2016   2015  

New investment commitments(1)(5)(10):

                               

New portfolio companies

  $ 1,134   $ 909   $ 2,155   $ 2,107   $ 2,483  

Existing portfolio companies

    2,277     1,928     3,734     1,596     1,334  

Total new investment commitments(2)

    3,411     2,837     5,889     3,703     3,817  

Less:

                               

Investment commitments exited(3)

    3,542     2,628     5,593     3,844     3,816  

Net investment commitments

  $ (131 ) $ 209   $ 296   $ (141 ) $ 1  

Principal amount of investments funded(5)(10):

                               

First lien senior secured loans

  $ 1,612   $ 1,773   $ 3,442   $ 1,965   $ 2,071  

Second lien senior secured loans

    626     663     1,491     987     1,232  

Subordinated certificates of the SDLP(4)

    155     125     222     272      

Subordinated certificates of the SSLP

                3     229  

Senior subordinated loans

    366     57     273     173     257  

Preferred equity securities

    6     113     120     37     89  

Other equity securities

    229     80     116     53     27  

Total

  $ 2,994   $ 2,811   $ 5,664   $ 3,490   $ 3,905  

Principal amount of investments sold or repaid(6):

                               

First lien senior secured loans

  $ 2,144   $ 1,481   $ 2,394   $ 2,522   $ 2,948  

Second lien senior secured loans

    927     626     1,536     903     195  

Subordinated certificates of the SDLP(4)

    53     2     4     2      

Subordinated certificates of the SSLP

            474         330  

Senior subordinated loans

    323     165     269     189     132  

Collateralized loan obligations

    21     63     150          

Preferred equity securities

    21     77     275     4     11  

Other equity securities

    19     296     476     35     33  

Commercial real estate

                    2  

Total

  $ 3,508   $ 2,710   $ 5,578   $ 3,655   $ 3,651  

Principal amount of investments acquired as part of the American Capital Acquisition on January 3, 2017:

                               

First lien senior secured loans

      $ 550   $ 550          

Second lien senior secured loans

        855     855          

Senior subordinated loans

        244     244          

Collateralized loan obligations

        265     265          

Preferred equity securities

        109     109          

Other equity securities

        520     520          

Total

      $ 2,543   $ 2,543          

Number of new investment commitments(5)(7)(10)

    80     75     155     82     86  

Average new investment commitment amount(5)(10)

  $ 43   $ 38   $ 38   $ 45   $ 44  

Weighted average term for new investment commitments (in months)(5)(8)(10)

    74     75     75     80     65  

Percentage of new investment commitments at floating rates(5)(10)

    90 %   96 %   94 %   91 %   89 %

Percentage of new investment commitments at fixed rates(5)(10)

    3 %   1 %   4 %   6 %   8 %

Weighted average yield of debt and other income producing securities(5)(8):

                               

Funded during the period at amortized cost(10)

    9.5 %   8.7 %   9.0 %   9.3 %   9.0 %

Funded during the period at fair value(9)(10)

    9.5 %   8.6 %   9.0 %   9.2 %   9.0 %

Exited or repaid during the period at amortized cost

    8.9 %   8.8 %   8.9 %   8.5 %   7.9 %

Exited or repaid during the period at fair value(9)

    8.9 %   8.7 %   8.9 %   8.4 %   7.9 %

Weighted average yield of debt and other income producing securities acquired as part of the American Capital Acquisition on January 3, 2017:

                               

Funded during the period at amortized cost

        10.0 %   10.0 %        

Funded during the period at fair value(9)

        10.0 %   10.0 %        

(1)
New investment commitments include new agreements to fund revolving credit facilities or delayed draw loans. See "Off Balance Sheet Arrangements" as well as Note 7 to our consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017, for more information on our commitments to fund revolving credit facilities or delayed draw loans.

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(2)
Includes both funded and unfunded commitments. Of these new investment commitments, we funded $2.7 billion and $2.6 billion for the six months ended June 30, 2018 and 2017, respectively, and $5.1 billion, $3.3 billion and $3.6 billion for the years ended December 31, 2017, 2016 and 2015, respectively.

(3)
Includes both funded and unfunded commitments. For the six months ended June 30, 2018 and 2017, investment commitments exited included exits of unfunded commitments of $180 million and $73 million, respectively. For the years ended December 31, 2017, 2016 and 2015, investment commitments exited included exits of unfunded commitments of $301 million, $341 million and $263 million, respectively.

(4)
See "Senior Direct Lending Program" below and Note 4 to our consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017 for more information on the SDLP.

(5)
In July 2017, in connection with the effective termination of Senior Secured Loan Fund LLC (d/b/a the "Senior Secured Loan Program" or the "SSLP"), we purchased $1.6 billion in aggregate principal amount of first lien senior secured loans outstanding at par plus accrued and unpaid interest and fees from the SSLP (the "SSLP Loan Sale") and assumed the SSLP's remaining unfunded loan commitments totaling $50 million. The loans purchased from the SSLP included loans to 10 different borrowers with a weighted average yield at amortized cost and fair value of 7.1% and 7.1%, respectively. Upon completion of the SSLP Loan Sale, the SSLP made a liquidation distribution to the holders of the subordinated certificates of the SSLP (the "SSLP Certificates"), of which Ares Capital received $1.5 billion. The impact of these transactions is excluded from the information presented in the table. See "Senior Secured Loan Program" below and Note 4 to our consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017 for more information on the SSLP.

(6)
For the six months ended June 30, 2018 and 2017, the principal amount of investments sold or repaid included $415 million and $515 million, respectively, of investments acquired as part of the American Capital Acquisition. For the year ended December 31, 2017, the principal amount of investments sold or repaid included $1.1 billion of investments acquired as part of the American Capital Acquisition.

(7)
Number of new investment commitments represents each commitment to a particular portfolio company or a commitment to multiple companies as part of an individual transaction (e.g., the purchase of a portfolio of investments).

(8)
"Weighted average yield of debt and other income producing securities" is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities, divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value, as applicable.

(9)
Represents fair value for investments in the portfolio as of the most recent prior quarter end, if applicable.

(10)
Excludes investments acquired as part of the American Capital Acquisition on January 3, 2017. See Note 14 to our consolidated financial statements for the three and six months ended June 30, 2018 and Note 16 for the year ended December 31, 2017 for additional information regarding the American Capital Acquisition.

              As of June 30, 2018 and December 31, 2017, our investments consisted of the following:

 
  As of  
 
  June 30, 2018   December 31, 2017  
(in millions)
  Amortized
Cost
  Fair
Value
  Amortized
Cost
  Fair
Value
 

First lien senior secured loans

  $ 4,739   $ 4,626   $ 5,337   $ 5,197  

Second lien senior secured loans

    3,618     3,449     3,885     3,744  

Subordinated certificates of the SDLP(1)

    589     589     487     487  

Senior subordinated loans

    1,059     1,077     978     995  

Collateralized loan obligations

    93     92     115     114  

Preferred equity securities

    496     679     485     532  

Other equity securities

    841     1,015     618     772  

Total

  $ 11,435   $ 11,527   $ 11,905   $ 11,841  

(1)
The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans to 20 and 19 different borrowers as of June 30, 2018 and December 31, 2017, respectively.

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              The weighted average yields at amortized cost and fair value of the following portions of our portfolio as of June 30, 2018 and December 31, 2017 were as follows:

 
  As of  
 
  June 30, 2018   December 31, 2017  
 
  Amortized
Cost
  Fair
Value
  Amortized
Cost
  Fair
Value
 

Debt and other income producing securities(1)

    10.4 %   10.5 %   9.7 %   9.8 %

Total portfolio(2)

    9.1 %   9.0 %   8.7 %   8.7 %

First lien senior secured loans(2)

    8.5 %   8.7 %   7.9 %   8.1 %

Second lien senior secured loans(2)

    10.3 %   10.8 %   9.7 %   10.0 %

Subordinated certificates of the SDLP(2)(3)

    15.0 %   15.0 %   14.5 %   14.5 %

Senior subordinated loans(2)

    13.4 %   13.1 %   13.0 %   12.8 %

Collateralized loan obligations

    9.6 %   9.8 %   9.7 %   9.7 %

Income producing equity securities(2)

    13.3 %   13.3 %   13.0 %   13.0 %

(1)
"Weighted average yield of debt and other income producing securities" is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities, divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value as applicable. The weighted average yield of debt and other income producing securities that were acquired as part of the American Capital Acquisition and held as of June 30, 2018 was 11.7% and 11.5% at amortized cost and fair value, respectively. The weighted average yield of debt and other income producing securities that were acquired as part of the American Capital Acquisition and held as of December 31, 2017 was 10.3% and 10.1% at amortized cost and fair value, respectively.

(2)
"Weighted average yields" are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on the relevant accruing debt and other income producing securities, divided by (b) the total relevant investments at amortized cost or at fair value as applicable. The weighted average yield on total investments that were acquired as part of the American Capital Acquisition and held as of June 30, 2018 was 9.5% and 7.2% at amortized cost and fair value, respectively. The weighted average yield on total investments that were acquired as part of the American Capital Acquisition and held as of December 31, 2017 was 8.7% and 7.8% at amortized cost and fair value, respectively.

(3)
The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans.

              Ares Capital Management, our investment adviser, employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our investment adviser grades the credit risk of all investments on a scale of 1 to 4 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors. Under this system, investments with a grade of 4 involve the least amount of risk to our initial cost basis. The trends and risk factors for this investment since origination or acquisition are generally favorable, which may include the performance of the portfolio company or a potential exit. Investments

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graded 3 involve a level of risk to our initial cost basis that is similar to the risk to our initial cost basis at the time of origination or acquisition. This portfolio company is generally performing as expected and the risk factors to our ability to ultimately recoup the cost of our investment are neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a grade of 3. Investments graded 2 indicate that the risk to our ability to recoup the initial cost basis of such investment has increased materially since origination or acquisition, including as a result of factors such as declining performance and non-compliance with debt covenants; however, payments are generally not more than 120 days past due. An investment grade of 1 indicates that the risk to our ability to recoup the initial cost basis of such investment has substantially increased since origination or acquisition, and the portfolio company likely has materially declining performance. For debt investments with an investment grade of 1, most or all of the debt covenants are out of compliance and payments are substantially delinquent. For investments graded 1, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit. For investments graded 1 or 2, our investment adviser enhances its level of scrutiny over the monitoring of such portfolio company. The grade of a portfolio investment may be reduced or increased over time.

              We assigned a fair value as of January 3, 2017 to each of the portfolio investments acquired in connection with the American Capital Acquisition. The initial cost basis of each investment acquired was equal to the fair value of such investment as of January 3, 2017. Many of these portfolio investments were assigned a fair value reflecting a discount to American Capital's cost basis at the time of American Capital's origination or acquisition. Each investment was initially assessed a grade of 3 (i.e., generally the grade we assign a portfolio company at acquisition), reflecting the relative risk to our initial cost basis of such investments. It is important to note that our grading system does not take into account factors or events in respect of the period from when American Capital originated or acquired such portfolio investments or the status of these portfolio investments in terms of compliance with debt facilities, financial performance and similar factors. Rather, it is only intended to measure risk from the time that we acquired the portfolio investment in connection with the American Capital Acquisition. Accordingly, it is possible that the grades of these portfolio investments may be reduced or increased after January 3, 2017.

              Set forth below is the grade distribution of our portfolio companies as of June 30, 2018 and December 31, 2017:

 
  As of  
 
  June 30, 2018   December 31, 2017  
(dollar amounts in millions)
  Fair Value   %   Number of
Companies
  %   Fair Value   %   Number of
Companies
  %  

Grade 1

  $ 153     1.3 %   20     5.8 % $ 72     0.6 %   16     5.1 %

Grade 2

    416     3.6 %   11     3.2 %   343     2.9 %   14     4.5 %

Grade 3

    9,059     78.6 %   300     86.7 %   10,099     85.3 %   268     85.3 %

Grade 4

    1,899     16.5 %   15     4.3 %   1,327     11.2 %   16     5.1 %

Total

  $ 11,527     100.0 %   346     100.0 % $ 11,841     100.0 %   314     100.0 %

              As of June 30, 2018 and December 31, 2017, the weighted average grade of the investments in our portfolio at fair value was 3.1 and 3.1, respectively.

              As of June 30, 2018, investments on non-accrual status represented 2.7% and 0.8% of the total investments at amortized cost and at fair value, respectively. As of December 31, 2017, investments on non-accrual status represented 3.1% and 1.4% of the total investments at amortized cost and at fair value, respectively.

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Co-Investment Programs

              We have established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle market companies. Varagon was formed in 2013 as a lending platform by American International Group, Inc. and other partners. The joint venture is called the SDLP. In July 2016, we and Varagon and its clients completed the initial funding of the SDLP. The SDLP may generally commit and hold individual loans of up to $300 million. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required).

              We provide capital to the SDLP in the form of the SDLP Certificates, and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. As of June 30, 2018, we and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates.

              As of June 30, 2018 and December 31, 2017, we and Varagon and its clients had agreed to make capital available to the SDLP of $6.4 billion and $2.9 billion, respectively, in the aggregate, of which $1.4 billion and $591 million, respectively, is to be made available from us. This capital will only be committed to the SDLP upon approval of transactions by the investment committee of the SDLP. Below is a summary of the funded capital and unfunded capital commitments of the SDLP.

 
  As of  
 
  June 30, 2018   December 31, 2017  

Total capital funded to the SDLP(1)

  $ 2,928   $ 2,319  

Total capital funded to the SDLP by the Company(1)

  $ 589   $ 487  

Total unfunded capital commitments to the SDLP(2)

  $ 115   $ 92  

Total unfunded capital commitments to the SDLP by the Company(2)

  $ 24   $ 19  

(1)
At principal amount.

(2)
These commitments have been approved by the investment committee of the SDLP and will be funded as the transactions are completed.

              The SDLP Certificates pay a coupon of LIBOR plus 8.0% and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

              The amortized cost and fair value of our SDLP Certificates held by us were $589 million and $589 million, respectively, as of June 30, 2018 and $487 million and $487 million, respectively, as of December 31, 2017. Our yield on our investment in the SDLP at amortized cost and fair value was 15.0% and 15.0%, respectively, as of June 30, 2018 and 14.5% and 14.5%, respectively, as of December 31, 2017. For the three and six months ended June 30, 2018, we earned interest income of $20 million and $39 million, respectively, from our investment in the SDLP Certificates. For the three and six months ended June 30, 2017, we earned interest income of $11 million and $21 million, respectively, from our investment in the SDLP Certificates. We are also entitled to certain fees in connection with the SDLP. For the three and six months ended June 30, 2018, in connection with the SDLP, we earned capital structuring service and other fees totaling $5 million and $8 million, respectively. For the three and six months ended June 30, 2017, in connection with the SDLP, we earned capital structuring service and other fees totaling $5 million and $6 million, respectively.

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              As of June 30, 2018 and December 31, 2017, the portfolio was comprised of all first lien senior secured loans primarily to U.S. middle-market companies and were in industries similar to the companies in our portfolio. As of June 30, 2018 and December 31, 2017, none of the loans were on non-accrual status. Below is a summary of the SDLP's portfolio as of June 30, 2018 and December 31, 2017:

 
  As of  
(dollar amounts in millions)
  June 30,
2018
  December 31,
2017
 

Total first lien senior secured loans(1)

  $ 2,760   $ 2,316  

Weighted average yield on first lien senior secured loans(2)

    8.2 %   7.6 %

Largest loan to a single borrower(1)

  $ 249   $ 200  

Total of five largest loans to borrowers(1)

  $ 1,087   $ 947  

Number of borrowers in the SDLP

    20     19  

Commitments to fund delayed draw loans(3)

  $ 115   $ 92  

(1)
At principal amount.

(2)
Computed as (a) the annual stated interest rate on accruing first lien senior secured loans, divided by (b) total first lien senior secured loans at principal amount.

(3)
As discussed above, these commitments have been approved by the investment committee of the SDLP.

              We and General Electric Capital Corporation and GE Global Sponsor Finance LLC (collectively, "GE") had previously co-invested in first lien senior secured loans of middle market companies through an unconsolidated Delaware limited liability company, the SSLP. The SSLP was capitalized as transactions were completed. All portfolio decisions and generally all other decisions in respect of the SSLP were approved by an investment committee of the SSLP consisting of representatives of ours and GE (with approval from a representative of each required). We provided capital to the SSLP in the form of the SSLP Certificates. GE provided capital to the SSLP in the form of senior notes and SSLP Certificates.

              As of June 30, 2017, our investment in the SSLP Certificates at amortized cost and fair value was $1.9 billion and $1.9 billion, respectively, and our yield on our investment in the SSLP Certificates at amortized cost and fair value was 5.8% and 5.8%, respectively. As of June 30, 2017, the SSLP had $1.2 billion in cash and GE's senior notes outstanding totaled $601 million. In July 2017, the SSLP made its monthly waterfall distribution from this cash, which fully repaid the outstanding principal amount of the senior notes of the SSLP with the remaining amounts distributed to the holders of the SSLP Certificates. From this distribution, we received $474 million in respect of our SSLP Certificates. After this distribution, the amortized cost of our SSLP Certificates was $1.5 billion.

              In addition, in July 2017, we and GE agreed to an effective termination of the SSLP whereby on July 26, 2017, we purchased the remaining $1.6 billion in aggregate principal amount of first lien senior secured loans outstanding at par plus accrued and unpaid interest and fees from the SSLP and assumed the SSLP's remaining unfunded loan commitments totaling $50 million. Upon completion of the SSLP Loan Sale, the SSLP made a liquidation distribution to the holders of the SSLP Certificates (the "SSLP Liquidation Distribution"), of which we received $1.5 billion. In connection with the SSLP Liquidation Distribution, we recognized an $18 million realized loss. After completion of the transactions described above, the operations of the SSLP were effectively terminated pursuant to the terms of the documents governing the SSLP and the SSLP no longer has an obligation to fund existing commitments and other amounts in respect of its former portfolio companies.

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              For the three and six months ended June 30, 2017, we earned interest income of $29 million and $63 million, respectively, from our investment in the SSLP Certificates. We were also entitled to certain fees in connection with the SSLP. For the three and six months ended June 30, 2017, in connection with the SSLP, we earned capital structuring service, sourcing and other fees totaling $3 million and $5 million, respectively, from our investment in the SSLP Certificates.

RESULTS OF OPERATIONS

For the three and six months ended June 30, 2018 and 2017

              Operating results for the three and six months ended June 30, 2018 and 2017 were as follows:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
(in millions)
  2018   2017   2018   2017  

Total investment income

  $ 333   $ 284   $ 650   $ 559  

Total expenses, net of waiver of income based fees

    165     153     333     332  

Net investment income before income taxes

    168     131     317     227  

Income tax expense, including excise tax

    6     7     11     9  

Net investment income

    162     124     306     218  

Net realized gains on investments and foreign currency transactions

    27     110     15     112  

Net unrealized gains (losses) on investments, foreign currency and other transactions

    65     (52 )   175     (30 )

Realized losses on extinguishment of debt

        (4 )       (4 )

Net increase in stockholders' equity resulting from operations

  $ 254   $ 178   $ 496   $ 296  

              Net income can vary substantially from period to period due to various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, comparisons of net increase in stockholders' equity resulting from operations may not be meaningful.

Investment Income

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
(in millions)
  2018   2017   2018   2017  

Interest income from investments

  $ 262   $ 231   $ 516   $ 462  

Capital structuring service fees

    25     29     54     41  

Dividend income

    24     16     46     40  

Other income

    22     8     34     16  

Total investment income

  $ 333   $ 284   $ 650   $ 559  

              The increase in interest income from investments for the three months ended June 30, 2018 from the comparable period in 2017 was primarily due to an increase in the average size of our portfolio and an increase in the weighted average yield of our portfolio. The size of our portfolio increased from an average of $11.7 billion at amortized cost for the three months ended June 30, 2017 to an average of $11.8 billion at amortized cost for the comparable period in 2018. The weighted average yield of our portfolio increased from 8.0% for the three months ended June 30, 2017 to 9.1% for the comparable period in 2018. The increase in the weighted average yield was primarily due to an increase in LIBOR during the period. The decrease in capital structuring service fees for the three

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months ended June 30, 2018 from the comparable period in 2017 was primarily due to the decrease in new investment commitments, which decreased from $2.0 billion for the three months ended June 30, 2017 to $1.6 billion for the comparable period in 2018. Dividend income for the three months ended June 30, 2018 and 2017 included dividends received from IHAM totaling $15 million and $10 million, respectively. Also during the three months ended June 30, 2018, we received $2 million in other non-recurring dividends from non-income producing equity securities compared to $3 million for the comparable period in 2017. Dividend income for the three months ended June 30, 2018 included other recurring dividends of $7 million compared to $4 million for the comparable period in 2017.

              The increase in interest income from investments for the six months ended June 30, 2018 from the comparable period in 2017 was primarily due to an increase in the size of our portfolio and an increase in the weighted average yield of our portfolio. The size of our portfolio increased from an average of $11.6 billion at amortized cost for the six months ended June 30, 2017 to an average of $11.9 billion at amortized cost for the comparable period in 2018. The weighted average yield of our portfolio increased from 8.1% for the six months ended June 30, 2017 to 9.0% for the comparable period in 2018, primarily due to an increase in LIBOR during the period. The increase in capital structuring service fees for the six months ended June 30, 2018 from the comparable period in 2017 was due to the increase in new investment commitments (excluding investments acquired as a result of the American Capital Acquisition), which increased from $2.8 billion for the six months ended June 30, 2017 to $3.4 billion for the comparable period in 2018, as well as the increase in the weighted average capital structuring service fees received on new investment commitments, which increased from 1.4% for the six months ended June 30, 2017 to 1.6% for the comparable period in 2018. Dividend income for the six months ended June 30, 2018 and 2017 included dividends received from IHAM totaling $28 million and $20 million, respectively. Also during the six months ended June 30, 2018, we received $5 million in other non-recurring dividends from non-income producing equity securities compared to $15 million for the comparable period in 2017.

Operating Expenses

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
(in millions)
  2018   2017   2018   2017  

Interest and credit facility fees

  $ 61   $ 55   $ 121   $ 110  

Base management fees

    45     44     91     83  

Income based fees

    40     30     78     62  

Capital gains incentive fees

    18     10     38     26  

Administrative fees

    4     3     7     6  

Net professional fees and other costs related to the American Capital Acquisition

    (1 )   12     2     38  

Other general and administrative

    8     9     16     17  

Total operating expenses

    175     163     353     342  

Waiver of income based fees

    (10 )   (10 )   (20 )   (10 )

Total expenses, net of waiver of income based fees

  $ 165   $ 153   $ 333   $ 332  

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              Interest and credit facility fees for the three and six months ended June 30, 2018 and 2017 were comprised of the following:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
(in millions)
  2018   2017   2018   2017  

Stated interest expense

  $ 51   $ 47   $ 101   $ 94  

Facility fees

    4     3     8     4  

Amortization of debt issuance costs

    5     4     9     9  

Net accretion of discount on notes payable

    1     1     3     3  

Total interest and credit facility fees

  $ 61   $ 55   $ 121   $ 110  

              Stated interest expense for the three months ended June 30, 2018 increased from the comparable period in 2017 primarily due to the increase in the average principal amount of debt outstanding. For the three months ended June 30, 2018, our average principal debt outstanding increased to $4.9 billion as compared to $4.6 billion for the comparable period in 2017. The weighted average stated interest rate on our outstanding debt was 4.1% for the three months ended June 30, 2018 as compared to 4.1% for the comparable period in 2017. Facility fees for the three months ended June 30, 2018 increased from the comparable period in 2017 primarily due to the lower utilization of our revolving facilities resulting in higher unused commitment fees.

              Stated interest expense for the six months ended June 30, 2018 increased from the comparable period in 2017 primarily due to the increase in the average principal amount of debt outstanding. For the six months ended June 30, 2018, our average principal debt outstanding increased to $4.9 billion as compared to $4.6 billion for the comparable period in 2017. The weighted average stated interest rate on our outstanding debt was 4.1% for the six months ended June 30, 2018 as compared to 4.1% for the comparable period in 2017. Facility fees for the six months ended June 30, 2018 increased from the comparable period in 2017 primarily due to the lower utilization of our revolving facilities resulting in higher unused commitment fees.

              The increase in base management fees for the three and six months ended June 30, 2018 from the comparable periods in 2017 was primarily due to the increase in the average size of our portfolio for the three and six months ended June 30, 2018 as compared to the three and six months ended June 30, 2017. The increase in income based fees for the three months ended June 30, 2018 from the comparable period in 2017 was primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the three and six months ended June 30, 2018 being higher than in the comparable period in 2017. The results for the three and six months ended June 30, 2018 reflect the Fee Waiver of $10 million and $20 million, respectively. The results for the three and six months ended June 30, 2017 also reflect the Fee Waiver of $10 million and $10 million, respectively.

              For the three and six months ended June 30, 2018, the capital gains incentive fees calculated in accordance with GAAP was $18 million and $38 million, respectively. For the three and six months ended June 30, 2017, the capital gains incentive fees calculated in accordance with GAAP was $10 million and $26 million, respectively. The capital gains incentive fee expense accrual for the three and six months ended June 30, 2017 included an $11 million accrual related to the American Capital Acquisition as a result of the fair value of the net assets acquired exceeding the fair value of the merger consideration paid by us. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our investment advisory and management agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such

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cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of June 30, 2018, the total capital gains incentive fee accrual calculated in accordance with GAAP was $117 million. As of June 30, 2018, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2018 for more information on the base management fees, income based fees and capital gains incentive fees.

              Administrative fees represent fees paid to Ares Operations for our allocable portion of overhead and other expenses incurred by Ares Operations in performing its obligations under the administration agreement, including our allocable portion of the compensation, rent and other expenses of certain of our executive officers and their respective staffs. Administrative fees incurred related specifically to the American Capital Acquisition are included in net professional fees and other costs related to the American Capital Acquisition as discussed below.

              For the three and six months ended June 30, 2018 and 2017, we incurred a net expense of $(1) million and $2 million, respectively, in professional fees and other costs related to the American Capital Acquisition. For the three and six months ended June 30, 2017, we incurred $12 million and $38 million, respectively, in net professional fees and other costs related to the American Capital Acquisition. For the six months ended June 30, 2017, these costs included $18 million in one-time investment banking fees incurred upon the closing of the American Capital Acquisition.

              Other general and administrative expenses includes, among other costs, professional fees, insurance, fees and expenses related to evaluating and making investments in portfolio companies, including the costs associated with meeting with and marketing to financial sponsors and independent directors' fees.

Income Tax Expense, Including Excise Tax

              We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must generally (among other requirements) timely distribute to our stockholders at least 90% of our investment company taxable income, as defined by the Code, for each year. In order to maintain our RIC status, we have made and intend to continue to make the requisite distributions to our stockholders which will generally relieve us from U.S. federal corporate-level income taxes.

              Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. If we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax on estimated excess taxable income as such taxable income is earned. For the three and six months ended June 30, 2018, we recorded a net expense of $3 million and $7 million for U.S. federal excise tax, respectively. For the three and six months ended June 30, 2017, we recorded a net expense of $4 million and $7 million for U.S. federal excise tax, respectively.

              Certain of our consolidated subsidiaries are subject to U.S. federal and state income taxes. For the three and six months ended June 30, 2018, we recorded a net tax expense of approximately $3 million and $4 million for these subsidiaries, respectively. For the three and six months ended June 30, 2017, we recorded a net tax expense of approximately $3 million and $2 million for these subsidiaries, respectively. The income tax expense for our taxable consolidated subsidiaries will vary depending on the level of realized gains from the exits of investments held by such taxable subsidiaries during the respective periods.

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Net Realized Gains/Losses

              The net realized gains from the sales, repayments or exits of investments during the three and six months ended June 30, 2018 and 2017 were comprised of the following:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
(in millions)
  2018   2017   2018   2017  

Sales, repayments or exits of investments(1)

  $ 2,142 (1) $ 1,900 (2) $ 3,510 (1) $ 2,800 (2)

Net realized gains on investments:

                         

Gross realized gains

    31   $ 150     42     164  

Gross realized losses

    (9 )   (38 )   (20 )   (39 )

Total net realized gains on investments

  $ 22 (3) $ 112 (4) $ 22 (3) $ 125 (4)

(1)
Includes $447 million of investments sold to IHAM and certain vehicles managed by IHAM during the three and six months ended June 30, 2018. A net realized loss of $0 million was recorded on these transactions with IHAM during the three and six months ended June 30, 2018. See Note 4 to our consolidated financial statements for the three and six months ended June 30, 2018 for more detail on IHAM and its managed vehicles.

(2)
Includes $8 million and $29 million of investments sold to IHAM and certain vehicles managed by IHAM during the three and six months ended June 30, 2017, respectively. No realized gains or losses were recorded on these transactions with IHAM during the three months ended June 30, 2017. A net realized loss of $0 million was recorded on these transactions with IHAM during six months ended June 30, 2017.

(3)
Includes approximately $5 million and $12 million, respectively, of net realized gains on investments acquired as part of the American Capital Acquisition for the three and six months ended June 30, 2018.

(4)
Includes approximately $21 million and $23 million, respectively, of net realized gains on investments acquired as part of the American Capital Acquisition for the three and six months ended June 30, 2017.

              The net realized gains (losses) on investments during the three months ended June 30, 2018 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

TDG Group Holding Company

  $ 8  

PowerPlan, Inc.

    7  

CFW Co-Invest, L.P.

    3  

AwarePoint Corporation

    (4 )

Other, net

    8  

Total

  $ 22  

              During the three months ended June 30, 2018, we recognized net realized gains on foreign currency transactions of $5 million.

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              The net realized gains (losses) on investments during the three months ended June 30, 2017 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

10th Street, LLC

  $ 34  

Community Education Centers, Inc.

    24  

TA THI Parent, Inc.

    16  

NECCO Realty Investments LLC

    13  

GHX Ultimate Parent Corporation

    11  

Wilcon Holdings LLC

    10  

Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.

    8  

CIBT Investment Holdings, LLC

    6  

Market Track Holdings, LLC

    6  

Hard 8 Games, LLC

    5  

Competitor Group, Inc.

    (21 )

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

    (13 )

Other, net

    13  

Total

  $ 112  

              During the three months ended June 30, 2017, we recognized net realized losses on foreign currency transactions of $2 million.

              During the three months ended June 30, 2017, we redeemed the entire $183 million in aggregate principal amount outstanding of the unsecured notes that were scheduled to mature on October 1, 2022 (the "October 2022 Notes") in accordance with the terms of the indenture governing the October 2022 Notes. The October 2022 Notes were redeemed at par plus accrued and unpaid interest for a total redemption price of approximately $185 million, which resulted in a realized loss on the extinguishment of debt of $4 million.

              The net realized gains (losses) on investments during the six months ended June 30, 2018 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

TDG Group Holding Company

  $ 8  

PowerPlan, Inc.

    7  

CFW Co-Invest, L.P.

    4  

AwarePoint Corporation

    (4 )

EcoMotors, Inc.

    (9 )

Other, net

    16  

Total, net

  $ 22  

              During the six months ended June 30, 2018, we also recognized net realized gains on foreign currency transactions of $7 million.

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              The net realized gains (losses) on investments during the six months ended June 30, 2017 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

10th Street, LLC

  $ 34  

Community Education Centers, Inc.

    24  

TA THI Parent, Inc.

    16  

Netsmart Technologies, Inc.

    13  

GHX Ultimate Parent Corporation

    11  

Wilcon Holdings LLC

    10  

Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.

    8  

S Toys Holdings LLC (fka The Step2 Company, LLC)

    7  

CIBT Investment Holdings, LLC

    6  

Market Track Holdings, LLC

    6  

Hard 8 Games, LLC

    5  

Competitor Group, Inc.

    (21 )

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

    (13 )

Other, net

    19  

Total, net

  $ 125  

              During the six months ended June 30, 2017, we also recognized net realized losses on foreign currency transactions of $13 million.

Net Unrealized Gains/Losses

              We value our portfolio investments quarterly and the changes in value are recorded as unrealized gains or losses in our consolidated statement of operations. Net unrealized gains and losses for our portfolio for the three and six months ended June 30, 2018 and 2017 were comprised of the following:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
(in millions)
  2018   2017   2018   2017  

Unrealized appreciation

  $ 161   $ 151   $ 281   $ 196  

Unrealized depreciation

    (107 )   (119 )   (165 )   (172 )

Net unrealized depreciation (appreciation) reversed related to net realized gains or losses(1)

    6     (76 )   40     (50 )

Total net unrealized gains (losses)

  $ 60   $ (44 ) $ 156   $ (26 )

(1)
The net unrealized (appreciation) depreciation reversed related to net realized gains or losses represents the unrealized appreciation or depreciation recorded on the related asset at the end of the prior period.

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              The changes in net unrealized appreciation and depreciation on investments during the three months ended June 30, 2018 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

Alcami Holdings, LLC

  $ 70  

Rug Doctor, LLC

    9  

Varsity Brands Holding Co., Inc.

    6  

CCS Intermediate Holdings, LLC

    5  

Soil Safe, Inc.

    5  

PERC Holdings 1 LLC

    5  

OTG Management, LLC

    4  

GHX Ultimate Parent Corporation

    4  

American Academy Holdings, LLC

    3  

Accruent, LLC

    3  

FPI Holding Corporation

    (3 )

Patterson Medical Supply, Inc.

    (3 )

CFW Co-Invest, L.P.

    (3 )

SCM Insurance Services Inc.

    (4 )

Shock Doctor, Inc.

    (4 )

Miles 33 (Finance) Limited

    (4 )

ADF Capital, Inc.

    (5 )

SHO Holding I Corporation

    (5 )

Ivy Hill Asset Management, L.P.

    (7 )

New Trident Holdcorp, Inc.

    (10 )

Indra Holdings Corp.

    (13 )

Other, net

    1  

Total

  $ 54  

              During the three months ended June 30, 2018, we recognized net unrealized gains on foreign currency and other transactions of $5 million.

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              The changes in net unrealized appreciation and depreciation on investments during the three months ended June 30, 2017 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

Bellotto Holdings Limited

  $ 49  

Alcami Holdings, LLC

    18  

Ciena Capital LLC

    10  

EDS Group

    9  

Miles 33 (Finance) Limited

    7  

Columbo MidCo Limited

    6  

Imaging Business Machines, L.L.C.

    6  

CCS Intermediate Holdings, LLC

    (3 )

Javlin Three LLC

    (3 )

Indra Holdings Corp.

    (3 )

Green Energy Partners

    (5 )

Rug Doctor, LLC

    (5 )

Urgent Cares of America Holdings I, LLC

    (6 )

Infilaw Holding, LLC

    (7 )

ADF Capital, Inc.

    (8 )

New Trident Holdcorp, Inc.

    (9 )

Soil Safe, Inc.

    (10 )

Other, net

    (14 )

Total

  $ 32  

              During the three months ended June 30, 2017, we also recognized net unrealized losses on foreign currency and other transactions of $8 million.

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              The changes in net unrealized appreciation and depreciation during the six months ended June 30, 2018 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

Alcami Holdings, LLC

  $ 157  

CCS Intermediate Holdings, LLC

    18  

Varsity Brands Holding Co., Inc.

    10  

Rug Doctor, LLC

    9  

Ivy Hill Asset Management, L.P.

    6  

Accruent, LLC

    6  

PERC Holdings 1 LLC

    5  

Visual Edge Technology, Inc.

    4  

Cent CLO 2014-22 Limited

    4  

Acrisure, LLC

    3  

American Academy Holdings, LLC

    3  

Imaging Business Machines, L.L.C.

    3  

PIH Corporation

    3  

GHX Ultimate Parent Corporation

    3  

American Residential Services L.L.C.

    (3 )

CFW Co-Invest, L.P.

    (3 )

Patterson Medical Supply, Inc.

    (4 )

SHO Holding I Corporation

    (4 )

ADF Capital, Inc.

    (4 )

Panda Temple Power, LLC

    (5 )

Miles 33 (Finance) Limited

    (5 )

NECCO Holdings, Inc.

    (6 )

SCM Insurance Services Inc.

    (6 )

Columbo Midco Limited

    (6 )

Eckler Industries, Inc.

    (7 )

Instituto de Banca y Comercio, Inc.

    (10 )

New Trident Holdcorp, Inc.

    (12 )

Singer Sewing Company

    (15 )

Indra Holdings Corp.

    (22 )

Other, net

    (6 )

Total

  $ 116  

              During the six months ended June 30, 2018, we also recognized net unrealized gains on foreign currency and other transactions of $19 million.

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              The changes in net unrealized appreciation and depreciation during the six months ended June 30, 2017 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

Bellotto Holdings Limited

  $ 54  

Alcami Holdings, LLC

    18  

EDS Group

    10  

Ciena Capital LLC

    9  

Columbo Midco Limited

    7  

Imaging Business Machines, L.L.C.

    7  

Miles 33 (Finance) Limited

    7  

Senior Secured Loan Fund LLC

    6  

PIH Corporation

    5  

PERC Holdings 1 LLC

    5  

American Seafoods Investors LLC

    3  

Javlin Three LLC

    (3 )

Panda Temple Power, LLC

    (4 )

Cent CLO 22 Limited

    (4 )

Cadence Aerospace, LLC

    (4 )

NMSC Holdings, Inc.

    (4 )

Joule Unlimited Technologies, Inc.

    (4 )

Indra Holdings Corp.

    (5 )

Rug Doctor, LLC

    (5 )

Urgent Cares of America Holdings I, LLC

    (6 )

Green Energy Partners

    (7 )

EcoMotors, Inc.

    (8 )

Soil Safe, Inc.

    (10 )

New Trident Holdcorp, Inc.

    (12 )

Infilaw Holding, LLC

    (13 )

ADF Capital, Inc.

    (17 )

Other, net

    (1 )

Total

  $ 24  

              During the six months ended June 30, 2017, we also recognized net unrealized losses on foreign currency and other transactions of $4 million.

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For the years ended December 31, 2017, 2016 and 2015

              Operating results for the years ended December 31, 2017, 2016 and 2015 were as follows:

 
  For the Years Ended
December 31,
 
(in millions)
  2017   2016   2015  

Total investment income

  $ 1,160   $ 1,012   $ 1,025  

Total expenses, net of waiver of income based fees

    630     497     499  

Net investment income before income taxes

    530     515     526  

Income tax expense, including excise tax

    19     21     18  

Net investment income

    511     494     508  

Net realized gains on investments and foreign currency transactions

    24     110     127  

Net unrealized gains (losses) on investments, foreign currency and other transactions

    136     (130 )   (246 )

Realized losses on extinguishment of debt

    (4 )       (10 )

Net increase in stockholders' equity resulting from operations

  $ 667   $ 474   $ 379  

              Net income can vary substantially from period to period due to various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, comparisons of net increase in stockholders' equity resulting from operations may not be meaningful.

Investment Income

 
  For the Years Ended
December 31,
 
(in millions)
  2017   2016   2015  

Interest income from investments

  $ 951   $ 806   $ 817  

Capital structuring service fees

    105     99     95  

Dividend income

    76     75     74  

Management and other fees

    6     16     24  

Other income

    22     16     15  

Total investment income

  $ 1,160   $ 1,012   $ 1,025  

              The increase in interest income from investments for the year ended December 31, 2017 from the comparable period in 2016 was primarily due to an increase in the average size of our portfolio, partially offset by a decrease in the weighted average yield of our portfolio. The size of our portfolio increased from an average of $9.0 billion at amortized cost for the year ended December 31, 2016 to an average of $11.4 billion at amortized cost for the comparable period in 2017, which was largely due to the investments acquired as part of the American Capital Acquisition. The weighted average yield of our total portfolio decreased from 9.0% for the year ended December 31, 2016 to 8.5% for the comparable period in 2017. The decline in the weighted average yield was primarily due to the declining yield of the SSLP Certificates up until the SSLP Liquidation Distribution and the effective termination of the SSLP, during the year ended December 31, 2017. The increase in capital structuring service fees for the year ended December 31, 2017 from the comparable period in 2016 was due to the increase in new investment commitments (excluding investments acquired as a result of the American Capital Acquisition and investments acquired in the SSLP Loan Sale), which increased from $3.7 billion for year ended December 31, 2016 to $5.9 billion for the comparable period in 2017. This increase was

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partially offset by a decrease in weighted average capital structuring fees received on new investment commitments, which decreased from 2.7% for the year ended December 31, 2016 to 1.8% for the comparable period in 2017. This decline was primarily due to having a higher percentage of new investment commitments made to existing portfolio companies during the year ended December 31, 2017 as compared to the comparable period in 2016. Dividend income for the years ended December 31, 2017 and 2016 included dividends received from IHAM, a wholly owned portfolio company, totaling $40 million and $40 million, respectively. Also during the year ended December 31, 2017, we received $19 million in other non-recurring dividends from non-income producing equity securities compared to $20 million for the comparable period in 2016. The decrease in management and other fees for the year ended December 31, 2017 from the comparable period in 2016 was due to lower sourcing fees from the SSLP resulting from the continued decrease in the size of the SSLP portfolio and eventually the effective termination of the SSLP in July 2017. The increase in other income for the year ended December 31, 2017 from the comparable period in 2016 was primarily attributable to higher amendment fees and administrative agent fees.

              The decrease in interest income from investments for the year ended December 31, 2016 from the comparable period in 2015 was primarily due to a decrease in the weighted average yield of our portfolio, partially offset by an increase in the average size of our portfolio. The weighted average yield of our portfolio decreased from 9.5% for the year ended December 31, 2015 to 9.0% for the comparable period in 2016, primarily driven by the decrease in the yield of the SSLP Certificates. The size of our portfolio increased from an average of $8.6 billion at amortized cost for the year ended December 31, 2015 to an average of $9.0 billion at amortized cost for the comparable period in 2016. The increase in capital structuring service fees for the year ended December 31, 2016 from the comparable period in 2015 was due to the increase in weighted average capital structuring fees received on new investment commitments, which increased from 2.5% for the year ended December 31, 2015 to 2.7% for the comparable period in 2016. Dividend income for the years ended December 31, 2016 and 2015 included dividends received from IHAM, totaling $40 million and $50 million, respectively. The dividends received from IHAM for the year ended December 31, 2015 included additional dividends of $10 million that were paid in addition to the quarterly dividends generally paid by IHAM. IHAM paid the additional dividends out of accumulated earnings that had previously been retained by IHAM. Also during the year ended December 31, 2016, we received $20 million in other non-recurring dividends from non-income producing equity securities compared to $9 million for the comparable period in 2015. The decrease in management and other fees for the year ended December 31, 2016 from the comparable period in 2015 was due to lower sourcing fees from the SSLP resulting from a decrease in the size of the SSLP portfolio.

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Operating Expenses

 
  For the Years Ended
December 31,
 
(in millions)
  2017   2016   2015  

Interest and credit facility fees

  $ 225   $ 186   $ 227  

Base management fees

    171     137     134  

Income based fees

    134     123     121  

Capital gains incentive fees

    41     (5 )   (27 )

Administrative fees

    12     14     14  

Professional fees and other costs related to the American Capital Acquisition

   
45
   
15
   
 

Other general and administrative

    32     27     30  

Total operating expenses

  $ 660   $ 497   $ 499  

Waiver of income based fees

    (30 ) $   $  

Total expenses, net of waiver of income based fees

  $ 630   $ 497   $ 499  

              Interest and credit facility fees for the years ended December 31, 2017, 2016 and 2015 were comprised of the following:

 
  For the Years Ended
December 31,
 
(in millions)
  2017   2016   2015  

Stated interest expense

  $ 189   $ 161   $ 183  

Facility fees

    12     5     10  

Amortization of debt issuance costs

    18     14     17  

Net accretion of discount on notes payable

    6     6     17  

Total interest and credit facility fees

  $ 225   $ 186   $ 227  

              Stated interest expense for the year ended December 31, 2017 increased from the comparable period in 2016 primarily due to the increase in our average principal amount of debt outstanding. For the year ended December 31, 2017, our average debt outstanding increased to $4.6 billion as compared to $3.9 billion for the comparable period in 2016, which was largely a result of the American Capital Acquisition. The weighted average stated interest rate on our outstanding debt was 4.1% for both the year ended December 31, 2017 and for the comparable period in 2016. Facility fees for the year ended December 31, 2017 increased from the comparable period in 2016 primarily due to the increased commitments under our revolving facilities resulting in higher unused commitment fees. Amortization of debt issuance costs for the year ended December 31, 2017 increased from the comparable period in 2016 primarily due to the increase in debt issuance costs in connection with the amendments to the Revolving Credit Facility and Revolving Funding Facility.

              Stated interest expense for the year ended December 31, 2016 decreased from the comparable period in 2015 primarily due to the decrease in our weighted average stated interest rate of our debt outstanding, partially offset by an increase in the average principal amount of debt outstanding. The weighted average stated interest rate on our outstanding debt was 4.1% for the year ended December 31, 2016 as compared to 5.0% for the comparable period in 2015 primarily as a result of the repayment upon maturity of certain higher cost unsecured convertible notes and increased utilization of our lower cost revolving facilities. For the year ended December 31, 2016, our average principal debt outstanding increased to $3.9 billion as compared to $3.7 billion for the comparable period in 2015. Facility fees for the year ended December 31, 2016 decreased from the comparable period in 2015

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primarily due to the increased utilization of our revolving facilities resulting in lower unused commitment fees. Amortization of debt issuance costs and net accretion of discount on notes payable for the year ended December 31, 2016 decreased from the comparable period in 2015 primarily due to the maturity of the $575 aggregate principal amount of unsecured convertible notes and the $230 aggregate principal amount of unsecured convertible notes.

              The increase in base management fees for the year ended December 31, 2017 from the comparable period in 2016 was primarily due to the increase in the average size of the portfolio for the year ended December 31, 2017 (including the approximately $2.5 billion in investments acquired in the American Capital Acquisition) as compared to the year ended December 31, 2016. The increase in income based fees for the year ended December 31, 2017 from the comparable period in 2016 was primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the year ended December 31, 2017 being higher than in the comparable period in 2016. As discussed earlier, the year ended December 31, 2017 also reflects the Fee Waiver of $30 million.

              For the year ended December 31, 2017, the capital gains incentive fee expense calculated in accordance with GAAP was $41 million. For the years ended December 31, 2016 and 2015, the reduction in capital gains incentive fees calculated in accordance with GAAP was $5 million and $27 million, respectively. The capital gains incentive fee expense accrual for the year ended December 31, 2017 changed from the comparable period in 2016 primarily due to net gains on investments, foreign currency and other transactions and the extinguishment of debt during the year ended December 31, 2017 of $156 million compared to net losses of $20 million during the year ended December 31, 2016. The capital gains incentive fee expense accrual for the year ended December 31, 2017 included an $11 million accrual related to the American Capital Acquisition as a result of the fair value of the net assets acquired exceeding the fair value of the merger consideration paid by us. The capital gains incentive fee expense accrual for the year ended December 31, 2016 changed from the comparable period in 2015 primarily due to net losses on investments, foreign currency and other transactions and the extinguishment of debt during the year ended December 31, 2016 of $20 million compared to net losses of $129 million during the year ended December 31, 2015. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our investment advisory and management agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of December 31, 2017, 2016 and 2015, the total capital gains incentive fee accrual calculated in accordance with GAAP was $79 million, $38 million and $42 million, respectively. As of December 31, 2017 and 2016, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial statements for the year ended December 31, 2017 for more information on the base management fees, income based fees and capital gains incentive fees.

              Administrative fees represent fees paid to Ares Operations for our allocable portion of overhead and other expenses incurred by Ares Operations in performing its obligations under the administration agreement, including our allocable portion of the compensation, rent and other expenses of certain of our executive officers and their respective staffs. Administrative fees incurred related specifically to the American Capital Acquisition are included in professional fees and other costs related to the American Capital Acquisition as discussed below.

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              For the years ended December 31, 2017 and 2016, the Company incurred $45 million and $15 million, respectively, in professional fees and other costs related to the American Capital Acquisition. For the year ended December 31, 2017, these costs included $4 million of expenses related to a long term incentive plan liability assumed in the American Capital Acquisition. See Note 13 to our consolidated financial statements for the year ended December 31, 2017 for a description of the assumed long term incentive plan liability. For the year ended December 31, 2017, these costs also included $18 million in one-time investment banking fees incurred in January 2017 upon the closing of the American Capital Acquisition.

              Other general and administrative expenses includes professional fees, rent and related utilities, insurance, marketing costs, director's fees and depreciation, among other costs.

Income Tax Expense, Including Excise Tax

              We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must generally (among other requirements) timely distribute to our stockholders at least 90% of our investment company taxable income, as defined by the Code, for each year. In order to maintain our RIC status, we have made and intend to continue to make the requisite distributions to our stockholders which will generally relieve us from U.S. federal corporate-level income taxes.

              Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. If we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax on estimated excess taxable income as such taxable income is earned. For the years ended December 31, 2017, 2016 and 2015, we recorded a net expense of $12 million, $12 million and $9 million, respectively, for U.S. federal excise tax. The net expense for the years ended December 31, 2017, 2016 and 2015 each included a net reduction in expense related to the recording of a requested refund resulting from the overpayment of the prior year's excise tax of $1 million, $1 million and $1 million, respectively.

              Certain of our consolidated subsidiaries are subject to U.S. federal and state income taxes. For the years ended December 31, 2017, 2016 and 2015, we recorded a net tax expense of approximately $7 million, $9 million and $9 million, respectively, for these subsidiaries. The income tax expense for our taxable consolidated subsidiaries will vary depending on the level of realized gains from the exits of investments held by such taxable subsidiaries during the respective periods.

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Net Realized Gains/Losses

              The net realized gains from the sales, repayments or exits of investments during the years ended December 31, 2017, 2016 and 2015 were comprised of the following:

 
  For the Years Ended
December 31,
 
(in millions)
  2017   2016   2015  

Sales, repayments or exits of investments(1)

  $ 7,037 (2) $ 3,749 (3) $ 3,741  

Net realized gains on investments:

                   

Gross realized gains

    281   $ 121   $ 125  

Gross realized losses

    (237 )   (11 )   (4 )

Total net realized gains on investments

  $ 44 (4) $ 110   $ 121  

(1)
Includes $134 million, $472 million and $538 million of investments sold to IHAM and certain vehicles managed by IHAM during the years ended December 31, 2017, 2016 and 2015, respectively. A net realized loss of $0 million was recorded on these transactions with IHAM during the year ended December 31, 2017. A net realized gain of $1 million and $1 million was recorded on these transactions with IHAM during the years ended December 31, 2016 and 2015, respectively. See Note 4 to our consolidated financial statements for the year ended December 31, 2017 for more detail on IHAM and its managed vehicles.

(2)
Includes the $1.5 billion of proceeds from the SSLP Liquidation Distribution discussed above.

(3)
Includes $474 million of investments sold to the SDLP in conjunction with the initial funding of the SDLP. No realized gains or losses were recorded on these transactions with the SDLP.

(4)
Includes approximately $85 million of net realized gains on investments acquired as part of the American Capital Acquisition.

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              The net realized gains on investments during the year ended December 31, 2017 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

Bellotto Holdings Limited

  $ 58  

10th Street, LLC

    34  

Community Education Centers, Inc. 

    24  

Tectum Holdings, Inc. 

    17  

American Broadband Holding Company

    15  

NECCO Realty Investments LLC

    13  

GHX Ultimate Parent Corporation

    11  

Wilcon Holdings LLC

    10  

La Paloma Generating Company, LLC

    (9 )

Pegasus Community Energy, LLC

    (9 )

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

    (12 )

Senior Secured Loan Fund LLC

    (18 )

Competitor Group, Inc., Calera XVI, LLC and Champion Parent Corporation

    (21 )

Infilaw Holding, LLC

    (140 )

Other, net

    71  

Total, net

  $ 44  

              During the year ended December 31, 2017, we recognized net realized losses on foreign currency transactions of $20 million. In addition, during the year ended December 31, 2017, we redeemed the entire $183 million aggregate principal amount outstanding of the October 2022 Notes. The October 2022 Notes were redeemed at par plus accrued and unpaid interest for a total redemption price of approximately $185 million, which resulted in a realized loss on the extinguishment of debt of $4 million.

              The net realized gains on investments during the year ended December 31, 2016 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

The Step2 Company, LLC

  $ 18  

Napa Management Services Corporation

    16  

UL Holding Co., LLC

    13  

Physiotherapy Associates Holdings, Inc. 

    8  

Q9 Holdings Inc. 

    (9 )

Other, net

    64  

Total, net

  $ 110  

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              The net realized gains on investments during the year ended December 31, 2015 consisted of the following:

(in millions)
Portfolio Company
  Net Realized
Gains (Losses)
 

Cast & Crew Payroll, LLC

  $ 26  

Tripwire, Inc. 

    14  

TPP Holdings, LLC

    11  

Global Healthcare Exchange, LLC

    8  

Protective Industries, Inc. 

    8  

Other, net

    54  

Total

  $ 121  

              During the year ended December 31, 2015, we recognized net realized gains on foreign currency transactions of $6 million. In addition, during the year ended December 31, 2015, we redeemed the entire $144 million aggregate principal amount outstanding of the unsecured notes that were scheduled to mature on February 15, 2022 (the "February 2022 Notes"). The February 2022 Notes were redeemed at par plus accrued and unpaid interest for a total redemption price of approximately $145 million, which resulted in a realized loss on the extinguishment of debt of $4 million. Also during the year ended December 31, 2016, the $200 million aggregate principal amount of unsecured notes that were scheduled to mature on October 15, 2040 were redeemed at par plus accrued and unpaid interest for a total redemption price of approximately $201 million, which resulted in a realized loss on the extinguishment of debt of $6 million.

Net Unrealized Gains/Losses

              We value our portfolio investments quarterly and the changes in value are recorded as unrealized gains or losses in our consolidated statement of operations. Net unrealized gains and losses for our portfolio for the years ended December 31, 2017, 2016 and 2015 were comprised of the following:

 
  For the Years Ended
December 31,
 
(in millions)
  2017   2016   2015  

Unrealized appreciation

  $ 331   $ 168   $ 116  

Unrealized depreciation

    (301 )   (306 )   (304 )

Net unrealized (appreciation) depreciation reversed related to net realized gains or losses(1)

    113     13     (60 )

Total net unrealized gains (losses)

  $ 143   $ (125 ) $ (248 )

(1)
The net unrealized (appreciation) depreciation reversed related to net realized gains or losses represents the unrealized appreciation or depreciation recorded on the related asset at the end of the prior period.

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              The changes in net unrealized appreciation and depreciation on investments during the year ended December 31, 2017 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

Alcami Holdings, LLC

  $ 167  

Ivy Hill Asset Management, L.P. 

    13  

Columbo MidCo Limited

    13  

CCS Intermediate Holdings, LLC

    12  

Imperial Capital Private Opportunities, LP

    11  

Ciena Capital LLC

    11  

Singer Sewing Company

    (9 )

Shock Doctor, Inc. 

    (9 )

Indra Holdings Corp. 

    (15 )

ADF Capital, Inc. 

    (16 )

Instituto de Banca y Comercio, Inc. 

    (23 )

New Trident Holdcorp, Inc. 

    (45 )

Other, net

    (80 )

Total

  $ 30  

              During the year ended December 31, 2017, we also recognized net unrealized losses on foreign currency and other transactions of $7 million.

              The changes in net unrealized appreciation and depreciation on investments during the year ended December 31, 2016 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

Senior Secured Loan Fund LLC

  $ 26  

UL Holding Co., LLC

    20  

Community Education Centers, Inc. 

    19  

ADF Capital, Inc. 

    (9 )

10th Street, LLC

    (9 )

Indra Holdings Corp. 

    (11 )

CCS Intermediate Holdings, LLC

    (22 )

Instituto de Banca y Comercio, Inc. 

    (52 )

Infilaw Holdings, LLC

    (127 )

Other, net

    27  

Total, net

  $ (138 )

              During the year ended December 31, 2016, we also recognized net unrealized losses on foreign currency and other transactions of $5 million.

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              The changes in net unrealized appreciation and depreciation on investments during the year ended December 31, 2015 consisted of the following:

(in millions)
Portfolio Company
  Net Unrealized
Appreciation
(Depreciation)
 

OTG Management, LLC

  $ 28  

Ciena Capital LLC

    11  

Green Energy Partners

    (8 )

Primexx Energy Corporation

    (8 )

Nodality, Inc. 

    (9 )

Competitor Group, Inc. 

    (9 )

2329497 Ontario Inc. 

    (10 )

Instituto de Banca y Comercio, Inc. 

    (14 )

CCS Intermediate Holdings, LLC

    (14 )

Infilaw Holdings, LLC

    (14 )

Ivy Hill Asset Management, L.P. 

    (24 )

Petroflow Energy Corporation

    (26 )

Senior Secured Loan Fund LLC

    (77 )

Other, net

    (14 )

Total

  $ (188 )

              During the year ended December 31, 2015, we also recognized net unrealized gains on foreign currency transactions of $2 million.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

              Our liquidity and capital resources are generated primarily from the net proceeds of public offerings of equity and debt securities, advances from the Revolving Credit Facility, the Revolving Funding Facility and the SMBC Funding Facility (each as defined below, and together, the "Facilities"), net proceeds from the issuance of other securities, including unsecured notes, as well as cash flows from operations.

              As of June 30, 2018, we had $509 million in cash and cash equivalents and $4.6 billion in total aggregate principal amount of debt outstanding ($4.5 billion at carrying value). Subject to leverage, borrowing base and other restrictions, we had approximately $3.1 billion available for additional borrowings under the Facilities as of June 30, 2018.

              We may from time to time seek to retire or repurchase our common stock through cash purchases, as well as retire, cancel or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. Such purchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. The amounts involved may be material. In addition, we may from time to time enter into additional debt facilities, increase the size of existing facilities or issue additional debt securities, including unsecured debt and/or debt securities convertible into common stock. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the Investment Company Act, we are currently allowed to borrow amounts such that our asset coverage, calculated pursuant to the Investment Company Act, is at least 200% after such borrowings. On June 21, 2018, our board of directors, including a "required majority" of our board of directors, approved the application of the modified asset coverage requirement set forth in Section 61(a)(2) of the Investment Company Act, as amended by the SBCAA. As a result, effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. As of June 30, 2018, the aggregate principal amount outstanding of the senior securities issued by us was $4.6 billion. As of June 30, 2018, our asset coverage was 255%.

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Equity Capital Activities

              As of June 30, 2018 and December 31, 2017, our total equity market capitalization was $7.0 billion and $6.7 billion, respectively. There were no sales of our equity securities during the six months ended June 30, 2018 and 2017.

              On January 3, 2017, in connection with the American Capital Acquisition, we issued 112 million shares valued at approximately $16.42 per share.

              We are authorized under our stock repurchase program to purchase up to $300 million in the aggregate of our outstanding common stock in the open market at certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Exchange Act. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. We cannot assure stockholders that any shares will be repurchased under the program. The expiration date of the stock repurchase program is February 28, 2019. The program may be suspended, extended, modified or discontinued at any time. As of June 30, 2018, we had repurchased a total of 0.5 million shares of our common stock in the open market under the stock repurchase program since its inception in September 2015, at an average price of $13.92 per share, including commissions paid, leaving approximately $293 million available for additional repurchases under the program. During the six months ended June 30, 2018, we did not repurchase any shares of our common stock under the stock repurchase program.

Debt Capital Activities

              Our debt obligations consisted of the following as of June 30, 2018 and December 31, 2017:

 
  As of  
 
  June 30, 2018   December 31, 2017  
(in millions)
  Total
Aggregate
Principal
Amount
Available/
Outstanding(1)
  Principal
Amount
  Carrying
Value
  Total
Aggregate
Principal
Amount
Available/
Outstanding(1)
  Principal
Amount
  Carrying
Value
 

Revolving Credit Facility

  $ 2,133 (2) $ 414   $ 414   $ 2,108 (2) $ 395   $ 395  

Revolving Funding Facility

    1,000             1,000     600     600  

SMBC Funding Facility

    400             400     60     60  

SBA Debentures

            (3)   50          

2018 Convertible Notes

            (4)   270     270     270 (5)

2019 Convertible Notes

    300     300     299 (5)   300     300     298 (5)

2022 Convertible Notes

    388     388     370 (5)   388     388     368 (5)

2018 Notes

    750     750     749 (6)   750     750     748 (6)

2020 Notes

    600     600     598 (7)   600     600     597 (7)

January 2022 Notes

    600     600     594 (8)   600     600     593 (8)

2023 Notes

    750     750     743 (9)   750     750     743 (9)

2025 Notes

    600     600     593 (10)            

2047 Notes

    230     230     182 (11)   230     230     182 (11)

Total

  $ 7,751   $ 4,632   $ 4,542   $ 7,446   $ 4,943   $ 4,854  

(1)
Subject to borrowing base, leverage and other restrictions. Represents the total aggregate amount committed or outstanding, as applicable, under such instrument.

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(2)
Provides for a feature that allows us, under certain circumstances, to increase the size of the Revolving Credit Facility to a maximum of $3.1 billion.

(3)
See below for more information on the termination of the undrawn SBA Debenture (as defined below) commitments.

(4)
See below for more information on the repayment of the 2018 Convertible Notes at maturity.

(5)
Represents the aggregate principal amount outstanding of the Convertible Unsecured Notes. As of June 30, 2018, the total unamortized debt issuance costs and the unaccreted discount for the 2019 Convertible Notes and the 2022 Convertible Notes were $1 million and $18 million, respectively. As of December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount for the 2018 Convertible Notes, the 2019 Convertible Notes and the 2022 Convertible Notes were $0 million, $2 million and $20 million, respectively.

(6)
Represents the aggregate principal amount outstanding of the 2018 Notes less unamortized debt issuance costs and plus the net unamortized premium that was recorded upon the issuances of the 2018 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs less the net unamortized premium were $1 million and $2 million, respectively.

(7)
Represents the aggregate principal amount outstanding of the 2020 Notes less unamortized debt issuance costs and the net unaccreted discount recorded upon the issuances of the 2020 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs and the net unaccreted discount were $2 million and $3 million, respectively.

(8)
Represents the aggregate principal amount outstanding of the January 2022 Notes less unamortized debt issuance costs and the net unaccreted discount recorded upon the issuances of the January 2022 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs and the net unaccreted discount were $6 million and $7 million, respectively.

(9)
Represents the aggregate principal amount outstanding of the 2023 Notes, less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2023 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount was $7 million and $7 million, respectively.

(10)
Represents the aggregate principal amount outstanding of the 2025 Notes, less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2025 Notes. As of June 30, 2018, the total unamortized debt issuance costs and the unaccreted discount was $7 million.

(11)
Represents the aggregate principal amount outstanding of the 2047 Notes less the unaccreted purchased discount recorded as part of the acquisition of Allied Capital in April 2010 (the "Allied Acquisition"). As of June 30, 2018 and December 31, 2017, the total unaccreted purchased discount was $48 million and $48 million, respectively.

              The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all our debt outstanding as of June 30, 2018 were 4.2% and 4.5 years, respectively, and as of December 31, 2017 were 4.1% and 4.3 years, respectively.

              The ratio of total principal amount of debt outstanding to stockholders' equity as of June 30, 2018 was 0.64:1.00 compared to 0.70:1.00 as of December 31, 2017.

              We are party to a senior secured revolving credit facility (as amended and restated, the "Revolving Credit Facility"), that allows us to borrow up to $2.1 billion at any one time outstanding. The Revolving Credit Facility consists of a $414 million term loan tranche with a stated maturity date

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of March 30, 2023 and a $1.7 billion revolving tranche. For $1.6 billion of the revolving tranche, the end of the revolving period and the stated maturity date are March 30, 2022 and March 30, 2023, respectively. For $50 million of the revolving tranche, the end of the revolving period and the stated maturity date are January 4, 2021 and January 4, 2022, respectively. For the remaining $45 million of the revolving tranche, the end of the revolving period and the stated maturity date are May 4, 2019 and May 4, 2020, respectively. The Revolving Credit Facility also provides for a feature that allows us, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of $3.1 billion. The interest rate charged on the Revolving Credit Facility is based on an applicable spread of either 1.75% or 1.875% over LIBOR or 0.75% or 1.00% over an "alternate base rate" (as defined in the agreements governing the Revolving Credit Facility), in each case, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of June 30, 2018, the interest rate in effect was LIBOR plus 1.75%. We are also required to pay a letter of credit fee of either 2.00% or 2.25% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. Additionally, we are required to pay a commitment fee of 0.375% per annum on any unused portion of the Revolving Credit Facility. As of June 30, 2018, there was $414 million outstanding under the Revolving Credit Facility and we were in compliance in all material respects with the terms of the Revolving Credit Facility.

              Our consolidated subsidiary, Ares Capital CP Funding LLC ("Ares Capital CP") is party to a revolving funding facility (as amended, the "Revolving Funding Facility"), that allows Ares Capital CP to borrow up to $1 billion at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are January 3, 2019 and January 3, 2022, respectively. As of June 30, 2018, the interest rate charged on the Revolving Funding Facility was based on LIBOR plus 2.15% per annum or a "base rate" (as defined in the agreements governing the Revolving Funding Facility) plus 1.15% per annum. Ares Capital CP is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility. As of June 30, 2018, there were no outstanding amounts under the Revolving Funding Facility and we and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.

              Our consolidated subsidiary, Ares Capital JB Funding LLC ("ACJB"), is party to a revolving funding facility (as amended, the "SMBC Funding Facility"), that allows ACJB to borrow up to $400 million at any one time outstanding. The SMBC Funding Facility is secured by all of the assets held by ACJB. As of June 30, 2018, the end of the reinvestment period and the stated maturity date for the SMBC Funding Facility were September 14, 2018 and September 14, 2023, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement. The interest rate charged on the SMBC Funding Facility is based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over a "base rate" (as defined in the agreements governing the SMBC Funding Facility), in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. As of June 30, 2018, the interest rate in effect was LIBOR plus 2.00%. Additionally, ACJB is required to pay a commitment fee of between 0.35% and 0.875% per annum depending on the size of the unused portion of the SMBC Funding Facility. As of June 30, 2018, there were no outstanding amounts under the SMBC Funding Facility and we and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility.

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              In April 2015, our consolidated subsidiary, Ares Venture Finance, L.P. ("AVF LP"), received a license from the SBA to operate as a Small Business Investment Company ("SBIC") under the provisions of Section 301(c) of the Small Business Investment Act of 1958, as amended.

              The license from the SBA allowed AVF LP to obtain leverage by issuing SBA Debentures ("SBA Debentures"), subject to issuance of a capital commitment by the SBA and other customary procedures. Leverage through the SBA Debentures was subject to required capitalization thresholds. The original amount committed to AVF LP by the SBA was $75 million. In September 2017, AVF LP fully repaid the $25 million of the aggregate principal amount of the SBA Debentures outstanding at the time. In April 2018, our consolidated subsidiary, AVF LP, surrendered its license to operate as a SBIC and the undrawn SBA Debenture commitments of $50 million were terminated.

              We have issued $300 million aggregate principal amount of unsecured convertible notes that mature on January 15, 2019 (the "2019 Convertible Notes") and the $388 million aggregate principal amount of unsecured convertible notes that mature on February 1, 2022 (the "2022 Convertible Notes" and, together with the 2019 Convertible Notes, the "Convertible Unsecured Notes"). The Convertible Unsecured Notes mature upon their respective maturity dates unless previously converted or repurchased in accordance with their terms. We do not have the right to redeem the Convertible Unsecured Notes prior to maturity. The 2019 Convertible Notes and the 2022 Convertible Notes bear interest at a rate of 4.375% and 3.75%, respectively, per year, payable semi-annually.

              Certain key terms related to the convertible features for each of the Convertible Unsecured Notes as of June 30, 2018 are listed below.

 
  2019
Convertible Notes
  2022
Convertible Notes

Conversion premium

  15.0%   15.0%

Closing stock price at issuance

  $17.53   $16.86

Closing stock price date

  July 15, 2013   January 23, 2017

Conversion price(1)

  $19.99   $19.39

Conversion rate (shares per one thousand dollar principal amount)(1)

  50.0292   51.5756

Conversion dates

  July 15, 2018   August 1, 2021

(1)
Represents conversion price and conversion rate, as applicable, as of June 30, 2018, taking into account certain de minimis adjustments that will be made on the conversion date.

              In certain circumstances, the Convertible Unsecured Notes will be convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, at their respective conversion rates (listed below as of June 30, 2018) subject to customary anti-dilution adjustments and the requirements of their respective indenture (the "Convertible Unsecured Notes Indentures"). Prior to the close of business on the business day immediately preceding their respective conversion date (listed above), holders may convert their Convertible Unsecured Notes only under certain circumstances set forth in the respective Convertible Unsecured Notes Indenture. On or after their respective conversion dates until the close of business on the scheduled trading day immediately preceding their respective maturity date, holders may convert their Convertible Unsecured Notes at any time. In addition, if we engage in certain corporate events as described in their respective Convertible Unsecured Notes Indenture, holders of the Convertible Unsecured Notes may require us to repurchase

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for cash all or part of the Convertible Unsecured Notes at a repurchase price equal to 100% of the principal amount of the Convertible Unsecured Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the required repurchase date.

              In January 2018, we repaid in full the $270 million aggregate principal amount of unsecured convertible notes due in January 2018 (the "2018 Convertible Notes") at par upon their maturity. The 2018 Convertible Notes bore interest at a rate of 4.75% per year, payable semi-annually.

              We have issued $750 million in aggregate principal amount of unsecured notes, which bear interest at a rate of 4.875% per year and mature on November 30, 2018 (the "2018 Notes"). The 2018 Notes require payment of interest semi-annually, and all principal is due upon maturity. These notes are redeemable in whole or in part at any time at our option at a redemption price equal to par plus a "make whole" premium, as determined pursuant to the indenture governing the 2018 Notes, and any accrued and unpaid interest.

              We have issued $600 million in aggregate principal amount of unsecured notes, which bear interest at a rate of 3.875% per year and mature on January 15, 2020 (the "2020 Notes"). The 2020 Notes require payment of interest semi-annually, and all principal is due upon maturity. These notes are redeemable in whole or in part at any time at our option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2020 Notes, and any accrued and unpaid interest.

              We have issued $600 million in aggregate principal amount of unsecured notes, which bear interest at a rate of 3.625% per year and mature on January 19, 2022 (the "January 2022 Notes"). The January 2022 Notes require payment of interest semi-annually, and all principal is due upon maturity. These notes are redeemable in whole or in part at any time at our option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the January 2022 Notes, and any accrued and unpaid interest.

              We have issued $750 million in aggregate principal amount of unsecured notes that mature on February 10, 2023 (the "2023 Notes"). The 2023 Notes bear interest at a rate of 3.500% per year, payable semi-annually and all principal is due upon maturity. The 2023 Notes may be redeemed in whole or in part at any time at our option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2023 Notes, and any accrued and unpaid interest.

              We have issued $600 million in aggregate principal amount of unsecured notes that mature on March 1, 2025 (the "2025 Notes"). The 2025 Notes bear interest at a rate of 4.250% per year, payable semi-annually and all principal is due upon maturity. The 2025 Notes may be redeemed in whole or in part at any time at our option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2025 Notes, and any accrued and unpaid interest.

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              As part of the Allied Acquisition, we assumed $230 million aggregate principal amount of unsecured notes which bear interest at a rate of 6.875% and mature on April 15, 2047 (the "2047 Notes" and together with the 2018 Notes, the 2020 Notes, the January 2022 Notes, the 2023 Notes and the 2025 Notes, the "Unsecured Notes"). The 2047 Notes require payment of interest quarterly, and all principal is due upon maturity. These notes are redeemable in whole or in part at any time or from time to time at our option, at a par redemption price of $25.00 per security plus accrued and unpaid interest.

              As of June 30, 2018, we were in compliance in all material respects with the terms of the Convertible Unsecured Notes Indentures and the indentures governing the Unsecured Notes.

              The Convertible Unsecured Notes and the Unsecured Notes are our senior unsecured obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Convertible Unsecured Notes and the Unsecured Notes; equal in right of payment to our existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.

              See Note 5 to our consolidated financial statements for the three and six months ended June 30, 2018 for more information on our debt obligations.

CONTRACTUAL OBLIGATIONS

              A summary of the maturities of our principal amounts of debt and other contractual payment obligations as of December 31, 2017 are as follows:

 
  Payments Due by Period  
(in millions)
  Total   Less than
1 year
  1-3 years   3-5 years   After
5 years
 

Revolving Credit Facility

  $ 395   $   $   $ 395   $  

Revolving Funding Facility

    600             600 (1)    

SMBC Funding Facility

    60                 60 (2)

2018 Convertible Notes

    270     270              

2019 Convertible Notes

    300         300          

2022 Convertible Notes

    388                 388      

2018 Notes

    750     750              

2020 Notes

    600         600            

January 2022 Notes

    600                 600        

2023 Notes

    750                       750  

2047 Notes

    230                 230  

Operating lease obligations(3)

    192     26     50     51     65  

  $ 5,135   $ 1,046   $ 950   $ 2,034   $ 1,105  

(1)
As of December 31, 2017, the end of the reinvestment period for the Revolving Funding Facility was January 3, 2019. Subsequent to the end of this reinvestment period and prior to the stated maturity date of January 3, 2022, any principal proceeds from sales and repayments of loan assets held by Ares Capital CP will be used to repay the aggregate principal amount outstanding.

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(2)
As of December 31, 2017, the end of the reinvestment period for the SMBC Funding Facility was September 14, 2018. Subsequent to the end of this reinvestment period and prior to the stated maturity date of September 14, 2023, any principal proceeds from sales and repayments of loan assets held by ACJB will be used to repay the aggregate principal amount outstanding.

(3)
We are obligated under a number of operating leases and subleases to pay for office spaces with terms ranging from less than one year to more than five years. See Note 7 to our consolidated financial statements for the year ended December 31, 2017 for more information on our lease obligations.

OFF BALANCE SHEET ARRANGEMENTS

              We have various commitments to fund investments in our portfolio, as described below.

              As of June 30, 2018 and December 31, 2017, we had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) our discretion:

 
  As of  
(in millions)
  June 30,
2018
  December 31,
2017
 

Total revolving and delayed draw loan commitments

  $ 1,422   $ 881  

Less: drawn commitments

    (384 )   (201 )

Total undrawn commitments

    1,038     680  

Less: commitments substantially at our discretion

    (14 )   (11 )

Less: unavailable commitments due to borrowing base or other covenant restrictions

         

Total net adjusted undrawn revolving and delayed draw loan commitments

  $ 1,024   $ 669  

              Included within the total revolving and delayed draw loan commitments as of June 30, 2018 and December 31, 2017 were delayed draw loan commitments totaling $348 million and $251 million, respectively. Our commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels).

              Also included within the total revolving and delayed draw loan commitments as of June 30, 2018 were commitments to issue up to $190 million in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of June 30, 2018, we had $26 million in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For all these letters of credit issued and outstanding, we would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $13 million expire in 2018 and $13 million expires in 2019. As of June 30, 2018, we recorded a liability of $5 million for certain letters of credit issued and outstanding and none of the other letters of credit issued and outstanding were recorded as a liability on our balance sheet as such other letters of credit are considered in the valuation of the investments in the portfolio company.

              We also have commitments to co-invest in the SDLP for our portion of the SDLP's commitments to fund delayed draw loans to certain portfolio companies of the SDLP. See "—Senior

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Direct Lending Program" above and Note 4 to our consolidated financial statements for the three and six months ended June 30, 2018 for more information.

              As of June 30, 2018 and December 31, 2017, we were party to subscription agreements to fund equity investments in private equity investment partnerships as follows:

 
  As of  
(in millions)
  June 30,
2018
  December 31,
2017
 

Total private equity commitments

  $ 116   $ 111  

Less: funded private equity commitments

    (70 )   (62 )

Total unfunded private equity commitments

    46     49  

Less: private equity commitments substantially our discretion

    (46 )   (48 )

Total net adjusted unfunded private equity commitments

  $   $ 1  

              In the ordinary course of business, we may sell certain of our investments to third party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales), we have, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future.

              In addition, in the ordinary course of business, we may guarantee certain obligations in connection with our portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable.

RECENT DEVELOPMENTS

              From July 1, 2018 through July 25, 2018, we made new investment commitments of approximately $895 million, of which $794 million were funded. Of these new commitments, 70% were in first lien senior secured loans, 25% were in second lien senior secured loans and 5% were in other equity securities. Of the approximately $895 million of new investment commitments, 95% were floating rate and 5% were non-interest bearing. The weighted average yield of debt and other income producing securities funded during the period at amortized cost was 7.5%. We may seek to sell all or a portion of these new investment commitments, although there can be no assurance that we will be able to do so.

              From July 1, 2018 through July 25, 2018, we exited approximately $629 million of investment commitments, including $291 million of investment commitments acquired in the American Capital Acquisition. Of the total investment commitments, 62% were first lien senior secured loans, 25% were senior subordinated loans, 11% were second lien senior secured loans and 2% were investments in the SDLP Certificates. Of the approximately $629 million of exited investment commitments, 75% were floating rate and 25% were fixed rate. The weighted average yield of debt and other income producing securities exited or repaid during the period at amortized cost was 9.5% and the weighted average yield on total investments exited or repaid during the period at amortized cost was 9.5%. On the approximately $629 million of investment commitments exited from July 1, 2018 through July 25, 2018, we recognized total net realized gains of approximately $326 million.

              In addition, as of July 25, 2018, we had an investment backlog and pipeline of approximately $710 million and $660 million, respectively. Investment backlog includes transactions approved by our investment adviser's investment committee and/or for which a formal mandate, letter of intent or a

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signed commitment have been issued, and therefore we believe are likely to close. Investment pipeline includes transactions where due diligence and analysis are in process, but no formal mandate, letter of intent or signed commitment have been issued. The consummation of any of the investments in this backlog and pipeline depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective portfolio company, our acceptance of the terms and structure of such investment and the execution and delivery of satisfactory transaction documentation. In addition, we may sell all or a portion of these investments and certain of these investments may result in the repayment of existing investments. We cannot assure you that we will make any of these investments or that we will sell all or any portion of these investments.

CRITICAL ACCOUNTING POLICIES

Basis of Presentation

              The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with GAAP, and include the accounts of the Company and its consolidated subsidiaries. The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification ("ASC") 946. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the results of the operations and financial condition as of and for the periods presented. All significant intercompany balances and transactions have been eliminated.

              Interim financial statements are prepared in accordance with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period presented, have been included. The current period's results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2018.

Cash and Cash Equivalents

              Cash and cash equivalents include funds from time to time deposited with financial institutions and short-term, liquid investments in a money market account. Cash and cash equivalents are carried at cost which approximates fair value.

Concentration of Credit Risk

              We place our cash and cash equivalents with financial institutions and, at times, cash held in money market accounts may exceed the Federal Deposit Insurance Corporation insured limit.

Investments

              Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized.

              Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, we look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available (i.e., substantially all of our investments) are valued at fair value as determined in good faith by our

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board of directors, based on, among other things, the input of our investment adviser, audit committee and independent third-party valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing 12-month period (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. The valuation process is conducted at the end of each fiscal quarter, and a portion of the Company's investment portfolio at fair value is subject to review by an independent valuation firm each quarter. In addition, our independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, our investment valuation process within the context of performing the integrated audit.

              As part of the valuation process, we may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation.

              Because there is not a readily available market value for most of the investments in our portfolio, we value substantially all of our portfolio investments at fair value as determined in good faith by our board of directors, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

              In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

              Our board of directors undertakes a multi-step valuation process each quarter, as described below:

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              See Note 8 to our consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017 for more information on our valuation process.

Interest and Dividend Income Recognition

              Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.

              Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current. We may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.

              Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

Payment-in-Kind Interest

              We have loans in our portfolio that contain PIK provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan and recorded as interest income. To maintain our status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends, even though we have not yet collected the cash.

Capital Structuring Service Fees and Other Income

              Our investment adviser seeks to provide assistance to our portfolio companies and in return we may receive fees for capital structuring services. These fees are fixed based on contractual terms, are generally only available to us as a result of our underlying investments, are normally paid at the closing of the investments, are generally non-recurring and non-refundable and are recognized as revenue when earned upon closing of the investment. The services that our investment adviser provides vary by investment, but generally include reviewing existing credit facilities, arranging bank financing, arranging equity financing, structuring financing from multiple lenders, structuring financing from multiple equity investors, restructuring existing loans, raising equity and debt capital, and providing general financial advice, which concludes upon closing of the investment. Any services of the above nature subsequent to the closing would generally generate a separate fee payable to us. In certain instances where we are invited to participate as a co-lender in a transaction and do not provide significant services in connection with the investment, a portion of loan fees paid to us in such situations will be deferred and amortized over the estimated life of the loan.

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              Other income includes amendment fees that are fixed based on contractual terms and are generally non-recurring and non-refundable and are recognized as revenue when earned upon closing of the transaction. Other income also includes fees for management and consulting services, loan guarantees, commitments, and other services rendered by us to portfolio companies. Such fees are fixed based on contractual terms and are recognized as income as services are rendered.

Foreign Currency Translation

              Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

              Results of operations based on changes in foreign exchange rates are separately disclosed in the statement of operations, if any. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Derivative Instruments

              We do not utilize hedge accounting and as such we value our derivatives at fair value with the unrealized gains or losses recorded in "net unrealized gains (losses) from foreign currency and other transactions" in our consolidated statement of operations.

Equity Offering Expenses

              Our offering costs are charged against the proceeds from equity offerings when proceeds are received.

Debt Issuance Costs

              Debt issuance costs are amortized over the life of the related debt instrument using the straight line method or the effective yield method, depending on the type of debt instrument.

Income Taxes

              We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must (among other requirements) meet certain source-of- income and asset diversification requirements and timely distribute to our stockholders at least 90% of our investment company taxable income, as defined by the Code, for each year. We (among other requirements) have made and intend to continue to make the requisite distributions to our stockholders, which will generally relieve us from U.S. federal corporate-level income taxes.

              Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that we determine that our estimated current year taxable income will be in excess of estimated dividend

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distributions for the current year, we accrue excise tax, if any, on estimated excess taxable income as such taxable income is earned.

              Certain of our consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes.

Dividends to Common Stockholders

              Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by our board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are generally distributed, although we may decide to retain such capital gains for investment.

              We have adopted a dividend reinvestment plan that provides for reinvestment of any distributions we declare in cash on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, if our board of directors authorizes, and we declare, a cash dividend, then our stockholders who have not "opted out" of our dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of our common stock, rather than receiving the cash dividend. We intend to use primarily newly issued shares to implement the dividend reinvestment plan (so long as we are trading at a premium to net asset value). If our shares are trading at a discount to net asset value and we are otherwise permitted under applicable law to purchase such shares, we may purchase shares in the open market in connection with our obligations under our dividend reinvestment plan. However, we reserve the right to issue new shares of our common stock in connection with our obligations under the dividend reinvestment plan even if our shares are trading below net asset value.

Use of Estimates in the Preparation of Financial Statements

              The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of actual and contingent assets and liabilities at the date of the financial statements and the reported amounts of income or loss and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation of investments.

Recent Accounting Pronouncements

              In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, Leases (Topic 842). The guidance in this ASU supersedes the leasing guidance in Leases (Topic 840). Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for those leases previously classified as operating leases. The guidance requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The amendments in ASU No. 2016-02 are effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. While we are currently evaluating the impact of ASU No. 2016-02, we expect an increase to the consolidated balance sheets for the lease assets and associated lease liabilities for our lease agreements previously accounted for as operating leases.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

              We are subject to financial market risks, including changes in interest rates and the valuations of our investment portfolio.

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Interest Rate Risk

              Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. See "Risk Factors—Risks Relating to Our Business—We are exposed to risks associated with changes in interest rates."

              As of June 30, 2018, 78% of the investments at fair value in our portfolio bore interest at variable rates, 8% bore interest at fixed rates, 13% were non-interest earning and 1% were on non-accrual status. Additionally, for the variable rate investments, 99% of these investments contained interest rate floors (representing 78% of total investments at fair value). Also, as of June 30, 2018, all the loans made through the SDLP contained interest rate floors. The Facilities all bear interest at variable rates with no interest rate floors, while the Unsecured Notes and the Convertible Unsecured Notes bear interest at fixed rates.

              We regularly measure our exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

              In December 2017, in connection with $395 million of the term loan tranche of our Revolving Credit Facility, we entered into a three-year interest rate swap agreement for a total notional amount of $395 million. Under the interest rate swap agreement, we pay a fixed interest rate of 2.06% and receive a floating rate based on the prevailing one-month LIBOR. See Note 5 to our consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017 for more information on the Revolving Credit Facility and see Note 6 to our consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017 for more information on the interest rate swap.

              Based on our June 30, 2018 balance sheet, the following table shows the annual impact on net income of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure and reflecting the effect of our interest rate swap agreement discussed in the paragraph above:

(in millions)
Basis Point Change
  Interest
Income
  Interest
Expense(1)
  Net
Income(2)
 

Up 300 basis points

  $ 267   $ 1   $ 266  

Up 200 basis points

  $ 178   $   $ 178  

Up 100 basis points

  $ 88   $   $ 88  

Down 100 basis points

  $ (87 ) $   $ (87 )

Down 200 basis points

  $ (97 ) $   $ (97 )

Down 300 basis points

  $ (92 ) $   $ (92 )

(1)
Includes the impact of the interest rate swap (discussed above) as a result of changes in interest rates.

(2)
Excludes the impact of income based fees. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2018 for more information on the income based fees.

              The above sensitivity analysis does not include our collateralized loan obligation ("CLO") equity investments. CLO equity investments are levered structures that are collateralized primarily with first lien floating rate loans that may have LIBOR floors and are levered primarily with floating rate

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debt that does not have a LIBOR floor. The residual cash flows available to the equity holders of the CLOs will decline as interest rates increase until interest rates surpass the LIBOR floors on the floating rate loans. However, the revenue recognized on our CLO equity investments is calculated using the effective interest method which incorporates a forward LIBOR curve in the projected cash flows. Any change to interest rates that is not in-line with the forward LIBOR curve used in the projections, in either the timing or magnitude of the change, will cause actual distributions to differ from the current projections and will impact the related revenue recognized from these investments.

              Based on our December 31, 2017, balance sheet, the following table shows the annual impact on net income of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure:

(in millions)
Basis Point Change
  Interest
Income
  Interest
Expense(1)
  Net
Income(2)
 

Up 300 basis points

  $ 289   $ 20   $ 269  

Up 200 basis points

  $ 192   $ 13   $ 179  

Up 100 basis points

  $ 96   $ 7   $ 89  

Down 100 basis points

  $ (44 ) $ (7 ) $ (37 )

Down 200 basis points

  $ (37 ) $ (10 ) $ (27 )

Down 300 basis points

  $ (38 ) $ (10 ) $ (28 )

(1)
Includes the impact of the interest rate swap (discussed above) as a result of changes in interest rates.

(2)
Excludes the impact of income based fees. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2018 for more information on the income based fees.

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SENIOR SECURITIES
(dollar amounts in thousands, except per unit data)

              Information about our senior securities (including preferred stock, debt securities and other indebtedness) is shown in the following tables as of the end of the last ten fiscal years and as of June 30, 2018. The report of our independent registered public accounting firm, KPMG LLP, on the senior securities table as of December 31, 2017, is attached as an exhibit to the registration statement of which this prospectus and the accompanying prospectus supplement is a part. The "—"indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.

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)
 

Revolving Credit Facility

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 413,750   $ 2,547   $     N/A  

Fiscal 2017

  $ 395,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 571,053   $ 2,296   $     N/A  

Fiscal 2015

  $ 515,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 170,000   $ 2,292   $     N/A  

Fiscal 2013

  $   $   $     N/A  

Fiscal 2012

  $   $   $     N/A  

Fiscal 2011

  $ 395,000   $ 2,393   $     N/A  

Fiscal 2010

  $ 146,000   $ 3,079   $     N/A  

Fiscal 2009

  $ 474,144   $ 2,294   $     N/A  

Fiscal 2008

  $ 480,486   $ 2,201   $     N/A  

Revolving Funding Facility

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $   $   $     N/A  

Fiscal 2017

  $ 600,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 155,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 250,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 324,000   $ 2,292   $     N/A  

Fiscal 2013

  $ 185,000   $ 2,547   $     N/A  

Fiscal 2012

  $ 300,000   $ 2,721   $     N/A  

Fiscal 2011

  $ 463,000   $ 2,393   $     N/A  

Fiscal 2010

  $ 242,050   $ 3,079   $     N/A  

Fiscal 2009

  $ 221,569   $ 2,294   $     N/A  

Fiscal 2008

  $ 114,300   $ 2,201   $     N/A  

Revolving Funding II Facility

                         

Fiscal 2009

  $   $   $     N/A  

SMBC Revolving Funding Facility

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $   $   $     N/A  

Fiscal 2017

  $ 60,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 105,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 110,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 62,000   $ 2,292   $     N/A  

Fiscal 2013

  $   $   $     N/A  

Fiscal 2012

  $   $   $     N/A  

SBA Debentures

                         

Fiscal 2017

  $   $   $     N/A  

Fiscal 2016

  $ 25,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 22,000   $ 2,213   $     N/A  

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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)
 

Debt Securitization

                         

Fiscal 2011

  $ 77,531   $ 2,393   $     N/A  

Fiscal 2010

  $ 155,297   $ 3,079   $     N/A  

Fiscal 2009

  $ 273,752   $ 2,294   $     N/A  

Fiscal 2008

  $ 314,000   $ 2,201   $     N/A  

February 2016 Convertible Notes

                         

Fiscal 2015

  $ 575,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 575,000   $ 2,292   $     N/A  

Fiscal 2013

  $ 575,000   $ 2,547   $     N/A  

Fiscal 2012

  $ 575,000   $ 2,721   $     N/A  

Fiscal 2011

  $ 575,000   $ 2,393   $     N/A  

June 2016 Convertible Notes

                         

Fiscal 2015

  $ 230,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 230,000   $ 2,292   $     N/A  

Fiscal 2013

  $ 230,000   $ 2,547   $     N/A  

Fiscal 2012

  $ 230,000   $ 2,721   $     N/A  

Fiscal 2011

  $ 230,000   $ 2,393   $     N/A  

2017 Convertible Notes

                         

Fiscal 2016

  $ 162,500   $ 2,296   $     N/A  

Fiscal 2015

  $ 162,500   $ 2,213   $     N/A  

Fiscal 2014

  $ 162,500   $ 2,292   $     N/A  

Fiscal 2013

  $ 162,500   $ 2,547   $     N/A  

Fiscal 2012

  $ 162,500   $ 2,721   $     N/A  

2018 Convertible Notes

                         

Fiscal 2017

  $ 270,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 270,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 270,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 270,000   $ 2,292   $     N/A  

Fiscal 2013

  $ 270,000   $ 2,547   $     N/A  

Fiscal 2012

  $ 270,000   $ 2,721   $     N/A  

2019 Convertible Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 300,000   $ 2,547   $     N/A  

Fiscal 2017

  $ 300,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 300,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 300,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 300,000   $ 2,292   $     N/A  

Fiscal 2013

  $ 300,000   $ 2,547   $     N/A  

2022 Convertible Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 388,000   $ 2,547   $     N/A  

Fiscal 2017

  $ 388,000   $ 2,415   $     N/A  

2011 Notes

                         

Fiscal 2010

  $ 300,584   $ 3,079   $   $ 1,018  

2012 Notes

                         

Fiscal 2010

  $ 161,210   $ 3,079   $   $ 1,018  

2018 Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 750,000   $ 2,547   $     N/A  

Fiscal 2017

  $ 750,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 750,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 750,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 750,000   $ 2,292   $     N/A  

Fiscal 2013

  $ 600,000   $ 2,547   $     N/A  

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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)
 

2020 Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 600,000   $ 2,547   $     N/A  

Fiscal 2017

  $ 600,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 600,000   $ 2,296   $     N/A  

Fiscal 2015

  $ 600,000   $ 2,213   $     N/A  

Fiscal 2014

  $ 400,000   $ 2,292   $     N/A  

January 2022 Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 600,000   $ 2,547   $     N/A  

Fiscal 2017

  $ 600,000   $ 2,415   $     N/A  

Fiscal 2016

  $ 600,000   $ 2,296   $     N/A  

February 2022 Notes

                         

Fiscal 2014

  $ 143,750   $ 2,292   $   $ 1,024  

Fiscal 2013

  $ 143,750   $ 2,547   $   $ 1,043  

Fiscal 2012

  $ 143,750   $ 2,721   $   $ 1,035  

October 2022 Notes

                         

Fiscal 2016

  $ 182,500   $ 2,296   $   $ 1,017  

Fiscal 2015

  $ 182,500   $ 2,213   $   $ 1,011  

Fiscal 2014

  $ 182,500   $ 2,292   $   $ 1,013  

Fiscal 2013

  $ 182,500   $ 2,547   $   $ 993  

Fiscal 2012

  $ 182,500   $ 2,721   $   $ 986  

2040 Notes

                         

Fiscal 2014

  $ 200,000   $ 2,292   $   $ 1,040  

Fiscal 2013

  $ 200,000   $ 2,547   $   $ 1,038  

Fiscal 2012

  $ 200,000   $ 2,721   $   $ 1,041  

Fiscal 2011

  $ 200,000   $ 2,393   $   $ 984  

Fiscal 2010

  $ 200,000   $ 3,079   $   $ 952  

2023 Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 750,000   $ 2,547   $     N/A  

Fiscal 2017

  $ 750,000   $ 2,415   $     N/A  

2025 Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 600,000   $ 2,547   $     N/A  

2047 Notes

                         

Fiscal 2018 (as of June 30, 2018, unaudited)

  $ 229,557   $ 2,547   $   $ 1,016  

Fiscal 2017

  $ 229,557   $ 2,415   $   $ 1,021  

Fiscal 2016

  $ 229,557   $ 2,296   $   $ 1,015  

Fiscal 2015

  $ 229,557   $ 2,213   $   $ 1,011  

Fiscal 2014

  $ 229,557   $ 2,292   $   $ 985  

Fiscal 2013

  $ 230,000   $ 2,547   $   $ 972  

Fiscal 2012

  $ 230,000   $ 2,721   $   $ 978  

Fiscal 2011

  $ 230,000   $ 2,393   $   $ 917  

Fiscal 2010

  $ 230,000   $ 3,079   $   $ 847  

(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 our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the "Asset Coverage Per Unit" (including for the February 2022 Notes, the October 2022 Notes, the 2040 Notes and the 2047 Notes, which were issued in $25 increments). In June 2016, Ares Capital received exemptive relief from the SEC allowing it to modify the asset coverage requirements to exclude SBA Debentures from this calculation. As such,

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(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, except for with respect to the 2011 Notes, the 2012 Notes, the February 2022 Notes, the October 2022 Notes, the 2040 Notes and the 2047 Notes, as other senior securities are not registered for public trading on a stock exchange. The average market value per unit for each of the 2011 Notes, the 2012 Notes, the February 2022 Notes, the October 2022 Notes, the 2040 Notes and the 2047 Notes is based on the average daily prices of such notes and is expressed per $1,000 of indebtedness (including for the February 2022 Notes, the October 2022 Notes, the 2040 Notes and the 2047 Notes, which were issued in $25 increments).

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BUSINESS

Ares Capital

              Ares Capital, a Maryland corporation, is a specialty finance company that is a closed-end, non-diversified management investment company. We have elected to be regulated as a BDC under the Investment Company Act. We were founded on April 16, 2004, were initially funded on June 23, 2004 and completed our IPO on October 8, 2004. As of June 30, 2018, we were the largest BDC in the United States with approximately $12.3 billion of total assets.

              We are externally managed by our investment adviser, Ares Capital Management, a subsidiary of Ares Management, a publicly traded, leading global alternative asset manager, pursuant to our investment advisory and management agreement. Our administrator, Ares Operations, a subsidiary of Ares Management, provides certain administrative and other services necessary for us to operate.

              Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in U.S. middle-market companies, where we believe the supply of primary capital is limited and the investment opportunities are most attractive. However, we may from time to time invest in larger or smaller companies. We generally use the term "middle-market" to refer to companies with annual EBITDA between $10 million and $250 million. As used herein, EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization.

              We invest primarily in first lien senior secured loans (including "unitranche" loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component. First and second lien senior secured loans generally are senior debt instruments that rank ahead of subordinated debt of a given portfolio company. Mezzanine debt is subordinated to senior loans and is generally unsecured. Our investments in corporate borrowers generally range between $30 million and $500 million each and, investments in project finance/power generation projects generally range between $10 million and $200 million. However, the investment sizes may be more or less than these ranges and may vary based on, among other things, our capital availability, the composition of our portfolio and general micro-and macro-economic factors.

              To a lesser extent, we also make preferred and/or common equity investments, which have generally been non-control equity investments of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments.

              The proportion of these types of investments will change over time given our views on, among other things, the economic and credit environment in which we are operating. In connection with our investing activities, we may make commitments with respect to indebtedness or securities of a potential portfolio company substantially in excess of our final investment. In such situations, while we may initially agree to fund up to a certain dollar amount of an investment, we may subsequently syndicate or sell a portion of such amount (including, without limitation, to vehicles managed by our portfolio company, IHAM), such that we are left with a smaller investment than what was reflected in our original commitment. In addition to originating investments, we may also acquire investments in the secondary market (including purchases of a portfolio of investments).

              The first and second lien senior secured loans in which we invest generally have stated terms of three to 10 years and the mezzanine debt investments in which we invest generally have stated terms of up to 10 years, but the expected average life of such first and second lien loans and mezzanine debt is generally between three and seven years. However, we may invest in loans and securities with any maturity or duration. The instruments in which we invest typically are not rated by any rating agency, but we believe that if such instruments were rated, they would be below investment grade (rated lower

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than "Baa3" by Moody's Investors Service, lower than "BBB–" by Fitch Ratings or lower than "BBB–" by Standard & Poor's Ratings Services), which, under the guidelines established by these entities, is an indication of having predominantly speculative characteristics with respect to the issuer's capacity to pay interest and repay principal. Bonds that are rated below investment grade are sometimes referred to as "high yield bonds" or "junk bonds." We may invest without limit in debt or other securities of any rating, as well as debt or other securities that have not been rated by any nationally recognized statistical rating organization.

              We believe that our investment adviser, Ares Capital Management, is able to leverage the current investment platform, resources and existing relationships of Ares with financial sponsors, financial institutions, hedge funds and other investment firms to provide us with attractive investment opportunities. In addition to deal flow, the Ares investment platform assists our investment adviser in analyzing, structuring and monitoring investments. Ares has been in existence for over 20 years and its partners have an average of approximately 23 years of experience in leveraged finance, private equity, distressed debt, commercial real estate finance, investment banking and capital markets. We have access to Ares' investment professionals and administrative professionals, who provide assistance in accounting, finance, legal, compliance, operations, information technology and investor relations. As of June 30, 2018, Ares had approximately 405 investment professionals and approximately 640 administrative professionals.

              While our primary focus is to generate current income and capital appreciation through investments in first and second lien senior secured loans and mezzanine debt and, to a lesser extent, equity securities of eligible portfolio companies, we also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.

American Capital Acquisition

              On January 3, 2017, we completed the American Capital Acquisition in a cash and stock transaction valued at approximately $4.2 billion. In connection with the stock consideration, we issued approximately 112 million shares of our common stock to American Capital's then-existing stockholders (including holders of outstanding in-the-money American Capital stock options), thereby resulting in our then-existing stockholders owning approximately 73.7% of the combined company and then-existing American Capital stockholders owning approximately 26.3% of the combined company.

              In connection with the American Capital Acquisition, Ares Capital Management has agreed to the Fee Waiver. See Notes 3 and 14 to our consolidated financial statements for the three and six months ended June 30, 2018 and Notes 3 and 16 for the year ended December 31, 2017 for additional information regarding the American Capital Acquisition.

Ares Management, L.P.

              Ares is a publicly traded, leading global alternative asset manager. As of June 30, 2018, Ares had over 1,000 employees in over 15 principal and originating offices across the United States, Europe, Asia and Australia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole.

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Ares Capital Management LLC

              Ares Capital Management, our investment adviser, is served by an origination, investment and portfolio management team of approximately 95 U.S.-based investment professionals as of June 30, 2018 and led by certain partners of the Ares Credit Group: Kipp deVeer, Mitchell Goldstein and Michael Smith. Ares Capital Management leverages off of Ares' investment platform and benefits from the significant capital markets, trading and research expertise of Ares' investment professionals. Ares Capital Management's investment committee has eight members primarily comprised of certain of the U.S.-based partners of the Ares Credit Group.

MARKET OPPORTUNITY

              We believe that current market conditions present attractive opportunities for us to invest in middle-market companies, specifically:

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COMPETITIVE ADVANTAGES

              We believe that we have the following competitive advantages over other capital providers to middle-market companies:

The Ares Platform

              Ares operates three distinct but complementary investment groups, including the Ares Credit Group, the Ares Private Equity Group and the Ares Real Estate Group. We believe our affiliation with Ares provides a distinct competitive advantage through Ares' originations, due diligence, and marketing activities. In particular, we believe that the Ares platform provides us with an advantage through its deal flow generation and investment evaluation process. Ares' asset management platform also provides additional market information, company knowledge and industry insight that benefit our investment and due diligence process. Ares' professionals maintain extensive financial sponsor and intermediary relationships, which provide valuable insight and access to transactions and information.

Seasoned Management Team

              The investment professionals in the Ares Credit Group and members of our investment adviser's investment committee also have significant experience investing across market cycles. This experience also provides us with a competitive advantage in identifying, originating, investing in and managing a portfolio of investments in middle-market companies.

Broad Origination Strategy

              We focus on self-originating most of our investments by pursuing a broad array of investment opportunities in middle-market companies and power generation projects across multiple channels. We also leverage off of the extensive relationships of the broader Ares platform, including relationships with the portfolio companies in the IHAM Vehicles, to identify investment opportunities. We believe that this allows for asset selectivity and that there is a significant relationship between proprietary deal origination and credit performance. We believe that our focus on generating proprietary deal flow and lead investing also gives us greater control over capital structure, deal terms, pricing and documentation and enables us to actively manage our portfolio investments. Moreover, by leading the investment process, we are often able to secure controlling positions in credit tranches, thereby providing additional control in investment outcomes. We also have originated substantial proprietary deal flow from middle-market intermediaries, which often allows us to act as the sole or principal source of institutional capital to the borrower.

Scale and Flexible Transaction Structuring

              We believe that being one of the largest BDCs makes us a more desirable and flexible capital provider, especially in competitive markets. We are flexible with the types of investments we make and the terms associated with those investments. We believe this approach and experience enables our investment adviser to identify attractive investment opportunities throughout economic cycles and across a company's capital structure so we can make investments consistent with our stated investment objective and preserve principal while seeking appropriate risk adjusted returns. In addition, we have the flexibility to provide "one stop" financing with the ability to invest capital across the balance sheet and syndicate and hold larger investments than many of our competitors. We believe that the ability to underwrite, syndicate and hold larger investments benefits our stockholders by (a) potentially increasing net income and earnings through syndication, (b) increasing originated deal flow flexibility, (c) broadening market relationships and deal flow, (d) allowing us to optimize our portfolio composition and (e) allowing us to provide capital to a broader spectrum of middle-market companies, which we believe currently have limited access to capital from traditional lending sources. In addition,

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we believe that the ability to provide capital at every level of the balance sheet provides a strong value proposition to middle-market borrowers and our senior debt capabilities provide superior deal origination and relative value analysis capabilities compared to junior capital focused lenders.

Experience with and Focus on Middle-Market Companies

              Ares has historically focused on investments in middle-market companies and we benefit from this experience. In sourcing and analyzing deals, our investment adviser benefits from Ares' extensive network of relationships focused on middle-market companies, including management teams, members of the investment banking community, private equity groups and other investment firms with whom Ares has had long-term relationships. We believe this network enables us to identify well-positioned prospective portfolio company investments. The Ares Credit Group works closely with Ares' other investment professionals. As of June 30, 2018, Ares oversaw a portfolio of investments in over 1,500 companies, over 500 structured assets and over 170 properties across approximately 60 industries, which provides access to an extensive network of relationships and insights into industry trends and the state of the capital markets.

Disciplined Investment Philosophy

              In making its investment decisions, our investment adviser has adopted Ares' long-standing, consistent, credit-based investment approach that was developed over 20 years ago by its founders. Specifically, our investment adviser's investment philosophy, portfolio construction and portfolio management involve an assessment of the overall macroeconomic environment and financial markets and company-specific research and analysis. Its investment approach emphasizes capital preservation, low volatility and minimization of downside risk. In addition to engaging in extensive due diligence from the perspective of a long-term investor, our investment adviser's approach seeks to reduce risk in investments by focusing on:

Extensive Industry Focus

              We seek to concentrate our investing activities in industries with a history of predictable and dependable cash flows and in which the Ares investment professionals have had extensive investment experience. Ares investment professionals have developed long-term relationships with management teams and management consultants in approximately 60 industries, and have accumulated substantial information and identified potential trends within these industries. In turn, we benefit from these relationships, information and identification of potential trends in making investments.

OPERATING AND REGULATORY STRUCTURE

              Our investment activities are managed by our investment adviser and supervised by our board of directors, a majority of whom are independent of Ares and its affiliates. Our investment adviser is registered under the Advisers Act. Under our investment advisory agreement we have agreed to pay

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our investment adviser base management fees, income based fees and capital gains incentive fees. See "—Investment Advisory and Management Agreement". Ares Operations provides us with certain administrative and other services necessary for us to operate pursuant to the administration agreement. See "—Administration Agreement".

              As a BDC, we are required to comply with certain regulatory requirements. For example, we are not generally permitted to co-invest in any portfolio company in which a fund managed by Ares or any of its downstream affiliates (other than us and our downstream affiliates) is also co-investing. On January 18, 2017, we received an order from the SEC that permits us and other BDCs and registered closed-end management investment companies managed by Ares to co-invest in portfolio companies with each other and with affiliated investment funds. Co-investments made under the Co-investment Exemptive Order are subject to compliance with certain conditions and other requirements, which could limit our ability to participate in a co-investment transaction. We may also otherwise co-invest with funds managed by Ares or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our allocation procedures.

              Also, while we may borrow funds to make investments, our ability to use debt is limited in certain significant aspects. See "Regulation." In particular, under the provisions of the Investment Company Act, BDCs must have at least 200% asset coverage calculated pursuant to the Investment Company Act (i.e., we are permitted to borrow one dollar for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us) in order to incur debt or issue preferred stock (which we refer to collectively as "senior securities"), unless the BDC obtains approval (either stockholder approval or approval of a "required majority" of its board of directors) to apply the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act, as amended by the SBCAA, reducing the required asset coverage ratio applicable to the BDC from 200% to 150%.

              Currently, our asset coverage requirement applicable to senior securities is 200%. On June 21, 2018, our board of directors, including a "required majority" of our board of directors, approved the application of the modified asset coverage requirement set forth in Section 61(a)(2) of the Investment Company Act, as amended by the SBCAA. As a result, effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. In order to incur this additional leverage, we intend to enter into certain amendments for our Revolving Credit Facility and Revolving Funding Facility to reduce the current asset coverage requirements specified therein. See "Risk Factors—Risks Relating to Our Business—Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement will reduce from 200% to 150%, which may increase the risk of investing with us" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources."

              As of June 30, 2018, our asset coverage was 255%.

              In addition, as a consequence of us being a RIC under the Code for U.S. federal income tax purposes, our asset growth is dependent on our ability to raise equity capital through the issuance of common stock. RICs generally must distribute substantially all of their investment company taxable income (as defined under the Code) to stockholders as dividends in order to preserve their status as a RIC and not to be subject to additional U.S. federal corporate-level income taxes. This requirement, in turn, generally prevents us from using our earnings to support our operations, including making new investments.

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INVESTMENTS

Ares Capital Corporation Portfolio

              We have built an investment portfolio of primarily first and second lien senior secured loans, mezzanine debt and, to a lesser extent, equity investments in private middle-market companies. Our portfolio is well diversified by industry sector and its concentration to any single issuer is limited.

              Our debt investments in corporate borrowers generally range between $30 million and $500 million each and investments in project finance/power generation projects generally range between $10 million and $200 million each. However, the sizes of our investments may be more or less than these ranges and may vary based on, among other things, our capital availability, the composition of our portfolio and general micro- and macro-economic factors.

              Our preferred and/or common equity investments have generally been non-control equity investments of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments.

              In addition, the proportion of these types of investments will change over time given our views on, among other things, the economic and credit environment in which we are operating. In connection with our investing activities, we may make commitments with respect to indebtedness or securities of a potential portfolio company substantially in excess of our expected final hold size. In such situations, while we may initially agree to fund up to a certain dollar amount of an investment, we may subsequently syndicate a portion of such amount such that we are left with a smaller investment than what was reflected in our original commitment. In addition to originating investments, we may also acquire investments in the secondary market (including purchases of a portfolio of investments).

              We make senior secured loans primarily in the form of first lien loans (including unitranche loans) and second lien loans. Our senior secured loans generally have terms of three to ten years. In connection with our senior secured loans we generally receive a security interest in certain of the assets of the borrower and consequently such assets serve as collateral in support of the repayment of such senior secured loans. Senior secured loans are generally exposed to the least amount of credit risk because they typically hold a senior position with respect to scheduled interest and principal payments and security interests in assets of the borrower. However, unlike mezzanine debt, senior secured loans typically do not receive any stock, warrants to purchase stock or other yield enhancements. Senior secured loans may include both revolving lines of credit and term loans.

              Structurally, mezzanine debt usually ranks subordinate in priority of payment to senior secured loans and is often unsecured. However, mezzanine debt ranks senior to preferred and common equity in a borrower's capital structure. Mezzanine debt investments generally offer lenders fixed returns in the form of interest payments and will often provide lenders an opportunity to participate in the capital appreciation of a borrower, if any, through an equity interest. This equity interest typically takes the form of an equity co-investment and/or warrants. Due to its higher risk profile and often less restrictive covenants as compared to senior secured loans, mezzanine debt generally bears a higher stated interest rate than senior secured loans. The equity co-investment and warrants (if any) associated with a mezzanine debt investment typically allow lenders to receive repayment of their principal on an agreed amortization schedule while retaining their equity interest in the borrower. Equity issued in connection with mezzanine debt also may include a "put" feature, which permits the holder to sell its equity interest back to the borrower at a price determined through an agreed formula.

              In making an equity investment, in addition to considering the factors discussed under "—Investment Selection" below, we also consider the anticipated timing of a liquidity event, such as a public offering, sale of the company or redemption of our equity securities.

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              While our primary focus is to generate current income and capital appreciation through investments in first and second lien senior secured loans and mezzanine debt and, to a lesser extent, equity securities of eligible portfolio companies, we also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. See "Regulation." Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.

Senior Direct Lending Program

              We have established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle market companies. Varagon was formed in 2013 as a lending platform by American International Group, Inc. and other partners. The joint venture is called the SDLP. In July 2016, we and Varagon and its clients completed the initial funding of the SDLP. The SDLP may generally commit and hold individual loans of up to $300 million. We may directly co-invest with the SDLP to accommodate larger transactions. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required).

              We provide capital to the SDLP in the form of the SDLP Certificates, and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. As of June 30, 2018, we and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates. The SDLP Certificates pay a coupon of LIBOR plus a stated spread and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

              As of June 30, 2018, we and Varagon and its clients had agreed to make capital available to the SDLP of $6.4 billion in the aggregate, of which $1.4 billion is to be made available from us. We will continue to provide capital to the SDLP in the form of SDLP Certificates, and Varagon and its clients will provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. Investment of any unfunded amount must be approved by the investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required).

              For more information on the SDLP, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity—Co-Investment Programs—Senior Direct Lending Program."

Ivy Hill Asset Management, L.P.

              As of June 30, 2018, our portfolio company, IHAM, an SEC-registered investment adviser, managed 23 vehicles and served as the sub-manager/sub-servicer for two other vehicles. As of June 30, 2018, IHAM had assets under management of approximately $5.0 billion. As of June 30, 2018, the amortized cost and fair value of our investment in IHAM was $451 million and $562 million, respectively. In connection with IHAM's registration as a registered investment adviser, on March 30, 2012, we received exemptive relief from the SEC allowing us to, subject to certain conditions, own directly or indirectly up to 100% of IHAM's outstanding equity interests and make additional investments in IHAM. From time to time, IHAM or certain IHAM Vehicles may purchase investments

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from us or sell investments to us, in each case for a price equal to the fair market value of such investments determined at the time of such transactions.

              On January 3, 2017, in connection with the American Capital Acquisition, American Capital Asset Management, LLC, a wholly owned portfolio company of American Capital ("ACAM"), merged with and into IHAM, with IHAM remaining as the surviving entity as a wholly owned portfolio company of ours. As a result, IHAM now manages certain funds that were previously managed by ACAM.

              See Notes 4 and 14 to our consolidated financial statements for the three months and six months ended June 30, 2018 for more information about IHAM and its role in the American Capital Acquisition.

Industry Composition

              We generally seek to invest in companies in the industries in which Ares' investment professionals have direct expertise. The following is a representative list of the industries in which we have invested:

              However, we may invest in other industries if we are presented with attractive opportunities.

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              The industrial and geographic compositions of our portfolio at fair value as of June 30, 2018 and December 31, 2017 were as follows:

 
  As of  
Industry
  June 30,
2018
  December 31,
2017
 

Healthcare Services

    22.2 %   22.5 %

Business Services

    16.1     19.2  

Consumer Products

    7.5     6.8  

Financial Services

    6.9     4.3  

Investment Funds and Vehicles(1)

    6.6     5.8  

Manufacturing

    5.7     6.0  

Other Services

    5.5     6.2  

Power Generation

    4.3     3.6  

Restaurants and Food Services

    3.9     3.3  

Education

    3.4     3.0  

Food and Beverage

    3.1     4.3  

Oil and Gas

    2.8     2.5  

Automotive Services

    2.5     3.0  

Wholesale Distribution

    2.3     2.5  

Containers and Packaging

    2.1     2.1  

Other

    5.1     4.9  

Total

    100.0 %   100.0 %

(1)
Includes our investment in the SDLP, which had made first lien senior secured loans to 20 and 19 different borrowers as of June 30, 2018 and December 31, 2017, respectively. The portfolio companies in the SDLP are in industries similar to the companies in our portfolio.
 
  As of  
Geographic Region
  June 30,
2018
  December 31,
2017
 

West(1)

    29.0 %   23.9 %

Midwest

    23.9     25.3  

Southeast

    23.1     28.5  

Mid Atlantic

    16.0     15.0  

Northeast

    5.0     3.9  

International

    3.0     3.4  

Total

    100.0 %   100.0 %

(1)
Includes our investment in the SDLP, which represented 5.1% and 4.1% of the total investment portfolio at fair value as of June 30, 2018 and December 31, 2017, respectively.

              As of June 30, 2018, 2.7% of total investments at amortized cost (or 0.8% of total investments at fair value) were on non-accrual status. As of December 31, 2017, 3.1% of total investments at amortized cost (or 1.4% of total investments at fair value) were on non-accrual status.

              Since our IPO on October 8, 2004 through June 30, 2018, our exited investments resulted in an asset level realized gross internal rate of return (as discussed in more detail in footnote 1 to the table below) to us of approximately 14% (based on original cash invested, net of syndications, of approximately $23.1 billion and total proceeds from such exited investments of approximately $29.3 billion). Approximately 63% of these exited investments resulted in an asset level realized gross internal rate of return to us of 10% or greater.

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              The realized gross internal rate of return, original cash invested, net of syndications, and total proceeds, in each case from exited investments, are listed below from our IPO on October 8, 2004 through the end of each period shown below.

 
  Exited Investments
IPO through
 
(dollar amounts in millions)
  June 30,
2018
  December 31,
2017
  December 31,
2016
  December 31,
2015
  December 31,
2014
  December 31,
2013
  December 31,
2012
  December 31,
2011
  December 31,
2010
  December 31,
2009
  December 31,
2008
  December 31,
2007
  December 31,
2006
  December 31,
2005
  December 31,
2004
 

Realized gross internal rate of return to Ares Capital(1)

    14 %   14 %   13 %   13 %   13 %   13 %   13 %   14 %   15 %   14 %   19 %   21 %   26 %   41 %   17 %

Original cash invested, net of syndications

  $ 23,058   $ 20,613   $ 14,264   $ 12,170   $ 9,883   $ 7,717   $ 6,817   $ 4,638   $ 2,696   $ 1,220   $ 923   $ 684   $ 424   $ 119   $ 28  

Total proceeds

  $ 29,266   $ 26,424   $ 17,523   $ 14,903   $ 12,121   $ 9,445   $ 8,264   $ 5,627   $ 3,256   $ 1,405   $ 1,104   $ 818   $ 511   $ 140   $ 32  

(1)
Internal rate of return is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. Internal rate of return is gross of expenses related to investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized.

              Additionally, since our IPO on October 8, 2004 through June 30, 2018, our realized gains exceeded our realized losses by approximately $629 million (excluding a one-time gain on the Allied Acquisition) and realized gains/losses from the extinguishment of debt and other assets). For this same time period, our average annualized net realized gain rate was approximately 1.0% (excluding a one-time gain on the Allied Acquisition and realized gains/losses from the extinguishment of debt and other assets). Net realized gain/loss rates for a particular period are the amount of net realized gains/losses during such period divided by the average quarterly investments at amortized cost in such period.

              Information included herein regarding internal rates of return, realized gains and losses and annualized net realized gain rates are historical results relating to our past performance and are not necessarily indicative of future results, the achievement of which cannot be assured.

INVESTMENT SELECTION

              Ares' investment philosophy was developed over 20 years ago and has remained consistent and relevant throughout a number of economic cycles. We are managed using a similar investment philosophy used by the investment professionals of Ares in respect of its other investment funds.

              This investment philosophy involves, among other things:

              The foundation of Ares' investment philosophy is intensive credit investment analysis, a portfolio management discipline based on both market technicals and fundamental value-oriented research, and diversification strategy. We follow a rigorous investment process based on:

              We seek to identify those companies exhibiting superior fundamental risk-reward profiles and strong defensible business franchises while focusing on the relative value of the investment across the industry as well as for the specific company.

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Intensive Due Diligence

              The process through which an investment decision is made involves extensive research into the target company, its industry, its growth prospects and its ability to withstand adverse conditions. If the senior investment professional responsible for the potential transaction determines that an investment opportunity should be pursued, we will engage in an intensive due diligence process. Approximately 30-40% of the investments initially reviewed by us proceed to this phase. Though each transaction will involve a somewhat different approach, the regular due diligence steps generally undertaken include:

Selective Investment Process

              After an investment has been identified and preliminary diligence has been completed, a credit research and analysis report is prepared. This report is reviewed by the senior investment professional in charge of the potential investment. If such senior and other investment professionals are in favor of the potential investment, then it is first presented to the investment committee on a preliminary basis.

              After the investment committee approves continued work on the potential investment, a more extensive due diligence process is employed by the transaction team. Additional due diligence with respect to any investment may be conducted on our behalf by attorneys, independent accountants, and other third party consultants and research firms prior to the closing of the investment, as appropriate on a case-by-case basis. Approximately 7-10% of all investments initially reviewed by us will be presented to the investment committee. Approval of an investment for funding requires the approval of the majority of the investment committee of our investment adviser, although unanimous consent is sought.

Issuance of Formal Commitment

              Once we have determined that a prospective portfolio company is suitable for investment, we work with the management and/or sponsor of that company and its other capital providers, including senior, junior and equity capital providers, if any, to finalize the structure of the investment.

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Approximately 5-7% of the investments initially reviewed by us eventually result in the issuance of formal commitments and the closing of such transactions.

Debt Investments

              We invest in portfolio companies primarily in the form of first lien senior secured loans (including unitranche loans), second lien senior secured loans and mezzanine debt. The first and second lien senior secured loans generally have terms of three to ten years. In connection with our first and second lien senior secured loans we generally receive security interests in certain assets of our portfolio companies that could serve as collateral in support of the repayment of such loans. First and second lien senior secured loans generally have floating interest rates, which may have LIBOR floors, and also may provide for some amortization of principal and excess cash flow payments, with the remaining principal balance due at maturity.

              We structure our mezzanine investments primarily as unsecured subordinated loans that provide for relatively higher fixed interest rates. The mezzanine debt investments generally have terms of up to ten years. These loans typically have interest-only payments, with amortization of principal, if any, deferred to the later years of the mezzanine investment. In some cases, we may enter into loans that, by their terms, convert into equity or additional debt or defer payments of interest (or at least cash interest) for the first few years after our investment. Also, in some cases our mezzanine debt will be secured by a subordinated lien on some or all of the assets of the borrower.

              In some cases, our debt investments may provide for a portion of the interest payable to be PIK interest. To the extent interest is PIK, it will be payable through the increase of the principal amount of the loan by the amount of interest due on the then-outstanding aggregate principal amount of such loan.

              In the case of our first and second lien senior secured loans and mezzanine debt, we tailor the terms of the investment to the facts and circumstances of the transaction and the prospective portfolio company, negotiating a structure that aims to protect our rights and manage our risk while creating incentives for the portfolio company to achieve its business plan and improve its profitability. For example, in addition to seeking a senior position in the capital structure of our portfolio companies, we will seek, where appropriate, to limit the downside potential of our investments by:

              We generally require financial covenants and terms that require an issuer to reduce leverage, thereby enhancing credit quality. These methods include: (a) maintenance leverage covenants requiring a decreasing ratio of indebtedness to cash flow over time, (b) maintenance cash flow covenants requiring an increasing ratio of cash flow to the sum of interest expense and capital expenditures and (c) indebtedness incurrence prohibitions, limiting a company's ability to take on additional indebtedness. In addition, by including limitations on asset sales and capital expenditures we may be able to prevent a borrower from changing the nature of its business or capitalization without our consent.

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              Our debt investments may include equity features, such as warrants or options to buy a minority interest in the portfolio company. Warrants we receive with our debt investments may require only a nominal cost to exercise, and thus, as a portfolio company appreciates in value, we may achieve additional investment return from this equity interest. We may structure the warrants to provide provisions protecting our rights as a minority-interest holder, as well as puts, or rights to sell such securities back to the portfolio company, upon the occurrence of specified events. In many cases, we also obtain registration rights in connection with these equity interests, which may include demand and "piggyback" registration rights.

Equity Investments

              To a lesser extent, we also make preferred and/or common equity investments, which have generally been non-control equity investments, of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments.

ACQUISITION OPPORTUNITIES

              We believe that there may be opportunity for further consolidation in our industry. From time to time, we evaluate potential strategic opportunities, including acquisitions of:

              We have been in, and from time to time may engage in, discussions with counterparties in respect of various potential strategic acquisition and investment transactions, including potential acquisitions of other finance companies, business development companies and asset managers. Some of these transactions could be material to our business and, if completed, could be difficult to integrate, result in increased leverage or dilution and/or subject us to unexpected liabilities. However, none of these discussions has progressed to the point at which the completion of any such transaction could be deemed to be probable or reasonably certain as of the date of this prospectus. Completion of any such transaction would be subject to completion of due diligence, finalization of key business and financial terms (including price) and negotiation of final definitive documentation as well as a number of other factors and conditions including, without limitation, the approval of our board of directors, any required third party consents and, in certain cases, the approval of our stockholders. We cannot predict how quickly the terms of any such transaction could be finalized, if at all. Accordingly, there can be no assurance that such transaction would be completed. In connection with evaluating potential strategic acquisition and investment transactions, we may incur significant expenses for the evaluation and due diligence investigation of these potential transactions.

ON-GOING RELATIONSHIPS WITH AND MONITORING OF PORTFOLIO COMPANIES

              We closely monitor each investment we make, maintain a regular dialogue with both the management team and other stakeholders and seek specifically tailored financial reporting. In addition, senior investment professionals may take board seats or obtain board observation rights in connection with our portfolio companies. As of June 30, 2018, of our 346 portfolio companies, we were entitled to board seats or board observation rights on 27% of these companies and these companies represented approximately 49% of our portfolio at fair value.

              We seek to exert significant influence post-investment, in addition to covenants and other contractual rights and through board participation, when appropriate, by actively working with

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management on strategic initiatives. We often introduce managers of companies in which we have invested to other portfolio companies to capitalize on complementary business activities and best practices.

              Our investment adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our investment adviser grades the credit risk of all investments on a scale of 1 to 4 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors. Under this system, investments with a grade of 4 involve the least amount of risk to our initial cost basis. The trends and risk factors for this investment since origination or acquisition are generally favorable, which may include the performance of the portfolio company or a potential exit. Investments graded 3 involve a level of risk to our initial cost basis that is similar to the risk to our initial cost basis at the time of origination or acquisition. This portfolio company is generally performing as expected and the risk factors to our ability to ultimately recoup the cost of our investment are neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a grade of 3. Investments graded 2 indicate that the risk to our ability to recoup the initial cost basis of such investment has increased materially since origination or acquisition, including as a result of factors such as declining performance and non-compliance with debt covenants; however, payments are generally not more than 120 days past due. An investment grade of 1 indicates that the risk to our ability to recoup the initial cost basis of such investment has substantially increased since origination or acquisition, and the portfolio company likely has materially declining performance. For debt investments with an investment grade of 1, most or all of the debt covenants are out of compliance and payments are substantially delinquent. For investments graded 1, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit. For investments graded 1 or 2, our investment adviser enhances its level of scrutiny over the monitoring of such portfolio company. The grade of a portfolio investment may be reduced or increased over time.

              We assigned a fair value as of January 3, 2017 to each of the portfolio investments acquired in connection with the American Capital Acquisition. The initial cost basis of each investment acquired was equal to the fair value of such investment as of January 3, 2017. Many of these portfolio investments were assigned a fair value reflecting a discount to American Capital's cost basis at the time of American Capital's origination or acquisition. Each investment was initially assessed a grade of 3 (i.e., generally the grade we assign a portfolio company at acquisition), reflecting the relative risk to our initial cost basis of such investments. It is important to note that our grading system does not take into account factors or events in respect of the period from when American Capital originated or acquired such portfolio investments or the status of these portfolio investments in terms of compliance with debt facilities, financial performance and similar factors. Rather, it is only intended to measure risk from the time that we acquired the portfolio investment in connection with the American Capital Acquisition. Accordingly, it is possible that the grades of these portfolio investments may be reduced or increased after January 3, 2017.

              As of June 30, 2018, the weighted average grade of our portfolio at fair value was 3.1. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity."

MANAGERIAL ASSISTANCE

              As a BDC, we must offer, and must provide upon request, significant managerial assistance to certain of our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting

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with and advising officers of portfolio companies and providing other organizational and financial guidance. Ares Operations may provide all or a portion of this assistance pursuant to our administration agreement, the costs of which will be reimbursed by us. We may receive fees for these services.

COMPETITION

              Our primary competitors include public and private funds, commercial and investment banks, commercial finance companies, other BDCs and private equity funds, each of which we compete with for financing opportunities. Many of our competitors are substantially larger and have considerably greater financial and marketing resources than we do. For example, some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider more investments and establish more relationships than we do. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act imposes on us as a BDC. For additional information concerning the competitive risks we face, see "Risk Factors—Risks Relating to Our Business—We operate in a highly competitive market for investment opportunities."

              We believe that the relationships of the members of our investment adviser's investment committee and of the partners of Ares enable us to learn about, and compete effectively for, financing opportunities with attractive middle-market companies in the industries in which we seek to invest. We believe that Ares' professionals' deep and long-standing direct sponsor relationships and the resulting proprietary transaction opportunities that these relationships often present, provide valuable insight and access to transactions and information. We use the industry information of Ares' investment professionals to which we have access to assess investment risks and determine appropriate pricing for our investments in portfolio companies.

STAFFING

              We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided by individuals who are employees or affiliates of our investment adviser, Ares Capital Management, and our administrator, Ares Operations, each of which is a subsidiary of Ares Management, pursuant to the terms of our investment advisory and management agreement and our administration agreement, respectively, each as described below. Each of our executive officers is an employee or affiliate of our investment adviser or our administrator. Our day-to-day investment activities are managed by our investment adviser. Most of the services necessary for the origination of our investment portfolio are provided by investment professionals employed by Ares Capital Management. Ares Capital Management had approximately 95 U.S.-based investment professionals as of June 30, 2018 who focus on origination, transaction development, investment and the ongoing monitoring of our investments. See "Management—Investment Advisory and Management Agreement" below. We reimburse both our investment adviser and our administrator for a certain portion of expenses incurred in connection with such staffing, as described in more detail below. Because we have no employees, Ares Capital does not have a formal employee relations policy.

PROPERTIES

              We do not own any real estate or other physical properties materially important to our operation. Our headquarters are currently located at 245 Park Avenue, 44th Floor, New York, New York 10167. We are party to office leases pursuant to which we are leasing office facilities from third parties. For certain of these office leases, we have also entered into separate subleases with Ares Management LLC and IHAM, pursuant to which Ares Management LLC, the sole member of Ares Capital Management, and IHAM collectively sublease the full amount of these leases from us.

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LEGAL PROCEEDINGS

              We are party to certain lawsuits in the normal course of business. In addition, American Capital and Allied Capital were involved in various legal proceedings that we assumed in connection with the American Capital Acquisition and the Allied Acquisition, respectively. Furthermore, third parties may try to seek to impose liability on us in connection with our activities or the activities of our portfolio companies. While the outcome of any such legal proceedings cannot at this time be predicted with certainty, we do not expect that these legal proceedings will materially affect our business, financial condition or results of operations.

              On May 20, 2013, we were named as one of several defendants in an action filed in the United States District Court for the Eastern District of Pennsylvania by the bankruptcy trustee of DSI Renal Holdings LLC ("DSI Renal") and two affiliate companies. On March 17, 2014, the motion by us and the other defendants to transfer the case to the United States District Court for the District of Delaware (the "Delaware Court") was granted. On May 6, 2014, the Delaware Court referred the matter to the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The complaint alleges, among other things, that each of the named defendants participated in a purported fraudulent transfer involving the restructuring of a subsidiary of DSI Renal. Among other things, the complaint seeks, jointly and severally from all defendants, (1) damages of approximately $425 million, of which the complaint states our individual share is approximately $117 million, and (2) punitive damages. The defendants filed a motion to dismiss all claims on August 5, 2013. On July 20, 2017, the Bankruptcy Court issued an order granting the motion to dismiss certain claims and denying the motion to dismiss certain other claims, including the purported fraudulent transfer claims. The defendants answered the complaint on August 31, 2017. Under the operative scheduling order, discovery will continue until early 2019 with dispositive motions due on April 30, 2019. No trial date has been set. We are currently unable to assess with any certainty whether we may have any exposure in this matter. However, we believe the plaintiff's claims are without merit and intend to vigorously defend ourselves in this matter.

              On August 3, 2017, American Capital and one of its former portfolio companies were awarded a judgment plus prejudgment interest by the United States District Court for the District of Maryland (the "District Court") following a bench trial in a case first filed by one of American Capital's insurance companies concerning coverage for bodily injury claims against American Capital and/or its former portfolio company. The District Court found that the carrier breached its duty to defend American Capital and its former portfolio company against more than 1,000 bodily injury claims and awarded American Capital damages plus prejudgment interest. American Capital's carrier filed a notice of appeal to the United States Court of Appeals for the Fourth Circuit; thereafter, American Capital and its former portfolio company filed a notice of cross appeal. The appeal has been fully briefed and oral argument has been scheduled for September 2018. It is currently expected the appeal will be adjudicated in late 2018 at the earliest. American Capital's recovery, if any, will not be known until such time as the appeal is resolved.

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PORTFOLIO COMPANIES

              The following table describes each of the businesses included in our portfolio and reflects data as of June 30, 2018. 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 Investment Company 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 Investment Company 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 June 30, 2018
(dollar amounts in millions)
(Unaudited)

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

1163227 B.C. Ltd(5)

  Lab testing services for   First lien senior secured       6/25/2024         $ (7)

262 Manitou Drive

  nicotine containing products   revolving loan                      

Kitchener, ON N2C 1L3

      First lien senior secured loan   8.00% (Libor + 6.25%/Q)   6/25/2024           19.9  

Canada

                             

                             

1A Smart Start, LLC

  Provider of ignition interlock   First lien senior secured   6.50% (Libor + 4.50%/M)   8/21/2020           0.4 (8)

500 E Dallas Road

  devices   revolving loan                      

Suite 100

      First lien senior secured   6.59% (Libor + 4.50%/M)   8/21/2020           1.2 (8)

Grapevine, TX 76051

      revolving loan                      

                             

A.U.L. Corp.

  Provider of vehicle service   First lien senior secured       6/5/2023           (9)

1250 Main Street

  contracts and limited   revolving loan                      

Suite 300

  warranties for passenger   First lien senior secured loan   7.13% (Libor + 5.00%/M)   6/5/2023           7.7  

Napa, CA 94559

  vehicles                          

                             

Absolute Dental Management LLC and ADM

  Dental services provider   First lien senior secured loan   9.83% (Libor + 7.50%/Q)   1/5/2022           18.1  

Equity, LLC

      First lien senior secured loan   9.83% (Libor + 7.50%/Q)   1/5/2022           4.8  

526 South Tonopah Drive

      Class A preferred units             8.46 %   1.0  

Suite 200

      Class A common units             8.46 %    

Las Vegas, NV 89106

                             

                             

ACAS Equity Holdings Corporation(4)(6)

  Investment company   Common stock             100.00 %   0.5  

2000 Avenue of the Stars

                             

12th Floor

                             

Los Angeles, CA 90067

                             

                             

ACAS Real Estate Holdings Corporation(4)

  Real estate holding company   Common stock             100.00 %   2.1  

2000 Avenue of the Stars

                             

12th Floor

                             

Los Angeles, CA 90067

                             

                             

Accommodations Plus Technologies LLC and

  Provider of outsourced crew   First lien senior secured       5/11/2023           (10)

Accommodations Plus Technologies

  accommodations and logistics   revolving loan                      

Holdings LLC

  management solutions to the   First lien senior secured loan   7.12% (Libor + 5.00%/B)   5/11/2024           12.5  

265 Broadhollow Road

  airline industry   Class A common units             5.50 %   4.6  

Melville, NY 11747

                             

                             

Accruent, LLC, Accruent Holding, LLC,

  Real estate and facilities   First lien senior secured       7/28/2023           (11)

Athena Parent, Inc. and Athena

  management software   revolving loan                      

SuperHoldco, Inc.

  provider   First lien senior secured loan       7/28/2023           (12)

11500 Alterra Pkwy

      First lien senior secured loan   7.07% (Libor + 4.75%/Q)   7/28/2023           0.4  

#110

      First lien senior secured loan   7.06% (Libor + 4.75%/Q)   7/28/2023           0.5  

Austin, TX 78758

      Second lien senior secured loan       7/28/2024           (13)

      Second lien senior secured loan   11.07% (Libor + 8.75%/Q)   7/28/2024           3.5  

      Second lien senior secured loan   11.07% (Libor + 8.75%/Q)   7/28/2024           85.3  

      Senior subordinated loan       7/28/2025           (14)

      Senior subordinated loan       7/28/2025           (15)

      Senior subordinated loan   11.50% PIK   7/28/2025           22.5  

      Senior subordinated loan   11.50% PIK   7/28/2025           80.2  

      Senior subordinated loan   11.56% (Libor + 9.25%/Q)   7/28/2025           3.4  

      Common stock             0.76 %   3.6  

      Warrant       7/28/2037     2.50 %   4.1 (2)

                             

Acessa Health Inc. (fka HALT Medical, Inc.)

  Medical supply provider   Common stock             1.18 %    

121 Sand Creek Road

                             

Suite B

                             

Brentwood, CA 94513

                             

                             

Achilles Acquisition LLC

  Benefits broker and   First lien senior secured loan       6/6/2023           (16)

200 Galleria Parkway

  outsourced workflow   First lien senior secured loan   8.09% (Libor + 6.00%/M)   6/6/2023           2.8  

Atlanta, GA 30339

  automation platform provider   First lien senior secured loan   8.09% (Libor + 6.00%/M)   6/6/2023           5.9  

  for brokers   First lien senior secured loan   8.09% (Libor + 6.00%/M)   6/6/2023           2.9  

                             

Acrisure, LLC, Acrisure Investors FO, LLC

  Retail insurance advisor and   Membership interests             1.91 %   14.2  

and Acrisure Investors SO, LLC(6)

  brokerage   Membership interests             0.95 %   4.0  

5664 Prairie Creek Drive SE

                             

Celedonia, MI 49316

                             

                             

ADCS Billings Intermediate Holdings, LLC

  Dermatology practice   First lien senior secured   9.75% (Base Rate + 4.75%/Q)   5/18/2022           3.2 (17)

151 South Lane

      revolving loan                      

Suite 300

                             

Maitland, FL 32751

                             

                             

125


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

ADF Capital, Inc., ADF Restaurant

  Restaurant owner and   First lien senior secured loan       12/18/2018           (18)

Group, LLC, and ARG Restaurant

  operator   First lien senior secured loan   20.33% PIK (Libor + 18.00%/Q)   12/18/2018           4.1  

Holdings, Inc.(4)

      First lien senior secured loan       12/18/2018           8.0  

165 Passaic Avenue

      Promissory note       12/18/2023     1.86 %    

Fairfield, NJ 07004

      Warrant       12/18/2023     95.00 %   (2)

                             

ADG, LLC and RC IV GEDC Investor LLC

  Dental services provider   First lien senior secured   6.80% (Libor + 4.75%/M)   9/28/2022           1.0 (19)

29777 Telegraph Road

      revolving loan                      

Suite 3000

      First lien senior secured   6.84% (Libor + 4.75%/M)   9/28/2022           2.0 (19)

Southfeild, MI 48304

      revolving loan                      

      First lien senior secured   8.75% (Base Rate + 3.75%/M)   9/28/2022           0.6 (19)

      revolving loan                      

      Second lien senior secured   11.09% (Libor + 9.00%/M)   3/28/2024           79.6  

      loan                      

      Membership units             0.92 %   1.4  

                             

AEP Holdings, Inc. and Arrowhead Holdco

  Distributor of   First lien senior secured loan   7.92% (Libor + 5.75%/B)   8/31/2021           44.3  

Company

  non-discretionary, mission-   Common stock             1.17 %   4.1  

3787 95th Avenue

  critical aftermarket                          

Blaine, MN 55104

  replacement parts                          

                             

Air Medical Group Holdings, Inc. and Air

  Emergency air medical   Senior subordinated loan   9.96% (Libor + 7.88%/M)   3/13/2026           182.7  

Medical Buyer Corp.

  services provider   Warrant       3/14/2028     0.08 %   1.5 (2)

209 Highway 121 Bypass

                             

Suite 21

                             

Lewisville, TX 75067

                             

                             

Alcami Holdings, LLC(4)

  Outsourced drug   First lien senior secured   7.50% (Libor + 5.50%/M)   10/25/2019           7.7 (20)

2320 Scientific Park Drive

  development services   revolving loan                      

Wilmington, NC 28405

  provider   First lien senior secured revolving loan   7.55% (Libor + 5.50%/M)   10/25/2019           2.0 (20)

      First lien senior secured revolving loan   7.59% (Libor + 5.50%/M)   10/25/2019           15.9 (20)

      First lien senior secured loan   7.59% (Libor + 5.50%/M)   10/26/2020           10.0  

      First lien senior secured loan   7.59% (Libor + 5.50%/M)   10/26/2020           95.2  

      First lien senior secured loan   11.50% (Base Rate + 6.50%/M)   10/26/2020           0.2  

      Senior subordinated loan   12.25%   10/26/2020           25.0  

      Senior subordinated loan   11.75%   10/26/2020           30.0  

      Senior subordinated loan   12.00%   10/26/2020           30.0  

      Senior subordinated loan   14.75% PIK   10/26/2020           38.9  

      Senior subordinated loan   15.25% PIK   10/26/2020           39.5  

      Series P-1 preferred membership units             98.70 %   81.6  

      Series P-2 preferred membership units             99.94 %   117.3  

      Series R preferred membership units             100.00 %   40.6  

      Series R-2 preferred membership units             100.00 %   73.4  

                             

Alegeus Technologies Holdings Corp.

  Benefits administration and   Preferred stock             1.50 %   3.1  

1601 Trapelo Road

  transaction processing   Common stock             1.50 %    

South Building, 2nd Floor

  provider                          

Waltham, MA 02451

                             

                             

Alphabet Energy, Inc.

  Technology developer to   First lien senior secured loan       8/1/2017            

26225 Eden Landing Road

  convert waste-heat into   Series 1B preferred stock             0.19 %    

Suite D

  electricity   Warrant       12/12/2023     0.88 %   (2)

Hayward, CA 94545

                             

                             

Alteon Health, LLC

  Provider of physician   First lien senior secured loan   8.59% (Libor + 6.50%/M)   9/1/2022           2.6  

350 Motor Parkway

  management services                          

Suite 309

                             

Hauppauge, NY 11788

                             

                             

American Academy Holdings, LLC

  Provider of education,   First lien senior secured   8.58% (Libor + 6.25%/Q)   12/15/2022           0.9 (21)

2233 S Presidents Dr

  training, certification,   revolving loan                      

Suite F

  networking, and consulting   First lien senior secured loan   8.58% (Libor + 6.25%/Q)   12/15/2022           109.9  

Salt Lake City, UT 84120

  services to medical coders   First lien senior secured loan   8.58% (Libor + 6.25%/Q)   12/15/2022           73.4  

  and other healthcare professionals   Senior subordinated loan   16.33% (Libor + 8.00% Cash, 6.00% PIK/Q)   6/15/2023           77.5  

                             

American Residential Services L.L.C.

  Heating, ventilation and air   Second lien senior secured   10.09% (Libor + 8.00%/M)   12/31/2022           63.0  

965 Ridge Lake Blvd

  conditioning services provider   loan                      

Memphis, TN 38120

                             

                             

American Seafoods Group LLC and American Seafoods Partners LLC

  Harvester and processor of seafood   Second lien senior secured loan   10.22% (Libor + 8.13%/M)   2/21/2024           66.2  

2025 First Avenue

      Class A units             0.24 %   0.1  

Suite 900

      Warrant       8/19/2035     3.36 %   10.3 (2)

Seattle, WA 98121

                             

                             

126


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

AMZ Holding Corp.

  Specialty chemicals   First lien senior secured       6/27/2022           (22)

4800 State Road 60 East

  manufacturer   revolving loan                      

Mulberry, FL 33860

      First lien senior secured loan   9.00% (Base Rate + 4.00%/Q)   6/27/2022           0.1  

      First lien senior secured loan   7.09% (Libor + 5.00%/Q)   6/27/2022           12.1  

                             

ARES 2007-3R(4)(5)(6)

  Investment vehicle   Subordinated note       4/16/2021           0.1  

P.O. Box 1093 South Church Street

                             

GT Queensgate House

                             

George Town, Grand Cayman

                             

Cayman Islands

                             

                             

Associated Asphalt Partners, LLC

  Provider of asphalt   First lien senior secured loan   7.34% (Libor + 5.25%/M)   4/5/2024           3.8  

130 Church Avenue SW

  terminalling, storage and                          

Roanoke, VA 24011

  distribution                          

                             

Athletic Club Holdings, Inc.

  Premier health club operator   First lien senior secured loan   10.49% (Libor + 8.50%/M)   10/31/2020           35.0  

5201 East Tudor Road

                             

Anchorage, AL 99507

                             

                             

Avetta, LLC

  Supply chain risk   First lien senior secured       4/10/2024           (23)

17671 Cowan

  management SaaS platform   revolving loan                      

Suite 150

  for global enterprise clients   First lien senior secured loan       4/10/2024           (24)

Irvine, CA 92614

                             

                             

Badger Sportswear Acquisition, Inc.

  Provider of team uniforms   Second lien senior secured   11.09% (Libor + 9.00%/M)   3/11/2024           56.8  

111 Badger Lane

  and athletic wear   loan                      

Statesville, NC 28625

                             

                             

Bambino CI Inc.

  Manufacturer and provider of   First lien senior secured   8.09% (Libor + 6.00%/M)   10/17/2022           2.8 (25)

747 West 4170

  single-use obstetrics products   revolving loan                      

South Murray, UT 84123

      First lien senior secured loan   8.09% (Libor + 6.00%/M)   10/17/2023           31.0  

                             

BeyondTrust Software, Inc.

  Management software   First lien senior secured loan   8.61% (Libor + 6.25%/Q)   11/21/2023           45.9  

5090 40th Street

  solutions provider                          

Suite 400

                             

Phoenix, AZ 85018

                             

                             

Blue Wolf Capital Fund II, L.P.(5)(6)

  Investment partnership   Limited partnership interest             8.50 %   3.7  

48 Wall Street

                             

31st Floor

                             

New York, NY 10005

                             

                             

Brandtone Holdings Limited(5)

  Mobile communications and   First lien senior secured loan       11/1/2018            

51-54 Pearse Street

  marketing services provider   First lien senior secured loan       2/1/2019            

Dublin 2

      Warrant       8/5/2026     2.14 %   (2)

Ireland

                             

                             

BRG Sports, Inc.

  Designer, manufacturer and   Preferred stock             1.65 %    

669 Sugar Lane

  licensor of branded sporting   Common stock             1.28 %   0.4  

Elyria, OH 44035

  goods                          

                             

Cadence Aerospace, LLC

  Aerospace precision   First lien senior secured       11/14/2022           (26)

2600 94th Street SW

  components manufacturer   revolving loan                      

Suite 150

      First lien senior secured loan   8.86% (Libor + 6.50%/Q)   11/14/2023           32.3  

Everett, WA 98204

                             

                             

Callidus Capital Corporation(4)

  Asset management services   Common stock             100.00 %   1.7  

2000 Avenue of the Stars

                             

12th Floor

                             

Los Angeles, CA 90067

                             

                             

CallMiner, Inc.

  Provider of cloud-based   Warrant       7/23/2024     1.83 %   (2)

200 West Street

  conversational analytics                          

Waltham, MA 02452

  solutions                          

                             

Campus Management Acquisition Corp.(3)

  Education software developer   Preferred stock             16.75 %   10.7  

350 Park Avenue

                             

23rd Floor

                             

New York, NY 10022

                             

                             

Capital Sports Holdings Inc.(5)

  Owner and operator of a       7.00% (CDOR + 5.25%/Q)   6/22/2024           15.1  

1000 Palladium Dr

  National Hockey League                          

Ottawa, ON K2V 1A4

  team                          

Canada

                             

                             

Capstone Logistics Acquisition, Inc.

  Outsourced supply chain   First lien senior secured       10/7/2019           (27)

6525 The Corners Parkway

  solutions provider to   revolving loan                      

Suite 520

  operators of distribution                          

Peachtree Corners, GA 30092

  centers                          

                             

Care Hospice, Inc

  Provider of hospice services   First lien senior secured       4/12/2022           (28)

500 Faulconer Drive

      revolving loan                      

Suite 200

                             

Charlottesville, VA 22903

                             

                             

127


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

Carlyle Global Market Strategies CLO 2015-3(5)(6)

  Investment vehicle   Subordinated note   9.20%   7/28/2028           18.7  

190 Elgin Avenue

                             

George Town, Grand Cayman KY1-9005

                             

Cayman Islands

                             

                             

CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC

  Correctional facility healthcare operator   First lien senior secured revolving loan   6.33% (Libor + 4.00%/Q)   7/23/2019           4.0 (29)

3343 Perimeter Hill Drive

      First lien senior secured loan   6.33% (Libor + 4.00%/Q)   7/23/2021           6.4  

Suite 300

      Second lien senior secured   10.68% (Libor + 8.38%/Q)   7/23/2022           129.6  

Nashville, TN 37211

      loan                      

      Class A units             1.22 %   0.9  

                             

Cent CLO 2014-22 Limited(5)(6)

  Investment vehicle   Subordinated note   11.83%   11/7/2026           25.3  

P.O. Box 1093 Boundary Hall Cricket Square

                             

Grand Cayman KY1-1102

                             

Cayman Islands

                             

                             

Centurion CDO 8 Limited(5)(6)

  Investment vehicle   Subordinated note       3/8/2019            

P.O. Box 1093 South Church Street

                             

GT Queensgate House

                             

George Town, Grand Cayman

                             

Cayman Islands

                             

                             

CFW Co-Invest, L.P. and NCP Curves, L.P.

  Health club franchisor   Limited partnership interest             12.24 %   8.5  

100 Ritchie Road

      Limited partnership interest             7.41 %   (5)

Waco, TX 76712

                             

                             

Champion Parent Corporation and

  Endurance sports media and   First lien senior secured loan       11/30/2018            

Calera XVI, LLC(4)

  event operator   First lien senior secured loan       11/30/2018           0.2  

9401 Waples Street

      Preferred shares             45.00 %    

Suite 150

      Membership units             7.88 %    

San Diego, CA 92121

      Common shares             32.96 %    

                             

ChargePoint, Inc.

  Developer and operator of   Warrant       12/24/2024     3.70 %   2.1 (2)

1692 Dell Avenue

  electric vehicle charging                          

Campbell, CA 95008

  stations                          

                             

Chariot Acquisition, LLC

  Manufacturer of aftermarket   First lien senior secured       9/30/2021           (30)

3510 Port Jacksonville Pkwy

  golf cart parts and accessories   revolving loan                      

Jacksonville, FL 32226

      First lien senior secured loan   8.83% (Libor + 6.50%/Q)   9/30/2021           17.9  

      First lien senior secured loan   8.83% (Libor + 6.50%/Q)   9/30/2021           9.1  

                             

Chesapeake Research Review, LLC and

  Provider of central   First lien senior secured       11/7/2023           (31)

Schulman Associates Institutional Review

  institutional review boards   revolving loan                      

Board, Inc.

  over clinical trials   First lien senior secured loan   8.08% (Libor + 5.75%/Q)   11/7/2023           16.3  

6940 Columbia Gateway Drive

                             

Suite 110

                             

Columbia, MD 21046

                             

                             

CHG PPC Parent LLC

  Diversified food products   Second lien senior secured   9.59% (Libor + 7.50%/M)   3/30/2026           59.9  

2201 Broadway

  manufacturer   loan                      

San Antonio, TX 78215

                             

                             

CHL, LTD.

  Repair and service solutions   Warrant       5/2/2020     6.00 %   (2)

1023 State Street

  provider for cable, satellite   Warrant       5/2/2020     6.00 %   (2)

Schenectady, NY 12307

  and telecommunications based service providers   Warrant       5/2/2020     6.00 %   (2)

                             

Ciena Capital LLC(4)

  Real estate and small   First lien senior secured   6.00%   9/14/2018           14.0 (32)

1633 Broadway

  business loan servicer   revolving loan                      

39th Floor

      Equity interests             100.00 %   17.8  

New York, NY 10019

                             

                             

Cipriani USA Inc.

  Manager and operator   First lien senior secured loan   9.84% (Libor + 7.75%/M)   5/30/2023           66.4  

110 E 42nd Street

  of banquet facilities,                          

New York City, NY 10017

  restaurants, hotels and other leisure properties                          

                             

Clearwater Analytics, LLC

  Provider of integrated cloud-   First lien senior secured   7.08% (Libor + 5.00%/M)   9/1/2022           0.3 (33)

777 W. Main Street

  based investment portfolio   revolving loan                      

Suite 900

  management, accounting,                          

Boise, ID 83702

  reporting and analytics software                          

                             

CMW Parent LLC (fka Black Arrow, Inc.)

  Multiplatform media firm   Series A units             0.00 %    

65 North San Pedro

                             

San Jose, CA 95110

                             

                             

CoLTs 2005-1 Ltd.(4)(5)(6)

  Investment vehicle   Preferred shares                    

P.O. Box 908 Mary Street

                             

GT Walker House

                             

George Town, Grand Cayman

                             

Cayman Islands

                             

                             

128


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

CoLTs 2005-2 Ltd.(4)(5)(6)

  Investment vehicle   Preferred shares                    

P.O. Box 908 Mary Street

                             

GT Walker House

                             

George Town, Grand Cayman

                             

Cayman Islands

                             

                             

Columbo Midco Limited, Columbo Bidco

  Compliance, accounting and   Preferred stock             95.52 %   21.5  

Limited and Columbo Topco Limited(4)(5)

  tax consulting services   Preferred stock             85.80 %   8.7  

25 Bedford Street

  provider   Preferred stock             100.00 %   4.3  

London, WC2E 9ES

                             

United Kingdom

                             

                             

Command Alkon Incorporated

  Software solutions provider to   First lien senior secured   9.00% (Base Rate + 4.00%/M)   9/1/2022           1.5 (34)

1800 International Park Drive

  the ready-mix concrete   revolving loan                      

Suite 400

  industry   First lien senior secured loan   6.98% (Libor + 5.00%/M)   9/1/2023           20.5  

Birmingham, AL 35243

      Second lien senior secured loan   10.98% (Libor + 9.00%/M)   3/1/2024           33.8  

                             

Commercial Credit Group, Inc.

  Commercial equipment   Senior subordinated loan   11.73% (Libor + 9.75%/M)   8/31/2022           28.0  

227 Waste trade Street

  finance and leasing company                          

Suite 1450

                             

Charlotte, NC 28202

                             

                             

Comprehensive EyeCare Partners, LLC

  Vision care practice   First lien senior secured   6.83% (Libor + 4.50%/Q)   2/14/2024           (35)

1256 Main Street

  management company   revolving loan                      

Suite 256

      First lien senior secured loan       2/14/2024           (36)

South Lake, TX 76092

      First lien senior secured loan   6.83% (Libor + 4.50%/Q)   2/14/2024           5.4  

                             

Compusearch Software Systems, Inc.

  Provider of enterprise   Second lien senior secured   11.09% (Libor + 8.75%/Q)   11/8/2021           51.0  

21251 Ridgetop Circle

  software and services for   loan                      

Suite 100

  organizations in the public                          

Dulles, VA 20166

  sector                          

                             

Compuware Parent, LLC

  Web and mobile cloud   Class A-1 common stock             0.41 %   2.8  

777 Mariners Island Blvd

  performance testing and   Class B-1 common stock             0.41 %   0.6  

San Mateo, CA 94404

  monitoring services provider   Class C-1 common stock             0.41 %   0.4  

      Class A-2 common stock             0.41 %    

      Class B-2 common stock             0.41 %    

      Class C-2 common stock             0.41 %    

                             

Connoisseur Media, LLC

  Owner and operator of radio   First lien senior secured loan   8.71% (Libor + 6.38%/Q)   6/27/2019           19.8  

126 Main Street

  stations   First lien senior secured loan   8.73% (Libor + 6.38%/Q)   6/27/2019           34.6  

Suite 202

      First lien senior secured loan   8.73% (Libor + 6.38%/Q)   6/27/2019           14.8  

Westport, CT 06880

                             

                             

Consumer Health Parent LLC

  Developer and marketer of   Preferred units             0.94 %   1.2  

8515 E. Anderson Dr.

  over-the-counter cold remedy   Series A units             0.94 %   0.1  

Scottsdale, AZ 85255

  products                          

                             

Corepoint Health, LLC

  Provider of data integration   First lien senior secured       2/17/2020           (37)

3010 Gaylord Parkway

  and health information   revolving loan                      

Suite 320

  exchange solutions to the                          

Frisco, TX 75034

  healthcare industry                          

                             

Correctional Medical Group Companies, Inc.

  Correctional facility   First lien senior secured loan   10.47% (Libor + 8.14%/Q)   9/29/2021           48.8  

2511 Garden Road

  healthcare operator   First lien senior secured loan   10.71% (Libor + 8.38%/Q)   9/29/2021           3.1  

Suite A160

                             

Monterey, CA 93940

                             

                             

Cozzini Bros., Inc. and BH-Sharp Holdings LP

  Provider of commercial knife   First lien senior secured   7.59% (Libor + 5.50%/M)   3/10/2023           1.0 (38)

350 Howard Avenue

  sharpening and cutlery   revolving loan                      

Des Plaines, IL 60018

  services in the restaurant   First lien senior secured loan       3/10/2023           (39)

  industry   First lien senior secured loan   7.59% (Libor + 5.50%/M)   3/10/2023           6.6  

      First lien senior secured loan   7.59% (Libor + 5.50%/M)   3/10/2023           11.7  

      Common units             3.24 %   3.0  

                             

CPV Maryland Holding Company II, LLC

  Gas turbine power generation   Senior subordinated loan   6.00% Cash, 5.00% PIK   12/31/2020           43.3  

c/o Competitive Power Ventures, Inc.

  facilities operator   Warrant       8/8/2018     4.00 %   (2)

8403 Colesville Road

                             

Suite 915

                             

Silver Spring, MD 20910

                             

                             

CREST Exeter Street Solar 2004-1(5)(6)

  Investment vehicle   Preferred shares                    

P.O. Box 908 Mary Street

                             

GT Walker House

                             

George Town, Grand Cayman

                             

Cayman Islands

                             

                             

129


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

Crown Health Care Laundry Services, LLC

  Provider of outsourced   First lien senior secured   8.82% (Libor + 6.75%/M)   12/20/2021           0.3 (40)

and Crown Laundry Holdings, LLC(3)

  healthcare linen management   revolving loan                      

1501 North Guillemard Street

  solutions   First lien senior secured   8.84% (Libor + 6.75%/M)   12/20/2021           3.7 (40)

Pensacola, FL 32501

      revolving loan                      

      First lien senior secured loan       12/20/2021           (41)

      First lien senior secured loan   8.84% (Libor + 6.75%/M)   12/20/2021           11.9  

      First lien senior secured loan   8.80% (Libor + 6.75%/M)   12/20/2021           1.0  

      First lien senior secured loan   8.84% (Libor + 6.75%/M)   12/20/2021           5.0  

      First lien senior secured loan   8.84% (Libor + 6.75%/M)   12/20/2021           5.2  

      Class A preferred units             10.59 %   2.3  

      Class B common units             10.59 %   2.3  

                             

CSHM LLC(4)

  Dental services provider   Class A membership units             1.90 %    

618 Church Street

                             

Suite 520

                             

Nashville, TN 37219

                             

                             

CST Buyer Company (d/b/a Intoxalock)

  Provider of ignition interlock   First lien senior secured       3/1/2023           (42)

11035 Aurora Ave

  devices   revolving loan                      

Des Moines, IA 50325

                             

                             

D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC

  Dental services provider   First lien senior secured revolving loan   10.25% (Base Rate + 5.25%/Q)   12/21/2022           1.3 (43)

1350 Spring Street NW

      Class A preferred units             0.64 %   1.4  

Suite 600

                             

Atlanta, GA 30353

                             

                             

Datix Bidco Limited(5)

  Global healthcare software   First lien senior secured loan   7.02% (Libor + 4.50%/Q)   4/27/2025           5.8  

11 Worple Road

  company that provides                          

Wimbledon, London SW19 4JS

  software solutions for patient                          

United Kingdom

  safety and risk management                          

                             

DCA Investment Holding, LLC

  Multi-branded dental practice   First lien senior secured       7/2/2021           (44)

6240 Lake osprey drive

  management   revolving loan                      

Sarasota, FL 34240

      First lien senior secured loan   7.58% (Libor + 5.25%/Q)   7/2/2021           18.6  

                             

DecoPac, Inc.

  Supplier of cake decorating   First lien senior secured   6.42% (Libor + 4.25%/B)   9/29/2023           0.2 (45)

3500 Thurston Avenue

  solutions and products to   revolving loan                      

Anoka, MN 55303

  in-store bakeries   First lien senior secured revolving loan   6.58% (Libor + 4.25%/B)   9/29/2023           0.6 (45)

                             

Dent Wizard International Corporation and DWH Equity Investors, L.P.

  Automotive reconditioning services   Second lien senior secured loan   10.08% (Libor + 8.00%/M)   10/7/2020           50.0  

4710 Earth City Expressway

      Class A common stock             0.44 %   0.4  

Bridgeton, MO 63044

      Class B common stock             0.37 %   0.9  

                             

DFC Global Facility Borrower II LLC

  Non-bank provider of   First lien senior secured   12.73% (Libor + 10.75%/M)   9/27/2022           82.7 (46)

74 E Swedesford Road

  alternative financial services   revolving loan                      

Suite 150

                             

Malvern, PA 19355

                             

                             

DFS Holding Company, Inc.

  Distributor of maintenance,   First lien senior secured loan   7.09% (Libor + 5.00%/M)   2/17/2022           4.5  

607 W Dempster Street

  repair, and operations parts,   First lien senior secured loan   7.59% (Libor + 5.50%/M)   2/17/2022           103.3  

Mount Prospect, IL 60056

  supplies, and equipment to the foodservice industry   First lien senior secured loan   7.59% (Libor + 5.50%/M)   2/17/2022           73.3  

                             

DGH Borrower LLC

  Developer, owner and   First lien senior secured loan       6/8/2023           (47)

358 North Shore Drive

  operator of quick start, small-   First lien senior secured loan   8.82% (Libor + 6.50%/Q)   6/8/2023           43.2  

Suite 201

  scale natural gas-fired power                          

Pittsburgh, PA 15212

  generation projects                          

                             

Directworks, Inc. and Co-Exprise

  Provider of cloud-based   First lien senior secured loan       4/1/2018           0.2  

Holdings, Inc.

  software solutions for direct   Warrant       12/19/2024     4.76 %   (2)

6021 Wallace Road

  materials sourcing and                          

Suite 300

  supplier management for                          

Wexford, PA 15090

  manufacturers                          

                             

Dorner Holding Corp.

  Manufacturer of precision   First lien senior secured   7.84% (Libor + 5.75%/M)   3/15/2022           0.2 (48)

975 Cottonwood Avenue

  unit conveyors   revolving loan                      

Hartland, WI 53029

                             

                             

Doxim Inc.(5)

  Enterprise content   First lien senior secured loan       2/28/2024           (49)

1380 Rodick Road

  management provider   First lien senior secured loan   8.33% (Libor + 6.00%/Q)   2/28/2024           10.1  

Suite 102

                             

Markham, ON L3R 4G5

                             

Canada

                             

                             

DRB Holdings, LLC

  Provider of integrated   First lien senior secured       10/6/2023           (50)

3245 Pickle Road

  technology solutions to car   revolving loan                      

Akron, OH 44312

  wash operators   First lien senior secured loan   7.59% (Libor + 5.50%/M)   10/6/2023           24.0  

                             

130


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

DTI Holdco, Inc. and OPE DTI Holdings, Inc.

  Provider of legal process   First lien senior secured   6.56% (Libor + 4.50%/M)   9/30/2021           1.3 (51)

2 Ravinia Drive

  outsourcing and managed   revolving loan                      

Suite 850

  services   First lien senior secured   6.56% (Libor + 4.50%/M)   9/30/2021           0.4 (51)

Atlanta, GA 30346

      revolving loan                      

      First lien senior secured revolving loan   6.60% (Libor + 4.50%/M)   9/30/2021           0.5 (51)

      Class A common stock             0.86 %   6.3  

      Class B common stock             0.86 %    

                             

Earthcolor Group, LLC

  Printing management services   Limited liability company             9.30 %    

249 Pomeroy Road

      interests                      

Parsippany, NJ 07054

                             

                             

Eaton Vance CDO X plc(5)(6)

  Investment vehicle   Subordinated note       2/22/2027           0.3  

85 Merrion Square

                             

Dublin 2

                             

Ireland

                             

                             

ECI Purchaser Company, LLC

  Manufacturer of equipment   First lien senior secured loan   7.75% (Libor + 5.25%/Q)   12/31/2018           21.8  

890 Winter Street

  to safely control pressurized   First lien senior secured loan   7.72% (Libor + 5.25%/Q)   12/31/2018           88.7  

Suite 130

  gases   First lien senior secured loan   7.72% (Libor + 5.25%/Q)   12/31/2018           74.8  

Waltham, MA 02451

      First lien senior secured loan   7.75% (Libor + 5.25%/Q)   12/31/2018           0.3  

      First lien senior secured loan   7.75% (Libor + 5.25%/Q)   12/31/2018           0.2  

                             

Eckler Industries, Inc. and Eckler

  Restoration parts and   First lien senior secured       5/25/2022           (52)

Purchaser LLC(4)

  accessories provider for   revolving loan                      

5200 S. Washington Ave

  classic automobiles   First lien senior secured loan       5/25/2022           17.2  

Titusville, FL 32780

      Class A preferred units             67.97 %   1.0  

      Class A common units             67.97 %    

                             

Edward Don & Company, LLC and

  Distributor of foodservice   First lien senior secured loan   12.50% (Base Rate + 7.50%/Q)   9/30/2022           47.4  

VCP-EDC Co-Invest, LLC

  equipment and supplies   First lien senior secured loan   10.50% (Libor + 8.50%/M)   9/30/2022           17.6  

9801 Adam Don Pkwy

      Membership units             2.02 %   4.8  

Woodridge, IL 60517

                             

                             

Emergency Communications Network, LLC

  Provider of mission critical   First lien senior secured       6/1/2022           (53)

780 W Granada Blvd

  emergency mass notification   revolving loan                      

Ormond Beach, FL 32174

  solutions   First lien senior secured loan   8.34% (Libor + 6.25%/M)   6/1/2023           25.0  

      First lien senior secured loan   8.34% (Libor + 6.25%/M)   6/1/2023           19.7  

                             

Emerus Holdings, Inc.

  Freestanding 24-hour   First lien senior secured   6.60% (Libor + 4.50%/M)   9/1/2020           1.3 (54)

82330 North Loop 1604 W

  emergency care micro-   revolving loan                      

San Antonio, TX 78249

  hospitals operator   First lien senior secured loan   6.60% (Libor + 4.50%/M)   9/1/2021           2.8  

                             

Empirix, Inc.

  Provider of hardware and   First lien senior secured       11/1/2019           (55)

600 Technology Park Drive

  software solutions and   revolving loan                      

Suite 100

  services for communications                          

Billerica, MA 01821

  network management                          

                             

EN Engineering, L.L.C.

  National utility services firm   First lien senior secured       6/30/2021           (56)

28100 Torch Parkway

  providing engineering and   revolving loan                      

Suite 400

  consulting services to natural                          

Warrenville, IL 60555

  gas, electric power and other energy and industrial end markets                          

                             

Entertainment Partners, LLC and

  Provider of entertainment   First lien senior secured       5/8/2023           (57)

Entertainment Partners Canada Inc.

  workforce and production   revolving loan                      

2835 North Naomi Street

  management solutions   First lien senior secured loan       5/8/2023           (58)

Burbank, CA 91504

      First lien senior secured loan   7.24% (Libor + 5.50%/Q)   5/8/2022           2.7 (5)

      First lien senior secured loan   7.25% (Libor + 5.50%/Q)   5/8/2022           2.2 (5)

      First lien senior secured loan   7.43% (Libor + 5.50%/Q)   5/8/2022           2.7 (5)

      First lien senior secured loan   8.12% (Libor + 5.75%/Q)   5/8/2023           0.7  

      First lien senior secured loan   8.12% (Libor + 5.75%/Q)   5/8/2023           26.1  

      First lien senior secured loan   8.09% (Libor + 5.75%/Q)   5/8/2023           0.6  

      First lien senior secured loan   8.09% (Libor + 5.75%/Q)   5/8/2023           22.1  

      First lien senior secured loan   8.27% (Libor + 5.75%/Q)   5/8/2023           0.7  

      First lien senior secured loan   8.27% (Libor + 5.75%/Q)   5/8/2023           26.1  

                             

Episerver, Inc. (fka Ektron, Inc.)

  Provider of web content   First lien senior secured       12/3/2019           (59)

2500 Sand Hill Road

  management and eCommerce   revolving loan                      

Suite 300

  solutions                          

Menlo Park, CA 94025

                             

                             

ESCP PPG Holdings, LLC(3)

  Distributor of new equipment   Class A units             7.91 %   2.5  

8330 State Road

  and aftermarket parts to the                          

Philadelphia, PA 19136

  heavy-duty truck industry                          

                             

ETG Holdings, Inc.(4)

  Manufacturer of industrial   Common stock             30.00 %    

P.O. Box 487

  woven products                          

Greenville, SC 29602

                             

                             

131


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

European Capital UK SME Debt LP(4)(5)(6)

  Investment partnership   Limited partnership interest             45.00 %   34.5  

25 Bedford Street

                             

London, WC2E 9ES

                             

United Kingdom

                             

                             

Everspin Technologies, Inc.

  Designer and manufacturer   Warrant             3.98 %   (2)

1347 N Alma School Road

  of computer memory                          

Suite 220

  solutions                          

Chandler, AZ 85224

                             

                             

Excelligence Holdings Corp.

  Developer, manufacturer and   First lien senior secured loan   8.09% (Libor + 6.00%/M)   4/18/2023           8.9  

2 Lower Ragsdale Drive

  retailer of educational                          

#215

  products                          

Monterey, CA 93940

                             

                             

Extenet Systems, Inc.

  Provider of antenna networks   First lien senior secured       11/13/2022           (60)

3030 Warrenville Road DuPage

  for use by wireless service   revolving loan                      

Suite 340

  providers, government                          

DuPage, IL 60532

  agencies, healthcare organizations and other commercial enterprises                          

                             

Fashion Holding Luxembourg SCA
(Modacin/Camaeiu)(4)(5)

  Retailer of women's clothing   Preferred stock             1.46 %    

6 Rue Eugene Ruppert

                             

Luxembourg City, L-2453

                             

Luxembourg

                             

                             

Feradyne Outdoors, LLC and Bowhunter Holdings, LLC

  Provider of branded archery and bowhunting accessories   Common units             3.20 %   0.9  

110 Beasley Road

                             

Cartersville, GA 30120

                             

                             

Ferraro Fine Foods Corp. and Italian Fine Foods Holdings L.P.

  Specialty Italian food distributor   First lien senior secured revolving loan   6.35% (Libor + 4.25%/M)   5/9/2023           0.3 (61)

287 South Randolphville Road

      First lien senior secured   6.62% (Libor + 4.25%/M)   5/9/2023           1.3 (61)

Piscataway, NJ 08854

      revolving loan                      

      First lien senior secured loan   6.62% (Libor + 4.25%/Q)   5/9/2024           9.3  

      Class A common units             1.12 %   2.7  

                             

Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.(3)

  Debt collection services provider   Common stock             18.00 %    

1967 Lakeside Parkway

                             

Suite 402

                             

Tucker, GA 30084

                             

                             

First Insight, Inc.

  Software company providing   Warrant       3/20/2024     0.88 %   (2)

1606 Carmody Court

  merchandising and pricing                          

Suite 106

  solutions to companies                          

Sewickley, PA 15143

  worldwide                          

                             

Flinn Scientific, Inc. and WCI-Quantum Holdings, Inc.

  Distributor of instructional products, services and   First lien senior secured loan   6.94% (Libor + 5.00%/Q)   10/24/2020           33.6  

770 N. Raddant Rd

  resources   First lien senior secured loan   7.45% (Libor + 5.00%/Q)   10/24/2020           27.9  

Batavia, IL 60510

      Series A preferred stock             1.27 %   1.3  

                             

FM: Systems Group LLC

  Provider of facilities and   First lien senior secured       1/31/2022           (62)

2301 Sugar Bush Road

  space management software   revolving loan                      

Suite 500

  solutions                          

Raleigh, NC 27612

                             

                             

Foundation Risk Partners, Corp.

  Full service independent   First lien senior secured       11/10/2023           (63)

4634 Gulfstarr Drive

  insurance agency   revolving loan                      

Destin, FL 32541

      First lien senior secured loan   7.07% (Libor + 4.75%/Q)   11/10/2023           6.0  

      First lien senior secured loan   7.08% (Libor + 4.75%/Q)   11/10/2023           1.8  

      First lien senior secured loan   7.11% (Libor + 4.75%/Q)   11/10/2023           22.2  

      First lien senior secured loan   6.84% (Libor + 4.75%/Q)   11/10/2023           0.1  

      Second lien senior secured loan   10.86% (Libor + 8.50%/Q)   11/10/2024           27.2  

                             

FPI Holding Corporation(4)

  Distributor of fruits   First lien senior secured loan       6/1/2018           (64)

38773 Road 48

      First lien senior secured loan       6/1/2018            

Dinuba, CA 93618

                             

                             

Frontline Technologies Group Holding LLC,

  Provider of human capital   First lien senior secured loan       9/18/2023           (65)

Frontline Technologies Blocker Buyer, Inc.,

  management and SaaS-based   First lien senior secured loan   8.59% (Libor + 6.50%/M)   9/18/2023           19.3  

Frontline Technologies Holdings, LLC and

  software solutions to   Class A preferred units             0.62 %   3.6  

Frontline Technologies Parent, LLC

  employees and administrators   Class B common units             0.62 %    

1400 Atwater Drive

  of K-12 school organizations                          

Malvern, PA 19355

                             

                             

132


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

FWR Holding Corporation

  Restaurant owner, operator,   First lien senior secured   7.96% (Libor + 6.00%/M)   8/21/2023           0.7 (66)

8027 Cooper Creed Boulevard

  and franchisor   revolving loan                      

#103

      First lien senior secured loan       8/21/2023           (67)

University Park, FL 34201

      First lien senior secured loan   7.63% (Libor + 6.00%/M)   8/21/2023           0.3  

      First lien senior secured loan   8.44% (Libor + 6.00%/M)   8/21/2023           0.2  

      First lien senior secured loan   7.84% (Libor + 6.00%/Q)   8/21/2023           2.0  

      First lien senior secured loan   8.44% (Libor + 6.00%/Q)   8/21/2023           2.0  

                             

Garden Fresh Restaurant Corp. and GFRC

  Restaurant owner and   First lien senior secured       2/1/2022           (68)

Holdings LLC

  operator   revolving loan                      

15822 Bernardo Center Drive

      First lien senior secured loan   10.07% (Libor + 8.00%/B)   2/1/2022           24.9  

Suite A

                             

San Diego, CA 92127

                             

                             

Gastro Health Holdco, LLC

  Healthcare services provider   First lien senior secured       6/28/2021           (69)

9500 S. Dadeland Blvd

      revolving loan                      

Suite 802

                             

Miami, FL 33156

                             

                             

Gehl Foods, LLC and GF Parent LLC

  Producer of low-acid, aseptic   Class A preferred units             2.58 %   0.3  

4757 Nexus Center Drive

  food and beverage products   Class A common units             2.58 %    

San Diego, CA 92121

      Class B common units             2.58 %    

                             

Genomatica, Inc.

  Developer of a biotechnology   Warrant       3/28/2023     0.70 %   (2)

100 Acorn Park Drive

  platform for the production                          

Cambridge Discovery Park 5th Floor

  of chemical products                          

Cambridge, MA 02140

                             

                             

Gentle Communications, LLC

  Dental services provider   First lien senior secured       5/27/2022           (70)

200 5th Avenue

      revolving loan                      

Suite 3

                             

Waltham, MA 02451

                             

                             

GHX Ultimate Parent Corporation, Commerce

  On-demand supply chain   Second lien senior secured   10.33% (Libor + 8.00%/Q)   6/30/2025           34.4  

Parent, Inc. and Commerce Topco, LLC

  automation solutions provider   loan                      

1315 W Century Drive

  to the healthcare industry   Second lien senior secured   12.00% (Base Rate + 7.00%/Q)   6/30/2025           54.8  

Suite 100

      loan                      

Louisville, CO 80027

      Series A preferred stock   13.08% PIK (Libor + 10.75%/Q)         64.15 %   125.3  

      Class A units             1.34 %   19.6  

                             

Global Franchise Group, LLC

  Worldwide franchisor of   First lien senior secured       12/18/2019           (71)

1346 Oakbrook Drive

  quick service restaurants   revolving loan                      

Suite 170

      First lien senior secured loan   7.84% (Libor + 5.75%/M)   12/18/2019           8.1  

Norcross, GA 30093

                             

                             

Goldentree Loan Opportunities VII,

  Investment vehicle   Subordinated note       4/25/2025           6.9  

Limited(5)(6)

                             

P.O. Box 1093 Boundary Hall Cricket Square

                             

Grand Cayman KY1-1102

                             

Cayman Islands

                             

                             

Graphpad Software, LLC

  Provider of data analysis,   First lien senior secured       12/21/2023           (72)

7825 Fay Avenue

  statistics, and visualization   revolving loan                      

#230

  software solutions for                          

La Jolla, CA 92037

  scientific research applications                          

                             

Green Energy Partners, Stonewall LLC and

  Gas turbine power generation   First lien senior secured loan   7.83% (Libor + 5.50%/Q)   11/13/2021           24.7  

Panda Stonewall Intermediate

  facilities operator   Senior subordinated loan   8.00% Cash, 5.25% PIK   12/31/2021           20.5  

Holdings II LLC

      Senior subordinated loan   8.00% Cash, 5.25% PIK   12/31/2021           95.6  

12 Paoli Pike

                             

Suite 5

                             

Paoli, PA 19301

                             

                             

Greenphire, Inc. and RMCF III CIV XXIX,

  Software provider for clinical   Limited partnership interest             99.90 %   2.6  

L.P

  trial management                          

640 Freedom Business Center Drive

                             

Suite 201

                             

King of Prussia, PA 19406

                             

                             

GS Pretium Holdings, Inc.

  Manufacturer and supplier of   Common stock             0.41 %   0.7  

15450 South Outer Forty Drive

  high performance plastic                          

Suite 120

  containers                          

Chesterfield, MO 63017

                             

                             

GTCR-Ultra Acquisition, Inc. and GTCR-Ultra

  Provider of payment   First lien senior secured       8/1/2022           (73)

Holdings, LLC

  processing and merchant   revolving loan                      

30 East Randolph Street

  acquiring solutions   Class A-2 units             0.83 %   1.0  

7th Floor

      Class B units             0.82 %    

Chicago, IL 60601

                             

133


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
HAI Acquisition Corporation and Aloha   Professional employer   First lien senior secured   8.36% (Libor + 6.00%/Q)   11/1/2023           4.7 (74)
Topco, LLC   organization offering human   revolving loan                      
6600 Kalanianaole Hwy   resources, compliance and   First lien senior secured loan   8.36% (Libor + 6.00%/Q)   11/1/2024           16.7  
Suite 200   risk management services   First lien senior secured loan   8.36% (Libor + 6.00%/Q)   11/1/2024           49.4  
Honolulu, HI 96825       Class A units             0.82 %   1.7  
                             
Halcyon Loan Advisors Funding   Investment vehicle   Subordinated note   15.90%   7/25/2027           10.6  
2015-2 Ltd.(5)(6)                              
P.O. Box 1093 Boundary Hall Cricket Square                              
Grand Cayman KY1-1102                              
Cayman Islands                              
                             
Halex Holdings, Inc.(4)   Manufacturer of flooring   First lien senior secured       12/31/2018           (75)
4200 Santa Ana Street   installation products   revolving loan             100.00 %    
Ontario, CA 91761       Common stock                      
                             
Harvey Tool Company, LLC   Manufacturer of cutting tools   First lien senior secured   6.59% (Libor + 4.50%/M)   10/12/2023           0.9 (76)
428 Newburyport Turnpike   to the metalworking industry   revolving loan                      
Rowley, MA 01969       First lien senior secured loan       10/12/2024           (77)
        First lien senior secured loan   7.08% (Libor + 4.75%/Q)   10/12/2024           20.7  
        First lien senior secured loan   7.08% (Libor + 4.75%/Q)   10/12/2024           19.9  
        Second lien senior secured loan       10/12/2025           (78)
        Second lien senior secured loan   10.84% (Libor + 8.50%/Q)   10/12/2025           43.7  
                             
HCI Equity, LLC(4)(5)(6)   Investment company   Member interest             100.00 %   0.1  
2000 Avenue of the Stars                              
12th Floor                              
Los Angeles, CA 90067                              
                             
Help/Systems Holdings, Inc.   Provider of IT operations   First lien senior secured   5.85% (Libor + 3.75%/M)   3/29/2023           0.2 (79)
6455 City West ParkWay   management and   revolving loan                      
Eden Prairie, MN 55344   cybersecurity software                          
                             
Herbert Park B.V.(5)(6)   Investment vehicle   Subordinated note       10/20/2026            
238 Herikerbergweg                              
Luna Arena, 1101 CM                              
Amsterdam, Zuidoost                              
The Netherlands                              
                             
Heritage Food Service Group, Inc. and   Distributor of repair and   Second lien senior secured   10.60% (Libor + 8.50%/B)   10/20/2022           31.6  
WCI-HFG Holdings, LLC   replacement parts for   loan                      
5130 Executive Boulevard   commercial kitchen   Preferred units             2.50 %   3.6  
Fort Wayne, IN 46808   equipment                          
                             
Hosting.Com, Inc.   Provider of mission critical   First lien senior secured       2/28/2022           (80)
900 South Broadway   hosting solutions to server   revolving loan                      
Suite 400   message block and enterprise                          
Denver, CO 80209   customers                          
                             
Hygiena Borrower LLC
941 Avenida Acaso
  Adenosine triphosphate
testing technology provider
  First lien senior secured
revolving loan
      8/26/2022           (81)
Carmarillo, CA 93012       First lien senior secured loan       8/26/2022             (82)
        First lien senior secured loan   6.33% (Libor + 4.00%/Q)   8/26/2022           7.5  
        Second lien senior secured loan       8/26/2023           (83)
        Second lien senior secured loan   10.08% (Libor + 7.75%/Q)   8/26/2023           9.9  
        Second lien senior secured loan   10.08% (Libor + 7.75%/Q)   8/26/2023           10.6  
        Second lien senior secured loan   10.08% (Libor + 7.75%/Q)   8/26/2023           11.0  
                             
ICSH Parent, Inc. and Vulcan Container   Industrial container   Second lien senior secured   10.09% (Libor + 8.00%/M)   4/28/2025           64.3  
Services Holdings, Inc.   manufacturer, reconditioner   loan                      
1540 Greenwood Avenue   and servicer   Series A common stock             1.10 %   4.8  
Montebello, CA 90640                              
                             
IfByPhone Inc.   Voice-based marketing   Warrant       10/15/2022     5.00 %   0.1 (2)
300 W. Adams Street   automation software provider                          
Suite 900                              
Chicago, IL 60606                              
                             
Imaging Business Machines, L.L.C. and   Provider of high-speed   Senior subordinated loan   14.00%   6/15/2022           8.3  
Scanner Holdings Corporation(4)   intelligent document scanning   Senior subordinated loan   14.00%   6/15/2022           8.3  
2750 Crestwood Blvd   hardware and software   Series A preferred stock             85.81 %   7.9  
Birmingham, AL 35210       Class A common stock             8.19 %    
        Class B common stock             8.19 %    
                             
Imperial Capital Group LLC   Investment services   Class A common units             2.45 %   10.5  
2000 Avenue of the Stars       2006 Class B common units             2.45 %    
9th Floor S                              
Los Angeles, CA 90067                              
                             

134


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
Imperial Capital Private Opportunities, LP(6)   Investment partnership   Limited partnership interest             80.00 %   13.0  
2000 Avenue of the Stars                              
9th Floor S                              
Los Angeles, CA 90067                              
                             
Implementation Management Assistance, LLC   Revenue cycle consulting firm   First lien senior secured   8.00% (Base Rate + 3.00%/Q)   12/13/2023           1.5 (84)
3 Dickinson Drive   to the healthcare industry   revolving loan                      
Suite 200       First lien senior secured loan       12/13/2023           (85)
Chadds Ford, PA 19317       First lien senior secured loan   6.83% (Libor + 4.50%/Q)   12/13/2023           16.9  
                             
Implus Footcare, LLC   Provider of footwear and   First lien senior secured loan   8.84% (Libor + 6.75%/M)   4/30/2021           14.5  
2001 T.W. Alexander Drive   other accessories   First lien senior secured loan   8.84% (Libor + 6.75%/M)   4/30/2021           77.1  
Box 13925       First lien senior secured loan   8.84% (Libor + 6.75%/M)   4/30/2021           19.8  
Durham, NC 27709-3925                              
                             
Indra Holdings Corp.   Designer, marketer, and   First lien senior secured loan   6.34% (Libor + 4.25%/M)   5/1/2021           6.5  
9655 International Blvd   distributor of rain and cold   Second lien senior secured       11/1/2021           19.2  
Cincinnati, OH 45246   weather products   loan                      
                             
Infilaw Holding, LLC   Operator of for-profit law   First lien senior secured       2/1/2018           (86)
1100 5th Avenue South   schools   revolving loan                      
Suite 301                              
Naples, FL 34102                              
                             
Infogix, Inc. and Infogix Parent Corporation   Enterprise data analytics and   First lien senior secured       4/30/2024           (87)
1240 E. Diehl Rd   integrity software solutions   revolving loan             1.47 %   2.5  
Suite 400   provider   Series A preferred stock             1.47 %   0.7  
Naperville, IL 60563       Common stock                      
                             
Inmar, Inc.   Technology-driven solutions   Second lien senior secured   10.09% (Libor + 8.00%/M)   5/1/2025           28.3  
2601 Pilgrim CourtWinston   provider for retailers,   loan                      
Salem, NC 27106   wholesalers and                          
    manufacturers                          
                             
Instituto de Banca y Comercio, Inc. & Leeds IV Advisors, Inc.   Private school operator   First lien senior secured revolving loan   13.00% (Base Rate + 8.00%/Q)   2/28/2019           9.9 (88)
1660 Calle Santa Ana       First lien senior secured loan   10.50% PIK (Libor + 9.00%/Q)   2/28/2019           3.4  
Santurce, PR 00909       Senior preferred series A-1 shares             83.50 %   14.8  
        Series B preferred stock             5.00 %    
        Series C preferred stock             3.98 %    
        Common stock             4.02 %    
                             
InterVision Systems, LLC and InterVision Holdings, LLC   Provider of cloud based IT solutions, infrastructure and   First lien senior secured loan   10.18% (Libor + 8.12%/M)   5/31/2022           9.8  
2270 Martin Avenue   services   First lien senior secured loan   10.14% (Libor + 8.05%/M)   5/31/2022           24.5  
Santa Clara, CA 95050       First lien senior secured loan   10.14% (Libor + 8.05%/M)   5/31/2022           9.9  
        Class A membership units             2.50 %   1.1  
                             
Ioxus, Inc(3)   Manufacturer of energy   First lien senior secured loan   7.00% Cash, 5.00% PIK   12/30/2019           9.7  
18 Stadium Circle   storage devices   First lien senior secured loan       12/30/2019           1.2  
Oneonta, NY 13820       Series CC preferred stock             5.51 %    
        Warrant       1/27/2026     19.49 %   (2)
        Warrant       8/24/2026     19.49 %   (2)
        Warrant       1/27/2027     5.51 %   (2)
                             
iParadigms Holdings, LLC   Anti-plagiarism software   Second lien senior secured   9.58% (Libor + 7.25%/Q)   7/29/2022           32.5  
1111 Broadway   provider to the education   loan                      
3rd Floor   market                          
Oakland, CA 94607                              
                             
iPipeline, Inc., Internet Pipeline, Inc., iPipeline   Provider of SaaS-based   First lien senior secured       8/4/2021           (89)
Limited and iPipeline Holdings, Inc.   software solutions to the   revolving loan                      
222 Valley Creek Blvd   insurance and financial   First lien senior secured loan   8.60% (Libor + 6.50%/M)   8/4/2022           11.8 (5)
Suite 300   services industry   First lien senior secured loan   8.34% (Libor + 6.25%/M)   8/4/2022           7.5  
Exton, PA 19341       First lien senior secured loan   8.34% (Libor + 6.25%/M)   8/4/2022           9.0  
        First lien senior secured loan   9.35% (Libor + 7.25%/M)   8/4/2022           16.2  
        First lien senior secured loan   9.35% (Libor + 7.25%/M)   8/4/2022           14.5  
        Preferred stock             0.73 %   4.0  
        Common stock             0.64 %    
                             
IQMS   Provider of enterprise   First lien senior secured loan   10.34% (Libor + 8.25%/M)   3/28/2022           4.0  
2231 Wisteria Lane   resource planning and   First lien senior secured loan   10.34% (Libor + 8.25%/M)   3/28/2022           18.7  
Paso Robles, CA 93446   manufacturing execution   First lien senior secured loan   10.34% (Libor + 8.25%/M)   3/28/2022           14.9  
    software for small and
midsized manufacturers
                         
                             
Ivy Hill Asset Management, L.P.(4)(6)   Asset management services   Member interest             100.00 %   520.9  
245 Park Avenue                              
44th Floor                              
New York, NY 10167                              
                             

135


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
Javlin Three LLC, Javlin Four LLC, and Javlin Five LLC(6)   Asset-backed financial services company   First lien senior secured loan   5.00%   6/24/2017           14.1  
1414 Harney Street                              
Suite 440                              
Omaha, NE 68102                              
                             
Jazz Acquisition, Inc.   Designer and distributor of   Second lien senior secured   9.08% (Libor + 6.75%/Q)   6/19/2022           23.0  
c/o Warburg Pincus 450   aftermarket replacement   loan                      
Lexington Avenue   components to the                          
New York, NY 10017   commercial airlines industry                          
                             
JDC Healthcare Management, LLC   Dental services provider   First lien senior secured   8.80% (Libor + 6.75%/M)   4/11/2022           0.5 (90)
3030 Lyndon B Johnson       revolving loan                      
Fwy #1400       First lien senior secured   8.84% (Libor + 6.75%/M)   4/11/2022           2.0 (90)
Dallas, TX 75231       revolving loan                      
        First lien senior secured loan       4/10/2023           (91)
        First lien senior secured loan   9.01% (Libor + 6.75%/Q)   4/10/2023           4.1  
        First lien senior secured loan   8.84% (Libor + 6.75%/M)   4/10/2023           9.7  
        First lien senior secured loan   8.84% (Libor + 6.75%/M)   4/10/2023           19.4  
                             
Jim N Nicks Management, LLC   Restaurant owner and   First lien senior secured   7.34% (Libor + 5.25%/M)   7/10/2023           0.6 (92)
3755 Corporate Woods Drive   operator   revolving loan                      
Birmingham, AL 35242       First lien senior secured revolving loan   7.60% (Libor + 5.25%/M)   7/10/2023           1.2 (92)
        First lien senior secured revolving loan   7.61% (Libor + 5.25%/M)   7/10/2023           0.9 (92)
        First lien senior secured loan       7/10/2023           (93)
        First lien senior secured loan   7.34% (Libor + 5.25%/M)   7/10/2023           0.6  
        First lien senior secured loan   7.61% (Libor + 5.25%/M)   7/10/2023           0.6  
        First lien senior secured loan   7.34% (Libor + 5.25%/M)   7/10/2023           13.8  
                             
Joule Unlimited Technologies, Inc. and   Renewable fuel and chemical   First lien senior secured loan       10/1/2018            
Stichting Joule Global Foundation   production developer   Warrant       7/25/2023     0.99 %   (2)(5)
18 Crosby Drive                              
Bedford, MA 01730                              
                             
JWC/KI Holdings, LLC   Foodservice sales and   Membership units             5.13 %   4.7  
1701 Crossroads Drive   marketing agency                          
Odenton, MD 21113                              
                             
K2 Pure Solutions Nocal, L.P.   Chemical producer   First lien senior secured   9.22% (Libor + 7.13%/M)   2/19/2021           1.5 (94)
260 Queen Street West       revolving loan                      
4th Floor       First lien senior secured loan   8.09% (Libor + 6.00%/M)   2/19/2021           39.4  
Toronto, ON M5V1Z8       First lien senior secured loan   8.09% (Libor + 6.00%/M)   2/19/2021           12.8  
Canada                              
                             
KBHS Acquisition, LLC (d/b/a Alita Care, LLC)   Provider of behavioral health services   First lien senior secured revolving loan   7.06% (Libor + 5.00%/M)   3/17/2022           0.3 (95)
160 Chubb Avenue
Suite 206
Lyndhurst, NJ 07071
      First lien senior secured revolving loan   7.09% (Libor + 5.00%/M)   3/17/2022           2.2 (95)
        First lien senior secured revolving loan   7.02% (Libor + 5.00%/M)   3/17/2022           0.8 (95)
                             
Kettle Cuisine, LLC   Manufacturer of fresh   Second lien senior secured   11.84% (Libor + 9.75%/M)   2/21/2022           28.5  
330 Lynnway   refrigerated and frozen food   loan                      
Lynn, MA 01901   products                          
                             
Key Surgical LLC   Provider of sterile processing,   First lien senior secured   8.75% (Base Rate + 3.75%/Q)   6/1/2022           0.6 (96)
8101 Wallas Road   operating room and   revolving loan                      
Minneapolis, MN 55344   instrument care supplies for hospitals   First lien senior secured loan   5.75% (EURIBOR + 4.75%/Q)   6/1/2023           17.4  
                             
KHC Holdings, Inc. and Kele Holdco, Inc.   Catalog-based distribution   First lien senior secured   6.35% (Libor + 4.25%/M)   10/30/2020           2.5 (97)
3300 Brother Blvd   services provider for building   revolving loan                      
Bartlett, TN 38133   automation systems   First lien senior secured loan   8.33% (Libor + 6.00%/Q)   10/31/2022           66.1  
        Common stock             2.71 %   3.0  
                             
Kore Wireless Group Inc.   Wireless network data   First lien senior secured       3/12/2021           (98)
3700 Mansell Road   provider   revolving loan                      
Suite 250                              
Alpharetta, GA 30022                              
                             
KPS Global LLC   Manufacturer of walk-in   First lien senior secured loan   4.56% (Libor + 2.50%/M)   4/5/2022           1.6  
4201 N Beach St   cooler and freezer systems   First lien senior secured loan   8.94% (Libor + 6.88%/M)   4/5/2022           10.4  
Fort Worth, TX 76137       First lien senior secured loan   8.94% (Libor + 6.88%/M)   4/5/2022           5.2  
                             
LBP Intermediate Holdings LLC   Manufacturer of paper and   First lien senior secured   7.84% (Libor + 5.50%/Q)   7/10/2020           0.2 (99)
1325 S Cicero Ave   corrugated foodservice   revolving loan                      
Cicero, IL 60804   packaging   First lien senior secured loan   7.83% (Libor + 5.50%/Q)   7/10/2020           11.8  
        First lien senior secured loan   7.83% (Libor + 5.50%/Q)   7/10/2020           5.0  
                             

136


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
Liaison Acquisition, LLC   Provider of centralized   First lien senior secured       2/8/2022           (100)
311 Arsenal Street   applications services to   revolving loan                      
Watertown, MA 02472   educational associations   Second lien senior secured loan   11.31% (Libor + 9.25%/M)   8/8/2023           15.0  
                             
LLSC Holdings Corporation (dba Lawrence Merchandising Services)(4)   Marketing services provider   Series A preferred stock             100.00 %    
3500 Holly Lane       Common stock             100.00 %    
North Suite 10                              
Plymouth, MN 55447                              
                             
Lone Wolf Real Estate Technologies Inc.(5)   Provider of accounting and   First lien senior secured       7/5/2021           (101)
231 Shearson Crescent   front-office solutions for real   revolving loan                      
Suite 310   estate brokers and agents                          
Cambridge, ON N1T 1J5                              
Canada                              
                             
LS DE LLC and LM LSQ Investors LLC(6)   Asset based lender   Senior subordinated loan   10.50%   6/25/2021           3.0  
2600 Lucien Way       Senior subordinated loan   10.50%   6/25/2021           27.0  
Suite 100       Membership units             2.12 %   3.9  
Maitland, FL 32751                              
                             
LTG Acquisition, Inc.   Designer and manufacturer   Class A membership units             5.08 %   1.1  
900 Klein Road   of display, lighting and                          
Plano, TX 75074   passenger communication                          
    systems for mass                          
    transportation markets                          
                             
MacLean-Fogg Company and MacLean-Fogg   Manufacturer and supplier   Senior subordinated loan   10.50% Cash, 3.00% PIK   10/9/2025           104.5  
Holdings, L.L.C.   for the power utility and   Preferred units   4.50% Cash, 9.25% PIK         93.58 %   77.7  
1000 Allanson Road   automotive markets                          
Mundelein, IL 60060   worldwide                          
                             
Magento, Inc.   eCommerce platform   First lien senior secured       11/2/2020           (102)
54 N. Central Ave.   provider for the retail   revolving loan                      
Suite 200   industry                          
Campbell, CA 95008                              
                             
Masergy Holdings, Inc.   Provider of software-defined   First lien senior secured       12/15/2021           (103)
2740 North Dallas Parkway   solutions for enterprise global   revolving loan                      
Plano, TX 75093   networks, cyber security, and                          
    cloud communications                          
                             
Massage Envy, LLC and ME Equity LLC   Franchisor in the massage   First lien senior secured       9/26/2020           (104)
14350 N 87th Street   industry   revolving loan                      
Suite 200, 205 and 230       First lien senior secured loan       12/31/2024           (105)
Scottdale, AZ 85260       First lien senior secured loan   9.08% (Libor + 6.75%/Q)   12/31/2024           1.1  
        First lien senior secured loan   9.07% (Libor + 6.75%/Q)   12/31/2024           0.6  
        First lien senior secured loan   9.08% (Libor + 6.75%/M)   12/31/2024           0.7  
        First lien senior secured loan   9.09% (Libor + 6.75%/M)   12/31/2024           0.7  
        First lien senior secured loan   9.07% (Libor + 6.75%/Q)   9/28/2020           0.6  
        First lien senior secured loan   9.05% (Libor + 6.75%/M)   9/28/2020           0.5  
        First lien senior secured loan   9.08% (Libor + 6.75%/Q)   9/26/2020           0.3  
        First lien senior secured loan   9.05% (Libor + 6.75%/Q)   9/28/2020           0.3  
        First lien senior secured loan   9.08% (Libor + 6.75%/Q)   9/28/2020           0.1  
        First lien senior secured loan   9.07% (Libor + 6.75%/Q)   9/28/2020           1.0  
        First lien senior secured loan   9.06% (Libor + 6.75%/Q)   9/26/2020           38.3  
        First lien senior secured loan   9.06% (Libor + 6.75%/Q)   9/26/2020           18.6  
        Common stock             1.62 %   5.1  
                             
Mavis Tire Express Services Corp. and Mavis Tire Express Services TopCo, L.P.   Auto parts retailer   Second lien senior secured loan       3/20/2026           (106)
385 Saw Mill River Road
Suite 17
      Second lien senior secured loan   9.58% (Libor + 7.50%/M)   3/20/2026           0.5  
Millwood, Ny 10546       Second lien senior secured loan   9.58% (Libor + 7.50%/M)   3/20/2026           108.3  
        Class A units             0.91 %   12.5  
                             
MB Aerospace Holdings II Corp.   Aerospace engine   Second lien senior secured   10.83% (Libor + 8.50%/Q)   1/22/2026           68.4  
39 Bradley Park Road   components manufacturer   loan                      
East Granby, CT 06026                              
                             
MB2 Dental Solutions, LLC   Dental services provider   First lien senior secured   8.75% (Base Rate + 3.75%/Q)   9/29/2023           2.1 (107)
2403 Lacy Lane       revolving loan                      
Carrollton, TX 75006       First lien senior secured loan   7.05% (Libor + 4.75%/Q)   9/29/2023           4.7  
                             
MCH Holdings, Inc. and MC Acquisition   Healthcare professional   First lien senior secured loan   7.57% (Libor + 5.50%/M)   1/17/2020           65.3  
Holdings I, LLC   provider   First lien senior secured loan   7.59% (Libor + 5.50%/M)   1/17/2020           77.3  
825 East Gate Blvd.       First lien senior secured loan   7.57% (Libor + 5.50%/M)   1/17/2020           9.0  
Garden City, NY 11530       First lien senior secured loan   7.59% (Libor + 5.50%/M)   1/17/2020           10.7  
        Class A units             0.56 %   1.1  
                             

137


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
Mckenzie Sports Products, LLC   Designer, manufacturer and   First lien senior secured       9/18/2020           (108)
1910 Saint Luke's Church Road   distributor of hunting-related   revolving loan                      
Salisbury, NC 28146   supplies   First lien senior secured loan   7.84% (Libor + 5.75%/M)   9/18/2020           5.5  
        First lien senior secured loan   7.84% (Libor + 5.75%/M)   9/18/2020           84.5  
                             
Medplast Holdings, Inc   Manufacturer of molded   First lien senior secured   6.59% (Libor + 4.50%/Q)   12/6/2021           1.7 (109)
405 West Geneva Drive   plastic and elastomeric parts   revolving loan                      
Tempe, AZ 85282   and assemblies   First lien senior secured revolving loan   8.50% (Base Rate + 3.50%/Q)   12/6/2021           0.1 (109)
                             
Microstar Logistics LLC, Microstar Global Asset Management LLC, and MStar Holding   Keg management solutions provider   Second lien senior secured loan   9.59% (Libor + 7.50%/M)   7/31/2019           78.5  
Corporation       Second lien senior secured loan   9.59% (Libor + 7.50%/M)   7/31/2019           54.0  
5299 DTC Blvd       Second lien senior secured loan   9.59% (Libor + 7.50%/M)   7/31/2019           10.0  
Suite 510       Common stock             3.47 %   7.7  
Greenwood Village, CO 80111                              
                             
Miles 33 (Finance) Limited(4)(5)   Software provider to the   First lien senior secured loan   4.00% (EURIBOR + 3.50%M)   9/28/2018           4.1  
Miles House Easthampstead Road   regional media industry and   Senior subordinated loan   5.00% (EURIBOR + 4.50%/M)   9/30/2021           9.1  
Bracknell, 1NJ RG12   magazines   Preferred stock             100.00 %    
United Kingdom       Preferred stock             69.00 %    
        Common stock             60.00 %    
                             
Ministry Brands, LLC and MB Parent   Software and payment   First lien senior secured   9.00% (Base Rate + 4.00%/Q)   12/2/2022           3.3 (110)
HoldCo, L.P.   services provider to faith-   revolving loan                      
14488 Old Stage Road   based institutions   First lien senior secured loan   6.10% (Libor + 4.00%/M)   12/2/2022           4.9  
Lenoir City, TN 37772       First lien senior secured loan   6.10% (Libor + 4.00%/M)   12/2/2022           10.6  
        First lien senior secured loan   6.10% (Libor + 4.00%/M)   12/2/2022           14.6  
        Second lien senior secured loan   11.75% (Libor + 9.25%/Q)   6/2/2023           16.6  
        Second lien senior secured loan   11.75% (Libor + 9.25%/Q)   6/2/2023           17.9  
        Second lien senior secured loan   11.75% (Libor + 9.25%/Q)   6/2/2023           4.7  
        Second lien senior secured loan   11.75% (Libor + 9.25%/Q)   6/2/2023           9.2  
        Second lien senior secured loan   10.50% (Libor + 8.00%/Q)   6/2/2023           38.6  
        Second lien senior secured loan   11.75% (Libor + 9.25%/Q)   6/2/2023           90.0  
        Class A units             0.55 %   6.6  
                             
Montgomery Lane, LLC and Montgomery Lane, Ltd.(4)(5)(6)   Investment company   Common stock             100.00 %    
245 Park Avenue       Common stock             100.00 %    
43rd Floor                              
New York, NY 10167                              
                             
Movati Athletic (Group) Inc.(5)   Premier health club operator   First lien senior secured loan       10/5/2022           (111)
33 University Avenue       First lien senior secured loan   6.24% (Libor + 4.50%/Q)   10/5/2022           0.6  
Windsor, ON N9A 5N8       First lien senior secured loan   6.36% (Libor + 4.50%/Q)   10/5/2022           2.9  
Canada       First lien senior secured loan   6.23% (Libor + 4.50%/Q)   10/5/2022            
                             
Moxie Patriot LLC   Gas turbine power generation   First lien senior secured loan   8.08% (Libor + 5.75%/Q)   12/21/2020           32.8  
4100 Spring Valley Road   facilities operator                          
Suite 1001                              
Dallas, TX 75244                              
                             
MPH Energy Holdings, LP   Operator of municipal   Limited partnership interest             3.13 %    
225 S. Main Street   recycling facilities                          
Rutland, VT 05701                              
                             
MSHC, Inc.   Heating, ventilation and air   First lien senior secured   8.25% (Base Rate + 3.25%/Q)   7/29/2022           0.9 (112)
214 N Tryon Street   conditioning services provider   revolving loan                      
Suite 2425       First lien senior secured loan       7/31/2023             (113)
Charlotte, NC 28202       Second lien senior secured loan       7/31/2024           (114)
        Second lien senior secured loan   10.58% (Libor + 8.25%/Q)   7/31/2024           4.8  
        Second lien senior secured loan   10.58% (Libor + 8.25%/Q)   7/31/2024           46.0  
                             
MVL Group, Inc.(4)   Marketing research provider   Common stock             56.10 %    
1061 E. Indiantown Road                              
Suite 300                              
Jupiter, FL 33477                              
                             

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Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
MW Dental Holding Corp.   Dental services provider   First lien senior secured   9.08% (Libor + 6.75%/Q)   4/12/2021           3.5 (115)
680 Hehli Way       revolving loan                      
PO Box 69       First lien senior secured loan       4/12/2021           (116)
Mondovi, WI 54755       First lien senior secured loan   9.08% (Libor + 6.75%/Q)   4/12/2021           9.1  
        First lien senior secured loan   9.08% (Libor + 6.75%/Q)   4/12/2021           58.6  
        First lien senior secured loan   9.08% (Libor + 6.75%/Q)   4/12/2021           46.5  
        First lien senior secured loan   9.08% (Libor + 6.75%/Q)   4/12/2021           19.2  
                             
My Health Direct, Inc.   Healthcare scheduling   Warrant       9/18/2024     4.85 %   (2)
4322 Harding Pike   exchange software solution                          
Nashville, TN 37205   provider                          
                             
NAS, LLC, Nationwide Marketing   Buying and marketing   Second lien senior secured   11.06% (Libor + 8.75%/Q)   12/1/2021           24.1  
Group, LLC and Nationwide Administrative   services organization for   loan                      
Services, Inc.   appliance, furniture and   Second lien senior secured   11.11% (Libor + 8.75%/Q)   12/1/2021           7.0  
110 Oakwood Drive   consumer electronics dealers   loan                      
Suite 200                              
Winston-Salem, NC 27103                              
                             
National Intergovernmental Purchasing   Leading group purchasing   First lien senior secured       5/23/2023           (117)
Alliance Company   organization ("GPO") for   revolving loan                      
840 Crescent Centre Dr #600   public agencies and                          
Franklin, TN 37067   educational institutions in the                          
    U.S                          
                             
Navisun LLC and Navisun Holdings LLC(4)   Owner and operater of   First lien senior secured loan       11/15/2023           (118)
39 Grace Street   commercial and industrial   First lien senior secured loan   8.00% PIK   11/15/2023           17.1  
New Canaan, CT 06840   solar projects   Series A preferred units   10.50% PIK         100.00 %   1.9  
        Class A units             55.00 %    
                             
NECCO Holdings, Inc. and New England Confectionery Company, Inc.(4)   Producer and supplier of candy   First lien senior secured revolving loan       1/31/2018           2.9 (119)
135 American Legion       First lien senior secured loan       8/31/2018           (120)
Revere, MA 02151       First lien senior secured loan       8/31/2018            
        First lien senior secured loan       1/31/2018           1.6  
        First lien senior secured loan       11/9/2018           0.1  
        Common stock             100.00 %    
                             
NECCO Realty Investments LLC(4)   Real estate holding company   Membership units             100.00 %    
135 American Legion Highway                              
Revere, MA 02151                              
                             
New Trident Holdcorp, Inc. and Trident Holding Company, LLC   Outsourced mobile diagnostic healthcare service provider   Second lien senior secured loan   8.09% (Libor + 6.00%/M)   7/31/2022           17.6  
505 Hamilton Ave       Second lien senior secured       7/31/2020           33.0  
Suite 200       loan                      
Palo Alto, CA 94301       Senior subordinated loan       7/31/2020            
                             
NM GRC HOLDCO, LLC   Regulatory compliance   First lien senior secured loan       1/9/2020           (121)
1370 Broadway   services provider to financial   First lien senior secured loan   7.83% (Libor + 5.50%/Q)   2/9/2024           60.5  
12th FLoor   institutions                          
New York, NY 10018                              
                             
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC   Anesthesia management services provider   Second lien senior secured loan   12.45% (Libor + 10.00%/Q)   10/19/2023           65.5  
68 South Service Road       Class A units             0.68 %   0.7  
Suite 350                              
Melville, NY 11747                              
                             
Nodality, Inc.   Biotechnology company   First lien senior secured loan       8/12/2016            
170 Harbor Way       First lien senior secured loan       8/25/2016            
Suite 200       Warrant       3/15/2026     51.00 %   (2)
San Francisco, CA 94080                              
                             
Nordco Inc.   Manufacturer of railroad   First lien senior secured       8/26/2020           (122)
245 West Forest Hill Avenue   maintenance-of-way   revolving loan                      
Oak Creek, WI 53154   machinery                          
                             
Novetta Solutions, LLC   Provider of advanced   First lien senior secured loan   7.10% (Libor + 5.00%/M)   10/16/2022           11.9  
7921 Jones Branch Drive   analytics solutions for the   Second lien senior secured   10.60% (Libor + 8.50%/M)   10/16/2023           26.4  
5th Floor   government, defense and   loan                      
McLean, VA 22102   commercial industries                          
                             
NSI Holdings, Inc.(3)   Manufacturer of plastic   Series A preferred stock             6.29 %    
1415 Orchard Drive   containers for the wholesale                          
Chambersburg, PA 17201   nursery industry                          
                             
NSM Insurance Group, LLC   Insurance program   First lien senior secured loan   6.82% (Libor + 4.50%/Q)   5/11/2024           6.7  
555 North Lane   administrator   First lien senior secured loan   6.86% (Libor + 4.50%/Q)   5/11/2024           13.1  
Suite 6060                              
Conshohocken, PA 19428                              
                             

139


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
NSM Sub Holdings Corp.   Provider of customized   First lien senior secured   9.00% (Base Rate + 4.00%/Q)   10/3/2022           1.3 (123)
320 Premier Court   mobility, rehab and adaptive   revolving loan                      
Suite 220   seating systems   First lien senior secured loan       10/3/2022           (124)
Franklin, TN 37067       First lien senior secured loan   6.83% (Libor + 4.50%/Q)   10/3/2022           4.9  
                             
nThrive, Inc. (fka Precyse Acquisition Corp.)   Provider of healthcare   Second lien senior secured   11.84% (Libor + 9.75%/M)   4/20/2023           9.8  
100 North Point Center East   information management   loan                      
Suite 200   technology and services                          
Alpharetta, GA 30022                              
                             
OAKC 2015-11(5)(6)   Investment vehicle   Subordinated note   9.00%   10/20/2028           13.8  
190 Elgin Avenue                              
George Town, Grand Cayman KY1-9005                              
Cayman Islands                              
                             
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC   Provider of technology-enabled solutions to   Limited liability company membership interest             1.57 %   0.6  
15950 Dallas Parkway   pharmacies                          
Suite 350                              
Dallas, TX 75248                              
                             
OpenSky Project, Inc. and OSP Holdings, Inc.   Social commerce platform   Warrant       4/28/2025     3.00 %   (2)
18 West 18th Street   operator                          
New York, NY 10011                              
                             
Orion Foods, LLC(4)   Convenience food service   First lien senior secured loan       9/1/2015           0.4  
2930 W. Maple Street   retailer   Second lien senior secured       9/1/2015            
Sioux Falls, SD 57118       loan Preferred units             93.53 %    
        Class A common units             100.00 %    
        Class B common units             25.00 %    
                             
Osmose Utilities Services, Inc.   Provider of structural   First lien senior secured       8/21/2020           (125)
635 Highway 74 S   integrity management services   revolving loan                      
Peachtree City, GA 30269   to transmission and distribution infrastructure   Second lien senior secured loan   10.08% (Libor + 7.75%/Q)   8/21/2023           51.4  
        Second lien senior secured loan   10.08% (Libor + 7.75%/Q)   8/21/2023           34.0  
                             
OTG Management, LLC   Airport restaurant operator   First lien senior secured   11.33% (Libor + 9.00%/Q)   8/26/2021           1.6 (126)
352 Park Avenue South       revolving loan                      
New York, NY 10010       First lien senior secured   11.67% (Libor + 9.00%/Q)   8/26/2021           8.4 (126)
        revolving loan                      
        First lien senior secured loan       8/26/2021           (127)
        First lien senior secured loan   11.36% (Libor + 9.00%/Q)   8/26/2021           12.6  
        First lien senior secured loan   11.37% (Libor + 9.00%/Q)   8/26/2021           2.2  
        First lien senior secured loan   11.34% (Libor + 9.00%/Q)   8/26/2021           2.5  
        First lien senior secured loan   11.31% (Libor + 9.00%/Q)   8/26/2021           2.2  
        First lien senior secured loan   11.32% (Libor + 9.00%/Q)   8/26/2021           1.0  
        First lien senior secured loan   11.33% (Libor + 9.00%/Q)   8/26/2021           0.9  
        First lien senior secured loan   11.06% (Libor + 9.00%/B)   8/26/2021           48.9  
        First lien senior secured loan   11.36% (Libor + 9.00%/B)   8/26/2021           48.9  
        Senior subordinated loan   17.50% PIK   2/26/2022           27.5  
        Class A preferred units             20.00 %   37.1  
        Common units             3.79 %   8.5  
        Warrant             8.33 %   18.8 (2)
        Warrant             0.60 %   (2)
                             
Palermo Finance Corporation   Provider of mission-critical   First lien senior secured       4/17/2022           (128)
9477 Waples Street   integrated public safety   revolving loan                      
Suite 100   software and services to local,                          
San Diego, CA 92121   state and federal agencies                          
                             
Panda Liberty LLC (fka Moxie Liberty LLC)   Gas turbine power generation   First lien senior secured loan   8.83% (Libor + 6.50%/Q)   8/21/2020           46.1  
4100 Spring Valley Road   facilities operator   First lien senior secured loan   8.83% (Libor + 6.50%/Q)   8/21/2020           31.6  
Suite 1001                              
Dallas, TX 75244                              
                             
Panda Temple Power, LLC and T1 Power Holdings LLC(3)   Gas turbine power generation facilities operator   Second lien senior secured loan   10.05% (Libor + 8.00%/M)   2/7/2023           9.0  
2892 Panda Drive       Class A Common units             6.16 %   10.3  
Temple, TX 76501                              
                             
Paper Source, Inc. and Pine Holdings, Inc.   Retailer of fine and artisanal   First lien senior secured   9.75% (Base Rate + 5.00%/Q)   9/23/2019           0.8 (129)
410 N Milwaukee   paper products   revolving loan                      
Chicago, IL 60654       First lien senior secured loan   8.58% (Libor + 6.25%/Q)   9/23/2019           9.2  
        Class A common stock             3.64 %   3.1  
                             
Park Place Technologies, LLC   Provides hardware   First lien senior secured       3/29/2023           (130)
5910 Landerbrook Drive   maintenance and support   revolving loan                      
Mayfield Heights, OH 44124   services for IT data centers                          
                             

140


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
Partnership Capital Growth Fund I, L.P.(6)   Investment partnership   Limited partnership interest             25.00 %   0.1  
1 Embarcadero Center                              
Suite 3810                              
San Francisco, CA 94111                              
                             
Partnership Capital Growth Investors III, L.P.(6)   Investment partnership   Limited partnership interest             2.50 %   4.0  
1 Embarcadero Center                              
Suite 3810                              
San Francisco, CA 94111                              
                             
Pathway Vet Alliance, LLC   Operator of freestanding   First lien senior secured loan       10/10/2024           (131)
800 W Cesar Chavex St   veterinary hospitals   First lien senior secured loan   6.34% (Libor + 4.25%/M)   10/10/2024           0.2  
B-100       First lien senior secured loan   6.34% (Libor + 4.25%/M)   10/10/2024           0.1  
Austin, TX 78701       First lien senior secured loan   6.34% (Libor + 4.25%/M)   10/10/2024           1.4  
                             
Patterson Medical Supply, Inc.   Distributor of rehabilitation   Second lien senior secured   10.86% (Libor + 8.50%/Q)   8/28/2023           68.6  
28100 Torch Parkway   supplies and equipment   loan                      
Suite 700                              
Warrenville, IL 60555                              
                             
Payment Alliance International, Inc.   Reseller of ATM process   First lien senior secured   10.05% (Base Rate + 5.05%/M)   9/15/2021           2.5 (132)
6060 Dutchmans Lane   services through 3rd party   revolving loan                      
Louisville, KY 40205   processing networks                          
                             
PayNearMe, Inc.   Electronic cash payment   Warrant             1.11 %   (2)
292 Gibralter Drive   system provider                          
Suite 104                              
Sunnyvale, IL 60555                              
                             
PCG-Ares Sidecar Investment II, L.P.(6)   Investment partnership   Limited partnership interest             100.00 %   10.6  
1 Embarcadero Center                              
Suite 3810                              
San Francisco, CA 94111                              
                             
PCG-Ares Sidecar Investment, L.P.(6)   Investment partnership   Limited partnership interest             100.00 %   4.2  
1 Embarcadero Center                              
Suite 3810                              
San Francisco, CA 94111                              
                             
PCM Bmark, Inc. and BakeMark Holdings, Inc.   Manufacturer and distributor of specialty bakery   First lien senior secured loan   7.30% (Libor + 5.25%/M)   8/14/2023           0.8  
7351 7351 Crider Avenue   ingredients                          
Pico Rivera, CA 90660                              
                             
PDI TA Holdings, Inc.   Provider of enterprise   First lien senior secured       8/25/2023           (133)
3407 S 31st Street   management software for the   revolving loan                      
Temple, TX 76502   convenience retail and   First lien senior secured loan       8/25/2023           (134)
    petroleum wholesale markets   First lien senior secured loan   7.23% (Libor + 4.75%/Q)   8/25/2023           0.4  
        First lien senior secured loan   6.37% (Libor + 4.75%/Q)   8/25/2023           2.2  
        First lien senior secured loan   7.11% (Libor + 4.75%/Q)   8/25/2023           2.7  
        First lien senior secured loan   7.22% (Libor + 4.75%/Q)   8/25/2023           5.1  
        First lien senior secured loan   7.08% (Libor + 4.75%/Q)   8/25/2023           21.2  
        Second lien senior secured loan       8/25/2024           (135)
        Second lien senior secured loan   11.11% (Libor + 8.75%/Q)   8/25/2024           8.2  
        Second lien senior secured loan   11.23% (Libor + 8.75%/Q)   8/25/2024           1.9  
        Second lien senior secured loan   10.61% (Libor + 8.75%/Q)   8/25/2024           6.5  
        Second lien senior secured loan   10.71% (Libor + 8.75%/Q)   8/25/2023           16.7  
        Second lien senior secured loan   11.07% (Libor + 8.75%/Q)   8/25/2024           66.8  
                             
Pegasus Intermediate Holdings, LLC   Plant maintenance and   First lien senior secured       11/7/2022           (136)
1101 Haynes Street   scheduling process software   revolving loan                      
#218   provider                          
Raleigh, NC 27604                              
                             
Pelican Products, Inc.   Manufacturer of flashlights   Second lien senior secured   9.73% (Libor + 7.75%/M)   5/1/2026           27.1  
23215 Early Avenue       loan                      
Torrance, CA 90505                              
                             
Penn Virginia Holding Corp.   Oil and gas exploration and   Second lien senior secured   9.10% (Libor + 7.00%/M)   9/29/2022           90.1  
14701 St. Mary's Lane   production company   loan                      
Suite 275                              
Houston, TX 77079                              
                             
PERC Holdings 1 LLC   Operator of recycled energy,   Class B common units             18.94 %   28.6  
2215 So. York Road   combined heat and power,                          
Suite 202   and energy efficiency facilities                          
Oak Brook, IL 60523                              
                             

141


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  
PetIQ, LLC   Distributor and manufacturer   First lien senior secured   7.23% (Libor + 5.25%/M)   1/17/2023           18.0  
500 East Shore Drive   of pet prescription   revolving loan                      
Suite 120   medications and health                          
Eagle, ID 83616   products                          
                             
Petroflow Energy Corporation and TexOak   Oil and gas exploration and   First lien senior secured loan   9.98% (Libor + 8.00%/M)   6/29/2019           9.8  
Petro Holdings LLC(3)   production company   Second lien senior secured       12/29/2019            
525 S. Main       loan                      
Suite 1120       Common units             20.20 %    
Tulsa, OK 74103                              
                             
PHL Investors, Inc., and PHL Holding Co.(4)   Mortgage services   Class A common stock             100.00 %    
50 Weston Street                              
Hartford, CT 06120                              
                             
PHNTM Holdings, Inc. and Planview   Provider of project and   First lien senior secured loan   7.34% (Libor + 5.25%/M)   1/27/2023           19.7  
Parent, Inc.   portfolio management   First lien senior secured loan   7.34% (Libor + 5.25%/M)   1/27/2023           5.0  
12301 Research Blvd, Research Park Plaza V   software   First lien senior secured loan   7.34% (Libor + 5.25%/M)   1/27/2023           5.1  
Suite 101       Second lien senior secured loan   11.84% (Libor + 9.75%/M)   7/27/2023           62.0  
Austin, TX 78759       Class A common shares             0.19 %   1.2  
        Class B common shares             0.19 %   0.2  
                             
PhyMED Management LLC   Provider of anesthesia   Second lien senior secured   11.07% (Libor + 8.75%/Q)   5/18/2021           45.8  
110 29th Avenue North   services   loan                      
Suite 301                              
Nashville, TN 37203                              
                             
PIH Corporation and Primrose Holding Corporation(3)   Franchisor of education-based early childhood centers   First lien senior secured revolving loan   7.63% (Libor + 5.50%/M)   12/15/2018           1.0 (137)
3660 Cedarcrest Road       First lien senior secured loan   7.60% (Libor + 5.50%/M)   12/15/2020           1.6  
Acworth, GA 30101       Common stock             8.46 %   21.0  
                             
Piper Jaffray Merchant Banking Fund I, L.P.(6)   Investment partnership   Limited partnership interest             2.00 %   1.6  
800 Nicollet Mall                              
Suite 800                              
Minneapolis, MN 55402                              
                             
Plantation Products, LLC, Seed Holdings, Inc. and Flora Parent, Inc.   Provider of branded lawn and garden products   Second lien senior secured loan   10.35% (Libor + 7.99%/Q)   6/23/2021           2.0  
202 South Washington Street       Second lien senior secured   10.35% (Libor + 7.99%/Q)   6/23/2021           54.0  
Norton, MA 02766       loan                      
        Second lien senior secured loan   10.35% (Libor + 7.99%/Q)   6/23/2021           10.0  
        Common stock             2.56 %   6.0  
                             
Plusgrade L.P.(5)   Provider of auction software   First lien senior secured       7/31/2021           (138)
1801 McGill College   solutions to the airline   revolving loan                      
Suite 1410   industry                          
Montreal, QC H3A 2N4                              
Canada                              
                             
Poplicus Incorporated   Business intelligence and   Warrant             3.23 %   (2)
1061 Market Street   market analytics platform for                          
Floor 6   companies that sell to the                          
San Francisco, CA 94103   public sector                          
                             
Practice Insight, LLC   Revenue cycle management   First lien senior secured   9.00% (Base Rate + 4.00%/Q)   8/23/2022           0.6 (139)
1 Greenway Plaza   provider to the emergency   revolving loan                      
Suite 350   healthcare industry   First lien senior secured loan   7.09% (Libor + 5.00%/M)   8/23/2022           12.4  
Houston, TX 77046                              
                             
Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.   Provider of data visualization software for data analytics   Class A common shares             0.42 %   7.6  
150 N. Radnor Chester Road       Class B common shares             0.42 %   0.1  
Suite E220                              
Radnor, PA 19087                              
                             
ProVation Medical, Inc.   Provider of documentation   First lien senior secured loan   9.05% (Libor + 7.00%/M)   3/8/2024           13.0  
800 Washington Avenue North   and coding software for GI                          
Suite 400   physicians                          
Minneapolis, MN 55401                              
                             
Pyramid Management Advisors, LLC and Pyramid Investors, LLC   Hotel operator   First lien senior secured revolving loan   8.83% (Libor + 6.75%/M)   7/15/2021           0.6 (140)
1 Post Office Square       First lien senior secured loan       7/15/2021           (141)
Suite 1900       First lien senior secured loan   8.84% (Libor + 6.75%/M)   7/15/2021           17.1  
Boston, MA 02109       Membership units             1.40 %   0.9  

142


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

QC Supply, LLC

  Specialty distributor and   First lien senior secured   8.10% (Libor + 6.00%/M)   12/29/2021           8.8 (142)

574 Road 11

  solutions provider to the   revolving loan                      

Schuyler, NE 68661

  swine and poultry markets   First lien senior secured loan       12/29/2022           (143)

      First lien senior secured loan   8.10% (Libor + 6.00%/M)   12/29/2022           8.5  

      First lien senior secured loan   8.10% (Libor + 6.00%/M)   12/29/2022           10.9  

      First lien senior secured loan   8.10% (Libor + 6.00%/M)   12/29/2022           14.4  

                             

Qualium Investissement(5)(6)

  Investment partnership   Class A common stock             1.93 %   6.1  

41 Avenue Friedland

      Class B common stock             1.93 %   0.1  

Paris, DE

      Class C common stock             1.93 %   0.1  

France

                             

                             

R1 RCM Inc.

  Revenue cycle management   First lien senior secured       5/8/2023           (144)

401 North Michigan Avenue

  provider to the emergency   revolving loan                      

Suite 2700

  healthcare industry                          

Chicago, Il 60611

                             

                             

R2 Acquisition Corp.

  Marketing services   Common stock             0.32 %   0.2  

207 NW Park Ave

                             

Portland, OR 97209

                             

                             

R3 Education Inc., Equinox EIC Partners LLC

  Medical school operator   Preferred stock             18.94 %   0.5  

and Sierra Education Finance Corp.

      Common membership             15.76 %   21.2  

1750 W Broadway Street

      interest                      

#222

      Warrant       11/10/2019     10.00 %   11.8 (2)

Oviedo, FL 32765

                             

                             

Ranpak Corp.

  Manufacturer and marketer   Second lien senior secured   9.34% (Libor + 7.25%/M)   10/3/2022           8.0  

7990 Auburn Road

  of paper-based protective   loan                      

P.O. Box 8004

  packaging systems and                          

Concord Township, OH 44077

  materials                          

                             

RE Community Holdings GP, LLC and RE

  Operator of municipal   Limited partnership interest             2.86 %    

Community Holdings, LP

  recycling facilities   Limited partnership interest             2.49 %    

809 West Hill Street

                             

Charlotte, NC 28208

                             

                             

RecoveryDirect Acquisition, L.L.C.

  Outpatient physical therapy   First lien senior secured   6.55% (Libor + 4.50%/M)   1/3/2023           2.3 (145)

2803 Greystone Commercial Boulevard

  provider   revolving loan                      

Suite 18

      First lien senior secured loan   6.83% (Libor + 4.50%/Q)   1/3/2024           7.0  

Birmingham, AL 35242

      First lien senior secured loan   6.83% (Libor + 4.50%/Q)   1/3/2024           14.9  

      First lien senior secured loan   6.83% (Libor + 4.50%/Q)   1/3/2024           19.9  

                             

Regent Education, Inc.

  Provider of software solutions   Warrant       12/23/2026     0.27 %   (2)

340 E. Patrick Street

  designed to optimize the   Warrant       12/28/2026     8.00 %   (2)

Suite 201

  financial aid and enrollment                          

Frederick, MD 21701

  processes                          

                             

Respicardia, Inc.

  Developer of implantable   Warrant       6/28/2022     0.19 %   (2)

12400 Whitewater Drive

  therapies to improve                          

Suite 150

  cardiovascular health                          

Minnetonka, MN 55343

                             

                             

Restaurant Technologies, Inc.

  Provider of bulk cooking oil   First lien senior secured   6.84% (Libor + 4.75%/M)   11/23/2021           0.1 (146)

2250 Pilot Knob Road

  management services to the   revolving loan                      

Suite 100

  restaurant and fast food   First lien senior secured   6.78% (Libor + 4.75%/M)   11/23/2021           0.5 (146)

Mendota Heights, MN 55120

  service industries   revolving loan                      

      First lien senior secured revolving loan   8.75% (Base Rate + 3.75%/M)   11/23/2021           0.7 (146)

                             

Retriever Medical/Dental Payments LLC

  Provider of payment   First lien senior secured       2/3/2023           (147)

115 E Stevens Ave

  processing services and   revolving loan                      

Valhalla, NY 10595

  software to healthcare providers                          

                             

RF HP SCF Investor, LLC(6)

  Branded specialty food   Membership interest             10.08 %   15.2  

71 West 23rd Street

  company                          

New York, NY 10010

                             

                             

Riverview Power LLC

  Operator of natural gas and   First lien senior secured loan   10.33% (Libor + 8.00%/Q)   12/29/2022           94.3  

2200 Atlantic Street

  oil fired power generation                          

Suite 800

  facilities                          

Stamford, CT 06902

                             

                             

RMP Group, Inc

  Revenue cycle management   First lien senior secured       3/2/2022           (148)

4135 South Stream Blvd

  provider to the emergency   revolving loan                      

Suite 400

  healthcare industry                          

Charlotte, NC 28217

                             

                             

Roark-Money Mailer LLC

  Marketer, advertiser and   Membership units             0.44 %    

14271 Corporate Drive

  distributor of coupons in the                          

Garden Grove, CA 92843

  mail industry                          

                             

143


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

RuffaloCODY, LLC

  Provider of student   First lien senior secured       5/29/2019           (149)

1025 Kirkwood Parkway SW

  fundraising and enrollment   revolving loan                      

Cedar Rapids, IA 52404

  management services                          

                             

Rug Doctor, LLC and RD Holdco Inc.(4)

  Manufacturer and marketer   Second lien senior secured   12.18% (Libor + 9.75%/Q)   10/31/2019           16.9  

4701 Old Shepard Place

  of carpet cleaning machines   loan                      

Plano, TX 75093

      Common stock             45.86 %   20.3  

      Warrant       12/23/2023     46.98 %   (2)

                             

S Toys Holdings LLC (fka The Step2

  Toy manufacturer   Common units             1.77 %   0.5  

Company, LLC)(4)

      Class B common units             100.00 %    

10010 Aurora-Hudson Road

      Warrant             5.00 %   (2)

Streetsboro, OH 44241

                             

                             

Salter Labs

  Developer, manufacturer and   First lien senior secured   6.61% (Libor + 4.25%/Q)   3/11/2020           0.6 (150)

100 Sycamore Rd.

  supplier of consumable   revolving loan                      

Arvin, CA 93203

  products for medical device customers   First lien senior secured revolving loan   6.58% (Libor + 4.25%/Q)   3/11/2020           0.2 (150)

      First lien senior secured revolving loan   8.25% (Base Rate + 3.25%/Q)   3/11/2020           0.2 (150)

                             

Sanders Industries Holdings, Inc. and SI

  Manufacturer of elastomeric   First lien senior secured       5/30/2019           (151)

Holdings, Inc.

  parts, mid-sized composite   revolving loan                      

3701 Conany Street

  structures, and composite   First lien senior secured loan   8.81% (Libor + 6.50%/Q)   5/30/2020           54.9  

Long Beach, CA 90809

  tooling   First lien senior secured loan   8.81% (Libor + 6.50%/Q)   5/30/2020           14.4  

      Common stock             1.83 %   1.3  

                             

Saw Mill PCG Partners LLC

  Manufacturer of metal   Common units             66.67 %    

8751 Old State Road 60

  precision engineered                          

Sellersburg, IN 47172

  components                          

                             

SCM Insurance Services Inc.(5)

  Provider of claims   First lien senior secured   9.00% (Base Rate + 4.00%/Q)   8/29/2022           1.7 (152)

5083 Windermere Boulevard

  management, claims   revolving loan                      

SW #101

  investigation & support and   First lien senior secured loan   6.64% (Libor + 5.00%/M)   8/29/2024           19.9  

Edmonton, AB T6W 0J5

  risk management solutions   Second lien senior secured   10.64% (Libor + 9.00%/M)   3/1/2025           56.0  

Canada

  for the Canadian property and casualty insurance industry   loan                      

                             

SCSG EA Acquisition Company, Inc.

  Provider of outsourced   First lien senior secured   6.28% (Libor + 4.25%/Q)   9/1/2022           0.1 (153)

3100 West End Avenue

  clinical services to hospitals   revolving loan                      

Suite 800

  and health systems   First lien senior secured   6.61% (Libor + 4.25%/Q)   9/1/2022           0.2 (153)

Nashville, TN 37203

      revolving loan                      

                             

Securelink, Inc.

  Provider of a SaaS third-party   First lien senior secured       8/15/2022           (154)

11402 Bee Cave Road

  remote access software   revolving loan                      

Austin, TX 78738

  platform                          

                             

Senior Direct Lending Program, LLC(4)(6)

  Co-investment vehicle   Subordinated certificates   10.34% (Libor + 8.00%/Q)   12/31/2036           589.0  

2000 Avenue of the Stars

      Member interest             87.50 %    

12th Floor

                             

Los Angeles, CA 90067

                             

                             

Severin Acquisition, LLC

  Provider of student   First lien senior secured   7.09% (Libor + 4.75%/Q)   7/30/2021           1.2 (155)

150 Parkshore Drive

  information system software   revolving loan                      

Folsom, CA 95630

  solutions to the K-12   First lien senior secured   7.06% (Libor + 4.75%/Q)   7/30/2021           0.6 (155)

  education market   revolving loan                      

      Second lien senior secured loan   11.11% (Libor + 8.75%/Q)   7/31/2022           38.7  

      Second lien senior secured loan   11.11% (Libor + 8.75%/Q)   7/31/2022           4.2  

      Second lien senior secured loan   11.36% (Libor + 9.00%/Q)   7/31/2022           3.1  

      Second lien senior secured loan   11.11% (Libor + 8.75%/Q)   7/31/2022           15.0  

      Second lien senior secured loan   11.61% (Libor + 9.25%/Q)   7/31/2022           3.3  

      Second lien senior secured loan   11.61% (Libor + 9.25%/Q)   7/31/2022           2.8  

      Second lien senior secured loan   9.34% (Libor + 7.00%/M)   7/31/2026           79.2  

      Second lien senior secured loan   11.11% (Libor + 8.75%/Q)   7/31/2022           5.5  

      Second lien senior secured loan   11.36% (Libor + 9.00%/Q)   7/31/2022           3.1  

      Second lien senior secured loan   11.11% (Libor + 8.75%/Q)   7/31/2022           20.0  

      Second lien senior secured loan   11.61% (Libor + 9.25%/Q)   7/31/2022           4.4  

      Second lien senior secured loan   11.61% (Libor + 9.25%/Q)   7/31/2022           2.8  

                             

144


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

SFE Intermediate Holdco LLC

  Provider of outsourced   First lien senior secured       7/31/2022           (156)

9366 East Raintree Drive

  foodservice to K-12 school   revolving loan                      

Suite 101

  districts   First lien senior secured loan   7.36% (Libor + 5.00%/Q)   7/31/2023           6.7  

Scottdale, AZ 85260

                             

                             

Shift PPC LLC

  Digital solutions provider   First lien senior secured       12/22/2021           (157)

348 East Maple Road

      revolving loan                      

Birmingham, MI 48009

                             

                             

SHO Holding I Corporation

  Manufacturer and distributor   Second lien senior secured   10.86% (Libor + 8.50%/Q)   4/27/2023           88.0  

250 S. Australian Avenue

  of slip resistant footwear   loan                      

West Palm Beach, FL 33401

                             

                             

Shock Doctor, Inc. and Shock Doctor

  Developer, marketer and   Second lien senior secured   13.36% (Libor + 11.00%/Q)   10/22/2021           81.4  

Holdings, LLC(3)

  distributor of sports   loan                      

110 Cheshire Lane

  protection equipment and   Class A preferred units             3.74 %   1.4  

Suite120

  accessories   Class C preferred units             12.20 %   1.4  

Minnetonka, MN 55305

                             

                             

Simpson Performance Products, Inc.

  Provider of motorsports   First lien senior secured loan   9.89% (Libor + 7.56%/Q)   2/20/2020           10.0  

328 FM 306

  safety equipment   First lien senior secured loan   9.89% (Libor + 7.56%/Q)   2/20/2020           18.3  

New Braunels, TX 78130

                             

                             

Singer Sewing Company, SVP-Singer Holdings, LLC and SVP-Singer Holdings LP(4)

  Manufacturer of consumer sewing machines   First lien senior secured revolving loan   11.33% (Libor + 9.00%/Q)   3/16/2023           70.3 (158)

1224 Heil Quaker Boulevard

      First lien senior secured loan   5.00% (Libor + 2.67%/Q)   3/16/2023           159.3  

La Vergne, TN 37086

      Class A common units             65.00 %    

                             

SiroMed Physician Services, Inc. and SiroMed Equity Holdings, LLC

  Outsourced anesthesia provider   First lien senior secured revolving loan       3/26/2024           (159)

1000 Winter Street

      First lien senior secured loan   7.08% (Libor + 4.75%/Q)   3/26/2024           17.3  

Suite 4300

      Common units             4.81 %   4.7  

Waltham, MA 02451

                             

                             

Siteworx Holdings, LLC & Siteworx LLC

  Provider of design, web   First lien senior secured   6.25% (Base Rate + 1.25%/M)   1/2/2020           1.4 (160)

11480 Commerce Park Dr

  content management,   revolving loan                      

Suite 300

  eCommerce solutions and   First lien senior secured loan   7.83% (Libor + 5.50%/M)   1/2/2020           3.4  

Reston, VA 20191

  system integration                          

                             

SK SPV IV, LLC

  Collision repair site operators   Series A common stock             76.92 %   2.5  

600 N Central Expressway

      Series B common stock             76.92 %   2.5  

Suite #4000

                             

Richardson, TX 75080

                             

                             

SocialFlow, Inc.

  Social media optimization   Warrant             0.30 %   (2)

52 Vanderbilt Avenue

  platform provider                          

12th Floor

                             

New York, NY 10017

                             

                             

Soil Safe, Inc. and Soil Safe Acquisition

  Provider of soil treatment,   First lien senior secured       1/1/2020           (161)

Corp.(4)

  recycling and placement   revolving loan                      

6700 Alexander Bell Drive

  services   First lien senior secured loan   8.34% (Libor + 6.25%/M)   1/1/2020           20.0  

Suite 300

      Second lien senior secured   10.75% (Libor + 7.75%/M)   6/30/2020           12.7  

Columbia, MD 21046

      loan                      

      Senior subordinated loan   16.50% PIK   12/31/2020           39.9  

      Senior subordinated loan   14.50% PIK   12/31/2020           33.9  

      Senior subordinated loan       12/31/2020           6.3  

      Common stock             90.00 %    

                             

Sonny's Enterprises, LLC

  Manufacturer and supplier of   First lien senior secured   6.59% (Libor + 4.50%/M)   12/1/2022           0.5 (162)

5605 Hiatus Road

  car wash equipment, parts   revolving loan                      

Tamarac, FL 33321

  and supplies to the conveyorized car wash market                          

                             

SoundCloud Limited(5)

  Platform for receiving,   Common stock             0.23 %   0.7  

76/77 Rheinsberger Str

  sending, and distributing                          

Berlin, 10115

  music                          

Germany

                             

                             

Sparefoot, LLC

  PMS solutions and web   First lien senior secured   6.35% (Libor + 4.25%/M)   4/13/2023           0.3 (163)

3300 Interstate Hwy 35

  services for the self-storage   revolving loan                      

Suite 200

  industry.   First lien senior secured loan   6.34% (Libor + 4.25%/M)   4/13/2024           4.7  

Austin, TX 78705

      Second lien senior secured loan   10.34% (Libor + 8.25%/M)   4/13/2025           6.0  

                             

Sparta Systems, Inc., Project Silverback Holdings Corp. and Silverback Holdings, Inc.

  Quality management software provider   First lien senior secured revolving loan       8/22/2022           (164)

2000 Waterview Drive

      Second lien senior secured   10.34% (Libor + 8.25%/M)   8/21/2025           19.6  

Suite 300

      loan                      

Hamilton, NJ 08691

      Series B preferred shares             0.32 %   0.8  

                             

Spectra Finance, LLC

  Venue management and food   First lien senior secured   6.00% (Libor + 4.00%/M)   4/3/2023           6.6 (165)

3601 S. Broad Street

  and beverage provider   revolving loan                      

Philadelphia, PA 19148

      First lien senior secured loan   6.83% (Libor + 4.50%/Q)   4/2/2024           18.9  

                             

145


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

Spin HoldCo Inc.

  Laundry service and   Second lien senior secured   9.82% (Libor + 7.50%/Q)   5/14/2023           175.0  

303 Sunnyside Blvd

  equipment provider   loan                      

Suite 70

                             

Plainview, NY 11803

                             

                             

St. Croix Hospice Acquisition Corp.

  Provider of hospice services   First lien senior secured       9/29/2022           (166)

7200 Hudson Boulevard North

      revolving loan                      

Suites 230 and 100

                             

Oakdale, MN 55128

                             

                             

Startec Equity, LLC(4)

  Communication services   Member interest             100.00 %    

2000 Avenue of the Stars

                             

12th Floor

                             

Los Angeles, CA 90067

                             

                             

Storm UK Holdco Limited and Storm US

  Provider of water   First lien senior secured       5/5/2022           (167)

Holdco Inc.(5)

  infrastructure software   revolving loan                      

Jacobs Well West Street

  solutions for municipalities /                          

Newbury, Berkshire RG14 1BD

  utilities and engineering                          

United Kingdom

  consulting firms                          

                             

Sundance Energy, Inc.

  Oil and gas producer   Second lien senior secured   10.37% (Libor + 8.00%/Q)   4/23/2023           60.1  

633 17th Street

      loan                      

Suite 1950

                             

Denver, CO 80202

                             

                             

Sunk Rock Foundry Partners LP, Hatteras

  Manufacturer of metal   First lien senior secured   7.12% (Libor + 4.75%/Q)   10/31/2022           1.4 (168)

Electrical Manufacturing Holding Company

  castings, precision machined   revolving loan                      

and Sigma Electric Manufacturing Corporation

  components and                          

120 Sigma Drive

  sub-assemblies in the   First lien senior secured   7.20% (Libor + 4.75%/Q)   10/31/2022           1.0 (168)

Garner, NC 27529

  electrical products, power   revolving loan                      

  transmission and distribution and general industrial markets   First lien senior secured loan   7.11% (Libor + 4.75%/Q)   10/31/2023           8.1  

      First lien senior secured loan   7.11% (Libor + 4.75%/Q)   10/31/2023           9.2  

                             

Sunshine Sub, LLC

  Premier health club operator   First lien senior secured       5/27/2024           (169)

4776 New Broad Street

      revolving loan                      

Suite 195

      First lien senior secured loan       5/27/2024           (170)

Orlando, FL 32814

      First lien senior secured loan   6.84% (Libor + 4.75%/M)   5/27/2024           9.7  

                             

Symmetry Surgical, Inc

  Marketer and distributor of   First lien senior secured   6.00% (Libor + 4.00%/M)   7/1/2021           2.0 (171)

3034 Owen Drive

  medical devices focused on   revolving loan                      

Antioch, TN 37013

  the general surgery market                          

                             

Synergy HomeCare Franchising, LLC and NP/Synergy Holdings, LLC

  Franchisor of private-pay home care for the elderly   First lien senior secured revolving loan       4/2/2024           (172)

500 North Roosevelt

      First lien senior secured loan   8.08% (Libor + 5.75%/Q)   4/2/2024           16.0  

Chandler, AZ 85226

      Common units             1.61 %   0.6  

                             

Syntax USA Acquisition Corporation(5)

  Provider of cloud ERP   First lien senior secured   6.24% (Libor + 4.25%/Q)   4/16/2021           1.1 (173)

8000 Decarie Blvd

  hosting and consulting   revolving loan                      

Suite 300

  services for Oracle users                          

Montreal, QC H4P 2S4

                             

Canada

                             

                             

Talari Networks, Inc.

  Networking equipment   First lien senior secured loan   15.30% (Libor + 13.00%/M)   10/1/2019           6.1  

1 Almaden Blvd

  provider   Warrant             0.27 %   (2)

Suite 200

                             

San Jose, CA 95113

                             

                             

TDG Group Holding Company and TDG Co-Invest, LP

  Operator of multiple franchise concepts primarily   First lien senior secured revolving loan   7.59% (Libor + 5.50%/Q)   5/31/2024           (174)

524 W. Waco Drive

  related to home maintenance   First lien senior secured loan       5/31/2024           (175)

Waco, TX 76701

  or repairs   First lien senior secured loan   7.83% (Libor + 5.50%/Q)   5/31/2024           9.3  

      Preferred units             10.00 %   2.9  

      Common units             10.00 %    

                             

Teasdale Foods, Inc.

  Provider of beans, sauces and   First lien senior secured   6.81% (Libor + 4.75%/M)   10/28/2020           0.4 (176)

P.O. Box 814 901 Packers Street

  hominy to the retail,   revolving loan                      

Atwater, CA 95301

  foodservice and wholesale   First lien senior secured   8.75% (Base Rate + 3.75%/M)   10/28/2020           0.1 (176)

  channels   revolving loan   7.09% (Libor + 4.75%/M)   10/28/2020           0.6  

      Second lien senior secured loan   10.84% (Libor + 8.75%/M)   10/28/2021           32.6  

      Second lien senior secured loan   10.84% (Libor + 8.75%/M)   10/28/2021           30.6  

      Second lien senior secured loan   10.84% (Libor + 8.75%/M)   10/28/2021           20.6  

                             

Telestream Holdings Corporation

  Provider of digital video tools   First lien senior secured       3/24/2022           (177)

848 Gold Flat Road

  and workflow solutions to the   revolving loan                      

Nevada City, CA 95959

  media and entertainment industries                          

                             

146


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

Telular Corporation

  Provider of monitoring   First lien senior secured   8.25% (Base Rate + 3.25%/Q)   6/24/2019           3.4 (178)

200 South Wacker Drive

  solutions enabling data   revolving loan                      

Suite 1800

  connectivity over both cellular                          

Chicago, IL 60606

  and satellite communication networks                          

                             

TerSera Therapeutics LLC

  Acquirer and developer of   First lien senior secured loan   7.58% (Libor + 5.25%/Q)   3/30/2023           5.3  

150 N. Two Conway Park

  specialty therapeutic                          

Suite 195

  pharmaceutical products                          

Lake Forest, IL 60045

                             

                             

The Gordian Group, Inc.

  Construction software and   First lien senior secured       7/17/2019           (179)

140 Bridges Road

  service provider   revolving loan                      

Suite E

      First lien senior secured loan   6.61% (Libor + 4.25%/Q)   7/17/2019           8.1  

Mauldin, SC 29662

      First lien senior secured loan   6.61% (Libor + 4.25%/Q)   7/17/2019           0.6  

      First lien senior secured loan   6.57% (Libor + 4.25%/Q)   7/17/2019           5.9  

      First lien senior secured loan   6.57% (Libor + 4.25%/Q)   7/17/2019           0.4  

      First lien senior secured loan   6.58% (Libor + 4.25%/Q)   7/17/2019           8.0  

      First lien senior secured loan   6.58% (Libor + 4.25%/Q)   7/17/2019           0.6  

      Common stock             5.00 %    

                             

The Teaching Company Holdings, Inc.

  Education publications   Preferred stock             1.77 %   1.2  

4151 Lafayette Center Drive

  provider   Common stock             3.64 %    

#100

                             

Chantilly, VA 20151

                             

                             

Things Remembered, Inc. and TRM Holdco Corp.(3)

  Personalized gifts retailer   First lien senior secured revolving loan   10.31% (Libor + 8.00%/M)   2/28/2019           0.4 (180)

5500 Avion Park Drive

      First lien senior secured   12.00% (Base Rate + 7.00%/M)   2/28/2019           0.9 (180)

Highland Heights, OH 44143

      revolving loan                      

      First lien senior secured loan       3/2/2020           0.7  

      Common stock             11.19 %    

                             

Tidi Products, LLC

  Manufacturer and supplier of   First lien senior secured       7/1/2020           (181)

570 Enterprise Drive

  single-use infection   revolving loan                      

Neenah, WI 54956

  prevention products in the medical, dental, and food service markets                          

                             

Total Community Options, Inc.

  Service provider for the   First lien senior secured       5/13/2021           (182)

8950 East Lowry Boulevard

  elderly and other disabled   revolving loan                      

Denver, CO 80230

  individuals in need of care and support                          

                             

TowerCo IV Finance LLC

  Owner and operator of   First lien senior secured   5.85% (Libor + 3.75%/M)   10/12/2021           0.3 (183)

5000 Valleystone Drive

  cellular telecommunications   revolving loan                      

Cary, NC 27519

  towers   First lien senior secured revolving loan   5.80% (Libor + 3.75%/M)   10/12/2021           7.0 (183)

                             

TPTM Merger Corp.

  Manufacturer of time   First lien senior secured       9/12/2020           (184)

116 American Road

  temperature indicator   revolving loan                      

Morris Plains, NJ 07950

  products   First lien senior secured loan   8.83% (Libor + 6.50%/Q)   9/12/2020           13.3  

      First lien senior secured loan   8.83% (Libor + 6.50%/Q)   9/12/2020           9.9  

                             

Tyden Group Holding Corp.(5)

  Producer and marketer of   Preferred stock             3.84 %   0.4  

P.O. Box 908 Mary Street

  global cargo security, product   Common stock             3.84 %   3.9  

GT Walker House

  identification and traceability                          

George Town, Grand Cayman

  products and utility meter                          

Cayman Islands

  products                          

                             

U.S. Acute Care Solutions, LLC

  Provider of physician   First lien senior secured       1/1/2022           (185)

4535 Dressler Road

  management services   revolving loan                      

Canton, OH 44718

                             

                             

U.S. Anesthesia Partners, Inc.

  Anesthesiology service   Second lien senior secured   9.34% (Libor + 7.25%/M)   6/23/2025           71.8  

2411 Fountain View Drive

  provider   loan                      

Suite 200

                             

Houston, TX 77057

                             

                             

147


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

UL Holding Co., LLC(3)

  Provider of collection and   Senior subordinated loan   10.00% PIK   5/2/2020           3.0  

2824 N Ohio

  landfill avoidance solutions   Senior subordinated loan       5/2/2020           0.4  

Wichita, KS 67201

  for food waste and unsold   Senior subordinated loan   10.00% PIK   5/2/2020           6.5  

  food products   Senior subordinated loan       5/2/2020           0.5  

      Senior subordinated loan   10.00% PIK   5/2/2020           25.7  

      Senior subordinated loan       5/2/2020           3.8  

      Class A common units             8.85 %   1.4  

      Class B-5 common units             40.50 %   0.7  

      Class C common units             8.77 %    

      Warrant             10.44 %   (2)

      Warrant             10.44 %   (2)

      Warrant             10.44 %   (2)

      Warrant             10.44 %   (2)

      Warrant             10.44 %   (2)

      Warrant             10.44 %   (2)

      Warrant             10.44 %   (2)

                             

Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC

  Operator of urgent care clinics   First lien senior secured revolving loan       2/15/2022           (186)

935 Shotwell Road

      Preferred units             20.00 %   3.3  

Suite 108

      Series A common units             1.12 %    

Clayton, NC 27520

      Series C common units             20.00 %    

                             

Utility Pipeline, Ltd.

  Natural gas distribution   First lien senior secured       4/18/2022           (187)

140 Broadway

  management company   revolving loan                      

New York, NY 10005

                             

                             

Varsity Brands Holding Co., Inc., Hercules Achievement, Inc., Hercules Achievement

  Leading manufacturer and distributor of textiles,   Second lien senior secured loan   10.34% (Libor + 8.25%/M)   12/15/2025           72.7  

Holdings, Inc. and Hercules VB Holdings, Inc.

  apparel & luxury goods   Second lien senior secured   10.34% (Libor + 8.25%/M)   12/15/2025           50.0  

6745 Lenox Center Court

      loan                      

Memphis, TN 38115

      Common stock             0.82 %   9.1  

      Common stock             0.82 %   9.1  

                             

Vela Trading Technologies, LLC

  Provider of market data   First lien senior secured   9.32% (Libor + 7.00%/Q)   6/30/2022           2.0 (188)

211 East 43rd Street

  software and content to   revolving loan                      

5th Floor

  global financial services   First lien senior secured loan   9.31% (Libor + 7.00%/Q)   6/30/2022           4.9  

New York, NY 10017

  clients                          

                             

Velocity Holdings Corp.

  Hosted enterprise resource   Common units             2.00 %   3.1  

13432 Wards Rd

  planning application                          

Lynchburg, VA 24501

  management services provider                          

                             

Veson Nautical LLC

  Provider of maritime   First lien senior secured       1/31/2022           (189)

500 Boylston Street Boston

  operations and data   revolving loan                      

Suite 400

  collaboration software                          

Boston, MA 02116

                             

                             

VistaPharm, Inc. and Vertice Pharma UK Parent Limited(5)

  Manufacturer and distributor of generic pharmaceutical   Preferred shares             0.35 %   0.7  

630 Central Avenue

  products                          

New Providence, NJ 07974

                             

                             

Visual Edge Technology, Inc.

  Provider of outsourced office   First lien senior secured       8/31/2022           (190)

3874 Highland Park

  solutions with a focus on   loan                      

North Canton, OH 44720

  printer and copier equipment   First lien senior secured loan   7.75% (Libor + 5.75%/M)   8/31/2022           6.0  

  and other parts and supplies   First lien senior secured loan   7.65% (Libor + 5.75%/M)   8/31/2022           0.4  

      First lien senior secured loan   7.75% (Libor + 5.75%/M)   8/31/2022           16.8  

      Senior subordinated loan   12.50% PIK   9/2/2024           52.5  

      Warrant       8/31/2027     4.64 %   2.6 (2)

      Warrant       8/31/2027     4.64 %   4.1 (2)

                             

Vitesse CLO, Ltd.(5)(6)

  Investment vehicle   Preferred shares                    

P.O. Box 1093 Boundary Hall Cricket Square

                             

Grand Cayman KY1-1102

                             

Cayman Islands

                             

                             

VLS Recovery Services, LLC

  Provider of commercial and   First lien senior secured   8.07% (Libor + 6.00%/M)   10/17/2023           0.5 (191)

17020 Premium Drive

  industrial waste processing   revolving loan                      

Hockley, TX 77447

  and disposal services   First lien senior secured revolving loan   8.36% (Libor + 6.00%/M)   10/17/2023           1.1 (191)

      First lien senior secured revolving loan   8.33% (Libor + 6.00%/M)   10/17/2023           0.5 (191)

      First lien senior secured loan       10/17/2023           (192)

      First lien senior secured loan   7.97% (Libor + 6.00%/S)   10/17/2023           1.3  

      First lien senior secured loan   8.33% (Libor + 6.00%/Q)   10/17/2023           7.2  

      First lien senior secured loan   8.35% (Libor + 6.00%/Q)   10/17/2023           9.7  

      First lien senior secured loan   10.00% (Base Rate + 5.00%/Q)   10/17/2023            

                             

Voya CLO 2014-4 Ltd.(5)(6)

  Investment vehicle   Subordinated note   8.40%   10/14/2026           16.3  

P.O. Box 1093 Boundary Hall Cricket Square

                             

Grand Cayman KY1-1102

                             

Cayman Islands

                             

                             

148


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

VPROP Operating, LLC and Vista Proppants

  Sand-based proppant   First lien senior secured   11.38% (Libor + 8.50% Cash,   8/1/2021           28.4  

and Logistics, LLC

  producer and distributor to   loan   1.00% PIK/Q)                  

4413 Carey Street

  the oil and natural gas   First lien senior secured loan   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)   8/1/2021           35.4  

Fort Worth, TX 76119

  industry   First lien senior secured loan   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)   3/1/2021           15.2  

      First lien senior secured loan   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)   3/1/2021           75.9  

      Common units             8.22 %   11.6  

                             

VRC Companies, LLC

  Provider of records and   First lien senior secured   8.59% (Libor + 6.50%/M)   3/31/2022           0.6 (193)

5400 Meltech Blvd

  information management   revolving loan                      

Memphis, TN 38118

  services   First lien senior secured loan       3/31/2023           (194)

      First lien senior secured loan   8.59% (Libor + 6.50%/M)   3/31/2023           0.3  

      First lien senior secured loan   8.59% (Libor + 6.50%/M)   3/31/2023           0.4  

                             

VSC Investors LLC(6)

  Investment company   Membership interest             1.95 %   1.2  

401 Vance Street

                             

Los Angeles, CA 90272

                             

                             

WASH Multifamily Acquisition Inc. and Coinamatic Canada Inc.

  Laundry service and equipment provider   Second lien senior secured   9.09% (Libor + 7.00%/M)   5/15/2023           3.7 (5)

3690 Redondo Beach Ave

      loan                      

Redondo Beach, CA 90278

      Second lien senior secured loan   9.09% (Libor + 7.00%/M)   5/15/2023           21.1  

                             

Watchfire Enterprises, Inc.

  Manufacturer of LED   First lien senior secured       4/2/2020           (195)

1015 Maple Street

  electronic message centers   revolving loan                      

Danville, IL 61832 and digital billboards

                             

                             

West Dermatology, LLC

  Dermatology Practice   First lien senior secured   7.53% (Libor + 5.50%/M)   4/28/2022           0.4 (196)

680 Newport Center Drive

  Platform   revolving loan                      

Suite 150

      First lien senior secured   7.83% (Libor + 5.50%/M)   4/28/2022           2.5 (196)

Newport Beach, CA 92660

      revolving loan                      

      First lien senior secured loan       4/28/2023           (197)

      First lien senior secured loan   7.82% (Libor + 5.50%/Q)   4/28/2023           0.8  

      First lien senior secured loan   7.83% (Libor + 5.50%/Q)   4/28/2023           4.1  

      First lien senior secured loan   7.83% (Libor + 5.50%/Q)   4/28/2023           7.7  

                             

WIRB—Copernicus Group, Inc

  Provider of regulatory,   First lien senior secured       8/15/2022           (198)

202 Carnegie Center

  ethical, and safety review   revolving loan                      

Suite 107

  services for clinical research                          

Princeton, NJ 08540

  involving human subjects                          

                             

Woodstream Group, Inc. and Woodstream Corporation

  Pet products manufacturer   First lien senior secured loan       5/29/2021           (199)

69 N Locust Street

      First lien senior secured loan   8.58% (Libor + 6.25%/Q)   5/29/2022           4.0  

Lititz, PA 17543

      First lien senior secured loan   8.58% (Libor + 6.25%/Q)   5/29/2022           8.0  

                             

WorldPay Group PLC(5)

  Payment processing company   C2 shares             0.13 %    

25 Walbrook

                             

London, EC4N 8AF

                             

United Kingdom

                             

                             

Worldwide Facilities, LLC

  Specialty insurance wholesale   First lien senior secured       4/26/2024           (200)

725 S. Figueroa Street

  broker   revolving loan                      

19th Floor

      First lien senior secured loan       4/26/2024           (201)

Los Angeles, CA 90017

      First lien senior secured loan   6.55% (Libor + 4.25%/Q)   4/26/2024           0.9  

      First lien senior secured loan   6.61% (Libor + 4.25%/Q)   4/26/2024           1.6  

                             

Wrench Group LLC

  Provider of essential home   First lien senior secured loan       12/31/2024           (202)

3314 Bear Creek Drive

  services to residential                          

Melissa, TX 75454

  customers                          

                             

WSHP FC Acquisition LLC

  Provider of biospecimen   First lien senior secured   8.94% (Libor + 6.50%/Q)   3/30/2024           2.5 (203)

1476 Manning Parkway

  products   revolving loan                      

Powell, IL 43065

      First lien senior secured loan       3/30/2024           (204)

      First lien senior secured loan   7.50% (Libor + 6.50%/Q)   3/30/2024           28.3  

                             

XIFIN, Inc.

  Revenue cycle management   First lien senior secured   8.75% (Base Rate + 3.75%/Q)   11/20/2020           0.5 (205)

12225 El Camino Real

  provider to labs   revolving loan                      

Suite 300

                             

San Diego, CA 92130

                             

                             

Zemax Software Holdings, LLC

  Provider of optical   First lien senior secured       6/25/2024           (206)

10230 NE Points Drive

  illumination design software   revolving loan                      

Suite 540

  to design engineers   First lien senior secured loan   8.09% (Libor + 5.75%/Q)   6/25/2024           17.0  

Kirkland, WA 98033

                             

                             

149


Table of Contents

Issuer
  Business Description   Investment   Interest(1)   Maturity Date   % of
Class
Held at
6/30/2018
  Fair Value  

Zywave, Inc.

  Provider of software and   First lien senior secured       11/17/2022           (207)

10100 W Innovation Drive

  technology-enabled content   revolving loan                      

Suite 300

  and analytical solutions to   First lien senior secured   7.09% (Libor + 5.00%/M)   11/17/2022           0.5 (207)

Milwaukee, WI 53226

  insurance brokers   revolving loan                      

      First lien senior secured revolving loan   9.00% (Base Rate + 4.00%/M)   11/17/2022           1.9 (207)

      Second lien senior secured loan   11.33% (Libor + 9.00%/Q)   11/17/2023           27.0  

(1)
All interest is payable in cash unless otherwise indicated. A majority of the variable rate loans to our portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower's option, which resets daily (D), monthly (M), bimonthly (B), quarterly (Q) or semiannually (S). For each such loan, we have provided the current interest rate in effect as of June 30, 2018.

(2)
Percentages shown for warrants or convertible preferred stock held represents the percentages of common stock we may own on a fully diluted basis, assuming we exercise our warrants or convert our preferred stock to common stock.

(3)
As defined in the Investment Company Act, we are an "Affiliate" of this portfolio company because we own 5% or more of the portfolio company's outstanding voting securities.

(4)
As defined in the Investment Company Act, we are an "Affiliate" of this portfolio company because we own 5% or more of the portfolio company's outstanding voting securities or we have the power to exercise control over the management or policies of such portfolio company (including through a management agreement). In addition, as defined in the Investment Company Act, we "Control" this portfolio company because we own more than 25% of the portfolio company's outstanding voting securities or we have the power to exercise control over the management or policies of such portfolio company (including through a management agreement).

(5)
Non-U.S. company or principal place of business outside the U.S. and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(6)
Exception from the definition of investment company under Section 3(c) of the Investment Company Act and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(7)
Total commitment of $3.9 remains undrawn as of June 30, 2018

(8)
$1.9 of total commitment of $3.5 remains undrawn as of June 30, 2018

(9)
Total commitment of $1.2 remains undrawn as of June 30, 2018

(10)
Total commitment of $4.1 remains undrawn as of June 30, 2018

(11)
Total commitment of $12.9 remains undrawn as of June 30, 2018

(12)
Total commitment of $0.5 remains undrawn as of June 30, 2018

(13)
Total commitment of $4.7 remains undrawn as of June 30, 2018

(14)
Total commitment of $2.3 remains undrawn as of June 30, 2018

(15)
Total commitment of $0.2 remains undrawn as of June 30, 2018

(16)
Total commitment of $7.8 remains undrawn as of June 30, 2018

(17)
$1.7 of total commitment of $5.0 remains undrawn as of June 30, 2018

(18)
Total commitment of $1.3 remains undrawn as of June 30, 2018

(19)
$10.0 of total commitment of $13.7 remains undrawn as of June 30, 2018

(20)
$4.4 of total commitment of $30.0 remains undrawn as of June 30, 2018

(21)
$6.1 of total commitment of $7.0 remains undrawn as of June 30, 2018

(22)
Total commitment of $3.4 remains undrawn as of June 30, 2018

(23)
Total commitment of $4.2 remains undrawn as of June 30, 2018

(24)
Total commitment of $2.8 remains undrawn as of June 30, 2018

(25)
$6.7 of total commitment of $9.6 remains undrawn as of June 30, 2018

(26)
$13.8 of total commitment of $14.3 remains undrawn as of June 30, 2018

(27)
$0.9 of total commitment of $2.0 remains undrawn as of June 30, 2018

(28)
Total commitment of $2.3 remains undrawn as of June 30, 2018

(29)
$1.5 of total commitment of $7.5 remains undrawn as of June 30, 2018

(30)
Total commitment of $1.0 remains undrawn as of June 30, 2018

(31)
Total commitment of $5.8 remains undrawn as of June 30, 2018

(32)
$6.0 of total commitment of $20.0 remains undrawn as of June 30, 2018

(33)
$4.8 of total commitment of $5.0 remains undrawn as of June 30, 2018

(34)
$1.8 of total commitment of $3.4 remains undrawn as of June 30, 2018

150


Table of Contents

(35)
Total commitment of $1.9 remains undrawn as of June 30, 2018

(36)
Total commitment of $4.2 remains undrawn as of June 30, 2018

(37)
Total commitment of $4.3 remains undrawn as of June 30, 2018

(38)
$14.0 of total commitment of $15.0 remains undrawn as of June 30, 2018

(39)
Total commitment of $9.2 remains undrawn as of June 30, 2018

(40)
$2.6 of total commitment of $7.5 remains undrawn as of June 30, 2018

(41)
Total commitment of $11.0 remains undrawn as of June 30, 2018

(42)
Total commitment of $4.2 remains undrawn as of June 30, 2018

(43)
$3.8 of total commitment of $5.0 remains undrawn as of June 30, 2018

(44)
$5.8 of total commitment of $5.8 remains undrawn as of June 30, 2018

(45)
$7.2 of total commitment of $8.1 remains undrawn as of June 30, 2018

(46)
$32.3 of total commitment of $115.0 remains undrawn as of June 30, 2018

(47)
Total commitment of $26.5 remains undrawn as of June 30, 2018

(48)
$3.1 of total commitment of $3.3 remains undrawn as of June 30, 2018

(49)
Total commitment of $5.9 remains undrawn as of June 30, 2018

(50)
Total commitment of $9.9 remains undrawn as of June 30, 2018

(51)
$6.5 of total commitment of $8.8 remains undrawn as of June 30, 2018

(52)
Total commitment of $2.0 remains undrawn as of June 30, 2018

(53)
Total commitment of $6.5 remains undrawn as of June 30, 2018

(54)
$3.0 of total commitment of $4.5 remains undrawn as of June 30, 2018

(55)
$1.8 of total commitment of $1.9 remains undrawn as of June 30, 2018

(56)
Total commitment of $5.0 remains undrawn as of June 30, 2018

(57)
Total commitment of $8.0 remains undrawn as of June 30, 2018

(58)
Total commitment of $20.0 remains undrawn as of June 30, 2018

(59)
Total commitment of $0.8 remains undrawn as of June 30, 2018

(60)
Total commitment of $2.0 remains undrawn as of June 30, 2018

(61)
$6.4 of total commitment of $8.0 remains undrawn as of June 30, 2018

(62)
Total commitment of $1.5 remains undrawn as of June 30, 2018

(63)
Total commitment of $12.0 remains undrawn as of June 30, 2018

(64)
Total commitment of $2.6 remains undrawn as of June 30, 2018

(65)
Total commitment of $8.4 remains undrawn as of June 30, 2018

(66)
$1.4 of total commitment of $2.1 remains undrawn as of June 30, 2018

(67)
Total commitment of $0.8 remains undrawn as of June 30, 2018

(68)
$4.8 of total commitment of $7.5 remains undrawn as of June 30, 2018

(69)
Total commitment of $3.4 remains undrawn as of June 30, 2018

(70)
Total commitment of $5.0 remains undrawn as of June 30, 2018

(71)
Total commitment of $1.2 remains undrawn as of June 30, 2018

(72)
Total commitment of $1.1 remains undrawn as of June 30, 2018

(73)
Total commitment of $2.0 remains undrawn as of June 30, 2018

(74)
$14.2 of total commitment of $19.0 remains undrawn as of June 30, 2018

(75)
$0.1 of total commitment of $2.0 remains undrawn as of June 30, 2018

(76)
$15.9 of total commitment of $16.8 remains undrawn as of June 30, 2018

(77)
Total commitment of $10.9 remains undrawn as of June 30, 2018

(78)
Total commitment of $11.0 remains undrawn as of June 30, 2018

(79)
$4.8 of total commitment of $5.0 remains undrawn as of June 30, 2018

(80)
Total commitment of $1.5 remains undrawn as of June 30, 2018

(81)
Total commitment of $7.4 remains undrawn as of June 30, 2018

151


Table of Contents

(82)
Total commitment of $3.5 remains undrawn as of June 30, 2018

(83)
Total commitment of $4.1 remains undrawn as of June 30, 2018

(84)
$10.6 of total commitment of $12.1 remains undrawn as of June 30, 2018

(85)
Total commitment of $4.5 remains undrawn as of June 30, 2018

(86)
$0.0 of total commitment of $6.5 remains undrawn as of June 30, 2018

(87)
Total commitment of $5.3 remains undrawn as of June 30, 2018

(88)
$0.8 of total commitment of $10.8 remains undrawn as of June 30, 2018

(89)
Total commitment of $4.0 remains undrawn as of June 30, 2018

(90)
$4.5 of total commitment of $7.0 remains undrawn as of June 30, 2018

(91)
Total commitment of $3.9 remains undrawn as of June 30, 2018

(92)
$3.3 of total commitment of $6.1 remains undrawn as of June 30, 2018

(93)
Total commitment of $3.5 remains undrawn as of June 30, 2018

(94)
$3.5 of total commitment of $5.0 remains undrawn as of June 30, 2018

(95)
$1.7 of total commitment of $5.0 remains undrawn as of June 30, 2018

(96)
$2.2 of total commitment of $2.8 remains undrawn as of June 30, 2018

(97)
$4.4 of total commitment of $6.9 remains undrawn as of June 30, 2018

(98)
$2.4 of total commitment of $2.5 remains undrawn as of June 30, 2018

(99)
$0.6 of total commitment of $0.9 remains undrawn as of June 30, 2018

(100)
Total commitment of $3.9 remains undrawn as of June 30, 2018

(101)
Total commitment of $3.0 remains undrawn as of June 30, 2018

(102)
$7.3 of total commitment of $7.5 remains undrawn as of June 30, 2018

(103)
$2.5 of total commitment of $2.5 remains undrawn as of June 30, 2018

(104)
Total commitment of $5.0 remains undrawn as of June 30, 2018

(105)
Total commitment of $2.5 remains undrawn as of June 30, 2018

(106)
Total commitment of $17.1 remains undrawn as of June 30, 2018

(107)
$1.4 of total commitment of $3.5 remains undrawn as of June 30, 2018

(108)
Total commitment of $4.5 remains undrawn as of June 30, 2018

(109)
$0.2 of total commitment of $2.0 remains undrawn as of June 30, 2018

(110)
$7.6 of total commitment of $10.9 remains undrawn as of June 30, 2018

(111)
Total commitment of $2.4 remains undrawn as of June 30, 2018

(112)
$1.8 of total commitment of $2.6 remains undrawn as of June 30, 2018

(113)
Total commitment of $1.5 remains undrawn as of June 30, 2018

(114)
Total commitment of $26.4 remains undrawn as of June 30, 2018

(115)
$6.5 of total commitment of $10.0 remains undrawn as of June 30, 2018

(116)
Total commitment of $14.9 remains undrawn as of June 30, 2018

(117)
Total commitment of $9.0 remains undrawn as of June 30, 2018

(118)
Total commitment of $28.1 remains undrawn as of June 30, 2018

(119)
$5.1 of total commitment of $25.0 remains undrawn as of June 30, 2018

(120)
Total commitment of $0.4 remains undrawn as of June 30, 2018

(121)
Total commitment of $20.7 remains undrawn as of June 30, 2018

(122)
$12.5 of total commitment of $12.5 remains undrawn as of June 30, 2018

(123)
$3.8 of total commitment of $5.0 remains undrawn as of June 30, 2018

(124)
Total commitment of $2.2 remains undrawn as of June 30, 2018

(125)
$5.0 of total commitment of $6.0 remains undrawn as of June 30, 2018

(126)
$0.0 of total commitment of $10.0 remains undrawn as of June 30, 2018

(127)
Total commitment of $2.3 remains undrawn as of June 30, 2018

(128)
Total commitment of $0.2 remains undrawn as of June 30, 2018

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(129)
$1.7 of total commitment of $2.5 remains undrawn as of June 30, 2018

(130)
Total commitment of $5.4 remains undrawn as of June 30, 2018

(131)
Total commitment of $2.1 remains undrawn as of June 30, 2018

(132)
$1.7 of total commitment of $4.2 remains undrawn as of June 30, 2018

(133)
Total commitment of $6.8 remains undrawn as of June 30, 2018

(134)
Total commitment of $5.0 remains undrawn as of June 30, 2018

(135)
Total commitment of $23.2 remains undrawn as of June 30, 2018

(136)
Total commitment of $5.0 remains undrawn as of June 30, 2018

(137)
$2.3 of total commitment of $3.3 remains undrawn as of June 30, 2018

(138)
Total commitment of $1.5 remains undrawn as of June 30, 2018

(139)
$2.3 of total commitment of $2.9 remains undrawn as of June 30, 2018

(140)
$4.9 of total commitment of $5.5 remains undrawn as of June 30, 2018

(141)
Total commitment of $1.5 remains undrawn as of June 30, 2018

(142)
$1.0 of total commitment of $10.0 remains undrawn as of June 30, 2018

(143)
Total commitment of $7.9 remains undrawn as of June 30, 2018

(144)
Total commitment of $10.0 remains undrawn as of June 30, 2018

(145)
$5.7 of total commitment of $8.0 remains undrawn as of June 30, 2018

(146)
$3.7 of total commitment of $5.4 remains undrawn as of June 30, 2018

(147)
Total commitment of $3.5 remains undrawn as of June 30, 2018

(148)
Total commitment of $1.8 remains undrawn as of June 30, 2018

(149)
$7.5 of total commitment of $7.7 remains undrawn as of June 30, 2018

(150)
$0.6 of total commitment of $1.7 remains undrawn as of June 30, 2018

(151)
Total commitment of $10.0 remains undrawn as of June 30, 2018

(152)
$2.3 of total commitment of $4.1 remains undrawn as of June 30, 2018

(153)
$3.5 of total commitment of $4.0 remains undrawn as of June 30, 2018

(154)
Total commitment of $3.0 remains undrawn as of June 30, 2018

(155)
$1.2 of total commitment of $2.9 remains undrawn as of June 30, 2018

(156)
Total commitment of $3.8 remains undrawn as of June 30, 2018

(157)
Total commitment of $3.6 remains undrawn as of June 30, 2018

(158)
$18.4 of total commitment of $90.0 remains undrawn as of June 30, 2018

(159)
Total commitment of $7.1 remains undrawn as of June 30, 2018

(160)
$0.1 of total commitment of $1.5 remains undrawn as of June 30, 2018

(161)
$6.9 of total commitment of $10.5 remains undrawn as of June 30, 2018

(162)
$1.3 of total commitment of $1.8 remains undrawn as of June 30, 2018

(163)
$1.1 of total commitment of $1.4 remains undrawn as of June 30, 2018

(164)
Total commitment of $6.5 remains undrawn as of June 30, 2018

(165)
$17.3 of total commitment of $24.1 remains undrawn as of June 30, 2018

(166)
Total commitment of $2.0 remains undrawn as of June 30, 2018

(167)
Total commitment of $1.1 remains undrawn as of June 30, 2018

(168)
$7.4 of total commitment of $10.0 remains undrawn as of June 30, 2018

(169)
Total commitment of $3.8 remains undrawn as of June 30, 2018

(170)
Total commitment of $3.9 remains undrawn as of June 30, 2018

(171)
$1.1 of total commitment of $3.1 remains undrawn as of June 30, 2018

(172)
Total commitment of $4.2 remains undrawn as of June 30, 2018

(173)
$2.1 of total commitment of $3.3 remains undrawn as of June 30, 2018

(174)
$0.3 of total commitment of $0.3 remains undrawn as of June 30, 2018

(175)
Total commitment of $3.2 remains undrawn as of June 30, 2018

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(176)
$0.3 of total commitment of $0.8 remains undrawn as of June 30, 2018

(177)
Total commitment of $2.3 remains undrawn as of June 30, 2018

(178)
$1.6 of total commitment of $5.0 remains undrawn as of June 30, 2018

(179)
Total commitment of $1.1 remains undrawn as of June 30, 2018

(180)
$0.9 of total commitment of $2.3 remains undrawn as of June 30, 2018

(181)
Total commitment of $2.3 remains undrawn as of June 30, 2018

(182)
Total commitment of $4.2 remains undrawn as of June 30, 2018

(183)
$9.7 of total commitment of $17.0 remains undrawn as of June 30, 2018

(184)
Total commitment of $4.3 remains undrawn as of June 30, 2018

(185)
Total commitment of $1.7 remains undrawn as of June 30, 2018

(186)
Total commitment of $10.0 remains undrawn as of June 30, 2018

(187)
Total commitment of $3.0 remains undrawn as of June 30, 2018

(188)
$1.5 of total commitment of $3.5 remains undrawn as of June 30, 2018

(189)
Total commitment of $2.5 remains undrawn as of June 30, 2018

(190)
Total commitment of $4.9 remains undrawn as of June 30, 2018

(191)
$10.8 of total commitment of $13.2 remains undrawn as of June 30, 2018

(192)
Total commitment of $7.6 remains undrawn as of June 30, 2018

(193)
$0.4 of total commitment of $1.0 remains undrawn as of June 30, 2018

(194)
Total commitment of $1.6 remains undrawn as of June 30, 2018

(195)
Total commitment of $2.0 remains undrawn as of June 30, 2018

(196)
$4.1 of total commitment of $7.0 remains undrawn as of June 30, 2018

(197)
Total commitment of $3.8 remains undrawn as of June 30, 2018

(198)
$3.0 of total commitment of $3.0 remains undrawn as of June 30, 2018

(199)
Total commitment of $4.7 remains undrawn as of June 30, 2018

(200)
Total commitment of $1.3 remains undrawn as of June 30, 2018

(201)
Total commitment of $1.4 remains undrawn as of June 30, 2018

(202)
Total commitment of $2.8 remains undrawn as of June 30, 2018

(203)
$3.3 of total commitment of $5.8 remains undrawn as of June 30, 2018

(204)
Total commitment of $6.0 remains undrawn as of June 30, 2018

(205)
$4.1 of total commitment of $4.6 remains undrawn as of June 30, 2018

(206)
Total commitment of $4.1 remains undrawn as of June 30, 2018

(207)
$9.0 of total commitment of $11.5 remains undrawn as of June 30, 2018

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MANAGEMENT

              Our business and affairs are managed under the direction of our board of directors. The responsibilities of the board of directors include, among other things, the quarterly valuation of our investments. The size of our board of directors is set at nine members and currently consists of four directors who are "interested persons" of Ares Capital as defined in Section 2(a)(19) of the Investment Company Act and five directors who are not such "interested persons." We refer to the directors who are non-interested persons as our "independent directors." We refer to our directors who are "interested persons" as our "interested directors." Our board of directors elects our officers, who serve at the discretion of the board of directors. The board of directors maintains an audit committee and nominating and governance committee, and may establish additional committees from time to time as necessary.

              Under our charter and bylaws, our directors are divided into three classes. Directors are elected for staggered terms of three years each, with the term of office of only one of these three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualifies.

BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN OTHER OFFICERS

Name, Address and Age(1)
  Position(s)
Held with
Fund
  Term of
Office and
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years
  Number of
Portfolios in
Fund
Complex
Overseen by
Director
  Other Directorships
of Public or
Registered Investment
Companies Held by
Director During
Past 5 Years
Independent Directors                    

Steve Bartlett, 70

 

Director

 

Class II Director since 2012 (re-election in 2021)

 

Since 2012, Mr. Bartlett has been providing strategic independent consulting services to several U.S. corporations. From 1999 to 2012, Mr. Bartlett served as President and Chief Executive Officer of the Financial Services Roundtable.

 

One(2)

 

Intersections Inc.

Ann Torre Bates, 60

 

Director

 

Class I Director since 2010 (re-election in 2020)

 

Ms. Bates currently dedicates her time serving on boards of directors of several companies in the financial sector. From 1997 to 2012, Ms. Bates was a strategic and financial consultant, principally with respect to corporate finance matters.

 

One(2)

 

Navient Corporation, SLM Corporation, United Natural Foods, Inc., 19 investment companies in the Franklin Templeton Group of Mutual Funds

Daniel G. Kelly, Jr., 67

 

Director

 

Class III Director since 2016 (re-election in 2019)

 

Since 2016, Mr. Kelly has been retired. From 1999 to 2015, Mr. Kelly was a Partner of the law firm of Davis Polk & Wardwell LLP.

 

One(2)

 

American Shared Hospital Services

Steven B. McKeever, 58

 

Director

 

Class I Director since 2012 (re-election in 2020)

 

Since 1997, Mr. McKeever has been Chief Executive Officer of Hidden Beach Recordings, an independent record label based in Los Angeles, California.

 

One(2)

 

 

Eric B. Siegel, 60

 

Director

 

Class III Director since 2004 (re-election in 2019)

 

Since 2005, Mr. Siegel has served as Special Advisor to the Chairman of the Milwaukee Brewers Baseball Club and a member of the Club's Board of Advisors. Mr. Siegel is a director and Chairman of the Executive Committee and Nominating and Governance Committee and member of the Audit Committee and Security Committee of El Paso Electric Company, a NYSE publicly traded utility company.

 

One(2)

 

El Paso Electric Company

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Name, Address and Age(1)
  Position(s)
Held with
Fund
  Term of
Office and
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years
  Number of
Portfolios in
Fund
Complex
Overseen by
Director
  Other Directorships
of Public or
Registered Investment
Companies Held by
Director During
Past 5 Years
Interested Directors                    

Michael J Arougheti, 45(3)

 

Co-Chairman and Director; Executive Vice President

 

Class I Director since February 2009 (re-election in 2020); Executive Vice President since October 2014 (indefinite term)

 

Since October 2014, Mr. Arougheti has served as an Executive Vice President of the Company, since July 2014, he has served as Co-Chairman of the Board and since February 2009, he has served as a director of the Company. Mr. Arougheti previously served as Chief Executive Officer of the Company from May 2013 to July 2014 and President of the Company from May 2004 to May 2013. Mr. Arougheti is a Co-Founder and the Chief Executive Officer and President of Ares and also serves on the Board of Directors of Ares Partners Holdco LLC. He is also a member of the Board of Directors and Management Committee of Ares. Mr. Arougheti is a member of the Investment Committee of Ares Capital Management, the Ares Credit Group's U.S. and European Direct Lending Investment Committees, the Ares Equity Income Opportunity Strategy Portfolio Review Committee and the Ares Operations Management Group.

 

One(2)

 

Ares Management, L.P., Ares Commercial Real Estate Corporation

R. Kipp deVeer, 45(6)

 

Director and Chief Executive Officer

 

Class III Director since 2015 (re-election in 2019); Chief Executive Officer since July 2014 (indefinite term)

 

Since July 2014, Mr. deVeer has served as Chief Executive Officer of the Company. Mr. deVeer previously served as President of the Company from May 2013 to July 2014. Mr. deVeer joined Ares in May 2004 and currently serves as a Partner of Ares Management GP LLC and on the Board of Directors of Ares Partners Holdco LLC. He is a Partner in and Head of the Ares Credit Group and also a member of the Management Committee of Ares. Mr. deVeer is a member of the Investment Committees of Ares Capital Management and the Ares Credit Group's U.S. and European Direct Lending Investment Committees and other select Ares Credit Group investment committees. Mr. deVeer is also a director of Ares Management Limited, a subsidiary of Ares overseeing the European activities of Ares.

 

One(2)

 

 

Robert L. Rosen, 71(4)

 

Director

 

Class II Director since 2004 (re-election in 2021)

 

Since August 2005, Mr. Rosen has served as the managing partner of RLR Capital Partners, which invests principally in the securities of publicly traded North American companies. From 1987 to the present, Mr. Rosen has been Chief Executive Officer of RLR Partners, LLC, a private investment firm with interests in financial services, healthcare, media and multi-industry companies. From 2010 to 2013, Mr. Rosen was party to a strategic advisory agreement with Ares and, from 2013 to 2016, Mr. Rosen was an Operating Advisor to the Ares Management Private Equity Group. From February 2016 to February 2018, Mr. Rosen was a Partner of Ares. Since February 2018, Mr. Rosen has been party to a strategic advisory agreement with Ares.

 

One(2)

 

Ares Commercial Real Estate Corporation, Sapient Corporation

Bennett Rosenthal, 54(5)

 

Co-Chairman and Director

 

Class II Director since 2004 (re-election in 2021)

 

Since July 2014, Mr. Rosenthal has served as Co-Chairman of the Board, and previously as Chairman of the Board since 2004. Mr. Rosenthal is a Co-Founder of Ares, a Partner of Ares Management GP LLC and a member of the Board of Directors of Ares Partner Holdco LLC. He is Co-Head of and a Partner in the Ares Private Equity Group and also serves as a member of the Board of Directors and Management Committee of Ares. Mr. Rosenthal is also a member of the Investment Committees of certain funds managed by the Ares Private Equity Group.

 

One(2)

 

Ares Management, L.P., Nortek, Inc.

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Name, Address and Age(1)
  Position(s)
Held with
Fund
  Term of
Office and
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years
  Number of
Portfolios in
Fund
Complex
Overseen by
Director
  Other Directorships
of Public or
Registered Investment
Companies Held by
Director During
Past 5 Years
Executive Officers and Certain Other Officers Who Are Not Directors        

Joshua M. Bloomstein, 44

 

General Counsel, Vice President and Secretary

 

General Counsel since January 2010; Secretary since December 2010; Vice President since November 2006 (indefinite terms)

 

Since January 2010, Mr. Bloomstein has served as General Counsel of the Company, since December 2010, Mr. Bloomstein has served as Secretary of the Company, and since November 2006, Mr. Bloomstein has served as Vice President of the Company. Additionally he is Vice President and Assistant Secretary of American Capital Senior Floating, Ltd. and Vice President and Assistant Secretary of CION Ares Diversified Credit Fund. He joined Ares in November 2006 and currently serves as a Partner and Co-General Counsel (Credit) and Deputy General Counsel (Corporate) of Ares Management.

 

 

 

 

Mitchell Goldstein, 51

 

Co-President

 

Since July 2014 (indefinite term)

 

Since July 2014, Mr. Goldstein has served as a Co-President of the Company. Mr. Goldstein previously served as an Executive Vice President of the Company from May 2013 to July 2014. He joined Ares in May 2005 and currently serves as a Partner and Co-Head of the Ares Credit Group, Vice President of American Capital Senior Floating, Ltd. and Vice President of CION Ares Diversified Credit Fund. He is a member of the Management Committee of Ares. Mr. Goldstein is a member of the Investment Committees of Ares Capital Management, select Ares Credit Group U.S. Direct Lending investment committees, the Ivy Hill Asset Management Investment Committee and the Ares Commercial Finance Investment Committee.

 

 

 

 

Miriam Krieger, 42

 

Chief Compliance Officer

 

Since July 2011 (indefinite term)

 

Since July 2011, Ms. Krieger has served as Chief Compliance Officer of the Company. She joined Ares in 2010 and is a Partner and Global Chief Compliance Officer of Ares and is a member of the Ares Operations Management Group. She also serves as Chief Compliance Officer of American Capital Senior Floating, Ltd. and Ivy Hill Asset Management, L.P.

 

 

 

 

Scott C. Lem, 40

 

Chief Accounting Officer, Vice President and Treasurer

 

Chief Accounting Officer since December 2013; Vice President and Treasurer since May 2013 (indefinite terms)

 

Since December 2013, Mr. Lem has served as Chief Accounting Officer of the Company and since May 2013, Mr. Lem has served as Vice President and Treasurer of the Company. Mr. Lem previously served as Assistant Treasurer of the Company from May 2009 to May 2013. He also serves as Chief Financial Officer of Ares Dynamic Credit Allocation Fund, Inc. and Chief Accounting Officer of American Capital Senior Floating, Ltd. and CION Ares Diversified Credit Fund. Additionally, he is a Managing Director and Chief Accounting Officer, Credit (Direct Lending) in the Ares Finance Department.

 

 

 

 

Penni F. Roll, 52

 

Chief Financial Officer

 

Since December 2010 (indefinite term)

 

Since December 2010, Ms. Roll has served as Chief Financial Officer of the Company. Ms. Roll serves as the Chief Financial Officer of American Capital Senior Floating, Ltd. and CION Ares Diversified Credit Fund and Chief Financial Officer, Vice President and Treasurer of Ivy Hill Asset Management, L.P. and Treasurer of Ares Dynamic Credit Allocation Fund, Inc. She joined Ares in 2010 and now serves as a Partner and Chief Financial Officer of the Ares Credit Group.

 

 

 

 

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Name, Address and Age(1)
  Position(s)
Held with
Fund
  Term of
Office and
Length of
Time Served
  Principal Occupation(s)
During Past 5 Years
  Number of
Portfolios in
Fund
Complex
Overseen by
Director
  Other Directorships
of Public or
Registered Investment
Companies Held by
Director During
Past 5 Years
Michael L. Smith, 47   Co-President   Since July 2014 (indefinite term)   Since July 2014, Mr. Smith has served as a Co-President of the Company. Mr. Smith previously served as an Executive Vice President of the Company from May 2013 to July 2014. Mr. Smith joined Ares in May 2004 and currently serves as a Partner and Co-Head of the Ares Credit Group and a member of the Management Committee of Ares. Mr. Smith is a member of the Investment Committees of Ares Capital Management, select Ares Credit Group U.S. Direct Lending investment committees, the Ivy Hill Asset Management Investment Committee and the Ares Commercial Finance Investment Committee.        

Michael D. Weiner, 65

 

Vice President

 

Since September 2006 (indefinite term)

 

Since September 2006, Mr. Weiner has been Vice President of the Company. He is Executive Vice President and Chief Legal Officer of Ares Management GP LLC, a Partner and General Counsel in the Ares Legal Group and a member of the Management Committee of Ares. Mr. Weiner has also served as Vice President and General Counsel of Ares Commercial Real Estate Corporation since 2012, Vice President and Assistant Secretary of Ares Dynamic Credit Allocation Fund,  Inc. and Vice President and Assistant Secretary of CION Ares Diversified Credit Fund. He additionally is a member of the Ares Operations Management Group and the Ares Enterprise Risk Committee.

 

 

 

 

(1)
The business address of Messrs. Arougheti, Bloomstein, deVeer, Goldstein, Rosen and Smith and Ms. Roll is c/o Ares Capital Corporation, 245 Park Avenue, 44th Floor, New York, New York 10167. The business address of Ms. Krieger is c/o Ares Capital Corporation, 1001 19th Street, North Suite 1200, Arlington, Virginia 22209. The business address of each other director, executive officer and listed officer is c/o Ares Capital Corporation, 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067.

(2)
Including the Company.

(3)
Mr. Arougheti is an interested director because he is an Executive Vice President of the Company, is on the Investment Committee of our investment adviser, is a Co-Founder and the Chief Executive Officer and President of Ares, is a member of the Board of Directors of Ares Partners Holdco LLC and serves on the Board of Directors and the Management Committee of Ares.

(4)
Mr. Rosen is an interested director because RLR Capital Partners and Mr. Rosen are parties to a strategic advisory agreement with Ares and Mr. Rosen owns certain equity interests in Ares and its affiliates.

(5)
Mr. Rosenthal is an interested director because he is a Co-Founder of Ares, Partner of Ares Management GP LLC and a member of the Board of Directors of Ares Partners Holdco LLC and serves on the Board of Directors and the Management Committee of Ares.

(6)
Mr. deVeer is an interested director because he is the Chief Executive Officer of the Company, is on the Investment Committee of our investment adviser, is a Partner of Ares Management GP LLC and a member of the Board of Directors of Ares Partner Holdco LLC and serves on the Management Committee of Ares.

Biographical Information and Discussion of Experience and Qualifications, etc.

Directors

              As described below under "Committees of the Board of Directors—Nominating and Governance Committee," the board of directors has identified certain desired attributes for director nominees. Each of our directors has demonstrated high character and integrity, superior credentials and recognition in his or her respective field and the relevant expertise and experience upon which to be able to offer advice and guidance to our management. Each of our directors also has sufficient time available to devote to the affairs of the Company, is able to work with the other members of the board of directors and contribute to the success of the Company and can represent the long-term interests of the Company's stockholders as a whole. Our directors have been selected such that the board of directors represents a range of backgrounds and experience. Set forth below is biographical information of each director, including a discussion of such director's particular experience, qualifications, attributes or skills that lead us and our board of directors to conclude, as of the date of this prospectus, that such individual should serve as a director, in light of the Company's business and structure.

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Independent Directors

              Steve Bartlett, 70, has served as a director of the Company since 2012 and currently serves on the audit committee. Mr. Bartlett has been a consultant since 2012, providing strategic independent consulting services to several U.S. corporations. From 1999 to 2012, Mr. Bartlett served as President and Chief Executive Officer of the Financial Services Roundtable. Mr. Bartlett currently sits on the board of directors of the Homeownership Preservation Foundation (HPF). In 2001, Mr. Bartlett served on the President's Commission on Excellence in Special Education. Mr. Bartlett previously served as the Mayor of Dallas, Texas from 1991 to 1995, a member of the United States Congress from 1983 to 1991, and a member of the Dallas City Council from 1977 to 1981. Mr. Bartlett also founded Meridian Products Corporation, a manufacturer of injection molded plastics in 1976. Mr. Bartlett previously served on the Board of Governors of the National YMCA, the board of directors of BIPAC and Easter Seals of Greater Washington, D.C., and the board of directors for the following companies: Centene Corporation (NYSE), IMCO Recycling, Inc. (NYSE), KB Home Corporation (NYSE), Sun Coast Industries (NYSE), Intersections Inc. (NASDAQ), Dallas Can! and Grace Presbyterian Village. Mr. Bartlett also served as co-chair of Character Counts of Dallas and chair of the Trinity Trails. Mr. Bartlett also served on the Dallas Fort Worth International Airport Board. Mr. Bartlett graduated from the University of Texas at Austin in 1971, later serving as a guest lecturer at the Lyndon B. Johnson School of Public Affairs. We believe that Mr. Bartlett's experience serving as President and Chief Executive Officer of the Financial Services Roundtable, his experience in politics (including serving as the Mayor of Dallas, Texas, a member of the United States Congress and a member of the Dallas City Council) and his service as a director of public and private companies provides the board of directors with key experience and insight to the Company, especially with respect to issues specific to boards of directors of public companies and companies in the financial services industry.

              Ann Torre Bates, 60, has served as a director of the Company since 2010 and is currently the chairperson of the audit committee. Ms. Bates currently dedicates her time serving on the boards of directors of several companies primarily in the financial sector. From 1997 to 2012, Ms. Bates was a strategic and financial consultant, principally with respect to corporate finance matters. From 1995 to 1997, Ms. Bates served as Executive Vice President, Chief Financial Officer and Treasurer of NHP, Inc., a national real estate services firm. From 1991 to 1995, Ms. Bates was Vice President and Treasurer of US Airways, and held various finance positions from 1988 to 1991. She currently serves on the board of directors of United Natural Foods, Inc. and is a director or trustee of 19 investment companies in the Franklin Templeton Group of Mutual Funds. She previously served as a director of Allied Capital Corporation from 2003 to 2010, SLM Corporation from 1997 to 2014 and Navient Corporation from 2014 to 2016. Ms. Bates holds a B.B.A in Accountancy from the University of Notre Dame and an M.B.A. in Finance and Economics from Cornell University. We believe that Ms. Bates' experience serving as a director of other public companies in the financial sector, as well as her past experience as a chief financial officer, provides the board of directors and, specifically, the audit committee of the board of directors with valuable knowledge and insight in the financial services sector as well as experience in financial and accounting matters.

              Daniel G. Kelly, Jr., 67, has served as a director of the Company since May 2016 and currently serves on the nominating and governance committee. Mr. Kelly was a Partner of Davis Polk & Wardwell LLP, an international law firm, from 1999 to 2015, co-founding its Silicon Valley office in 1999. During his time at Davis Polk, Mr. Kelly had an extensive corporate practice representing companies, private equity funds and financial institutions in a broad array of complex transactions, and also acted as a senior advisor to boards and special committees on numerous sensitive matters. He currently serves on the board of directors of American Shared Hospital Services, which is a publicly traded healthcare company, and as a Trustee of Choate Rosemary Hall and on the board of directors of Equality Now, a global organization dedicated to creating a world in which women and girls have the same legal rights as men and boys. Prior to joining Davis Polk, Mr. Kelly was a senior officer of a

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major investment banking firm, the chief legal officer of a New York Stock Exchange ("NYSE") listed corporation and a partner involved in management of two other law firms. Mr. Kelly graduated magna cum laude with a B.A. in History from Yale University and received his J.D. from Columbia University School of Law where he served as Notes and Comments Editor of the Columbia Law Review. We believe that Mr. Kelly's experience practicing as a corporate lawyer, including his substantial experience in providing advice and counsel on corporate governance and securities law matters to numerous public company clients in a wide variety of industries, provides the board of directors with unique insight on its duties and responsibilities.

              Steven B. McKeever, 58, has served as a director of the Company since 2012 and is currently the chairperson of the nominating and governance committee. Mr. McKeever is the CEO of Hidden Beach Recordings, an independent record label based in Los Angeles, California, which Mr. McKeever founded in 1997. From 1991 to 1995, Mr. McKeever was with Motown Records, where he served as Executive Vice President of Talent and Creative Affairs from 1993 to 1995 and Senior Vice President of Artists and Repertoire from 1991 to 1993. In 1992, Mr. McKeever created MoJAZZ Records, a subsidiary of Motown Records and served as its President. In 1993, he was instrumental in the sale of Motown Records to PolyGram Records. Mr. McKeever eventually left Motown Records in 1995 to work on his own entrepreneurial projects. Mr. McKeever began his career at the law firm of Irell & Manella LLP in Los Angeles as an entertainment lawyer. In 2011, Mr. McKeever served as the Executive Producer of Entertainment for the dedication of the Martin Luther King, Jr. Memorial in Washington, D.C. Mr. McKeever currently serves as a director of several organizations, including College Bound (Chairman), African Ancestry.com and The Pacific Institute Spirit Board. He served as a Governor of the Los Angeles Chapter of The National Academy of Recording Arts and Sciences (a/k/a The GRAMMYs) from 2001 to 2003 and 2008 to 2010 and gives generous time to various charitable organizations such as The City of Hope. Mr. McKeever received his B.S. from the University of Illinois at Urbana Champaign and received his J.D. from Harvard Law School. We believe that Mr. McKeever's diversity of experiences, in particular his small business and entrepreneurial experience, provides the board of directors with unique insight and expertise into the management of small and middle-market companies.

              Eric B. Siegel, 60, has served as a director of the Company since 2004 and has been the lead independent director of the board of directors since 2010. Mr. Siegel currently serves on the audit committee and the nominating and governance committee. Since 2005, Mr. Siegel has served as Special Advisor to the Chairman of the Milwaukee Brewers Baseball Club and a member of the Club's Board of Advisors. Mr. Siegel is a director and Chairman of the Executive Committee and Nominating and Governance Committee and member of the Audit Committee and Security Committee of El Paso Electric Company, a NYSE publicly traded utility company. Mr. Siegel is also a past member of the boards of directors of a number of public and private companies, including Kerzner International Ltd. Mr. Siegel is a retired limited partner of Apollo Advisors, L.P. and Lion Advisors, L.P., private investment management firms. Mr. Siegel is a member of the board of directors of the Friends of the Los Angeles Saban Free Clinic and a past member of the Board of Trustees of the Marlborough School. Mr. Siegel holds his B.A. summa cum laude and Phi Beta Kappa and J.D. Order of the Coif from the University of California at Los Angeles. We believe that Mr. Siegel's experience practicing as a corporate lawyer provides valuable insight to the board of directors on regulatory and risk management issues and his experience as a partner in investment firms and over 20 years of experience serving as a director for both public and private companies provide industry specific knowledge and expertise to the board of directors.

Interested Directors

              Michael J Arougheti, 45, has served as Co-Chairman of the board of directors since July 2014, as a director of the Company since 2009 and as an Executive Vice President of the Company since

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October 2014. Mr. Arougheti previously served as Chief Executive Officer of the Company from May 2013 to July 2014, and President of the Company from May 2004 to May 2013. Mr. Arougheti is a Co-Founder and the Chief Executive Officer and President of Ares. He additionally serves as a director and the Chief Executive Officer and President of Ares Management GP LLC, Ares' general partner, and on the Board of Directors of Ares Partners Holdco LLC, the seven-member governing body which controls Ares. He serves as a member of the Board of Directors and Management Committee of Ares. Mr. Arougheti also is a member of the Investment Committee of the investment adviser, and the Ares Credit Group's U.S. and European Direct Lending Investment Committees, the Ares Equity Income Opportunity Strategy Portfolio Review Committee and the Ares Operations Management Group. Mr. Arougheti may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. From 2001 to 2004, Mr. Arougheti was employed by Royal Bank of Canada, where he was a Managing Partner of the Principal Finance Group of RBC Capital Partners and a member of the firm's Mezzanine Investment Committee. At RBC Capital Partners, Mr. Arougheti oversaw an investment team that originated, managed and monitored a diverse portfolio of middle-market leveraged loans, senior and junior subordinated debt, preferred equity and common stock and warrants on behalf of RBC and other third party institutional investors. Mr. Arougheti joined Royal Bank of Canada in October 2001 from Indosuez Capital, where he was a Principal, responsible for originating, structuring and executing leveraged transactions across a broad range of products and asset classes. Mr. Arougheti also sat on the firm's Investment Committee. Prior to joining Indosuez in 1994, Mr. Arougheti worked at Kidder, Peabody & Co., where he was a member of the firm's Mergers and Acquisitions Group. In addition to serving as chairman of the board of directors of Ares Commercial Real Estate Corporation, Mr. Arougheti also serves on the boards of directors of Investor Group Services, Riverspace Arts and Operation HOPE. Mr. Arougheti received a B.A. in Ethics, Politics and Economics, cum laude, from Yale University. We believe that Mr. Arougheti's depth of experience in investment management, leveraged finance and financial services, as well as his intimate knowledge of the Company's business and operations, not only gives the board of directors valuable industry-specific knowledge and expertise on these and other matters but also position him well to continue to serve as Co-Chairman of the board of directors. Mr. Arougheti is an interested director because he is an Executive Vice President of the Company, is on the Investment Committee of the investment adviser, is a Co-Founder and the Chief Executive Officer and President of Ares and serves on the Board of Directors of Ares Partners Holdco LLC and as a member of the Board of Directors and Management Committee of Ares.

              R. Kipp deVeer, 45, has served as a director of the Company since 2015 and currently serves as Chief Executive Officer of the Company. Mr. deVeer previously served as President of the Company from May 2013 to July 2014. He joined Ares in May 2004 and currently serves as a Partner of Ares Management GP LLC, Ares' general partner, and on the Board of Directors of Ares Partners Holdco LLC, the seven-member governing body which controls Ares. He is a Partner in and Head of the Ares Credit Group and a member of the Management Committee of Ares. Mr. deVeer may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Mr. deVeer is a member of the Investment Committees of our investment adviser, the Ares Credit Group's U.S. and European Direct Lending Investment Committees and other select Ares Credit Group investment committees. Mr. deVeer is also a director of Ares Management Limited, a subsidiary of Ares Management overseeing the European activities of Ares. Prior to joining Ares, Mr. deVeer was a partner at RBC Capital Partners, a division of Royal Bank of Canada, which led the firm's middle market financing and principal investment business. Mr. deVeer joined RBC in October 2001 from Indosuez Capital, where he was Vice President in the Merchant Banking Group. Previously, Mr. deVeer worked at J.P. Morgan and Co., both in the Special Investment Group of J.P. Morgan Investment Management, Inc. and the Investment Banking Division of J.P. Morgan Securities Inc. Mr. deVeer received a B.A. from Yale University and an M.B.A. from Stanford University's Graduate School of Business. We believe that

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Mr. deVeer's depth of experience in investment management, leveraged finance and financial services, as well as his intimate knowledge of our business and operations, gives the board of directors valuable industry specific knowledge and expertise on these and other matters. Mr. deVeer is an interested director because he is the Chief Executive Officer of the Company, a Partner of Ares Management GP LLC, an officer of and on the Investment Committee of our investment adviser and a member of the Board of Directors of Ares Partners Holdco LLC, and serves on the Management Committee of Ares.

              Robert L. Rosen, 71, has served as a director of the Company since 2004. Since February 2018, Mr. Rosen has been party to a strategic advisory agreement with Ares. Mr. Rosen is the Managing Partner of RLR Capital Partners, which invests principally in the securities of publicly traded North American companies. From 2016 to 2018, Mr. Rosen was a Partner of Ares, from 2013 to 2016, Mr. Rosen was an Operating Advisor to the Ares Management Private Equity Group and, from 2010 to 2013, Mr. Rosen was party to a strategic advisory agreement with Ares. From 2005 to 2008, Mr. Rosen was a Managing Partner of RLR Focus Fund LP, an "active value" hedge fund. From 1995 to 2001, Mr. Rosen served as an exclusive consultant to Apollo Management, L.P. In 1998, Mr. Rosen founded National Financial Partners (NYSE: NFP), an independent provider of financial services to high net worth individuals and small to medium sized corporations. He served as NFP's CEO from 1998 to 2000 and as its Chairman until January 2002. From 1987 to 1993, Mr. Rosen was a Managing Partner of Ballantrae Partners, L.P., an investment partnership. From 1989 to 1993, Mr. Rosen was Chairman and CEO of Damon Corporation, a leading healthcare and laboratory testing company that was ultimately sold to Quest Diagnostics. From 1983 to 1987, Mr. Rosen was Vice Chairman of Maxxam Group. Prior to that, Mr. Rosen spent 12 years at Shearson American Express in positions in research, investment banking and senior management, and for two years was Assistant to Sanford Weill, the then Chairman and CEO of Shearson. Mr. Rosen previously served on the board of directors of Ares Commercial Real Estate Corporation and Sapient Corporation. Mr. Rosen is a member of the Council on Foreign Relations. Mr. Rosen holds a B.A. from the City University of New York in Economics and an M.B.A. from the New York University Leonard N. Stern School of Business in Finance. We believe that Mr. Rosen's over 35 years of experience as a senior executive of financial services, healthcare services and private equity funds brings broad financial industry and specific investment management insight and experience to the board of directors and that his expertise in finance provides valuable knowledge to the board of directors. Mr. Rosen is an interested director because RLR Capital Partners and Mr. Rosen are parties to a strategic advisory agreement with Ares and Mr. Rosen owns certain equity interests in Ares and its affiliates.

              Bennett Rosenthal, 54, has served as Co-Chairman of our board of directors since 2014, and previously as Chairman of our board of directors since 2004. Mr. Rosenthal is a Co-Founder of Ares and a Partner of Ares Management GP LLC, Ares' general partner. He also serves on the Board of Directors of Ares Partners Holdco LLC, the seven-member governing body which controls Ares. He is Co-Head and a Partner in the Ares Private Equity Group and serves as a member of the Board of Directors and Management Committee of Ares. Mr. Rosenthal also is a member of the Investment Committees of certain funds managed by the Ares Private Equity Group. Mr. Rosenthal may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Mr. Rosenthal joined Ares in 1998 from Merrill Lynch & Co., where he served as a Managing Director in the Global Leveraged Finance Group. Mr. Rosenthal currently serves on the Board of Directors of City Ventures, LLC, Jacuzzi Brands Corporation, the parent entities of CHG Healthcare Holdings L.P., CPG International Inc., Dawn Holdings, Inc., DuPage Medical Group, National Veterinary Associates, Inc., Aspen Dental Management, Inc. and several other private companies. Mr. Rosenthal's previous board of directors experience includes Maidenform Brands, Inc., Hanger, Inc. and Nortek, Inc. Mr. Rosenthal also serves on the Board of Trustees of the Windward School in Los Angeles, and on the Graduate Executive Board of the Wharton School of Business. Mr. Rosenthal graduated summa cum laude with a B.S. in Economics from the University of Pennsylvania's Wharton School of Business where he also received

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his M.B.A. with distinction. We believe that Mr. Rosenthal's intimate knowledge of the business and operations of Ares, extensive experience in the financial industry as well as the management of private equity and debt investments in particular and experience as a director of other public and private companies not only give the board of directors valuable insight but also position him well to continue to serve as Co-Chairman of the board of directors. Mr. Rosenthal is an interested director because he is a Co-Founder of Ares, Partner of Ares Management GP LLC and a member of the Board of Directors of Ares Partners Holdco LLC and serves on the Board of Directors and the Management Committee of Ares.

Executive Officers and Certain Other Officers Who Are Not Directors

              Joshua M. Bloomstein, 44, serves as the General Counsel, Vice President and Secretary of the Company. He joined Ares in November 2006 and currently serves as a Partner and Co General Counsel (Credit) and Deputy General Counsel (Corporate) of Ares Management, and may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Mr. Bloomstein also currently serves as Vice President and Assistant Secretary of American Capital Senior Floating, Ltd. (NASDAQ:ACSF) and Vice President and Assistant Secretary of CION Ares Diversified Credit Fund. Prior to joining Ares, Mr. Bloomstein was an attorney with Latham & Watkins LLP specializing in leveraged buyouts and private equity investments as well as general partnership and corporate matters. Mr. Bloomstein graduated magna cum laude with a B.A. in Political Science from the State University of New York at Albany and received a J.D. degree, magna cum laude, from the University of Miami, where he was elected to the Order of the Coif.

              Mitchell Goldstein, 51, serves as a Co-President of the Company. Mr. Goldstein previously served as an Executive Vice President of the Company from May 2013 to July 2014. He joined Ares in May 2005 and currently serves as a Partner in and Co-Head of the Ares Credit Group, Vice President of American Capital Senior Floating, Ltd. (NASDAQ:ACSF) and Vice President of CION Ares Diversified Credit Fund. He is a member of the Management Committee of Ares, and may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Mr. Goldstein is a member of the Investment Committees of the investment adviser, select Ares Credit Group U.S. Direct Lending investment committees and the Ivy Hill Asset Management Investment Committee and the Ares Commercial Finance Investment Committee. Prior to joining Ares, Mr. Goldstein worked at Credit Suisse First Boston ("CSFB"), where he was a Managing Director in the Financial Sponsors Group. At CSFB, Mr. Goldstein was responsible for providing investment banking services to private equity funds and hedge funds with a focus on M&A and restructurings as well as capital raisings, including high yield, bank debt, mezzanine debt, and IPOs. Mr. Goldstein joined CSFB in 2000 at the completion of the merger with Donaldson, Lufkin & Jenrette. From 1998 to 2000, Mr. Goldstein was at Indosuez Capital, where he was a member of the Investment Committee and a Principal, responsible for originating, structuring and executing leveraged transactions across a broad range of products and asset classes. From 1993 to 1998, Mr. Goldstein worked at Bankers Trust. He also serves on the Board of Trustees of CION Ares Diversified Credit Fund. Mr. Goldstein graduated summa cum laude from the State University of New York at Binghamton with a B.S. in Accounting, received an M.B.A. from Columbia University's Graduate School of Business and is a Certified Public Accountant.

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              Miriam Krieger, 42, serves as Chief Compliance Officer of the Company. She joined Ares in April 2010 and is a Partner and Global Chief Compliance Officer of Ares, as well as Ares' Global Anti-Money Laundering Officer and Global Anti-Corruption Officer and is a member of the Ares Operations Management Group. She also serves as the Chief Compliance Officer of American Capital Senior Floating, Ltd. (NASDAQ:ACSF) and Ivy Hill Asset Management, L.P. She may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. From March 2008 until joining Ares, Ms. Krieger was Chief Compliance Officer and Corporate Secretary of Allied Capital Corporation, where she also served as Executive Vice President from August 2008 until April 2010 and as Senior Vice President from March 2008 to August 2008. Ms. Krieger also served as Senior Vice President and Chief Compliance Officer at MCG Capital Corporation, a publicly traded business development company, from 2006 to 2008 and Vice President and Assistant General Counsel from 2004 to 2006. From 2001 to 2004, Ms. Krieger was an associate in the Financial Services Group of the law firm of Sutherland Asbill & Brennan LLP. Ms. Krieger graduated with a B.A. in Economics and Political Science from Wellesley College and received a J.D. and an M.A. in Economics from Duke University.

              Scott C. Lem, 40, serves as Chief Accounting Officer, Vice President and Treasurer of the Company. Mr. Lem previously served as Assistant Treasurer of the Company from May 2009 to May 2013. Mr. Lem also currently serves as Chief Financial Officer of Ares Dynamic Credit Allocation Fund, Inc. (NYSE:ARDC) and Chief Accounting Officer of American Capital Senior Floating, Ltd. (NASDAQ:ACSF) and CION Ares Diversified Credit Fund. He is a Managing Director and Chief Accounting Officer, Credit (Direct Lending) in the Ares Finance Department. He may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. From July 2003 to December 2008, Mr. Lem served as Controller of Ares Management. Prior to joining Ares in July 2003, Mr. Lem was with Ernst & Young LLP and Arthur Andersen LLP, most recently as a Senior Associate conducting audits for clients across several industries including entertainment, hospitality and real estate. Mr. Lem graduated summa cum laude with a B.S. in Accounting from the University of Southern California's Leventhal School of Accounting and summa cum laude with a B.S. in Business Administration from the University of Southern California's Marshall School of Business. Mr. Lem has also received an M.B.A. in Finance from UCLA's Anderson School of Management. Mr. Lem is a Certified Public Accountant (Inactive).

              Penni F. Roll, 52, serves as the Chief Financial Officer of the Company. She joined Ares Management in 2010 and now serves as a Partner and Chief Financial Officer of the Ares Credit Group. She also serves as the Chief Financial Officer of American Capital Senior Floating, Ltd. (NASDAQ:ACSF) and CION Ares Diversified Credit Fund, and the Treasurer of Ares Dynamic Credit Allocation Fund (NYSE:ARDC). Ms. Roll is also Chief Financial Officer, Vice President and Treasurer of Ivy Hill Asset Management, L.P. ("IHAM") and Chief Financial Officer of Ivy Hill Asset Management GP, LLC, IHAM's General Partner, where she also serves on the Board of Managers. She may additionally from time to time serve as an officer, director or principal of other entities affiliated with Ares Management or of other investment funds managed by Ares Management and its affiliates. Prior to joining Ares Management, Ms. Roll served as Chief Financial Officer of Allied Capital Corporation from 1998 until April 2010. Ms. Roll joined Allied Capital Corporation in 1995 as its Controller after serving as a Manager in KPMG LLP's financial services practice. Ms. Roll graduated magna cum laude with a B.S.B.A. in Accounting from West Virginia University.

              Michael L. Smith, 47, serves as a Co-President of the Company. Mr. Smith previously served as an Executive Vice President of the Company from May 2013 to July 2014. Mr. Smith joined Ares in May 2004 and currently serves as a Partner in and Co-Head of the Ares Credit Group and a member of the Management Committee of Ares. From time to time, he may serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares

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Management and its affiliates. Mr. Smith is a member of the Investment Committees of our investment adviser, select Ares Credit Group U.S. Direct Lending investment committees, the Ivy Hill Asset Management Investment Committee and the Ares Commercial Finance Investment Committee. Prior to joining Ares, Mr. Smith was a Partner at RBC Capital Partners, a division of Royal Bank of Canada, which led the firm's middle market financing and principal investment business. Mr. Smith joined RBC in October 2001 from Indosuez Capital, where he was a Vice President in the Merchant Banking Group. Previously, Mr. Smith worked at Kenter, Glastris & Company, and at Salomon Brothers Inc., in their Debt Capital Markets Group and Financial Institutions Group. Mr. Smith received a B.S. in Business Administration, cum laude, from the University of Notre Dame and a Masters in Management from Northwestern University's Kellogg Graduate School of Management.

              Michael D. Weiner, 65, serves as a Vice President of the Company. Mr. Weiner serves as Executive Vice President and Chief Legal Officer of Ares Management GP LLC, Ares' general partner, a Partner and General Counsel in the Ares Legal Group and a member of the Management Committee of Ares. He may from time to time serve as an officer, director or principal of entities affiliated with Ares Management or of investment funds managed by Ares Management and its affiliates. Mr. Weiner has also served as Vice President and General Counsel of Ares Commercial Real Estate Corporation since 2012, Vice President and Assistant Secretary of Ares Dynamic Credit Allocation Fund, Inc. and Vice President and Assistant Secretary of CION Ares Diversified Credit Fund. From September 2006 to January 2010, Mr. Weiner served as General Counsel of the Company. He additionally is a member of the Ares Operations Management Group and the Ares Enterprise Risk Committee. Mr. Weiner joined Ares in September 2006. Previously, Mr. Weiner served as General Counsel to Apollo Management, L.P. and had been an officer of the corporate general partners of Apollo since 1992. Prior to joining Apollo, Mr. Weiner was a partner in the law firm of Morgan, Lewis & Bockius specializing in corporate and alternative financing transactions, securities law as well as general partnership, corporate and regulatory matters. Mr. Weiner has served on the boards of directors of several corporations. Mr. Weiner currently serves on the Board of Governors of the Cedars Sinai Medical Center in Los Angeles. Mr. Weiner graduated with a B.S. in Business and Finance from the University of California at Berkeley and a J.D. from the University of Santa Clara.

BOARD LEADERSHIP STRUCTURE

              Our board of directors monitors and performs an oversight role with respect to the business and affairs of the Company, including with respect to investment practices and performance, compliance with regulatory requirements and the services, expenses and performance of service providers to the Company. Among other things, our board of directors approves the appointment of our investment adviser, administrator and officers, reviews and monitors the services and activities performed by our investment adviser, administrator and officers and approves the engagement, and reviews the performance of, our independent registered public accounting firm.

              Under the Company's bylaws, our board of directors may designate a chairman to preside over the meetings of the board of directors and meetings of the stockholders and to perform such other duties as may be assigned to him by the board of directors. We do not have a fixed policy as to whether the chairman of the board of directors should be an independent director and believe that our flexibility to select our chairman and reorganize our leadership structure from time to time is in the best interests of the Company and its stockholders.

              Presently, Mr. Arougheti and Mr. Rosenthal serve as co-chairs of our board of directors. Mr. Arougheti is an interested director because he is an Executive Vice President of the Company, is on the Investment Committee of the investment adviser, is a Co-Founder and the Chief Executive Officer and President of Ares and serves on the Board of Directors of Ares Partners Holdco LLC and as a member of the Board of Directors and Management Committee of Ares. The Company believes that Mr. Arougheti's depth of experience in investment management, leveraged finance and financial

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services, as well as his intimate knowledge of the Company's business and operations, gives our board of directors valuable industry-specific knowledge and expertise on these and other matters. Mr. Rosenthal is an interested director because he is a Co-Founder of Ares, Partner of Ares Management GP LLC and a member of the Board of Directors of Ares Partners Holdco LLC and serves on the Board of Directors and the Management Committee of Ares. The Company believes that Mr. Rosenthal's history with the Company, familiarity with the Ares investment platform and extensive experience in the management of private equity and debt investments qualifies him to serve as co-chairman of our board of directors. Moreover, we believe that we are best served through our existing leadership structure with Mr. Arougheti and Mr. Rosenthal as co-chairs of our board of directors, as Mr. Arougheti and Mr. Rosenthal's relationships with our investment adviser provide an effective bridge between our board of directors and our investment adviser, thus ensuring an open dialogue between our board of directors and our investment adviser and that both groups act with a common purpose.

              The independent directors have designated a lead independent director whose duties include, among other things, chairing executive sessions of the independent directors, acting as a liaison between the independent directors and the co-chairs of the board of directors and between the independent directors and officers of the Company and our investment adviser, facilitating communication among the independent directors and the Company's counsel, reviewing and commenting on board of director and committee meeting agendas and calling additional meetings of the independent directors as appropriate. In August 2010, the board of directors designated and appointed Mr. Siegel as the lead independent director and Mr. Siegel has served as lead independent director since that time.

              We believe that board leadership structures must be evaluated on a case-by-case basis and that our existing board leadership structure is appropriate. However, we continually re-examine our corporate governance policies on an ongoing basis to ensure that they continue to meet the Company's needs.

BOARD'S ROLE IN RISK OVERSIGHT

              Our board of directors performs its risk oversight function and fulfills its risk oversight responsibilities primarily (1) through its three standing committees, which report to the entire board of directors and are comprised solely of independent directors and (2) by working with our Chief Compliance Officer to monitor risk in accordance with our compliance policies and procedures.

              As described below in more detail under "Committees of the Board of Directors," the audit committee and the nominating and governance committee assist the board of directors in performing its risk oversight function and fulfilling its risk oversight responsibilities. The audit committee's risk oversight responsibilities include overseeing the Company's accounting and financial reporting processes, assisting the board of directors in fulfilling its oversight responsibilities relating to the Company's systems of internal controls over financial reporting, audits of the Company's financial statements and disclosure controls and procedures, assisting the board of directors in determining the fair value of securities that are not publicly traded or for which current market values are not readily available, and discussing with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies. The nominating and governance committee's risk oversight responsibilities include developing, reviewing and updating certain policies regarding the nomination of directors, identifying, evaluating and nominating directors to fill vacancies on the board of directors or to stand for election by our stockholders, reviewing the Company's policies relating to corporate governance, and overseeing the evaluation of our board of directors and its committees.

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              Our board of directors also performs its risk oversight function and fulfills its risk oversight responsibilities by working with our Chief Compliance Officer to monitor risk in accordance with the Company's policies and procedures. Our Chief Compliance Officer prepares a written report annually discussing the adequacy and effectiveness of the compliance policies and procedures of the Company and certain of its service providers. Our Chief Compliance Officer's report, which is reviewed by and discussed with our board of directors, addresses at a minimum (1) the operation of the compliance policies and procedures of the Company and certain of its service providers since the last report; (2) any material changes to such policies and procedures since the last report; (3) any recommendations for material changes to such policies and procedures as a result of our Chief Compliance Officer's annual review; and (4) any compliance matter that has occurred since the date of the last report about which our board of directors would reasonably need to know to oversee the Company's compliance activities and risks. In addition, our Chief Compliance Officer reports to our board of directors on a quarterly basis with respect to material compliance matters and meets separately in executive session with the independent directors periodically, but in no event less than once each year.

              We believe that our board of directors' role in risk oversight is effective and appropriate given the extensive regulation to which we are already subject as a BDC. Specifically, as a BDC we must comply with certain regulatory requirements and restrictions that control the levels of risk in our business and operations. For example, our ability to incur indebtedness is currently limited such that our asset coverage must equal at least 200% immediately after each time we incur indebtedness (though effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced from 200% to 150%), we generally have to invest at least 70% of our total assets in "qualifying assets" and, subject to certain exceptions, we are subject to restrictions on our ability to engage in transactions with Ares and its affiliates. See "Regulation." In addition, we have elected to be treated as a RIC under the Code. As a RIC we must, among other things, meet certain source of income and asset diversification requirements. See "Certain Material U.S. Federal Income Tax Considerations."

              We believe that the extent of our board of directors' (and its committees') role in risk oversight complements our board of directors' leadership structure because it allows our independent directors, through the three fully independent board committees, a lead independent director, executive sessions with each of our Chief Compliance Officer, our independent registered public accounting firm and independent valuation providers and otherwise, to exercise oversight of risk without any conflict that might discourage critical review.

              We believe that our board of directors' role in risk oversight must be evaluated on a case-by-case basis and that our board of directors' existing role in risk oversight is appropriate. However, our board of directors re-examines the manner in which it administers its risk oversight function on an ongoing basis to ensure that it continues to meet the Company's needs.

COMMITTEES OF THE BOARD OF DIRECTORS

              Our board of directors has established an audit committee, a nominating and governance committee and a co-investment committee. We do not have a compensation committee because our executive officers do not receive any direct compensation from us. During 2017, the board of directors held 15 formal meetings, the audit committee held five formal meetings, the nominating and governance committee held two formal meetings, the co-investment committee held 19 formal meetings and the independent directors held one formal meeting. We encourage, but do not require, the directors to attend our annual meeting of stockholders in person.

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Audit Committee

              The members of the audit committee are Ms. Bates and Messrs. Bartlett and Siegel, each of whom is independent for purposes of the Investment Company Act and The NASDAQ Global Select Market's corporate governance regulations. Ms. Bates currently serves as chairperson of the audit committee.

              The role of the audit committee is to assist our board of directors in fulfilling its oversight responsibilities by: (1) overseeing the Company's accounting and financial reporting processes and the audits of the Company's financial statements and internal control over financial reporting and (2) reviewing the financial reports and other financial information provided by the Company to the public. The audit committee is also responsible for approving our independent registered public accounting firm and recommending them to our board of directors (including a majority of the independent directors) for approval and submission to our stockholders for ratification, reviewing with our independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by our independent registered public accounting firm, reviewing the independence of our independent registered public accounting firm and reviewing the adequacy of our internal controls and procedures.

              The audit committee also assists our board of directors in determining the fair value of debt and equity securities that are not publicly traded or for which current market values are not readily available, and in connection therewith recommends valuation policies to the board of directors, considers valuation issues with respect to liquid securities and reviews valuations of illiquid securities proposed by the investment adviser. The audit committee also receives input from independent valuation firms that have been engaged at the direction of the board of directors to value certain portfolio investments. In addition, the audit committee is responsible for discussing with the Company's officers and management of our investment adviser the Company's major financial risk exposures and the steps that the Company has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies. The audit committee also reviews and approves all transactions with related persons of the Company that are brought to the audit committee's attention, including each annual renewal of our investment advisory and management agreement and our administration agreement.

              This description of the audit committee's role and responsibilities is summary in nature, is not exhaustive and is qualified in its entirety by reference to the charter of the audit committee, which can be accessed via the Company's website at www.arescapitalcorp.com. The contents of the Company's website are not intended to be incorporated by reference into this prospectus or the accompanying prospectus supplement, and any references to the Company's website are intended to be inactive textual references only.

              Our board of directors has determined that Ms. Bates is an "audit committee financial expert" within the meaning of the rules of the SEC.

Nominating and Governance Committee

              The members of the nominating and governance committee are Messrs. Kelly, McKeever and Siegel, each of whom is independent for purposes of the Investment Company Act and The NASDAQ Global Select Market's corporate governance regulations. Mr. McKeever currently serves as chairman of the nominating and governance committee. The nominating and governance committee is responsible for (1) developing, reviewing and, as appropriate, updating certain policies regarding the nomination of directors and recommending such policies or any changes in such policies to the board of directors for approval, (2) identifying individuals qualified to become directors, (3) evaluating and recommending to the board of directors nominees to fill vacancies on the board of directors or committees thereof or to stand for election by the stockholders of the Company, (4) reviewing the

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Company's policies relating to corporate governance and recommending any changes in such policies to the board of directors, and (5) overseeing the evaluation of the board of directors (including its leadership structure) and its committees.

              In considering possible candidates for election as a director, the nominating and governance committee takes into account, in addition to such other factors as it deems relevant, the desirability of selecting directors who:

              The nominating and governance committee also considers all applicable legal and regulatory requirements that govern the composition of the board of directors.

              The nominating and governance committee may consider recommendations for nomination of directors from our stockholders. Nominations made by stockholders must be delivered to or mailed (setting forth the information required by our bylaws) and received at our principal executive offices not earlier than the 150th day and not later than 5:00 p.m., New York time, on the 120th day prior to the first anniversary of the date on which we first mailed our proxy materials for the previous year's annual meeting of stockholders; provided, however, that if the date of the annual meeting has changed by more than 30 days from the prior year, the nomination must be received not earlier than the 150th day prior to the date of such annual meeting or later than 5:00 p.m., New York time, on the later of (1) the 120th day prior to the date of such annual meeting or (2) the 10th day following the day on which public announcement of such meeting date is first made.

              This description of the nominating and governance committee's role and responsibilities is summary in nature, is not exhaustive and is qualified in its entirety by reference to the charter of the nominating and governance committee, which can be accessed via the Company's website at www.arescapitalcorp.com. The contents of the Company's website are not intended to be incorporated by reference into this prospectus or the accompanying prospectus supplement, and any references to the Company's website are intended to be inactive textual references only.

Compensation Committee

              The role of the compensation committee is performed by the audit committee, which is comprised entirely of independent directors for purposes of the NASDAQ corporate governance requirements and rules and regulations of the SEC, including the compensation committee requirements of NASDAQ Marketplace Rule 5605(d) and Rule 5605(a)(2). The Company's executive officers do not receive any direct compensation from us. The audit committee charter contains all of the provisions that a compensation committee charter would be required to include under the NASDAQ corporate governance listing requirements and the rules and regulations of the SEC. In addition, pursuant to the audit committee charter, the amounts payable to our investment adviser and

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our administrator pursuant to our investment advisory and management agreement and administration agreement, respectively, are separately approved by the audit committee. The compensation payable to our investment adviser pursuant to the investment advisory and management agreement is also separately approved by a majority of our independent directors in accordance with Section 15(c) of the Investment Company Act.

              The specific responsibilities of the audit committee, including those related to compensation, are set forth in the charter of the audit committee, which can be accessed via the Company's website at www.arescapitalcorp.com. The contents of the Company's website are not intended to be incorporated by reference into this prospectus or the accompanying prospectus supplement, and any references to the Company's website are intended to be inactive textual references only.

Co-Investment Committee

              The members of the co-investment committee are Ms. Bates and Messrs. Bartlett, Kelly, McKeever and Siegel, each of whom is independent for purposes of the Investment Company Act and The NASDAQ Global Select Market's corporate governance regulations. The co-investment committee is primarily responsible for reviewing and making certain findings in respect of co-investment transactions pursuant to the Co-investment Exemptive Order the Company received from the Commission on January 18, 2017.

BENEFICIAL OWNERSHIP OF OUR DIRECTORS

              The following table sets forth the dollar range of our equity securities based on the closing price of our common stock on August 6, 2018 and the number of shares beneficially owned by each of our directors as of December 31, 2017. We are not part of a "family of investment companies," as that term is defined in the Investment Company Act.

Name of Director
  Dollar Range of Equity
Securities in the
Company(1)(2)

Independent Directors(3)

   

Steve Bartlett(4)

  Over $100,000

Ann Torre Bates

  Over $100,000

Daniel G. Kelly, Jr. 

  Over $100,000

Steven B. McKeever

  Over $100,000

Eric B. Siegel

  Over $100,000

Interested Directors

   

Michael J Arougheti

  Over $100,000

R. Kipp deVeer(5)

  Over $100,000

Robert L. Rosen

  Over $100,000

Bennett Rosenthal

  Over $100,000

(1)
The dollar ranges are as follows: none, $1-$10,000, $10,001-$50,000, $50,001-$100,000 or over $100,000.

(2)
Beneficial ownership determined in accordance with Rule 16a-1(a)(2) under the Exchange Act.

(3)
As of December 31, 2017, to the best of our knowledge, except as listed above, none of the independent directors, nor any of their immediate family members, had any interest in us, our investment adviser or any person or entity directly or indirectly controlling, controlled by or under common control with us or our investment adviser.

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(4)
The shares of our common stock held by Mr. Bartlett have been pledged as security in connection with a line of credit with a third party financial institution unaffiliated with the Company.

(5)
The shares of the Company's common stock held by Mr. deVeer have been pledged as security in connection with a line of credit with a third party financial institution unaffiliated with the Company.

COMPENSATION TABLE

              The following table shows information regarding the compensation earned or actually received by our directors, none of whom is our employee, for services as a director for the fiscal year ended December 31, 2017. No compensation is paid by us to interested directors. No information has been provided with respect to our executive officers who are not directors since our executive officers do not receive any direct compensation from us.

Name
  Fees Earned or
Paid in
Cash(1)
  Total  

Independent Directors

             

Steve Bartlett

  $ 217,000   $ 217,000  

Ann Torre Bates

  $ 233,500   $ 233,500  

Daniel G. Kelly, Jr. 

  $ 218,500   $ 218,500  

Steven B. McKeever

  $ 222,500   $ 222,500  

Eric B. Siegel

  $ 240,500   $ 240,500  

Interested Directors

             

Michael J Arougheti(2)

    None     None  

R. Kipp deVeer(2)

    None     None  

Robert L. Rosen(3)

    None     None  

Bennett Rosenthal(2)

    None     None  

(1)
For a discussion of the independent directors' compensation, see below.

(2)
Each of Messrs. Arougheti, deVeer and Rosenthal is compensated by Ares Management and its affiliates in connection with his services as an officer, director and/or principal of entities affiliated with Ares Management and of investment funds managed by Ares Management and its affiliates. Such director's compensation arrangement with Ares Management and its affiliates existed prior to his service as a director of the Company.

(3)
Mr. Rosen was compensated by Ares Management and its affiliates in connection with his services as an officer, director and/or principal of entities affiliated with Ares Management and of investment funds managed by Ares Management and its affiliates for the fiscal year ended December 31, 2017. However, under such compensation arrangement, Mr. Rosen did not receive any compensation or other payment from Ares Management or any of its affiliates in connection with his service as a director of the Company.

              The independent directors receive an annual fee of $160,000. They also receive $2,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board meeting and receive $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting. In addition, the chairperson of the audit committee receives an additional annual fee of $10,000, the lead independent director receives an additional annual fee of $15,000, and each chairperson of any other committee receives an additional annual fee of $2,000 for his or her additional services in these capacities. In addition, we purchase directors' and officers' liability insurance on behalf of our directors and officers.

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PORTFOLIO MANAGERS

              We consider the members of the Investment Committee of Ares Capital Management to be our portfolio managers. The following individuals function as portfolio managers primarily responsible for the day-to-day management of our portfolio.

Name
  Position   Length of
Service with
Ares (years)
  Principal Occupation(s) During Past 5 Years

Mark Affolter

  Partner and Portfolio Manager of the Ares Credit Group     10   Mr. Affolter is a Partner and Portfolio Manager in the Ares Credit Group, Central Region Head for U.S. Direct Lending and a member of the Management Committee of Ares. Additionally, Mr. Affolter serves as a member of the Ares Credit Group's U.S. Direct Lending Investment Committee.

Michael J Arougheti

 

Co-Chairman of the board of directors of the Company; Executive Vice President of the Company

   
14
 

Since October 2014, Mr. Arougheti has served as an Executive Vice President of the Company, since July 2014, he has served as Co-Chairman of the Company's board of directors and since February 2009, he has served as a director of the Company. Mr. Arougheti previously served as Chief Executive Officer of the Company from May 2013 to July 2014 and President of the Company from May 2004 to May 2013. Mr. Arougheti is a Co-Founder and the Chief Executive Officer and President of Ares and also serves on the board of directors of Ares Partners Holdco LLC. He is also a member of the Board of Directors and Management Committee of Ares. Mr. Arougheti is a member of the Investment Committee of Ares Capital Management, the Ares Credit Group's U.S. and European Direct Lending Investment Committees, the Ares Equity Income Opportunity Strategy Portfolio Review Committee and the Ares Operations Management Group.

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Name
  Position   Length of
Service with
Ares (years)
  Principal Occupation(s) During Past 5 Years

R. Kipp deVeer

 

Chief Executive Officer of the Company; Partner in and Head of the Ares Credit Group

    14  

Since July 2014, Mr. deVeer has served as Chief Executive Officer of the Company. Mr. deVeer previously served as President of the Company from May 2013 to July 2014. Mr. deVeer joined Ares in May 2004 and currently serves as a Partner of Ares Management GP LLC and on the Board of Directors of Ares Partners Holdco LLC. He is a Partner in and Head of the Ares Credit Group and also a member of the Management Committee of Ares. Mr. deVeer is a member of the Investment Committees of Ares Capital Management and the Ares Credit Group's U.S. and European Direct Lending Investment Committees. Mr. deVeer is also a director of Ares Management Limited, a subsidiary of Ares overseeing the European activities of Ares.

Mitchell Goldstein

 

Co-President of the Company; Partner in and Co-Head of the Ares Credit Group

   
13
 

Since July 2014, Mr. Goldstein has served as a Co-President of the Company. Mr. Goldstein previously served as an Executive Vice President of the Company from May 2013 to July 2014. Mr. Goldstein has served as an officer of Ares Capital Management since 2005. Mr. Goldstein joined Ares in May 2005 and currently serves as a Partner of the Ares Credit Group. Mr. Goldstein also currently serves as a Vice President of American Capital Senior Floating, Ltd. and CION Ares Diversified Credit Fund. Mr. Goldstein is a member of the Investment Committees of Ares Capital Management, the Ares Credit Group's U.S. Direct Lending and Commercial Finance Investment Committees and the Ivy Hill Asset Management Investment Committee, and is a member of the Management Committee of Ares.

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Name
  Position   Length of
Service with
Ares (years)
  Principal Occupation(s) During Past 5 Years

Jim Miller

 

Partner and Portfolio Manager of the Ares Credit Group

    12  

Mr. Miller is a Partner and Portfolio Manager in the Ares Credit Group, as well as the East Region Co-Head for U.S. Direct Lending and a member of the Management Committee of Ares. Additionally, Mr. Miller serves on the Ares Credit Group's U.S. Direct Lending and Commercial Finance Investment Committees.

Kort Schnabel

 

Partner and Portfolio Manager of the Ares Credit Group

   
17
 

Mr. Schnabel is a Partner and Portfolio Manager in the Ares Credit Group, as well as the West Region Head for U.S. Direct Lending and a member of the Management Committee of Ares. Additionally, Mr. Schnabel serves on Ares Credit Group's U.S. Direct Lending Investment Committee.

David Schwartz

 

Partner and Portfolio Manager of the Ares Credit Group

   
14
 

Mr. Schwartz is a Partner and Portfolio Manager in the Ares Credit Group, East Region Co-Head for U.S. Direct Lending and a member of the Management Committee of Ares. Additionally, Mr. Schwartz serves as a member of the Ares Credit Group's U.S. Direct Lending Investment Committee.

Michael L. Smith

 

Co-President of the Company; Partner in and Co-Head of the Ares Credit Group

   
14
 

Since July 2014, Mr. Smith has served as a Co-President of the Company. Mr. Smith previously served as an Executive Vice President of the Company from May 2013 to July 2014. Mr. Smith has served as an officer of Ares Capital Management since 2004. Mr. Smith joined Ares in May 2004 and currently serves as a Partner of the Ares Credit Group. Mr. Smith is a member of the Investment Committees of Ares Capital Management, the Ares Credit Group's U.S. Direct Lending Investment Committee, the Ivy Hill Asset Management Investment Committee, the Ares Commercial Finance Investment Committee and the Management Committee of Ares.

              None of the individuals listed above is primarily responsible for the day-to-day management of the portfolio of any other account, except that Messrs. Affolter, deVeer, Goldstein, Miller, Schnabel, Schwartz and Smith are each Partners of the Ares Credit Group. All such individuals have responsibilities with respect to certain funds and managed accounts, which as of June 30, 2018 had

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approximately $86.9 billion (including the Company) of assets under management, a portion of which is used to calculate Ares' advisory fees related to such funds and managed accounts. See "Risk Factors—Risks Relating to Our Business—There are significant potential conflicts of interest that could impact our investment returns."

              Each of Messrs. Affolter, Arougheti, deVeer, Goldstein, Miller, Schnabel, Schwartz and Smith is responsible for deal origination, execution and portfolio management. In addition to their deal origination, execution and portfolio management responsibilities, (1) Mr. Arougheti also spends a portion of his time on corporate and administrative activities in his capacity as Chief Executive Officer and President of Ares Management, (2) Mr. deVeer also spends a portion of his time on corporate and administrative activities in his capacity as the Company's Chief Executive Officer and as a Partner in and Head of the Ares Credit Group, (3) Messrs. Goldstein and Smith also spend portions of their time on corporate and administrative activities in their capacities as Co-Presidents of the Company and as Partners of the Ares Credit Group and (4) Messrs. Affolter, Miller, Schnabel and Schwartz are each a Partner in the Ares Credit Group. Each of Messrs. Affolter, Arougheti, deVeer, Goldstein, Miller, Schnabel, Schwartz and Smith receives a compensation package that includes some combination of fixed draw and variable incentive compensation based on our performance. None of the portfolio managers receives any direct compensation from us.

              The following table sets forth the dollar range of our equity securities based on the closing price of our common stock on August 6, 2018 and the number of shares beneficially owned by each of the portfolio managers described above as of December 31, 2017 unless otherwise indicated below.

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

Mark Affolter

  None

Michael J Arougheti

  Over $1,000,000

R. Kipp deVeer

  Over $1,000,000

Mitchell Goldstein

  Over $1,000,000

Jim Miller

  $500,000-$1,000,000

Kort Schnabel

  None

David Schwartz

  Over $1,000,000

Michael L. Smith

  Over $1,000,000

(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.

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

Management Services

              Ares Capital Management serves as our investment adviser and is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of our board of directors, our investment adviser manages the day-to-day operations of, and provides investment advisory and management services to, Ares Capital. Under the terms of the investment advisory and management agreement, our investment adviser:

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              Ares Capital Management's services to us under the investment advisory and management agreement are not exclusive, and it is free to furnish similar services to other entities. Similarly, affiliates of our investment adviser may directly or indirectly manage funds or other investment vehicles with investment objectives similar to ours. Accordingly, we may compete with these Ares funds or other investment vehicles managed by our investment adviser and its affiliates for capital and investment opportunities. Ares Capital Management endeavors to allocate investment opportunities in a fair and equitable manner, and in any event consistent with any fiduciary duties owed to Ares Capital. Nevertheless, it is possible that we may not be given the opportunity to participate in certain investments made by investment funds or other investment vehicles managed by Ares Capital Management or its affiliates.

Base Management Fee

              Pursuant to the investment advisory and management agreement and subject to the overall supervision of our board of directors, our investment adviser provides investment advisory and management services to us. For providing these services, our investment adviser receives fees from us consisting of a base management fee, an income based fee and a capital gains incentive fee.

              The base management fee is calculated at an annual rate of 1.5% based on the average value of our total assets (other than cash or cash equivalents but including assets purchased with borrowed funds) at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears. In connection with our board of directors approving the modified asset coverage requirements applicable to senior securities from 200% to 150% effective on June 21, 2019 (unless we receive earlier stockholder approval), the investment advisory and management agreement will be amended prior to June 21, 2019 (or such earlier date) to reduce our annual base management fee from 1.5% to 1.0% on all assets financed using leverage over 1.0x debt to equity.

Income Based Fee

              The income based fee is calculated and payable quarterly in arrears based on our net investment income excluding income based fees and capital gains incentive fees ("pre-incentive fee net investment income") for the quarter. Pre- incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the administration agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the income based fee and capital gains incentive fee accrued under GAAP). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that we have not yet received in cash. Our investment adviser is not under any obligation to reimburse us for any part of the income based fees it received that were based on accrued interest that we never actually received. See "Risk Factors—Risks Relating to Our Business—There are significant potential conflicts of interest that could impact our investment returns" and "Risk Factors—Risks Relating to Our Business—We may be obligated to pay our investment adviser certain fees even if we incur a loss."

              Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses, unrealized capital appreciation, unrealized capital depreciation or income tax expense

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related to realized gains and losses. Because of the structure of the income based fee, it is possible that we may pay such fees in a quarter where we incur a loss. For example, if we receive pre-incentive fee net investment income in excess of the hurdle rate (as defined below) for a quarter, we will pay the applicable income based fee even if we have incurred a loss in that quarter due to realized and/or unrealized capital losses.

              Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets (defined as total assets less indebtedness and before taking into account any income based fees and capital gains incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed "hurdle rate" of 1.75% per quarter. If market credit spreads rise, we may be able to invest in debt instruments that provide for a higher return, which may increase our pre-incentive fee net investment income and make it easier for our investment adviser to surpass the fixed hurdle rate and receive an income based fee based on such net investment income. To the extent we have retained pre-incentive fee net investment income that has been used to calculate the income based fee, it is also included in the amount of our total assets (other than cash and cash equivalents but including assets purchased with borrowed funds) used to calculate the 1.5% base management fee.

              We pay our investment adviser an income based fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:

              The following is a graphical representation of the calculation of the income based fee:

Quarterly Income Based Fee Based on Net Investment Income

Pre-incentive fee net investment income return
(expressed as a percentage of the value of net assets)

GRAPHIC

Percentage of pre-incentive fee net investment income
allocated to income based fee

              These calculations are adjusted for any share issuances or repurchases during the quarter.

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              In connection with the American Capital Acquisition, our investment adviser has agreed to waive, for each of the first ten calendar quarters beginning with the second calendar quarter of 2017 and ending with the third calendar quarter of 2019, the lesser of (1) $10 million of income based fees and (2) the amount of income based fees for such quarter, in each case, to the extent earned and payable by us in such quarter pursuant to and as calculated under the investment advisory and management agreement.

Capital Gains Incentive Fee

              The capital gains incentive fee is determined and payable in arrears as of the end of each calendar year (or, upon termination of our investment advisory and management agreement, as of the termination date) and is calculated at the end of each applicable year by subtracting (1) the sum of our cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) our cumulative aggregate realized capital gains, in each case calculated from October 8, 2004 (the date we completed our IPO). Realized capital gains and losses include gains and losses on investments and foreign currencies, gains and losses on extinguishment of debt and other assets, as well as any income tax and other expenses related to net realized gains and losses. If such amount is positive at the end of such year, then the capital gains incentive fee for such year is equal to 20% of such amount, less the aggregate amount of capital gains incentive fees paid in all prior years. If such amount is negative, then there is no capital gains incentive fee for such year.

              The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (1) the net sales price of each investment in our portfolio when sold and (2) the accreted or amortized cost basis of such investment.

              The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (1) the net sales price of each investment in our portfolio when sold is less than (2) the accreted or amortized cost basis of such investment.

              The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (1) the valuation of each investment in our portfolio as of the applicable capital gains incentive fee calculation date and (2) the accreted or amortized cost basis of such investment.

              Notwithstanding the foregoing, as a result of an amendment to the capital gains incentive fee under the investment advisory and management agreement that was adopted on June 6, 2011, if we are required by GAAP to record an investment at its fair value as of the time of acquisition instead of at the actual amount paid for such investment by us (including, for example, as a result of the application of the acquisition method of accounting), then solely for the purposes of calculating the capital gains incentive fee, the "accreted or amortized cost basis" of an investment shall be the Contractual Cost Basis, which is an amount equal to (1) (A) the actual amount paid by us for such investment plus (B) any amounts recorded in our financial statements as required by GAAP that are attributable to the accretion of such investment plus (C) any other adjustments made to the cost basis included in our financial statements, including PIK interest or additional amounts funded (net of repayments) minus (2) any amounts recorded in our financial statements as required by GAAP that are attributable to the amortization of such investment, whether such calculated Contractual Cost Basis is higher or lower than the fair value of such investment (as determined in accordance with GAAP) at the time of acquisition.

              We defer cash payment of any income based fee and the capital gains incentive fee otherwise earned by our investment adviser if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (1) the aggregate distributions to our stockholders and (2) the change in 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) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. Any deferred income based fees and capital gains incentive fees are carried over for payment in subsequent calculation periods to the extent such payment is payable under our investment advisory and management agreement.

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Examples of Fee Calculation

Example 1—Income Based Fee(1):

Assumptions

    •    Hurdle rate(2) = 1.75%    
    •    Management fee(3) = 0.375%    
    •    Other expenses (legal, accounting, custodian, transfer agent, etc.)(4) = 0.20%    
    •    All assets financed using leverage equal to or under 1.0x debt to equity.    

(1)
The hypothetical amount of pre-incentive fee net investment income shown is based on a percentage of total net assets. In addition, the example assumes that during the most recent four full calendar quarter period ending on or prior to the date the payment set forth in the example is to be made, the sum of (1) our aggregate distributions to our stockholders and (2) our change in 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) is at least 7% of our net assets (defined as total assets less indebtedness) at the beginning of such period (as adjusted for any share issuances or repurchases).

(2)
Represents a quarter of the 7.0% annualized hurdle rate.

(3)
Represents a quarter of the 1.5% annualized management fee.

(4)
Excludes offering expenses.

Alternative 1

Additional Assumptions

    •    Investment income (including interest, dividends, fees, etc.) = 1.25%    
    •    Pre-incentive fee net investment income
            (investment income – (management fee + other expenses)) = 0.675%
   
    Pre-incentive fee net investment income does not exceed the hurdle rate,
therefore there is no income based fee.
   

Alternative 2

Additional Assumptions

    •    Investment income (including interest, dividends, fees, etc.) = 2.70%    
    •    Pre-incentive fee net investment income
            (investment income – (management fee + other expenses)) = 2.125%
   
    Pre-incentive fee net investment income exceeds hurdle rate, therefore there is an income based fee.    
    Income Based Fee   =   100% × "Catch-Up" + the greater of 0% AND (20% × (pre-incentive fee net investment income – 2.1875%))    
        =   (100% × (2.125% – 1.75%)) + 0%    
        =   100% × 0.375%    
        =   0.375%    

Alternative 3

Additional Assumptions

    •    Investment income (including interest, dividends, fees, etc.) = 3.50%    
    •    Pre-incentive fee net investment income
            (investment income – (management fee + other expenses)) = 2.925%
   
    Pre-incentive fee net investment income exceeds hurdle rate, therefore there is an income based fee.    
    Income Based Fee   =   100% × "Catch-Up" + the greater of 0% AND (20% × (pre-incentive fee net investment income – 2.1875%))    
        =   (100% × (2.1875% – 1.75%)) + (20% × (2.925% – 2.1875%))    
        =   0.4375% + (20% × 0.7375%)    
        =   0.4375% + 0.1475%    
        =   0.585%    

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Example 2—Capital Gains Incentive Fee:

Alternative 1:

Assumptions

The capital gains incentive fee, if any, would be:

Alternative 2

Assumptions

The capital gains incentive fee, if any, would be:

              For the three and six months ended June 30, 2018, we incurred $46 million and $91 million in base management fees, respectively, and $30 million and $58 million in income based fees, respectively. The income based fees for the three and six months ended June 30, 2018 were net of the Fee Waiver of $10 million and $20 million, respectively. There was no capital gains incentive fee earned by our investment adviser as calculated under the investment advisory and management agreement for the three and six months ended June 30, 2018. However, in accordance with GAAP, the Company has cumulatively accrued a capital gains incentive fee of $117 million as of June 30, 2018, none of which was due under the investment advisory and management agreement.

              For the year ended December 31, 2017, we incurred $171 million in base management fees, and $134 million in income based fees. The income based fees for the year ended December 31, 2017

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were net of the Fee Waiver of $30 million. There was no capital gains incentive fee earned by our investment adviser as calculated under the investment advisory and management agreement for the year ended December 31, 2017. However, in accordance with GAAP, the Company has cumulatively accrued a capital gains incentive fee of $79 million as of December 31, 2017, all of which was not due under the investment advisory and management agreement.

              For the year ended December 31, 2016, we incurred $137 million in base management fees, and $123 million in income based fees. There was no capital gains incentive fee earned by our investment adviser as calculated under the investment advisory and management agreement for the year ended December 31, 2016. However, in accordance with GAAP, the Company has cumulatively accrued a capital gains incentive fee of $38 million as of December 31, 2016, all of which was not due under the investment advisory and management agreement.

              For the year ended December 31, 2015, we incurred $134 million in base management fees and $121 million in income based fees. There was no capital gains incentive fee earned by our investment adviser as calculated under the investment advisory and management agreement for the year ended December 31, 2015. However, in accordance with GAAP, the Company cumulatively accrued a capital gains incentive fee of $42 million as of December 31, 2015, all of which was not due under the investment advisory and management agreement.

              GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the investment advisory and management agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee actually payable under the investment advisory and management agreement plus the aggregate cumulative unrealized capital appreciation, net of any expenses associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 20% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods. As of June 30, 2018, the Company has paid capital gains incentive fees since inception totaling $57 million. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future.

Payment of Our Expenses

              The services of all investment professionals and staff of our investment adviser, when and to the extent engaged in providing investment advisory and management services to us and routine overhead expenses of such personnel allocable to such services, are provided and paid for by our investment adviser. Under the investment advisory and management agreement, we bear all other costs and expenses of our operations and transactions, including, but not limited to, those relating to: organization; calculation of our net asset value (including, but not limited to, the cost and expenses of any independent valuation firm); expenses incurred by our investment adviser payable to third parties, including agents, consultants or other advisers, in monitoring our financial and legal affairs and in monitoring our investments (including the cost of consultants hired to develop information technology systems designed to monitor our investments) and performing due diligence on our prospective portfolio companies; interest payable on indebtedness, if any, incurred to finance our investments (including payments to third party vendors for financial information services); offerings of our common

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stock and other securities; investment advisory and management fees; administration fees; fees and expenses payable to third parties, including agents, consultants or other advisers, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting with and marketing to financial sponsors, regardless of whether such transactions are ultimately consummated; transfer agent and custodial fees; registration fees; listing fees; taxes; independent directors' fees and expenses; costs of preparing and filing reports or other documents with the SEC; the costs of any reports, proxy statements or other notices to stockholders, including printing costs; to the extent we are covered by any joint insurance policies, our allocable portion of the insurance premiums for such policies; direct costs and expenses of administration, including auditor and legal costs; and all other expenses incurred by us or our administrator in connection with administering our business as described in more detail under "—Administration Agreement" below.

Duration, Termination and Amendment

              At an in-person meeting of our board of directors on March 16, 2011, the form of our current investment advisory and management agreement, including two proposed amendments to our then existing investment advisory and management agreement, was approved by our board of directors with the recommendation that our stockholders vote to approve the proposed amendments. On June 6, 2011, our stockholders approved the proposed amendments, and we entered into a restated investment advisory and management agreement, reflecting such amendments on June 6, 2011. At an in-person meeting of our board of directors on April 25, 2018, our board of directors, including a majority of the directors who are not "interested persons" of the Company as defined in the Investment Company Act, voted to approve the continuation of the investment advisory and management agreement to June 6, 2019. A discussion regarding the basis for our board of directors' approval of the 2011 adoption of the form of our current investment advisory and management agreement is available in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

              Unless terminated earlier, the investment advisory and management agreement will automatically renew for successive annual periods if approved annually by our board of directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not "interested persons" of the Company (as defined in the Investment Company Act). The investment advisory and management agreement will automatically terminate in the event of its assignment. The investment advisory and management agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

              Conflicts of interest may arise if our investment adviser seeks to change the terms of our investment advisory and management agreement, including, for example, the amount of the base management fee, the income based fee, the capital gains incentive fee or other compensation terms. Material amendments to our investment advisory and management agreement must be approved by the affirmative vote of the holders of a majority of our outstanding voting securities and by a majority of our independent directors, and we may from time to time decide it is appropriate to seek the requisite approval to change the terms of the agreement.

              In connection with our board of directors approving the modified asset coverage requirements applicable to senior securities from 200% to 150% effective on June 21, 2019 (unless we receive earlier stockholder approval), the investment advisory and management agreement will be amended prior to June 21, 2019 (or such earlier date) to reduce our annual base management fee from 1.5% to 1.0% on all assets financed using leverage over 1.0x debt to equity.

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Indemnification

              The investment advisory and management agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, our investment adviser, its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other persons or entities affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of our investment adviser's services under the investment advisory and management agreement or otherwise as our investment adviser.

Organization of our Investment Adviser

              Our investment adviser is a Delaware limited liability company that is registered as an investment adviser under the Advisers Act. The principal executive offices of Ares Capital Management are located at 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067.

ADMINISTRATION AGREEMENT

              We are also party to an administration agreement with Ares Operations, an affiliate of our investment adviser and a subsidiary of Ares Management. Our board of directors approved the continuation of our administration agreement on April 25, 2018, which extended the term of the agreement until June 1, 2019. Pursuant to the administration agreement, Ares Operations furnishes us with office equipment and clerical, bookkeeping and record keeping services at our office facilities. Under the administration agreement, Ares Operations also performs, or oversees the performance of, our required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, investor relations and technology, being responsible for the financial records that we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, Ares Operations assists us in determining and publishing our net asset value, assists us in providing managerial assistance to our portfolio companies, oversees the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others. Payments under the administration agreement are equal to an amount based upon our allocable portion of Ares Operations' overhead and other expenses (including travel expenses) incurred by Ares Operations in performing its obligations under the administration agreement, including our allocable portion of the compensation, rent and other expenses of certain of our officers (including our chief compliance officer, chief financial officer, chief accounting officer, general counsel, secretary, treasurer and assistant treasurer) and their respective staffs. The administration agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

              For the three and six months ended June 30, 2018, the Company incurred $4 million and $7 million, respectively, in administrative fees. As of June 30, 2018, $4 million of these fees were unpaid and included in "accounts payable and other liabilities" in the accompanying June 30, 2018 consolidated balance sheet.

              For the year ended December 31, 2017, the Company incurred $12 million in administrative fees. In addition, for the year ended December 31, 2017, the Company incurred an additional $8 million in administrative fees related to the integration of the American Capital Acquisition. These acquisition-related expenses are included in "professional fees and other costs related to the American Capital Acquisition" in the consolidated statement of operations. As of December 31, 2017, $4 million of these fees were unpaid and included in "accounts payable and other liabilities" in our December 31, 2017 consolidated balance sheet.

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              For each of the years ended December 31, 2016 and 2015, the Company incurred $14 million in administrative fees. As of December 31, 2016 and 2015, $4 million and $4 million of these fees were unpaid and included in "accounts payable and other liabilities" in our December 31, 2016 and 2015 consolidated balance sheets, respectively.

Indemnification

              The administration agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, Ares Operations, its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other persons or entities affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of Ares Operations' services under the administration agreement or otherwise as our administrator.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

              We have procedures in place for the review, approval and monitoring of transactions involving us and certain persons related to us. For example, we have a code of conduct that generally prohibits any of our officers or directors from engaging in any transaction where there is a conflict between such individual's personal interest and our interests. Waivers to the code of conduct can generally only be obtained from the Chief Compliance Officer, the co-chairs of the board of directors or the chairperson of the audit committee and are publicly disclosed as required by applicable law and regulations. In addition, the audit committee is required to review and approve all related-party transactions (as defined in Item 404 of Regulation S-K, as promulgated under the Securities Act).

              As a BDC, we are also subject to certain regulatory requirements that restrict our ability to engage in certain related-party transactions. We have separate policies and procedures that have been adopted to ensure that we do not enter into any such prohibited transactions without seeking necessary approvals.

              We are party to an investment advisory and management agreement with Ares Capital Management, a subsidiary of Ares Management, an entity in which certain of our directors and officers and members of the investment committee of our investment adviser may have indirect ownership and pecuniary interests. Certain of our directors and officers and members of the investment committee of our investment adviser also serve as officers or principals of other investment managers affiliated with Ares Management that currently, and may in the future, manage investment funds with investment objectives similar to our investment objective. In addition, certain of our directors and officers and members of the investment committee of our investment adviser serve or may serve as officers, directors or principals of entities that operate in the same or related line of business as we do or of investment funds managed by our affiliates. Accordingly, we may not be made aware of and/or be given the opportunity to participate in certain investments made by investment funds managed by advisers affiliated with Ares Management. However, our investment adviser intends to allocate investment opportunities in a fair and equitable manner in accordance with our investment adviser's investment allocation policy. See "Risk Factors—Risks Relating to Our Business—There are significant potential conflicts of interest that could impact our investment returns."

              In connection with the American Capital Acquisition, our investment adviser has agreed to waive, for each of the first ten calendar quarters beginning with the second quarter of 2017 and ending with the third quarter of 2019, the lesser of (i) $10 million of income based fees and (ii) the amount of income based fees for such quarter, in each case to the extent earned and payable by us in such quarter pursuant to and as calculated under the investment advisory and management agreement.

              Pursuant to the terms of the administration agreement between Ares Operations and us, Ares Operations, a subsidiary of Ares Management, currently provides us with certain administrative and other services necessary to conduct our day-to-day operations, and we reimburse Ares Operations, at cost, for our allocable portion of overhead and other expenses (including travel expenses) incurred by Ares Operations in performing its obligations under our administration agreement, including our allocable portion of the compensation, rent and other expenses of certain of our officers (including our chief compliance officer, chief financial officer, chief accounting officer, general counsel, secretary, treasurer and assistant treasurer) and their respective staffs, but not investment professionals.

              Our portfolio company, IHAM, is party to an administration agreement with Ares Operations, pursuant to which Ares Operations provides IHAM with, among other things, office facilities, equipment, clerical, bookkeeping and record keeping services, services relating to the marketing and sale of interests in vehicles managed by IHAM, services of, and oversight of, custodians, depositories, accountants, attorneys, underwriters and such other persons in any other capacity deemed to be necessary. Under the IHAM administration agreement, IHAM reimburses Ares Operations for all of the actual costs associated with such services, including its allocable portion of the compensation, rent

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and other expenses of its overhead and the cost of Ares Operations' officers and respective staff in performing its obligations under the IHAM administration agreement.

              We are party to office leases pursuant to which we are leasing office facilities from third parties. For certain of these office leases, we have also entered into separate subleases with Ares Management LLC, the sole member of the investment adviser, and IHAM, pursuant to which Ares Management LLC and IHAM sublease office space from us. Effective March 31, 2018, Ares Capital Management LLC and IHAM collectively subleased the full amount of these leases. Prior to March 31, 2018, these parties subleased a portion of these leases. For the three and six months ended June 30, 2018, amounts payable to us under these subleases totaled $3 million and $5 million, respectively. For the year ended December 31, 2017, amounts payable by Ares Management LLC and IHAM to us under these subleases totaled $7 million.

              Prior to April 1, 2018, Ares Management LLC was also a party to separate subleases with us, pursuant to which we subleased certain office leases from Ares Management LLC. For the year ended December 31, 2017, amounts payable to Ares Management LLC under these subleases totaled $1 million. These subleases are no longer in place.

              We have entered into agreements with Ares Management LLC and IHAM, pursuant to which Ares Management LLC and IHAM are entitled to use our proprietary portfolio management software. For the fiscal year ended December 31, 2017, amounts payable by Ares Management LLC and IHAM to us under these agreements totaled $0 million.

              We have also entered into a license agreement with Ares Management LLC pursuant to which Ares Management LLC has agreed to grant us a non-exclusive, royalty-free license to use the name "Ares." Under this agreement, we will have a right to use the Ares name for so long as Ares Capital Management remains our investment adviser. Other than with respect to this limited license, we have no legal right to the "Ares" name.

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CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS

              To our knowledge, as of August 8, 2018, there were no persons that owned 25% or more of our outstanding voting securities and no person would be deemed to control us, as such term is defined in the Investment Company Act.

              The following table sets forth, as of August 8, 2018 (unless otherwise noted), the number of shares of our common stock beneficially owned by each of our current directors and named executive officers, all directors, executive officers and certain other officers as a group and certain beneficial owners, according to information furnished to us by such persons or publicly available filings.

              Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Ownership information for those persons who beneficially own 5% or more of the outstanding shares of our common stock is based upon Schedule 13D, Schedule 13G, Form 13F or other filings by such persons with the SEC and other information obtained from such persons. To our knowledge, as of August 8, 2018, there were no persons that owned 5% or more of the outstanding shares of our common stock. Except as otherwise noted below, each person named in the following table has sole voting and investment power with respect to all shares of our common stock that he or she beneficially owns.

              The address for Messrs. Arougheti, deVeer, Goldstein, Rosen and Smith, Ms. Roll and certain other officers is c/o Ares Capital Corporation, 245 Park Avenue, 44th Floor, New York, New York 10167. The address for each of the other directors, executive officers and certain other officers is c/o Ares Capital Corporation, 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067.

Name of Beneficial Owner
  Amount and
Nature of
Beneficial
Ownership
  Percent of
Class(1)
 

Directors and Named Executive Officers:

             

Interested Directors

             

Michael J Arougheti

    1,030,776     *  

R. Kipp deVeer

    175,000 (2)   *  

Robert L. Rosen

    37,398     *  

Bennett Rosenthal

    255,138 (3)   *  

Independent Directors

             

Steve Bartlett

    9,800 (4)   *  

Ann Torre Bates

    13,275 (5)   *  

Daniel G. Kelly, Jr. 

    18,085     *  

Steven B. McKeever

    13,730     *  

Eric B. Siegel

    40,957 (6)   *  

Named Executive Officers Who Are Not Directors

             

Mitchell Goldstein

    235,536 (7)   *  

Michael L. Smith

    151,012     *  

Penni F. Roll

    73,452 (8)   *  

All Directors, Executive Officers and Certain Other Officers as a Group (16 persons)

    2,140,814 (9)   *  

*
Represents less than 1%.

(1)
Based on 426,298,200 shares of common stock outstanding as of August 8, 2018.

(2)
The shares of our common stock held by Mr. deVeer have been pledged as security in connection with a line of credit with a third party financial institution unaffiliated with us.

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(3)
Consists of 255,138 shares of common stock indirectly beneficially owned by Mr. Rosenthal through BAR Holdings, LLC of which Mr. Rosenthal is the manager.

(4)
The shares of our common stock held by Mr. Bartlett have been pledged as security in connection with a line of credit with a third party financial institution unaffiliated with us.

(5)
Consists of (i) 11,000 shares of common stock owned directly; and (ii) 2,275 shares of common stock indirectly beneficially owned by Ms. Bates through her spouse.

(6)
Consists of (i) 30,630 shares of common stock owned directly; (ii) 8,166 shares of common stock indirectly beneficially owned by Mr. Siegel through his spouse; and (iii) 2,161 shares of common stock indirectly beneficially owned by Mr. Siegel as a custodian for the accounts of his children. Mr. Siegel has shared voting and investment authority with respect to shares held by his spouse.

(7)
139,869 shares of our common stock held by Mr. Goldstein have been pledged as security in connection with margin trading accounts.

(8)
Consists of (i) 11,147 shares of common stock owned directly; and (ii) 62,305 shares of common stock indirectly beneficially owned by Ms. Roll through a trust for the benefit of Ms. Roll, her spouse and her children.

(9)
Includes shares owned by our officers that are not "Named Executive Officers," as defined in Item 402 of Regulation S-K, as promulgated under the Securities Act.

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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.

              Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, we look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available (i.e., substantially all of our investments) are valued at fair value as determined in good faith by our board of directors, based on, among other things, the input of our investment adviser, audit committee and independent third-party valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing 12-month period (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. We follow ASC 820-10, which expands the application of fair value accounting for investments (see Note 8 to the consolidated financial statements for the three and six months ended June 30, 2018 and the year ended December 31, 2017). ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. The valuation process is conducted at the end of each fiscal quarter, and a portion of the Company's investment portfolio at fair value is subject to review by an independent valuation firm each quarter. In addition, our independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, our investment valuation process within the context of performing the integrated audit.

              As part of the valuation process, we may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation.

              Because there is not a readily available market value for most of the investments in our portfolio, we value substantially all of our portfolio investments at fair value as determined in good faith by our board of directors, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which we have previously recorded it.

              In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

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              Our board of directors undertakes a multi-step valuation process each quarter, as described below:

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DIVIDEND REINVESTMENT PLAN

              We have adopted a dividend reinvestment plan that provides for reinvestment of any distributions we declare in cash on behalf of our stockholders, unless a stockholder elects to receive cash as provided below. As a result, if our board of directors authorizes, and we declare, a cash dividend, then our stockholders who have not "opted out" of our dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of our common stock, rather than receiving the cash dividends.

              No action is required on the part of a registered stockholder to have their cash dividend reinvested in shares of our common stock. A registered stockholder may elect to receive an entire cash dividend in cash by notifying Computershare Shareowner Services LLC ("Computershare"), the plan administrator and our transfer agent and registrar, in writing so that such notice is received by the plan administrator no later than the record date fixed by the board of directors for dividends to stockholders. The plan administrator will set up an account for shares acquired through the dividend reinvestment plan for each stockholder who has not elected to receive dividends in cash and hold such shares in non-certificated form. Upon request by a stockholder participating in the dividend reinvestment plan, received in writing no later than 10 days prior to the record date, the plan administrator will, instead of crediting fractional shares to the participant's account, issue a check for any fractional share.

              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.

              We intend to use primarily newly issued shares to implement the dividend reinvestment plan (so long as our shares are trading at or at a premium to net asset value). If our shares are trading at a discount to net asset value and we are otherwise permitted under applicable law to purchase such shares, we intend to purchase shares in the open market in connection with our obligations under our dividend reinvestment plan. However, we reserve the right to issue new shares of our common stock in connection with our obligations under the dividend reinvestment plan even if our shares are trading 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 dividend payable to such stockholder by the market price per share of our common stock at the close of regular trading on The NASDAQ Global Select Market on the dividend payment date. Market price per share on that date shall be the closing price for such shares on The NASDAQ Global Select Market or, if no sale is reported for such day, at the average of their reported bid and asked prices. If shares are purchased in the open market to implement the dividend reinvestment plan, the number of shares to be issued to a stockholder shall be determined by dividing the dollar amount of the cash dividend payable to such stockholder by the weighted average price per share for all shares purchased by the plan administrator in the open market in connection with the dividend. The number of shares of our common stock to be outstanding after giving effect to payment of the dividend cannot be established until the value per share at which additional shares will be issued has been determined and elections of our stockholders have been tabulated.

              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 $0.12 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

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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 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."

              Participants may terminate their accounts under the dividend reinvestment plan by notifying the plan administrator via its website at www.computershare.com/investor, by filling out the transaction request form located at bottom of their statement and sending it to the plan administrator at P.O. Box 30170, College Station, TX 77842-3170 or by calling the plan administrator's hotline at 1-866-365-2497.

              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 via the Internet at www.computershare.com/investor, by mail at P.O. Box 30170, College Station, TX 77842-3170 or by telephone at 1-866-365- 2497.

              Additional information about the dividend reinvestment plan may be obtained by contacting the plan administrator via the Internet at www.computershare.com/investor, by mail at P.O. Box 30170, College Station, TX 77842-3170 or by telephone at 1-866-365- 2497.

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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 applicable to us and to an investment in shares of our preferred stock or our 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 holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, entities that are treated as pass-through entities for U.S. federal income tax purposes (including S corporations), insurance companies, dealers in securities, traders in securities that elect to use a mark-to-market method of accounting for securities holdings, pension plans, banks, trusts and other financial institutions, persons who hold our preferred stock and our common stock as part of a straddle or a hedging or conversion transaction, and U.S. stockholders (as defined below) whose functional currency is not the U.S. dollar. This discussion assumes that investors hold our preferred stock or common stock as capital assets (within the meaning of the Code). This discussion is based upon the Code, its legislative history, existing and 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 Internal Revenue Service (the "IRS") regarding the offerings pursuant to this prospectus or pursuant to the accompanying prospectus supplement unless expressly stated therein. This discussion 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 invested 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 such 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 or debt securities or as units in combination with such 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:

              A "non-U.S. stockholder" is a beneficial owner of shares of our preferred stock or common stock that is neither a U.S. stockholder nor an entity treated as a partnership for U.S. federal income tax purposes.

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              If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds shares of our preferred stock or common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Prospective beneficial owners of shares of our preferred or common stock that are partnerships or partners in such partnerships should consult their own tax advisers with respect to the purchase, ownership and disposition of shares of our preferred stock or common stock.

              Tax matters are very complicated and the tax consequences to investors in our shares will depend on the facts of their particular situation. We encourage investors to consult their own tax advisers regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of U.S. federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty and the effect of any possible changes in the tax laws.

ELECTION TO BE TAXED AS A RIC

              As a BDC, we have elected to be treated as a RIC under the Code. As a RIC, we generally will not pay corporate-level income taxes on our income and net capital gains that we distribute to our stockholders as dividends on a timely basis. We will be subject to U.S. federal corporate-level income tax on any undistributed income and/or 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, generally an amount equal to at least 90% of our "investment company taxable income," as defined by the Code. 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."

TAXATION AS A RIC

              If we:

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 (generally, net long- term capital gain in excess of net short-term capital loss) we distribute (or are deemed to distribute) to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gain 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 the one-year period ending October 31 in that calendar year and (3) any income recognized, but not distributed, in preceding years (to the extent that income tax was not imposed on such amounts) (collectively, the "Excise Tax Requirement"). We have paid in the past, and can be expected to 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:

              We may be required to recognize taxable income in circumstances in which we do not receive cash, such as income from hedging or foreign currency transactions. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments originally issued at a price less than par or, in certain cases, that have increasing interest rates or that are issued with warrants) or have PIK interest, such original issue discount or PIK interest is included in our investment company taxable income before we receive any corresponding cash payments. As such, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement and/or the Excise Tax Requirement, even though we will not have received any corresponding cash amount.

              Furthermore, 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, result in unusable capital losses and future non-cash income.

              In addition, 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 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 when a purchase or sale of stock or securities is deemed to occur or (e) adversely alter the characterization of certain complex financial transactions. We will monitor our transactions and may make certain tax elections in order 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. In that case, our yield on those securities would be decreased. Stockholders will generally

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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 "passive foreign investment company" (a "PFIC"), we may be subject to U.S. federal income tax on a portion of any "excess distribution" 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. Recently, the IRS and U.S. Treasury Department issued proposed Treasury regulations that provide that the income inclusions from a QEF would not be qualifying income for purposes of the 90% Income Test unless we receive a cash distribution from such entity in the same year attributable to the included income. 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 limitations which 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.

              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 Investment Company Act, we generally are 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.

              Some of the income and fees that we recognize, such as management fees, may not satisfy the 90% Income Test. In order 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 be required to recognize such income or fees through one or more entities treated as U.S. corporations for U.S. federal income tax purposes. 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 was too great and we were otherwise unable to mitigate this effect, 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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              If we fail to satisfy the 90% Income Test or the Diversification Tests in any taxable year, we may be eligible for relief provisions 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 Test.

              If we fail to satisfy the Annual Distribution Requirement or otherwise fail to qualify as a RIC in any taxable year, and are not eligible for relief as described above, we will be subject to tax in that year on all of our taxable income, regardless of whether we make any distributions to our stockholders. In that case, all of our income will be subject to corporate-level income tax, reducing the amount available to be distributed to our stockholders. In contrast, assuming we qualify as a RIC, our U.S. federal corporate-level income tax should be substantially reduced or eliminated. 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."

Capital Loss Carryforwards and Unrealized Losses

              As a RIC, we are permitted to carry forward a net capital loss realized in a taxable year beginning on or before January 1, 2011 to offset our capital gain, if any, realized during the eight years following the year of the loss. A capital loss carryforward realized in a taxable year beginning before January 1, 2011 is treated as a short-term capital loss in the year to which it is carried. We are permitted to carry forward a net capital loss realized in taxable years beginning on or after January 1, 2011 to offset capital gain indefinitely. For net capital losses realized in taxable years beginning on or after January 1, 2011, the excess of our net short-term capital loss over our net long-term capital gain is treated as a short- term capital loss arising on the first day of our next taxable year and the excess of our net long-term capital loss over our net short-term capital gain is treated as a long-term capital loss arising on the first day of our next taxable year. If future capital gain is offset by carried-forward capital losses, such future capital gain is not subject to fund-level U.S. federal income tax, regardless of whether distributed to stockholders. A RIC cannot carry back or carry forward any net operating losses.

              It is believed that transactions we have undertaken, including the Allied Acquisition, have resulted in a limitation on our ability to use both our own and Allied Capital's capital loss carryforwards and, potentially, to use unrealized capital losses inherent in the tax basis of our own pre- acquisition assets and Allied Capital's assets we acquired. These limitations, imposed by Section 383 of the Code and based on the principles of Section 382 of the Code, are imposed on an annual basis. Losses in excess of the limitation may be carried forward, subject to the overall eight-year limitation. The Section 382 limitation applied to our and Allied Capital's losses generally will equal the product of the net asset value of each corporation immediately prior to the Allied Acquisition, respectively, and the "long-term tax-exempt rate," published by the IRS, in effect at such time. As of April 2010, the month during which the Allied Acquisition was consummated, the long-term tax-exempt rate was 4.03%. While our ability to utilize losses in the future depends upon a variety of factors that cannot be known in advance, because capital loss carryforwards realized in taxable years beginning before January 1, 2011 generally expire eight taxable years following recognition, substantially all of our and Allied Capital's losses may become permanently unavailable. Future transactions we enter into may further limit our ability to utilize losses.

              As of December 31, 2017, for U.S. federal income tax purposes, we had capital loss carryforwards of approximately $43 million and other losses limited under Sections 382 of the Code of approximately $0.3 billion. These amounts are estimates and will not be finally determined until we file our 2017 income tax return in 2018.

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TAXATION OF U.S. STOCKHOLDERS

              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. The following summary generally describes certain U.S. federal income tax consequences of an investment in shares of our preferred stock and common stock by taxable U.S. stockholders and not by U.S. stockholders that generally are exempt from U.S. federal income taxation. U.S. stockholders should consult their own tax advisors before investing in shares of our preferred stock or common stock.

              Distributions by us generally are taxable to U.S. stockholders as ordinary income or long-term capital gain. Distributions of our investment company taxable income (which is, generally, our ordinary income excluding net capital gain) 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 (which generally is the excess of our net long-term capital gain over our net short-term capital loss) properly reported by us as "capital gain dividends" will be taxable to 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 U.S. stockholders' holding periods for their 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 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. We have made distributions in excess of our earnings and profits and may continue to do so in the future. 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.

              A portion of our ordinary income dividends, but not capital gain dividends, paid to corporate U.S. stockholders may, if certain conditions are met, qualify for the 50% dividends-received deduction to the extent that we have received dividends from certain corporations during the taxable year, but only to the extent such ordinary income dividends are treated as paid out of our earnings and profits. We expect only a small portion of our dividends to qualify for this deduction. A corporate U.S. stockholder may be required to reduce its basis on its preferred stock with respect to certain "extraordinary dividends," as provided under Section 1059 of the Code. Corporate U.S. stockholders should consult their own tax advisors in determining the application of these rules in their particular circumstances.

              In general, "qualified dividend income" realized by non-corporate U.S. stockholders is taxable at the same rate as net capital gain. Generally, qualified dividend income is dividend income attributable to certain U.S. and foreign corporations, as long as certain holding period requirements are met. As long as certain requirements are met, our dividends paid to non-corporate U.S. stockholders attributable to qualified dividend income may be treated by such U.S. stockholders as qualified dividend income, but only to the extent such ordinary income dividends are treated as paid out of our earnings and profits. We expect only a small portion of our dividends to qualify as qualified dividend income.

              Although we currently intend to distribute any of 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 distribution." In that case, among other consequences, we will pay tax on the retained amount, each U.S. stockholder will be required to include such

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stockholder's share of the deemed distribution in income as if it had been actually distributed to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit equal to such stockholder's allocable 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 for such stockholder's preferred stock or common stock.

              Because we expect to pay tax on any retained net capital gain at our regular corporate tax rate, and because that rate currently is in excess of the maximum rate currently payable by individuals on net capital gain, the amount of tax that individual stockholders will be treated as having paid and for which they will receive a credit would exceed the tax they owe on the retained net capital gain. Such excess generally may be claimed as a credit against a U.S. stockholder's other U.S. federal income tax obligations or may be refunded to the extent it exceeds the stockholder's liability for U.S. federal income tax. A U.S. stockholder that is not subject to U.S. federal income tax or otherwise is not required to file a U.S. federal income tax return would be required to file a U.S. federal income tax return on the appropriate form in order to claim a refund for the taxes we paid. In order to utilize the deemed distribution approach, we must provide a written statement to our stockholders reporting the deemed distribution after the close of the relevant taxable year. We cannot treat any of our investment company taxable income as a "deemed distribution."

              For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of 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, the 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 our 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 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 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, even though most of the dividend was paid in shares of our stock, which may result in our U.S. stockholders having to pay tax on such dividends, even if no cash is received, and our non-U.S. stockholders may be subject to withholding tax in respect of amounts distributed in our common stock. In general, any dividend on shares of our preferred stock will be taxable as a dividend, regardless of whether any portion is paid in stock.

              If investors 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 the investors will be subject to tax on the distribution even though it represents a return of their investment. We have built-up or have the potential to build up large amounts of unrealized gain which, when realized and distributed, could have the effect of a taxable return of capital to stockholders.

              Distributions that we make to our U.S. stockholders out of current or accumulated earnings and profits will not be eligible for the 20% pass-through deduction under Section 199A.

              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 such stockholder's adjusted tax basis in the stock sold and the amount of the proceeds received in exchange. Any gain arising from such sale or

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disposition generally will be treated as long-term capital gain or loss if the stockholder has held such stockholder's shares 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 held for 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 (generally, the excess of net long-term capital gain over net short-term capital loss for a taxable year, including long-term capital gain derived from an investment in our shares). 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.

              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 any non-corporate 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 has failed to properly report certain interest and dividend income to the IRS and to respond to notices to that effect. 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.

              An additional 3.8% surtax is imposed on the "net investment income" of certain U.S. holders who are citizens and resident aliens, and on the undistributed "net investment income" of certain estates and trusts. Among other items, "net investment income" includes generally taxable distributions or deemed distributions of stock, such as our preferred stock and our common stock, as well as taxable gain on the disposition of stock, including our preferred stock or common stock.

              Under U.S. Treasury regulations, if a stockholder recognizes a loss with respect to shares of $2 million or more for a non-corporate stockholder or $10 million or more for a corporate stockholder

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in any single taxable year (or a greater loss over a combination of years), the 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, stockholders of a RIC are not excepted. Future guidance may extend the current exception from this reporting requirement to stockholders of most or all RICs. 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. Stockholders should consult their own tax advisors to determine the applicability of these regulations in light of their individual circumstances.

TAXATION OF NON-U.S. STOCKHOLDERS

              Whether an investment in shares of our preferred stock or common stock is appropriate for a non-U.S. stockholder will depend upon that person's particular circumstances. An investment in shares of 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 should consult their own tax advisors before investing in 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 lowered or eliminated by an applicable income tax treaty) to the extent payable from our current and accumulated earnings and profits unless an exception applies.

              If a non-U.S. stockholder receives distributions and such distributions are effectively connected with a U.S. trade or business of the non-U.S. stockholder and, if an income tax treaty applies, attributable to a permanent establishment in the United States of such non-U.S. stockholder, such distributions generally will be subject to U.S. federal income tax at the rates applicable to U.S. persons. In that case, we will not be required to withhold U.S. federal income tax if the non-U.S. stockholder complies with applicable certification and disclosure requirements. Special certification requirements apply to a non-U.S. stockholder that is a foreign trust and such entities are urged to consult their own tax advisors.

              Actual or deemed distributions of our net capital gain (which generally is the excess of our net long-term capital gain over our net short-term capital loss) 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 (a) the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the non-U.S. stockholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the non-U.S. stockholder in the United States (as discussed above) or (b) 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. For a corporate non-U.S. stockholder, distributions (both actual and deemed), and gains recognized upon the sale of our preferred stock or common stock that are effectively connected with a U.S. trade or business may, under certain circumstances, be subject to an additional "branch profits tax" (unless lowered or eliminated by an applicable income tax treaty). Non-U.S. stockholders of our preferred stock or common stock are encouraged to consult their own advisors as to the applicability of an income tax treaty in their individual circumstances.

              In general, no U.S. source 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." Under this exemption, interest-related dividends and short-term

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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, and that satisfy certain other requirements. No assurance can be given that we will distribute any interest-related or short-term capital gain dividends.

              If we distribute our net capital gain in the form of deemed rather than actual distributions (which we may do in the future), a non-U.S. stockholder will be entitled to a U.S. federal income tax credit or tax refund equal to the non-U.S. stockholder's allocable share of the tax we pay on the capital gain deemed to have been distributed. In order 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 portion of such dividend is paid in cash (which portion could be as low as 20%) 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 though most of the dividend was 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. In general, any dividend on shares of our preferred stock will be taxable as a dividend, regardless of whether any portion is paid in stock.

              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 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.

              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 and common stock and, after December 31, 2018, 30% of the gross proceeds from a sale of our preferred stock and 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. 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 or proceeds 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 should consult their own tax advisers regarding the particular consequences to them of this legislation and guidance. We will not pay any additional amounts in respect to any amounts withheld.

FAILURE TO QUALIFY AS A RIC

              If we were unable to qualify for treatment as a RIC, and relief were not available as discussed above, we would be subject to tax on all of our taxable income at regular corporate rates. We would

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not be able to deduct distributions to stockholders and would not be required to make distributions for 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 tax basis, and any remaining distributions would be treated as a capital gain. If we were to fail to meet the RIC requirements for more than two consecutive years and then sought to requalify as a RIC, we would be subject to tax on any unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized within the subsequent five years, unless we make a special election to pay corporate-level tax on such built-in gains at the time of our requalification as a RIC.

POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX CONSIDERATIONS

              Prospective investors should recognize that the present U.S. federal income tax treatment of an investment in shares of our preferred stock or common stock may be modified by legislative, judicial or administrative action at any time, and that any such action may affect investments and commitments previously made. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in U.S. federal tax laws and interpretations thereof could adversely affect the tax consequences of an investment in us.

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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.

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DESCRIPTION OF OUR CAPITAL STOCK

              The following description is based on relevant portions of the Maryland General Corporation Law and on our charter and bylaws. This summary is not necessarily complete, and we refer you to the Maryland General Corporation Law and our charter and bylaws for a more detailed description of the provisions summarized below.

STOCK

              Our authorized stock consists of 600,000,000 shares of stock, par value $0.001 per share, all of which are currently designated as common stock. Our common stock trades on The NASDAQ Global Select Market under the symbol "ARCC." On August 6, 2018, the last reported sales price of our common stock on The NASDAQ Global Select Market was $17.38 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 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 Maryland General Corporation Law, our charter provides that a majority of the entire board of directors, 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 we have authority to issue.

Common Stock

              All shares of our 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 our common stock if, as and when authorized by our board of directors and declared by us out of funds legally available therefor. Shares of our common stock have no preemptive, exchange, conversion or redemption rights and are freely transferable, except 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 our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay 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.

              Each share of our 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 our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will be unable to elect any director.

              The following are our outstanding classes of capital stock as of August 8, 2018:

(1)
Title of Class
  (2)
Amount Authorized
  (3)
Amount Held by
Registrant
or for its
Account
  (4)
Amount Outstanding
Exclusive of Amount
Shown Under
Column (3)
 

Common Stock

    600,000,000       426,298,200  

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Preferred Stock

              Our charter authorizes our board of directors 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 of directors 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 of directors 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 Investment Company Act. The Investment Company 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 Investment Company 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. Our 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 Investment Company Act.

              Our charter authorizes us to obligate ourselves, and our bylaws obligate us, to the maximum extent permitted by Maryland law and subject to the requirements of the Investment Company Act, to indemnify 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, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in that capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit 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 Investment Company 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.

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              In addition to the indemnification provided for in our bylaws, we have entered into indemnification agreements with each of our current directors and certain of our officers and with members of our investment adviser's investment committee and we intend to enter into indemnification agreements with each of our future directors, members of our investment committee and certain of our officers. The indemnification agreements attempt to provide these directors, officers and other persons the maximum indemnification permitted under Maryland law and the Investment Company 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 adviser'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 adviser's investment committee.

              Maryland law requires a corporation (unless its charter provides otherwise, which our 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 OUR CHARTER AND BYLAWS

              The Maryland General Corporation Law and our charter and bylaws contain provisions that could make it more difficult for a potential acquiror to acquire us 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 our board of directors. 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

              Our board of directors 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 us 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.

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Election of Directors

              Our charter and bylaws provide that the affirmative vote of the holders of a majority of the outstanding shares of stock entitled to vote in the election of directors will be required to elect a director. Pursuant to the charter, our board of directors may amend the bylaws to alter the vote required to elect directors.

Number of Directors; Vacancies; Removal

              Our charter provides that the number of directors will be set only by the board of directors in accordance with our bylaws. Our bylaws provide that a majority of our entire board of directors may at any time increase or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than four or more than eleven. Our charter sets forth our election, subject to certain requirements, to be subject to the provision of Subtitle 8 of Title 3 of the Maryland General Corporation Law regarding the filling of vacancies on the board of directors. Accordingly, except as may be provided by the board of directors in setting the terms of any class or series of preferred stock, any and all vacancies on the board of directors 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 directorship in which the vacancy occurred and until a successor is elected and qualifies, subject to any applicable requirements of the Investment Company Act.

              Our charter provides that a director may be removed only for cause, as defined in our 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 Maryland General Corporation Law and our charter, 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 our 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

              Our bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for election to the board of directors 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 of directors or (c) by a stockholder who is a stockholder of record both at the time of giving the advance notice required by the bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who 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 of directors at a special meeting may be made only (a) by or at the direction of the board of directors 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 both at the time of giving the advance notice required by the bylaws and at the time of the meeting, 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 us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed

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necessary or desirable by our board of directors, 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 our bylaws do not give our board of directors 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.

Calling of Special Meetings of Stockholders

              Our bylaws provide that special meetings of stockholders may be called by our board of directors and certain of our officers. Additionally, our 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 at such meeting.

Approval of Extraordinary Corporate Action; Amendment of 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. See "Risk Factors—Risks Relating to Offerings Pursuant to this Prospectus—Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse effect on the price of our common stock." 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. Our 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. Our 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 requires the approval of the stockholders entitled to cast at least 80 percent 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 our board of directors), such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a matter. The "continuing directors" are defined in our 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 of directors.

              Our charter and bylaws provide that the board of directors will have the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.

No Appraisal Rights

              Except with respect to appraisal rights arising in connection with the Control Share Acquisition Act discussed below, as permitted by the Maryland General Corporation Law, our charter provides that stockholders will not be entitled to exercise appraisal rights unless a majority of our board of directors 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.

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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 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 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:

              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 our bylaws, compliance with the Investment Company 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.

              Our 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 the Company will have the same voting rights as all of the other shares of the Company's common stock. Such provision could be amended or eliminated at any time in the future. However, we will amend our bylaws to be subject to the Control Share Acquisition Act only if the board of directors determines that it would be in our best interests and we determine (after consultation with the SEC staff) that our being subject to the Control Share Acquisition Act does not conflict with the Investment Company Act.

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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:

              A person is not an interested stockholder under this statute if the board of directors approved in advance the transaction by which such person otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors 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 directors of the corporation and approved by the affirmative vote of at least:

              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 of directors before the time that the interested stockholder becomes an interested stockholder. Our board of directors 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 of directors, 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 of directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Conflict with the Investment Company Act

              Our bylaws provide that, if and to the extent that any provision of the Maryland General Corporation Law, including the Control Share Acquisition Act (if we amend our bylaws to be subject to such act) and the Business Combination Act, or any provision of our charter or bylaws conflicts with any provision of the Investment Company Act, the applicable provision of the Investment Company Act will control.

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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 of directors 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 Investment Company Act, Maryland law and any other limitations imposed by law.

              The Investment Company 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 of directors will determine and the articles supplementary and the prospectus supplement relating to such class or series will describe:

              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 of directors, 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.

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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.

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

              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.

              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:

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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 Investment Company 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 of directors approves such issuance on the basis that the issuance is in the best interests of Ares 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 Investment Company 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.

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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 both 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 U.S. Bank National Association, a financial institution acting as trustee on your behalf, and is subject to and governed by the Trust Indenture Act of 1939, as amended. 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." Second, the trustee performs certain administrative duties for us.

              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" 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:

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              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 Investment Company Act, is at least equal to 200% immediately after each such issuance. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. 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. Specifically, prior to June 21, 2019 (or such earlier date), we may be precluded from declaring dividends or repurchasing shares of our common stock unless our asset coverage is at least 200% (and at least 150% on and after June 21, 2019 (or on or after such earlier date)). 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."

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

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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 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 depositary, 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 depositary and its participants.

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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):

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              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 Trust Indenture Act of 1939). 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:

              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.

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

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              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:

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:

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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:

              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:

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              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."

              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:

              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 Investment Company 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.

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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 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

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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.

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:

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              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.

THE TRUSTEE UNDER THE INDENTURE

              U.S. Bank National Association will serve as the trustee under the indenture.

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. 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

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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.

              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 both 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 of third parties, such as U.S. Treasury securities. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security.

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

              We will not offer any units under this prospectus or an accompanying prospectus supplement without first filing a new post-effective amendment to the registration statement.

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SALES OF COMMON STOCK BELOW NET ASSET VALUE

              Pursuant to approval granted at a special meeting of stockholders held on May 14, 2018, we currently are permitted to sell or otherwise issue shares of our common stock at a price below net asset value, subject to certain limitations and determinations that must be made by our board of directors. Such stockholder approval expires on May 14, 2019.

              In order to sell shares of common stock pursuant to this authorization, no additional authorization from our stockholders has to be solicited, but a majority of our directors who have no financial interest in the sale and a majority of our independent directors must (a) find that the sale is in our best interests and in the best interests of our stockholders and (b) in consultation with any underwriter or underwriters of the offering, make a good faith determination as of a time either immediately prior to the first solicitation by us or on our behalf of firm commitments to purchase such shares of common stock, or immediately prior to the issuance of such common stock, that the price at which such shares of common stock are to be sold is not less than a price that closely approximates the market value of those shares of common stock, less any distributing commission or discount.

              In making a determination that an offering of common stock below its net asset value per share is in our and our stockholders' best interests, our board of directors will consider a variety of factors including:

              Our board of directors will also consider the fact that sales of shares of common stock at a discount will benefit our investment adviser as our investment adviser will earn additional investment management fees on the proceeds of such offerings, as it would from the offering of any other of our securities or from the offering of common stock at premium to net asset value per share.

              We will not sell shares of our common stock pursuant to stockholder approval (or any rights, warrants or units 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 if the cumulative dilution to our net asset value per share from offerings under the registration statement, as amended by such post-effective amendment, exceeds 15%. This would be measured separately for each offering pursuant to the registration statement, as amended by this post-effective amendment, by calculating the percentage dilution or accretion to aggregate net asset value from that

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offering and then summing the percentage from each offering. For example, if our most recently determined net asset value per share at the time of the first offering is $15.00 and we have 30 million shares of common stock outstanding, the sale of 6 million shares of common stock at net proceeds to us of $7.50 per share (a 50% discount) would produce dilution of 8.33%. If we subsequently determined that our net asset value per share increased to $15.75 on the then 36 million shares of common stock outstanding and then made an additional offering, we could, for example, sell approximately an additional 7.2 million shares of common stock at net proceeds to us of $9.45 per share, which would produce dilution of 6.67%, before we would reach the aggregate 15% limit.

              Sales by us of our common stock at a discount from net asset value per share pose potential risks for our existing stockholders whether or not they participate in the offering, as well as for new investors who participate in the offering. Any sale of common stock at a price below net asset value per share would result in an immediate dilution to existing common stockholders who do not participate in such sale on at least a pro rata basis. See "Risk Factors—Risks Relating to Offerings Pursuant to this Prospectus—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."

              The following three headings and accompanying tables explain and provide hypothetical examples on the impact of an offering of our common stock at a price less than net asset value per share on three different types of investors:

Impact on Existing Stockholders Who Do Not Participate in the Offering

              Our existing stockholders who do not participate in an offering below net asset value per share or who do not buy additional shares in the secondary market at the same or lower price as we obtain in the offering (after expenses and commissions) face the greatest potential risks. These stockholders will experience an immediate dilution in the net asset value of the shares of common stock they hold and their net asset value per share. These stockholders will also experience a disproportionately greater decrease in their participation in our earnings and assets and their voting power than the increase we will experience in our assets, potential earning power and voting interests due to such offering. These stockholders may also experience a decline in the market price of their shares, which often reflects to some degree announced or potential increases and decreases in net asset value per share. This decrease could be more pronounced as the size of the offering and level of discounts increases. Further, if current stockholders do not purchase any shares to maintain their percentage interest, regardless of whether such offering is above or below the then current net asset value, their voting power will be diluted.

              The following chart illustrates the level of net asset value dilution that would be experienced by a nonparticipating stockholder in three different hypothetical offerings of different sizes and levels of discount from net asset value per share. It is not possible to predict the level of market price decline that may occur.

              The examples assume that the issuer has 30 million shares outstanding, $600 million in total assets and $150 million in total liabilities. The current net asset value and net asset value per share are thus $450 million and $15.00. The chart illustrates the dilutive effect on Stockholder A of (a) an offering of 1.5 million shares of common stock (5% of the outstanding shares) at $14.25 per share after offering expenses and commissions (a 5% discount from net asset value), (b) an offering of 3 million

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shares of common stock (10% of the outstanding shares) at $13.50 per share after offering expenses and commissions (a 10% discount from net asset value), (c) an offering of 6 million shares of common stock (20% of the outstanding shares) at $12.00 per share after offering expenses and commissions (a 20% discount from net asset value) and (d) an offering of 7.5 million shares of common stock (25% of the outstanding shares) at $11.25 per share after offering expenses and commissions (a 25% discount from net asset value). The prospectus supplement pursuant to which any discounted offering is made will include a chart based on the actual number of shares of common stock in such offering and the actual discount to the most recently determined net asset value. It is not possible to predict the level of market price decline that may occur.

 
   
  Example 1   Example 2   Example 3   Example 4  
 
   
  5% Offering at
5% Discount
  10% Offering at
10% Discount
  20% Offering at
20% Discount
  25% Offering at
25% Discount
 
 
  Prior to Sale
Below NAV
  Following
Sale
  %
Change
  Following
Sale
  %
Change
  Following
Sale
  %
Change
  Following
Sale
  %
Change
 

Offering Price

                                                       

Price per Share to Public

        $ 15.00       $ 14.21       $ 12.63       $ 11.84      

Net Proceeds per Share to Issuer

        $ 14.25       $ 13.50       $ 12.00       $ 11.25      

Decrease to Net Asset Value

                                                       

Total Shares Outstanding

    30,000,000     31,500,000     5.00 %   33,000,000     10.00 %   36,000,000     20.00 %   37,500,000     25.00 %

Net Asset Value per Share

  $ 15.00   $ 14.96     (0.24 )% $ 14.86     (0.91 )% $ 14.50     (3.33 )% $ 14.25     (5.00 )%

Dilution to Nonparticipating Stockholder

                                                       

Shares Held by Stockholder A

    30,000     30,000     0.00 %   30,000     0.00 %   30,000     0.00 %   30,000     0.00 %

Percentage Held by Stockholder A

    0.10 %   0.10 %   (4.76 )%   0.09 %   (9.09 )%   0.08 %   (16.67 )%   0.08 %   (20.00 )%

Total Net Asset Value Held by Stockholder A

  $ 450,000   $ 448,929     (0.24 )% $ 445,909     (0.91 )% $ 435,000     (3.33 )% $ 427,500     (5.00 )%

Total Investment by Stockholder A (Assumed to Be $15.00 per Share)

  $ 450,000   $ 450,000         $ 450,000         $ 450,000         $ 450,000        

Total Dilution to Stockholder A (Total Net Asset Value Less Total Investment)

        $ (1,071 )       $ (4,091 )       $ (15,000 )       $ (22,500 )      

Investment per Share Held by Stockholder A (Assumed to be $15.00 per Share on Shares Held Prior to Sale)

  $ 15.00   $ 15.00     0.00 % $ 15.00     0.00 % $ 15.00     0.00 % $ 15.00     0.00 %

Net Asset Value per Share Held by Stockholder A              

        $ 14.96         $ 14.86         $ 14.50         $ 14.50        

Dilution per Share Held by Stockholder A (Net Asset Value per Share Less Investment per Share)               

        $ (0.04 )       $ (0.14 )       $ (0.50 )       $ (0.75 )      

Percentage Dilution to Stockholder A (Dilution per Share Divided by Investment per Share)

                (0.24 )%         (0.91 )%         (3.33 )%         (5.00 )%

Impact on Existing Stockholders Who Do Participate in the Offering

              Our existing stockholders who participate in an offering below net asset value per share or who buy additional shares in the secondary market at the same or lower price as we obtain in the offering (after expenses and commissions) will experience the same types of net asset value dilution as the nonparticipating stockholders, although at a lower level, to the extent they purchase less than the same percentage of the discounted offering as their interest in shares of our common stock immediately prior to the offering. The level of net asset value dilution will decrease as the number of shares such stockholders purchase increases. Existing stockholders who buy more than such percentage will experience net asset value dilution but will, in contrast to existing stockholders who purchase less than their proportionate share of the offering, experience accretion in net asset value per share over their investment per share and will also experience a disproportionately greater increase in their participation in our earnings and assets and their voting power than our increase in assets, potential earning power

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and voting interests due to such offering. The level of accretion will increase as the excess number of shares such stockholder purchases increases. Even a stockholder who over-participates will, however, be subject to the risk that we may make additional discounted offerings in which such stockholder does not participate, in which case such a stockholder will experience net asset value dilution as described above in such subsequent offerings. These stockholders may also experience a decline in the market price of their shares, which often reflects to some degree announced or potential increases and decreases in net asset value per share. This decrease could be more pronounced as the size of the offering and level of discounts increases.

              The following chart illustrates the level of dilution and accretion in the hypothetical 20% discount offering from the prior chart (Example 3) for a stockholder that acquires shares equal to (a) 50% of its proportionate share of the offering (i.e., 3,000 shares, which is 0.05% of an offering of 6 million shares) rather than its 0.10% proportionate share and (b) 150% of such percentage (i.e., 9,000 shares, which is 0.15% of an offering of 6 million shares rather than its 0.10% proportionate share). The prospectus supplement pursuant to which any discounted offering is made will include a chart for these examples based on the actual number of shares in such offering and the actual discount from the most recently determined net asset value per share. It is not possible to predict the level of market price decline that may occur.

 
   
  50% Participation   150% Participation  
 
  Prior to Sale
Below NAV
  Following
Sale
  %
Change
  Following
Sale
  %
Change
 

Offering Price

                               

Price per Share to Public

        $ 12.63         $ 12.63        

Net Proceeds per Share to Issuer

        $ 12.00         $ 12.00        

Decrease/Increase to Net Asset Value

                               

Total Shares Outstanding

    30,000,000     36,000,000     20 %   36,000,000     20 %

Net Asset Value per Share

  $ 15.00   $ 14.50     (3.33 )% $ 14.50     (3.33 )%

Dilution/Accretion to Participating Stockholder Shares Held by Stockholder A

    30,000     33,000     10 %   39,000     30 %

Percentage Held by Stockholder A

    0.10 %   0.09 %   (8.33 )%   0.11 %   8.33 %

Total Net Asset Value Held by Stockholder A

  $ 450,000   $ 478,500     6.33 % $ 565,500     25.67 %

Total Investment by Stockholder A (Assumed to be $15.00 per Share on Shares Held Prior to Sale)

        $ 487,895         $ 563,684        

Total Dilution/Accretion to Stockholder A (Total Net Asset Value Less Total Investment)

        $ (9,395 )       $ 1,816        

Investment per Share Held by Stockholder A (Assumed to Be $15.00 on Shares Held Prior to Sale)

  $ 15.00   $ 14.78     (1.44 )% $ 14.45     (3.64 )%

Net Asset Value per Share Held by Stockholder A

        $ 14.50         $ 14.50        

Dilution/Accretion per Share Held by Stockholder A (Net Asset Value per Share Less Investment per Share)

        $ (0.28 )       $ 0.05     0.40 %

Percentage Dilution/Accretion to Stockholder A (Dilution per Share Divided by Investment per Share)

                (1.96 )%         0.32 %

Impact on New Investors

              Investors who are not currently stockholders and who participate in an offering of shares of our common stock below net asset value, but whose investment per share is greater than the resulting net asset value per share due to selling compensation and expenses paid by us, will experience an immediate decrease, although small, in the net asset value of their shares and their net asset value per share compared to the price they pay for their shares. Investors who are not currently stockholders and who participate in an offering of shares of our common stock below net asset value per share and whose investment per share is also less than the resulting net asset value per share due to selling compensation and expenses paid by us being significantly less than the discount per share, will experience an immediate increase in the net asset value of their shares and their net asset value per share compared to the price they pay for their shares. These investors will experience a

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disproportionately greater participation in our earnings and assets and their voting power than our increase in assets, potential earning power and voting interests due to such offering. These investors will, however, be subject to the risk that we may make additional discounted offerings in which such new stockholder does not participate, in which case such new stockholder will experience dilution as described above in such subsequent offerings. These investors may also experience a decline in the market price of their shares, which often reflects to some degree announced or potential increases and decreases in net asset value per share. This decrease could be more pronounced as the size of the offering and level of discounts increases.

              The following chart illustrates the level of dilution or accretion for new investors that would be experienced by a new investor in the same hypothetical 5%, 10%, 20% and 25% discounted offerings as described in the first chart above. The illustration is for a new investor who purchases the same percentage (0.10%) of the shares in the offering as Stockholder A in the prior examples held immediately prior to the offering. The prospectus supplement pursuant to which any discounted offering is made will include a chart for these examples based on the actual number of shares in such offering and the actual discount from the most recently determined net asset value per share. It is not possible to predict the level of market price decline that may occur.

 
   
  Example 1   Example 2   Example 3   Example 4  
 
   
  5% Offering at
5% Discount
  10% Offering at
10% Discount
  20% Offering at
20% Discount
  25% Offering at
25% Discount
 
 
  Prior to Sale
Below NAV
  Following
Sale
  %
Change
  Following
Sale
  %
Change
  Following
Sale
  %
Change
  Following
Sale
  %
Change
 

Offering Price

                                                       

Price per Share to Public

        $ 15.00         $ 14.21         $ 12.63         $ 11.84        

Net Proceeds per Share to Issuer

        $ 14.25         $ 13.50         $ 12.00         $ 11.25        

Decrease/Increase to Net Asset Value

                                                       

Total Shares Outstanding

    30,000,000     31,500,000     5 %   33,000,000     10 %   36,000,000     20 %   37,500,000     25.00 %

Net Asset Value per Share

  $ 15.00   $ 14.96     (0.24 )% $ 14.86     (0.91 )% $ 14.50     (3.33 )% $ 14.25     (5.00 )%

Dilution/Accretion to New Investor A

                                                       

Shares Held by Investor A

    0     1,500           3,000           6,000           7,500        

Percentage Held by Investor A

    0.00 %   0.00 %         0.01 %         0.02 %         0.02 %      

Total Net Asset Value Held by Investor A

  $ 0   $ 22,446         $ 44,591         $ 87,000         $ 106,875        

Total Investment by Investor A (At Price to Public)

        $ 22,500         $ 42,632         $ 75,789         $ 88,816        

Total Dilution/Accretion to Investor A (Total Net Asset Value Less Total Investment)

        $ (54 )       $ 1,959         $ 11,211         $ 18,059        

Investment per Share Held by Investor A

  $ 0   $ 15.00         $ 14.21         $ 12.63         $ 11.84        

Net Asset Value per Share Held by Investor A

        $ 14.96         $ 14.86         $ 14.50         $ 14.25        

Dilution/Accretion per Share Held by Investor A (Net Asset Value per Share Less Investment per Share)

        $ (0.04 )       $ 0.65         $ 1.87         $ 2.41        

Percentage Dilution/Accretion to Investor A (Dilution per Share Divided by Investment per Share)

                (0.24 )%         4.60 %         14.79 %         20.33 %

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ISSUANCE OF WARRANTS OR SECURITIES TO SUBSCRIBE FOR
OR CONVERTIBLE INTO SHARES OF OUR COMMON STOCK

              At our 2008 annual stockholders meeting, our stockholders approved our ability to sell or otherwise issue warrants or securities to subscribe for or convertible into shares of our common stock, not exceeding 25% of our then outstanding common stock, at an exercise or conversion price that, at the date of issuance, will not be less than the greater of the market value per share of our common stock and the net asset value per share of our common stock. The authorization granted to sell or otherwise issue warrants or securities to subscribe for or convertible into shares of our common stock has no expiration. Any exercise of warrants or securities to subscribe for or convertible into shares of our common stock at an exercise or conversion price that is below net asset value at the time of such exercise or conversion would result in an immediate dilution to existing common stockholders. This dilution would include reduction in net asset value 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 offering.

              As a result of obtaining this authorization, in order to sell or otherwise issue such securities, (a) the exercise, conversion or subscription rights in such securities must expire by their terms within 10 years, (b) with respect to any warrants, options or rights to subscribe or convert to our common stock that are issued along with other securities, such warrants, options or rights must not be separately transferable, (c) the exercise or conversion price of such securities must not be less than the greater of the market value per share of our common stock and the net asset value per share of our common stock at the date of issuance of such securities, (d) the issuance of such securities must be approved by a majority of the board of directors who have no financial interest in the transaction and a majority of the independent directors on the basis that such issuance is in the best interests of the Company and its stockholders and (e) the number of shares of our common stock that would result from the exercise or conversion of such securities and all other securities convertible, exercisable or exchangeable into shares of our common stock outstanding at the time of issuance of such securities must not exceed 25% of our outstanding common stock at such time.

              We could also sell shares of common stock below net asset value per share in certain other circumstances, including through subscription rights issued in rights offerings. See "Description of Our Subscription Rights" and "Risk Factors—Risks Relating to Offerings Pursuant to this Prospectus—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."

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REGULATION

              We have elected to be regulated as a BDC under the Investment Company Act and have elected to be treated as a RIC under the Code. As with other companies regulated by the Investment Company Act, a BDC must adhere to certain substantive regulatory requirements. The Investment Company Act contains prohibitions and restrictions relating to certain transactions between BDCs and certain affiliates (including any investment advisers or sub-advisers), principal underwriters and certain affiliates of those affiliates or underwriters. Among other things, we generally cannot co-invest in any portfolio company in which a fund managed by Ares or any of its downstream affiliates (other than us and our downstream affiliates) is also co-investing. On January 18, 2017, we received an order from the SEC that permits us and other business development companies and registered closed-end management investment companies managed by Ares to co-invest in portfolio companies with each other and with affiliated investment funds. Co-investments made under the Co-investment Exemptive Order are subject to compliance with certain conditions and other requirements contained in the Co-investment Exemptive Order, which could limit our ability to participate in a co-investment transaction. We may also otherwise co-invest with funds managed by Ares or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our allocation procedures.

              The Investment Company Act contains certain restrictions on certain types of investments we may make. Specifically, we may only invest up to 30% of our portfolio in entities that are not considered "eligible portfolio companies" (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.

              The Investment Company Act also requires that a majority of our directors be persons other than "interested persons," as that term is defined in Section 2(a)(19) of the Investment Company Act, referred to herein as "independent directors." In addition, the Investment Company Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless that change is approved by holders of at least a majority of our outstanding voting securities. Under the Investment Company Act, the vote of holders of at least a "majority of outstanding voting securities" means the vote of the holders of the lesser of: (a) 67% or more of the outstanding shares of our common stock present at a meeting or represented by proxy if holders of more than 50% of the shares of our common stock are present or represented by proxy or (b) more than 50% of the outstanding shares of our common stock.

              We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies. We may enter into hedging transactions to manage the risks associated with interest rate and currency fluctuations. We may purchase or otherwise receive warrants or options to purchase the common stock of our portfolio companies in connection with acquisition financings or other investments. In connection with such an acquisition, we may acquire rights to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances. We also do not intend to acquire securities issued by any investment company that exceed the limits imposed by the Investment Company Act. Under these limits, we generally cannot acquire more than 3% of the voting stock of any investment company (as defined in the Investment Company Act), invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. With regard to that portion of our portfolio invested in securities issued by investment companies, it should be noted that such investments might subject our stockholders to additional expenses.

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QUALIFYING ASSETS

              A BDC must have been organized and have its principal place of business in the United States and must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) below. Thus, under the Investment Company Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the Investment Company Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company's total assets. The principal categories of qualifying assets relevant to our business are the following:

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MANAGERIAL ASSISTANCE TO PORTFOLIO COMPANIES

              BDCs generally must offer to make available to the issuer of portfolio securities significant managerial assistance, by either offering, and providing if accepted, significant guidance and counsel concerning the management operations or business objectives of the portfolio company or by exercising a controlling influence over the management or policies of a portfolio company, except in circumstances where either (i) the BDC does not treat such issuer of securities as an eligible portfolio company, or (ii) the BDC purchases such securities in conjunction with one or more other persons acting together and one of the other persons in the group makes available such managerial assistance.

TEMPORARY INVESTMENTS

              Pending investment in other types of "qualifying assets," as described above, our investments may consist of cash, cash items, U.S. Government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as "temporary investments," so that 70% of our assets are qualifying assets. Typically, we will invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. Government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price that is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase agreements from a single counterparty, we may not meet the Diversification Tests in order to qualify as a RIC. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our investment adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

INDEBTEDNESS AND SENIOR SECURITIES

              We are currently permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, calculated pursuant to the Investment Company Act, is at least equal to 200% immediately after each such issuance. Effective on June 21, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced to 150%. In addition, while certain types of indebtedness and senior securities remain outstanding, we may be required to make provisions to prohibit distributions 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. Specifically, prior to June 21, 2019 (or such earlier date), we may be precluded from declaring dividends or repurchasing shares of our common stock unless our asset coverage is at least 200% (and at least 150% on and after June 21, 2019 (or on or after such earlier date)). 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

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Business—Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital."

CODE OF ETHICS

              We and Ares Capital Management have each adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to each code may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with the code's requirements. Our code of ethics is filed as an exhibit to our registration statement of which this prospectus is a part. For information on how to obtain a copy of the code of ethics, see "Available Information."

PROXY VOTING POLICIES AND PROCEDURES

              SEC-registered advisers that have the authority to vote (client) proxies (which authority may be implied from a general grant of investment discretion) are required to adopt policies and procedures reasonably designed to ensure that the adviser votes proxies in the best interests of its clients. Registered advisers also must maintain certain records on proxy voting. In most cases, we invest in securities that do not generally entitle us to voting rights in our portfolio companies. When we do have voting rights, we delegate the exercise of such rights to Ares Capital Management. Ares Capital Management's proxy voting policies and procedures are summarized below:

              In determining how to vote, officers of our investment adviser consult with each other and other investment professionals of Ares, taking into account our and our investors' interests as well as any potential conflicts of interest. Our investment adviser consults with legal counsel to identify potential conflicts of interest. Where a potential conflict of interest exists, our investment adviser may, if it so elects, resolve it by following the recommendation of a disinterested third party, by seeking the direction of our independent directors or, in extreme cases, by abstaining from voting. While our investment adviser may retain an outside service to provide voting recommendations and to assist in analyzing votes, our investment adviser will not delegate its voting authority to any third party.

              An officer of Ares Capital Management keeps a written record of how all such proxies are voted. Our investment adviser retains records of (a) proxy voting policies and procedures, (b) all proxy statements received (or it may rely on proxy statements filed on the SEC's EDGAR system in lieu thereof), (c) all votes cast, (d) investor requests for voting information and (e) any specific documents prepared or received in connection with a decision on a proxy vote. If it uses an outside service, our investment adviser may rely on such service to maintain copies of proxy statements and records, so long as such service will provide a copy of such documents promptly upon request.

              Our investment adviser's proxy voting policies are not exhaustive and are designed to be responsive to the wide range of issues that may be subject to a proxy vote. In general, our investment adviser votes our proxies in accordance with these guidelines unless: (a) it has determined otherwise due to the specific and unusual facts and circumstances with respect to a particular vote, (b) the subject matter of the vote is not covered by these guidelines, (c) a material conflict of interest is present or (d) our investment adviser finds it necessary to vote contrary to its general guidelines to maximize stockholder value or the best interests of Ares Capital. In reviewing proxy issues, our investment adviser generally uses the following guidelines:

              Elections of Directors:    In general, our investment adviser will vote proxies in favor of the management-proposed slate of directors. If there is a proxy fight for seats on a portfolio company's board of directors, or our investment adviser determines that there are other compelling reasons for withholding our vote, it will determine the appropriate vote on the matter. Our investment adviser may withhold votes for directors when it (a) believes a direct conflict of interest exists between the interests

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of the director and the stockholders, (b) concludes that the actions of the director are unlawful, unethical or negligent or (c) believes the board is entrenched in or dealing inadequately with performance problems, and/or acting with insufficient independence between the board and management. Finally, our investment adviser may withhold votes for directors of non-U.S. issuers where there is insufficient information about the nominees disclosed in the proxy statement.

              Appointment of Auditors:    We believe that a portfolio company remains in the best position to choose its independent auditors and our investment adviser will generally support management's recommendation in this regard.

              Changes in Capital Structure:    Changes in a portfolio company's charter or bylaws may be required by state or federal regulation. In general, our investment adviser will cast our votes in accordance with the management on such proposals. However, our investment adviser will consider carefully any proposal regarding a change in corporate structure that is not required by state or federal regulation.

              Corporate Restructurings, Mergers and Acquisitions:    We believe proxy votes dealing with corporate reorganizations are an extension of the investment decision. Accordingly, our investment adviser will analyze such proposals on a case-by-case basis and vote in accordance with its perception of our interests.

              Proposals Affecting Stockholder Rights:    We will generally vote in favor of proposals that give stockholders a greater voice in the affairs of a portfolio company and oppose any measure that seeks to limit such rights. However, when analyzing such proposals, our investment adviser will balance the financial impact of the proposal against any impairment of stockholder rights as well as of our investment in the portfolio company.

              Corporate Governance:    We recognize the importance of good corporate governance. Accordingly, our investment adviser will generally favor proposals that promote transparency and accountability within a portfolio company.

              Anti-Takeover Measures:    Our investment adviser will evaluate, on a case-by-case basis, any proposals regarding anti-takeover measures to determine the measure's likely effect on stockholder value dilution.

              Stock Splits:    Our investment adviser will generally vote with management on stock split matters.

              Limited Liability of Directors:    Our investment adviser will generally vote with management on matters that could adversely affect the limited liability of directors.

              Social and Corporate Responsibility:    Our investment adviser will review proposals related to social, political and environmental issues to determine whether they may adversely affect stockholder value. Our investment adviser may abstain from voting on such proposals where they do not have a readily determinable financial impact on stockholder value.

              Stockholders may obtain information regarding how we voted proxies with respect to our portfolio securities during the twelve-month period ended June 30, 2018 free of charge by making a written request for proxy voting information to our Investor Relations Department at Ares Capital Corporation, 245 Park Avenue, 44th Floor, New York, New York 10167, by calling us at (888) 818-5298 or on the SEC's website at www.sec.gov.

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PRIVACY PRINCIPLES

              We endeavor to maintain the privacy of our recordholders and to safeguard their non-public personal information. The following information is provided to help you understand what personal information we collect, how we protect that information and why, in certain cases, we may share information with select other parties.

              Generally, we will not receive any non-public personal information about recordholders of our common stock, although certain of our recordholders' non-public information may become available to us. The non-public personal information that we may receive falls into the following categories:

              We disclose non-public personal information about recordholders:

              When we share non-public recordholder personal information referred to above, the information is made available for limited business purposes and under controlled circumstances designed to protect our recordholders' privacy. The Company does not permit use of recordholder information for any non-business or marketing purpose, nor do we permit third parties to rent, sell, trade or otherwise release or disclose information to any other party.

              The Company's service providers, such as its adviser, administrator, and transfer agent, are required to maintain physical, electronic, and procedural safeguards to protect recordholder non-public personal information; to prevent unauthorized access or use; and to dispose of such information when it is no longer required.

              Personnel of affiliates may access recordholder information only for business purposes. The degree of access is based on the sensitivity of the information and on personnel need for the information to service a recordholder's account or comply with legal requirements.

              If a recordholder ceases to be a recordholder, we will adhere to the privacy policies and practices as described above. We may choose to modify our privacy policies at any time. Before we do so, we will notify recordholders and provide a description of our privacy policy.

              In the event of a corporate change in control resulting from, for example, a sale to, or merger with, another entity, or in the event of a sale of assets, we reserve the right to transfer non-public personal information of holders of our securities to the new party in control or the party acquiring assets.

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OTHER

              We have designated a chief compliance officer and established a compliance program pursuant to the requirements of the Investment Company Act. We are periodically examined by the SEC for compliance with the Investment Company Act.

              We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office.

Compliance with the Sarbanes-Oxley Act of 2002 and The NASDAQ Global Select Market Corporate Governance Regulations

              The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") imposes a wide variety of regulatory requirements on publicly held companies and their insiders. Many of these requirements affect us. The Sarbanes-Oxley Act has required us to review our policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all future regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

              In addition, The NASDAQ Global Select Market has adopted various corporate governance requirements as part of its listing standards. We believe we are in compliance with such corporate governance listing standards. We will continue to monitor our compliance with all future listing standards and will take actions necessary to ensure that we are in compliance therewith.

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CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR

              Our securities are held under a custody agreement by U.S. Bank National Association. The address of the custodian is Corporate Trust Services, One Federal Street, 3rd Floor, Boston, MA 02110. Computershare acts as the transfer agent, dividend paying agent and registrar for our common stock. The principal business address of Computershare is 250 Royall Street, Canton, MA 02021.

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BROKERAGE ALLOCATION AND OTHER PRACTICES

              Since we generally acquire and dispose of our investments in privately negotiated transactions, we infrequently use brokers in the normal course of business.

              Subject to policies established by our board of directors, our investment adviser, Ares Capital Management, is primarily responsible for the execution of the publicly traded securities portion of our portfolio transactions and the allocation of brokerage commissions. Our investment adviser does not expect to execute transactions through any particular broker or dealer, but seeks to obtain the best net results for us, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm's risk and skill in positioning blocks of securities.

              While our investment adviser generally seeks reasonably competitive trade execution costs, we will not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements, our investment adviser may select a broker based partly upon brokerage or research services provided to our investment adviser and us and any other clients. In return for such services, we may pay a higher commission than other brokers would charge if our investment adviser determines in good faith that such commission is reasonable in relation to the services provided.

              We also pay brokerage commissions incurred in connection with open-market purchases pursuant to our dividend reinvestment plan.

              The aggregate amount of brokerage commissions paid by us during the three most recent fiscal years is $0.2 million.

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PLAN OF DISTRIBUTION

              We may offer, from time to time, in one or more offerings or series, up to $3,000,000,000 of our common stock, preferred stock, debt securities, subscription rights to purchase shares of our common stock or warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, or units comprised of any combination of the foregoing, in one or more underwritten public offerings, at-the-market offerings, negotiated transactions, block trades, best efforts or a combination of these methods. We may sell the securities through underwriters or dealers, directly to one or more purchasers, including existing stockholders in a rights offering, through agents or through a combination of any such methods of sale. In the case of a rights offering, the applicable prospectus supplement will set forth the number of shares of our common stock issuable upon the exercise of each right and the other terms of such rights offering. Any underwriter or agent involved in the offer and sale of the securities will be named in the applicable prospectus supplement. A prospectus supplement or supplements will also describe the terms of the offering of the securities, including: the purchase price of the securities and the proceeds we will receive from the sale; any over-allotment options under which underwriters may purchase additional securities from us; any agency fees or underwriting discounts and other items constituting agents' or underwriters' compensation; the public offering price; any discounts or concessions allowed or re-allowed or paid to dealers; and any securities exchange or market on which the securities may be listed. Only underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.

              The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at prevailing market prices at the time of sale, at prices related to such prevailing market prices, or at negotiated prices, provided, however, that the offering price per share of our common stock, less any underwriting commissions or discounts, must equal or exceed the net asset value per share of our common stock at the time of the offering except (a) in connection with a rights offering to our existing stockholders, (b) with the consent of the majority of our common stockholders or (c) under such circumstances as the SEC may permit. The price at which securities may be distributed may represent a discount from prevailing market prices.

              In connection with the sale of the securities, underwriters or agents may receive compensation from us or from purchasers of the securities, for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities may be deemed to be underwriters under the Securities Act, and any discounts and commissions they receive from us and any profit realized by them on the resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act. Any such underwriter or agent will be identified and any such compensation received from us will be described in the applicable prospectus supplement. The maximum aggregate commission or discount to be received by any member of FINRA or independent broker-dealer will not be greater than 8% of the gross proceeds of the sale of securities offered pursuant to this prospectus and any applicable prospectus supplement. We may also reimburse the underwriter or agent for certain fees and legal expenses incurred by it.

              Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate-covering or other short-covering transactions involve purchases of the securities, either through exercise of the over-allotment option or in the open market after the distribution is completed, to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are

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purchased in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.

              Any underwriters that are qualified market makers on the NASDAQ Global Market may engage in passive market making transactions in our common stock on the NASDAQ Global Market in accordance with Regulation M under the Exchange Act, during the business day prior to the pricing of the offering, before the commencement of offers or sales of our common stock. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker's bid, however, the passive market maker's bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

              We may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agent will act on a best-efforts basis for the period of its appointment.

              Unless otherwise specified in the applicable prospectus supplement, each class or series of securities will be a new issue with no trading market, other than our common stock, which is traded on The NASDAQ Global Select Market. We may elect to list any other class or series of securities on any exchanges, but we are not obligated to do so. We cannot guarantee the liquidity of the trading markets for any securities.

              Under agreements that we may enter, underwriters, dealers and agents who participate in the distribution of shares of our securities may be entitled to indemnification by us against certain liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Underwriters, dealers and agents may engage in transactions with, or perform services for, us in the ordinary course of business.

              If so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase our securities from us pursuant to contracts providing for payment and delivery on a future date. Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by us. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of our securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject. The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts. Such contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth the commission payable for solicitation of such contracts.

              We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third parties in such sale transactions will be underwriters and, if not identified in this prospectus, will be identified in the applicable prospectus supplement.

              In order to comply with the securities laws of certain states, if applicable, our securities offered hereby will be sold in such jurisdictions only through registered or licensed brokers or dealers.

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LEGAL MATTERS

              The legality of the securities offered hereby will be passed upon for the Company by Proskauer Rose LLP, Los Angeles, California and Venable LLP, Baltimore, Maryland. Certain legal matters in connection with the offering will be passed upon for the underwriters, if any, by the counsel named in the prospectus supplement.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

              KPMG LLP, located at 550 South Hope Street, Suite 1500, Los Angeles, California 90071, is the independent registered public accounting firm of the Company.

              The audited financial statements of the Company included in this prospectus have been so included in reliance on the report of KPMG LLP, an independent registered public accounting firm whose report thereon is included elsewhere in this prospectus, given on the authority of said firm as experts in auditing and accounting.

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AVAILABLE INFORMATION

              We have filed with the SEC a registration statement on Form N-2, together with all amendments and related exhibits, under the Securities Act, with respect to the securities offered by this prospectus. The registration statement contains additional information about us and the securities being offered by this prospectus.

              We file with or submit to the SEC annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act. This information is available free of charge by calling us collect at (310) 201-4200 or on our website at www.arescapitalcorp.com. Information contained on our website is not incorporated into this prospectus and you should not consider such information to be part of this document. You also may inspect and copy these reports, proxy statements and other information, as well as the registration statement and related exhibits and schedules, at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Such information is also available from the EDGAR database on the SEC's website at www.sec.gov. You also can obtain copies of such information, after paying a duplicating fee, by sending a request by e-mail to publicinfo@sec.gov or by writing the SEC's Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549. You may obtain information on the operation of the SEC's Public Reference Room by calling the SEC at (202) 551-8090 or (800) SEC-0330.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

  F-2

Consolidated Balance Sheet as of December 31, 2017 and 2016

  F-5

Consolidated Statement of Operations for the years ended December 31, 2017, 2016 and 2015

  F-6

Consolidated Schedules of Investments as of December 31, 2017 and 2016

  F-7

Consolidated Statement of Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015

  F-76

Consolidated Statement of Cash Flows for the years ended December 31, 2017, 2016 and 2015

  F-77

Notes to Consolidated Financial Statements

  F-78

Interim Unaudited Financial Statements

 
 

Consolidated Balance Sheet as of June 30, 2018 (unaudited) and December 31, 2017

 
F-127

Consolidated Statement of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited)

  F-128

Consolidated Schedule of Investments as of June 30, 2018 (unaudited) and December 31, 2017

  F-129

Consolidated Statement of Stockholders' Equity for the six months ended June 30, 2018 (unaudited)

  F-217

Consolidated Statement of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)

  F-218

Notes to Consolidated Financial Statements (unaudited)

  F-219

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Report of Independent Registered Public Accounting Firm

To the stockholders and board of directors
Ares Capital Corporation:

Opinion on the Consolidated Financial Statements

              We have audited the accompanying consolidated balance sheets of Ares Capital Corporation and subsidiaries (the "Company"), including the consolidated schedules of investments, as of December 31, 2017 and 2016, the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes (collectively, the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

              We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 13, 2018 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

              These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

              We conducted our audits in accordance with auditing standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Such procedures also included confirmation of investments as of December 31, 2017, by correspondence with custodians, portfolio companies or agents. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

GRAPHIC

We have served as the Company's auditor since 2004.

Los Angeles, California
February 13, 2018

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Report of Independent Registered Public Accounting Firm

The stockholders and board of directors
Ares Capital Corporation:

Opinion on Internal Control Over Financial Reporting

              We have audited Ares Capital Corporation and subsidiaries' (the "Company") internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

              We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, including the consolidated schedules of investments, as of December 31, 2017 and 2016, and the related consolidated statements of operations, stockholders' equity, and cash flows, for each of the years in the three-year period ended December 31, 2017 and the related notes (collectively, the consolidated financial statements), and our report dated February 13, 2018 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

              The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

              We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

              A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

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(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

              Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

GRAPHIC

Los Angeles, California
February 13, 2018

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions, except per share data)

 
  As of December 31,  
 
  2017   2016  

ASSETS

             

Investments at fair value

             

Non-controlled/non-affiliate company investments

  $ 10,010   $ 5,940  

Non-controlled affiliate company investments

    216     185  

Controlled affiliate company investments

    1,615     2,695  

Total investments at fair value (amortized cost of $11,905 and $9,034, respectively)

    11,841     8,820  

Cash and cash equivalents

    316     223  

Interest receivable

    93     112  

Receivable for open trades

    1     29  

Other assets

    96     61  

Total assets

  $ 12,347   $ 9,245  

LIABILITIES

             

Debt

  $ 4,854   $ 3,874  

Base management fees payable

    44     34  

Income based fees payable

    27     32  

Capital gains incentive fees payable

    79     38  

Accounts payable and other liabilities

    181     58  

Interest and facility fees payable

    64     44  

Total liabilities

    5,249     4,080  

Commitments and contingencies (Note 7)

             

STOCKHOLDERS' EQUITY

             

Common stock, par value $0.001 per share, 600 and 500 common shares authorized, respectively; 426 and 314 common shares issued and outstanding, respectively

         

Capital in excess of par value

    7,192     5,292  

Accumulated undistributed (overdistributed) net investment income

    (81 )   37  

Accumulated undistributed net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets

    72     57  

Net unrealized losses on investments, foreign currency and other transactions

    (85 )   (221 )

Total stockholders' equity

    7,098     5,165  

Total liabilities and stockholders' equity

  $ 12,347   $ 9,245  

NET ASSETS PER SHARE

  $ 16.65   $ 16.45  

   

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

 
  For the Years Ended
December 31,
 
 
  2017   2016   2015  

INVESTMENT INCOME:

                   

From non-controlled/non-affiliate company investments:

                   

Interest income from investments

  $ 753   $ 549   $ 508  

Capital structuring service fees

    95     90     70  

Dividend income

    26     35     19  

Other income

    19     14     13  

Total investment income from non-controlled/non-affiliate company investments

    893     688     610  

From non-controlled affiliate company investments:

                   

Interest income from investments

    17     16     14  

Capital structuring service fees

        1     3  

Dividend income

    1         4  

Total investment income from non-controlled affiliate company investments

    18     17     21  

From controlled affiliate company investments:

                   

Interest income from investments

    181     241     295  

Capital structuring service fees

    10     8     22  

Dividend income

    49     40     51  

Management and other fees

    6     16     24  

Other income

    3     2     2  

Total investment income from controlled affiliate company investments

    249     307     394  

Total investment income

    1,160     1,012     1,025  

EXPENSES:

                   

Interest and credit facility fees

    225     186     227  

Base management fees

    171     137     134  

Income based fees

    134     123     121  

Capital gain incentive fees

    41     (5 )   (27 )

Administrative fees

    12     14     14  

Professional fees and other costs related to the American Capital Acquisition

    45     15      

Other general and administrative

    32     27     30  

Total expenses

    660     497     499  

Waiver of income based fees

    (30 )        

Total expenses, net of waiver of income based fees

    630     497     499  

NET INVESTMENT INCOME BEFORE INCOME TAXES

    530     515     526  

Income tax expense, including excise tax

    19     21     18  

NET INVESTMENT INCOME

    511     494     508  

REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:

                   

Net realized gains (losses):

                   

Non-controlled/non-affiliate company investments

    (56 )   66     95  

Non-controlled affiliate company investments

        14     26  

Controlled affiliate company investments

    100     30      

Foreign currency transactions

    (20 )       6  

Net realized gains

    24     110     127  

Net unrealized gains (losses):

                   

Non-controlled/non-affiliate company investments

    (42 )   (179 )   (149 )

Non-controlled affiliate company investments

    (2 )   14     (8 )

Controlled affiliate company investments

    187     40     (91 )

Foreign currency and other transactions

    (7 )   (5 )   2  

Net unrealized gains (losses)

    136     (130 )   (246 )

Net realized and unrealized gains (losses) on investments, foreign currency and other transactions

    160     (20 )   (119 )

REALIZED LOSSES ON EXTINGUISHMENT OF DEBT

    (4 )       (10 )

NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS

  $ 667   $ 474   $ 379  

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)

  $ 1.57   $ 1.51   $ 1.20  

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)

    425     314     314  

   

See accompanying notes to consolidated financial statements.

F-6


Table of Contents

ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Healthcare Services                                      
Absolute Dental Management LLC and ADM Equity, LLC   Dental services provider   First lien senior secured loan ($18.8 par due 1/2022)   11.08% (Libor + 9.39%/Q)     1/5/2016   $ 18.8   $ 17.6 (2)(17)      
        First lien senior secured loan ($5.0 par due 1/2022)   11.08% (Libor + 9.39%/Q)     1/5/2016     5.0     4.7 (4)(17)      
        Class A preferred units (4,000,000 units)         1/5/2016     4.0     0.9 (2)      
        Class A common units (4,000,000 units)         1/5/2016         (2)      
                        27.8     23.2        
                                       
Acessa Health Inc. (fka HALT Medical, Inc.)   Medical supply provider   Common stock (569,823 shares)         6/22/2017     0.1            
                                       
ADCS Billings Intermediate Holdings, LLC(21)   Dermatology practice   First lien senior secured revolving loan       5/18/2016         (19)      
                                       
ADG, LLC and RC IV GEDC Investor LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.0 par due 9/2022)   6.14% (Libor + 4.75%/Q)     9/28/2016     1.0     1.0 (2)(17)      
        First lien senior secured revolving loan ($1.4 par due 9/2022)   6.24% (Libor + 4.75%/Q)     9/28/2016     1.4     1.3 (2)(17)      
        First lien senior secured revolving loan ($8.5 par due 9/2022)   6.32% (Libor + 4.75%/Q)     9/28/2016     8.5     8.3 (2)(17)      
        First lien senior secured revolving loan ($0.6 par due 9/2022)   8.25% (Base Rate + 3.75%/Q)     9/28/2016     0.6     0.6 (2)(17)      
        Second lien senior secured loan ($87.5 par due 3/2024)   10.57% (Libor + 9.00%/Q)     9/28/2016     87.5     81.4 (2)(17)      
        Membership units (3,000,000 units)         9/28/2016     3.0     1.9 (2)      
                        102.0     94.5        
                                       
Alcami Holdings, LLC(8)(21)   Outsourced drug development services provider   First lien senior secured revolving loan ($2.0 par due 10/2019)   6.89% (Libor + 5.50%/Q)     1/3/2017     2.0     2.0 (2)(17)      
        First lien senior secured revolving loan ($15.9 par due 10/2019)   6.96% (Libor + 5.50%/Q)     1/3/2017     15.9     15.9 (2)(17)      
        First lien senior secured revolving loan ($7.7 par due 10/2019)   7.06% (Libor + 5.50%/Q)     1/3/2017     7.7     7.7 (2)(17)      
        First lien senior secured loan ($10.0 par due 10/2020)   7.07% (Libor + 5.50%/Q)     1/3/2017     10.0     10.0 (2)(17)      
        First lien senior secured loan ($95.7 par due 10/2020)   7.07% (Libor + 5.50%/Q)     1/3/2017     95.7     95.7 (3)(17)      
        First lien senior secured loan ($0.2 par due 10/2020)   11.00% (Base Rate + 6.50%/Q)     1/3/2017     0.2     0.2 (3)(17)      
        Senior subordinated loan ($30.0 par due 10/2020)   11.75%     1/3/2017     30.0     30.0 (2)      
        Senior subordinated loan ($30.0 par due 10/2020)   12.00%     1/3/2017     30.0     30.0 (2)      
        Senior subordinated loan ($25.0 par due 10/2020)   12.25%     1/3/2017     25.0     25.0 (2)      
        Senior subordinated loan ($36.1 par due 10/2020)   14.75% PIK     1/3/2017     36.1     36.1 (2)      
        Senior subordinated loan ($36.6 par due 10/2020)   15.25% PIK     1/3/2017     22.8     36.6 (2)      
        Series R preferred membership units (30,000 units)         1/3/2017         54.1        
        Series R-2 preferred membership units (54,936 units)         1/3/2017         99.0        
                        275.4     442.3        

F-7


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Alegeus Technologies Holdings Corp.   Benefits administration and transaction processing provider   Preferred stock (2,997 shares)         12/13/2013     3.1     2.8        
        Common stock (3 shares)         12/13/2013                
                        3.1     2.8        
                                       
Alteon Health, LLC   Provider of physician management services   First lien senior secured loan ($3.5 par due 9/2022)   7.00% (Libor + 5.50%/Q)     5/15/2017     3.5     3.3 (2)(17)      
                                       
American Academy Holdings, LLC(21)   Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals   First lien senior secured revolving loan ($0.9 par due 12/2022)   9.75% (Base Rate + 5.25%/Q)     12/15/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($0.5 par due 12/2022)   7.84% (Libor + 6.25%/Q)     12/15/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($199.8 par due 12/2022)   8.01% (Libor + 6.25%/Q)     12/15/2017     199.8     197.8 (2)(17)      
        Senior subordinated loan ($75.0 par due 6/2023)   15.76% (Libor + 14.00%/Q)     12/15/2017     75.0     73.5 (2)(17)      
                        276.2     272.7        
                                       
Argon Medical Devices, Inc.   Manufacturer and marketer of single-use specialty medical devices   Second lien senior secured loan ($9.0 par due 6/2022)   11.07% (Libor + 9.50%/Q)     12/23/2015     8.8     9.0 (2)(17)      
                                       
AwarePoint Corporation   Healthcare technology platform developer   First lien senior secured loan ($8.1 par due 12/2019)   13.98% (Libor + 12.50%/M)     9/5/2014     8.0     6.5 (2)(15)(17)      
        Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)         11/14/2014         0.4 (2)      
                        8.0     6.9        
                                       
Bambino CI Inc.(21)   Manufacturer and provider of single-use obstetrics products   First lien senior secured revolving loan ($1.1 par due 10/2022)   7.49% (Libor + 6.00%/Q)     10/17/2017     1.1     1.1 (2)(17)      
        First lien senior secured loan ($43.7 par due 10/2023)   7.49% (Libor + 6.00%/Q)     10/17/2017     43.7     43.3 (2)(17)      
                        44.8     44.4        
                                       
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC(21)   Correctional facility healthcare operator   First lien senior secured revolving loan ($4.5 par due 7/2019)   5.69% (Libor + 4.00%/Q)     7/23/2014     4.5     4.1 (2)(17)(20)      
        First lien senior secured loan ($6.5 par due 7/2021)   5.69% (Libor + 4.00%/Q)     7/23/2014     6.5     5.9 (2)(17)      
        Second lien senior secured loan ($135.0 par due 7/2022)   9.86% (Libor + 8.38%/Q)     7/23/2014     134.2     112.0 (2)(17)      
        Class A units (1,000,000 units)         8/19/2010         0.9 (2)      
                        145.2     122.9        
                                       
Correctional Medical Group Companies, Inc.   Correctional facility healthcare operator   First lien senior secured loan ($48.8 par due 9/2021)   9.62% (Libor + 8.62%/Q)     9/29/2015     48.8     48.8 (3)(17)      
        First lien senior secured loan ($3.1 par due 9/2021)   9.62% (Libor + 8.62%/Q)     9/29/2015     3.1     3.1 (2)(17)      
                        51.9     51.9        
                                       
CSHM LLC(8)   Dental services provider   Class A membership units (1,979 units)         1/3/2017                
                                       
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC(21)   Dental services provider   Class A preferred units (1,000,000 units)         12/21/2016     1.0     1.1 (2)      
                                       
DCA Investment Holding, LLC(21)   Multi-branded dental practice management   First lien senior secured revolving loan       7/2/2015         (19)      
        First lien senior secured loan ($18.7 par due 7/2021)   6.94% (Libor + 5.25%/Q)     7/2/2015     18.6     18.4 (4)(17)      
                        18.6     18.4        
                                     

F-8


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Drayer Physical Therapy Institute LLC   Outpatient physical therapy provider   First lien senior secured loan ($12.3 par due 7/2018)   10.50% (Base Rate + 6.00%/Q)     7/26/2017     12.3     12.3 (2)(17)      
        First lien senior secured loan ($114.6 par due 7/2018)   10.50% (Base Rate + 6.00%/Q)     7/26/2017     114.6     114.6 (2)(17)      
                        126.9     126.9        
                                       
Emerus Holdings, Inc.(21)   Freestanding 24-hour emergency care micro-hospitals operator   First lien senior secured revolving loan ($0.3 par due 9/2020)   8.00% (Base Rate + 3.50%/Q)     3/14/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($2.3 par due 9/2021)   6.07% (Libor + 4.50%/Q)     3/14/2017     2.0     2.1 (2)(17)      
                        2.3     2.4        
                                       
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC   On-demand supply chain automation solutions provider to the healthcare industry   Second lien senior secured loan ($103.7 par due 6/2025)   9.69% (Libor + 8.00%/Q)     6/30/2017     102.8     103.7 (2)(17)      
        Series A perpetual preferred stock (110,425 shares)   12.44% PIK (Libor + 10.75%/Q)     6/30/2017     117.4     117.4 (2)(17)      
        Class A units (14,013,303 units)         6/30/2017     14.0     16.9 (2)      
                        234.2     238.0        
                                       
Greenphire, Inc. and RMCF III CIV XXIX, L.P   Software provider for clinical trial management   Limited partnership interest (99.90% interest)         12/19/2014     1.0     2.4 (2)      
                                       
Heartland Dental, LLC   Detanl services provider   Second lien senior secured loan ($27.8 par due 7/2024)   9.75% (Libor + 8.50%/Q)     7/31/2017     27.4     27.8 (2)(17)      
                                       
Hygiena Borrower LLC(21)   Adenosine triphosphate testing technology provider   Second lien senior secured loan ($10.0 par due 8/2023)   10.69% (Libor + 9.00%/Q)     8/26/2016     10.0     10.0 (2)(17)      
        Second lien senior secured loan ($10.7 par due 8/2023)   10.69% (Libor + 9.00%/Q)     2/27/2017     10.7     10.7 (2)(17)      
                        20.7     20.7        
                                       
Intermedix Corporation   Revenue cycle management provider to the emergency healthcare industry   First lien senior secured loan ($72.3 par due 12/2019)   6.16% (Libor + 4.75%/Q)     7/26/2017     72.3     70.8 (2)(17)      
        First lien senior secured loan ($35.2 par due 12/2019)   6.16% (Libor + 4.75%/Q)     7/26/2017     35.2     34.5 (3)(17)      
        First lien senior secured loan ($9.3 par due 12/2019)   6.16% (Libor + 4.75%/Q)     7/26/2017     9.3     9.1 (4)(17)      
        First lien senior secured loan ($80.8 par due 12/2019)   6.35% (Libor + 4.75%/Q)     7/26/2017     80.8     79.2 (2)(17)      
        First lien senior secured loan ($39.3 par due 12/2019)   6.35% (Libor + 4.75%/Q)     7/26/2017     39.3     38.5 (3)(17)      
        First lien senior secured loan ($10.4 par due 12/2019)   6.35% (Libor + 4.75%/Q)     7/26/2017     10.4     10.2 (4)(17)      
        Second lien senior secured loan ($112.0 par due 6/2020)   9.94% (Libor + 8.25%/Q)     12/27/2012     112.0     107.5 (2)(17)      
                        359.3     349.8        
                                       
JDC Healthcare Management, LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.5 par due 4/2022)   7.82% (Libor + 6.25%/Q)     4/10/2017     1.5     1.5 (2)(17)      
        First lien senior secured loan ($9.9 par due 4/2023)   7.82% (Libor + 6.25%/Q)     4/10/2017     9.9     9.7 (2)(17)      
        First lien senior secured loan ($19.9 par due 4/2023)   7.82% (Libor + 6.25%/Q)     4/10/2017     19.9     19.5 (4)(17)      
                        31.3     30.7        
                                     

F-9


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
KBHS Acquisition, LLC (d/b/a Alita Care, LLC)(21)   Provider of behavioral health services   First lien senior secured revolving loan ($0.2 par due 3/2022)   6.43% (Libor + 5.00%/Q)     3/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.1 par due 3/2022)   6.46% (Libor + 5.00%/Q)     3/17/2017     0.1     0.1 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 3/2022)   6.50% (Libor + 5.00%/Q)     3/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 3/2022)   6.56% (Libor + 5.00%/Q)     3/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.8 par due 3/2022)   6.57% (Libor + 5.00%/Q)     3/17/2017     0.8     0.8 (2)(17)      
        First lien senior secured revolving loan ($0.3 par due 3/2022)   8.50% (Base Rate + 4.00%/Q)     3/17/2017     0.3     0.3 (2)(17)      
                        1.8     1.8        
                                       
Key Surgical LLC(21)   Provider of sterile processing, operating room and instrument care supplies for hospitals   First lien senior secured revolving loan ($0.9 par due 6/2022)   6.35% (Libor + 4.75%/Q)     6/1/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($18.0 par due 6/2023)   5.75% (EURIBOR + 4.75%/Q)     6/1/2017     16.9     18.0 (2)(17)      
        First lien senior secured loan ($4.4 par due 6/2023)   6.23% (Libor + 4.75%/Q)     6/1/2017     4.3     4.4 (4)(17)      
                        22.1     23.3        
                                       
MB2 Dental Solutions, LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.3 par due 9/2023)   8.25% (Base Rate + 3.75%/Q)     9/29/2017     1.3     1.3 (2)(17)      
        First lien senior secured loan ($4.7 par due 9/2023)   6.44% (Libor + 4.75%/Q)     9/29/2017     4.7     4.7 (2)(17)      
                        6.0     6.0        
                                       
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC   Healthcare professional provider   First lien senior secured loan ($65.3 par due 1/2020)   6.96% (Libor + 5.50%/Q)     7/26/2017     65.3     64.6 (2)(17)      
        First lien senior secured loan ($79.0 par due 1/2020)   7.07% (Libor + 5.50%/Q)     7/26/2017     79.0     78.3 (2)(17)      
        First lien senior secured loan ($9.0 par due 1/2020)   6.96% (Libor + 5.50%/Q)     7/26/2017     9.0     9.0 (4)(17)      
        First lien senior secured loan ($11.0 par due 1/2020)   7.07% (Libor + 5.50%/Q)     7/26/2017     11.0     10.8 (4)(17)      
        Class A units (1,438,643 shares)         1/17/2014     1.5     1.0 (2)      
                        165.8     163.7        
                                       
MW Dental Holding Corp.(21)   Dental services provider   First lien senior secured revolving loan ($9.7 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     9.7     9.7 (2)(17)      
        First lien senior secured loan ($44.4 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     44.4     44.4 (2)(17)      
        First lien senior secured loan ($46.8 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     46.8     46.8 (3)(17)      
        First lien senior secured loan ($19.3 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     19.3     19.3 (4)(17)      
                        120.2     120.2        
                                       
My Health Direct, Inc.   Healthcare scheduling exchange software solution provider   Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)         9/18/2014         (2)      
                                     

F-10


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
New Trident Holdcorp, Inc. and Trident Holding Company, LLC   Outsourced mobile diagnostic healthcare service provider   First lien senior secured loan ($19.9 par due 7/2019)   7.44% (Libor + 5.75%/Q)     8/1/2013     15.9     16.0 (2)(17)      
        Second lien senior secured loan ($80.0 par due 7/2020)       8/1/2013     79.3     44.2 (2)(14)(16)      
        Senior subordinated loan ($8.9 par due 7/2020)       11/29/2017     8.8     (2)(16)      
                        104.0     60.2        
                                       
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC   Anesthesia management services provider   Second lien senior secured loan ($72.8 par due 10/2023)   11.69% (Libor + 10.00%/Q)     4/19/2016     72.8     67.0 (2)(17)      
        Class A units (25,277 units)         4/19/2016     2.5     1.3 (2)      
                        75.3     68.3        
                                       
Nodality, Inc.   Biotechnology company   First lien senior secured loan ($2.3 par due 8/2016)       11/12/2015     2.1     (2)(16)      
        First lien senior secured loan ($10.9 par due 8/2016)       4/25/2014     9.7     (2)(16)      
        Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)         5/1/2016         (2)      
                        11.8            
                                       
nThrive, Inc. (fka Precyse Acquisition Corp.)   Provider of healthcare information management technology and services   Second lien senior secured loan ($10.0 par due 4/2023)   11.32% (Libor + 9.75%/Q)     4/20/2016     9.7     10.0 (2)(17)      
                                       
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC(21)   Provider of technology-enabled solutions to pharmacies   First lien senior secured loan ($5.9 par due 11/2018)   9.19% (Libor + 7.50%/Q)     11/21/2013     5.9     5.9 (4)(17)      
        Limited liability company membership interest (1.57%)         11/21/2013     1.0     0.8 (2)      
                        6.9     6.7        
                                       
Pathway Partners Vet Management Company LLC(21)   Owner and operator of veterinary hospitals   First lien senior secured loan ($0.3 par due 10/2024)   6.07% (Libor + 4.50%/Q)     10/4/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($6.0 par due 10/2024)   6.07% (Libor + 4.50%/Q)     10/4/2017     6.0     6.0 (2)(17)      
                        6.3     6.3        
                                       
Patterson Medical Supply, Inc.   Distributor of rehabilitation supplies and equipment   Second lien senior secured loan ($78.0 par due 8/2023)   9.98% (Libor + 8.50%/Q)     9/2/2015     76.4     72.5 (2)(17)      
                                       
PhyMED Management LLC   Provider of anesthesia services   Second lien senior secured loan ($47.2 par due 5/2021)   10.21% (Libor + 8.75%/Q)     12/18/2015     46.8     45.3 (2)(17)      
                                       
Practice Insight, LLC(21)   Revenue cycle management provider to the emergency healthcare industry   First lien senior secured revolving loan ($0.6 par due 8/2022)   8.50% (Base Rate + 4.00%/Q)     8/23/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($12.7 par due 8/2022)   6.48% (Libor + 5.00%/Q)     8/23/2017     12.7     12.7 (2)(17)      
                        13.3     13.3        
                                       
Respicardia, Inc.   Developer of implantable therapies to improve cardiovascular health   Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)         6/28/2012         (2)      
                                       
Sarnova HC, LLC, Tri-Anim Health Services, Inc., and BEMS Holdings, LLC   Distributor of emergency medical service and respiratory products   Second lien senior secured loan ($54.0 par due 7/2022)   11.07% (Libor + 9.50%/Q)     1/29/2016     54.0     54.0 (2)(17)      
                                       
TerSera Therapeutics LLC   Acquirer and developer of specialty therapeutic pharmaceutical products   First lien senior secured loan ($5.3 par due 3/2023)   6.94% (Libor + 5.25%/Q)     5/3/2017     5.2     5.3 (4)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Transaction Data Systems, Inc.   Pharmacy management software provider   Second lien senior secured loan ($35.3 par due 6/2022)   10.35% (Libor + 9.00%/Q)     6/15/2015     35.3     35.3 (2)(17)      
        Second lien senior secured loan ($3.8 par due 6/2022)   10.35% (Libor + 9.00%/Q)     12/19/2017     3.8     3.8 (2)(17)      
                        39.1     39.1        
                                       
U.S. Anesthesia Partners, Inc.   Anesthesiology service provider   Second lien senior secured loan ($71.8 par due 6/2025)   8.82% (Libor + 7.25%/Q)     6/16/2017     70.8     71.8 (2)(17)      
                                       
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC (21)   Operator of urgent care clinics   Preferred units (7,696,613 units)         6/11/2015     7.7     0.5        
        Series A common units (2,000,000 units)         6/11/2015     2.0            
        Series C common units (5,288,427 units)         6/11/2015                
                        9.7     0.5        
                                       
VistaPharm, Inc. and Vertice Pharma UK Parent Limited(21)   Manufacturer and distributor of generic pharmaceutical products   First lien senior secured loan ($7.8 par due 12/2021)   7.86% (Libor + 6.00%/Q)     11/6/2017     7.8     7.7 (2)(17)      
        Preferred shares (40,662 shares)         12/21/2015     0.3     0.5 (9)      
                        8.1     8.2        
                        2,622.8     2,668.6     37.60 %
Business Services                                      
Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc.(21)   Real estate and facilities management software provider   First lien senior secured revolving loan ($0.7 par due 7/2023)   6.36% (Libor + 4.75%/Q)     7/28/2017     0.7     0.7 (2)(17)      
        Second lien senior secured loan ($13.2 par due 7/2024)   10.13% (Libor + 8.75%/Q)     7/28/2017     13.2     13.2 (2)(17)      
        Second lien senior secured loan ($0.5 par due 7/2024)   10.36% (Libor + 8.75%/Q)     7/28/2017     0.5     0.5 (2)(17)      
        Second lien senior secured loan ($2.6 par due 7/2024)   10.16% (Libor + 8.75%/Q)     7/28/2017     2.6     2.6 (2)(17)      
        Second lien senior secured loan ($58.4 par due 7/2024)   10.13% (Libor + 8.75%/Q)     7/28/2017     58.4     58.4 (2)(17)      
        Senior subordinated loan ($21.2 par due 7/2025)   11.50% PIK     7/28/2017     21.2     20.4 (2)      
        Senior subordinated loan ($75.7 par due 7/2025)   11.50% PIK     7/28/2017     75.7     72.8 (2)      
        Common stock (3,464 shares)         5/16/2016     3.6     2.7 (2)      
        Warrant to purchase up to 11,380 shares of common stock (expires 7/2037)         7/28/2017         3.3 (2)      
                        175.9     174.6        
                                       
Achilles Acquisition LLC(21)   Benefits broker and outsourced workflow automation platform provider for brokers   First lien senior secured loan ($3.0 par due 6/2023)   7.69% (Libor + 6.00%/Q)     6/6/2017     3.0     3.0 (2)(17)      
        First lien senior secured loan ($10.2 par due 6/2023)   7.69% (Libor + 6.00%/Q)     6/6/2017     10.2     10.2 (4)(17)      
                        13.2     13.2        
                                       
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC   Retail insurance advisor and brokerage   Membership interests (10,793,504 units)         11/18/2016     10.8     10.8 (2)      
        Membership interests (2,698,376 units)         11/18/2016     2.7     2.7 (2)      
                        13.5     13.5        
                                       
BeyondTrust Software, Inc.   Management software solutions provider   First lien senior secured loan ($46.2 par due 11/2023)   7.89% (Libor + 6.25%/Q)     11/21/2017     45.5     45.7 (3)(17)      

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Brandtone Holdings Limited(9)   Mobile communications and marketing services provider   First lien senior secured loan ($4.7 par due 11/2018)       5/11/2015     4.5     (2)(16)      
        First lien senior secured loan ($3.1 par due 2/2019)       5/11/2015     2.9     (2)(16)      
        Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)         5/11/2015         (2)      
                        7.4            
                                       
CallMiner, Inc.   Provider of cloud-based conversational analytics solutions   Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)         7/23/2014         (2)      
                                       
Chesapeake Research Review, LLC and Schulman Associates Institutional Review Board, Inc.(21)   Provider of central institutional review boards over clinical trials   First lien senior secured revolving loan ($0.6 par due 11/2023)   7.14% (Libor + 5.75%/Q)     11/7/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($30.8 par due 11/2023)   7.14% (Libor + 5.75%/Q)     11/7/2017     30.8     30.5 (2)(17)      
                        31.4     31.1        
                                       
Clearwater Analytics, LLC(21)   Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software   First lien senior secured revolving loan ($0.4 par due 9/2022)   9.00% (Libor + 7.50%/Q)     9/1/2016     0.4     0.4 (2)(17)      
                                       
CMW Parent LLC (fka Black Arrow, Inc.)   Multiplatform media firm   Series A units (32 units)         9/11/2015         (2)      
                                       
Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited(8)(9)   Compliance, accounting and tax consulting services provider   Preferred stock (34,028,135 shares)         1/3/2017     2.3     9.9        
        Preferred stock (17,653,253 shares)         1/3/2017     21.6     26.0        
        Preferred stock (3,232,666 shares)         1/3/2017     4.0     4.7        
                        27.9     40.6        
                                       
Command Alkon Incorporated(21)   Software solutions provider to the ready-mix concrete industry   First lien senior secured revolving loan ($1.5 par due 9/2022)   8.50% (Base Rate + 4.00%/Q)     9/1/2017     1.5     1.5 (2)(17)(20)      
        First lien senior secured loan ($25.6 par due 9/2023)   6.48% (Libor + 5.00%/Q)     9/1/2017     25.6     25.3 (2)(17)      
        Second lien senior secured loan ($33.8 par due 3/2024)   10.48% (Libor + 9.00%/Q)     9/1/2017     33.8     33.4 (2)(17)      
                        60.9     60.2        
                                       
Compusearch Software Systems, Inc.   Provider of enterprise software and services for organizations in the public sector   Second lien senior secured loan ($51.0 par due 11/2021)   10.16% (Libor + 8.75%/Q)     1/3/2017     51.0     51.0 (2)(17)      
                                       
Compuware Parent, LLC   Web and mobile cloud performance testing and monitoring services provider   Class A-1 common stock (4,132 units)         12/15/2014     2.2     2.2 (2)      
        Class B-1 common stock (4,132 units)         12/15/2014     0.4     0.4 (2)      
        Class C-1 common stock (4,132 units)         12/15/2014     0.3     0.3 (2)      
        Class A-2 common stock (4,132 units)         12/15/2014         (2)      
        Class B-2 common stock (4,132 units)         12/15/2014         (2)      
        Class C-2 common stock (4,132 units)         12/15/2014         (2)      
                        2.9     2.9        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Convergint Technologies LLC   Integrated services provider for security, fire and life safety   Second lien senior secured loan ($25.0 par due 12/2020)   10.27% (Libor + 8.50%/Q)     12/18/2017     25.0     25.0 (2)(17)      
        Second lien senior secured loan ($3.0 par due 12/2020)   10.12% (Libor + 8.50%/Q)     1/3/2017     3.0     3.0 (2)(17)      
        Second lien senior secured loan ($6.0 par due 12/2020)   9.98% (Libor + 8.50%/Q)     1/3/2017     6.0     6.0 (2)(17)      
        Second lien senior secured loan ($14.0 par due 12/2020)   10.00% (Libor + 8.50%/Q)     1/3/2017     14.0     14.0 (2)(17)      
        Second lien senior secured loan ($8.0 par due 12/2020)   10.27% (Libor + 8.50%/Q)     1/3/2017     8.0     8.0 (2)(17)      
        Second lien senior secured loan ($8.0 par due 12/2020)   9.45% (Libor + 8.00%/Q)     1/3/2017     8.0     8.0 (2)(17)      
        Second lien senior secured loan ($11.0 par due 12/2020)   9.50% (Libor + 8.00%/Q)     1/3/2017     11.0     11.0 (2)(17)      
        Second lien senior secured loan ($75.0 par due 12/2020)   9.61% (Libor + 8.00%/Q)     1/3/2017     75.0     75.0 (2)(17)      
                        150.0     150.0        
                                       
Directworks, Inc. and Co-Exprise Holdings, Inc.   Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers   First lien senior secured loan ($1.8 par due 4/2018)       12/19/2014     1.3     0.2 (2)(16)      
        Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)         12/19/2014         (2)      
                        1.3     0.2        
                                       
DRB Holdings, LLC(21)   Provider of integrated technology solutions to car wash operators   First lien senior secured loan ($36.7 par due 10/2023)   7.10% (Libor + 5.75%/Q)     10/6/2017     36.7     36.3 (2)(17)      
                                       
DTI Holdco, Inc. and OPE DTI Holdings, Inc.(21)   Provider of legal process outsourcing and managed services   First lien senior secured loan ($4.1 par due 10/2023)   6.63% (Libor + 5.25%/Q)     9/23/2016     4.1     4.1 (4)(17)      
        Class A common stock (7,500 shares)         8/19/2014     7.5     6.9 (2)      
        Class B common stock (7,500 shares)         8/19/2014         (2)      
                        11.6     11.0        
                                       
Emergency Communications Network, LLC(21)   Provider of mission critical emergency mass notification solutions   First lien senior secured loan ($37.9 par due 6/2023)   7.82% (Libor + 6.25%/Q)     6/1/2017     37.7     37.5 (2)(17)      
        First lien senior secured loan ($19.9 par due 6/2023)   7.82% (Libor + 6.25%/Q)     6/1/2017     19.8     19.8 (4)(17)      
                        57.5     57.3        
                                       
EN Engineering, L.L.C.(21)   National utility services firm providing engineering and consulting services to natural gas, electric power and other energy and industrial end markets   First lien senior secured revolving loan       6/30/2015         (19)      
                                       
Entertainment Partners, LLC and Entertainment Partners Canada Inc.(21)   Provider of entertainment workforce and production management solutions   First lien senior secured loan ($7.9 par due 5/2022)   6.85% (Libor + 5.50%/Q)     5/8/2017     7.3     7.9 (2)(9)(17)      
        First lien senior secured loan ($4.2 par due 5/2023)   7.15% (Libor + 5.75%/Q)     5/8/2017     4.2     4.1 (2)(17)      
        First lien senior secured loan ($26.1 par due 5/2023)   7.15% (Libor + 5.75%/Q)     5/8/2017     26.1     25.8 (3)(17)      
        First lien senior secured loan ($3.6 par due 5/2023)   7.44% (Libor + 5.75%/Q)     5/8/2017     3.6     3.6 (2)(17)      
        First lien senior secured loan ($22.5 par due 5/2023)   7.44% (Libor + 5.75%/Q)     5/8/2017     22.5     22.2 (3)(17)      
        First lien senior secured loan ($4.2 par due 5/2023)   7.34% (Libor + 5.75%/Q)     5/8/2017     4.2     4.1 (2)(17)      
        First lien senior secured loan ($26.1 par due 5/2023)   7.34% (Libor + 5.75%/Q)     5/8/2017     26.1     25.8 (3)(17)      
                        94.0     93.5        

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
First Insight, Inc.   Software company providing merchandising and pricing solutions to companies worldwide   Warrant to purchase up to 122,827 units of Series C preferred stock (expires 3/2024)         3/20/2014         (2)      
                                       
Flexera Software LLC   Provider of software and software applications that manages application usage, compliance and security risk   Second lien senior secured loan ($5.0 par due 4/2021)   8.57% (Libor + 7.00%/Q)     1/3/2017     4.8     5.0 (2)(17)      
                                       
Foundation Risk Partners, Corp.(21)   Full service independent insurance agency   First lien senior secured loan ($23.5 par due 11/2023)   6.16% (Libor + 4.75%/Q)     11/10/2017     23.5     23.3 (3)(17)      
        Second lien senior secured loan ($27.5 par due 11/2024)   9.91% (Libor + 8.50%/Q)     11/10/2017     27.5     27.2 (2)(17)      
                        51.0     50.5        
                                       
Graphpad Software, LLC(21)   Provider of data analysis, statistics, and visualization software solutions for scientific research applications   First lien senior secured revolving loan ($0.6 par due 12/2023)   7.66% (Libor + 6.00%/Q)     12/21/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($8.8 par due 12/2023)   7.66% (Libor + 6.00%/Q)     12/21/2017     8.8     8.7 (2)(17)      
                        9.4     9.3        
                                       
GTCR-Ultra Acquisition, Inc. and GTCR-Ultra Holdings, LLC(21)   Provider of payment processing and merchant acquiring solutions   First lien senior secured loan ($8.9 par due 8/2024)   7.37% (Libor + 6.00%/Q)     8/1/2017     8.9     8.9 (4)(17)      
        Class A-2 units (911 units)         8/1/2017     0.9     1.0 (2)      
        Class B units (2,878,372 units)         8/1/2017         (2)      
                        9.8     9.9        
                                       
HAI Acquisition Corporation and Aloha Topco, LLC(21)   Professional employer organization provider of human resources, compliance and risk management services   First lien senior secured revolving loan ($4.7 par due 11/2023)   7.38% (Libor + 6.00%/Q)     11/1/2017     4.7     4.7 (2)(17)      
        First lien senior secured loan ($81.4 par due 11/2024)   9.50% (Base Rate + 5.00%/Q)     11/1/2017     81.4     80.6 (2)(17)      
        Class A units (16,980 units)         11/1/2017     1.7     1.7 (2)      
                        87.8     87.0        
                                       
IfByPhone Inc.   Voice-based marketing automation software provider   Warrant to purchase up to 124,300 shares of Series C preferred stock (expires 10/2022)         10/15/2012     0.1     0.1 (2)      
                                       
Implementation Management Assistance, LLC(21)   Revenue cycle consulting firm to the healthcare industry   First lien senior secured loan ($8.0 par due 12/2023)   5.46% (Libor + 4.00%/Q)     12/13/2017     8.0     7.9 (2)(17)      
                                       
Infogix, Inc. and Infogix Parent Corporation   Enterprise data analytics and integrity software solutions provider   First lien senior secured loan ($51.6 par due 12/2021)   8.44% (Libor + 6.75%/Q)     1/3/2017     51.6     51.6 (2)(12)(17)      
        First lien senior secured loan ($34.9 par due 12/2021)   8.44% (Libor + 6.75%/Q)     1/3/2017     34.9     34.9 (3)(12)(17)      
        Series A preferred stock (2,475 shares)         1/3/2017     2.5     2.9        
        Common stock (1,297,768 shares)         1/3/2017         0.3        
                        89.0     89.7        
                                       
Inmar, Inc.   Technology-driven solutions provider for retailers, wholesalers and manufacturers   Second lien senior secured loan ($28.3 par due 5/2025)   9.42% (Libor + 8.00%/Q)     4/25/2017     27.9     28.3 (2)(17)      

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
InterVision Systems, LLC and InterVision Holdings, LLC   Provider of cloud based IT solutions, infrastructure and services   First lien senior secured loan ($24.7 par due 5/2022)   9.79% (Libor + 7.95%/Q)     5/31/2017     24.7     24.7 (2)(17)      
        First lien senior secured loan ($10.0 par due 5/2022)   9.79% (Libor + 7.95%/Q)     5/31/2017     10.0     10.0 (4)(17)      
        Class A membership units (1,000 units)         5/31/2017     1.0     1.4        
                        35.7     36.1        
                                       
iParadigms Holdings, LLC   Anti-plagiarism software provider to the education market   Second lien senior secured loan ($37.5 par due 7/2022)   8.94% (Libor + 7.25%/Q)     1/3/2017     36.8     36.7 (2)(17)      
                                       
iPipeline, Inc., Internet Pipeline, Inc., iPipeline Limited and iPipeline Holdings, Inc. (21)   Provider of SaaS-based software solutions to the insurance and financial services industry   First lien senior secured loan ($7.5 par due 8/2022)   7.74% (Libor + 6.25%/Q)     6/15/2017     7.4     7.5 (2)(17)      
        First lien senior secured loan ($9.1 par due 8/2022)   7.74% (Libor + 6.25%/Q)     9/15/2017     9.1     9.1 (2)(17)      
        First lien senior secured loan ($46.4 par due 8/2022)   8.60% (Libor + 7.25%/Q)     8/4/2015     46.4     46.4 (3)(17)      
        First lien senior secured loan ($14.7 par due 8/2022)   8.60% (Libor + 7.25%/Q)     8/4/2015     14.7     14.7 (4)(17)      
        First lien senior secured loan ($12.2 par due 8/2022)   8.07% (Libor + 6.50%/Q)     12/18/2017     12.0     12.2 (2)(9)(17)      
        Preferred stock (1,100 shares)         8/4/2015     1.1     3.5 (2)      
        Common stock (668,781 shares)         8/4/2015         (2)      
                        90.7     93.4        
                                       
IQMS   Provider of enterprise resource planning and manufacturing execution software for small and midsized manufacturers   First lien senior secured loan ($4.0 par due 3/2022)   9.82% (Libor + 8.25%/Q)     3/28/2017     4.0     4.0 (2)(17)      
        First lien senior secured loan ($18.8 par due 3/2022)   9.82% (Libor + 8.25%/Q)     3/28/2017     18.8     18.8 (3)(17)      
        First lien senior secured loan ($15.0 par due 3/2022)   9.82% (Libor + 8.25%/Q)     3/28/2017     15.0     15.0 (4)(17)      
                        37.8     37.8        
                                       
Iron Bow Technologies, LLC   Provider and value added reseller of information technology products and solutions   Second lien senior secured loan ($10.0 par due 2/2021)   13.11% (Libor + 10.00% Cash, 1.75% PIK/Q)     1/3/2017     10.0     10.0 (2)(17)      
                                       
IronPlanet, Inc.   Online auction platform provider for used heavy equipment   Warrant to purchase to up to 133,333 shares of Series C preferred stock (expires 9/2023)         9/23/2013     0.2     0.4 (2)      
                                       
LLSC Holdings Corporation (dba Lawrence Merchandising Services)(8)   Marketing services provider   Series A preferred stock (9,000 shares)         1/3/2017     19.2     18.2        
        Common stock (1,000 shares)         1/3/2017                
                        19.2     18.2        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Miles 33 (Finance) Limited(8)(9)   Software provider to the regional media industry and magazines   First lien senior secured loan ($0.4 par due 9/2018)   7.00% (EURIBOR + 3.50% Cash, 3.00% PIK/Q)     1/3/2017     0.3     0.4        
        First lien senior secured loan ($4.1 par due 9/2018)   7.00% (EURIBOR + 3.50% Cash, 3.00% PIK/Q)     1/3/2017     3.7     4.1        
        Senior subordinated loan ($17.4 par due 9/2021)   5.00% (EURIBOR + 4.50%/Q)     1/3/2017     9.9     13.4        
        Preferred stock (19,500,000 shares)         1/3/2017                
        Preferred stock (900,000 shares)         1/3/2017                
        Common stock (600,000 shares)         1/3/2017                
                        13.9     17.9        
                                       
Ministry Brands, LLC and MB Parent HoldCo, L.P.(21)   Software and payment services provider to faith-based institutions   First lien senior secured revolving loan ($10.9 par due 12/2022)   6.57% (Libor + 5.00%/Q)     12/2/2016     10.9     10.9 (2)(17)      
        First lien senior secured loan ($1.7 par due 12/2022)   6.57% (Libor + 5.00%/Q)     8/22/2017     1.7     1.7 (2)(17)      
        First lien senior secured loan ($1.4 par due 12/2022)   6.38% (Libor + 5.00%/Q)     8/22/2017     1.4     1.4 (2)(17)      
        First lien senior secured loan ($10.6 par due 12/2022)   6.38% (Libor + 5.00%/Q)     4/6/2017     10.6     10.6 (2)(17)      
        First lien senior secured loan ($16.7 par due 12/2022)   6.38% (Libor + 5.00%/Q)     4/6/2017     16.5     16.7 (2)(17)      
        Second lien senior secured loan ($4.6 par due 6/2023)   10.82% (Libor + 9.25%/Q)     8/22/2017     4.6     4.6 (2)(17)      
        Second lien senior secured loan ($1.6 par due 6/2023)   10.60% (Libor + 9.25%/Q)     8/22/2017     1.6     1.6 (2)(17)      
        Second lien senior secured loan ($5.1 par due 6/2023)   10.63% (Libor + 9.25%/Q)     8/22/2017     5.1     5.1 (2)(17)      
        Second lien senior secured loan ($16.6 par due 6/2023)   10.63% (Libor + 9.25%/Q)     12/2/2016     16.6     16.6 (2)(17)      
        Second lien senior secured loan ($4.7 par due 6/2023)   10.63% (Libor + 9.25%/Q)     4/6/2017     4.7     4.7 (2)(17)      
        Second lien senior secured loan ($9.2 par due 6/2023)   10.63% (Libor + 9.25%/Q)     4/6/2017     9.2     9.2 (2)(17)      
        Second lien senior secured loan ($90.0 par due 6/2023)   10.63% (Libor + 9.25%/Q)     12/2/2016     89.3     90.0 (2)(17)      
        Class A units (500,000 units)         12/2/2016     5.0     6.8 (2)      
                        177.2     179.9        
                                       
MVL Group, Inc.(8)   Marketing research provider   Common stock (560,716 shares)         4/1/2010         (2)      
                                       
NAS, LLC, Nationwide Marketing Group, LLC and Nationwide Administrative Services, Inc.   Buying and marketing services organization for appliance, furniture and consumer electronics dealers   Second lien senior secured loan ($24.1 par due 12/2021)   10.32% (Libor + 9.00%/Q)     6/1/2015     24.1     24.1 (2)(17)      
                                       
Novetta Solutions, LLC   Provider of advanced analytics solutions for the government, defense and commercial industries   First lien senior secured loan ($12.7 par due 10/2022)   6.70% (Libor + 5.00%/Q)     1/3/2017     12.3     12.1 (2)(17)      
        Second lien senior secured loan ($31.0 par due 10/2023)   10.20% (Libor + 8.50%/Q)     1/3/2017     28.4     27.9 (2)(17)      
                        40.7     40.0        
                                       
Palermo Finance Corporation(21)   Provider of mission-critical integrated public safety software and services to local, state and federal agencies   First lien senior secured revolving loan       4/17/2017         (19)      
        First lien senior secured loan ($11.0 par due 4/2023)   5.85% (Libor + 4.50%/Q)     4/17/2017     10.9     11.0 (4)(17)      
        Second lien senior secured loan ($54.3 par due 10/2023)   9.85% (Libor + 8.50%/Q)     4/17/2017     54.3     54.3 (2)(17)      
                        65.2     65.3        
                                     

F-17


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Park Place Technologies, LLC   Provider of third party hardware maintenance and support services for IT data centers   Second lien senior secured loan ($41.5 par due 12/2022)   10.54% (Libor + 9.00%/Q)     1/3/2017     41.5     41.5 (2)(17)      
                                       
PayNearMe, Inc.   Electronic cash payment system provider   Warrant to purchase up to 195,726 shares of Series E preferred stock (expires 3/2023)         3/11/2016     0.2     (5)      
                                       
PDI TA Holdings, Inc.(21)   Provider of enterprise management software for the convenience retail and petroleum wholesale markets   First lien senior secured revolving loan ($0.9 par due 8/2023)   8.25% (Base Rate + 3.75%/Q)     8/25/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($3.7 par due 8/2023)   6.32% (Libor + 4.75%/Q)     8/25/2017     3.7     3.7 (2)(17)      
        First lien senior secured loan ($26.4 par due 8/2023)   6.21% (Libor + 4.75%/Q)     8/25/2017     26.4     26.1 (2)(17)      
        Second lien senior secured loan ($8.2 par due 8/2024)   10.32% (Libor + 8.75%/Q)     8/25/2017     8.2     8.1 (2)(17)      
        Second lien senior secured loan ($66.8 par due 8/2024)   10.21% (Libor + 8.75%/Q)     8/25/2017     66.8     66.1 (2)(17)      
                        106.0     104.9        
                                       
PHL Investors, Inc., and PHL Holding Co.(8)   Mortgage services   Class A common stock (576 shares)         7/31/2012     3.8     (2)      
                                       
PHNTM Holdings, Inc. and Planview Parent, Inc.   Provider of project and portfolio management software   First lien senior secured loan ($5.1 par due 1/2023)   6.82% (Libor + 5.25%/Q)     12/7/2017     5.1     5.1 (2)(17)      
        First lien senior secured loan ($31.6 par due 1/2023)   6.82% (Libor + 5.25%/Q)     1/27/2017     31.1     31.6 (2)(17)      
        First lien senior secured loan ($5.0 par due 1/2023)   6.82% (Libor + 5.25%/Q)     1/27/2017     4.9     5.0 (4)(17)      
        Second lien senior secured loan ($62.0 par due 7/2023)   11.32% (Libor + 9.75%/Q)     1/27/2017     61.2     62.0 (2)(17)      
        Class A common shares (990 shares)         1/27/2017     1.0     1.1 (2)      
        Class B common shares (168,329 shares)         1/27/2017         0.2 (2)      
                        103.3     105.0        
                                       
Poplicus Incorporated   Business intelligence and market analytics platform for companies that sell to the public sector   Warrant to purchase up to 2,402,991 shares of Series C preferred stock (expires 6/2025)         6/25/2015     0.1     (5)      
                                       
PowerPlan, Inc. and Project Torque Ultimate Parent Corporation   Fixed asset financial management software provider   Second lien senior secured loan ($30.0 par due 2/2023)   10.57% (Libor + 9.00%/Q)     2/23/2015     29.8     30.0 (2)(17)      
        Second lien senior secured loan ($50.0 par due 2/2023)   10.57% (Libor + 9.00%/Q)     2/23/2015     49.7     50.0 (3)(17)      
        Class A common stock (1,697 shares)         2/23/2015     1.7     3.3 (2)      
        Class B common stock (989,011 shares)         2/23/2015         (2)      
                        81.2     83.3        
                                       
Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.   Provider of data visualization software for data analytics   Class A common shares (7,444 shares)         8/22/2016     7.4     7.6 (2)      
        Class B common shares (1,841,608.69 shares)         8/22/2016     0.1     (2)      
                        7.5     7.6        
                                       
R2 Acquisition Corp.   Marketing services   Common stock (250,000 shares)         5/29/2007     0.2     0.3 (2)      

F-18


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
SCM Insurance Services Inc.(9)(21)   Provider of claims management, claims investigation & support and risk management solutions for the Canadian property and casualty insurance industry   First lien senior secured loan ($21.5 par due 8/2024)   6.35% (Libor + 5.00%/Q)     8/29/2017     21.5     21.2 (2)(17)      
        Second lien senior secured loan ($60.5 par due 3/2025)   10.35% (Libor + 9.00%/Q)     8/29/2017     60.5     59.9 (2)(17)      
                        82.0     81.1        
                                       
Shift PPC LLC(21)   Digital solutions provider   First lien senior secured loan ($1.7 par due 12/2021)   7.57% (Libor + 6.00%/Q)     12/22/2016     1.7     1.7 (4)(17)      
        First lien senior secured loan ($3.3 par due 12/2021)   7.69% (Libor + 6.00%/Q)     12/22/2016     3.3     3.3 (4)(17)      
        First lien senior secured loan ($5.0 par due 12/2021)   7.84% (Libor + 6.00%/Q)     12/22/2016     5.0     5.0 (4)(17)      
                        10.0     10.0        
                                       
Sparta Systems, Inc., Project Silverback Holdings Corp. and Silverback Holdings, Inc.(21)   Quality management software provider   Second lien senior secured loan ($20.0 par due 8/2025)   9.69% (Libor + 8.25%/Q)     8/21/2017     19.6     19.8 (2)(17)      
        Series B preferred shares (10,084 shares)         8/21/2017     1.1     1.1        
                        20.7     20.9        
                                       
Talari Networks, Inc.   Networking equipment provider   First lien senior secured loan ($6.0 par due 10/2019)   10.88% (Libor + 9.50%/M)     8/3/2015     6.0     5.7 (5)(17)      
        Warrant to purchase up to 421,052 shares of Series D-1 preferred stock (expires 8/2022)         8/3/2015     0.1     0.1 (5)      
                        6.1     5.8        
                                       
The Gordian Group, Inc.(21)   Construction software and service provider   First lien senior secured loan ($8.4 par due 7/2019)   6.14% (Libor + 4.50%/Q)     1/3/2017     8.3     8.4 (3)(17)      
        First lien senior secured loan ($3.2 par due 7/2019)   6.14% (Libor + 4.50%/Q)     1/3/2017     3.1     3.2 (4)(17)      
        First lien senior secured loan ($8.9 par due 7/2019)   5.86% (Libor + 4.50%/Q)     1/3/2017     8.8     8.9 (3)(17)      
        First lien senior secured loan ($3.4 par due 7/2019)   5.86% (Libor + 4.50%/Q)     1/3/2017     3.3     3.4 (4)(17)      
        First lien senior secured loan ($7.8 par due 7/2019)   5.95% (Libor + 4.50%/Q)     1/3/2017     7.6     7.8 (3)(17)      
        First lien senior secured loan ($2.9 par due 7/2019)   5.95% (Libor + 4.50%/Q)     1/3/2017     2.9     2.9 (4)(17)      
                        34.0     34.6        
                                       
The Greeley Company, Inc. and HCP Acquisition Holdings, LLC(8)   Healthcare compliance advisory services   Senior subordinated loan ($10.5 par due 3/2017)         3/5/2013         (2)(16)      
        Class A units (14,293,110 units)         6/26/2008         (2)      
                                   

F-19


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
UL Holding Co., LLC(7)   Provider of collection and landfill avoidance solutions for food waste and unsold food products   Senior subordinated loan ($2.8 par due 5/2020)   10.00% PIK     4/30/2012     0.9     2.8 (2)      
        Senior subordinated loan ($0.4 par due 5/2020)         4/30/2012     0.1     0.4 (2)      
        Senior subordinated loan ($6.2 par due 5/2020)   10.00% PIK     4/30/2012     1.9     6.2 (2)      
        Senior subordinated loan ($0.5 par due 5/2020)         4/30/2012     0.2     0.5 (2)      
        Senior subordinated loan ($24.5 par due 5/2020)   10.00% PIK     4/30/2012     7.6     24.5 (2)      
        Senior subordinated loan ($3.8 par due 5/2020)         4/30/2012     1.2     3.8 (2)      
        Class A common units (533,351 units)         6/17/2011     5.0     2.8 (2)      
        Class B-5 common units (272,834 units)         6/17/2011     2.5     1.4 (2)      
        Class C common units (758,546 units)         4/25/2008         (2)      
        Warrant to purchase up to 719,044 shares of Class A units         5/2/2014         (2)      
        Warrant to purchase up to 28,663 shares of Class B-1 units         5/2/2014         (2)      
        Warrant to purchase up to 57,325 shares of Class B-2 units         5/2/2014         (2)      
        Warrant to purchase up to 29,645 shares of Class B-3 units         5/2/2014         (2)      
        Warrant to purchase up to 80,371 shares of Class B-5 units         5/2/2014         (2)      
        Warrant to purchase up to 59,655 shares of Class B-6 units         5/2/2014         (2)      
        Warrant to purchase up to 1,046,713 shares of Class C units         5/2/2014         (2)      
                        19.4     42.4        
                                       
Velocity Holdings Corp.   Hosted enterprise resource planning application management services provider   Common units (1,713,546 units)         12/13/2013     4.5     3.4        
                                       
Visual Edge Technology, Inc.   Provider of outsourced office solutions with a focus on printer and copier equipment and other parts and supplies   First lien senior secured loan ($1.2 par due 8/2022)   7.32% (Libor + 5.75%/Q)     8/31/2017     1.2     1.2 (2)(17)      
        First lien senior secured loan ($3.8 par due 8/2022)   7.13% (Libor + 5.75%/Q)     8/31/2017     3.8     3.8 (2)(17)      
        First lien senior secured loan ($10.0 par due 8/2022)   7.23% (Libor + 5.75%/Q)     8/31/2017     10.0     10.0 (2)(17)      
        Senior subordinated loan ($41.5 par due 9/2024)   12.50% PIK     8/31/2017     37.6     39.0 (2)      
        Warrant to purchase up to 1,816,089 shares of common stock (expires 8/2027)         8/31/2017         0.9 (2)      
        Warrant to purchase up to 2,070,511 shares of preferred stock (expires 8/2027)         8/31/2017     4.1     4.4 (2)      
                        56.7     59.3        
                                     

F-20


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
VRC Companies, LLC(21)   Provider of records and information management services   First lien senior secured revolving loan ($0.8 par due 3/2022)   10.00% (Base Rate + 5.50%/Q)     4/17/2017     0.8     0.8 (2)(17)      
        First lien senior secured loan ($1.4 par due 3/2023)   7.82% (Libor + 6.50%/Q)     4/17/2017     1.4     1.4 (2)(17)      
        First lien senior secured loan ($0.2 par due 3/2023)   8.03% (Libor + 6.50%/Q)     4/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($0.4 par due 3/2023)   7.93% (Libor + 6.50%/Q)     10/3/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($0.3 par due 3/2023)   7.98% (Libor + 6.50%/Q)     10/3/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.3 par due 3/2023)   8.03% (Libor + 6.50%/Q)     10/3/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($5.5 par due 3/2023)   8.12% (Libor + 6.50%/Q)     4/17/2017     5.5     5.5 (2)(17)      
                        8.9     8.9        
                                       
WorldPay Group PLC(9)   Payment processing company   C2 shares (73,974 shares)         10/21/2015         (24)      
                                       
Zywave, Inc.(21)   Provider of software and technology-enabled content and analytical solutions to insurance brokers   First lien senior secured revolving loan ($1.3 par due 11/2022)   6.57% (Libor + 5.00%/Q)     11/17/2016     1.3     1.3 (2)(17)      
        First lien senior secured revolving loan ($1.0 par due 11/2022)   8.50% (Base Rate + 4.00%/Q)     11/17/2016     1.0     1.0 (2)(17)      
        Second lien senior secured loan ($27.0 par due 11/2023)   10.42% (Libor + 9.00%/Q)     11/17/2016     27.0     27.0 (2)(17)      
                        29.3     29.3        
                        2,235.8     2,267.3     31.94 %
Consumer Products                                      
Badger Sportswear Acquisition, Inc.   Provider of team uniforms and athletic wear   Second lien senior secured loan ($56.8 par due 3/2024)   10.46% (Libor + 9.00%/Q)     9/6/2016     56.7     56.8 (2)(17)      
                                       
BRG Sports, Inc.   Designer, manufacturer and licensor of branded sporting goods   Preferred stock (2,009 shares)         1/3/2017                
        Common stock (6,566,655 shares)         1/3/2017         0.3        
                            0.3        
                                       
Consumer Health Parent LLC   Developer and marketer of over-the-counter cold remedy products   Preferred units (1,072 units)         12/15/2017     1.1     1.1 (2)      
        Series A units (1,072 units)         12/15/2017         (2)      
                        1.1     1.1        
                                       
Feradyne Outdoors, LLC and Bowhunter Holdings, LLC   Provider of branded archery and bowhunting accessories   Common units (421 units)         4/24/2014     4.2     1.0 (2)      
                                       
Implus Footcare, LLC   Provider of footwear and other accessories   First lien senior secured loan ($14.6 par due 4/2021)   8.44% (Libor + 6.75%/Q)     6/1/2017     14.6     14.6 (2)(17)      
        First lien senior secured loan ($77.5 par due 4/2021)   8.44% (Libor + 6.75%/Q)     6/1/2017     77.5     77.5 (2)(17)      
        First lien senior secured loan ($19.9 par due 4/2021)   8.44% (Libor + 6.75%/Q)     6/1/2017     19.9     19.9 (4)(17)      
                        112.0     112.0        
                                       
Indra Holdings Corp.   Designer, marketer, and distributor of rain and cold weather products   Second lien senior secured loan ($80.0 par due 11/2021)       5/1/2014     76.9     43.6 (2)(16)      
                                     

F-21


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Plantation Products, LLC, Seed Holdings, Inc. and Flora Parent, Inc.   Provider of branded lawn and garden products   Second lien senior secured loan ($2.0 par due 6/2021)   9.41% (Libor + 7.99%/Q)     12/23/2014     2.0     2.0 (2)(17)      
        Second lien senior secured loan ($54.0 par due 6/2021)   9.41% (Libor + 7.99%/Q)     12/23/2014     53.8     54.0 (3)(17)      
        Second lien senior secured loan ($10.0 par due 6/2021)   9.41% (Libor + 7.99%/Q)     12/23/2014     10.0     10.0 (4)(17)      
        Common stock (30,000 shares)         12/23/2014     3.0     6.0 (2)      
                        68.8     72.0        
                                       
Rug Doctor, LLC and RD Holdco Inc.(8)   Manufacturer and marketer of carpet cleaning machines   Second lien senior secured loan ($16.9 par due 12/2018)   11.42% (Libor + 9.75%/Q)     1/3/2017     16.9     16.9 (2)(17)      
        Common stock (458,596 shares)         1/3/2017     14.0     10.8        
        Warrant to purchase up to 56,372 shares of common stock (expires 12/2023)         1/3/2017                
                        30.9     27.7        
                                       
S Toys Holdings LLC (fka The Step2 Company, LLC)(8)   Toy manufacturer   Class B common units (126,278,000 units)         10/30/2014         0.5 (2)      
        Common units (1,116,879 units)         4/1/2011                
        Warrant to purchase up to 3,157,895 units         4/1/2010                
                            0.5        
                                       
SHO Holding I Corporation   Manufacturer and distributor of slip resistant footwear   Second lien senior secured loan ($100.0 par due 4/2023)   9.92% (Libor + 8.50%/Q)     10/27/2015     98.2     92.0 (2)(17)      
                                       
Shock Doctor, Inc. and Shock Doctor Holdings, LLC(7)   Developer, marketer and distributor of sports protection equipment and accessories   Second lien senior secured loan ($89.4 par due 10/2021)   11.86% (Libor + 10.50%/Q)     4/22/2015     89.4     82.3 (2)(17)      
        Class A preferred units (50,000 units)         3/14/2014     5.0     1.9 (2)      
        Class C preferred units (50,000 units)         4/22/2015     5.0     1.9 (2)      
                        99.4     86.1        
                                       
Singer Sewing Company   Manufacturer of consumer sewing machines   First lien senior secured loan ($174.5 par due 12/2017)   9.19% (Libor + 7.00% Cash, 0.50% PIK/Q)     7/26/2017     174.5     165.7 (2)(17)      
                                       
Varsity Brands Holding Co., Inc., Hercules Achievement, Inc., Hercules Achievement Holdings, Inc. and Hercules VB Holdings, Inc.   Leading manufacturer and distributor of textiles, apparel & luxury goods   Second lien senior secured loan ($122.7 par due 12/2025)   9.82% (Libor + 8.25%/Q)     12/15/2017     122.7     122.7 (2)(17)      
        Common stock (3,548,841 shares)         12/11/2014     3.8     6.1 (2)      
        Common stock (3,548,841 shares)         12/11/2014     4.3     6.1 (2)      
                        130.8     134.9        
                                       
Woodstream Group, Inc. and Woodstream Corporation(21)   Pet products manufacturer   First lien senior secured loan ($1.0 par due 5/2022)   7.69% (Libor + 6.25%/Q)     6/21/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($2.0 par due 5/2022)   7.69% (Libor + 6.25%/Q)     6/21/2017     2.0     2.0 (4)(17)      
        First lien senior secured loan ($3.1 par due 5/2022)   7.89% (Libor + 6.25%/Q)     6/21/2017     3.1     3.1 (2)(17)      
        First lien senior secured loan ($6.2 par due 5/2022)   7.89% (Libor + 6.25%/Q)     6/21/2017     6.2     6.2 (4)(17)      
                        12.3     12.3        
                        865.8     806.0     11.36 %

F-22


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Other Services                                      
American Residential Services L.L.C.   Heating, ventilation and air conditioning services provider   Second lien senior secured loan ($67.0 par due 12/2022)   9.57% (Libor + 8.00%/Q)     6/30/2014     66.7     66.3 (2)(17)      
                                       
Associated Asphalt Partners, LLC   Provider of asphalt terminalling, storage and distribution   First lien senior secured loan ($4.2 par due 4/2024)   6.82% (Libor + 5.25%/Q)     3/30/2017     4.2     3.8 (2)(17)      
                                       
Champion Parent Corporation and Calera XVI, LLC(8)   Endurance sports media and event operator   First lien senior secured revolving loan ($0.7 par due 11/2018)       11/30/2012         (2)(16)      
        First lien senior secured loan ($5.9 par due 11/2018)       11/30/2012     0.9     0.2 (2)(16)      
        Preferred shares (18,875 shares)         3/25/2016         (2)      
        Membership units (2,522,512 units)         11/30/2012         (2)      
        Common shares (114,000 shares)         3/25/2016         (2)      
                        0.9     0.2        
                                       
Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC(7)(21)   Provider of outsourced healthcare linen management solutions   First lien senior secured revolving loan ($2.0 par due 12/2021)   7.82% (Libor + 6.25%/Q)     3/13/2014     2.0     2.0 (2)(17)(20)      
        First lien senior secured loan ($12.0 par due 12/2021)   7.82% (Libor + 6.25%/Q)     4/6/2017     12.0     12.0 (2)(17)      
        First lien senior secured loan ($5.0 par due 12/2021)   7.82% (Libor + 6.25%/Q)     3/13/2014     5.0     5.0 (2)(17)      
        First lien senior secured loan ($5.2 par due 12/2021)   7.82% (Libor + 6.25%/Q)     3/13/2014     5.2     5.2 (3)(17)      
        Class A preferred units (2,475,000 units)         3/13/2014     2.5     3.9 (2)      
        Class B common units (275,000 units)         3/13/2014     0.3     0.4 (2)      
                        27.0     28.5        
                                       
CST Buyer Company (d/b/a Intoxalock)(21)   Provider of ignition interlock devices   First lien senior secured loan ($11.3 par due 3/2023)   7.75% (Libor + 6.25%/Q)     3/1/2017     11.0     11.3 (2)(17)      
                                       
Dwyer Acquisition Parent, Inc. and TDG Group Holding Company   Operator of multiple franchise concepts primarily related to home maintenance or repairs   Senior subordinated loan ($52.7 par due 2/2020)   11.00%     8/15/2014     52.7     52.7 (2)      
        Senior subordinated loan ($23.5 par due 2/2020)   11.00%     5/1/2017     23.5     23.5 (2)      
        Senior subordinated loan ($31.5 par due 2/2020)   11.00%     6/12/2015     31.5     31.5 (2)      
        Common stock (32,843 shares)         8/15/2014     2.2     5.1 (2)      
                        109.9     112.8        
                                       
Massage Envy, LLC and ME Equity LLC(21)   Franchisor in the massage industry   First lien senior secured revolving loan ($0.5 par due 9/2020)   8.44% (Libor + 6.75%/Q)     6/28/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($0.3 par due 9/2020)   8.23% (Libor + 6.75%/Q)     4/12/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($1.0 par due 9/2020)   8.24% (Libor + 6.75%/Q)     4/12/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($0.1 par due 9/2020)   10.00% (Base Rate + 5.50%/Q)     4/12/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($0.3 par due 9/2020)   8.11% (Libor + 6.75%/Q)     7/27/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.5 par due 9/2020)   8.23% (Libor + 6.75%/Q)     7/27/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($38.5 par due 9/2020)   8.37% (Libor + 6.75%/Q)     9/27/2012     38.5     38.5 (3)(17)      
        First lien senior secured loan ($18.7 par due 9/2020)   8.37% (Libor + 6.75%/Q)     9/27/2012     18.7     18.7 (4)(17)      
        Common stock (3,000,000 shares)         9/27/2012     3.0     4.2 (2)      
                        62.9     64.1        
                                     

F-23


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
McKenzie Sports Products, LLC(21)   Designer, manufacturer and distributor of hunting-related supplies   First lien senior secured revolving loan ($0.9 par due 9/2020)   7.25% (Base Rate + 2.75%/Q)     9/18/2014     0.9     0.9 (3)(17)      
        First lien senior secured loan ($0.8 par due 9/2020)   7.44% (Libor + 5.75%/Q)     9/18/2014     0.8     0.8 (3)(13)(17)      
        First lien senior secured loan ($2.5 par due 9/2020)   5.32% (Libor + 3.75%/Q)     9/18/2014     2.5     2.5 (3)(17)      
        First lien senior secured loan ($2.2 par due 9/2020)   5.44% (Libor + 3.75%/Q)     9/18/2014     2.2     2.2 (3)(17)      
        First lien senior secured loan ($84.5 par due 9/2020)   7.44% (Libor + 5.75%/Q)     9/18/2014     84.5     84.5 (3)(13)(17)      
                        90.9     90.9        
                                       
MSHC, Inc.(21)   Heating, ventilation and air conditioning services provider   First lien senior secured revolving loan ($0.1 par due 7/2022)   7.75% (Base Rate + 3.25%/Q)     7/31/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($1.1 par due 7/2023)   5.92% (Libor + 4.25%/Q)     7/31/2017     1.1     1.1 (2)(17)      
        First lien senior secured loan ($3.2 par due 7/2023)   5.94% (Libor + 4.25%/Q)     7/31/2017     3.1     3.2 (2)(17)      
        Second lien senior secured loan ($46.0 par due 7/2024)   9.94% (Libor + 8.25%/Q)     7/31/2017     46.0     46.0 (2)(17)      
                        50.3     50.4        
                                       
OpenSky Project, Inc. and OSP Holdings, Inc.   Social commerce platform operator   Warrant to purchase up to 159,496 shares of Series D preferred stock (expires 4/2025)         6/29/2015         (2)      
                                       
Osmose Utilities Services, Inc.(21)   Provider of structural integrity management services to transmission and distribution infrastructure   First lien senior secured revolving loan       1/3/2017         (19)      
        Second lien senior secured loan ($25.0 par due 8/2023)   9.44% (Libor + 7.75%/Q)     9/3/2015     24.6     25.0 (2)(17)      
        Second lien senior secured loan ($34.0 par due 8/2023)   9.44% (Libor + 7.75%/Q)     1/3/2017     33.4     34.0 (2)(17)      
                        58.0     59.0        
                                       
SocialFlow, Inc.   Social media optimization platform provider   Warrant to purchase up to 215,331 shares of Series C preferred stock (expires 1/2026)         1/13/2016         (5)      
                                       
SoundCloud Limited(9)   Platform for receiving, sending, and distributing music   Common stock (73,422 shares)         8/15/2017     0.4     0.7 (2)      
                                       
Spin HoldCo Inc.   Laundry service and equipment provider   Second lien senior secured loan ($175.0 par due 5/2023)   9.21% (Libor + 7.75%/Q)     6/23/2017     175.0     175.0 (2)(17)      
                                       
Tyden Cayman Holdings Corp.(9)   Producer and marketer of global cargo security, product identification and traceability products and utility meter products   Preferred stock (46,276 shares)         1/3/2017     0.4     0.4        
        Common stock (5,521,203 shares)         1/3/2017     2.0     2.9        
                        2.4     3.3        
                                       
VLS Recovery Services, LLC(21)   Provider of commercial and industrial waste processing and disposal services   First lien senior secured revolving loan ($1.6 par due 10/2023)   7.53% (Libor + 6.00%/Q)     10/17/2017     1.6     1.6 (2)(17)(20)      
        First lien senior secured loan ($23.9 par due 10/2023)   7.53% (Libor + 6.00%/Q)     10/17/2017     23.9     23.7 (2)(17)      
        First lien senior secured loan ($7.4 par due 10/2023)   7.35% (Libor + 6.00%/Q)     10/17/2017     7.4     7.4 (2)(17)      
        First lien senior secured loan ($0.1 par due 10/2023)   9.50% (Base Rate + 5.00%/Q)     10/17/2017     0.1     0.1 (2)(17)      
                        33.0     32.8        

F-24


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
WASH Multifamily Acquisition Inc. and Coinamatic Canada Inc.   Laundry service and equipment provider   Second lien senior secured loan ($3.7 par due 5/2023)   8.57% (Libor + 7.00%/Q)     5/14/2015     3.7     3.7 (2)(17)      
        Second lien senior secured loan ($21.3 par due 5/2023)   8.57% (Libor + 7.00%/Q)     5/14/2015     21.0     21.1 (2)(17)      
                        24.7     24.8        
                                       
Wrench Group LLC(21)   Provider of essential home services to residential customers   First lien senior secured loan ($4.0 par due 3/2022)   6.19% (Libor + 4.50%/Q)     1/31/2017     4.0     4.0 (2)(17)      
        First lien senior secured loan ($4.3 par due 3/2022)   5.85% (Libor + 4.50%/Q)     12/15/2017     4.3     4.3 (2)(17)      
                        8.3     8.3        
                        725.6     732.2     10.32 %
Manufacturing                                      
Chariot Acquisition, LLC(21)   Aftermarket golf cart parts and accessories   First lien senior secured loan ($18.4 par due 9/2021)   7.91% (Libor + 6.25%/Q)     1/3/2017     18.2     18.0 (3)(17)      
        First lien senior secured loan ($9.4 par due 9/2021)   7.91% (Libor + 6.25%/Q)     1/3/2017     9.3     9.2 (4)(17)      
                        27.5     27.2        
                                       
Component Hardware Group, Inc.(21)   Commercial equipment   First lien senior secured revolving loan ($1.9 par due 7/2019)   6.19% (Libor + 4.50%/Q)     7/1/2013     1.9     1.9 (2)(17)      
        First lien senior secured loan ($7.9 par due 7/2019)   6.19% (Libor + 4.50%/Q)     7/1/2013     7.9     7.9 (4)(17)      
                        9.8     9.8        
                                       
Dorner Holding Corp.(21)   Manufacturer of precision unit conveyors   First lien senior secured revolving loan ($1.3 par due 3/2022)   7.32% (Libor + 5.75%/Q)     3/15/2017     1.3     1.3 (2)(17)      
        First lien senior secured loan ($4.4 par due 3/2023)   7.32% (Libor + 5.75%/Q)     3/15/2017     4.4     4.4 (2)(17)      
                        5.7     5.7        
                                       
ECI Purchaser Company, LLC   Manufacturer of equipment to safely control pressurized gases   First lien senior secured loan ($21.8 par due 12/2018)   7.09% (Libor + 5.25%/Q)     7/26/2017     21.8     21.5 (2)(17)      
        First lien senior secured loan ($88.7 par due 12/2018)   6.92% (Libor + 5.25%/Q)     7/26/2017     88.7     87.8 (2)(17)      
        First lien senior secured loan ($74.8 par due 12/2018)   6.92% (Libor + 5.25%/Q)     7/26/2017     74.8     74.0 (3)(17)      
        First lien senior secured loan ($0.3 par due 12/2018)   7.09% (Libor + 5.25%/Q)     7/26/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2018)   7.09% (Libor + 5.25%/Q)     7/26/2017     0.2     0.2 (3)(17)      
                        185.8     183.8        
                                       
ETG Holdings, Inc.(8)   Industrial woven products   Common stock (3,000 shares)         1/3/2017                
                                       
Harvey Tool Company, LLC(21)   Cutting tool provider to the metalworking industry   First lien senior secured revolving loan ($1.8 par due 10/2023)   5.96% (Libor + 4.50%/Q)     10/12/2017     1.8     1.7 (2)(17)      
        First lien senior secured loan ($40.8 par due 10/2024)   6.11% (Libor + 4.75%/Q)     10/12/2017     40.8     40.4 (2)(17)      
        Second lien senior secured loan ($43.7 par due 10/2025)   10.02% (Libor + 8.50%/Q)     10/12/2017     43.7     43.2 (2)(17)      
                        86.3     85.3        
                                     

F-25


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Ioxus, Inc(7)   Energy storage devices   First lien senior secured loan ($10.2 par due 12/2019)   12.00% PIK     4/29/2014     10.0     10.2 (2)(15)      
        First lien senior secured loan ($1.0 par due 12/2019)       4/29/2014     1.0     1.0 (2)(15)      
        Series CC preferred stock (67,330,609 shares)         1/27/2017     0.7     (2)      
        Warrant to purchase up to 3,038,730 shares of common stock (expires 1/2026)         1/28/2016         (2)      
        Warrant to purchase up to 1,210,235 shares of Series BB preferred stock (expires 8/2026)         1/28/2016         (2)      
        Warrant to purchase up to 336,653,045 shares of Series CC preferred stock (expires 1/2027)         1/27/2017         (2)      
                        11.7     11.2        
                                       
KPS Global LLC   Walk-in cooler and freezer systems   First lien senior secured loan ($1.7 par due 4/2022)   3.93% (Libor + 2.50%/Q)     4/5/2017     1.7     1.7 (2)(17)      
        First lien senior secured loan ($11.2 par due 4/2022)   7.18% (Libor + 5.75%/Q)     4/5/2017     11.2     11.0 (2)(17)      
        First lien senior secured loan ($5.6 par due 4/2022)   7.18% (Libor + 5.75%/Q)     4/5/2017     5.6     5.5 (4)(17)      
                        18.5     18.2        
                                       
MacLean-Fogg Company and MacLean-Fogg Holdings, L.L.C.   Manufacturer and supplier for the power utility and automotive markets worldwide   Senior subordinated loan ($103.0 par due 10/2025)   10.50% Cash, 3.00% PIK     10/31/2013     103.0     103.0 (2)      
        Preferred units (70,183 units)   4.50% Cash, 9.25% PIK     10/9/2015     76.3     76.3        
                        179.3     179.3        
                                       
Niagara Fiber Intermediate Corp.(21)   Insoluble fiber filler products   First lien senior secured revolving loan ($0.9 par due 5/2018)       5/8/2014         (2)(16)      
        First lien senior secured loan ($5.9 par due 5/2018)       5/8/2014     0.2     (2)(16)      
        First lien senior secured loan ($0.6 par due 5/2018)       5/8/2014         (2)(16)      
                        0.2            
                                       
Nordco Inc.(21)   Railroad maintenance-of-way machinery   First lien senior secured revolving loan       8/26/2015         (19)      
                                       
Pelican Products, Inc.   Flashlights   Second lien senior secured loan ($40.0 par due 4/2021)   9.94% (Libor + 8.25%/Q)     4/11/2014     40.0     39.6 (2)(17)      
                                       
Sanders Industries Holdings, Inc. and SI Holdings, Inc.(21)   Elastomeric parts, mid-sized composite structures, and composite tooling   First lien senior secured loan ($56.5 par due 5/2020)   7.38% (Libor + 6.00%/Q)     7/21/2017     56.5     55.4 (2)(17)      
        First lien senior secured loan ($14.8 par due 5/2020)   7.38% (Libor + 6.00%/Q)     7/21/2017     14.8     14.5 (4)(17)      
        Common stock (1,500 shares)         5/30/2014     1.5     0.8 (2)      
                        72.8     70.7        
                                       
Saw Mill PCG Partners LLC   Metal precision engineered components   Common units (1,000 units)         1/30/2007     1.0     (2)      
                                     

F-26


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Sonny's Enterprises, LLC(21)   Manufacturer and supplier of car wash equipment, parts and supplies to the conveyorized car wash market   First lien senior secured revolving loan ($1.0 par due 12/2022)   6.30% (Libor + 4.75%/Q)     11/30/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($0.9 par due 12/2022)   6.44% (Libor + 4.75%/Q)     12/5/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($0.4 par due 12/2022)   6.44% (Libor + 4.75%/Q)     6/1/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2022)   6.44% (Libor + 4.75%/Q)     5/3/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2022)   6.44% (Libor + 4.75%/Q)     9/28/2017     0.2     0.2 (2)(17)      
                        2.7     2.7        
                                       
Sunk Rock Foundry Partners LP, Hatteras Electrical Manufacturing Holding Company and Sigma Electric Manufacturing Corporation(21)   Manufacturer of metal castings, precision machined components and sub-assemblies in the electrical products, power transmission and distribution and general industrial markets   First lien senior secured revolving loan ($1.5 par due 10/2022)   6.16% (Libor + 4.75%/Q)     10/31/2017     1.5     1.5 (2)(17)      
        First lien senior secured loan ($16.4 par due 10/2023)   6.13% (Libor + 4.75%/Q)     10/31/2017     16.4     16.2 (2)(17)      
        First lien senior secured loan ($9.3 par due 10/2023)   6.13% (Libor + 4.75%/Q)     10/31/2017     9.3     9.2 (2)(17)      
                        27.2     26.9        
                                       
TPTM Merger Corp.(21)   Time temperature indicator products   First lien senior secured loan ($10.5 par due 9/2018)   9.98% (Libor + 8.42%/Q)     9/12/2013     10.5     10.5 (3)(17)      
        First lien senior secured loan ($6.2 par due 9/2018)   9.98% (Libor + 8.42%/Q)     9/12/2013     6.2     6.2 (4)(17)      
        First lien senior secured loan ($6.5 par due 9/2018)   10.11% (Libor + 8.42%/Q)     9/12/2013     6.5     6.5 (3)(17)      
        First lien senior secured loan ($3.8 par due 9/2018)   10.11% (Libor + 8.42%/Q)     9/12/2013     3.8     3.8 (4)(17)      
                        27.0     27.0        
                                       
WP CPP Holdings, LLC   Precision engineered castings   Second lien senior secured loan ($19.7 par due 4/2021)   9.13% (Libor + 7.75%/Q)     1/3/2017     18.8     19.3 (2)(17)      
                        714.3     706.7     9.96 %
Investment Funds and Vehicles                                      
ACAS Equity Holdings Corporation(8)(10)   Investment company   Common stock (589 shares)         1/3/2017     0.5     0.4        
                                       
Ares IIIR/IVR CLO Ltd.(8)(9)(10)   Investment vehicle   Subordinated notes ($20.0 par due 4/2021)         1/3/2017         0.1        
                                       
Blue Wolf Capital Fund II, L.P.(9)(10)   Investment partnership   Limited partnership interest (8.50% interest)         1/3/2017     3.0     3.5 (24)      
                                       
Carlyle Global Market Strategies CLO 2013-3(9)(10)   Investment vehicle   Subordinated notes ($5.0 par due 10/2030)   15.00%     1/3/2017     2.6     3.2        
                                       
Cent CLO 2014-22 Limited(9)(10)   Investment vehicle   Subordinated notes ($45.4 par due 11/2026)   11.75%     1/3/2017     23.6     22.7        
                                       
Centurion CDO 8 Limited(9)(10)   Investment vehicle   Subordinated notes ($5.0 par due 3/2019)         1/3/2017                
                                       
CGMS 2015-3A(9)(10)   Investment vehicle   Subordinated notes ($24.6 par due 7/2028)   10.00%     1/3/2017     19.2     18.9        
                                       
CoLTs 2005-1 Ltd.(8)(9)(10)   Investment vehicle   Preferred shares (360 shares)         1/3/2017                
                                       
CoLTs 2005-2 Ltd.(8)(9)(10)   Investment vehicle   Preferred shares (34,170,000 shares)         1/3/2017                
                                       
CREST Exeter Street Solar 2004-1(9)(10)   Investment vehicle   Preferred shares (3,500,000 shares)         1/3/2017                

F-27


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Eaton Vance CDO X plc(9)(10)   Investment vehicle   Subordinated notes ($15.0 par due 2/2027)   3.00%     1/3/2017     4.1     6.4        
                                       
European Capital UK SME Debt LP(8)(9)(10)(22)   Investment partnership   Limited partnership interest (45% interest)         1/3/2017     41.1     41.7        
                                       
Flagship CLO V(9)(10)   Investment vehicle   Subordinated notes ($0.0 par due 9/2019)         1/3/2017                
                                       
Goldentree Loan Opportunities VII, Limited(9)(10)   Investment vehicle   Subordinated notes ($35.3 par due 4/2025)   4.25%     1/3/2017     18.7     19.1        
                                       
Halcyon Loan Advisors Funding 2015-2 Ltd.(9)(10)   Investment vehicle   Subordinated notes ($21.7 par due 7/2027)   16.35%     1/3/2017     14.0     11.3        
                                       
HCI Equity, LLC(8)(9)(10)   Investment company   Member interest (100.00% interest)         4/1/2010         0.1 (24)      
                                       
Herbert Park B.V.(9)(10)   Investment vehicle   Subordinated notes ($5.4 par due 10/2026)         1/3/2017     0.9     0.5        
                                       
Imperial Capital Private Opportunities, LP(10)   Investment partnership   Limited partnership interest (80.00% interest)         5/10/2007     1.0     15.1 (2)      
                                       
LightPoint CLO VII, Ltd.(9)(10)   Investment vehicle   Subordinated notes ($9.0 par due 5/2021)         1/3/2017                
                                       
Montgomery Lane, LLC and Montgomery Lane, Ltd.(8)(9)(10)   Investment company   Common stock (100 shares)         1/3/2017         0.6        
        Common stock (50,000 shares)         1/3/2017                
                            0.6        
                                       
OAKC 2015-11(9)(10)   Investment vehicle   Subordinated notes ($17.8 par due 10/2028)   9.50%     1/3/2017     14.3     13.0        
                                       
Partnership Capital Growth Fund I, L.P.(10)   Investment partnership   Limited partnership interest (25.00% interest)         6/16/2006         0.1 (2)(24)      
                                       
Partnership Capital Growth Investors III, L.P.(10)(22)   Investment partnership   Limited partnership interest (2.50% interest)         10/5/2011     2.5     3.5 (2)(24)      
                                       
PCG-Ares Sidecar Investment II, L.P.(10)(22)   Investment partnership   Limited partnership interest (100.00% interest)         10/31/2014     7.5     11.7 (2)      
                                       
PCG-Ares Sidecar Investment, L.P.(10)(22)   Investment partnership   Limited partnership interest (100.00% interest)         5/22/2014     4.4     5.1 (2)      
                                       
Piper Jaffray Merchant Banking Fund I, L.P.(10)(22)   Investment partnership   Limited partnership interest (2.00% interest)         8/16/2012     1.5     1.6 (24)      
                                       
Qualium Investissement(9)(10)   Investment partnership   Class A common stock (9,900,000 shares)         1/3/2017     5.9     6.5 (24)      
        Class B common stock (100,000 shares)         1/3/2017     0.1     0.1 (24)      
        Class C common stock (48,939 shares)         1/3/2017     0.1     0.1 (24)      
                        6.1     6.7        
                                       
Senior Direct Lending Program, LLC(8)(10)(23)   Co-investment vehicle   Subordinated certificates ($487.1 par due 12/2036)   9.34% (Libor + 8.00%/Q)(18)     7/27/2016     487.1     487.1        
        Member interest (87.50% interest)         7/27/2016                
                        487.1     487.1        
                                       
Vitesse CLO, Ltd.(9)(10)   Investment vehicle   Preferred shares (20,000,000 shares)         1/3/2017                
                                       
Voya CLO 2014-4 Ltd.(9)(10)   Investment vehicle   Subordinated notes ($26.7 par due 10/2026)   10.50%     1/3/2017     17.0     18.6        

F-28


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
VSC Investors LLC(10)   Investment company   Membership interest (1.95% interest)         1/24/2008     0.3     1.3 (2)(24)      
                        669.4     692.3     9.75 %
Financial Services                                      
Callidus Capital Corporation(8)   Asset management services   Common stock (100 shares)         4/1/2010     3.0     1.7        
                                       
Ciena Capital LLC(8)(21)   Real estate and small business loan servicer   First lien senior secured revolving loan ($14.0 par due 12/2017)   6.00%     11/29/2010     14.0     14.0 (2)      
        Equity interests         11/29/2010     25.0     18.3 (2)      
                        39.0     32.3        
                                       
Commercial Credit Group, Inc.   Commercial equipment finance and leasing company   Senior subordinated loan ($28.0 par due 8/2022)   11.11% (Libor + 9.75%/Q)     5/10/2012     28.0     28.0 (2)(17)      
                                       
DFC Global Facility Borrower II LLC(21)   Non-bank provider of alternative financial services   First lien senior secured revolving loan ($75.0 par due 9/2022)   12.11% (Libor + 10.75%/Q)     9/27/2017     75.0     75.0 (2)(17)      
                                       
Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.(7)   Debt collection services provider   Common stock (180 shares)         1/11/2017         (2)      
                                       
Gordian Group, LLC   Provider of products, services and software to organizations pursuing efficient and effective procurement and information solutions   Common stock (526 shares)         11/30/2012         (2)      
                                       
Imperial Capital Group LLC   Investment services   Class A common units (24,945 units)         5/10/2007     6.1     10.2 (2)      
        2006 Class B common units (8,173 units)         5/10/2007         (2)      
                        6.1     10.2        
                                       
Ivy Hill Asset Management, L.P.(8)(10)   Asset management services   Member interest (100.00% interest)         6/15/2009     244.0     315.1        
                                       
Javlin Three LLC, Javlin Four LLC, and Javlin Five LLC(10)   Asset-backed financial services company   First lien senior secured loan ($18.6 par due 6/2017)   11.36% (Libor + 10.00%/Q)     6/24/2014     18.6     16.8 (2)(17)      
                                       
LS DE LLC and LM LSQ Investors LLC(10)   Asset based lender   Senior subordinated loan ($3.0 par due 6/2021)   10.50%     6/15/2017     3.0     3.0 (2)      
        Senior subordinated loan ($27.0 par due 6/2021)   10.50%     6/25/2015     27.0     27.0 (2)      
        Membership units (3,275,000 units)         6/25/2015     3.3     3.9        
                        33.3     33.9        
                        447.0     513.0     7.23 %
Food and Beverage                                      
American Seafoods Group LLC and American Seafoods Partners LLC   Harvester and processor of seafood   Second lien senior secured loan ($87.0 par due 2/2024)   9.57% (Libor + 8.13%/Q)     8/21/2017     86.8     87.0 (2)(17)      
        Class A units (77,922 units)         8/19/2015     0.1     0.1 (2)      
        Warrant to purchase up to 7,422,078 Class A units (expires 8/2035)         8/19/2015     7.4     10.1 (2)      
                        94.3     97.2        
                                       
Bakemark Holdings, Inc.   Manufacturer and distributor of specialty bakery ingredients   First lien senior secured loan ($1.7 par due 8/2023)   6.94% (Libor + 5.25%/Q)     8/14/2017     1.7     1.7 (2)(17)      
                                     

F-29


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
DecoPac, Inc.(21)   Supplier of cake decorating solutions and products to in-store bakeries   First lien senior secured revolving loan ($2.3 par due 9/2023)   5.94% (Libor + 4.25%/Q)     9/29/2017     2.3     2.2 (2)(17)      
        First lien senior secured revolving loan ($0.3 par due 9/2023)   5.89% (Libor + 4.25%/Q)     9/29/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($8.4 par due 9/2024)   5.94% (Libor + 4.25%/Q)     9/29/2017     8.4     8.3 (2)(17)      
                        11.0     10.8        
                                       
Eagle Family Foods Group LLC   Manufacturer and producer of milk products   First lien senior secured loan ($0.2 par due 12/2021)   5.69% (Libor + 4.00%/Q)     8/29/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($7.9 par due 12/2021)   10.74% (Libor + 9.05%/Q)     9/11/2017     7.8     7.5 (2)(17)      
        First lien senior secured loan ($1.4 par due 12/2021)   10.74% (Libor + 9.05%/Q)     8/22/2016     1.4     1.3 (2)(17)      
        First lien senior secured loan ($20.2 par due 12/2021)   10.74% (Libor + 9.05%/Q)     8/22/2016     20.2     19.2 (3)(17)      
        First lien senior secured loan ($54.8 par due 12/2021)   10.74% (Libor + 9.05%/Q)     12/31/2015     54.5     52.0 (3)(17)      
                        84.1     80.2        
                                       
Edward Don & Company, LLC and VCP-EDC Co-Invest, LLC   Distributor of foodservice equipment and supplies   First lien senior secured loan ($47.6 par due 9/2022)   10.00% (Libor + 8.50%/Q)     3/31/2017     47.6     47.6 (2)(17)      
        Membership units (2,970,000 units)         6/9/2017     3.0     3.4        
                        50.6     51.0        
                                       
FPI Holding Corporation(8)(21)   Distributor of fruits   First lien senior secured loan ($0.7 par due 6/2018)       1/3/2017     0.4     0.4 (16)      
                                       
Gehl Foods, LLC and GF Parent LLC   Producer of low-acid, aseptic food and beverage products   First lien senior secured loan ($120.7 par due 6/2019)   7.88% (Libor + 6.50%/Q)     7/26/2017     120.7     120.7 (2)(17)      
        Class A preferred units (2,940 units)         5/13/2015     2.9     1.9 (2)      
        Class A common units (60,000 units)         5/13/2015     0.1     (2)      
        Class B common units (0.26 units)         5/13/2015         (2)      
                        123.7     122.6        
                                       
JWC/KI Holdings, LLC   Foodservice sales and marketing agency   Membership units (5,000 units)         11/16/2015     5.0     5.3 (2)      
                                       
Kettle Cuisine, LLC   Manufacturer of fresh refrigerated and frozen food products   Second lien senior secured loan ($28.5 par due 2/2022)   11.21% (Libor + 9.75%/Q)     8/21/2015     28.5     28.5 (2)(17)      
                                       
NECCO Holdings, Inc. and New England Confectionery Company, Inc. (8)(21)   Producer and supplier of candy   First lien senior secured revolving loan ($21.7 par due 1/2018)       1/3/2017     9.7     9.2 (16)      
        First lien senior secured loan ($0.6 par due 8/2018)       11/20/2017     0.6     (16)      
        First lien senior secured loan ($10.9 par due 1/2018)       1/3/2017     0.9     1.3 (16)      
        First lien senior secured loan ($0.7 par due 1/2018)       11/20/2017     0.7     0.1 (16)      
        Common stock (860,189 shares)         1/3/2017                
                        11.9     10.6        
                                       
RF HP SCF Investor, LLC(10)   Branded specialty food company   Membership interest (10.08% interest)         12/22/2016     12.5     14.4 (2)      

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Teasdale Foods, Inc.(21)   Provider of beans, sauces and hominy to the retail, foodservice and wholesale channels   First lien senior secured revolving loan ($0.2 par due 10/2020)   6.18% (Libor + 4.75%/Q)     6/30/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 10/2020)   8.25% (Base Rate + 3.75%/Q)     6/30/2017     0.2     0.2 (2)(17)      
        Second lien senior secured loan ($33.6 par due 10/2021)   10.44% (Libor + 8.75%/Q)     1/3/2017     33.6     33.3 (2)(17)      
        Second lien senior secured loan ($21.3 par due 10/2021)   10.11% (Libor + 8.75%/Q)     1/3/2017     21.3     21.1 (2)(17)      
        Second lien senior secured loan ($31.5 par due 10/2021)   10.13% (Libor + 8.75%/Q)     1/3/2017     31.5     31.2 (2)(17)      
                        86.8     86.0        
                        510.5     508.7     7.17 %
Power Generation                                      
Alphabet Energy, Inc.   Technology developer to convert waste-heat into electricity   First lien senior secured loan ($3.4 par due 8/2017)         12/16/2013     3.3     0.4 (2)(16)      
        Series 1B preferred stock (12,976 shares)         6/21/2016     0.2     (2)      
        Warrant to purchase up to 125,000 shares of Series 2 preferred stock (expires 12/2023)         6/30/2016     0.1     (2)      
                        3.6     0.4        
                                       
CPV Maryland Holding Company II, LLC   Gas turbine power generation facilities operator   Senior subordinated loan ($46.1 par due 12/2020)   5.00% Cash, 5.00% PIK     8/8/2014     46.1     42.4 (2)      
        Warrant to purchase up to 4 units of common stock (expires 8/2018)         8/8/2014         (2)      
                        46.1     42.4        
                                       
DESRI VI Management Holdings, LLC   Wind power generation facility operator   Senior subordinated loan ($13.9 par due 12/2021)   10.00%     12/24/2014     13.9     13.9 (2)      
                                       
Green Energy Partners, Stonewall LLC and Panda Stonewall Intermediate Holdings II LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($24.9 par due 11/2021)   7.19% (Libor + 5.50%/Q)     11/13/2014     24.8     24.4 (2)(17)      
        Senior subordinated loan ($20.2 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     20.2     19.5 (2)      
        Senior subordinated loan ($94.6 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     94.6     91.3 (2)      
                        139.6     135.2        
                                       
Joule Unlimited Technologies, Inc. and Stichting Joule Global Foundation   Renewable fuel and chemical production developer   First lien senior secured loan ($8.3 par due 10/2018)       3/31/2015     7.9     0.4 (2)(16)      
        Warrant to purchase up to 32,051 shares of Series C-2 preferred stock (expires 7/2023)         7/25/2013         (2)(9)      
                        7.9     0.4        
                                       
Moxie Patriot LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($33.9 par due 12/2020)   7.44% (Libor + 5.75%/Q)     12/19/2013     33.8     33.4 (2)(17)      
                                       
Navisun LLC and Navisun Holdings LLC(8)(21)   Owner and operater of commercial and industrial solar projects   First lien senior secured loan ($2.6 par due 11/2023)   8.00% PIK     11/15/2017     2.6     2.6 (2)      
        Series A Preferred units (1,000 units)   10.50% PIK     11/15/2017     0.3     0.3 (2)      
        Class A units (550 units)         11/15/2017         (2)      
                        2.9     2.9        
                                     

F-31


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Panda Liberty LLC (fka Moxie Liberty LLC)   Gas turbine power generation facilities operator   First lien senior secured loan ($5.0 par due 8/2020)   8.19% (Libor + 6.50%/Q)     5/8/2017     4.6     4.6 (2)(17)      
        First lien senior secured loan ($34.4 par due 8/2020)   8.19% (Libor + 6.50%/Q)     8/21/2013     34.2     31.6 (2)(17)      
                        38.8     36.2        
                                       
Panda Temple Power II, LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($19.6 par due 4/2019)   7.69% (Libor + 6.00%/Q)     4/3/2013     19.6     17.4 (2)(17)      
                                       
Panda Temple Power, LLC   Gas turbine power generation facilities operator   First lien senior secured revolving loan ($2.3 par due 4/2018)   10.35% (Libor + 9.00%/Q)     4/28/2017     2.3     2.3 (2)(17)      
        First lien senior secured loan ($24.8 par due 3/2022)       3/6/2015     23.6     18.4 (2)(16)      
                        25.9     20.7        
                                       
PERC Holdings 1 LLC   Operator of recycled energy, combined heat and power, and energy efficiency facilities   Class B common units (21,653,543 units)         10/20/2014     21.7     24.0 (2)      
                                       
Riverview Power LLC   Operator of natural gas and oil fired power generation facilities   First lien senior secured loan ($98.1 par due 12/2022)   9.69% (Libor + 8.00%/Q)     12/29/2016     95.9     98.2 (2)(17)      
                        449.7     425.1     5.99 %
Restaurants and Food Services                                      
ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc. (8)(21)   Restaurant owner and operator   First lien senior secured loan ($3.7 par due 12/2018)   19.67% PIK (Libor + 18.00%/Q)     12/22/2016     3.7     3.7 (2)(17)      
        First lien senior secured loan ($49.3 par due 12/2018)       11/27/2006     39.9     12.3 (2)(16)      
        Promissory note ($29.2 par due 12/2023)         11/27/2006     13.8     (2)      
        Warrant to purchase up to 0.95 units of Series D common stock (expires 12/2023)         12/18/2013         (2)      
                        57.4     16.0        
                                       
Benihana, Inc.(21)   Restaurant owner and operator   First lien senior secured revolving loan ($0.5 par due 7/2018)   8.57% (Libor + 7.00%/Q)     8/21/2012     0.5     0.5 (2)(17)(20)      
        First lien senior secured revolving loan ($1.1 par due 7/2018)   8.69% (Libor + 7.00%/Q)     8/21/2012     1.1     1.1 (2)(17)(20)      
        First lien senior secured revolving loan ($1.0 par due 7/2018)   10.25% (Base Rate + 5.75%/Q)     8/21/2012     1.0     0.9 (2)(17)(20)      
        First lien senior secured loan ($0.3 par due 1/2019)   8.59% (Libor + 7.00%/Q)     12/28/2016     0.3     0.3 (2)(17)      
        First lien senior secured loan ($4.7 par due 1/2019)   8.59% (Libor + 7.00%/Q)     8/21/2012     4.7     4.5 (4)(17)      
                        7.6     7.3        
                                       
Cozzini Bros., Inc. and BH-Sharp Holdings LP(21)   Provider of commercial knife sharpening and cutlery services in the restaurant industry   First lien senior secured loan ($1.9 par due 3/2023)   7.07% (Libor + 5.50%/Q)     3/10/2017     1.9     1.9 (2)(17)      
        First lien senior secured loan ($1.2 par due 3/2023)   6.92% (Libor + 5.50%/Q)     3/10/2017     1.2     1.2 (2)(17)      
        First lien senior secured loan ($19.3 par due 3/2023)   6.92% (Libor + 5.50%/Q)     3/10/2017     19.3     19.3 (4)(17)      
        Common units (2,950,000 units)         3/10/2017     3.0     2.8 (2)      
                        25.4     25.2        

F-32


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
FWR Holding Corporation(21)   Restaurant owner, operator, and franchisor   First lien senior secured revolving loan ($0.3 par due 8/2023)   7.57% (Libor + 6.00%/Q)     8/21/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.2 par due 8/2023)   7.60% (Libor + 6.00%/Q)     8/21/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($2.0 par due 8/2023)   7.32% (Libor + 6.00%/Q)     8/21/2017     2.0     2.0 (2)(17)      
        First lien senior secured loan ($2.0 par due 8/2023)   7.48% (Libor + 6.00%/Q)     8/21/2017     2.0     2.0 (2)(17)      
                        4.5     4.5        
                                       
Garden Fresh Restaurant Corp. and GFRC Holdings LLC(8)(21)   Restaurant owner and operator   First lien senior secured revolving loan ($0.1 par due 2/2022)   9.50% (Libor + 8.00%/Q)     2/1/2017     0.1     0.1 (2)(17)(20)      
        First lien senior secured loan ($24.9 par due 2/2022)   9.50% (Libor + 8.00%/Q)     10/3/2013     24.9     24.9 (2)(17)      
                        25.0     25.0        
                                       
Global Franchise Group, LLC(21)   Worldwide franchisor of quick service restaurants   First lien senior secured loan ($8.7 par due 12/2019)   7.44% (Libor + 5.75%/Q)     9/15/2017     8.7     8.6 (2)(17)      
                                       
Heritage Food Service Group, Inc. and WCI-HFG Holdings, LLC   Distributor of repair and replacement parts for commercial kitchen equipment   Second lien senior secured loan ($31.6 par due 10/2022)   9.92% (Libor + 8.50%/Q)     10/20/2015     31.6     31.6 (2)(17)      
        Preferred units (3,000,000 units)         10/20/2015     3.0     3.6 (2)      
                        34.6     35.2        
                                       
Hojeij Branded Foods, LLC(21)   Leading operator of airport concessions across the U.S.   First lien senior secured loan ($0.3 par due 7/2022)   7.29% (Libor + 6.00%/Q)     7/20/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($6.3 par due 7/2022)   7.57% (Libor + 6.00%/Q)     7/20/2017     6.2     6.3 (4)(17)      
                        6.5     6.6        
                                       
Jim N Nicks Management, LLC(21)   Restaurant owner and operator   First lien senior secured revolving loan ($1.2 par due 7/2023)   6.71% (Libor + 5.25%/Q)     7/10/2017     1.2     1.2 (2)(17)      
        First lien senior secured revolving loan ($0.5 par due 7/2023)   6.64% (Libor + 5.25%/Q)     7/10/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($0.6 par due 7/2023)   6.63% (Libor + 5.25%/Q)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($0.6 par due 7/2023)   6.94% (Libor + 5.25%/Q)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($14.1 par due 7/2023)   6.94% (Libor + 5.25%/Q)     7/10/2017     14.1     13.8 (4)(17)      
                        17.0     16.7        
                                       
Orion Foods, LLC(8)   Convenience food service retailer   First lien senior secured loan ($1.2 par due 9/2015)       4/1/2010     1.2     0.5 (2)(16)      
        Second lien senior secured loan ($19.4 par due 9/2015)       4/1/2010         (2)(16)      
        Preferred units (10,000 units)         10/28/2010         (2)      
        Class A common units (25,001 units)         4/1/2010         (2)      
        Class B common units (1,122,452 units)         4/1/2010         (2)      
                        1.2     0.5        
                                     

F-33


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
OTG Management, LLC(21)   Airport restaurant operator   First lien senior secured revolving loan ($8.4 par due 8/2021)   9.85% (Libor + 8.50%/Q)     8/26/2016     8.4     8.4 (2)(17)      
        First lien senior secured loan ($4.9 par due 8/2021)   9.88% (Libor + 8.50%/Q)     8/26/2016     4.9     4.9 (2)(17)      
        First lien senior secured loan ($1.6 par due 8/2021)   9.91% (Libor + 8.50%/Q)     8/26/2016     1.6     1.6 (2)(17)      
        First lien senior secured loan ($2.2 par due 8/2021)   9.98% (Libor + 8.50%/Q)     8/26/2016     2.2     2.2 (2)(17)      
        First lien senior secured loan ($97.8 par due 8/2021)   9.88% (Libor + 8.50%/Q)     8/26/2016     97.8     97.8 (3)(17)      
        Senior subordinated loan ($25.3 par due 2/2022)   17.50% PIK     8/26/2016     25.1     25.3 (2)      
        Class A preferred units (3,000,000 units)         8/26/2016     30.0     34.7 (2)      
        Common units (3,000,000 units)         1/5/2011     3.0     9.1 (2)      
        Warrant to purchase up to 7.73% of common units (expires 6/2018)         6/19/2008     0.1     (2)      
        Warrant to purchase 0.60% of the common units deemed outstanding (expires 12/2018)         8/29/2016         19.9 (2)      
                        173.1     203.9        
                                       
Restaurant Holding Company, LLC   Fast food restaurant operator   First lien senior secured loan ($31.7 par due 2/2019)   9.32% (Libor + 7.75%/Q)     3/13/2014     31.6     30.7 (3)(17)      
                                       
Restaurant Technologies, Inc.(21)   Provider of bulk cooking oil management services to the restaurant and fast food service industries   First lien senior secured revolving loan ($0.2 par due 11/2021)   6.32% (Libor + 4.75%/Q)     11/23/2016     0.2     0.2 (2)(17)(20)      
        First lien senior secured revolving loan ($0.4 par due 11/2021)   6.30% (Libor + 4.75%/Q)     11/23/2016     0.4     0.4 (2)(17)(20)      
                        0.6     0.6        
                                       
SFE Intermediate Holdco LLC(21)   Provider of outsourced foodservice to K-12 school districts   First lien senior secured revolving loan ($0.8 par due 7/2022)   6.50% (Libor + 5.00%/Q)     7/31/2017     0.8     0.8 (2)(17)      
        First lien senior secured loan ($6.8 par due 7/2023)   6.38% (Libor + 5.00%/Q)     7/31/2017     6.7     6.8 (4)(17)      
                        7.5     7.6        
                        400.7     388.4     5.47 %
Automotive Services                                      
A.U.L. Corp.(21)   Provider of vehicle service contracts ("VSCs") and limited warranties for passenger vehicles   First lien senior secured revolving loan ($0.4 par due 6/2023)   9.00% (Base Rate + 4.50%/Q)     6/7/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($7.8 par due 6/2023)   6.75% (Libor + 5.00%/Q)     6/7/2017     7.8     7.8 (2)(17)      
                        8.2     8.2        
                                       
AEP Holdings, Inc. and Arrowhead Holdco Company   Distributor of non-discretionary, mission-critical aftermarket replacement parts   First lien senior secured loan ($0.1 par due 8/2021)   7.09% (Libor + 5.75%/Q)     7/21/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($3.0 par due 8/2021)   7.13% (Libor + 5.75%/Q)     7/21/2017     3.0     3.0 (2)(17)      
        First lien senior secured loan ($1.5 par due 8/2021)   7.23% (Libor + 5.75%/Q)     7/21/2017     1.5     1.5 (2)(17)      
        Common stock (3,467 shares)         8/31/2015     3.5     4.3 (2)      
                        8.1     8.9        
                                       
ChargePoint, Inc.   Developer and operator of electric vehicle charging stations   Warrant to purchase up to 809,126 shares of Series E preferred stock (expires 12/2024)         12/30/2014     0.3     2.1 (2)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Dent Wizard International Corporation and DWH Equity Investors, L.P.   Automotive reconditioning services   Second lien senior secured loan ($50.0 par due 10/2020)   10.24% (Libor + 8.75%/Q)     4/7/2015     50.0     50.0 (2)(17)      
        Class A common stock (10,000 shares)         4/7/2015     0.2     0.5 (2)      
        Class B common stock (20,000 shares)         4/7/2015     0.4     1.0 (2)      
                        50.6     51.5        
                                       
Eckler Industries, Inc.(21)   Restoration parts and accessories provider for classic automobiles   First lien senior secured revolving loan ($2.0 par due 12/2017)       7/12/2012     2.0     1.5 (2)(16)      
        First lien senior secured loan ($6.6 par due 12/2017)       7/12/2012     6.6     4.9 (2)(16)      
        First lien senior secured loan ($24.3 par due 12/2017)       7/12/2012     24.3     18.0 (2)(16)      
        Series A preferred stock (1,800 shares)         7/12/2012     1.8     (2)      
        Common stock (20,000 shares)         7/12/2012     0.2     (2)      
                        34.9     24.4        
                                       
EcoMotors, Inc.   Engine developer   First lien senior secured loan ($9.4 par due 3/2018)       9/1/2015     9.1     0.1 (2)(16)      
        Warrant to purchase up to 321,888 shares of Series C preferred stock (expires 12/2022)         12/28/2012         (2)      
        Warrant to purchase up to 70,000 shares of Series C preferred stock (expires 2/2025)         2/24/2015         (2)      
                        9.1     0.1        
                                       
ESCP PPG Holdings, LLC(7)   Distributor of new equipment and aftermarket parts to the heavy-duty truck industry   Class A units (3,500,000 units)         12/14/2016     3.5     2.8 (2)      
                                       
Mavis Tire Supply LLC   Auto parts retailer   First lien senior secured loan ($38.5 par due 10/2020)   6.67% (Libor + 5.25%/Q)     7/26/2017     38.5     38.5 (2)(17)      
        First lien senior secured loan ($2.0 par due 10/2020)   6.67% (Libor + 5.25%/Q)     10/18/2017     2.0     2.0 (2)(17)      
        First lien senior secured loan ($179.0 par due 10/2020)   6.67% (Libor + 5.25%/Q)     7/26/2017     179.0     179.0 (2)(17)      
                        219.5     219.5        
                                       
Simpson Performance Products, Inc.   Provider of motorsports safety equipment   First lien senior secured loan ($10.0 par due 2/2020)   9.25% (Libor + 7.59%/Q)     2/20/2015     10.0     10.0 (2)(17)      
        First lien senior secured loan ($18.3 par due 2/2020)   9.25% (Libor + 7.59%/Q)     2/20/2015     18.3     18.3 (3)(17)      
                        28.3     28.3        
                                       
SK SPV IV, LLC   Collision repair site operators   Series A common stock (12,500 units)         8/18/2014     0.6     3.2 (2)      
        Series B common stock (12,500 units)         8/18/2014     0.6     3.2 (2)      
                        1.2     6.4        
                        363.7     352.2     4.96 %
Education                                      
Campus Management Acquisition Corp.(7)   Education software developer   Preferred stock (485,159 shares)         2/8/2008     10.5     11.0 (2)      
                                       
Excelligence Holdings Corp.   Developer, manufacturer and retailer of educational products   First lien senior secured loan ($10.0 par due 4/2023)   7.35% (Libor + 6.00%/Q)     4/17/2017     10.0     9.6 (4)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Flinn Scientific, Inc. and WCI-Quantum Holdings, Inc.   Distributor of instructional products, services and resources   First lien senior secured loan ($32.0 par due 10/2020)   6.50% (Libor + 5.00%/Q)     7/26/2017     32.0     32.0 (2)(17)      
        First lien senior secured loan ($38.7 par due 10/2020)   6.37% (Libor + 5.00%/Q)     7/26/2017     38.7     38.7 (2)(17)      
        Series A preferred stock (1,272 shares)         10/24/2014     1.0     1.2 (2)      
                        71.7     71.9        
                                       
Frontline Technologies Group Holding LLC, Frontline Technologies Blocker Buyer, Inc., Frontline Technologies Holdings, LLC and Frontline Technologies Parent, LLC(21)   Provider of human capital management ("HCM") and SaaS-based software solutions to employees and administrators of K-12 school organizations   First lien senior secured loan ($39.6 par due 9/2023)   8.09% (Libor + 6.50%/Q)     9/19/2017     39.1     39.0 (2)(17)      
        Class A preferred units (4,574 units)         9/18/2017     4.6     4.8        
        Class B units (499,050 units)         9/18/2017                
                        43.7     43.8        
                                       
Infilaw Holding, LLC(21)   Operator of for-profit law schools   First lien senior secured revolving loan ($4.5 par due 2/2018)       8/25/2011     3.5     (2)(16)(20)      
                                       
Instituto de Banca y Comercio, Inc. & Leeds IV Advisors, Inc.(21)   Private school operator   First lien senior secured revolving loan ($11.8 par due 12/2018)   12.50% (Base Rate + 8.00%/Q)     5/18/2017     11.8     11.8 (2)(17)      
        First lien senior secured loan ($3.2 par due 12/2018)   10.50% (Libor + 9.00%/Q)     10/31/2015     3.2     3.2 (2)(17)      
        Senior preferred series A-1 shares (163,902 shares)         10/31/2015     119.4     25.2 (2)      
        Series B preferred stock (1,401,385 shares)         8/5/2010     4.0     (2)      
        Series C preferred stock (1,994,644 shares)         6/7/2010     0.5     (2)      
        Series B preferred stock (348,615 shares)         8/5/2010     1.0     (2)      
        Series C preferred stock (517,942 shares)         6/7/2010     0.1     (2)      
        Common stock (16 shares)         6/7/2010         (2)      
        Common stock (4 shares)         6/7/2010         (2)      
                        140.0     40.2        
                                       
Liaison Acquisition, LLC(21)   Provider of centralized applications services to educational associations   Second lien senior secured loan ($15.0 par due 8/2023)   10.81% (Libor + 9.25%/Q)     2/9/2017     14.7     15.0 (2)(17)      
                                       
PIH Corporation and Primrose Holding Corporation(7)(21)   Franchisor of education-based early childhood centers   First lien senior secured revolving loan ($0.6 par due 12/2018)   6.63% (Libor + 5.25%/Q)     12/13/2013     0.6     0.6 (2)(17)      
        First lien senior secured revolving loan ($0.4 par due 12/2018)   8.75% (Base Rate + 4.25%/Q)     12/13/2013     0.4     0.4 (2)(17)      
        First lien senior secured loan ($1.6 par due 12/2018)   7.07% (Libor + 5.50%/Q)     12/15/2017     1.6     1.6 (2)(17)      
        Common stock (7,227 shares)         1/3/2017     10.7     17.8        
                        13.3     20.4        
                                       
R3 Education Inc., Equinox EIC Partners LLC and Sierra Education Finance Corp.   Medical school operator   Preferred stock (1,977 shares)         7/30/2008     0.5     0.5 (2)      
        Common membership interest (15.76% interest)         9/21/2007     15.8     26.2 (2)      
        Warrant to purchase up to 27,890 shares (expires 11/2019)         12/8/2009         9.1 (2)      
                        16.3     35.8        

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Regent Education, Inc.   Provider of software solutions designed to optimize the financial aid and enrollment processes   Warrant to purchase up to 987 shares of common stock (expires 12/2026)         12/23/2016         (2)      
        Warrant to purchase up to 5,393,194 shares of common stock (expires 12/2026)         12/23/2016         (2)      
                                   
                                       
RuffaloCODY, LLC(21)   Provider of student fundraising and enrollment management services   First lien senior secured revolving loan       5/29/2013         (19)      
                                       
Severin Acquisition, LLC(21)   Provider of student information system software solutions to the K-12 education market   Second lien senior secured loan ($38.7 par due 7/2022)   10.32% (Libor + 8.75%/Q)     2/1/2017     37.9     38.7 (2)(17)      
        Second lien senior secured loan ($3.1 par due 7/2022)   10.57% (Libor + 9.00%/Q)     10/14/2016     3.1     3.1 (17)      
        Second lien senior secured loan ($4.2 par due 7/2022)   10.32% (Libor + 8.75%/Q)     10/28/2015     4.1     4.2 (2)(17)      
        Second lien senior secured loan ($15.0 par due 7/2022)   10.32% (Libor + 8.75%/Q)     7/31/2015     14.8     15.0 (2)(17)      
        Second lien senior secured loan ($3.3 par due 7/2022)   10.82% (Libor + 9.25%/Q)     2/1/2016     3.2     3.3 (2)(17)      
        Second lien senior secured loan ($2.8 par due 7/2022)   10.82% (Libor + 9.25%/Q)     8/8/2016     2.8     2.8 (17)      
        Second lien senior secured loan ($3.1 par due 7/2022)   10.57% (Libor + 9.00%/Q)     1/3/2017     3.1     3.1 (17)      
        Second lien senior secured loan ($5.5 par due 7/2022)   10.32% (Libor + 8.75%/Q)     1/3/2017     5.5     5.5 (2)(17)      
        Second lien senior secured loan ($20.0 par due 7/2022)   10.32% (Libor + 8.75%/Q)     1/3/2017     20.0     20.0 (2)(17)      
        Second lien senior secured loan ($4.4 par due 7/2022)   10.82% (Libor + 9.25%/Q)     1/3/2017     4.4     4.4 (2)(17)      
        Second lien senior secured loan ($2.8 par due 7/2022)   10.82% (Libor + 9.25%/Q)     1/3/2017     2.8     2.8 (17)      
                        101.7     102.9        
                        425.4     350.6     4.94 %
Wholesale Distribution                                      
DFS Holding Company, Inc.   Distributor of maintenance, repair, and operations parts, supplies, and equipment to the foodservice industry   First lien senior secured loan ($4.7 par due 2/2022)   6.69% (Libor + 5.00%/Q)     3/1/2017     4.7     4.6 (2)(17)      
        First lien senior secured loan ($188.7 par due 2/2022)   7.19% (Libor + 5.50%/Q)     7/26/2017     188.7     186.8 (2)(17)      
                        193.4     191.4        
                                       
Flow Solutions Holdings, Inc.   Distributor of high value fluid handling, filtration and flow control products   Second lien senior secured loan ($6.0 par due 10/2018)   10.57% (Libor + 9.00%/Q)     12/16/2014     6.0     6.0 (2)(17)      
        Second lien senior secured loan ($29.5 par due 10/2018)   10.57% (Libor + 9.00%/Q)     12/16/2014     29.5     29.5 (2)(17)      
                        35.5     35.5        
                                       
KHC Holdings, Inc. and Kele Holdco, Inc.(21)   Catalog-based distribution services provider for building automation systems   First lien senior secured revolving loan ($0.7 par due 10/2020)   5.80% (Libor + 4.25%/Q)     1/3/2017     0.7     0.7 (2)(17)      
        First lien senior secured loan ($66.2 par due 10/2022)   7.69% (Libor + 6.00%/Q)     1/3/2017     66.2     66.2 (3)(17)      
        Common stock (30,000 shares)         1/3/2017     3.1     3.1        
                        70.0     70.0        
                        298.9     296.9     4.18 %
Oil and Gas                                      
Moss Creek Resources, LLC   Exploration and production company   Senior subordinated loan ($30.0 par due 4/2022)   9.50% (Libor + 8.00%/Q)     5/5/2017     29.7     30.0 (2)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Penn Virginia Holding Corp.   Exploration and production company   Second lien senior secured loan ($90.1 par due 9/2022)   8.57% (Libor + 7.00%/Q)     9/28/2017     90.1     88.3 (2)(17)      
                                       
Petroflow Energy Corporation and TexOak Petro Holdings LLC(7)   Oil and gas exploration and production company   First lien senior secured loan ($12.8 par due 6/2019)   3.36% (Libor + 2.00%/Q)     6/29/2016     11.7     12.4 (2)(17)      
        Second lien senior secured loan ($24.7 par due 12/2019)       6/29/2016     21.9     (2)(16)      
        Common units (202,000 units)         6/29/2016     11.1            
                        44.7     12.4        
                                       
VPROP Operating, LLC and Vista Proppants and Logistics, LLC   Sand based proppant producer and distributor to the oil and natural gas industry   First lien senior secured loan ($28.2 par due 8/2021)   10.98% (Libor + 9.50%/Q)     8/1/2017     28.1     28.2 (2)(17)      
        First lien senior secured loan ($35.3 par due 8/2021)   10.74% (Libor + 8.50% Cash, 1.00% PIK/Q)     11/9/2017     35.3     35.3 (2)(17)      
        First lien senior secured loan ($15.2 par due 3/2021)   10.98% (Libor + 8.50% Cash, 1.00% PIK/Q)     3/1/2017     15.2     15.2 (2)(17)      
        First lien senior secured loan ($75.5 par due 3/2021)   10.98% (Libor + 8.50% Cash, 1.00% PIK/Q)     3/1/2017     75.5     75.5 (3)(17)      
        Common units (997,864 units)         11/9/2017     9.7     9.7 (2)      
                        163.8     163.9        
                        328.3     294.6     4.15 %
Containers and Packaging                                      
GS Pretium Holdings, Inc.   Manufacturer and supplier of high performance plastic containers   Common stock (500,000 shares)         6/2/2014     0.5     0.8 (2)      
                                       
ICSH Parent, Inc. and Vulcan Container Services Holdings, Inc.   Industrial container manufacturer, reconditioner and servicer   Second lien senior secured loan ($63.6 par due 4/2025)   9.38% (Libor + 8.00%/Q)     4/28/2017     62.9     63.6 (2)(17)      
        Series A common stock (24,900 shares)         4/28/2017     2.5     3.3 (2)      
                        65.4     66.9        
                                       
LBP Intermediate Holdings LLC(21)   Manufacturer of paper and corrugated foodservice packaging   First lien senior secured revolving loan       7/10/2015         (19)      
        First lien senior secured loan ($11.8 par due 7/2020)   7.19% (Libor + 5.50%/Q)     7/10/2015     11.8     11.8 (3)(17)      
        First lien senior secured loan ($5.0 par due 7/2020)   7.19% (Libor + 5.50%/Q)     7/10/2015     5.0     5.0 (4)(17)      
                        16.8     16.8        
                                       
Microstar Logistics LLC, Microstar Global Asset Management LLC, and MStar Holding Corporation   Keg management solutions provider   Second lien senior secured loan ($78.5 par due 12/2018)   9.05% (Libor + 7.50%/Q)     12/14/2012     78.5     78.5 (2)(17)      
        Second lien senior secured loan ($54.0 par due 12/2018)   9.05% (Libor + 7.50%/Q)     12/14/2012     54.0     54.0 (3)(17)      
        Second lien senior secured loan ($10.0 par due 12/2018)   9.05% (Libor + 7.50%/Q)     12/14/2012     10.0     10.0 (4)(17)      
        Common stock (50,000 shares)         12/14/2012     4.0     6.8 (2)      
                        146.5     149.3        
                                       
NSI Holdings, Inc.(7)   Manufacturer of plastic containers for the wholesale nursery industry   Series A preferred stock (2,192 shares)         1/3/2017                
                                       
Ranpak Corp.   Manufacturer and marketer of paper-based protective packaging systems and materials   Second lien senior secured loan ($13.3 par due 10/2022)   8.75% (Libor + 7.25%/Q)     1/3/2017     12.8     13.3 (2)(17)      
                        242.0     247.1     3.48 %

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Environmental Services                                      
MPH Energy Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (3.13% interest)         1/8/2014         (2)      
                                       
RE Community Holdings GP, LLC and RE Community Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (2.86% interest)         3/1/2011         (2)      
        Limited partnership interest (2.49% interest)         3/1/2011         (2)      
                                   
                                       
Soil Safe, Inc. and Soil Safe Acquisition Corp.(8)(21)   Provider of soil treatment, recycling and placement services   First lien senior secured revolving loan       1/3/2017         (19)      
        First lien senior secured loan ($22.0 par due 1/2020)   8.00% (Libor + 6.25%/Q)     1/3/2017     22.0     22.0 (2)(17)      
        Second lien senior secured loan ($12.7 par due 6/2020)   10.75% (Libor + 7.75%/Q)     1/3/2017     12.7     12.7 (2)(17)      
        Senior subordinated loan ($36.7 par due 12/2020)   16.50% PIK     1/3/2017     36.7     36.7 (2)      
        Senior subordinated loan ($31.5 par due 12/2020)   14.50% PIK     1/3/2017     31.5     31.5 (2)      
        Senior subordinated loan ($30.5 par due 12/2020)       1/3/2017     11.5     4.0 (16)      
        Common stock (810 shares)         1/3/2017                
                        114.4     106.9        
                                       
Storm UK Holdco Limited and Storm US Holdco Inc.(9)(21)   Provider of water infrastructure software solutions for municipalities / utilities and engineering consulting firms   First lien senior secured revolving loan ($0.1 par due 5/2022)   9.00% (Base Rate + 4.50%/Q)     5/5/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($1.6 par due 5/2023)   6.89% (Libor + 5.50%/Q)     5/5/2017     1.6     1.5 (2)(17)      
                        1.7     1.6        
                                       
Waste Pro USA, Inc   Waste management services   Second lien senior secured loan ($75.2 par due 10/2020)   9.05% (Libor + 7.50%/Q)     10/15/2014     75.2     75.2 (3)(17)      
                        191.3     183.7     2.59 %
Printing, Publishing and Media                                      
Connoisseur Media, LLC   Owner and operator of radio stations   First lien senior secured loan ($21.0 par due 6/2019)   7.74% (Libor + 6.38%/Q)     7/26/2017     21.0     20.8 (2)(17)      
        First lien senior secured loan ($0.1 par due 6/2019)   9.88% (Base Rate + 5.38%/Q)     7/26/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($0.7 par due 6/2019)   8.07% (Libor + 6.38%/Q)     7/26/2017     0.7     0.6 (2)(17)      
        First lien senior secured loan ($0.3 par due 6/2019)   8.07% (Libor + 6.38%/Q)     7/26/2017     0.3     0.3 (4)(17)      
        First lien senior secured loan ($41.4 par due 6/2019)   7.76% (Libor + 6.38%/Q)     7/26/2017     41.4     41.0 (2)(17)      
        First lien senior secured loan ($17.8 par due 6/2019)   7.76% (Libor + 6.38%/Q)     7/26/2017     17.8     17.6 (4)(17)      
                        81.3     80.4        
Earthcolor Group, LLC   Printing management services   Limited liability company interests (9.30%)         5/18/2012                
                                       
EDS Group(8)(9)   Provider of print and digital services   Common stock (2,432,750 shares)         1/3/2017         2.7        
                                       
Roark-Money Mailer LLC   Marketer, advertiser and distributor of coupons in the mail industry   Membership units (35,000 units)         1/3/2017                
                                       
The Teaching Company Holdings, Inc.   Education publications provider   Preferred stock (10,663 shares)         9/29/2006     1.1     2.4 (2)      
        Common stock (15,393 shares)         9/29/2006         (2)      
                        1.1     2.4        
                        82.4     85.5     1.20 %

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Chemicals                                      
AMZ Holding Corp.(21)   Specialty chemicals manufacturer   First lien senior secured loan ($12.2 par due 6/2022)   6.57% (Libor + 5.00%/Q)     6/27/2017     12.2     12.2 (4)(17)      
                                       
Genomatica, Inc.   Developer of a biotechnology platform for the production of chemical products   Warrant to purchase 322,422 shares of Series D preferred stock (expires 3/2023)         3/28/2013         (2)      
                                       
K2 Pure Solutions Nocal, L.P.(21)   Chemical producer   First lien senior secured revolving loan ($1.5 par due 2/2021)   8.70% (Libor + 7.13%/Q)     8/19/2013     1.5     1.5 (2)(17)      
        First lien senior secured loan ($40.0 par due 2/2021)   7.57% (Libor + 6.00%/Q)     8/19/2013     40.0     40.0 (3)(17)      
        First lien senior secured loan ($13.0 par due 2/2021)   7.57% (Libor + 6.00%/Q)     8/19/2013     13.0     13.0 (4)(17)      
                        54.5     54.5        
                        66.7     66.7     0.94 %
Retail                                      
Fashion Holding Luxembourg SCA (Modacin/Camaeiu)(8)(9)   Retailer of women's clothing   Preferred stock (241,776,675 shares)         1/3/2017                
                                       
Galls, LLC   Distributor of public safety, private security and defense products in the United States   Second lien senior secured loan ($2.0 par due 8/2021)   9.71% (Libor + 8.25%/Q)     8/25/2017     2.0     2.0 (2)(17)      
        Second lien senior secured loan ($7.1 par due 8/2021)   9.85% (Libor + 8.25%/Q)     8/25/2017     7.1     7.1 (2)(17)      
        Second lien senior secured loan ($1.9 par due 8/2021)   9.94% (Libor + 8.25%/Q)     8/25/2017     1.9     1.9 (2)(17)      
        Second lien senior secured loan ($14.3 par due 8/2021)   9.94% (Libor + 8.25%/Q)     1/3/2017     14.3     14.3 (2)(17)      
        Second lien senior secured loan ($26.0 par due 8/2021)   9.94% (Libor + 8.25%/Q)     1/3/2017     26.0     26.0 (2)(17)      
                        51.3     51.3        
                                       
Paper Source, Inc. and Pine Holdings, Inc.(21)   Retailer of fine and artisanal paper products   First lien senior secured loan ($9.6 par due 9/2019)   7.94% (Libor + 6.25%/Q)     9/23/2013     9.6     9.4 (4)(17)      
        Class A common stock (36,364 shares)         9/23/2013     6.0     3.1 (2)      
                        15.6     12.5        
                                       
Things Remembered, Inc. and TRM Holdco Corp.(7)(21)   Personalized gifts retailer   First lien senior secured loan ($12.3 par due 3/2020)       8/30/2016     10.5     1.5 (2)(16)      
        Common stock (10,631,940 shares)         8/30/2016     6.1     (2)      
                        16.6     1.5        
                        83.5     65.3     0.92 %
Aerospace and Defense                                      
Cadence Aerospace, LLC(21)   Aerospace precision components manufacturer   First lien senior secured revolving loan ($0.7 par due 11/2022)   7.91% (Libor + 6.50%/Q)     11/14/2017     0.7     0.7 (2)(17)(20)      
        First lien senior secured loan ($32.5 par due 11/2023)   7.91% (Libor + 6.50%/Q)     11/14/2017     32.2     32.2 (2)(17)      
                        32.9     32.9        
                                       
Jazz Acquisition, Inc.   Designer and distributor of aftermarket replacement components to the commercial airlines industry   Second lien senior secured loan ($25.0 par due 6/2022)   8.44% (Libor + 6.75%/Q)     1/3/2017     19.8     22.5 (2)(17)      
                        52.7     55.4     0.78 %
Health Clubs                                      
Athletic Club Holdings, Inc.   Premier health club operator   First lien senior secured loan ($35.0 par due 10/2020)   10.07% (Libor + 8.50%/Q)     10/11/2007     35.0     35.0 (3)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
CFW Co-Invest, L.P., NCP Curves, L.P. and Curves International Holdings, Inc.   Health club franchisor   Limited partnership interest (4,152,165 shares)         7/31/2012     4.2     4.4 (2)      
        Limited partnership interest (2,218,235 shares)         7/31/2012     2.2     9.7 (2)(9)      
        Common stock (1,680 shares)         11/12/2014         (2)(9)      
                        6.4     14.1        
                                       
Movati Athletic (Group) Inc.(9)(21)   Premier health club operator   First lien senior secured loan ($0.3 par due 10/2022)   5.90% (Libor + 4.50%/Q)     10/5/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($3.1 par due 10/2022)   5.91% (Libor + 4.50%/Q)     10/5/2017     3.0     3.0 (2)(17)      
                        3.3     3.3        
                        44.7     52.4     0.74 %
Farming and Agriculture                                      
QC Supply, LLC(21)   Specialty distributor and solutions provider to the swine and poultry markets   First lien senior secured revolving loan ($4.0 par due 12/2021)   7.57% (Libor + 6.00%/Q)     12/29/2016     4.0     3.9 (2)(17)      
        First lien senior secured loan ($2.5 par due 12/2022)   7.57% (Libor + 6.00%/Q)     12/29/2016     2.5     2.4 (2)(17)      
        First lien senior secured loan ($11.2 par due 12/2022)   7.57% (Libor + 6.00%/Q)     12/29/2016     11.2     11.0 (2)(17)      
        First lien senior secured loan ($14.9 par due 12/2022)   7.57% (Libor + 6.00%/Q)     12/29/2016     14.9     14.6 (4)(17)      
                        32.6     31.9        
                        32.6     31.9     0.45 %
Hotel Services                                      
Pyramid Management Advisors, LLC and Pyramid Investors, LLC   Hotel Operator   First lien senior secured loan ($3.0 par due 7/2021)   8.69% (Libor + 7.00%/Q)     7/15/2016     3.0     3.0 (2)(17)      
        First lien senior secured loan ($19.5 par due 7/2021)   11.37% (Libor + 10.06%/Q)     7/15/2016     19.5     19.5 (3)(17)      
        Membership units (996,833 units)         7/15/2016     1.0     0.8 (2)      
                        23.5     23.3        
                        23.5     23.3     0.33 %
Computers and Electronics                                      
Everspin Technologies, Inc.   Designer and manufacturer of computer memory solutions   Warrant to purchase up to 18,461 shares of common stock (expires 10/2026)         6/5/2015     0.4     (5)(24)      
                                       
Imaging Business Machines, L.L.C. and Scanner Holdings Corporation(8)   Provider of high-speed intelligent document scanning hardware and software   Senior subordinated loan ($8.3 par due 6/2022)   14.00%     1/3/2017     8.1     8.3 (2)      
        Senior subordinated loan ($8.3 par due 6/2022)   14.00%     1/3/2017     8.1     8.3 (2)      
        Series A preferred stock (66,424,135 shares)         1/3/2017         4.5        
        Class A common stock (33,173 shares)         1/3/2017                
        Class B common stock (134,214 shares)         1/3/2017                
                        16.2     21.1        
                        16.6     21.1     0.30 %

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Telecommunications                                      
Adaptive Mobile Security Limited(9)   Developer of security software for mobile communications networks   First lien senior secured loan ($0.9 par due 10/2018)   12.00% (EURIBOR + 8.00% Cash, 2.00% PIK/M)     10/17/2016     0.8     0.8 (2)(17)      
        First lien senior secured loan ($0.8 par due 7/2018)   12.00% (EURIBOR + 8.00% Cash, 2.00% PIK/M)     1/16/2015     0.7     0.7 (2)(17)      
        First lien senior secured loan ($0.3 par due 10/2018)   12.00% (EURIBOR + 8.00% Cash, 2.00% PIK/M)     1/16/2015     0.3     0.3 (2)(17)      
                        1.8     1.8        
                                       
CHL, LTD.   Repair and service solutions provider for cable, satellite and telecommunications based service providers   Warrant to purchase up to 120,000 shares of Series A common stock (expires 5/2020)         1/3/2017                
        Warrant to purchase up to 280,000 shares of Series B common stock (expires 5/2020)         1/3/2017                
        Warrant to purchase up to 80,000 shares of Series C common stock (expires 5/2020)         1/3/2017                
                                   
                                       
LTG Acquisition, Inc.   Designer and manufacturer of display, lighting and passenger communication systems for mass transportation markets   Class A membership units (5,000 units)         1/3/2017     5.1     1.7        
                                       
Startec Equity, LLC(8)   Communication services   Member interest         4/1/2010                
                        6.9     3.5     0.05 %
Commercial Real Estate Financial                                      
ACAS Real Estate Holdings Corporation(8)   Real estate holding company   Common stock (1,000 shares)         1/3/2017     2.6     2.1        
                                       
NECCO Realty Investments LLC(8)   Real estate holding company   Membership units (7,450 units)         1/3/2017                
                        2.6     2.1     0.03 %
Housing and Building Materials                                      
Halex Holdings, Inc.(8)(21)   Manufacturer of flooring installation products   First lien senior secured revolving loan ($1.1 par due 12/2018)         1/24/2017     1.1            
        Common stock (51,853 shares)         1/3/2017                
                        1.1            
                        1.1         %
Total Investments                     $ 11,904.5   $ 11,840.6     166.83 %

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Table of Contents

Derivative Instruments

Foreign currency forward contracts

Description
  Notional Amount
to be Purchased
  Notional Amount
to be sold
  Counterparty   Settlement Date   Unrealized Appreciation /
(Depreciation)
 

Foreign currency forward contract

  $ 3   CAD 4   Bank of Montreal   January 4, 2018   $  

Foreign currency forward contract

  $ 8   CAD 10   Bank of Montreal   January 16, 2018      

Foreign currency forward contract

  $ 81   CAD 103   Bank of Montreal   February 16, 2018     (1 )

Foreign currency forward contract

  $ 18   15   Bank of Montreal   January 16, 2018      

Foreign currency forward contract

  $ 9   8   Bank of Montreal   February 15, 2018      

Foreign currency forward contract

  $ 2   2   Bank of Montreal   March 15, 2018      

Foreign currency forward contract

  $ 90   £ 68   Bank of Montreal   February 15, 2018     (2 )

Foreign currency forward contract

  $ 12   £ 9   Bank of Montreal   February 16, 2018      

Total

                      $ (3 )

Interest rate swap

Description
  Payment Terms   Counterparty   Maturity Date   Notional Amount   Value   Upfront Payments/Receipts   Unrealized Appreciation /
(Depreciation)
 

Interest rate swap

  Pay Fixed 2.0642%   Receive Floating One-Month LIBOR of 1.50%   Bank of Montreal   January 4, 2021   $ 395   $ (1 ) $   $ (1 )

Total

                                    $ (1 )

(1)
Other than the Company's investments listed in footnote 8 below (subject to the limitations set forth therein), the Company does not "Control" any of its portfolio companies, for the purposes of the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). In general, under the Investment Company Act, the Company would "Control" a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company. All of the Company's portfolio company investments, which as of December 31, 2017 represented 167% of the Company's net assets or 96% of the Company's total assets, are subject to legal restrictions on sales.

(2)
These assets are pledged as collateral for the Revolving Credit Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Revolving Credit Facility (see Note 5 to the consolidated financial statements).

(3)
These assets are owned by the Company's consolidated subsidiary Ares Capital CP Funding LLC ("Ares Capital CP"), are pledged as collateral for the Revolving Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than Ares Capital CP's obligations under the Revolving Funding Facility (see Note 5 to the consolidated financial statements).

(4)
These assets are owned by the Company's consolidated subsidiary Ares Capital JB Funding LLC ("ACJB"), are pledged as collateral for the SMBC Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than ACJB's obligations under the SMBC Funding Facility (see Note 5 to the consolidated financial statements).

(5)
These assets are owned by the Company's consolidated subsidiary Ares Venture Finance, L.P. ("AVF LP"), are pledged as collateral for the SBA-guaranteed debentures (the "SBA Debentures") and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than AVF LP's obligations (see Note 5 to the consolidated financial statements). AVF LP operates as a Small Business Investment Company ("SBIC") under the provisions of Section 301(c) of the Small Business Investment Act of 1958, as amended.

(6)
Investments without an interest rate are non-income producing.

(7)
As defined in the Investment Company Act, the Company is deemed to be an "Affiliated Person" because it owns 5% or more of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management

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Table of Contents

(in millions)
Company
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
  Net realized
gains (losses)
  Net
unrealized
gains (losses)
 

Campus Management Acquisition Corp. 

  $   $   $   $   $   $   $   $   $ 0.7  

Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC

  $ 14.0   $ 0.8   $   $ 1.1   $ 0.1   $   $ 0.2   $   $ 1.0  

ESCP PPG Holdings, LLC

  $   $   $   $   $   $   $   $   $ (0.9 )

Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.

  $ 3.0   $ 3.0   $   $   $   $   $   $   $  

Ioxus, Inc

  $   $   $   $ 1.3   $   $   $   $   $ (0.1 )

Multi-Ad Services, Inc.

  $   $   $   $   $   $   $   $ 0.1   $  

NSI Holdings, Inc.

  $   $   $   $   $   $   $   $   $  

Petroflow Energy Corporation and TexOak Petro Holdings LLC

  $   $ 2.6   $ 1.8   $ 0.4   $   $   $   $ 0.2   $ (4.8 )

PIH Corporation and Primrose Holding Corporation

  $ 17.0   $ 6.2   $   $   $   $ 1.4   $   $   $ 7.0  

Shock Doctor, Inc. and Shock Doctor Holdings, LLC

  $   $   $   $ 10.7   $   $   $ 0.1   $   $ (9.1 )

Things Remembered, Inc. and TRM Holdco Corp.

  $ 5.1   $ 5.0   $ 0.3   $ 0.1   $   $   $ 0.1   $   $ (1.9 )

UL Holding Co., LLC

  $   $   $   $ 3.3   $   $   $   $   $ 6.3  
(8)
As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" and "Control" this portfolio company because it owns more than 25% of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company

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Table of Contents

(in millions)
Company
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
  Net realized
gains (losses)
  Net
unrealized
gains (losses)
 

10th Street, LLC and New 10th Street, LLC

  $   $ 53.3   $ 0.6   $ 2.0   $   $   $   $ 34.5   $ (34.7 )

ACAS 2007-1 CLO

  $   $   $   $   $   $   $   $   $  

ACAS Equity Holdings Corporation

  $ 0.5   $   $   $   $   $   $   $   $ (0.1 )

ACAS Real Estate Holdings Corporation

  $ 2.6   $   $   $   $   $   $   $   $ (0.5 )

ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.

  $   $   $   $ 0.6   $   $   $ 0.1   $   $ (15.9 )

Alcami Holdings, LLC

  $ 273.1   $ 5.5   $ 0.3   $ 29.8   $   $   $ 2.1   $   $ 166.8  

AllBridge Financial, LLC

  $   $   $   $   $   $ 0.4   $   $   $ (0.4 )

Ares IIIR/IVR CLO Ltd.

  $   $ 5.2   $   $ 0.4   $   $   $   $ 0.5   $ 0.1  

Bellotto Holdings Limited

  $ 193.6   $ 193.6   $   $   $   $   $   $ 58.1   $  

Callidus Capital Corporation

  $   $   $   $   $   $   $   $   $  

Ciena Capital LLC

  $   $   $ 10.0   $ 0.8   $   $   $   $   $ 10.6  

CoLTS 2005-1

  $   $   $   $   $   $   $   $   $  

CoLTS 2005-2

  $   $   $   $   $   $   $   $   $  

Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited

  $ 27.9   $   $   $   $   $   $   $   $ 12.7  

Community Education Centers, Inc. and CEC Parent Holdings LLC

  $   $ 36.2   $ 38.1   $ 1.2   $   $ 8.4   $ 0.1   $ 24.3   $ (10.9 )

Competitor Group, Inc., Calera XVI, LLC and Champion Parent Corporation

  $ 0.5   $ 18.6   $ 42.8   $   $   $   $   $ (20.1 ) $ 17.3  

CSHM LLC

  $   $   $   $   $   $   $   $   $  

EDS Group

  $ 11.8   $ 12.1   $   $ 0.4   $   $   $   $ 3.3   $ 2.7  

ETG Holdings, Inc.

  $   $   $   $   $   $   $   $   $  

European Capital Private Debt LP

  $ 97.9   $ 0.3   $ 97.7   $   $   $   $   $ 1.1   $  

European Capital UK SME Debt LP

  $ 46.8   $ 4.8   $ 0.8   $   $   $   $   $ 0.1   $ 0.6  

Fashion Holding Luxembourg SCA (Modacin/Camaeiu)

  $   $   $   $   $   $   $   $   $  

FPI Holding Corporation

  $ 0.4   $   $   $   $   $   $   $   $ (1.0 )

Garden Fresh Restaurant Corp. and GFRC Holdings LLC

  $ 14.6   $ 12.3   $ 18.9   $ 3.6   $   $   $ 0.2   $   $ 2.0  

Halex Holdings, Inc.

  $ 1.1   $   $   $   $   $   $   $ 2.4   $ (2.0 )

HALT Medical, Inc.

  $ 0.7   $   $ 0.6   $   $   $   $   $   $  

Hard 8 Games, LLC

  $ 9.4   $   $ 9.4   $   $   $   $   $ 4.6   $  

HCI Equity, LLC

  $   $   $   $   $   $   $   $   $  

Imaging Business Machines, L.L.C. and Scanner Holdings Corporation

  $ 16.1   $   $   $ 2.4   $   $   $ 0.6   $   $ 5.0  

Ivy Hill Asset Management, L.P.

  $ 228.6   $ 155.5   $   $   $   $ 40.0   $   $   $ 12.8  

LLSC Holdings Corporation (dba Lawrence Merchandising Services)

  $ 19.2   $   $   $   $   $   $ 0.2   $   $ (1.0 )

Miles 33 (Finance) Limited

  $ 15.2   $ 1.5   $ 0.6   $ 2.0   $   $   $   $ 0.2   $ 3.9  

Montgomery Lane, LLC and Montgomery Lane, Ltd.

  $ 2.2   $ 2.3   $   $   $   $   $   $ 1.1   $ 0.6  

MVL Group, Inc.

  $   $ 0.2   $   $   $   $   $   $ 0.1   $  

Navisun LLC and Navisun Holdings LLC

  $ 2.9   $   $   $   $   $   $   $   $  

NECCO Holdings, Inc.

  $ 60.4   $ 41.9   $ 7.1   $   $   $   $   $   $ (1.3 )

NECCO Realty Investments LLC

  $ 32.7   $ 27.4   $ 6.4   $ 1.2   $   $   $   $ 13.0   $  

Orion Foods, LLC

  $   $   $   $   $   $   $   $   $  

Pillar Processing LLC and PHL Investors, Inc.

  $   $   $   $   $   $   $   $   $  

Rug Doctor, LLC and RD Holdco Inc.

  $ 30.9   $   $   $ 1.9   $   $   $   $   $ (3.2 )

S Toys Holdings LLC (fka The Step2 Company, LLC)

  $   $   $   $   $   $   $   $ 6.8   $ (5.7 )

Senior Direct Lending Program, LLC

  $ 221.4   $ 2.0   $ 2.1   $ 52.3   $ 9.1   $   $ 1.5   $   $  

Senior Secured Loan Fund LLC

  $   $ 1,938.4   $   $ 69.3   $ 0.9   $   $ 4.5   $ (17.5 ) $ 24.2  

Soil Safe, Inc. and Soil Safe Acquisition Corp.

  $ 110.6   $ 4.2   $ 1.0   $ 13.0   $   $   $ 0.1   $   $ (7.6 )

Startec Equity, LLC

  $   $   $   $   $   $   $   $   $  

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

  $   $   $ 12.8   $   $   $   $   $ (12.3 ) $ 12.4  

*
Together with Varagon Capital Partners ("Varagon") and its clients, the Company has co-invested through the Senior Direct Lending Program LLC (d/b/a the "Senior Direct Lending Program" or the "SDLP"). The SDLP has been capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required); therefore, although the Company owns more than 25% of the voting securities of the SDLP, the Company does not believe that it has control over the SDLP (for purposes of the Investment Company Act or otherwise) because, among other things, these "voting securities" do not afford the Company the right to elect directors of the SDLP or any other special rights (see Note 4 to the consolidated financial statements).

F-45


Table of Contents

(9)
Non-U.S. company or principal place of business outside the U.S. and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets. Pursuant to Section 55(a) of the Investment Company Act, 12% of the Company's total assets are represented by investments at fair value and other assets that are considered "non-qualifying assets" as of December 31, 2017.

(10)
Exception from the definition of investment company under Section 3(c) of the Investment Company Act and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(11)
Variable rate loans to the Company's portfolio companies bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate ("LIBOR") or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower's option, which reset annually (A), semi-annually (S), quarterly (Q), bi-monthly (B), monthly (M) or daily (D). For each such loan, the Company has provided the interest rate in effect on the date presented.

(12)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 1.75% on $63 aggregate principal amount of a "first out" tranche of the portfolio company's senior term debt previously syndicated by the Company into "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.

(13)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.00% on $73 aggregate principal amount of a "first out" tranche of the portfolio company's first lien senior secured loans, 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.

(14)
The Company sold a participating interest of approximately $9 million of aggregate principal amount of the portfolio company's second lien senior secured term loan as a "first out" tranche. As the transaction did not qualify as a "true sale" in accordance with U.S. generally accepted accounting principles, the Company recorded a corresponding $9 million secured borrowing included in "accounts payable and other liabilities" in the accompanying consolidated balance sheet."

(15)
The Company is entitled to receive a fixed fee upon the occurrence of certain events as defined in the credit agreement governing the Company's debt investment in the portfolio company. The fair value of such fee is included in the fair value of the debt investment.

(16)
Loan was on non-accrual status as of December 31, 2017.

(17)
Loan includes interest rate floor feature.

(18)
In addition to the interest earned based on the stated contractual interest rate of this security, the certificates entitle the holders thereof to receive a portion of the excess cash flow from the SDLP's loan portfolio, after expenses, which may result in a return to the Company greater than the contractual stated interest rate.

(19)
As of December 31, 2017, no amounts were funded by the Company under this first lien senior secured revolving loan; however, there were letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(20)
As of December 31, 2017, in addition to the amounts funded by the Company under this first lien senior secured revolving loan, there were also letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(21)
As of December 31, 2017, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 7 to the consolidated financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.
(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

A.U.L. Corp. 

  $ 1.3   $ (0.4 ) $ 0.9   $   $   $ 0.9  

Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc.

    9.9     (0.7 )   9.2             9.2  

Achilles Acquisition LLC

    1.1         1.1             1.1  

ADCS Billings Intermediate Holdings, LLC

    5.0         5.0             5.0  

ADF Pizza I LLC

    1.3         1.3             1.3  

ADG, LLC

    13.7     (11.5 )   2.2             2.2  

Alcami Holdings, LLC

    30.0     (25.6 )   4.4             4.4  

American Academy Holdings, LLC

    7.0     (0.9 )   6.1             6.1  

AMZ Holding Corp.

    3.4         3.4             3.4  

Bambino CI Inc.

    9.6     (1.1 )   8.5             8.5  

Benihana, Inc.

    3.2     (3.1 )   0.1             0.1  

Cadence Aerospace, LLC

    14.3     (1.5 )   12.8             12.8  

CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC

    7.5     (6.4 )   1.1             1.1  

Chariot Acquisition, LLC

    1.0         1.0             1.0  

Chesapeake Research Review, LLC

    5.8     (0.6 )   5.2             5.2  

Ciena Capital LLC

    20.0     (14.0 )   6.0     (6.0 )        

Clearwater Analytics, LLC

    5.0     (0.5 )   4.5             4.5  

Command Alkon Incorporated

    3.3     (1.6 )   1.7             1.7  

Component Hardware Group, Inc

    3.7     (1.9 )   1.8             1.8  

Cozzini Bros., Inc. and BH-Sharp Holdings LP

    16.0         16.0             16.0  

Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC

    5.0     (2.6 )   2.4             2.4  

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Table of Contents

(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

CST Buyer Company

    4.2         4.2             4.2  

D4C Dental Brands, Inc.

    5.0         5.0             5.0  

DCA Investment Holding, LLC

    5.8     (0.1 )   5.7             5.7  

DecoPac, Inc.

    8.1     (2.6 )   5.5             5.5  

DFC Global Facility Borrower II LLC

    40.0         40.0             40.0  

Dorner Holding Corp.

    3.3     (1.3 )   2.0             2.0  

DRB Holdings, LLC

    9.9         9.9             9.9  

DTI Holdco, Inc. and OPE DTI Holdings, Inc.

    8.8         8.8             8.8  

Eckler Industries, Inc.

    4.0     (2.0 )   2.0     (2.0 )        

Emergency Communications Network, LLC

    6.5         6.5             6.5  

Emerus Holdings, Inc.

    2.0     (0.3 )   1.7             1.7  

EN Engineering, LLC

    5.0     (1.2 )   3.8             3.8  

Entertainment Partners, LLC and Entertainment Partners Canada Inc.

    28.0         28.0             28.0  

Foundation Risk Partners, Corp.

    19.9         19.9             19.9  

FPI Holding Corporation

    2.6         2.6             2.6  

Frontline Technologies Group Holding LLC

    8.4         8.4             8.4  

FWR Holding Corporation

    3.3     (0.3 )   3.0             3.0  

Garden Fresh Restaurant Corp.

    7.5     (2.9 )   4.6             4.6  

Gentle Communications, LLC

    5.0         5.0             5.0  

Global Franchise Group, LLC

    1.2         1.2             1.2  

GraphPAD Software, LLC

    1.1     (0.6 )   0.5             0.5  

GTCR-Ultra Acquisition, Inc. and GTCR-Ultra Holdings, LLC

    2.0         2.0             2.0  

HAI Acquisition Corporation

    19.0     (4.7 )   14.3             14.3  

Halex Holdings, Inc.

    2.0     (1.1 )   0.9             0.9  

Harvey Tool Company, LLC

    35.5     (1.8 )   33.7             33.7  

Hojeij Branded Foods, LLC

    2.9         2.9             2.9  

Hygiena Borrower LLC

    5.3         5.3             5.3  

Implementation Management Assistance, LLC

    24.1         24.1             24.1  

Infilaw Holdings, LLC

    11.5     (11.5 )                

Instituto de Banca y Comercio, Inc.

    11.8     (11.8 )                

iPipeline, Inc.

    4.0         4.0             4.0  

JDC Healthcare Management, LLC

    13.9     (1.5 )   12.4             12.4  

Jim N Nicks Management, LLC

    9.7     (1.7 )   8.0             8.0  

K2 Pure Solutions Nocal, L.P.

    5.0     (1.5 )   3.5             3.5  

KBHS Acquisition, LLC (d/b/a Alita Care, LLC)

    5.0     (1.8 )   3.2             3.2  

Key Surgical LLC

    2.8     (0.9 )   1.9             1.9  

KHC Holdings, Inc.

    6.9     (0.7 )   6.2             6.2  

Lakeland Tours, LLC

    1.9     (1.9 )                

LBP Intermediate Holdings LLC

    0.9     (0.1 )   0.8             0.8  

Liaison Acquisition, LLC

    3.9         3.9             3.9  

Massage Envy, LLC

    5.0     (0.5 )   4.5             4.5  

Massage Envy, LLC and ME Equity LLC

    0.6         0.6             0.6  

MB2 Dental Solutions, LLC

    3.5     (1.3 )   2.2             2.2  

McKenzie Sports Products, LLC

    4.5     (0.9 )   3.6             3.6  

Ministry Brands, LLC

    19.5     (10.9 )   8.6             8.6  

Movati Athletic (Group) Inc.

    2.8         2.8             2.8  

MSHC, Inc.

    9.8     (0.1 )   9.7             9.7  

MW Dental Holding Corp.

    10.0     (9.7 )   0.3             0.3  

Navisun LLC

    42.4         42.4             42.4  

NECCO Holdings, Inc.

    25.0     (21.7 )   3.3     (3.3 )        

Niagara Fiber Intermediate Corp.

    1.2     (0.9 )   0.3             0.3  

Nordco Inc.

    12.5         12.5             12.5  

NSM Sub Holdings Corp.

    5.0         5.0             5.0  

OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC

    2.5         2.5             2.5  

Osmose Utilities Services, Inc.

    6.0     (1.0 )   5.0             5.0  

OTG Management, LLC

    13.6     (8.4 )   5.2             5.2  

Palermo Finance Corporation

    1.1     (0.2 )   0.9             0.9  

Paper Source, Inc.

    3.3         3.3             3.3  

Pathway Partners Vet Management Company LLC

    2.4         2.4             2.4  

PDI TA Holdings, Inc.

    12.5     (0.9 )   11.6             11.6  

Pegasus Intermediate Holdings, LLC

    5.0         5.0             5.0  

PIH Corporation and Primrose Holding Corporation

    3.3     (1.0 )   2.3             2.3  

Practice Insight, LLC

    2.9     (0.6 )   2.3             2.3  

QC Supply, LLC

    24.2     (4.0 )   20.2             20.2  

Restaurant Technologies, Inc.

    5.4     (1.1 )   4.3             4.3  

Retriever Medical/Dental Payments LLC

    3.5         3.5             3.5  

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Table of Contents

(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

RuffaloCODY, LLC

    7.7     (0.2 )   7.5             7.5  

Sanders Industries Holdings, Inc.

    15.0         15.0             15.0  

SCM Insurance Services Inc.

    4.3         4.3             4.3  

SCSG EA Acquisition Company, Inc.

    4.0         4.0             4.0  

Severin Acquisition, LLC

    2.9         2.9             2.9  

SFE Intermediate Holdco LLC

    3.8     (0.8 )   3.0             3.0  

Shift PPC LLC

    3.6         3.6             3.6  

Sigma Electric Manufacturing Corporation

    10.0     (1.5 )   8.5             8.5  

Soil Safe, Inc. and Soil Safe Acquisition Corp.

    10.5     (4.6 )   5.9             5.9  

Sonny's Enterprises, LLC

    1.8     (1.0 )   0.8             0.8  

Sparta Systems, Inc.

    6.5         6.5             6.5  

Storm UK Holdco Limited and Storm US Holdco Inc.

    1.1     (0.1 )   1.0             1.0  

Teasdale Foods, Inc.

    0.8     (0.4 )   0.4             0.4  

The Gordian Group, Inc.

    1.1         1.1             1.1  

Things Remembered, Inc.

    2.4         2.4             2.4  

Towne Holdings, Inc.

    1.0         1.0             1.0  

TPTM Merger Corp.

    2.5         2.5             2.5  

Urgent Cares of America Holdings I, LLC

    10.0         10.0             10.0  

VistaPharm, Inc.

    2.5         2.5             2.5  

VLS Recovery Services, LLC

    22.1     (1.8 )   20.3             20.3  

VRC Companies, LLC

    1.9     (0.8 )   1.1             1.1  

Woodstream Group, Inc. and Woodstream Corporation

    4.7         4.7             4.7  

Wrench Group LLC

    4.6         4.6             4.6  

Zemax, LLC

    3.0         3.0             3.0  

Zywave, Inc.

    11.4     (2.4 )   9.0             9.0  

  $ 881.5   $ (201.5 ) $ 680.0   $ (11.3 ) $   $ 668.7  
(22)
As of December 31, 2017, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:
(in millions)
Company
  Total private
equity
commitments
  Less: funded
private equity
commitments
  Total
unfunded
private equity
commitments
  Less: private
equity
commitments
substantially at
the
discretion of the
Company
  Total net
adjusted
unfunded
private
equity
commitments
 

Partnership Capital Growth Investors III, L.P. 

  $ 5.0   $ (4.5 ) $ 0.5   $   $ 0.5  

PCG-Ares Sidecar Investment, L.P. and PCG-Ares Sidecar Investment II, L.P.

    50.0     (12.1 )   37.9     (37.9 )    

Piper Jaffray Merchant Banking Fund I, L.P.

    2.0     (1.8 )   0.2         0.2  

European Capital UK SME Debt LP

    54.0     (44.0 )   10.0     (10.0 )    

  $ 111.0   $ (62.4 ) $ 48.6   $ (47.9 ) $ 0.7  
(23)
As of December 31, 2017, the Company had commitments to co-invest in the SDLP for its portion of the SDLP's commitment to fund delayed draw loans of up to $19. See Note 4 to the consolidated financial statements for more information on the SDLP.

(24)
Other than the investments noted by this footnote, the fair value of the Company's investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 8 to the consolidated financial statements for more information regarding the fair value of the Company's investments.

(25)
As of December 31, 2017, the net estimated unrealized loss for federal tax purposes was $0.8 billion based on a tax cost basis of $12.7 billion. As of December 31, 2017, the estimated aggregate gross unrealized loss for federal income tax purposes was $1.3 billion and the estimated aggregate gross unrealized gain for federal income tax purposes was $0.5 billion.

F-48


Table of Contents


ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2016
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Investment Funds and Vehicles                                      
HCI Equity, LLC(8)(9)(10)   Investment company   Member interest (100.00% interest)         4/1/2010   $   $ 0.1        
                                       
Imperial Capital Private Opportunities, LP(10)(25)   Investment partnership   Limited partnership interest (80.00% interest)         5/10/2007     4.0     16.8 (2)      
                                       
Partnership Capital Growth Fund I, L.P.(10)   Investment partnership   Limited partnership interest (25.00% interest)         6/16/2006         0.1 (2)      
                                       
Partnership Capital Growth Investors III, L.P.(10)(25)   Investment partnership   Limited partnership interest (2.50% interest)         10/5/2011     2.7     3.2 (2)      
                                       
PCG-Ares Sidecar Investment II, L.P.(10)(25)   Investment partnership   Limited partnership interest (100.00% interest)         10/31/2014     7.5     12.5 (2)      
                                       
PCG-Ares Sidecar Investment, L.P.(10)(25)   Investment partnership   Limited partnership interest (100.00% interest)         5/22/2014     3.4     4.2 (2)      
                                       
Piper Jaffray Merchant Banking Fund I, L.P.(10)(25)   Investment partnership   Limited partnership interest (2.00% interest)         8/16/2012     1.7     1.5        
                                       
Senior Direct Lending Program, LLC(8)(10)(27)   Co-investment vehicle   Subordinated certificates ($269.8 par due 12/2036)(21)   9.00% (Libor + 8.00%/Q)(21)     7/27/2016     269.8     269.8        
        Member interest (87.50% interest)         7/27/2016                
                        269.8     269.8        
                                       
Senior Secured Loan Fund LLC(8)(11)(26)   Co-investment vehicle   Subordinated certificates ($2,004.0 par due 12/2024)(20)   9.00% (Libor + 8.00%/M)(20)     10/30/2009     1,938.4     1,914.2        
        Member interest (87.50% interest)         10/30/2009                
                        1,938.4     1,914.2        
                                       
VSC Investors LLC(10)   Investment company   Membership interest (1.95% interest)         1/24/2008     0.3     1.2 (2)      
                        2,227.8     2,223.6     43.05 %
                                       
Healthcare Services                                      
                                       
Absolute Dental Management LLC and ADM Equity, LLC   Dental services provider   First lien senior secured loan ($18.8 par due 1/2022)   9.06% (Libor + 8.06%/Q)     1/5/2016     18.8     17.8 (3)(19)      
        First lien senior secured loan ($5.0 par due 1/2022)   9.06% (Libor + 8.06%/Q)     1/5/2016     5.0     4.8 (4)(19)      
        Class A preferred units (4,000,000 units)         1/5/2016     4.0     0.8 (2)      
        Class A common units (4,000,000 units)         1/5/2016         0.8 (2)      
                        27.8     24.2        
                                       
ADCS Billings Intermediate Holdings, LLC(24)   Dermatology practice   First lien senior secured revolving loan ($1.6 par due 5/2022)   8.50% (Base Rate + 4.75%/Q)     5/18/2016     1.6     1.6 (2)(19)(23)      
                                       
ADG, LLC and RC IV GEDC Investor LLC(24)   Dental services provider   First lien senior secured revolving loan ($2.0 par due 9/2022)   5.75% (Libor + 4.75%/Q)     9/28/2016     2.0     2.0 (2)(19)      
        Second lien senior secured loan ($87.5 par due 3/2024)   10.00% (Libor + 9.00%/Q)     9/28/2016     87.5     87.5 (2)(19)      
        Membership units (3,000,000 units)         9/28/2016     3.0     3.0 (2)      
                        92.5     92.5        
                                       
Alegeus Technologies Holdings Corp.   Benefits administration and transaction processing provider   Preferred stock (2,997 shares)         12/13/2013     3.1     2.2        
        Common stock (3 shares)         12/13/2013                
                        3.1     2.2        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Argon Medical Devices, Inc.   Manufacturer and marketer of single-use specialty medical devices   Second lien senior secured loan ($9.0 par due 6/2022)   10.50% (Libor + 9.50%/Q)     12/23/2015     8.8     9.0 (2)(19)      
                                       
AwarePoint Corporation   Healthcare technology platform developer   First lien senior secured loan ($8.8 par due 6/2018)   11.50% (Libor + 10.50%/M)     9/5/2014     8.6     8.8 (2)(19)      
        Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)         11/14/2014         0.6 (2)      
                        8.6     9.4        
                                       
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC(24)   Correctional facility healthcare operator   First lien senior secured revolving loan ($3.8 par due 7/2019)   5.00% (Libor + 4.00%/Q)     7/23/2014     3.8     3.2 (2)(19)(23)      
        First lien senior secured revolving loan ($1.6 par due 7/2019)   6.75% (Base Rate + 3.00%/Q)     7/23/2014     1.6     1.4 (2)(19)(23)      
        First lien senior secured loan ($6.6 par due 7/2021)   5.00% (Libor + 4.00%/Q)     7/23/2014     6.6     5.6 (2)(19)      
        Second lien senior secured loan ($135.0 par due 7/2022)   9.38% (Libor + 8.38%/Q)     7/23/2014     134.0     101.3 (2)(19)      
        Class A units (601,937 units)         8/19/2010         0.1 (2)      
                        146.0     111.6        
                                       
Correctional Medical Group Companies, Inc.   Correctional facility healthcare operator   First lien senior secured loan ($3.1 par due 9/2021)   9.38% (Libor + 8.38%/Q)     9/29/2015     3.1     3.0 (2)(19)      
        First lien senior secured loan ($48.8 par due 9/2021)   9.38% (Libor + 8.38%/Q)     9/29/2015     48.8     47.8 (3)(19)      
                        51.9     50.8        
                                       
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC(24)   Dental services provider   Class A preferred units (1,000,000 units)         12/21/2016     1.0     1.0 (2)      
                                       
DCA Investment Holding, LLC(24)   Multi-branded dental practice management   First lien senior secured revolving loan ($2.1 par due 7/2021)   8.00% (Base Rate + 4.25%/Q)     7/2/2015     2.1     2.0 (2)(19)(23)      
        First lien senior secured loan ($18.9 par due 7/2021)   6.25% (Libor + 5.25%/Q)     7/2/2015     18.8     18.5 (4)(19)      
                        20.9     20.5        
                                       
DNAnexus, Inc.   Bioinformatics company   First lien senior secured loan ($9.7 par due 10/2018)   9.25% (Libor + 8.25%/M)     3/21/2014     9.5     9.7 (2)(19)      
        Warrant to purchase up to 909,092 units of Series C preferred stock (expires 3/2024)         3/21/2014         0.1 (2)      
                        9.5     9.8        
                                       
Global Healthcare Exchange, LLC and GHX Ultimate Parent Corp.   On-demand supply chain automation solutions provider   Second lien senior secured loan ($47.5 par due 8/2023)   9.75% (Libor + 8.75%/Q)     8/18/2016     46.8     47.5 (2)(19)      
        Class A common stock (1,788 shares)         3/11/2014     1.8     1.8 (2)      
        Class B common stock (980 shares)         3/11/2014         5.5 (2)      
                        48.6     54.8        
                                       
Greenphire, Inc. and RMCF III CIV XXIX, L.P(24)   Software provider for clinical trial management   First lien senior secured loan ($1.5 par due 12/2018)   9.00% (Libor + 8.00%/M)     12/19/2014     1.5     1.5 (2)(19)      
        First lien senior secured loan ($3.6 par due 12/2018)   9.00% (Libor + 8.00%/M)     12/19/2014     3.6     3.6 (2)(19)      
        Limited partnership interest (99.90% interest)         12/19/2014     1.0     1.2 (2)      
                        6.1     6.3        
                                       
Hygiena Borrower LLC(24)   Adenosine triphosphate testing technology provider   Second lien senior secured loan ($10.0 par due 8/2023)   10.00% (Libor + 9.00%/Q)     8/26/2016     10.0     10.0 (2)(19)      
                                       
INC Research Mezzanine Co-Invest, LLC   Pharmaceutical and biotechnology consulting services   Common stock (13,252 shares)         9/27/2010         0.7 (2)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Intermedix Corporation   Revenue cycle management provider to the emergency healthcare industry   Second lien senior secured loan ($112.0 par due 6/2020)   9.25% (Libor + 8.25%/Q)     12/27/2012     112.0     108.6 (2)(19)      
                                       
MC Acquisition Holdings I, LLC   Healthcare professional provider   Class A units (1,338,314 shares)         1/17/2014     1.3     1.2 (2)      
                                       
MW Dental Holding Corp.(24)   Dental services provider   First lien senior secured revolving loan ($1.5 par due 4/2018)   9.00% (Libor + 7.50%/Q)     4/12/2011     1.5     1.5 (2)(19)      
        First lien senior secured loan ($44.9 par due 4/2018)   9.00% (Libor + 7.50%/Q)     4/12/2011     44.9     44.9 (2)(19)      
        First lien senior secured loan ($47.3 par due 4/2018)   9.00% (Libor + 7.50%/Q)     4/12/2011     47.3     47.3 (3)(19)      
        First lien senior secured loan ($19.5 par due 4/2018)   9.00% (Libor + 7.50%/Q)     4/12/2011     19.5     19.5 (4)(19)      
                        113.2     113.2        
                                       
My Health Direct, Inc.(24)   Healthcare scheduling exchange software solution provider   First lien senior secured revolving loan ($0.5 par due 9/2017)   8.75% (Base Rate + 5.00%/M)     9/18/2014     0.5     0.5 (2)(19)      
        First lien senior secured loan ($1.3 par due 1/2018)   10.75%     9/18/2014     1.3     1.3 (2)      
        Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)         9/18/2014         (2)      
                        1.8     1.8        
                                       
New Trident Holdcorp, Inc.   Outsourced mobile diagnostic healthcare service provider   Second lien senior secured loan ($80.0 par due 7/2020)   10.75% (Libor + 9.50%/Q)     8/6/2013     79.1     80.0 (2)(19)      
                                       
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC   Anesthesia management services provider   Second lien senior secured loan ($72.8 par due 10/2023)   11.00% (Libor + 10.00%/Q)     4/19/2016     72.8     72.8 (2)(19)      
        Class A units (25,277 units)         4/19/2016     2.5     2.4 (2)      
                        75.3     75.2        
                                       
Nodality, Inc.   Biotechnology company   First lien senior secured loan ($2.3 par due 8/2016)         11/12/2015     2.1     0.4 (2)(18)      
        First lien senior secured loan ($10.9 par due 8/2016)         4/25/2014     9.7     2.0 (2)(18)      
        Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)         3/15/2016         (2)      
                        11.8     2.4        
                                       
NSM Sub Holdings Corp.(24)   Provider of customized mobility, rehab and adaptive seating systems   First lien senior secured revolving loan ($0.6 par due 10/2022)   6.00% (Libor + 5.00%/Q)     10/3/2016     0.6     0.6 (2)(19)      
        First lien senior secured revolving loan ($0.3 par due 10/2022)   7.75% (Base Rate + 4.00%/Q)     10/3/2016     0.3     0.3 (2)(19)      
                        0.9     0.9        
                                       
nThrive, Inc. (fka Precyse Acquisition Corp.)   Provider of healthcare information management technology and services   Second lien senior secured loan ($10.0 par due 4/2023)   10.75% (Libor + 9.75%/Q)     4/20/2016     9.6     10.0 (2)(19)      
                                       
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC(24)   Provider of technology-enabled solutions to pharmacies   First lien senior secured loan ($5.9 par due 11/2018)   8.50% (Libor + 7.50%/Q)     11/21/2013     5.9     5.9 (4)(19)      
        Limited liability company membership interest (1.57%)         11/21/2013     1.0     0.7 (2)      
                        6.9     6.6        
                                       
Patterson Medical Supply, Inc.   Distributor of rehabilitation supplies and equipment   Second lien senior secured loan ($78.0 par due 8/2023)   9.50% (Libor + 8.50%/Q)     9/2/2015     76.1     78.0 (2)(19)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
PerfectServe, Inc.   Communications software platform provider for hospitals and physician practices   First lien senior secured loan ($9.0 par due 3/2020)   9.00% (Libor + 8.00%/M)     9/15/2015     8.7     9.0 (2)(19)      
        First lien senior secured loan ($2.0 par due 6/2020)   9.00% (Libor + 8.00%/M)     9/15/2015     2.0     2.0 (2)(19)      
        First lien senior secured loan ($3.0 par due 6/2021)   9.00% (Libor + 8.00%/M)     9/15/2015     3.0     3.0 (2)(19)      
        Warrant to purchase up to 28,428 shares of Series C preferred stock (expires 9/2025)         9/15/2015     0.2     0.3 (2)      
        Warrant to purchase up to 34,113 units of Series C preferred stock (expires 12/2023)         12/26/2013         0.3 (2)      
                        13.9     14.6        
                                       
PhyMED Management LLC   Provider of anesthesia services   Second lien senior secured loan ($47.2 par due 5/2021)   9.75% (Libor + 8.75%/Q)     12/18/2015     46.6     45.8 (2)(19)      
                                       
Respicardia, Inc.   Developer of implantable therapies to improve cardiovascular health   Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)         6/28/2012         (2)      
                                       
Sarnova HC, LLC, Tri-Anim Health Services, Inc., and BEMS Holdings, LLC   Distributor of emergency medical service and respiratory products   Second lien senior secured loan ($54.0 par due 7/2022)   10.50% (Libor + 9.50%/Q)     1/29/2016     54.0     54.0 (2)(19)      
                                       
Transaction Data Systems, Inc.   Pharmacy management software provider   Second lien senior secured loan ($7.8 par due 6/2022)   10.00% (Libor + 9.00%/Q)     6/15/2015     7.8     7.8 (2)(19)      
        Second lien senior secured loan ($27.5 par due 6/2022)   10.00% (Libor + 9.00%/Q)     6/15/2015     27.5     27.5 (2)(19)      
                        35.3     35.3        
                                       
U.S. Anesthesia Partners, Inc.   Anesthesiology service provider   Second lien senior secured loan ($23.5 par due 9/2020)   10.25% (Libor + 9.25%/Q)     12/14/2015     23.5     23.5 (2)(19)      
        Second lien senior secured loan ($50.0 par due 9/2020)   10.25% (Libor + 9.25%/Q)     9/24/2014     50.0     50.0 (2)(19)      
                        73.5     73.5        
                                       
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC(24)   Operator of urgent care clinics   First lien senior secured loan ($13.9 par due 12/2022)   7.00% (Libor + 6.00%/Q)     12/1/2015     13.9     12.6 (2)(19)      
        First lien senior secured loan ($54.2 par due 12/2022)   7.00% (Libor + 6.00%/Q)     12/1/2015     54.2     49.3 (2)(19)      
        Preferred units (7,696,613 units)         6/11/2015     7.7     9.4        
        Series A common units (2,000,000 units)         6/11/2015     2.0     0.1        
        Series C common units (1,026,866 units)         6/11/2015                
                        77.8     71.4        
                                       
Vertice Pharma UK Parent Limited   Manufacturer and distributor of generic pharmaceutical products   Preferred shares (40,662 shares)         12/21/2015     0.4     0.4 (9)      
                                       
Young Innovations, Inc.   Dental supplies and equipment manufacturer   Second lien senior secured loan ($31.4 par due 7/2019)   10.25% (Libor + 9.25%/Q)     10/18/2016     31.4     31.4 (2)(19)      
        Second lien senior secured loan ($55.0 par due 7/2019)   10.25% (Libor + 9.25%/Q)     5/30/2014     55.0     55.0 (2)(19)      
                        86.4     86.4        
                        1,312.3     1,263.7     24.47 %

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Business Services                                      
                                       
Accruent, LLC and Athena Parent, Inc.(24)   Real estate and facilities management software provider   First lien senior secured revolving loan ($0.3 par due 5/2022)   8.00% (Base Rate + 4.25%/Q)     5/16/2016     0.3     0.3 (2)(19)      
        Second lien senior secured loan ($10.5 par due 11/2022)   12.50% (Base Rate + 8.75%/Q)     9/19/2016     10.5     10.5 (2)(19)      
        Second lien senior secured loan ($42.5 par due 11/2022)   10.75% (Libor + 9.75%/Q)     9/19/2016     42.5     42.5 (2)(19)      
        Series A preferred stock (778 shares)         9/19/2016     0.8     0.8 (2)      
        Common stock (3,000 shares)         5/16/2016     3.0     3.1 (2)      
                        57.1     57.2        
                                       
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC(24)   Retail insurance advisor and brokerage   Second lien senior secured loan ($88.6 par due 11/2024)   10.25% (Libor + 9.25%/Q)     11/22/2016     88.6     88.6 (2)(19)      
        Membership interests (8,502,697 units)         11/18/2016     8.5     8.5 (2)      
        Membership interests (2,125,674 units)         11/18/2016     2.1     2.1 (2)      
                        99.2     99.2        
                                       
Brandtone Holdings Limited(9)   Mobile communications and marketing services provider   First lien senior secured loan ($4.7 par due 11/2018)         5/11/2015     4.5     (2)(18)      
        First lien senior secured loan ($3.1 par due 2/2019)         5/11/2015     3.0     (2)(18)      
        Warrant to purchase up to 184,003 units of Series Three participating convertible preferred shares (expires 8/2026)         5/11/2015         (2)      
                        7.5            
                                       
CallMiner, Inc.   Provider of cloud-based conversational analytics solutions   Second lien senior secured loan ($2.1 par due 5/2018)   10.50% (Libor + 9.50%/M)     7/23/2014     2.1     2.1 (2)(19)      
        Second lien senior secured loan ($1.2 par due 8/2018)   10.50% (Libor + 9.50%/M)     7/23/2014     1.2     1.2 (2)(19)      
        Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)         7/23/2014         (2)      
                        3.3     3.3        
                                       
CIBT Investment Holdings, LLC   Expedited travel document processing services   Class A shares (2,500 shares)         12/15/2011     2.5     5.9 (2)      
                                       
CMW Parent LLC (fka Black Arrow, Inc.)   Multiplatform media firm   Series A units (32 units)         9/11/2015         (2)      
                                       
Command Alkon, Incorporated and CA Note Issuer, LLC   Software solutions provider to the ready-mix concrete industry   Second lien senior secured loan ($10.0 par due 8/2020)   9.25% (Libor + 8.25%/Q)     9/28/2012     10.0     10.0 (2)(19)      
        Second lien senior secured loan ($11.5 par due 8/2020)   9.44% (Libor + 8.25%/Q)     9/28/2012     11.5     11.5 (2)(19)      
        Second lien senior secured loan ($26.5 par due 8/2020)   9.25% (Libor + 8.25%/Q)     9/28/2012     26.5     26.5 (2)(19)      
        Senior subordinated loan ($23.3 par due 8/2021)   14.00% PIK     8/8/2014     23.3     23.3 (2)      
                        71.3     71.3        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Compuware Parent, LLC   Web and mobile cloud performance testing and monitoring services provider   Class A-1 common stock (4,132 units)         12/15/2014     2.3     2.0 (2)      
        Class B-1 common stock (4,132 units)         12/15/2014     0.5     0.4 (2)      
        Class C-1 common stock (4,132 units)         12/15/2014     0.3     0.3 (2)      
        Class A-2 common stock (4,132 units)         12/15/2014         (2)      
        Class B-2 common stock (4,132 units)         12/15/2014         (2)      
        Class C-2 common stock (4,132 units)         12/15/2014         (2)      
                        3.1     2.7        
                                       
Directworks, Inc. and Co-Exprise Holdings, Inc.   Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers   First lien senior secured loan ($1.9 par due 4/2018)   10.25% (Libor + 9.25%/M)     12/19/2014     1.9     1.7 (2)(19)      
        Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)         12/19/2014         (2)      
                        1.9     1.7        
                                       
DTI Holdco, Inc. and OPE DTI Holdings, Inc.(24)   Provider of legal process outsourcing and managed services   First lien senior secured loan ($4.2 par due 9/2023)   6.25% (Libor + 5.25%/Q)     9/23/2016     4.1     4.1 (2)(19)      
        Class A common stock (7,500 shares)         8/19/2014     7.5     3.8 (2)      
        Class B common stock (7,500 shares)         8/19/2014         3.8 (2)      
                        11.6     11.7        
                                       
Faction Holdings, Inc. and The Faction Group LLC (fka PeakColo Holdings, Inc.)(24)   Wholesaler of cloud-based software applications and services   First lien senior secured revolving loan ($2.0 par due 11/2017)   8.00% (Base Rate + 4.25%/M)     11/3/2014     2.0     2.0 (2)(19)      
        First lien senior secured loan ($3.0 par due 12/2019)   9.75% (Libor + 8.75%/M)     12/3/2015     3.0     3.0 (2)(19)      
        First lien senior secured loan ($3.2 par due 5/2019)   9.75% (Libor + 8.75%/M)     11/3/2014     3.2     3.2 (2)(19)      
        Warrant to purchase up to 1,481 shares of Series A preferred stock (expires 12/2025)         12/3/2015         (2)      
        Warrant to purchase up to 2,037 shares of Series A preferred stock (expires 11/2024)         11/3/2014     0.1     0.1 (2)      
                        8.3     8.3        
                                       
First Insight, Inc.   Software company providing merchandising and pricing solutions to companies worldwide   Warrant to purchase up to 122,827 units of Series C preferred stock (expires 3/2024)         3/20/2014         (2)      
                                       
iControl Networks, Inc. and uControl Acquisition, LLC   Software and services company for the connected home market   Second lien senior secured loan ($20.0 par due 3/2019)   9.74% (Libor + 8.50%/M)     2/19/2015     19.8     20.2 (2)(17)(19)      
        Warrant to purchase up to 385,616 shares of Series D preferred stock (expires 2/2022)         2/19/2015         (2)      
                        19.8     20.2        
                                       
IfByPhone Inc.   Voice-based marketing automation software provider   Warrant to purchase up to 124,300 shares of Series C preferred stock (expires 10/2022)         10/15/2012     0.1     0.1 (2)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Interactions Corporation   Developer of a speech recognition software based customer interaction system   Second lien senior secured loan ($2.3 par due 7/2019)   9.85% (Libor + 8.85%/M)     6/16/2015     2.1     2.3 (19)      
        Second lien senior secured loan ($21.1 par due 7/2019)   9.85% (Libor + 8.85%/M)     6/16/2015     20.9     21.1 (5)(19)      
        Warrant to purchase up to 68,187 shares of Series G-3 convertible preferred stock (expires 6/2022)         6/16/2015     0.3     0.3 (2)      
                        23.3     23.7        
                                       
iPipeline, Inc., Internet Pipeline, Inc. and iPipeline Holdings, Inc.(24)   Provider of SaaS-based software solutions to the insurance and financial services industry   First lien senior secured loan ($46.9 par due 8/2022)   8.25% (Libor + 7.25%/Q)     8/4/2015     46.9     46.9 (3)(19)      
        First lien senior secured loan ($14.8 par due 8/2022)   8.25% (Libor + 7.25%/Q)     8/4/2015     14.8     14.8 (4)(19)      
        Preferred stock (1,485 shares)         8/4/2015     1.5     2.7 (2)      
        Common stock (647,542 shares)         8/4/2015         0.1 (2)      
                        63.2     64.5        
                                       
IronPlanet, Inc.   Online auction platform provider for used heavy equipment   Warrant to purchase up to 133,333 shares of Series C preferred stock (expires 9/2023)         9/24/2013     0.2     0.1 (2)      
                                       
Itel Laboratories, Inc.(24)   Data services provider for building materials to property insurance industry   Preferred units (1,798,391 units)         6/29/2012     1.0     1.3 (2)      
                                       
Market Track Holdings, LLC   Business media consulting services company   Preferred stock (1,685 shares)         12/13/2013     2.2     2.8        
        Common stock (16,251 shares)         12/13/2013     2.2     2.8        
                        4.4     5.6        
                                       
Maximus Holdings, LLC   Provider of software simulation tools and related services   Warrant to purchase up to 1,050,013 shares of common stock (expires 10/2019)         12/13/2013         1.5        
                                       
Ministry Brands, LLC and MB Parent HoldCo, L.P.(24)   Software and payment services provider to faith-based institutions   First lien senior secured revolving loan ($3.8 par due 12/2022)   6.00% (Libor + 5.00%/Q)     12/2/2016     3.8     3.8 (2)(19)      
        First lien senior secured loan ($7.6 par due 12/2022)   6.00% (Libor + 5.00%/Q)     12/2/2016     7.5     7.6 (2)(19)      
        Second lien senior secured loan ($90.0 par due 6/2023)   10.25% (Libor + 9.25%/Q)     12/2/2016     89.2     90.0 (2)(19)      
        Class A units (500,000 units)         12/2/2016     5.0     5.0 (2)      
                        105.5     106.4        
                                       
MVL Group, Inc.(8)   Marketing research provider   Senior subordinated loan ($0.5 par due 7/2012)         4/1/2010     0.2     0.2 (2)(18)      
        Common stock (560,716 shares)         4/1/2010         (2)      
                        0.2     0.2        
                                       
NAS, LLC, Nationwide Marketing Group, LLC and Nationwide Administrative Services, Inc.   Buying and marketing services organization for appliance, furniture and consumer electronics dealers   Second lien senior secured loan ($24.1 par due 12/2021)   9.75% (Libor + 8.75%/Q)     6/1/2015     24.1     22.4 (2)(19)      
                                       
PayNearMe, Inc.   Electronic cash payment system provider   First lien senior secured loan ($10.0 par due 9/2019)   9.50% (Libor + 8.50%/M)     3/11/2016     9.6     10.0 (5)(19)      
        Warrant to purchase up to 195,726 shares of Series E preferred stock (expires 3/2023)         3/11/2016     0.2     (5)      
                        9.8     10.0        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Pegasus Intermediate Holdings, LLC(24)   Plant maintenance and scheduling process software provider   First lien senior secured loan ($1.3 par due 11/2022)   7.25% (Libor + 6.25%/Q)     11/7/2016     1.3     1.3 (2)(19)      
                                       
PHL Investors, Inc., and PHL Holding Co.(8)   Mortgage services   Class A common stock (576 shares)         7/31/2012     3.8     (2)      
                                       
Planview, Inc.   Provider of project and portfolio management software   Second lien senior secured loan ($30.0 par due 8/2022)   10.50% (Libor + 9.50%/Q)     8/9/2016     30.0     30.5 (2)(19)      
                                       
Poplicus Incorporated   Business intelligence and market analytics platform for companies that sell to the public sector   First lien senior secured loan ($5.3 par due 1/2018)         6/25/2015     4.7     2.6 (5)(18)      
        Warrant to purchase up to 2,402,991 shares of Series C preferred stock (expires 6/2025)         6/25/2015     0.1     (5)      
                        4.8     2.6        
                                       
PowerPlan, Inc. and Project Torque Ultimate Parent Corporation   Fixed asset financial management software provider   Second lien senior secured loan ($30.0 par due 2/2023)   10.00% (Libor + 9.00%/Q)     2/23/2015     29.8     30.0 (2)(19)      
        Second lien senior secured loan ($50.0 par due 2/2023)   10.00% (Libor + 9.00%/Q)     2/23/2015     49.6     50.0 (3)(19)      
        Class A common stock (1,980 shares)         2/23/2015     2.0     (2)      
        Class B common stock (989,011 shares)         2/23/2015         3.8 (2)      
                        81.4     83.8        
                                       
Powersport Auctioneer Holdings, LLC   Powersport vehicle auction operator   Common units (1,972 units)         3/2/2012     1.0     1.5 (2)      
                                       
Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.   Provider of data visualization software for data analytics   First lien senior secured loan ($50.4 par due 8/2022)   9.25% (Libor + 8.25%/Q)     8/22/2016     49.7     50.4 (2)(19)      
        First lien senior secured loan ($59.9 par due 8/2022)   9.25% (Libor + 8.25%/Q)     8/22/2016     59.0     59.9 (3)(19)      
        First lien senior secured loan ($20.0 par due 8/2022)   9.25% (Libor + 8.25%/Q)     8/22/2016     19.7     20.0 (4)(19)      
        Class A common shares (7,445 shares)         8/22/2016     7.4     0.1 (2)      
        Class B common shares (1,841,609 shares)         8/22/2016     0.1     8.3 (2)      
                        135.9     138.7        
                                       
R2 Acquisition Corp.   Marketing services   Common stock (250,000 shares)         5/29/2007     0.3     0.3 (2)      
                                       
Rocket Fuel Inc.   Provider of open and integrated software for digital marketing optimization   Common stock (11,405 shares)         9/9/2014         (2)      
                                       
Shift PPC LLC   Digital solutions provider   First lien senior secured loan ($12.5 par due 12/2021)   7.00% (Libor + 6.00%/Q)     12/22/2016     12.5     12.5 (2)(19)      
                                       
Sonian Inc.   Cloud-based email archiving platform   First lien senior secured loan ($7.5 par due 6/2020)   8.65% (Libor + 7.65%/M)     9/9/2015     7.4     7.5 (5)(17)(19)      
        Warrant to purchase up to 169,045 shares of Series C preferred stock (expires 9/2022)         9/9/2015     0.1     0.1 (5)      
                        7.5     7.6        
                                       
Talari Networks, Inc.   Networking equipment provider   First lien senior secured loan ($6.0 par due 12/2018)   9.75% (Libor + 8.75%/M)     8/3/2015     5.9     6.0 (5)(19)      
        Warrant to purchase up to 421,052 shares of Series D-1 preferred stock (expires 8/2022)         8/3/2015     0.1     0.1 (5)      
                        6.0     6.1        
                                     

F-56


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
The Greeley Company, Inc. and HCP Acquisition Holdings, LLC(8)   Healthcare compliance advisory services   Senior subordinated loan ($10.2 par due 3/2017)         3/5/2013         0.4 (2)(18)      
        Class A units (14,293,110 units)         6/26/2008     12.8     (2)      
                        12.8     0.4        
                                       
TraceLink, Inc.   Supply chain management software provider for the pharmaceutical industry   Warrant to purchase up to 283,353 shares of Series A-2 preferred stock (expires 1/2025)         1/2/2015     0.1     2.5 (2)      
                                       
UL Holding Co., LLC(7)   Manufacturer and distributor of re-refined oil products   Senior subordinated loan ($5.8 par due 5/2020)   10.00% PIK     4/30/2012     1.4     5.4 (2)      
        Senior subordinated loan ($0.3 par due 5/2020)         4/30/2012     0.1     0.3 (2)      
        Senior subordinated loan ($23.9 par due 5/2020)   10.00% PIK     4/30/2012     5.9     22.4 (2)      
        Senior subordinated loan ($2.0 par due 5/2020)         4/30/2012     0.5     1.9 (2)      
        Senior subordinated loan ($2.8 par due 5/2020)   10.00% PIK     4/30/2012     0.7     2.6 (2)      
        Senior subordinated loan ($0.2 par due 5/2020)         4/30/2012     0.1     0.2 (2)      
        Class A common units (533,351 units)         6/17/2011     5.0     (2)      
        Class B-5 common units (272,834 units)         6/17/2011     2.5     (2)      
        Class C common units (758,546 units)         4/25/2008         (2)      
        Warrant to purchase up to 719,044 shares of Class A units         5/2/2014         (2)      
        Warrant to purchase up to 28,663 shares of Class B-1 units         5/2/2014         (2)      
        Warrant to purchase up to 57,325 shares of Class B-2 units         5/2/2014         (2)      
        Warrant to purchase up to 29,645 shares of Class B-3 units         5/2/2014         (2)      
        Warrant to purchase up to 80,371 shares of Class B-5 units         5/2/2014         (2)      
        Warrant to purchase up to 59,655 shares of Class B-6 units         5/2/2014         (2)      
        Warrant to purchase up to 1,046,713 shares of Class C units         5/2/2014         (2)      
                        16.2     32.8        
                                       
Velocity Holdings Corp.   Hosted enterprise resource planning application management services provider   Common units (1,713,546 units)         12/13/2013     4.5     2.8        
                                       
WorldPay Group PLC(9)   Payment processing company   C2 shares (73,974 shares)         10/21/2015                
                                       
Zywave, Inc.(24)   Provider of software and technology-enabled content and analytical solutions to insurance brokers   Second lien senior secured loan ($27.0 par due 11/2023)   10.00% (Libor + 9.00%/Q)     11/17/2016     27.0     27.0 (2)(19)      
                        862.5     867.7     16.80 %
                                       
Other Services                                      
                                       
American Residential Services L.L.C.   Heating, ventilation and air conditioning services provider   Second lien senior secured loan ($67.0 par due 12/2021)   9.00% (Libor + 8.00%/Q)     6/30/2014     66.7     67.0 (2)(19)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Community Education Centers, Inc. and CEC Parent Holdings LLC(8)   Offender re-entry and in-prison treatment services provider   First lien senior secured loan ($13.6 par due 12/2017)   6.25% (Libor + 5.25%/Q)     12/10/2010     13.6     13.6 (2)(13)(19)      
        First lien senior secured loan ($0.7 par due 12/2017)   8.00% (Base Rate + 4.25%/Q)     12/10/2010     0.7     0.7 (2)(13)(19)      
        Second lien senior secured loan ($21.9 par due 6/2018)   15.89% (Libor + 15.00%/Q)     12/10/2010     21.9     21.9 (2)      
        Class A senior preferred units (7,846 units)         3/27/2015     9.4     11.9 (2)      
        Class A junior preferred units (26,154 units)         3/27/2015     20.2     28.5 (2)      
        Class A common units (134 units)         3/27/2015         (2)      
                        65.8     76.6        
                                       
Competitor Group, Inc., Calera XVI, LLC and Champion Parent Corporation(8)(24)   Endurance sports media and event operator   First lien senior secured revolving loan ($0.9 par due 11/2018)   5.00% (Libor + 3.75%/Q)     9/29/2016     0.9     0.9 (2)(19)      
        First lien senior secured revolving loan ($4.7 par due 11/2018)   5.00% (Libor + 3.75%/Q)     11/30/2012     4.5     4.5 (2)(19)      
        First lien senior secured loan ($39.6 par due 11/2018)   5.00% (Libor + 3.75%/Q)     11/30/2012     38.0     38.6 (2)(19)      
        Preferred shares (18,875 shares)         3/25/2016     16.0     (2)      
        Membership units (2,522,512 units)         11/30/2012     2.5     (2)      
        Common shares (114,000 shares)         3/25/2016         (2)      
                        61.9     44.0        
                                       
Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC(7)(24)   Provider of outsourced healthcare linen management solutions   First lien senior secured revolving loan       3/13/2014         (22)      
        First lien senior secured loan ($5.8 par due 12/2021)   7.25% (Libor + 6.25%/Q)     3/13/2014     5.8     5.8 (2)(19)      
        First lien senior secured loan ($5.2 par due 12/2021)   7.25% (Libor + 6.25%/Q)     3/13/2014     5.2     5.2 (3)(19)      
        Class A preferred units (2,475,000 units)         3/13/2014     2.5     3.0 (2)      
        Class B common units (275,000 units)         3/13/2014     0.3     0.3 (2)      
                        13.8     14.3        
                                       
Dwyer Acquisition Parent, Inc. and TDG Group Holding Company   Operator of multiple franchise concepts primarily related to home maintenance or repairs   Senior subordinated loan ($31.5 par due 2/2020)   11.00%     6/12/2015     31.5     31.5 (2)      
        Senior subordinated loan ($52.7 par due 2/2020)   11.00%     8/15/2014     52.7     52.7 (2)      
        Common stock (32,843 shares)         8/15/2014     3.4     5.0 (2)      
                        87.6     89.2        
                                       
Massage Envy, LLC and ME Equity LLC(24)   Franchisor in the massage industry   First lien senior secured revolving loan ($3.5 par due 9/2020)   7.75% (Libor + 6.75%/Q)     9/27/2012     3.5     3.5 (2)(19)      
        First lien senior secured loan ($38.9 par due 9/2020)   7.75% (Libor + 6.75%/Q)     9/27/2012     38.9     38.9 (3)(19)      
        First lien senior secured loan ($18.9 par due 9/2020)   7.75% (Libor + 6.75%/Q)     9/27/2012     18.9     18.9 (4)(19)      
        Common stock (3,000,000 shares)         9/27/2012     3.0     3.3 (2)      
                        64.3     64.6        
                                       
McKenzie Sports Products, LLC(24)   Designer, manufacturer and distributor of hunting-related supplies   First lien senior secured loan ($5.5 par due 9/2020)   6.75% (Libor + 5.75%/Q)     9/18/2014     5.5     5.4 (3)(14)(19)      
        First lien senior secured loan ($84.5 par due 9/2020)   6.75% (Libor + 5.75%/Q)     9/18/2014     84.5     82.8 (3)(14)(19)      
                        90.0     88.2        

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
OpenSky Project, Inc. and OSP Holdings, Inc.   Social commerce platform operator   First lien senior secured loan ($0.9 par due 9/2017)   10.00%     6/4/2014     0.9     0.9 (2)      
        Warrant to purchase up to 159,496 shares of Series D preferred stock (expires 4/2025)         6/29/2015         (2)      
                        0.9     0.9        
                                       
Osmose Holdings, Inc.   Provider of structural integrity management services to transmission and distribution infrastructure   Second lien senior secured loan ($25.0 par due 8/2023)   8.75% (Libor + 7.75%/Q)     9/3/2015     24.6     24.5 (2)(19)      
                                       
SocialFlow, Inc.   Social media optimization platform provider   First lien senior secured loan ($4.0 par due 8/2019)   9.50% (Libor + 8.50%/M)     1/29/2016     3.9     4.0 (5)(19)      
        Warrant to purchase up to 215,331 shares of Series C preferred stock (expires 1/2026)         1/29/2016         (5)      
                        3.9     4.0        
                                       
Spin HoldCo Inc.   Laundry service and equipment provider   Second lien senior secured loan ($140.0 par due 5/2020)   8.00% (Libor + 7.00%/Q)     5/14/2013     140.0     138.6 (2)(19)      
                                       
Surface Dive, Inc.   SCUBA diver training and certification provider   Second lien senior secured loan ($31.6 par due 1/2022)   9.00% (Libor + 8.00%/Q)     7/28/2015     31.6     31.6 (2)(19)      
        Second lien senior secured loan ($94.1 par due 1/2022)   10.25% (Libor + 9.25%/Q)     1/29/2015     93.8     94.1 (2)(19)      
                        125.4     125.7        
                                       
U.S. Security Associates Holdings, Inc   Security guard service provider   Second lien senior secured loan ($25.0 par due 7/2018)   11.00%     11/24/2015     25.0     25.0 (2)      
                                       
WASH Multifamily Acquisition Inc. and Coinamatic Canada Inc.   Laundry service and equipment provider   Second lien senior secured loan ($3.7 par due 5/2023)   8.00% (Libor + 7.00%/Q)     5/14/2015     3.7     3.7 (2)(19)      
        Second lien senior secured loan ($21.3 par due 5/2023)   8.00% (Libor + 7.00%/Q)     5/14/2015     20.9     21.1 (2)(19)      
                        24.6     24.8        
                        794.5     787.4     15.25 %
Consumer Products                                      
                                       
Badger Sportswear Acquisition, Inc.   Provider of team uniforms and athletic wear   Second lien senior secured loan ($50.0 par due 3/2024)   10.00% (Libor + 9.00%/Q)     9/6/2016     49.9     50.0 (2)(19)      
                                       
Feradyne Outdoors, LLC and Bowhunter Holdings, LLC   Provider of branded archery and bowhunting accessories   First lien senior secured loan ($4.4 par due 3/2019)   4.00% (Libor + 3.00%/Q)     4/24/2014     4.4     4.3 (3)(19)      
        First lien senior secured loan ($5.2 par due 3/2019)   4.00% (Libor + 3.00%/Q)     4/24/2014     5.2     5.1 (3)(19)      
        First lien senior secured loan ($9.5 par due 3/2019)   6.55% (Libor + 5.55%/Q)     4/24/2014     9.5     9.0 (3)(16)(19)      
        First lien senior secured loan ($50.1 par due 3/2019)   6.55% (Libor + 5.55%/Q)     4/24/2014     50.1     47.6 (3)(16)(19)      
        Common units (300 units)         4/24/2014     3.7     2.4 (2)      
                        72.9     68.4        
Indra Holdings Corp.   Designer, marketer, and distributor of rain and cold weather products   Second lien senior secured loan ($80.0 par due 11/2021)   8.50% (Libor + 7.50%/Q)     5/1/2014     79.2     60.8 (2)(19)      
                                       
Plantation Products, LLC, Seed Holdings, Inc. and Flora Parent, Inc.   Provider of branded lawn and garden products   Second lien senior secured loan ($2.0 par due 6/2021)   8.99% (Libor + 7.99%/Q)     12/23/2014     2.0     2.0 (2)(19)      
        Second lien senior secured loan ($54.0 par due 6/2021)   8.99% (Libor + 7.99%/Q)     12/23/2014     53.8     54.0 (3)(19)      
        Second lien senior secured loan ($10.0 par due 6/2021)   8.99% (Libor + 7.99%/Q)     12/23/2014     10.0     10.0 (4)(19)      
        Common stock (30,000 shares)         12/23/2014     3.0     5.2 (2)      
                        68.8     71.2        

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
SHO Holding I Corporation   Manufacturer and distributor of slip resistant footwear   Second lien senior secured loan ($100.0 par due 4/2023)   9.50% (Libor + 8.50%/Q)     10/27/2015     97.8     99.0 (2)(19)      
                                       
Shock Doctor, Inc. and Shock Doctor Holdings, LLC(7)   Developer, marketer and distributor of sports protection equipment and accessories   Second lien senior secured loan ($89.4 par due 10/2021)   11.76% (Libor + 10.50%/Q)     4/22/2015     89.4     87.6 (2)(19)      
        Class A preferred units (50,000 units)         3/14/2014     5.0     3.8 (2)      
        Class C preferred units (50,000 units)         4/22/2015     5.0     3.8 (2)      
                        99.4     95.2        
The Step2 Company, LLC(8)   Toy manufacturer   Common units (1,116,879 units)         4/1/2011         6.2        
        Class B common units (126,278,000 units)         10/30/2014         (2)      
        Warrant to purchase up to 3,157,895 units         4/1/2010                
                            6.2        
                                       
Varsity Brands Holding Co., Inc., Hercules Achievement, Inc., Hercules Achievement Holdings, Inc. and Hercules VB Holdings, Inc.   Leading manufacturer and distributor of textiles, apparel & luxury goods   Second lien senior secured loan ($25.0 par due 12/2022)   9.75% (Libor + 8.75%/Q)     10/28/2016     25.0     25.0 (2)(19)      
        Second lien senior secured loan ($1.6 par due 12/2022)   9.75% (Libor + 8.75%/Q)     12/11/2014     1.6     1.6 (2)(19)      
        Second lien senior secured loan ($54.0 par due 12/2022)   9.75% (Libor + 8.75%/Q)     12/11/2014     53.6     54.0 (3)(19)      
        Second lien senior secured loan ($91.7 par due 12/2022)   9.75% (Libor + 8.75%/Q)     12/11/2014     91.0     91.7 (2)(19)      
        Common stock (3,353,370 shares)         12/11/2014     3.4     3.7 (2)      
        Common stock (3,353,371 shares)         12/11/2014     4.1     4.6 (2)      
                        178.7     180.6        
                                       
Wonder Holdings Acquisition Corp.   Developer and marketer of OTC healthcare products   Warrant to purchase up to 1,654,678 shares of common stock (expires 6/2021)         7/27/2011         0.8 (2)      
        Warrant to purchase up to 941 shares of preferred stock (expires 6/2021)         7/27/2011         1.5 (2)      
                            2.3        
                        646.7     633.7     12.27 %
                                       
Power Generation                                      
                                       
Alphabet Energy, Inc.   Technology developer to convert waste-heat into electricity   First lien senior secured loan ($3.9 par due 8/2017)   14.50% (Libor + 11.50% Cash, 2.00% PIK/M)     12/16/2013     3.8     3.9 (2)(17)(19)      
        Series 1B preferred stock (12,976 shares)         6/21/2016     0.2     0.1 (2)      
        Warrant to purchase up to 125,000 shares of Series 2 preferred stock (expires 12/2023)         6/30/2016     0.1     0.1 (2)      
                        4.1     4.1        
                                       
CEI Kings Mountain Investor, LP   Gas turbine power generation facilities operator   Senior subordinated loan ($32.6 par due 3/2017)   11.00% PIK     3/11/2016     32.6     32.6 (2)      
                                       
CPV Maryland Holding Company II, LLC   Gas turbine power generation facilities operator   Senior subordinated loan ($44.5 par due 12/2020)   10.00%     8/8/2014     44.5     43.3 (2)      
        Warrant to purchase up to 4 units of common stock (expires 8/2018)         8/8/2014         0.2 (2)      
                        44.5     43.5        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
DESRI VI Management Holdings, LLC   Wind power generation facility operator   Senior subordinated loan ($25.0 par due 12/2021)   9.75%     12/24/2014     25.0     25.0 (2)      
        Non-controlling units (10.0 units)         12/24/2014     1.6     1.8 (2)      
                        26.6     26.8        
                                       
Green Energy Partners, Stonewall LLC and Panda Stonewall Intermediate Holdings II LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($25.0 par due 11/2021)   6.50% (Libor + 5.50%/Q)     11/13/2014     24.8     24.6 (2)(19)      
        Senior subordinated loan ($19.5 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     19.5     19.2 (2)      
        Senior subordinated loan ($91.2 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     91.2     89.8 (2)      
                        135.5     133.6        
                                       
Joule Unlimited Technologies, Inc. and Stichting Joule Global Foundation   Renewable fuel and chemical production developer   First lien senior secured loan ($8.8 par due 10/2018)         3/31/2015     8.5     6.2 (2)(17)(18)      
        Warrant to purchase up to 32,051 shares of Series C-2 preferred stock (expires 7/2023)         7/25/2013         (2)(9)      
                        8.5     6.2        
                                       
La Paloma Generating Company, LLC   Natural gas fired, combined cycle plant operator   Second lien senior secured loan ($10.0 par due 2/2020)         2/20/2014     8.8     (2)(18)      
                                       
Moxie Liberty LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($34.7 par due 8/2020)   7.50% (Libor + 6.50%/Q)     8/21/2013     34.5     34.7 (2)(19)      
                                       
Moxie Patriot LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($34.3 par due 12/2020)   6.75% (Libor + 5.75%/Q)     12/19/2013     34.0     34.1 (2)(19)      
                                       
Noonan Acquisition Company, LLC   Gas turbine power generation facilities operator   Senior subordinated loan ($50.9 par due 10/2017)   10.25%     7/22/2016     50.9     50.9 (2)      
                                       
Panda Power Annex Fund Hummel Holdings II LLC   Gas turbine power generation facilities operator   Senior subordinated loan ($52.2 par due 1/2017)   13.00% PIK     10/27/2015     52.2     52.2 (2)      
                                       
Panda Temple Power II, LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($19.8 par due 4/2019)   7.25% (Libor + 6.00%/Q)     4/3/2013     19.7     18.0 (2)(19)      
                                       
Panda Temple Power, LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($24.6 par due 3/2022)   7.25% (Libor + 6.25%/Q)     3/6/2015     23.6     21.4 (2)(19)      
                                       
PERC Holdings 1 LLC   Operator of recycled energy, combined heat and power, and energy efficiency facilities   Class B common units (21,653,543 units)         10/20/2014     21.7     26.1 (2)      
                                       
Riverview Power LLC   Natural gas and oil fired power generation facilities operator   First lien senior secured loan ($8.6 par due 12/2021)   7.25% (Base Rate + 3.50%/Q)     12/29/2016     8.6     8.6 (2)(19)      
        First lien senior secured loan ($73.6 par due 12/2022)   11.00% (Base Rate + 7.25%/Q)     12/29/2016     73.6     73.6 (2)(19)      
                        82.2     82.2        
                        579.4     566.4     10.97 %
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Restaurants and Food Services                                      
                                       
ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.(8)   Restaurant owner and operator   First lien senior secured loan ($3.1 par due 12/2018)   15.00% (Libor + 14.00%/Q)     12/22/2016     3.1     3.1 (2)(19)      
        First lien senior secured loan ($29.6 par due 12/2018)         11/27/2006     28.9     20.4 (2)(18)      
        First lien senior secured loan ($11.3 par due 12/2018)         11/27/2006     11.0     7.8 (3)(18)      
        Promissory note ($25.5 par due 12/2023)         11/27/2006     13.8     (2)      
        Warrant to purchase up to 23,750 units of Series D common stock (expires 12/2023)         12/18/2013         (2)      
                        56.8     31.3        
                                       
Benihana, Inc.(24)   Restaurant owner and operator   First lien senior secured revolving loan ($0.8 par due 7/2018)   8.25% (Libor + 7.00%/Q)     8/21/2012     0.8     0.8 (2)(19)(23)      
        First lien senior secured revolving loan ($0.7 par due 7/2018)   9.50% (Base Rate + 5.75%/Q)     8/21/2012     0.7     0.7 (2)(19)(23)      
        First lien senior secured loan ($4.8 par due 1/2019)   8.25% (Libor + 7.00%/Q)     8/21/2012     4.8     4.6 (4)(19)      
        First lien senior secured loan ($0.3 par due 1/2019)   8.25% (Libor + 7.00%/Q)     12/28/2016     0.3     0.3 (2)(19)      
                        6.6     6.4        
                                       
DineInFresh, Inc.   Meal-delivery provider   First lien senior secured loan ($4.8 par due 7/2018)   9.75% (Libor + 8.75%/M)     12/19/2014     4.7     4.8 (2)(19)      
        Warrant to purchase up to 143,079 shares of Series A preferred stock (expires 12/2024)         12/19/2014         (2)      
                        4.7     4.8        
                                       
Garden Fresh Restaurant Corp.(24)   Restaurant owner and operator   First lien senior secured revolving loan       10/3/2013         (22)      
        First lien senior secured loan ($40.1 par due 7/2018)   10.50% (Libor + 9.00%/Q)     10/3/2013     40.1     38.1 (2)(19)      
        First lien senior secured loan ($1.5 par due 10/2017)   15.50% PIK     11/14/2016     1.5     1.5 (2)      
                        41.6     39.6        
                                       
Global Franchise Group, LLC and GFG Intermediate Holding, Inc.   Worldwide franchisor of quick service restaurants   First lien senior secured loan ($60.8 par due 12/2019)   10.47% (Libor + 9.47%/Q)     12/18/2014     60.8     60.8 (3)(19)      
                                       
Heritage Food Service Group, Inc. and WCI-HFG Holdings, LLC   Distributor of repair and replacement parts for commercial kitchen equipment   Second lien senior secured loan ($31.6 par due 10/2022)   9.50% (Libor + 8.50%/Q)     10/20/2015     31.6     31.6 (2)(19)      
        Preferred units (3,000,000 units)         10/20/2015     3.0     3.1 (2)      
                        34.6     34.7        
                                       
Orion Foods, LLC(8)   Convenience food service retailer   First lien senior secured loan ($1.2 par due 9/2015)         4/1/2010     1.2     0.5 (2)(18)      
        Second lien senior secured loan ($19.4 par due 9/2015)         4/1/2010         (2)(18)      
        Preferred units (10,000 units)         10/28/2010                
        Class A common units (25,001 units)         4/1/2010                
        Class B common units (1,122,452 units)         4/1/2010                
                        1.2     0.5        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
OTG Management, LLC(24)   Airport restaurant operator   First lien senior secured loan ($97.8 par due 8/2021)   9.50% (Libor + 8.50%/Q)     8/26/2016     97.8     97.8 (3)(19)      
        Senior subordinated loan ($21.2 par due 2/2022)   17.50% PIK     8/26/2016     21.1     21.2 (2)      
        Class A preferred units (3,000,000 units)         8/26/2016     30.0     30.9 (2)      
        Common units (3,000,000 units)         1/5/2011     3.0     11.0 (2)      
        Warrant to purchase up to 7.73% of common units (expires 6/2018)         6/19/2008     0.1     24.2 (2)      
        Warrant to purchase 0.60% of the common units deemed outstanding (expires 12/2018)         8/26/2016         (2)      
                        152.0     185.1        
                                       
Restaurant Holding Company, LLC   Fast food restaurant operator   First lien senior secured loan ($34.5 par due 2/2019)   8.75% (Libor + 7.75%/Q)     3/13/2014     34.4     33.8 (3)(19)      
                                       
Restaurant Technologies, Inc.(24)   Provider of bulk cooking oil management services to the restaurant and fast food service industries   First lien senior secured revolving loan ($0.3 par due 11/2021)   7.50% (Base Rate + 3.75%/Q)     11/23/2016     0.3     0.3 (2)(19)(23)      
                        393.0     397.3     7.69 %
                                       
Financial Services                                      
AllBridge Financial, LLC(8)   Asset management services   Equity interests         4/1/2010         0.4        
                                       
Callidus Capital Corporation(8)   Asset management services   Common stock (100 shares)         4/1/2010     3.0     1.7        
                                       
Ciena Capital LLC(8)(24)   Real estate and small business loan servicer   First lien senior secured revolving loan ($14.0 par due 12/2017)   6.00%     11/29/2010     14.0     14.0 (2)      
        Equity interests         11/29/2010     35.0     17.7 (2)      
                        49.0     31.7        
                                       
Commercial Credit Group, Inc.   Commercial equipment finance and leasing company   Senior subordinated loan ($28.0 par due 8/2022)   11.00% (Libor + 9.75%/Q)     5/10/2012     28.0     28.0 (2)(19)      
                                       
Imperial Capital Group LLC   Investment services   Class A common units (32,369 units)         5/10/2007     7.9     12.2 (2)      
        2006 Class B common units (10,605 units)         5/10/2007         (2)      
        2007 Class B common units (1,323 units)         5/10/2007         (2)      
                        7.9     12.2        
                                       
Ivy Hill Asset Management, L.P.(8)(10)   Asset management services   Member interest (100.00% interest)         6/15/2009     171.0     229.2        
                                       
Javlin Three LLC, Javlin Four LLC, and Javlin Five LLC(10)   Asset-backed financial services company   First lien senior secured loan ($32.1 par due 6/2017)   10.47% (Libor + 10%/Q)     6/24/2014     32.1     32.1 (2)      
                                       
LSQ Funding Group, L.C. and LM LSQ Investors LLC(10)   Asset based lender   Senior subordinated loan ($30.0 par due 6/2021)   10.50%     6/25/2015     30.0     30.0 (2)      
        Membership units (3,275,000 units)         6/25/2015     3.3     3.3        
                        33.3     33.3        
                                       
The Gordian Group, Inc.   Financial services firm   Common stock (526 shares)         11/30/2012         (2)      
                        324.3     368.6     7.14 %
                                       
Manufacturing                                      
Component Hardware Group, Inc.(24)   Commercial equipment   First lien senior secured revolving loan ($1.9 par due 7/2019)   5.50% (Libor + 4.50%/Q)     7/1/2013     1.9     1.9 (2)(19)      
        First lien senior secured loan ($8.0 par due 7/2019)   5.50% (Libor + 4.50%/Q)     7/1/2013     8.0     8.0 (4)(19)      
                        9.9     9.9        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Harvey Tool Company, LLC and Harvey Tool Holding, LLC(24)   Cutting tool provider to the metalworking industry   First lien senior secured revolving loan       8/13/2015         (22)      
        Senior subordinated loan ($28.1 par due 9/2020)   10.00% Cash, 1.00% PIK     8/13/2015     28.1     28.1 (2)      
        Class A membership units (750 units)         3/28/2014     0.9     1.7 (2)      
                        29.0     29.8        
                                       
Ioxus, Inc   Energy storage devices   First lien senior secured loan ($0.7 par due 8/2017)   12.00% PIK     8/24/2016     0.7     0.6 (2)      
        First lien senior secured loan ($10.2 par due 6/2019)   5.00% Cash, 7.00% PIK     4/29/2014     10.0     9.7 (2)      
        First lien senior secured loan ($0.4 par due 6/2019)         4/29/2014     0.4     0.4 (2)      
        Warrant to purchase up to 1,210,235 shares of Series BB preferred stock (expires 8/2026)         1/28/2016         (2)      
        Warrant to purchase up to 3,038,730 shares of common stock (expires 1/2026)         1/28/2016         (2)      
                        11.1     10.7        
                                       
KPS Global LLC   Walk-in cooler and freezer systems   First lien senior secured loan ($27.1 par due 12/2020)   9.67% (Libor + 8.67%/Q)     12/4/2015     27.1     27.1 (2)(19)      
                                       
MacLean-Fogg Company and MacLean-Fogg Holdings, L.L.C.   Manufacturer and supplier for the power utility and automotive markets worldwide   Senior subordinated loan ($99.9 par due 10/2025)   10.50% Cash, 3.00% PIK     10/31/2013     99.9     99.9 (2)      
        Preferred units (70,183 units)   4.50% Cash, 9.25% PIK     10/9/2015     73.5     73.5        
                        173.4     173.4        
                                       
Niagara Fiber Intermediate Corp.(24)   Insoluble fiber filler products   First lien senior secured revolving loan ($1.9 par due 5/2018)         5/8/2014     1.8     1.4 (2)(18)      
        First lien senior secured loan ($1.4 par due 5/2018)         5/8/2014     1.3     1.0 (2)(18)      
        First lien senior secured loan ($13.6 par due 5/2018)         5/8/2014     12.9     10.0 (2)(18)      
                        16.0     12.4        
                                       
Nordco Inc.   Railroad maintenance-of-way machinery   First lien senior secured revolving loan       8/26/2015         (22)      
                                       
Pelican Products, Inc.   Flashlights   Second lien senior secured loan ($40.0 par due 4/2021)   9.25% (Libor + 8.25%/Q)     4/11/2014     40.0     38.0 (2)(19)      
                                       
Saw Mill PCG Partners LLC   Metal precision engineered components   Common units (1,000 units)         1/30/2007     1.0     (2)      
                                       
SI Holdings, Inc.   Elastomeric parts, mid-sized composite structures, and composite tooling   Common stock (1,500 shares)         5/30/2014     1.5     1.5 (2)      
                                       
TPTM Merger Corp.(24)   Time temperature indicator products   First lien senior secured revolving loan ($1.3 par due 9/2018)   7.50% (Libor + 6.50%/Q)     9/12/2013     1.3     1.3 (2)(19)      
        First lien senior secured loan ($17.0 par due 9/2018)   9.67% (Libor + 8.67%/Q)     9/12/2013     17.0     17.0 (3)(19)      
        First lien senior secured loan ($10.0 par due 9/2018)   9.67% (Libor + 8.67%/Q)     9/12/2013     10.0     10.0 (4)(19)      
                        28.3     28.3        
                        337.3     331.1     6.41 %
                                       
Containers and Packaging                                      
Charter NEX US Holdings, Inc.   Producer of high-performance specialty films used in flexible packaging   Second lien senior secured loan ($11.8 par due 2/2023)   9.25% (Libor + 8.25%/Q)     2/5/2015     11.7     11.8 (2)(19)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
GS Pretium Holdings, Inc.   Manufacturer and supplier of high performance plastic containers   Common stock (500,000 shares)         6/2/2014     0.5     0.8 (2)      
                                       
ICSH, Inc. (24)   Industrial container manufacturer, reconditioner and servicer   First lien senior secured revolving loan ($1.0 par due 12/2018)   6.75% (Libor + 5.75%/Q)     8/30/2011     1.0     1.0 (2)(19)(23)      
        Second lien senior secured loan ($66.0 par due 12/2019)   10.00% (Libor + 9.00%/Q)     12/31/2015     66.0     66.0 (2)(19)      
                        67.0     67.0        
                                       
LBP Intermediate Holdings LLC(24)   Manufacturer of paper and corrugated foodservice packaging   First lien senior secured revolving loan       7/10/2015         (22)      
        First lien senior secured loan ($12.7 par due 7/2020)   6.50% (Libor + 5.50%/Q)     7/10/2015     12.6     12.7 (3)(19)      
                        12.6     12.7        
                                       
Microstar Logistics LLC, Microstar Global Asset Management LLC, and MStar Holding Corporation   Keg management solutions provider   Second lien senior secured loan ($78.5 par due 12/2018)   8.50% (Libor + 7.50%/Q)     12/14/2012     78.5     78.5 (2)(19)      
        Second lien senior secured loan ($54.0 par due 12/2018)   8.50% (Libor + 7.50%/Q)     12/14/2012     54.0     54.0 (3)(19)      
        Second lien senior secured loan ($10.0 par due 12/2018)   8.50% (Libor + 7.50%/Q)     12/14/2012     10.0     10.0 (4)(19)      
        Common stock (50,000 shares)         12/14/2012     4.0     8.1 (2)      
                        146.5     150.6        
                        238.3     242.9     4.70 %
                                       
Food and Beverage                                      
American Seafoods Group LLC and American Seafoods Partners LLC(24)   Harvester and processor of seafood   First lien senior secured loan ($6.9 par due 8/2021)   6.00% (Libor + 5.00%/Q)     8/19/2015     6.9     6.9 (2)(19)      
        First lien senior secured loan ($0.1 par due 8/2021)   7.75% (Base Rate + 4.00%/Q)     8/19/2015     0.1     0.1 (2)(19)      
        Second lien senior secured loan ($55.0 par due 2/2022)   10.00% (Libor + 9.00%/Q)     8/19/2015     55.0     55.0 (2)(19)      
        Class A units (77,922 units)         8/19/2015     0.1     0.1 (2)      
        Warrant to purchase up to 7,422,078 Class A units (expires 8/2035)         8/19/2015     7.4     7.8 (2)      
                        69.5     69.9        
                                       
Eagle Family Foods Group LLC   Manufacturer and producer of milk products   First lien senior secured loan ($21.6 par due 12/2021)   10.05% (Libor + 9.05%/Q)     8/22/2016     21.6     21.6 (3)(19)      
        First lien senior secured loan ($54.8 par due 12/2021)   10.05% (Libor + 9.05%/Q)     12/31/2015     54.4     54.8 (3)(19)      
                        76.0     76.4        
                                       
GF Parent LLC   Producer of low-acid, aseptic food and beverage products   Class A preferred units (2,940 units)         5/13/2015     2.9     1.4 (2)      
        Class A common units (60,000 units)         5/13/2015     0.1     (2)      
                        3.0     1.4        
                                       
JWC/KI Holdings, LLC   Foodservice sales and marketing agency   Membership units (5,000 units)         11/16/2015     5.0     6.2 (2)      
                                       
Kettle Cuisine, LLC   Manufacturer of fresh refrigerated and frozen food products   Second lien senior secured loan ($28.5 par due 2/2022)   10.75% (Libor + 9.75%/Q)     8/21/2015     28.5     28.5 (2)(19)      
                                       
RF HP SCF Investor, LLC   Branded specialty food company   Membership interest (10.08% interest)         12/22/2016     12.5     12.8 (2)      
                        194.5     195.2     3.78 %
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Education                                      
Campus Management Acquisition Corp.(7)   Education software developer   Preferred stock (485,159 shares)         2/8/2008     10.5     10.4 (2)      
                                       
Infilaw Holdings, LLC(24)   Operator of for-profit law schools   First lien senior secured revolving loan ($6.0 par due 2/2018)         8/25/2011     6.0     6.0 (2)(18)(23)      
        Series A preferred units (1.25 units)         8/25/2011     125.5     1.3 (2)(18)      
        Series A-1 preferred units (0.03 units)         7/29/2016     2.5     2.5 (2)      
        Series B preferred units (0.39 units)         10/19/2012     9.2     (2)      
                        143.2     9.8        
                                       
Instituto de Banca y Comercio, Inc. & Leeds IV Advisors, Inc.   Private school operator   First lien senior secured loan ($2.9 par due 12/2018)   10.50% PIK (Libor + 9.00%/Q)     10/31/2015     2.9     2.9 (2)(19)      
        Series B preferred stock (1,750,000 shares)         8/5/2010     5.0     (2)      
        Series C preferred stock (2,512,586 shares)         6/7/2010     0.7     (2)      
        Senior preferred series A-1 shares (163,902 shares)         10/31/2015     119.4     47.8 (2)      
        Common stock (20 shares)         6/7/2010         (2)      
                        128.0     50.7        
                                       
Lakeland Tours, LLC(24)   Educational travel provider   First lien senior secured revolving loan       2/10/2016         (22)      
        First lien senior secured loan ($5.0 par due 2/2022)   5.75% (Libor + 4.75%/Q)     2/10/2016     5.0     5.0 (2)(19)      
        First lien senior secured loan ($31.7 par due 2/2022)   10.43% (Libor + 9.43%/Q)     2/10/2016     31.3     31.7 (3)(19)      
                        36.3     36.7        
                                       
PIH Corporation(24)   Franchisor of education-based early childhood centers   First lien senior secured revolving loan ($0.6 par due 12/2018)   7.00% (Libor + 6.00%/Q)     12/13/2013     0.6     0.6 (2)(19)      
                                       
R3 Education Inc., Equinox EIC Partners LLC and Sierra Education Finance Corp.   Medical school operator   Preferred stock (1,977 shares)         7/30/2008     0.5     0.5 (2)      
        Common membership interest (15.76% interest)         9/21/2007     15.8     32.4 (2)      
        Warrant to purchase up to 27,890 shares (expires 11/2019)         12/8/2009         (2)      
                        16.3     32.9        
                                       
Regent Education, Inc.   Provider of software solutions designed to optimize the financial aid and enrollment processes   First lien senior secured loan ($3.8 par due 1/2021)   12.00% (Libor + 8.00% Cash, 2.00% PIK/M)     7/1/2014     3.7     3.8 (2)(19)      
        First lien senior secured loan ($0.1 par due 1/2021)         7/1/2014     0.1     0.1 (2)      
        Warrant to purchase up to 987 shares of common stock (expires 12/2026)         12/23/2016         (2)      
        Warrant to purchase up to 5,393,194 shares of common stock (expires 12/2026)         12/23/2016         0.1 (2)      
                        3.8     4.0        
                                       
RuffaloCODY, LLC(24)   Provider of student fundraising and enrollment management services   First lien senior secured revolving loan         5/29/2013         (23)      
                                     

F-66


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Severin Acquisition, LLC   Provider of student information system software solutions to the K-12 education market   Second lien senior secured loan ($15.0 par due 7/2022)   9.75% (Libor + 8.75%/Q)     7/31/2015     14.8     15.0 (2)(19)      
        Second lien senior secured loan ($4.2 par due 7/2022)   9.75% (Libor + 8.75%/Q)     10/28/2015     4.1     4.2 (2)(19)      
        Second lien senior secured loan ($3.3 par due 7/2022)   10.25% (Libor + 9.25%/Q)     2/1/2016     3.2     3.3 (2)(19)      
        Second lien senior secured loan ($2.8 par due 7/2022)   10.25% (Libor + 9.25%/Q)     8/8/2016     2.8     2.8 (2)(19)      
        Second lien senior secured loan ($3.1 par due 7/2022)   10.00% (Libor + 9.00%/Q)     10/14/2016     3.1     3.1 (2)(19)      
                        28.0     28.4        
                                       
WCI-Quantum Holdings, Inc.   Distributor of instructional products, services and resources   Series A preferred stock (1,272 shares)         10/24/2014     1.0     1.3 (2)      
                        367.7     174.8     3.38 %
                                       
Automotive Services                                      
AEP Holdings, Inc. and Arrowhead Holdco Company   Distributor of non-discretionary, mission-critical aftermarket replacement parts   First lien senior secured loan ($1.9 par due 8/2021)   7.75% (Libor + 6.75%/Q)     12/14/2016     1.9     1.9 (2)(19)      
        Common stock (3,467 shares)         8/31/2015     3.5     3.8 (2)      
                        5.4     5.7        
                                       
CH Hold Corp.(24)   Collision repair company   First lien senior secured revolving loan ($1.2 par due 11/2019)   8.00% (Base Rate + 4.25%/Q)     2/24/2016     1.2     1.2 (2)(19)(23)      
                                       
ChargePoint, Inc.   Developer and operator of electric vehicle charging stations   Second lien senior secured loan ($20.0 par due 8/2020)   9.75% (Libor + 8.75%/M)     12/24/2014     19.5     20.0 (2)(19)      
        Warrant to purchase up to 809,126 shares of Series E preferred stock (expires 12/2024)         12/24/2014     0.3     1.5 (2)      
                        19.8     21.5        
                                       
Dent Wizard International Corporation and DWH Equity Investors, L.P.   Automotive reconditioning services   Second lien senior secured loan ($50.0 par due 10/2020)   10.25% (Libor + 9.25%/Q)     4/7/2015     50.0     50.0 (3)(19)      
        Class A common stock (10,000 shares)         4/7/2015     0.3     0.7 (2)      
        Class B common stock (20,000 shares)         4/7/2015     0.7     1.3 (2)      
                        51.0     52.0        
                                       
Eckler Industries, Inc.(24)   Restoration parts and accessories provider for classic automobiles   First lien senior secured revolving loan ($2.0 par due 7/2017)   8.75% (Base Rate + 5.00%/Q)     7/12/2012     2.0     1.9 (2)(19)      
        First lien senior secured loan ($6.9 par due 7/2017)   7.25% (Libor + 6.00%/Q)     7/12/2012     6.9     6.7 (3)(19)      
        First lien senior secured loan ($25.9 par due 7/2017)   7.25% (Libor + 6.00%/Q)     7/12/2012     25.9     25.2 (3)(19)      
        Series A preferred stock (1,800 shares)         7/12/2012     1.8     (2)      
        Common stock (20,000 shares)         7/12/2012     0.2     (2)      
                        36.8     33.8        
                                       
EcoMotors, Inc.   Engine developer   First lien senior secured loan ($9.8 par due 3/2018)   11.00%     9/1/2015     9.5     7.9 (2)      
        Warrant to purchase up to 321,888 shares of Series C preferred stock (expires 12/2022)         12/28/2012         (2)      
        Warrant to purchase up to 70,000 shares of Series C preferred stock (expires 2/2025)         2/24/2015         (2)      
                        9.5     7.9        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
ESCP PPG Holdings, LLC(7)   Distributor of new equipment and aftermarket parts to the heavy-duty truck industry   Class A units (3,500,000 units)         12/14/2016     3.5     3.7 (2)      
                                       
Simpson Performance Products, Inc.   Provider of motorsports safety equipment   First lien senior secured loan ($18.5 par due 2/2020)   9.70% (Libor + 8.70%/Q)     2/20/2015     18.5     18.5 (3)(19)      
                                       
SK SPV IV, LLC   Collision repair site operators   Series A common stock (12,500 units)         8/18/2014     0.6     2.9 (2)      
        Series B common stock (12,500 units)         8/18/2014     0.6     2.9 (2)      
                        1.2     5.8        
                                       
TA THI Parent, Inc.   Collision repair company   Series A preferred stock (50,000 shares)         7/28/2014     5.0     14.3 (2)      
                        151.9     164.4     3.18 %
                                       
Oil and Gas                                      
Lonestar Prospects, Ltd.   Sand proppant producer and distributor to the oil and natural gas industry   First lien senior secured loan ($70.1 par due 9/2018)   8.50% (Libor + 6.50% Cash, 1.00% PIK/Q)     9/18/2014     70.1     70.1 (3)(19)      
                                       
Petroflow Energy Corporation and TexOak Petro Holdings LLC(7)   Oil and gas exploration and production company   First lien senior secured loan ($16.5 par due 6/2019)   3.00% (Libor + 2.00%/Q)     6/29/2016     16.1     15.0 (2)(19)      
        Second lien senior secured loan ($22.6 par due 12/2019)         6/29/2016     21.8     6.6 (2)(18)      
        Common units (202,000 units)         6/29/2016     11.1            
                        49.0     21.6        
                        119.1     91.7     1.78 %
                                       
Commercial Real Estate Finance                                      
10th Street, LLC and New 10th Street, LLC(8)   Real estate holding company   First lien senior secured loan ($25.6 par due 11/2019)   12.00% Cash, 1.00% PIK     3/31/2014     25.6     25.6 (2)      
        Senior subordinated loan ($27.5 par due 11/2019)   12.00% Cash, 1.00% PIK     4/1/2010     27.5     27.5 (2)      
        Member interest (10.00% interest)         4/1/2010     0.6            
        Option (25,000 units)         4/1/2010         35.3        
                        53.7     88.4        
                        53.7     88.4     1.71 %
                                       
Aerospace and Defense                                      
Cadence Aerospace, LLC   Aerospace precision components manufacturer   First lien senior secured loan ($4.0 par due 5/2018)   7.00% (Libor + 5.75%/Q)     5/15/2012     4.0     4.0 (4)(19)      
        Second lien senior secured loan ($79.7 par due 5/2019)   11.00% (Libor + 9.75%/Q)     5/10/2012     79.7     77.3 (2)(19)      
                        83.7     81.3        
                        83.7     81.3     1.57 %
                                       
Environmental Services                                      
MPH Energy Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (3.13% interest)         1/8/2014         (2)      
                                       
Pegasus Community Energy, LLC   Operator of municipal recycling facilities   Preferred stock (1,000 shares)         3/1/2011     8.8     (2)      
                                       
Waste Pro USA, Inc   Waste management services   Second lien senior secured loan ($75.9 par due 10/2020)   8.50% (Libor + 7.50%/Q)     10/15/2014     75.9     75.9 (3)(19)      
                        84.7     75.9     1.47 %
                                       
Chemicals                                      
Genomatica, Inc.   Developer of a biotechnology platform for the production of chemical products   Warrant to purchase 322,422 shares of Series D preferred stock (expires 3/2023)         3/28/2013         (2)      
                                     

F-68


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
K2 Pure Solutions Nocal, L.P.(24)   Chemical Producer   First lien senior secured revolving loan ($1.5 par due 2/2021)   8.125% (Libor + 7.125%/Q)     8/19/2013     1.5     1.5 (2)(19)      
        First lien senior secured loan ($40.0 par due 2/2021)   7.00% (Libor + 6.00%/Q)     8/19/2013     40.0     40.0 (3)(19)      
        First lien senior secured loan ($13.0 par due 2/2021)   7.00% (Libor + 6.00%/Q)     8/19/2013     13.0     13.0 (4)(19)      
                        54.5     54.5        
                                       
Kinestral Technologies, Inc.   Designer of adaptive, dynamic glass for the commercial and residential markets   First lien senior secured loan ($8.5 par due 10/2018)   8.75% (Libor + 7.75%/M)     4/22/2014     8.4     8.5 (2)(17)(19)      
        Warrant to purchase up to 325,000 shares of Series A preferred stock (expires 4/2024)         4/22/2014     0.1     0.2 (2)      
        Warrant to purchase up to 131,883 shares of Series B preferred stock (expires 4/2025)         4/9/2015         (2)      
                        8.5     8.7        
                        63.0     63.2     1.22 %
                                       
Health Clubs                                      
Athletic Club Holdings, Inc.   Premier health club operator   First lien senior secured loan ($35.0 par due 10/2020)   9.50% (Libor + 8.50%/Q)     10/11/2007     35.0     35.0 (3)(19)      
                                       
CFW Co-Invest, L.P., NCP Curves, L.P. and Curves International Holdings, Inc.   Health club franchisor   Limited partnership interest (4,152,165 shares)         7/31/2012     4.2     0.8 (2)      
        Common stock (1,680 shares)         11/12/2014         (2)(9)      
        Limited partnership interest (2,218,235 shares)         7/31/2012     2.2     8.5 (2)(9)      
                        6.4     9.3        
                        41.4     44.3     0.86 %
                                       
Hotel Services                                      
Aimbridge Hospitality, LLC(24)   Hotel operator   First lien senior secured loan ($2.9 par due 10/2018)   8.25% (Libor + 7.00%/Q)     1/7/2016     2.8     2.9 (2)(15)(19)      
        First lien senior secured loan ($3.3 par due 10/2018)   8.25% (Libor + 7.00%/Q)     7/15/2015     3.2     3.3 (2)(15)(19)      
        First lien senior secured loan ($14.8 par due 10/2018)   8.25% (Libor + 7.00%/Q)     7/15/2015     14.7     14.8 (4)(15)(19)      
                        20.7     21.0        
                                       
Pyramid Management Advisors, LLC and Pyramid Investors, LLC   Hotel operator   First lien senior secured loan ($3.0 par due 7/2021)   11.12% (Libor + 10.12%/Q)     7/15/2016     3.0     2.9 (2)(19)      
        First lien senior secured loan ($19.5 par due 7/2021)   11.12% (Libor + 10.12%/Q)     7/15/2016     19.5     19.1 (3)(19)      
        Membership units (990,369 units)         7/15/2016     1.0     0.7 (2)      
                        23.5     22.7        
                        44.2     43.7     0.85 %
                                       
Wholesale Distribution                                      
Flow Solutions Holdings, Inc.   Distributor of high value fluid handling, filtration and flow control products   Second lien senior secured loan ($6.0 par due 10/2018)   10.00% (Libor + 9.00%/Q)     12/16/2014     6.0     5.3 (2)(19)      
        Second lien senior secured loan ($29.5 par due 10/2018)   10.00% (Libor + 9.00%/Q)     12/16/2014     29.5     26.0 (2)(19)      
                        35.5     31.3        
                        35.5     31.3     0.61 %
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Farming and Agriculture                                      
QC Supply, LLC(24)   Specialty distributor and solutions provider to the swine and poultry markets   First lien senior secured revolving loan ($2.3 par due 12/2021)   7.00% (Libor + 6.00%/Q)     12/29/2016     2.3     2.3 (2)(19)      
        First lien senior secured loan ($28.9 par due 12/2022)   7.00% (Libor + 6.00%/Q)     12/29/2016     28.9     28.9 (2)(19)      
                        31.2     31.2        
                        31.2     31.2     0.60 %
                                       
Telecommunications                                      
Adaptive Mobile Security Limited(9)   Developer of security software for mobile communications networks   First lien senior secured loan ($1.8 par due 7/2018)   12.00% (Euribor + 9.00% Cash, 1% PIK/M)     1/16/2015     2.0     1.8 (2)(17)(19)      
        First lien senior secured loan ($0.5 par due 10/2018)   12.00% (Euribor + 9.00% Cash, 1% PIK/M)     1/16/2015     0.5     0.5 (2)(17)(19)      
        First lien senior secured loan ($1.1 par due 10/2018)   12.00% (Euribor + 9.00% Cash, 1% PIK/M)     10/17/2016     1.1     1.1 (2)(17)(19)      
                        3.6     3.4        
                                       
American Broadband Holding Company and Cameron Holdings of NC, Inc.   Broadband communication services   Warrant to purchase up to 208 shares (expires 11/2017)         11/7/2007         7.2        
        Warrant to purchase up to 200 shares (expires 9/2020)         9/1/2010         6.9        
                            14.1        
                                       
Startec Equity, LLC(8)   Communication services   Member interest         4/1/2010                
                                       
Wilcon Holdings LLC   Communications infrastructure provider   Class A common stock (2,000,000 shares)         12/13/2013     1.8     3.7        
                        5.4     21.2     0.41 %
                                       
Retail                                      
Paper Source, Inc. and Pine Holdings, Inc.(24)   Retailer of fine and artisanal paper products   First lien senior secured loan ($9.7 par due 9/2018)   7.25% (Libor + 6.25%/Q)     9/23/2013     9.7     9.7 (4)(19)      
        Class A common stock (36,364 shares)         9/23/2013     6.0     5.9 (2)      
                        15.7     15.6        
                                       
Things Remembered, Inc. and TRM Holdco Corp.(7)   Personalized gifts retailer   First lien senior secured loan ($11.0 par due 3/2020)         8/30/2016     10.6     3.5 (2)(18)      
        Common stock (10,631,940 shares)         8/30/2016     6.1     (2)      
                        16.7     3.5        
                        32.4     19.1     0.37 %
                                       
Computers and Electronics                                      
Everspin Technologies, Inc.(24)   Designer and manufacturer of computer memory solutions   First lien senior secured revolving loan ($1.1 par due 6/2017)   7.50% (Base Rate + 7.50%/M)     6/5/2015     1.1     1.1 (5)(19)      
        First lien senior secured loan ($7.3 par due 6/2019)   8.75% (Libor + 7.75%/M)     6/5/2015     7.0     7.3 (5)(19)      
        Warrant to purchase up to 18,461 shares of common stock (expires 10/2026)         6/5/2015     0.4     0.4 (5)      
                        8.5     8.8        
                        8.5     8.8     0.17 %
                                       
Printing, Publishing and Media                                      
Earthcolor Group, LLC   Printing management services   Limited liability company interests (9.30%)         5/18/2012                
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
The Teaching Company Holdings, Inc.   Education publications provider   Preferred stock (10,663 shares)         9/29/2006     1.1     3.0 (2)      
        Common stock (15,393 shares)         9/29/2006         (2)      
                        1.1     3.0        
                        1.1     3.0     0.06 %
                                       
Total Investments                     $ 9,034.1   $ 8,819.9 (29)   170.77 %

Derivative Instruments

Description
  Notional Amount
to be Purchased
  Notional Amount
to be Sold
  Counterparty   Settlement Date   Unrealized
Appreciation /
(Depreciation)
 

Foreign currency forward contract

  $ 3   2   Bank of Montreal   January 5, 2017      

(1)
Other than the Company's investments listed in footnote 8 below (subject to the limitations set forth therein), the Company does not "Control" any of its portfolio companies, for the purposes of the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). In general, under the Investment Company Act, the Company would "Control" a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company. All of the Company's portfolio company investments, which as of December 31, 2016 represented 171% of the Company's net assets or 95% of the Company's total assets, are subject to legal restrictions on sales.

(2)
These assets are pledged as collateral for the Revolving Credit Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Revolving Credit Facility (see Note 5 to the consolidated financial statements).

(3)
These assets are owned by the Company's consolidated subsidiary Ares Capital CP Funding LLC ("Ares Capital CP"), are pledged as collateral for the Revolving Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than Ares Capital CP's obligations under the Revolving Funding Facility (see Note 5 to the consolidated financial statements).

(4)
These assets are owned by the Company's consolidated subsidiary Ares Capital JB Funding LLC ("ACJB"), are pledged as collateral for the SMBC Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than ACJB's obligations under the SMBC Funding Facility (see Note 5 to the consolidated financial statements).

(5)
These assets are owned by the Company's consolidated subsidiary Ares Venture Finance, L.P. ("AVF LP"), are pledged as collateral for the SBA-guaranteed debentures (the "SBA Debentures") and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than AVF LP's obligations (see Note 5 to the consolidated financial statements). AVF LP operates as a Small Business Investment Company ("SBIC") under the provisions of Section 301(c) of the Small Business Investment Act of 1958, as amended.

(6)
Investments without an interest rate are non-income producing.

(7)
As defined in the Investment Company Act, the Company is deemed to be an "Affiliated Person" because it owns 5% or more of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions during the year ended December 31, 2016 in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to Control) are as follows:
(in millions)
Company
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
  Net realized
gains (losses)
  Net
unrealized
gains (losses)
 

Campus Management Corp. and Campus Management Acquisition Corp. 

  $   $   $   $   $   $   $   $   $ 1.0  

Crown Health Care Laundry Services, Inc. and Crown Laundry Holdings, LLC

  $ 9.3   $ 4.1   $ 18.0   $ 1.2   $ 0.4   $   $   $   $ (0.6 )

ESCP PPG Holdings, LLC

  $ 3.5   $   $   $   $   $   $   $   $  

Investor Group Services, LLC

  $   $   $   $   $   $   $   $ 0.4   $  

Multi-Ad Services, Inc.

  $   $   $   $   $   $   $   $   $  

Petroflow Energy Corporation and TexOak Petro Holdings LLC

  $   $   $   $   $   $   $   $   $ 3.4  

Shock Doctor, Inc. and Shock Doctor Holdings, LLC

  $   $   $   $ 10.5   $   $   $   $   $ (4.8 )

Things Remembered, Inc. and TRM Holdco Corp.

  $ 3.3   $ 3.3   $   $   $   $   $   $   $ (2.1 )

UL Holding Co., LLC and Universal Lubricants, LLC

  $   $ 45.3   $   $ 3.8   $   $   $   $ 13.2   $ 17.2  
(8)
As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" and "Control" this portfolio company because it owns more than 25% of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company

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Table of Contents

(in millions)
Company
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
  Net realized
gains (losses)
  Net
unrealized
gains (losses)
 

10th Street, LLC and New 10th Street, LLC

  $   $   $   $ 6.9   $   $   $   $   $ (9.2 )

ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.

  $ 3.1   $   $   $   $   $   $   $   $ (10.8 )

AllBridge Financial, LLC

  $   $ 1.1   $   $   $   $   $   $ 6.3   $ (6.5 )

Callidus Capital Corporation

  $   $   $   $   $   $   $   $   $  

Ciena Capital LLC

  $   $ 12.0   $   $ 1.5   $   $   $   $   $ 0.9  

Community Education Centers, Inc. and CEC Parent Holdings LLC

  $   $   $   $ 4.6   $   $   $   $   $ 18.9  

Competitor Group, Inc., Calera XVI, LLC and Champion Parent Corporation

  $ 2.5   $   $   $ 1.7   $   $   $   $   $ (0.8 )

Crescent Hotels & Resorts, LLC and affiliates

  $   $   $   $ 1.2   $   $   $   $ 2.5   $ (2.7 )

HCI Equity, LLC

  $   $   $   $   $   $   $   $   $  

Industrial Air Tool, LP and Affiliates d/b/a Industrial Air Tool

  $   $   $   $   $   $   $   $   $  

Ivy Hill Asset Management, L.P.

  $   $   $   $   $   $ 40.0   $   $   $ (6.3 )

Liquid Light, Inc.

  $   $ 2.4   $   $   $   $   $   $ (0.6 ) $  

MVL Group, Inc.

  $   $   $   $   $   $   $   $   $  

Orion Foods, LLC

  $   $ 6.4   $   $   $   $   $   $   $ 3.1  

PHL Investors, Inc., and PHL Holding Co.

  $   $   $   $   $   $   $   $   $  

Senior Direct Lending Program, LLC*

  $ 271.6   $ 1.7   $   $ 12.6   $ 4.9   $   $ 0.7   $   $  

Senior Secured Loan Fund LLC**

  $ 3.0   $   $   $ 208.0   $ 2.9   $   $ 17.0   $   $ 26.3  

Startec Equity, LLC

  $   $   $   $   $   $   $   $   $  

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

  $   $ 2.7   $   $   $   $   $   $ 3.9   $ 3.1  

The Step2 Company, LLC

  $   $ 64.7   $   $ 4.6   $   $   $   $ 18.1   $ 24.4  

*
Together with Varagon Capital Partners ("Varagon"), the Company has co-invested through the Senior Direct Lending Program LLC (d/b/a the "Senior Direct Lending Program" or the "SDLP"). The SDLP has been capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required); therefore, although the Company owns more than 25% of the voting securities of the SDLP, the Company does not believe that it has control over the SDLP (for purposes of the Investment Company Act or otherwise) because, among other things, these "voting securities" do not afford the Company the right to elect directors of the SDLP or any other special rights (see Note 4 to the consolidated financial statements).

**
Together with GE Global Sponsor Finance LLC and General Electric Capital Corporation (together,"GE"), the Company had previously co-invested through the Senior Secured Loan Fund LLC (d/b/a the "Senior Secured Loan Program" or the "SSLP"). The SSLP was capitalized as transactions were completed and all portfolio decisions and generally all other decisions in respect of the SSLP were approved by an investment committee of the SSLP consisting of representatives of the Company and GE (with approval from a representative of each required); therefore, although the Company owned more than 25% of the voting securities of the SSLP, the Company did not believe that it had control over the SSLP (for purposes of the Investment Company Act or otherwise) because, among other things, these "voting securities" did not afford the Company the right to elect directors of the SSLP or any other special rights (see Note 4 to the consolidated financial statements).
(9)
Non-U.S. company or principal place of business outside the U.S. and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(10)
Exception from the definition of investment company under Section 3(c) of the Investment Company Act and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(11)
In the first quarter of 2011, the staff of the Securities and Exchange Commission (the "Staff") informally communicated to certain business development companies ("BDCs") the Staff's belief that certain entities, which would be classified as an "investment company" under the Investment Company Act but for the exception from the definition of "investment company" set forth in Rule 3a-7 promulgated under the Investment Company Act, could not be treated as eligible portfolio companies (as defined in Section 2(a)(46) under Investment Company Act) (i.e. not eligible to be included in a BDC's 70% "qualifying assets" basket). Subsequently, in August 2011 the Securities and Exchange Commission issued a concept release (the "Concept Release") which stated that "[a]s a general matter, the Commission presently does not believe that Rule 3a-7 issuers are the type of small, developing and financially troubled businesses in which the U.S. Congress intended BDCs primarily to invest" and requested comment on whether or not a 3a-7 issuer should be considered an "eligible portfolio company". The Company provided a comment letter in respect of the Concept Release and continues to believe that the language of Section 2(a)(46) of the Investment Company Act permits a BDC to treat as "eligible portfolio companies" entities that rely on the 3a-7 exception. However, given the current uncertainty in this area (including the language in the Concept Release) and subsequent discussions with the Staff, the Company has, solely for purposes of calculating the composition of its portfolio pursuant to Section 55(a) of the Investment Company Act, identified such entities, which include the SSLP, as "non-qualifying assets" should the Staff ultimately disagree with the Company's position. Pursuant to Section 55(a) of the Investment Company Act (using the Staff's methodology described above solely for this purpose), 29% of the Company's total assets are represented by investments at fair value and other assets that are considered "non-qualifying assets" as of December 31, 2016.

(12)
Variable rate loans to the Company's portfolio companies bear interest at a rate that may be determined by reference to either the LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower's option, which reset annually (A), semi-annually (S), quarterly (Q), bi-monthly (B), monthly (M) or daily (D). For each such loan, the Company has provided the interest rate in effect on the date presented.

(13)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 1.13% on $8.9 aggregate principal amount of a "first out" tranche of the portfolio company's senior term debt previously syndicated by the Company into "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.

(14)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.00% on $81.5 aggregate principal amount of a "first out" tranche of the portfolio company's senior term debt previously syndicated by the Company into "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.

(15)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.50% on $69.5 aggregate principal amount of a "first out" tranche of the portfolio company's senior term debt previously syndicated by the Company into "first out" and "last

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(16)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.55% on $35.2 aggregate principal amount of a "first out" tranche of the portfolio company's first lien senior secured loans, 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.

(17)
The Company is entitled to receive a fixed fee upon the occurrence of certain events as defined in the credit agreement governing the Company's debt investment in the portfolio company. The fair value of such fee is included in the fair value of the debt investment.

(18)
Loan was on non-accrual status as of December 31, 2016.

(19)
Loan includes interest rate floor feature.

(20)
The certificates have a stated contractual interest rate and also entitle the holders thereof to receive a portion of the excess cash flow from the SSLP's loan portfolio, after expenses. However, the SSLP Certificates (defined below) are junior in right of payment to the senior notes held by GE, and the Company expects that for so long as principal proceeds from SSLP repayments are directed entirely to repay the senior notes as discussed above, the yield on the SSLP Certificates will be lower than the stated coupon and continue to decline. See Note 4 to the consolidated financial statements for more information on the SSLP.

(21)
In addition to the interest earned based on the stated contractual interest rate of this security, the certificates entitle the holders thereof to receive a portion of the excess cash flow from the SDLP's loan portfolio, after expenses, which may result in a return to the Company greater than the contractual stated interest rate.

(22)
As of December 31, 2016, no amounts were funded by the Company under this first lien senior secured revolving loan; however, there were letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(23)
As of December 31, 2016, in addition to the amounts funded by the Company under this first lien senior secured revolving loan, there were also letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(24)
As of December 31, 2016, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See

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(in millions)
Portfolio Company
  Total revolving
and delayed
draw loan
commitments
  Less: drawn
commitments
  Total
undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

Accruent, LLC

  $ 3.2   $ (0.3 ) $ 2.9   $   $   $ 2.9  

Acrisure, LLC

    9.7         9.7             9.7  

ADCS Clinics Intermediate Holdings, LLC

    5.0     (1.7 )   3.3             3.3  

ADG, LLC

    13.7     (2.0 )   11.7             11.7  

Aimbridge Hospitality, LLC

    2.4         2.4             2.4  

American Seafoods Group LLC

    22.1         22.1             22.1  

Benihana, Inc.

    3.2     (2.1 )   1.1             1.1  

CCS Intermediate Holdings, LLC

    7.5     (7.3 )   0.2             0.2  

CH Hold Corp.

    5.0     (1.2 )   3.8             3.8  

Chariot Acquisition, LLC

    1.0         1.0             1.0  

Ciena Capital LLC

    20.0     (14.0 )   6.0     (6.0 )        

Clearwater Analytics, LLC

    5.0         5.0             5.0  

Competitor Group, Inc.

    5.7     (5.5 )   0.2             0.2  

Component Hardware Group, Inc.

    3.7     (1.9 )   1.8             1.8  

Crown Health Care Laundry Services, Inc.

    17.0     (0.6 )   16.4             16.4  

D4C Dental Brands, Inc.

    5.0         5.0             5.0  

DCA Investment Holding, LLC

    5.8     (2.2 )   3.6             3.6  

DTI Holdco, Inc. and OPE DTI Holdings, Inc.

    8.8         8.8             8.8  

Eckler Industries, Inc.

    4.0     (2.0 )   2.0             2.0  

EN Engineering, L.L.C.

    5.0         5.0             5.0  

Everspin Technologies, Inc.

    4.0     (1.1 )   2.9             2.9  

Faction Holdings, Inc.

    2.0     (2.0 )                

Garden Fresh Restaurant Corp.

    7.0     (2.3 )   4.7             4.7  

Gentle Communications, LLC

    5.0         5.0             5.0  

Greenphire, Inc.

    2.0         2.0             2.0  

Harvey Tool Company, LLC

    0.8         0.8             0.8  

Hygiena Borrower LLC

    1.9         1.9             1.9  

ICSH, Inc.

    5.0     (1.8 )   3.2             3.2  

Infilaw Holdings, LLC

    20.0     (13.6 )   6.4     (6.4 )        

iPipeline, Inc.

    4.0         4.0             4.0  

Itel Laboratories, Inc.

    2.5         2.5             2.5  

K2 Pure Solutions Nocal, L.P.

    5.0     (1.5 )   3.5             3.5  

Lakeland Tours, LLC

    11.9     (0.5 )   11.4             11.4  

LBP Intermediate Holdings LLC

    0.9     (0.1 )   0.8             0.8  

Massage Envy, LLC

    5.0     (3.5 )   1.5             1.5  

McKenzie Sports Products, LLC

    4.5         4.5             4.5  

Ministry Brands LLC

    29.2     (3.8 )   25.4             25.4  

MW Dental Holding Corp.

    10.0     (1.5 )   8.5             8.5  

My Health Direct, Inc.

    1.0     (0.5 )   0.5             0.5  

Niagara Fiber Intermediate Corp.

    1.9     (1.9 )                

Nordco Inc

    11.3         11.3             11.3  

NSM Sub Holdings Corp.

    5.0     (0.8 )   4.2             4.2  

OmniSYS Acquisition Corporation

    2.5         2.5             2.5  

OTG Management, LLC

    22.2         22.2             22.2  

Paper Source, Inc.

    2.5         2.5             2.5  

Pegasus Intermediate Holdings, LLC

    5.0         5.0             5.0  

PIH Corporation

    3.3     (0.6 )   2.7             2.7  

QC Supply, LLC

    28.1     (2.3 )   25.8             25.8  

Restaurant Technologies, Inc.

    5.4     (0.7 )   4.7             4.7  

RuffaloCODY, LLC

    7.7     (0.2 )   7.5             7.5  

Severin Acquisition, LLC

    2.9         2.9             2.9  

Shift PPC LLC

    1.5         1.5             1.5  

Sonny's Enterprises, LLC

    1.8         1.8             1.8  

Things Remembered, Inc.

    2.8         2.8             2.8  

Towne Holdings, Inc.

    1.0         1.0             1.0  

TPTM Merger Corp.

    2.5     (1.3 )   1.2             1.2  

Urgent Cares of America Holdings I, LLC

    16.0         16.0             16.0  

Zemax, LLC

    3.0         3.0             3.0  

Zywave, Inc.

    10.5         10.5             10.5  

  $ 411.4   $ (80.8 ) $ 330.6   $ (12.4 ) $   $ 318.2  

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(25)
As of December 31, 2016, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:
(in millions)
Portfolio Company
  Total private
equity
commitments
  Less: funded
private equity
commitments
  Total unfunded
private equity
commitments
  Less: private equity
commitments
substantially at the
discretion of the
Company
  Total net
adjusted unfunded
private equity
commitments
 

Partnership Capital Growth Investors III, L.P. 

  $ 5.0   $ (4.2 ) $ 0.8   $   $ 0.8  

PCG-Ares Sidecar Investment, L.P. and PCG-Ares Sidecar Investment II, L.P.

    50.0     (10.9 )   39.1     (39.1 )    

Piper Jaffray Merchant Banking Fund I, L.P.

    2.0     (1.7 )   0.3         0.3  

  $ 57.0   $ (16.8 ) $ 40.2   $ (39.1 ) $ 1.1  
(26)
As of December 31, 2016, the Company had commitments to co-invest in the SSLP for its portion of the SSLP's commitment to fund delayed draw loans of up to $7.3. See Note 4 to the consolidated financial statements for more information on the SSLP.

(27)
As of December 31, 2016, the Company had commitments to co-invest in the SDLP for its portion of the SDLP's commitment to fund delayed draw loans of up to $37.1. See Note 4 to the consolidated financial statements for more information on the SDLP.

(28)
Other than the investments noted by this footnote, the fair value of the Company's investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 8 to the consolidated financial statements for more information regarding the fair value of the Company's investments.

(29)
As of December 31, 2016, the net estimated unrealized loss for federal tax purposes was $0.8 billion based on a tax cost basis of $9.7 billion. As of December 31, 2016, the estimated aggregate gross unrealized loss for federal income tax purposes was $0.9 billion and the estimated aggregate gross unrealized gain for federal income tax purposes was $0.1 billion.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(in millions, except per share data)

 
   
   
   
   
  Accumulated
Undistributed
(Overdistributed)
Net Realized
Gains (Losses)
on Investments,
Foreign Currency
Transactions,
Extinguishment of
Debt and Other Assets
   
   
 
 
   
   
   
   
  Net Unrealized
Gains (Losses) on
Investments,
Foreign Currency
and Other
Transactions
   
 
 
   
   
   
  Accumulated
Undistributed
(Overdistributed)
Net Investment
Income
   
 
 
  Common Stock    
   
 
 
  Capital in
Excess of
Par Value
  Total
Stockholders'
Equity
 
 
  Shares   Amount  

Balance at December 31, 2014

    314   $   $ 5,328   $ (33 ) $ (167 ) $ 155   $ 5,283  

Shares issued in connection with dividend reinvestment plan

            6                 6  

Repurchase of common stock

            (2 )               (2 )

Net increase in stockholders' equity resulting from operations

                508     117     (246 )   379  

Dividends declared and payable ($1.57 per share)

                (493 )           (493 )

Tax reclassification of stockholders' equity in accordance with GAAP

            (14 )   17     (3 )        

Balance at December 31, 2015

    314   $   $ 5,318   $ (1 ) $ (53 ) $ (91 ) $ 5,173  

Repurchases of common stock

            (5 )               (5 )

Net increase in stockholders' equity resulting from operations

                494     110     (130 )   474  

Dividends declared and payable ($1.52 per share)

                (477 )           (477 )

Tax reclassification of stockholders' equity in accordance with GAAP

            (21 )   21              

Balance at December 31, 2016

    314   $   $ 5,292   $ 37   $ 57   $ (221 ) $ 5,165  

Issuance of common stock in connection with the American Capital Acquisition

    112         1,839                 1,839  

Deemed contributions from Ares Capital Management (See Note 16)

            54                 54  

Shares issued in connection with dividend reinvestment plan

            6                 6  

Issuance of Convertible Unsecured Notes (See Note 5)

            15                 15  

Net increase in stockholders' equity resulting from operations

                511     20     136     667  

Dividends declared and payable ($1.52 per share)

                (648 )           (648 )

Tax reclassification of stockholders' equity in accordance with GAAP

            (14 )   19     (5 )        

Balance at December 31, 2017

    426   $   $ 7,192   $ (81 ) $ 72   $ (85 ) $ 7,098  

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

OPERATING ACTIVITIES:

                   

Net increase in stockholders' equity resulting from operations

  $ 667   $ 474   $ 379  

Adjustments to reconcile net increase in stockholders' equity resulting from operations:

                   

Net realized gains on investments and foreign currency transactions

    (24 )   (110 )   (127 )

Net unrealized losses (gains) on investments, foreign currency and other transactions

    (136 )   130     246  

Realized losses on extinguishment of debt

    4         10  

Net accretion of discount on investments

    (10 )   (6 )   (4 )

Payment-in-kind interest and dividends

    (79 )   (48 )   (24 )

Collections of payment-in-kind interest and dividends

    65     12     1  

Amortization of debt issuance costs

    18     14     17  

Net accretion of discount on notes payable

    6     6     17  

Depreciation

    1     1     1  

Acquisition of American Capital, net of cash acquired

    (2,381 )        

Proceeds from sales and repayments of investments

    7,047     3,711     3,691  

Purchases of investments

    (7,229 )   (3,475 )   (3,816 )

Changes in operating assets and liabilities:

                   

Interest receivable

    28     26     23  

Other assets

    31     (12 )   19  

Base management fees payable

    10          

Income based fees payable

    (5 )   1     (2 )

Capital gains incentive fees payable

    41     (4 )   (51 )

Accounts payable and other liabilities

    (122 )   (6 )   (24 )

Interest and facility fees payable

    20     (7 )   4  

Net cash provided by (used in) operating activities

    (2,048 )   707     360  

FINANCING ACTIVITIES:

                   

Borrowings on debt

    12,209     9,855     3,895  

Repayments and repurchases of debt

    (11,228 )   (10,104 )   (3,698 )

Debt issuance costs

    (37 )   (10 )   (6 )

Dividends paid

    (642 )   (477 )   (487 )

Repurchases of common stock

        (5 )   (2 )

Net proceeds from issuance of common stock

    1,839          

Net cash provided by (used in) financing activities

    2,141     (741 )   (298 )

CHANGE IN CASH AND CASH EQUIVALENTS

    93     (34 )   62  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

    223     257     195  

CASH AND CASH EQUIVALENTS, END OF PERIOD

  $ 316   $ 223   $ 257  

Supplemental Information:

                   

Interest paid during the period

  $ 171   $ 168   $ 181  

Taxes, including excise tax, paid during the period

  $ 24   $ 18   $ 16  

Dividends declared and payable during the period

  $ 648   $ 477   $ 493  

   

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2017
(in millions, except per share data, percentages and as otherwise indicated;
for example, with the word "billion" or otherwise)

1.     ORGANIZATION

        Ares Capital Corporation (the "Company") is a specialty finance company that is a closed-end, non-diversified management investment company incorporated in Maryland. The Company has elected to be regulated as a BDC under the Investment Company Act. The Company has elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code") and operates in a manner so as to qualify for the tax treatment applicable to RICs.

        The Company's investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in first lien senior secured loans (including "unitranche" loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, the Company also makes equity investments.

        The Company is externally managed by Ares Capital Management LLC ("Ares Capital Management" or the Company's "investment adviser"), a subsidiary of Ares Management, L.P. ("Ares Management"), a publicly traded, leading global alternative asset manager, pursuant to an investment advisory and management agreement. Ares Operations LLC ("Ares Operations" or the Company's "administrator"), a subsidiary of Ares Management, provides certain administrative and other services necessary for the Company to operate.

2.     SIGNIFICANT ACCOUNTING POLICIES

        The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles ("GAAP"), and include the accounts of the Company and its consolidated subsidiaries. The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification ("ASC") 946. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the results of the operations and financial condition as of and for the periods presented. All significant intercompany balances and transactions have been eliminated.

        Cash and cash equivalents include funds from time to time deposited with financial institutions and short-term, liquid investments in a money market account. Cash and cash equivalents are carried at cost which approximates fair value.

        The Company places its cash and cash equivalents with financial institutions and, at times, cash held in money market accounts may exceed the Federal Deposit Insurance Corporation insured limit.

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        Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized.

        Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Company looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available (i.e., substantially all of the Company's investments) are valued at fair value as determined in good faith by the Company's board of directors, based on, among other things, the input of the Company's investment adviser, audit committee and independent third-party valuation firms that have been engaged at the direction of the Company's board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing 12-month period (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. The valuation process is conducted at the end of each fiscal quarter, and a portion of the Company's investment portfolio at fair value is subject to review by an independent valuation firm each quarter. In addition, the Company's independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, the Company's investment valuation process within the context of performing the integrated audit.

        As part of the valuation process, the Company may take into account the following types of factors, if relevant, in determining the fair value of the Company's investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company considers the pricing indicated by the external event to corroborate its valuation.

        Because there is not a readily available market value for most of the investments in its portfolio, the Company values substantially all of its portfolio investments at fair value as determined in good faith by its board of directors, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of the Company's investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.

        In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

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        The Company's board of directors undertakes a multi-step valuation process each quarter, as described below:

        See Note 8 for more information on the Company's valuation process.

        Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.

        Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.

        Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

        The Company has loans in its portfolio that contain payment-in-kind ("PIK") provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan and recorded as interest income. To maintain the Company's status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends, even though the Company has not yet collected the cash.

        The Company's investment adviser seeks to provide assistance to its portfolio companies and in return the Company may receive fees for capital structuring services. These fees are generally only

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available to the Company as a result of the Company's underlying investments, are normally paid at the closing of the investments, are generally non-recurring and are recognized as revenue when earned upon closing of the investment. The services that the Company's investment adviser provides vary by investment, but generally include reviewing existing credit facilities, arranging bank financing, arranging equity financing, structuring financing from multiple lenders, structuring financing from multiple equity investors, restructuring existing loans, raising equity and debt capital, and providing general financial advice, which concludes upon closing of the investment. Any services of the above nature subsequent to the closing would generally generate a separate fee payable to the Company. In certain instances where the Company is invited to participate as a co-lender in a transaction and does not provide significant services in connection with the investment, a portion of loan fees paid to the Company in such situations will be deferred and amortized over the estimated life of the loan.

        Other income includes fees for management and consulting services, loan guarantees, commitments, amendments and other services rendered by the Company to portfolio companies. Such fees are recognized as income when earned or the services are rendered.

        The Company's books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

        Results of operations based on changes in foreign exchange rates are separately disclosed in the statement of operations, if any. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

        The Company does not utilize hedge accounting and as such values its derivatives at fair value with the unrealized gains or losses recorded in "net unrealized gains (losses) from foreign currency and other transactions" in the Company's consolidated statement of operations.

        The Company's offering costs are charged against the proceeds from equity offerings when proceeds are received.

        Debt issuance costs are amortized over the life of the related debt instrument using the straight line method or the effective yield method, depending on the type of debt instrument.

        The Company has elected to be treated as a RIC under the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must (among

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other requirements) meet certain source-of- income and asset diversification requirements and timely distribute to its stockholders at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company (among other requirements) has made and intends to continue to make the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal corporate-level income taxes.

        Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year taxable income will be in excess of estimated dividend distributions for the current year, the Company accrues excise tax, if any, on estimated excess taxable income as such taxable income is earned.

        Certain of the Company's consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes.

        Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the Company's board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such capital gains for investment.

        The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Company's board of directors authorizes, and the Company declares, a cash dividend, then the Company's stockholders who have not "opted out" of the Company's dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of the Company's common stock, rather than receiving the cash dividend. The Company intends to use primarily newly issued shares to implement the dividend reinvestment plan (so long as the Company is trading at a premium to net asset value). If the Company's shares are trading at a discount to net asset value and the Company is otherwise permitted under applicable law to purchase such shares, the Company may purchase shares in the open market in connection with the Company's obligations under the dividend reinvestment plan. However, the Company reserves the right to issue new shares of the Company's common stock in connection with the Company's obligations under the dividend reinvestment plan even if the Company's shares are trading below net asset value.

        The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of actual and contingent assets and liabilities at the date of the financial statements and the reported amounts of income or loss and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation of investments.

        In May 2014, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605). Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for annual reporting periods beginning

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after December 15, 2017, including interim periods within that reporting period. The application of this guidance will not have a material impact on the Company's consolidated financial statements.

3.     AGREEMENTS

        The Company is party to an investment advisory and management agreement (the "investment advisory and management agreement") with Ares Capital Management. Subject to the overall supervision of the Company's board of directors, Ares Capital Management provides investment advisory and management services to the Company. For providing these services, Ares Capital Management receives fees from the Company consisting of a base management fee, a fee based on the Company's net investment income ("income based fee") and a fee based on the Company's net capital gains ("capital gains incentive fee"). The investment advisory and management agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

        The base management fee is calculated at an annual rate of 1.5% based on the average value of the Company's total assets (other than cash or cash equivalents, but including assets purchased with borrowed funds) at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears.

        The income based fee is calculated and payable quarterly in arrears based on the Company's pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the quarter. Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the administration agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the income based fee and capital gains incentive fee accrued under GAAP). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash. The Company's investment adviser is not under any obligation to reimburse the Company for any part of the income based fees it received that was based on accrued interest that the Company never actually received.

        Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses, unrealized capital appreciation, unrealized capital depreciation or income tax expense related to realized gains and losses. Because of the structure of the income based fee, it is possible that the Company may pay such fees in a quarter where the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the hurdle rate (as defined below) for a quarter, the Company will pay the applicable income based fee even if the Company has incurred a loss in that quarter due to realized and/or unrealized capital losses.

        Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company's net assets (defined as total assets less indebtedness and before taking into account any income based fees and capital gains incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed "hurdle rate" of 1.75% per quarter. If market credit spreads rise, the Company may be able to invest its funds in debt instruments that provide for a higher return, which may increase the Company's pre-incentive fee net investment income and make it easier for the Company's investment adviser to surpass the fixed hurdle rate and receive an income based fee based on such net investment income. To the extent the Company has retained pre-incentive fee net investment income that has been used to calculate the income based fee, it is also

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included in the amount of the Company's total assets (other than cash and cash equivalents but including assets purchased with borrowed funds) used to calculate the 1.5% base management fee.

        The Company pays its investment adviser an income based fee with respect to the Company's pre-incentive fee net investment income in each calendar quarter as follows:

        These calculations are adjusted for any share issuances or repurchases during the quarter.

        In connection with the Company's acquisition of American Capital, Ltd., a Delaware corporation ("American Capital") (the "American Capital Acquisition"), Ares Capital Management agreed to waive, for each of the first ten calendar quarters beginning with the second quarter of 2017, the lesser of (x) $10 of income based fees and (y) the amount of income based fees for such quarter, in each case, to the extent earned and payable by the Company in such quarter pursuant to and as calculated under the Company's investment advisory and management agreement (the "Fee Waiver"). See Note 16 for additional information regarding the American Capital Acquisition.

        The capital gains incentive fee is determined and payable in arrears as of the end of each calendar year (or, upon termination of the investment advisory and management agreement, as of the termination date) and is calculated at the end of each applicable year by subtracting (a) the sum of the Company's cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (b) the Company's cumulative aggregate realized capital gains, in each case calculated from October 8, 2004 (the date the Company completed its initial public offering). Realized capital gains and losses include gains and losses on investments and foreign currencies, gains and losses on extinguishment of debt and from other assets, as well as any income tax and other expenses related to cumulative aggregate realized gains and losses. If such amount is positive at the end of such year, then the capital gains incentive fee for such year is equal to 20% of such amount, less the aggregate amount of capital gains incentive fees paid in all prior years. If such amount is negative, then there is no capital gains incentive fee for such year.

        The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.

        The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company's portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

        The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company's portfolio as of the applicable capital gains incentive fee calculation date and (b) the accreted or amortized cost basis of such investment.

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        Notwithstanding the foregoing, as a result of an amendment to the capital gains incentive fee under the investment advisory and management agreement that was adopted on June 6, 2011, if the Company is required by GAAP to record an investment at its fair value as of the time of acquisition instead of at the actual amount paid for such investment by the Company (including, for example, as a result of the application of the asset acquisition method of accounting), then solely for the purposes of calculating the capital gains incentive fee, the "accreted or amortized cost basis" of an investment shall be an amount (the "Contractual Cost Basis") equal to (1) (x) the actual amount paid by the Company for such investment plus (y) any amounts recorded in the Company's financial statements as required by GAAP that are attributable to the accretion of such investment plus (z) any other adjustments made to the cost basis included in the Company's financial statements, including PIK interest or additional amounts funded (net of repayments) minus (2) any amounts recorded in the Company's financial statements as required by GAAP that are attributable to the amortization of such investment, whether such calculated Contractual Cost Basis is higher or lower than the fair value of such investment (as determined in accordance with GAAP) at the time of acquisition.

        There was no capital gains incentive fee earned by the Company's investment adviser as calculated under the investment advisory and management agreement (as described above) for the years ended December 31, 2017, 2016 and 2015. However, in accordance with GAAP, the Company had cumulatively accrued a capital gains incentive fee of $79 as of December 31, 2017, of which $79 is not currently due under the investment advisory and management agreement. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the investment advisory and management agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 20% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods. As of December 31, 2017, the Company has paid capital gains incentive fees since inception totaling $57. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future.

        The Company defers cash payment of any income based fees and capital gains incentive fees otherwise earned by the Company's investment adviser if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to the Company's stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fees and capital gains incentive fees payable during the period) is less than 7.0% of the Company's net assets (defined as total assets less indebtedness) at the beginning of such period. Any deferred income based fees and capital gains incentive fees are carried over for payment in subsequent calculation periods to the extent such payment is payable under the investment advisory and management agreement.

        For the year ended December 31, 2017, base management fees were $171 and income based fees were $134. The income based fees for the year ended December 31, 2017 were net of the Fee Waiver of $30. For the year ended December 31, 2017, the capital gains incentive fees calculated in accordance with GAAP was $41. For the year ended December 31, 2017, $11 of capital gains incentive fees

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calculated in accordance with GAAP was recorded in connection with the American Capital Acquisition as a result of the fair value of the net assets acquired exceeding the fair value of the merger consideration paid by the Company. See Note 16 for additional information regarding the American Capital Acquisition. For the year ended December 31, 2016, base management fees were $137 and income based fees were $123. For the year ended December 31, 2016, the reduction in capital gains incentive fees calculated in accordance with GAAP was $5. For the year ended December 31, 2015, base management fees were $134 and income based fees were $121. For the year ended December 31, 2015, the capital gains incentive fees calculated in accordance with GAAP was $27.

        The services of all investment professionals and staff of the Company's investment adviser, when and to the extent engaged in providing investment advisory and management services to the Company and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Company's investment adviser. The Company bears all other costs and expenses of its operations and transactions, including, but not limited to, those relating to: rent for the offices in which the Company operates, including rent expenses for investment activities of the Company (see Note 7); organization; calculation of the Company's net asset value (including, but not limited to, the cost and expenses of any independent valuation firm); expenses incurred by the Company's investment adviser payable to third parties, including agents, consultants or other advisers, in monitoring the Company's financial and legal affairs and in monitoring the Company's investments (including the cost of consultants hired to develop information technology systems designed to monitor the Company's investments) and performing due diligence on the Company's prospective portfolio companies; interest payable on indebtedness, if any, incurred to finance the Company's investments (including payments to third party vendors for financial information services); offerings of the Company's common stock and other securities; investment advisory and management fees; administration fees; fees payable to third parties, including agents, consultants or other advisers, relating to, or associated with, evaluating and making investments regardless of whether such transactions are ultimately consummated; costs of marketing; transfer agent and custodial fees; registration fees; listing fees; taxes; independent directors' fees and expenses; costs of preparing and filing reports or other documents with the SEC; the costs of any reports, proxy statements or other notices to stockholders, including printing costs; to the extent the Company is covered by any joint insurance policies, the Company's allocable portion of the insurance premiums for such policies; direct costs and expenses of administration, including auditor and legal costs; and all other expenses incurred by the Company or its administrator in connection with administering the Company's business as described in more detail under "Administration Agreement" below.

        The Company is party to an administration agreement, referred to herein as the "administration agreement", with its administrator, Ares Operations. Pursuant to the administration agreement, Ares Operations furnishes the Company with office equipment and clerical, bookkeeping and record keeping services at the Company's office facilities. Under the administration agreement, Ares Operations also performs, or oversees the performance of, the Company's required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations, being responsible for the financial records that the Company is required to maintain and preparing reports to its stockholders and reports filed with the Securities and Exchange Commission (the "SEC"). In addition, Ares Operations assists the Company in determining and publishing its net asset value, assists the Company in providing managerial assistance to its portfolio companies, oversees the preparation and filing of the Company's tax returns and the printing and dissemination of reports to its stockholders, and generally oversees the payment of its expenses and the performance of administrative and professional services rendered to the Company by others. Payments under the administration agreement are equal to an amount based upon its allocable portion of Ares Operations' overhead and other expenses (including travel expenses) incurred by Ares

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Operations in performing its obligations under the administration agreement, including the Company's allocable portion of the compensation, rent and other expenses of certain of its officers (including the Company's chief compliance officer, chief financial officer, chief accounting officer, general counsel, treasurer and assistant treasurer) and their respective staffs. The administration agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

        For the years ended December 31, 2017, 2016 and 2015, the Company incurred $12, $14 and $14 in administrative fees, respectively. In addition, for the year ended December 31, 2017, the Company incurred an additional $8 in administrative fees related to the integration of the American Capital Acquisition. These acquisition-related expenses are included in "professional fees and other costs related to the American Capital Acquisition" in the consolidated statement of operations. As of December 31, 2017, $4 of the administrative fees were unpaid and included in "accounts payable and other liabilities" in the accompanying consolidated balance sheet.

4.     INVESTMENTS

        As of December 31, 2017 and 2016, investments consisted of the following:

 
  As of December 31,  
 
  2017   2016  
 
  Amortized Cost(1)   Fair Value   Amortized Cost(1)   Fair Value  

First lien senior secured loans

  $ 5,337   $ 5,197   $ 2,102   $ 2,036  

Second lien senior secured loans

    3,885     3,744     3,069     2,987  

Subordinated certificates of the SDLP(2)

    487     487     270     270  

Subordinated certificates of the SSLP(3)

            1,938     1,914  

Senior subordinated loans

    978     995     692     714  

Collateralized loan obligations

    115     114          

Preferred equity securities

    485     532     505     273  

Other equity securities

    618     772     458     626  

Total

  $ 11,905   $ 11,841   $ 9,034   $ 8,820  

(1)
The amortized cost represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.

(2)
The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans to 19 and 14 different borrowers as of December 31, 2017 and 2016, respectively.

(3)
The proceeds from these certificates were applied to co-investments with GE to fund first lien senior secured loans to 19 different borrowers as of December 31, 2016.

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        The industrial and geographic compositions of the Company's portfolio at fair value as of December 31, 2017 and 2016 were as follows:

 
  As of
December 31,
 
 
  2017   2016  

Industry

             

Healthcare Services

    22.5 %   14.3 %

Business Services

    19.2     9.8  

Consumer Products

    6.8     7.2  

Other Services

    6.2     8.9  

Manufacturing

    6.0     3.8  

Investment Funds and Vehicles(1)

    5.8     25.2  

Financial Services

    4.3     4.2  

Food and Beverage

    4.3     2.2  

Power Generation

    3.6     6.4  

Restaurants and Food Services

    3.3     4.5  

Automotive Services

    3.0     1.9  

Education

    3.0     2.0  

Wholesale Distribution

    2.5     0.4  

Oil and Gas

    2.5     1.0  

Containers and Packaging

    2.1     2.8  

Other

    4.9     5.4  

Total

    100.0 %   100.0 %

(1)
Includes the Company's investment in the SDLP, which had made first lien senior secured loans to 19 and 14 different borrowers as of December 31, 2017 and 2016, respectively, and the Company's investment in the SSLP, which had made first lien senior secured loans to 19 different borrowers as of December 31, 2016. The portfolio companies in the SDLP are in industries similar to the companies in the Company's portfolio. The portfolio companies in the SSLP were in industries similar to the companies in the Company's portfolio.
 
  As of December 31,  
 
  2017   2016  

Geographic Region

             

Southeast

    28.5 %   19.5 %

Midwest

    25.3     19.7  

West(1)

    23.9     41.5  

Mid Atlantic

    15.0     14.7  

Northeast

    3.9     3.6  

International

    3.4     1.0  

Total

    100.0 %   100.0 %

(1)
Includes the Company's investment in the SDLP, which represented 4.1% and 3.1% of the total investment portfolio at fair value as of December 31, 2017 and 2016, respectively, and the Company's investment in the SSLP, which represented 21.7% of the total investment portfolio at fair value as of December 31, 2016.

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        As of December 31, 2017, 3.1% of total investments at amortized cost (or 1.4% of total investments at fair value) were on non-accrual status. As of December 31, 2016, 2.9% of total investments at amortized cost (or 0.8% of total investments at fair value) were on non-accrual status.

Co-Investment Programs

        The Company has established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle market companies. Varagon was formed in 2013 as a lending platform by American International Group, Inc. (NYSE:AIG) and other partners. The joint venture is called the SDLP. In July 2016, the Company and Varagon and its clients completed the initial funding of the SDLP. In conjunction with the initial funding, we and Varagon and its clients sold investment commitments to the SDLP. Such investment commitments included $529 of investment commitments sold to the SDLP by the Company. No realized gains or losses were recorded by the Company on these transactions. The SDLP may generally commit and hold individual loans of up to $300. The Company and other accounts managed by the Company's investment adviser and its affiliates may directly co-invest with the SDLP to accommodate larger transactions. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required).

        The Company provides capital to the SDLP in the form of subordinated certificates (the "SDLP Certificates"), and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. As of December 31, 2017 and 2016, the Company and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates.

        As of December 31, 2017, the Company and Varagon and its clients had agreed to make capital available to the SDLP of $2,925 in the aggregate, of which $591 is to be made available from the Company. This capital will only be committed to the SDLP upon approval of transactions by the investment committee of the SDLP as discussed above. Below is a summary of the funded capital and unfunded capital commitments of the SDLP.

 
  As of
December 31,
 
 
  2017   2016  

Total capital funded to the SDLP(1)

  $ 2,319   $ 1,285  

Total capital funded to the SDLP by the Company(1)

  $ 487   $ 270  

Total unfunded capital commitments to the SDLP(2)

  $ 92   $ 177  

Total unfunded capital commitments to the SDLP by the Company(2)

  $ 19   $ 37  

(1)
At principal amount.

(2)
These commitments have been approved by the investment committee of the SDLP and will be funded as the transactions are completed.

        The SDLP Certificates pay a coupon of LIBOR plus 8.0% and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

        The amortized cost and fair value of the SDLP Certificates held by the Company were $487 and $487, respectively, as of December 31, 2017. The Company's yield on its investment in the SDLP at

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amortized cost and fair value was 14.5% and 14.5%, respectively, as of December 31, 2017. The amortized cost and fair value of the SDLP Certificates held by the Company were $270 and $270, respectively, as of December 31, 2016. The Company's yield on its investment in the SDLP at amortized cost and fair value was 14.0% and 14.0%, respectively, as of December 31, 2016. For the years ended December 31, 2017 and 2016, the Company earned interest income of $52 and $13, respectively, from its investment in the SDLP Certificates. The Company is also entitled to certain fees in connection with the SDLP. For the years ended December 31, 2017 and 2016, in connection with the SDLP, the Company earned capital structuring service and other fees totaling $11 and $6, respectively.

        As of December 31, 2017 and 2016, the SDLP's portfolio was comprised entirely of first lien senior secured loans to U.S. middle market companies and were in industries similar to the companies in the Company's portfolio. As of December 31, 2017 and 2016, none of the loans were on non-accrual status. Below is a summary of the SDLP's portfolio.

 
  As of
December 31,
 
 
  2017   2016  

Total first lien senior secured loans(1)

  $ 2,316   $ 1,281  

Largest loan to a single borrower(1)

  $ 200   $ 125  

Total of five largest loans to borrowers(1)

  $ 947   $ 560  

Number of borrowers in the SDLP

    19     14  

Commitments to fund delayed draw loans(2)

  $ 92   $ 177  

(1)
At principal amount.

(2)
As discussed above, these commitments have been approved by the investment committee of the SDLP.

        The Company and GE had previously co-invested in first lien senior secured loans of middle market companies through the SSLP. The SSLP was capitalized as transactions were completed. All portfolio decisions and generally all other decisions in respect of the SSLP were approved by an investment committee of the SSLP consisting of representatives of the Company and GE (with approval from a representative of each required). The Company provided capital to the SSLP in the form of subordinated certificates (the "SSLP Certificates"). GE provided capital to the SSLP in the form of senior notes and the SSLP Certificates.

        As of June 30, 2017, the Company's investment in the SSLP Certificates at amortized cost and fair value was $1.9 billion and $1.9 billion, respectively. As of June 30, 2017, the SSLP had $1.2 billion in cash and GE's senior notes outstanding totaled $601. In July 2017, the SSLP made its monthly waterfall distribution from this cash, which fully repaid the senior notes of the SSLP with the remaining amounts distributed to the holders of the SSLP Certificates. From this distribution, the Company received $474 in respect of the Company's SSLP Certificates. After this distribution, the Company's amortized cost in its SSLP Certificates was $1.5 billion.

        In addition, in July 2017, the Company and GE agreed to an effective termination of the SSLP whereby on July 26, 2017, the Company purchased the remaining $1.6 billion in aggregate principal amount of first lien senior secured loans outstanding at par plus accrued and unpaid interest and fees from the SSLP (the "SSLP Loan Sale") and assumed the SSLP's remaining unfunded loan commitments totaling $50. Upon completion of the SSLP Loan Sale, the SSLP made a liquidation distribution to the holders of the SSLP Certificates (the "SSLP Liquidation Distribution"), of which the Company received $1.5 billion. In connection with the SSLP Liquidation Distribution, the Company recognized an $18 realized loss. After completion of the transactions above, the operations of the SSLP

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were effectively terminated pursuant to the terms of the documents governing the SSLP and the SSLP no longer has an obligation to fund existing commitments and other amounts in respect of its former portfolio companies.

        Below is a summary of the funded capital and unfunded capital commitments of the SSLP as of December 31, 2016.

Total capital funded to the SSLP(1)

  $ 3,819  

Total capital funded to the SSLP by the Company(1)

  $ 2,004  

Total unfunded capital commitments to the SSLP(2)

  $ 50  

Total unfunded capital commitments to the SSLP by the Company(2)

  $ 7  

(1)
At principal amount.

(2)
These commitments were approved by the investment committee of the SSLP.

        As of December 31, 2016, the amortized cost and fair value of the SSLP Certificates held by the Company were $1,938 and $1,914, respectively. The Company's yield on its investment in the SSLP at amortized cost and fair value was 7.0% and 7.1%, respectively, as of December 31, 2016. For the years ended December 31, 2017, 2016 and 2015, the Company earned interest income of $69, $208 and $276, respectively, from its investment in the SSLP Certificates. The Company was also entitled to certain fees in connection with the SSLP. For the years ended December 31, 2017, 2016 and 2015, in connection with the SSLP, the Company earned capital structuring service, sourcing and other fees totaling $5, $20 and $48, respectively.

        In June 2017, the Company purchased the SSLP's entire $259 aggregate principal amount of first lien senior secured loan investments in Implus Footcare, LLC ("Implus") at fair value of $259. As a result of the transaction, the SSLP fully exited its investment in Implus.

        As of December 31, 2016, the SSLP's portfolio was comprised of all first lien senior secured loans to U.S. middle-market companies and were in industries similar to the companies in the Company's portfolio. As of December 31, 2016, none of these loans were on non-accrual status. Below is a summary of the SSLP's portfolio as of December 31, 2016.

Total first lien senior secured loans(1)

  $ 3,360  

Largest loan to a single borrower(1)

  $ 260  

Total of five largest loans to borrowers(1)

  $ 1,257  

Number of borrowers in the SSLP

    19  

Commitments to fund delayed draw loans(2)

  $ 50  

(1)
At principal amount.

(2)
As discussed above, these commitments were approved by the investment committee of the SSLP.

        Ivy Hill Asset Management, L.P. ("IHAM") is an asset management services company and an SEC-registered investment adviser. The Company has made investments in IHAM, its wholly owned portfolio company and previously made investments in certain vehicles managed by IHAM. As of December 31, 2017, IHAM had assets under management of approximately $4.1 billion. As of December 31, 2017, IHAM managed 21 vehicles and served as the sub-manager/sub-servicer for two other vehicles (these vehicles managed or sub-managed/sub-serviced by IHAM are collectively referred to as the "IHAM Vehicles"). IHAM earns fee income from managing the IHAM Vehicles and has also

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invested in certain of these vehicles as part of its business strategy. As of December 31, 2017 and 2016, IHAM had total investments of $229 and $223, respectively. For the years ended December 31, 2017, 2016 and 2015, IHAM had management and incentive fee income of $44, $17 and $20 respectively, and other investment-related income of $26, $24 and $25, respectively.

        In connection with the American Capital Acquisition, which was completed on January 3, 2017 (the "Acquisition Date"), American Capital Asset Management, LLC ("ACAM"), a wholly owned portfolio company of American Capital, merged with and into IHAM, with IHAM remaining as the surviving entity as a wholly owned portfolio company of the Company. As a result of the merger of IHAM and ACAM, the Company's investment in IHAM increased by $179, which was recorded as a capital contribution in the amount of the fair value of the net assets of ACAM as of the Acquisition Date. In January 2017, as a result of sales of certain assets previously held by ACAM, IHAM made a distribution to the Company of $103, which was recorded as a return of the Company's capital contribution discussed above. Also in connection with the American Capital Acquisition, the Company assumed a $7 bridge loan receivable from a consolidated subsidiary of ACAM. Such receivable amount was repaid by IHAM in January 2017. See Note 16 for additional information regarding the American Capital Acquisition. In March 2017, the Company made an additional capital contribution of $50 to IHAM, which was unrelated to the American Capital Acquisition. In June 2017, IHAM made a distribution to the Company of $52, which was recorded as a return of the Company's capital.

        The amortized cost and fair value of the Company's investment in IHAM was $244 and $315, respectively, as of December 31, 2017, and $171 and $229, respectively, as of December 31, 2016. For the years ended December 31, 2017, 2016 and 2015, the Company received dividend income distributions from IHAM of $40, $40 and $50, respectively. The dividend income for the year ended December 31, 2015 included additional dividends of $10 for the period in addition to the quarterly dividends generally paid by IHAM. IHAM paid the additional dividends out of accumulated earnings that had previously been retained by IHAM.

        From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, the Company. For any such sales or purchases by the IHAM Vehicles to or from the Company, the IHAM Vehicles must obtain approval from third parties unaffiliated with the Company or IHAM, as applicable. During the years ended December 31, 2017, 2016 and 2015, IHAM or certain of the IHAM Vehicles purchased $137, $495 and $538, respectively, of investments from the Company. A net realized loss of $0 was recorded by the Company on these transactions for the year end December 31, 2017. Net realized gains of $1 and $1 were recorded by the Company on these transactions for the years ended December 31, 2016 and 2015, respectively. During the year ended December 31, 2015, the Company purchased $12 of investments from certain of the IHAM Vehicles. The Company made no purchases from IHAM for the years ended December 31, 2017 and 2016, respectively.

        IHAM is party to an administration agreement, referred to herein as the "IHAM administration agreement," with Ares Operations. Pursuant to the IHAM administration agreement, Ares Operations provides IHAM with, among other things, office facilities, equipment, clerical, bookkeeping and record keeping services, services relating to the marketing and sale of interests in vehicles managed by IHAM, services of, and oversight of, custodians, depositories, accountants, attorneys, underwriters and such other persons in any other capacity deemed to be necessary. Under the IHAM administration agreement, IHAM reimburses Ares Operations for all of the actual costs associated with such services, including Ares Operations' allocable portion of the compensation, rent and other expenses of its officers, employees and respective staff in performing its obligations under the IHAM administration agreement.

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5.     DEBT

        In accordance with the Investment Company Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, calculated pursuant to the Investment Company Act, is at least 200% after such borrowing. On June 21, 2016, the Company, Ares Capital Management, Ares Venture Finance GP LLC and Ares Venture Finance,L.P. ("AVF LP") received exemptive relief from the SEC allowing the Company to modify the Company's calculation of asset coverage requirements to exclude the SBA Debentures (defined below). As such, the Company's ratio of total consolidated assets to outstanding indebtedness may be less than 200%. This exemptive relief provides the Company with increased investment flexibility but also increases the Company's risk related to leverage. As of December 31, 2017 the Company's asset coverage was 242%.

        The Company's outstanding debt as of December 31, 2017 and 2016 were as follows:

 
  As of December 31,  
 
  2017   2016  
 
  Total
Aggregate
Principal
Amount
Committed/
Outstanding(1)
  Principal
Amount
Outstanding
  Carrying
Value
  Total
Aggregate
Principal
Amount
Committed/
Outstanding(1)
  Principal
Amount
Outstanding
  Carrying
Value
 

Revolving Credit Facility

  $ 2,108 (2) $ 395   $ 395   $ 1,265   $ 571   $ 571  

Revolving Funding Facility

    1,000     600     600     540     155     155  

SMBC Funding Facility

    400     60     60     400     105     105  

SBA Debentures

    50             75     25     24  

2017 Convertible Notes

            (3)   162     162     162 (4)

2018 Convertible Notes

    270     270     270 (4)   270     270     267 (4)

2019 Convertible Notes

    300     300     298 (4)   300     300     296 (4)

2022 Convertible Notes

    388     388     368 (4)                  

2018 Notes

    750     750     748 (5)   750     750     745 (5)

2020 Notes

    600     600     597 (6)   600     600     596 (6)

January 2022 Notes

    600     600     593 (7)   600     600     592 (7)

October 2022 Notes

            (8)   183     183     179 (9)

2023 Notes

    750     750     743 (10)                  

2047 Notes

    230     230     182 (11)   230     230     182 (11)

Total

  $ 7,446   $ 4,943   $ 4,854   $ 5,375   $ 3,951   $ 3,874  

(1)
Subject to borrowing base, leverage and other restrictions. Represents the total aggregate amount committed or outstanding, as applicable, under such instrument.

(2)
Provides for a feature that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility (as defined below) to a maximum of $3,095.

(3)
See below for more information on the repayment of the 2017 Convertible Notes (as defined below) at maturity.

(4)
Represents the aggregate principal amount outstanding of the Convertible Unsecured Notes (as defined below). As of December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount for the 2018 Convertible Notes, the 2019 Convertible Notes and the 2022 Convertible Notes (each as defined below) were $0, $2 and $20, respectively. As of December 31, 2016, the total unamortized debt issuance costs and the unaccreted discount for the 2017 Convertible Notes, the 2018 Convertible Notes and the 2019 Convertible Notes (each as defined below) were $0, $3 and $4, respectively.

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(5)
Represents the aggregate principal amount outstanding of the 2018 Notes (as defined below) less unamortized debt issuance costs and plus the net unamortized premium that was recorded upon the issuances of the 2018 Notes. As of December 31, 2017 and 2016, the total unamortized debt issuance costs less the net unamortized premium was $2 and $5, respectively.

(6)
Represents the aggregate principal amount outstanding of the 2020 Notes (as defined below) less unamortized debt issuance costs and the net unaccreted discount recorded upon the issuances of the 2020 Notes. As of December 31, 2017 and 2016, the total unamortized debt issuance costs and the net unaccreted discount was $3 and $4, respectively.

(7)
Represents the aggregate principal amount outstanding of the January 2022 Notes (as defined below), less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the January 2022 Notes. As of December 31, 2017 and 2016, the total unamortized debt issuance costs and the unaccreted discount was $7 and $8, respectively.

(8)
See below for more information on the repayment of the October 2022 Notes (as defined below).

(9)
Represents the aggregate principal amount outstanding of the October 2022 Notes (as defined below) less unamortized debt issuance costs. As of December 31, 2016, the total unamortized debt issuance costs was $4.

(10)
Represents the aggregate principal amount outstanding of the 2023 Notes (as defined below), less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2023 Notes. As of December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount was $7.

(11)
Represents the aggregate principal amount outstanding of the 2047 Notes (as defined below) less the unaccreted purchased discount recorded as a part of the Allied Acquisition (as defined below). As of December 31, 2017 and 2016, the total unaccreted purchased discount was $48 and $48, respectively.

        The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount, of all the Company's outstanding debt as of December 31, 2017 were 4.1% and 4.3 years, respectively, and as of December 31, 2016 were 4.2% and 4.8 years, respectively.

        The Company is party to a senior secured revolving credit facility (as amended and restated, the "Revolving Credit Facility"), which allows the Company to borrow up to $2,108 at any one time outstanding. The Revolving Credit Facility consists of a $395 term loan tranche with a stated maturity date of January 4, 2022 and a $1,713 revolving tranche. For $1,630 of the revolving tranche, the end of the revolving period and the stated maturity date are January 4, 2021 and January 4, 2022, respectively. For $38 of the revolving tranche, the end of the revolving period and the stated maturity date are May 4, 2020 and May 4, 2021, respectively. For the remaining $45 of the revolving tranche, the end of the revolving period and the stated maturity date are May 4, 2019 and May 4, 2020, respectively. The Revolving Credit Facility also provides for a feature that allows the Company, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of $3,095. The Revolving Credit Facility generally requires payments of interest at the end of each LIBOR interest period, but no less frequently than quarterly, on LIBOR based loans, and monthly payments of interest on other loans. From the end of the revolving period to the stated maturity date as applicable for each revolving tranche, the Company is required to repay outstanding principal amounts under such revolving tranche on a monthly basis in an amount equal to 1/12th of the outstanding principal amount at the end of the revolving period.

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        Under the Revolving Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders' equity, (e) maintaining a ratio of total assets (less total liabilities other than indebtedness) to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not less than 2.0:1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Credit Facility. Amounts available to borrow under the Revolving Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company's portfolio that are pledged as collateral. As of December 31, 2017, the Company was in compliance in all material respects with the terms of the Revolving Credit Facility.

        As of December 31, 2017 and 2016, there was $395 and $571 outstanding, respectively, under the Revolving Credit Facility. As of December 31, 2017, the Revolving Credit Facility also provides for a sub-limit for the issuance of letters of credit for up to an aggregate amount of $150. As of December 31, 2017 and 2016, the Company had $44 and $28, respectively, in letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued. As of December 31, 2017, there was $1,669 available for borrowing (net of letters of credit issued) under the Revolving Credit Facility.

        Since March 26, 2015, the interest rate charged on the Revolving Credit Facility is based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over an "alternate base rate" (as defined in the agreements governing the Revolving Credit Facility), in each case, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of December 31, 2017, the interest rate in effect was LIBOR plus 1.75%. Prior to and including March 25, 2015, the interest rate charged on the Revolving Credit Facility was based on an applicable spread of 2.00% over LIBOR or an applicable spread of 1.00% over an "alternate base rate." As of December 31, 2017, the one, two, three and six month LIBOR was 1.56%, 1.62%, 1.69% and 1.84%, respectively. As of December 31, 2016, the one, two, three and six month LIBOR was 0.77%, 0.82%, 1.00% and 1.32%, respectively. In addition to the stated interest expense on the Revolving Credit Facility, the Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the Revolving Credit Facility. Since March 26, 2015, the Company is also required to pay a letter of credit fee of either 2.00% or 2.25% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. Prior to and including March 25, 2015, the Company paid a letter of credit fee of 2.25% per annum on letters of credit issued.

        In December 2017, the Company entered into an interest rate swap agreement to effectively fix the interest rate in connection with the $395 term loan tranche of the Revolving Credit Facility. See Note 6 for more information on the interest rate swap.

        The Revolving Credit Facility is secured by certain assets in the Company's portfolio and excludes investments held by Ares Capital CP under the Revolving Funding Facility, those held by ACJB under the SMBC Funding Facility (as defined below) and those held by AVF LP under the SBA Debentures, each as described below, and certain other investments.

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        For the years ended December 31, 2017, 2016 and 2015, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Credit Facility were as follows:

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Stated interest expense

  $ 15   $ 18   $ 1  

Facility fees

    7     2     5  

Amortization of debt issuance costs

    4     3     3  

Total interest and credit facility fees expense

  $ 26   $ 23   $ 9  

Cash paid for interest expense

  $ 15   $ 18   $ 1  

Average stated interest rate

    2.90 %   2.29 %   2.03 %

Average outstanding balance

  $ 514   $ 799   $ 67  

        The Company's consolidated subsidiary, Ares Capital CP Funding LLC ("Ares Capital CP"), is party to a revolving funding facility (as amended, the "Revolving Funding Facility"), which allows Ares Capital CP to borrow up to $1,000 at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are January 3, 2019 and January 3, 2022, respectively.

        Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by Ares Capital CP. Ares Capital CP is also subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests, loans with fixed rates and loans with certain investment ratings, as well as restrictions on portfolio company leverage, which may also affect the borrowing base and therefore amounts available to borrow. The Company and Ares Capital CP are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Revolving Funding Facility. As of December 31, 2017, the Company and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.

        As of December 31, 2017 and 2016, there was $600 and $155 outstanding, respectively, under the Revolving Funding Facility. From October 2, 2017 to December 31, 2017, the interest rate charged on the Revolving Funding Facility was based on LIBOR plus 2.15% per annum or a "base rate" (as defined in the agreements governing the Revolving Funding Facility) plus 1.15% per annum. From January 4, 2017 to October 1, 2017, the interest rate charged on the Revolving Funding Facility was based on LIBOR plus 2.30% per annum or a "base rate" plus 1.30% per annum. Prior to and including January 3, 2017, the interest rate charged on the Revolving Funding Facility was based on an applicable spread ranging from 2.25% to 2.50% over LIBOR or ranging from 1.25% to 1.50% over a "base rate" in each case, determined monthly based on the composition of the borrowing base relative to outstanding borrowings under the Revolving Funding Facility. Ares Capital CP is also required to pay a commitment fee between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility. Ares Capital CP is also required to pay a commitment termination premium in an amount equal to 1.00% of any commitment reduction prior to January 3, 2018 and 0.50% for any commitment reduction prior to July 3, 2018.

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        For the years ended December 31, 2017, 2016 and 2015, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Funding Facility were as follows:

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Stated interest expense

  $ 17   $ 4   $ 2  

Facility fees

    4     2     4  

Amortization of debt issuance costs

    3     2     2  

Total interest and credit facility fees expense

  $ 24   $ 8   $ 8  

Cash paid for interest expense

  $ 14   $ 3   $ 3  

Average stated interest rate

    3.41 %   2.80 %   2.47 %

Average outstanding balance

  $ 512   $ 142   $ 64  

        The Company's consolidated subsidiary, Ares Capital JB Funding LLC ("ACJB"), is party to a revolving funding facility (as amended, the "SMBC Funding Facility") with ACJB, as the borrower, and Sumitomo Mitsui Banking Corporation ("SMBC"), as the administrative agent, collateral agent, and lender, that allows ACJB to borrow up to $400 at any one time outstanding. The SMBC Funding Facility is secured by all of the assets held by ACJB. The end of the reinvestment period and the stated maturity date for the SMBC Funding Facility are September 14, 2018 and September 14, 2023, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement.

        Amounts available to borrow under the SMBC Funding Facility are subject to a borrowing base that applies an advance rate to assets held by ACJB. The Company and ACJB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the SMBC Funding Facility. As of December 31, 2017, the Company and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility.

        As of December 31, 2017 and 2016, there was $60 and $105 outstanding, respectively, under the SMBC Funding Facility. Since June 30, 2015, the interest rate charged on the SMBC Funding Facility is based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over a "base rate" (as defined in the agreements governing the SMBC Funding Facility), in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. As of December 31, 2017 and 2016, the interest rate in effect was LIBOR plus 2.00%. Prior to and including June 30, 2015, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of 2.00% over LIBOR or 1.00% over a "base rate." As of December 31, 2017 and 2016, the interest rate in effect was based on the one month LIBOR, which was 1.57% and 0.71%, respectively. ACJB is required to pay a commitment fee of between 0.35% and 0.875% per annum depending on the size of the unused portion of the SMBC Funding Facility.

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        For the years ended December 31, 2017, 2016 and 2015, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the SMBC Funding Facility were as follows:

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Stated interest expense

  $ 2   $ 3   $ 1  

Facility fees

    1     1     1  

Amortization of debt issuance costs

    1     1     1  

Total interest and credit facility fees expense

  $ 4   $ 5   $ 3  

Cash paid for interest expense

  $ 2   $ 3   $ 1  

Average stated interest rate

    2.87 %   2.29 %   2.09 %

Average outstanding balance

  $ 76   $ 112   $ 31  

        In April 2015, the Company's consolidated subsidiary, Ares Venture Finance, L.P. ("AVF LP"), received a license from the Small Business Administration ("SBA") to operate as a Small Business Investment Company ("SBIC") under the provisions of Section 301(c) of the Small Business Investment Act of 1958, as amended. The SBA places certain limitations on the financing of investments by SBICs in portfolio companies, including regulating the types of financings, restricting investments to only include small businesses with certain characteristics or in certain industries, and requiring capitalization thresholds that may limit distributions to the Company.

        The license from the SBA allows AVF LP to obtain leverage by issuing SBA-guaranteed debentures (the "SBA Debentures"), subject to issuance of a capital commitment by the SBA and other customary procedures. Leverage through the SBA Debentures is subject to required capitalization thresholds. Current SBA regulations limit the amount that any SBIC may borrow to $150 and the original amount committed to AVF LP by the SBA was $75. Any undrawn commitments expire on September 30, 2019. The SBA Debentures are non-recourse to the Company, have interest payable semi-annually, have a 10-year maturity and may be prepaid at any time without penalty. In September 2017, AVF LP fully repaid the $25 of the aggregate principal amount of the SBA Debentures outstanding at the time, and as a result had $50 of remaining commitments to AVF LP by the SBA.

        The interest rate for the SBA Debentures was fixed at the time the SBA Debentures and other applicable SBA-guaranteed debentures were pooled and sold to the public and were based on a spread over U.S. treasury notes with 10-year maturities. The pooling of newly issued SBA-guaranteed debentures occurred twice per year. The spread included an annual charge as determined by the SBA (the "Annual Charge") as well as a market-driven component. Prior to the 10-year fixed interest rate being determined, the interim interest rate charged for the SBA-guarantee debentures was based on LIBOR plus an applicable spread of 0.30% and the Annual Charge. As of December 31, 2016, the weighted average fixed interest rate in effect for the SBA Debentures was 3.48%.

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        For the years ended December 31, 2017, 2016 and 2015, the components of interest expense, cash paid for interest expense, average stated interest rate and average outstanding balances for the SBA Debentures were as follows:

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Stated interest expense

  $ 1   $ 1   $  

Amortization of debt issuance costs

             

Total interest and credit facility fees expense

  $ 1   $ 1   $  

Cash paid for interest expense

  $ 1   $ 1   $  

Average stated interest rate

    3.48 %   3.41 %   2.42 %

Average outstanding balance

  $ 17   $ 25   $ 18  

        The Company has issued $270 aggregate principal amount of unsecured convertible notes that mature on January 15, 2018 (the "2018 Convertible Notes"), $300 aggregate principal amount of unsecured convertible notes that mature on January 15, 2019 (the "2019 Convertible Notes") and $388 aggregate principal amount of unsecured convertible notes that mature on February 1, 2022 (the "2022 Convertible Notes" and together with the 2018 Convertible Notes and the 2019 Convertible Notes, the "Convertible Unsecured Notes"). The Convertible Unsecured Notes mature upon their respective maturity dates unless previously converted or repurchased in accordance with their terms. The Company does not have the right to redeem the Convertible Unsecured Notes prior to maturity. The 2018 Convertible Notes, the 2019 Convertible Notes and the 2022 Convertible Notes bear interest at a rate of 4.75%, 4.375% and 3.75%, respectively, per year, payable semi-annually.

        In certain circumstances, the Convertible Unsecured Notes will be convertible into cash, shares of the Company's common stock or a combination of cash and shares of its common stock, at the Company's election, at their respective conversion rates (listed below as of December 31, 2017) subject to customary anti-dilution adjustments and the requirements of their respective indenture (the "Convertible Unsecured Notes Indentures"). To the extent the 2018 Convertible Notes are converted, the Company has elected to settle with a combination of cash and shares of its common stock. Prior to the close of business on the business day immediately preceding their respective conversion date (listed below), holders may convert their Convertible Unsecured Notes only under certain circumstances set forth in the Convertible Unsecured Notes Indentures. On or after their respective conversion dates until the close of business on the scheduled trading day immediately preceding their respective maturity date, holders may convert their Convertible Unsecured Notes at any time. In addition, if the Company engages in certain corporate events as described in their respective Convertible Unsecured Notes Indenture, holders of the Convertible Unsecured Notes may require the Company to repurchase for cash all or part of the Convertible Unsecured Notes at a repurchase price equal to 100% of the principal amount of the Convertible Unsecured Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the required repurchase date.

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        Certain key terms related to the convertible features for each of the Convertible Unsecured Notes as of December 31, 2017 are listed below.

 
  2018
Convertible Notes
  2019
Convertible Notes
  2022
Convertible Notes
 

Conversion premium

  17.5 % 15.0 % 15.0 %

Closing stock price at issuance

  $16.91   $17.53   $16.86  

Closing stock price date

  October 3, 2012   July 15, 2013   January 23, 2017  

Conversion price(1)

  $19.64   $19.99   $19.39  

Conversion rate (shares per one thousand dollar principal amount)(1)

  50.9054   50.0292   51.5756  

Conversion dates

  July 15, 2017   July 15, 2018   August 1, 2021  

(1)
Represents conversion price and conversion rate, as applicable, as of December 31, 2017, taking into account certain de minimis adjustments that will be made on the conversion date.

        As of December 31, 2017, the principal amounts of each series of the Convertible Unsecured Notes exceeded the value of the underlying shares multiplied by the per share closing price of the Company's common stock.

        The Convertible Unsecured Notes Indentures contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) of the Investment Company Act and to provide financial information to the holders of the Convertible Unsecured Notes under certain circumstances. These covenants are subject to important limitations and exceptions that are described in the Convertible Unsecured Notes Indentures. As of December 31, 2017, the Company was in compliance in all material respects with the terms of the Convertible Unsecured Notes Indentures.

        The Convertible Unsecured Notes are accounted for in accordance with ASC 470-20. Upon conversion of any of the other Convertible Unsecured Notes, the Company intends to pay the outstanding principal amount in cash and to the extent that the conversion value exceeds the principal amount, the Company has the option to pay in cash or shares of the Company's common stock (or a combination of cash and shares) in respect of the excess amount, subject to the requirements of the Convertible Unsecured Notes Indentures. The Company has determined that the embedded conversion options in the Convertible Unsecured Notes are not required to be separately accounted for as a derivative under GAAP. In accounting for the Convertible Unsecured Notes, the Company estimated at the time of issuance separate debt and equity components for each of the Convertible Unsecured Notes. An original issue discount equal to the equity components of the Convertible Unsecured Notes was recorded in "capital in excess of par value" in the accompanying consolidated balance sheet. Additionally, the issuance costs associated with the Convertible Unsecured Notes were allocated to the debt and equity components in proportion to the allocation of the proceeds and accounted for as debt issuance costs and equity issuance costs, respectively.

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        The debt and equity component percentages, the issuance costs and the equity component amounts for each of the Convertible Unsecured Notes are listed below.

 
  2018
Convertible Notes
  2019
Convertible Notes
  2022
Convertible Notes
 

Debt and equity component percentages, respectively(1)

    98.0% and 2.0 %   99.8% and 0.2 %   96.0% and 4.0 %

Debt issuance costs(1)

  $ 6   $ 4   $ 9  

Equity issuance costs(1)

  $   $   $  

Equity component, net of issuance costs(2)

  $ 5   $ 1   $ 15  

(1)
At time of issuance.

(2)
At time of issuance and as of December 31, 2017.

        In addition to the original issue discount equal to the equity components of the Convertible Unsecured Notes, the 2018 Convertible Notes and the 2019 Convertible Notes were each issued at a discount. The Company records interest expense comprised of both stated interest expense as well as accretion of any original issue discount.

        As of December 31, 2017, the components of the carrying value of the Convertible Unsecured Notes, the stated interest rate and the effective interest rate were as follows:

 
  2018
Convertible Notes
  2019
Convertible Notes
  2022
Convertible Notes
 

Principal amount of debt

  $ 270   $ 300   $ 388  

Debt issuance costs, net of amortization

        (1 )   (13 )

Original issue discount, net of accretion

        (1 )   (7 )

Carrying value of debt

  $ 270   $ 298   $ 368  

Stated interest rate

    4.750 %   4.375 %   3.750 %

Effective interest rate(1)

    5.3 %   4.7 %   4.5 %

(1)
The effective interest rate of the debt component of the Convertible Unsecured Notes is equal to the stated interest rate plus the accretion of original issue discount.

        In February 2016, the Company repaid in full the $575 aggregate principal amount of unsecured convertible notes upon their maturity. In June 2016, the Company repaid in full the $230 aggregate principal amount of unsecured convertible notes upon their maturity. In March 2017, the Company repaid in full the $162 aggregate principal amount of unsecured convertible notes (the "2017 Convertible Notes") upon their maturity.

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        For the years ended December 31, 2017, 2016 and 2015, the components of interest expense and cash paid for interest expense for the Convertible Unsecured Notes, as well as any other convertible unsecured notes outstanding during the periods presented are listed below.

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Stated interest expense

  $ 41   $ 42   $ 79  

Amortization of debt issuance costs

    4     4     7  

Accretion of original issue discount

    5     6     17  

Total interest expense

  $ 50   $ 52   $ 103  

Cash paid for interest expense

  $ 37   $ 56   $ 79  

        The Company has issued $750 in aggregate principal amount of unsecured notes that mature on November 30, 2018 (the "2018 Notes"). The 2018 Notes bear interest at a rate of 4.875% per year, payable semi-annually and all principal is due upon maturity. The 2018 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, as determined pursuant to the indenture governing the 2018 Notes, and any accrued and unpaid interest. $600 in aggregate principal amount of the 2018 Notes were issued at a discount to the principal amount and $150 in aggregate principal amount of the 2018 Notes were issued at a premium to the principal amount.

        The Company has issued $600 in aggregate principal amount of unsecured notes that mature on January 15, 2020 (the "2020 Notes"). The 2020 Notes bear interest at a rate of 3.875% per year, payable semi-annually and all principal is due upon maturity. The 2020 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2020 Notes, and any accrued and unpaid interest. $400 in aggregate principal amount of the 2020 Notes were issued at a discount to the principal amount and $200 in aggregate principal amount of the 2020 Notes were issued at a premium to the principal amount.

        The Company has issued $600 in aggregate principal amount of unsecured notes that mature on January 19, 2022 (the "January 2022 Notes"). The January 2022 Notes bear interest at a rate of 3.625% per year, payable semi-annually and all principal is due upon maturity. The January 2022 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the January 2022 Notes, and any accrued and unpaid interest. The January 2022 Notes were issued at a discount to the principal amount.

        In June 2017, the Company redeemed the entire $183 in aggregate principal amount outstanding of the unsecured notes that were scheduled to mature on October 1, 2022 (the "October 2022 Notes") in accordance with the terms of the indenture governing the October 2022 Notes. The October 2022 Notes bore interest at a rate of 5.875% per year, payable quarterly. The October 2022 Notes were

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redeemed at par plus accrued and unpaid interest for a total redemption price of approximately $185, which resulted in a realized loss on the extinguishment of debt of $4.

        The Company has issued $750 in aggregate principal amount of unsecured notes that mature on February 10, 2023 (the "2023 Notes"). The 2023 Notes bear interest at a rate of 3.500% per year, payable semi-annually and all principal is due upon maturity. The 2023 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2023 Notes, and any accrued and unpaid interest. The 2023 Notes were issued at a discount to the principal amount.

        As part of the acquisition of Allied Capital Corporation ("Allied Capital") in April 2010 (the "Allied Acquisition"), the Company assumed $230 aggregate principal amount of unsecured notes due on April 15, 2047 (the "2047 Notes" and together with the 2018 Notes, the 2020 Notes, the January 2022 Notes and the 2023 Notes, the "Unsecured Notes"). The 2047 Notes bear interest at a rate of 6.875%, payable quarterly and all principal is due upon maturity. The 2047 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option, at a par redemption price of $25.00 per security plus accrued and unpaid interest. As of December 31, 2017 and 2016, the outstanding principal was $230 and $230 respectively, and the carrying value was $182 and $182, respectively. The carrying value represents the outstanding principal amount of the 2047 Notes less the unaccreted purchased discount recorded as a part of the Allied Acquisition.

        See Note 18 for a subsequent event regarding an additional issuance of unsecured notes.

        For the years ended December 31, 2017, 2016 and 2015, the components of interest expense and cash paid for interest expense for the Unsecured Notes, as well as any other unsecured notes outstanding during the periods presented are listed below.

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Stated interest expense

  $ 113   $ 93   $ 100  

Amortization of debt issuance costs

    6     4     4  

Net accretion of original issue discount

    1          

Accretion of purchase discount

             

Total interest expense

  $ 120   $ 97   $ 104  

Cash paid for interest expense

  $ 102   $ 87   $ 97  

        The Unsecured Notes contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) of the Investment Company Act and to provide financial information to the holders of such notes under certain circumstances. These covenants are subject to important limitations and exceptions set forth in the indentures governing such notes. As of December 31, 2017, the Company was in compliance in all material respects with the terms of the respective indentures governing each of the Unsecured Notes.

        The Convertible Unsecured Notes and the Unsecured Notes are the Company's unsecured senior obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Convertible Unsecured Notes and the Unsecured Notes; equal in right of payment to the Company's existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of its secured indebtedness (including

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existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities.

6.     DERIVATIVE INSTRUMENTS

        The Company enters into forward currency contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company's investments denominated in foreign currencies. As of December 31, 2017 and 2016, the counterparty to these forward currency contracts was Bank of Montreal. Net unrealized gains or losses on foreign currency contracts are included in "net unrealized gains (losses) from foreign currency and other transactions" and net realized gains or losses on forward currency contracts are included in "net realized gains (losses) from foreign currency transactions" in the accompanying consolidated statement of operations.

        The Company had an agreement with the SDLP to sell certain of the Company's investments to the SDLP at a mutually agreed upon price on a future date (the "Forward Sale Agreement"). The value of the Forward Sale Agreement with the SDLP changed as the fair value of the identified loans changed and as additional loans were added to such agreement. In July 2016, the Company and Varagon and its clients completed the initial funding of the SDLP. In conjunction with the initial funding, the Company and Varagon and its clients sold investment commitments to the SDLP and the Forward Sale Agreement was terminated. For the year ended December 31, 2016, the unrealized gain related to this agreement was included in the "net unrealized gains (losses) from foreign currency and other transactions" in the accompanying consolidated statement of operations.

        Forward currency contracts and interest rate swaps are considered undesignated derivative instruments.

        Certain information related to the Company's foreign currency forward contracts is presented below as of December 31, 2017 and 2016.

 
  As of December 31, 2017
Description
  Notional
Amount
  Maturity Date   Gross
Amount
of Recognized
Assets
  Gross
Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Foreign currency forward contract

    CAD4     1/4/2018   $   $   Other Assets

Foreign currency forward contract

    CAD10     1/16/2018           Other Assets

Foreign currency forward contract

    CAD103     2/16/2018         (1 ) Accounts payable and other liabilities

Foreign currency forward contract

  15     1/16/2018           Accounts payable and other liabilities

Foreign currency forward contract

  8     2/15/2018           Accounts payable and other liabilities

Foreign currency forward contract

  2     3/15/2018           Accounts payable and other liabilities

Foreign currency forward contract

  £ 68     2/15/2018         (2 ) Accounts payable and other liabilities

Foreign currency forward contract

  £ 9     2/16/2018           Accounts payable and other liabilities

Total

              $   $ (3 )  

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  As of December 31, 2016
Description
  Notional
Amount
  Maturity Date   Gross
Amount
of Recognized
Assets
  Gross
Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Foreign currency forward contract

  2     1/5/2017   $   $   Other Assets

Total

              $   $    

        In December 2017, in connection with the $395 term loan tranche of the Revolving Credit Facility the Company entered into a three-year interest rate swap agreement to mitigate our exposure to adverse fluctuations in interest rates for a total notional amount of $395 and a maturity date of January 4, 2021. Under the interest rate swap agreement, the Company will pay a fixed interest rate of 2.06% and receive a floating rate based on the prevailing one-month LIBOR, with the ability to elect one, two or three-month LIBOR. As of December 31, 2017 the one-month LIBOR rate in effect was 1.50%. For the year ended December 31, 2017, the Company recognized $1 in unrealized depreciation related to this swap agreement. As of December 31, 2017, this swap agreement had a fair value of $(1), which is included in the "accounts payable and other liabilities" in the accompanying consolidated balance sheet. Net unrealized gains or losses on the interest rate swap are included in "net unrealized gains (losses) from foreign currency and other transactions."

        Certain information related to the Company's interest rate swap is presented below as of December 31, 2017.

 
  As of December 31, 2017
Description
  Payment Terms   Notional
Amount
  Maturity
Date
  Gross
Amount
of Recognized
Assets
  Gross
Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Interest rate swap

    Pay Fixed 2.0642 % Receive Floating One-Month LIBOR of 1.50%   $ 395     1/4/2021   $   $ (1 ) Accounts payable and other liabilities

Total

                        $   $ (1 )  

7.     COMMITMENTS AND CONTINGENCIES

        The Company has various commitments to fund investments in its portfolio as described below. As of December 31, 2017 and 2016, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) the Company's discretion:

 
  As of December 31,  
 
  2017   2016  

Total revolving and delayed draw loan commitments

  $ 881   $ 411  

Less: drawn commitments

    (201 )   (81 )

Total undrawn commitments

    680     330  

Less: commitments substantially at discretion of the Company

    (11 )   (12 )

Less: unavailable commitments due to borrowing base or other covenant restrictions

         

Total net adjusted undrawn revolving and delayed draw loan commitments

  $ 669   $ 318  

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        Included within the total revolving and delayed draw loan commitments as of December 31, 2017 and 2016 were delayed draw loan commitments totaling $251 and $92, respectively. The Company's commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels).

        Also included within the total revolving and delayed draw loan commitments as of December 31, 2017 were commitments to issue up to $158 in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of December 31, 2017, the Company had $29 in letters of credit issued and outstanding under these commitments on behalf of portfolio companies. For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $28 expire in 2018 and $1 expire in 2019. As of December 31, 2017, the Company recorded a liability of $7 for certain letters of credit issued and outstanding and none of the other letters of credit issued and outstanding were recorded as a liability on the Company's balance sheet as such other letters of credit are considered in the valuation of the investments in the portfolio company.

        The Company also has commitments to co-invest in the SDLP for the Company's portion of the SDLP's commitments to fund delayed draw loans to certain portfolio companies of the SDLP. The Company previously had commitments to co-invest in the SSLP for the Company's portion of the SSLP's commitments to fund delayed draw loans to certain portfolio companies of the SSLP. See Note 4 for more information.

        As of December 31, 2017 and 2016, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:

 
  As of December 31,  
 
  2017   2016  

Total private equity commitments

  $ 111   $ 57  

Less: funded private equity commitments

    (62 )   (17 )

Total unfunded private equity commitments

    49     40  

Less: private equity commitments substantially at discretion of the Company

    (48 )   (39 )

Total net adjusted unfunded private equity commitments

  $ 1   $ 1  

        In the ordinary course of business, the Company may sell certain of its investments to third party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales) the Company has, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future.

        In addition, in the ordinary course of business, the Company may guarantee certain obligations in connection with its portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable.

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        The Company is obligated under a number of operating leases and subleases for office spaces with terms ranging from less than one year to more than 15 years. Total rent expense incurred by the Company for the years ended December 31, 2017, 2016 and 2015 was $3, $4 and $4, respectively.

        The following table shows future minimum payments under the Company's operating leases and subleases where it is a sublessee as of December 31, 2017:

For the Years Ending December 31,
  Amount  

2018

  $ 26  

2019

    25  

2020

    25  

2021

    25  

2022

    25  

Thereafter

    65  

Total

  $ 191  

        For certain of its operating leases, the Company has entered into subleases including ones with Ares Management and IHAM. See Note 13 for further description of these subleases.

        The following table shows future expected rental payments to be received under the Company's subleases where the Company is the sublessor as of December 31, 2017. The current allocations reflected below are as of December 31, 2017. The allocations in connection with the Company's subleases are subject to change and future review. Further, such allocations are subject to change depending on the composition of, and functions performed by, the staff in each office.

For the Years Ending December 31,
  Amount  

2018

  $ 14  

2019

    17  

2020

    16  

2021

    17  

2022

    16  

Thereafter

    44  

Total

  $ 124  

8.     FAIR VALUE OF FINANCIAL INSTRUMENTS

        The Company follows ASC 825-10, which provides companies the option to report selected financial assets and liabilities at fair value. ASC 825-10 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of the company's choice to use fair value on its earnings. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet. The Company has not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value. With the exception of the line items entitled "other assets" and "debt," which are reported at amortized cost, all assets and liabilities approximate fair value on the balance sheet. The carrying value of the lines titled "interest receivable," "receivable for open trades," "payable for open trades," "accounts payable and other liabilities," "base management fees payable," "income based fees payable," "capital gains incentive fees payable" and "interest and facility fees payable" approximate fair value due to their short maturity.

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        The Company also follows ASC 820-10, which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Company to assume that the portfolio investment is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820-10, the Company has considered its principal market as the market in which the Company exits its portfolio investments with the greatest volume and level of activity. ASC 820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below:

        In addition to using the above inputs in investment valuations, the Company continues to employ the net asset valuation policy approved by the Company's board of directors that is consistent with ASC 820-10 (see Note 2). Consistent with the Company's valuation policy, it evaluates the source of inputs, including any markets in which the Company's investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. The Company's valuation policy considers the fact that because there is not a readily available market value for most of the investments in the Company's portfolio, the fair value of the investments must typically be determined using unobservable inputs.

        The Company's portfolio investments (other than as described below in the following paragraph) are typically valued using two different valuation techniques. The first valuation technique is an analysis of the enterprise value ("EV") of the portfolio company. Enterprise value means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The primary method for determining EV uses a multiple analysis whereby appropriate multiples are applied to the portfolio company's EBITDA (generally defined as net income before net interest expense, income tax expense, depreciation and amortization). EBITDA multiples are typically determined based upon review of market comparable transactions and publicly traded comparable companies, if any. The Company may also employ other valuation multiples to determine EV, such as revenues or, in the case of certain portfolio companies in the power generation industry, kilowatt capacity. The second method for determining EV uses a discounted cash flow analysis whereby future expected cash flows of the portfolio company are discounted to determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions). The EV analysis is performed to determine the value of equity investments, the value of debt investments in portfolio companies where the Company has control or could gain control through an option or warrant security, and to determine if there is credit impairment for debt investments. If debt investments are credit impaired, an EV analysis may be used to value such debt investments; however, in addition to the methods outlined above, other methods such as a liquidation or wind-down analysis may be utilized to estimate enterprise value. The second valuation technique is a yield analysis, which is typically performed for non-credit impaired debt investments in portfolio companies where the

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Company does not own a controlling equity position. To determine fair value using a yield analysis, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the enterprise value of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Company depends on primary market data, including newly funded transactions, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

        For other portfolio investments such as investments in the SDLP Certificates, discounted cash flow analysis is the primary technique utilized to determine fair value. Expected future cash flows associated with the investment are discounted to determine a present value using a discount rate that reflects estimated market return requirements.

        The following tables summarize the significant unobservable inputs the Company used to value the majority of its investments categorized within Level 3 as of December 31, 2017 and 2016. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company's determination of fair values.

 
  As of December 31, 2017  
 
   
   
  Unobservable Input  
Asset Category
  Fair
Value
  Primary
Valuation Techniques
  Input   Estimated
Range
  Weighted
Average
 

First lien senior secured loans

  $ 5,197   Yield analysis   Market yield   4.2% - 19.8%     8.7 %

Second lien senior secured loans

    3,744   Yield analysis   Market yield   8.7% - 17.5%     10.9 %

Subordinated certificates of the SDLP

    487   Discounted cash flow analysis   Discount rate   11.5% - 12.5%     12.0 %

Senior subordinated loans

    995   Yield analysis   Market yield   9.7% - 17.5%     13.2 %

Collateralized loan obligations

    114   Discounted cash flow analysis   Discount rate   4.3% - 16.4%     10.2 %

            Constant prepayment rate   18.7% - 27.1%     21.8 %

            Constant default rate   1.8% - 2.6%     2.3 %

Preferred equity securities

    532   EV market multiple analysis   EBITDA multiple   3.0x - 19.0x     11.2 x

Other equity securities and other

    755   EV market multiple analysis   EBITDA multiple   3.5x - 19.0x     10.4 x

Total investments

  $ 11,824                    

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  As of December 31, 2016  
 
   
   
  Unobservable Input  
Asset Category
  Fair
Value
  Primary
Valuation Techniques
  Input   Estimated
Range
  Weighted
Average
 

First lien senior secured loans

  $ 2,036   Yield analysis   Market yield   5.5% - 20.0%     9.3 %

Second lien senior secured loans

    2,987   Yield analysis   Market yield   8.4% - 20.8%     10.7 %

Subordinated certificates of the SDLP

    270   Discounted cash flow analysis   Discount rate   11.0% - 12.0%     11.5 %

Subordinated certificates of the SSLP

    1,914   Discounted cash flow analysis   Discount rate   6.5% - 7.5%     7.0 %

Senior subordinated loans

    714   Yield analysis   Market yield   9.8% - 17.5%     12.2 %

Preferred equity securities

    273   EV market multiple analysis   EBITDA multiple   3.5x - 14.8x     8.6 x

Other equity securities and other

    619   EV market multiple analysis   EBITDA multiple   5.0x - 16.4x     10.7 x

Total investments

  $ 8,813                    

        Changes in market yields, discount rates or EBITDA multiples, each in isolation, may change the fair value of certain of the Company's investments. Generally, an increase in market yields or discount rates or decrease in EBITDA multiples may result in a decrease in the fair value of certain of the Company's investments.

        Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of the Company's investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.

        In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

        The following table presents fair value measurements of cash and cash equivalents, investments and derivatives as of December 31, 2017:

 
  Fair Value Measurements Using  
 
  Total   Level 1   Level 2   Level 3  

Cash and cash equivalents

  $ 316   $ 316   $   $  

Investments not measured at net asset value

  $ 11,824   $   $   $ 11,824  

Investments measured at net asset value(1)

  $ 17                    

Total investments

  $ 11,841                    

Derivatives

  $ (4 ) $   $ (4 ) $  

(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

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        The following table presents fair value measurements of cash and cash equivalents, investments and derivatives as of December 31, 2016:

 
  Fair Value Measurements Using  
 
  Total   Level 1   Level 2   Level 3  

Cash and cash equivalents

  $ 223   $ 223   $   $  

Investments not measured at net asset value

  $ 8,814   $ 1   $   $ 8,813  

Investments measured at net asset value(1)

  $ 6                    

Total investments

  $ 8,820                    

Derivatives

  $   $   $   $  

(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

        Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur.

        The following table presents changes in investments that use Level 3 inputs as of and for the year ended December 31, 2017:

 
  As of and For the
Year Ended
December 31, 2017
 

Balance as of December 31, 2016

  $ 8,813  

Net realized gains

    43  

Net unrealized gains

    141  

Investments acquired as part of the American Capital Acquisition

    2,527  

Purchases

    7,228  

Sales

    (1,838 )

Redemptions

    (5,179 )

Payment-in-kind interest and dividends

    79  

Net accretion of discount on securities

    10  

Net transfers in and/or out of Level 3

     

Balance as of December 31, 2017

  $ 11,824  

        As of December 31, 2017, the net unrealized depreciation on the investments that use Level 3 inputs was $82. For the year ended December 31, 2017, the net transfers out of Level 3 were due to privately held equity investments converting to publicly traded stock.

        For the year ended December 31, 2017, the total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to the Company's Level 3 assets still held as of December 31, 2017, and reported within the net unrealized gains (losses) from investments, foreign currency and other transactions in the Company's consolidated statement of operations was $107.

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        The following table presents changes in investments that use Level 3 inputs as of and for the year ended December 31, 2016:

 
  As of and For the
Year Ended
December 31, 2016
 

Balance as of December 31, 2015

  $ 9,045  

Net realized gains

    105  

Net unrealized losses

    (113 )

Purchases

    3,474  

Sales

    (1,776 )

Redemptions

    (1,970 )

Payment-in-kind interest and dividends

    48  

Net accretion of discount on securities

    6  

Net transfers in and/or out of Level 3

    (6 )

Balance as of December 31, 2016

  $ 8,813  

        As of December 31, 2016, the net unrealized depreciation on the investments that use Level 3 inputs was $223. For the year ended December 31, 2016, the net transfers out of Level 3 were due to privately held equity investments converting to publicly traded stock.

        For the year ended December 31, 2016, the total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to the Company's Level 3 assets still held as of December 31, 2016, and reported within the net unrealized gains (losses) from investments, foreign currency and other transactions in the Company's consolidated statement of operations was $(139).

        The following table presents changes in derivatives that use Level 3 inputs as of and for the year ended December 31, 2016:

 
  As of and For the
Year Ended
December 31, 2016
 

Balance as of December 31, 2015

  $ 3  

Net unrealized appreciation reversed related to the termination of the Forward Sale Agreement

    (3 )

Balance as of December 31, 2016

  $  

        As of December 31, 2016, the Company did not have any net unrealized appreciation on the derivatives that use Level 3 inputs.

        Following are the carrying and fair values of the Company's debt obligations as of December 31, 2017 and 2016. Fair value is estimated by discounting remaining payments using applicable current

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market rates, which take into account changes in the Company's marketplace credit ratings, or market quotes, if available.

 
  As of December 31,  
 
  2017   2016  
 
  Carrying
value(1)
  Fair
value
  Carrying
value(1)
  Fair
value
 

Revolving Credit Facility

  $ 395   $ 395   $ 571   $ 571  

Revolving Funding Facility

    600     600     155     155  

SMBC Funding Facility

    60     60     105     105  

SBA Debentures

            24     25  

2017 Convertible Notes (principal amount outstanding of $0 and $162, respectively)

            162 (2)   163  

2018 Convertible Notes (principal amount outstanding of $270)

    270 (2)   270     267 (2)   278  

2019 Convertible Notes (principal amount outstanding of $300)

    298 (2)   307     296 (2)   312  

2022 Convertible Notes (principal amount outstanding of $388 and $0, respectively)

    368 (2) $ 398          

2018 Notes (principal amount outstanding of $750)

    748 (3)   767     745 (3)   776  

2020 Notes (principal amount outstanding of $600)

    597 (4)   611     596 (4)   608  

January 2022 Notes (principal amount outstanding of $600)

    593 (5)   603     592 (5)   584  

October 2022 Notes (principal amount outstanding of $0 and $183, respectively)

            179 (6)   184  

2023 Notes (principal amount outstanding of $750 and $0, respectively)

    743 (7)   740          

2047 Notes (principal amount outstanding of $230)

    182 (8)   231     182 (8)   228  

  $ 4,854 (9) $ 4,982   $ 3,874 (9) $ 3,989  

(1)
The Revolving Credit Facility, the Revolving Funding Facility and the SMBC Funding Facility carrying values are the same as the principal amounts outstanding.

(2)
Represents the aggregate principal amount outstanding of the Convertible Unsecured Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuances of such notes.

(3)
Represents the aggregate principal amount outstanding of the 2018 Notes less unamortized debt issuance costs plus the net unamortized premium recorded upon the issuances of the 2018 Notes.

(4)
Represents the aggregate principal amount outstanding of the 2020 Notes less unamortized debt issuance costs and the net unaccreted discount recorded upon the issuances of the 2020 Notes.

(5)
Represents the aggregate principal amount outstanding of the January 2022 Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the January 2022 Notes.

(6)
Represents the aggregate principal amount outstanding of the October 2022 Notes less unamortized debt issuance costs.

(7)
Represents the aggregate principal amount outstanding of the 2023 Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2023 Notes.

(8)
Represents the aggregate principal amount outstanding of the 2047 Notes less the unaccreted purchased discount.

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(9)
Total principal amount of debt outstanding totaled $4,943 and $3,951 as of December 31, 2017 and December 31, 2016, respectively.

        The following table presents fair value measurements of the Company's debt obligations as of December 31, 2017 and 2016:

 
  As of December 31,  
Fair Value Measurements Using
  2017   2016  

Level 1

  $ 231   $ 412  

Level 2

    4,751     3,577  

Total

  $ 4,982   $ 3,989  

9.     STOCKHOLDERS' EQUITY

        There were no sales of the Company's equity securities for the years ended December 31, 2017, 2016 and 2015. See Note 12 for information regarding shares of common stock issued or purchased in accordance with the Company's dividend reinvestment plan.

        In connection with the American Capital Acquisition, the Company issued 112 shares valued at approximately $1,839. See Note 16 for additional information regarding the American Capital Acquisition.

        In September 2015, the Company's board of directors approved a stock repurchase program authorizing the Company to repurchase up to $100 in the aggregate of its outstanding common stock in the open market at certain thresholds below its net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any share repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. In May 2016, the Company suspended its stock repurchase program pending the completion of the American Capital Acquisition. In February 2017, the Company's board of directors authorized an amendment to its $300 stock repurchase program to (a) increase the total authorization under the program from $100 to $300 and (b) extend the expiration date of the program from February 28, 2017 to February 28, 2018 (see Note 18 for more information). Under the stock repurchase program, the Company may repurchase up to $300 in the aggregate of its outstanding common stock in the open market at a price per share that meets certain thresholds below its net asset value per share, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The program does not require the Company to repurchase any specific number of shares and it cannot assure stockholders that any shares will be repurchased under the program. The program may be suspended, extended, modified or discontinued at any time.

        As of December 31, 2017, the Company had repurchased a total of 0.5 shares of its common stock in the open market under the stock repurchase program since the program's inception in September 2015, at an average price of $13.92 per share, including commissions paid, leaving approximately $293 available for additional repurchases under the program. During the year ended December 31, 2017, the Company did not repurchase any shares of the Company's common stock under the stock repurchase program. During the year ended December 31, 2016, the Company repurchased a total of 0.4 shares of the Company's common stock in the open market for $5 under the stock repurchase program. The shares were repurchased at an average price of $13.94 per share, including commissions paid.

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10.   EARNINGS PER SHARE

        The following information sets forth the computations of basic and diluted net increase in stockholders' equity resulting from operations per share for the years ended December 31, 2017, 2016 and 2015:

 
  For the Years Ended December 31,  
 
  2017   2016   2015  

Net increase in stockholders' equity resulting from operations available to common stockholders

  $ 667   $ 474   $ 379  

Weighted average shares of common stock outstanding—basic and diluted

    425     314     314  

Basic and diluted net increase in stockholders' equity resulting from operations per share

  $ 1.57   $ 1.51   $ 1.20  

        For the purpose of calculating diluted net increase in stockholders' equity resulting from operations per share, the average closing price of the Company's common stock for the year ended December 31, 2017 was less than the conversion price for each of the Convertible Unsecured Notes outstanding as of December 31, 2017, as well as any other convertible unsecured notes outstanding during the period. For the year ended December 31, 2016, the average closing price of the Company's common stock was less than the conversion price for each of the Convertible Unsecured Notes outstanding as of December 31, 2016, as well as any other convertible unsecured notes outstanding during the period. Therefore, for all periods presented in the financial statements, the underlying shares for the intrinsic value of the embedded options in the Convertible Unsecured Notes and any other convertible unsecured notes outstanding during the periods presented had no impact on the computation of diluted net increase in stockholders' equity resulting from operations per share.

11.   INCOME AND EXCISE TAXES

        For U.S. Federal income tax purposes, dividends paid and distributions made to the Company's stockholders are reported by the Company to the stockholders as ordinary income, capital gains, or a combination thereof. Dividends paid per common share for the years ended December 31, 2017, 2016 and 2015 were taxable as follows (unaudited):

 
  For the Years Ended
December 31,
 
 
  2017   2016   2015  

Ordinary income(1)

  $ 1.45   $ 1.26   $ 1.56  

Capital gains

    0.07     0.26     0.01  

Total(2)

  $ 1.52   $ 1.52   $ 1.57  

(1)
For the years ended December 31, 2017, 2016 and 2015, ordinary income included dividend income of approximately $0.0296, $0.0892 and $0.0730, per share, respectively, that qualified to be taxed at the maximum capital gains rate. For certain eligible corporate shareholders, these dividends were eligible for the dividends received deduction.

(2)
For the years ended December 31, 2017, 2016 and 2015, dividends paid were comprised of interest-sourced dividends in amounts equal to 86.8%, 81.4% and 91.1% of total dividends paid, respectively.

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        The following reconciles net increase in stockholders' equity resulting from operations to taxable income for the years ended December 31, 2017, 2016 and 2015:

 
  For the Years Ended December 31,  
 
  2017   2016   2015  
 
  (Estimated)(1)
   
   
 

Net increase in stockholders' equity resulting from operations

  $ 667   $ 474   $ 379  

Adjustments:

                   

Net unrealized losses (gains) on investments, foreign currency and other transactions

    (136 )   130     246  

Income not currently taxable

    (66 )   (59 )   (56 )

Income for tax but not book

    142     57     49  

Expenses not currently deductible

    90     37     14  

Expenses for tax but not book

    (5 )   (6 )   (3 )

Realized gain/loss differences

    (38 )   (78 )   (44 )

Taxable income

  $ 654   $ 555   $ 585  

(1)
The calculation of estimated 2017 U.S. Federal taxable income includes a number of estimated inputs, including information received from third parties and, as a result, actual 2017 U.S. Federal taxable income will not be finally determined until the Company's 2017 U.S. Federal tax return is filed in 2018 (and, therefore, such estimate is subject to change).

        Taxable income generally differs from net increase in stockholders' equity resulting from operations for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized. In addition, on April 1, 2010, the Company acquired Allied Capital in a "tax-free" merger under the Code, which has caused certain merger-related items to vary in their deductibility for GAAP and tax purposes.

        Capital losses in excess of capital gains earned in a tax year may generally be carried forward and used to offset capital gains, subject to certain limitations. As of December 31, 2017, the Company estimates that it will have a capital loss carryforward of approximately $43 available for use in later tax years. Because of the loss limitation rules of the Code, some of the tax basis capital losses may be limited in their use. The unused balance will be carried forward and utilized as gains are realized, subject to such limitations. In addition to the capital loss carryforwards, the Company realized tax basis net losses totaling approximately $0.3 billion from the Allied Capital portfolio since the Allied Acquisition through December 31, 2017, that have not yet been deducted for tax purposes as their deductibility in years since the Allied Acquisition was limited by the Code. While the Company's ability to utilize losses in the future depends upon a variety of factors that cannot be known in advance, substantially all of the Company's capital loss carryforwards and the net realized losses from the Allied Capital portfolio may become permanently unavailable due to limitations by the Code. Unlike the Allied Acquisition, the American Capital Acquisition was treated as a taxable purchase of the American Capital assets for purposes of the Company's taxable income calculations, therefore, there is not expected to be significant unrecognizable losses from the legacy American Capital portfolio.

        For the year ended December 31, 2017, the Company had estimated U.S. Federal taxable income in excess of the distributions made from such taxable income during the year, and therefore, the Company has elected to carry forward the excess for distribution to shareholders in 2018. The amount carried forward to 2018 is estimated to be approximately $346, all of which is expected to be ordinary income, although these amounts will not be finalized until the 2017 tax returns are filed in 2018. For the years ended December 31, 2016 and 2015, the Company had taxable income in excess of the

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distributions made from such taxable income during the year, and therefore, the Company elected to carry forward the excess for distribution to shareholders in 2017 and 2016, respectively. The amounts carried forward to 2017 and 2016 were approximately $339 and $262, respectively. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, the Company accrues excise tax on estimated excess taxable income. For the years ended December 31, 2017, 2016 and 2015, a net expense of $12, $12 and $9, respectively, was recorded for U.S. federal excise tax. The net expense for the years ended December 31, 2017, 2016 and 2015 each included a reduction in expense related to the recording of a requested refund resulting from the overpayment of the prior year's excise tax of $1, $1 and $1, respectively.

        As of December 31, 2017, the estimated cost basis of investments for U.S. Federal tax purposes was $12.7 billion resulting in estimated gross unrealized gains and losses of $0.5 billion and $1.3 billion, respectively. As of December 31, 2016, the estimated cost basis of investments for U.S. Federal tax purposes was $9.7 billion resulting in estimated gross unrealized gains and losses of $0.1 billion and $0.8 billion, respectively. As of December 31, 2017 and 2016, the cost of investments for U.S. Federal tax purposes was greater than the amortized cost of investments for book purposes of $11.9 billion and $9.0 billion, respectively, primarily as a result of the Allied Acquisition. The Allied Acquisition qualified as a "tax-free" merger under the Code, which resulted in the acquired assets retaining Allied Capital's cost basis at the merger date.

        In general, the Company may make certain adjustments to the classification of stockholders' equity as a result of permanent book-to-tax differences, which may include merger-related items, differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes, among other items. During the year ended December 31, 2017, the Company decreased accumulated overdistributed net investment income by $19, decreased capital in excess of par value by $14 and decreased accumulated undistributed net realized gains on investments, foreign currency translations, extinguishment of debt and other assets by $5. During the year ended December 31, 2016, the Company increased accumulated undistributed net investment income by $21 and decreased capital in excess of par value by $21. During the year ended December 31, 2015, the Company decreased accumulated overdistributed net investment income by $17, increased accumulated net realized loss on investments, foreign currency transactions, extinguishment of debt and other assets by $3 and decreased capital in excess of par value by $14.

        Certain of the Company's consolidated subsidiaries are subject to U.S. federal and state income taxes. For the years ended December 31, 2017, 2016 and 2015, the Company recorded a tax expense of approximately $7, $9 and $9, respectively, for these subsidiaries.

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12.   DIVIDENDS AND DISTRIBUTIONS

        The following table summarizes the Company's dividends or distributions declared during the years ended December 31, 2017, 2016 and 2015:

Date declared
  Record date   Payment date   Per share
amount
  Total
amount
 

November 2, 2017

  December 15, 2017   December 29, 2017   $ 0.38   $ 162  

August 2, 2017

  September 15, 2017   September 29, 2017     0.38     162  

May 3, 2017

  June 15, 2017   June 30, 2017     0.38     162  

February 22, 2017

  March 15, 2017   March 31, 2017     0.38     162  

Total declared for 2017

          $ 1.52   $ 648  

November 2, 2016

  December 15, 2016   December 30, 2016   $ 0.38   $ 119  

August 3, 2016

  September 15, 2016   September 30, 2016     0.38     119  

May 4, 2016

  June 15, 2016   June 30, 2016     0.38     119  

February 26, 2016

  March 15, 2016   March 31, 2016     0.38     120  

Total declared for 2016

          $ 1.52   $ 477  

November 4, 2015

  December 15, 2015   December 31, 2015   $ 0.38   $ 120  

August 4, 2015

  September 15, 2015   September 30, 2015     0.38     119  

May 4, 2015

  June 15, 2015   June 30, 2015     0.38     119  

February 26, 2015

  March 13, 2015   March 31, 2015     0.38     119  

February 26, 2015

  March 13, 2015   March 31, 2015     0.05 (1)   16  

Total declared for 2015

          $ 1.57   $ 493  

(1)
Represents an additional dividend.

        The Company has a dividend reinvestment plan, whereby the Company may buy shares of its common stock in the open market or issue new shares in order to satisfy dividend reinvestment requests. When the Company issues new shares in connection with the dividend reinvestment plan, the issue price is equal to the closing price of its common stock on the dividend payment date. Dividend reinvestment plan activity for the years ended December 31, 2017, 2016 and 2015, was as follows:

 
  For the Years Ended
December 31,
 
 
  2017   2016   2015  

Shares issued

    0.4         0.4  

Average issue price per share

  $ 17.38   $   $ 17.17  

Shares purchased by plan agent to satisfy dividends declared and payable during the period for stockholders

    1.5     1.3     0.7  

Average purchase price per share

  $ 16.28   $ 15.14   $ 15.70  

13.   RELATED PARTY TRANSACTIONS

        In accordance with the investment advisory and management agreement, the Company bears all costs and expenses of the operation of the Company and reimburses its investment adviser or its affiliates for certain of such costs and expenses incurred in the operation of the Company. For the years ended December 31, 2017, 2016 and 2015, the Company's investment adviser or its affiliates incurred such expenses totaling $5, $5 and $7, respectively.

        The Company is party to office leases pursuant to which it is leasing office facilities from third parties. For certain of these office leases, the Company has also entered into separate subleases with

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Ares Management LLC, the sole member of Ares Capital Management, and IHAM, pursuant to which Ares Management LLC and IHAM sublease a portion of these leases. For the years ended December 31, 2017, 2016 and 2015, amounts payable to the Company under these subleases totaled $7, $6 and $5, respectively.

        Ares Management LLC has also entered into separate subleases with the Company, pursuant to which the Company subleases certain office spaces from Ares Management LLC. For the years ended December 31, 2017, 2016 and 2015, amounts payable to Ares Management LLC under these subleases totaled $1, $1 and $1, respectively.

        The Company has also entered into agreements with Ares Management LLC and IHAM, pursuant to which Ares Management LLC and IHAM are entitled to use the Company's proprietary portfolio management software. For the years ended December 31, 2017, 2016 and 2015, amounts payable to the Company under these agreements totaled $0, $0 and $0, respectively.

        As part of the American Capital Acquisition, the Company assumed a long term incentive plan liability related to certain employees of a subsidiary of ACAM, which is now a subsidiary of IHAM. The liability is determined based on the fair value of certain investments acquired in the American Capital Acquisition. As of December 31, 2017, the liability amount was estimated to be $29 and is included within accounts payable and other liabilities in the Company's consolidated balance sheet. This liability will be paid on an annual basis based on exited investments in a given calendar year and the value received upon their exit.

        See Notes 3, 4, 6 and 16 for descriptions of other related party transactions.

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14.   FINANCIAL HIGHLIGHTS

        The following is a schedule of financial highlights as of and for the years ended December 31, 2017, 2016 and 2015:

 
  As of and For the Years Ended December 31,  
 
  2017   2016   2015  

Per Share Data:

                   

Net asset value, beginning of period(1)

  $ 16.45   $ 16.46   $ 16.82  

Issuances of common stock

    (0.01 )       0.01  

Repurchases of common stock

            (0.01 )

Deemed contribution from Ares Capital Management (See Note 16)

    0.13          

Issuances of convertible notes

    0.04          

Net investment income for period(2)

    1.20     1.57     1.62  

Net realized and unrealized gains(losses) for period(2)

    0.36     (0.06 )   (0.41 )

Net increase in stockholders' equity

    1.72     1.51     1.21  

Total distributions to stockholders(3)

    (1.52 )   (1.52 )   (1.57 )

Net asset value at end of period(1)

  $ 16.65   $ 16.45   $ 16.46  

Per share market value at end of period

  $ 15.72   $ 16.49   $ 14.25  

Total return based on market value(4)

    4.55 %   26.39 %   1.35 %

Total return based on net asset value(5)

    10.53 %   9.15 %   7.16 %

Shares outstanding at end of period

    426     314     314  

Ratio/Supplemental Data:

                   

Net assets at end of period

  $ 7,098   $ 5,165   $ 5,173  

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

    9.45 %   9.59 %   9.51 %

Ratio of net investment income to average net assets(6)(8)

    7.65 %   9.58 %   9.75 %

Portfolio turnover rate(6)

    51 %   39 %   42 %

(1)
The net assets used equals the total stockholders' equity on the consolidated balance sheet.

(2)
Weighted average basic per share data.

(3)
Includes an additional dividend of $0.05 per share for the three months ended March 31, 2015.

(4)
For the year ended December 31, 2017, the total return based on market value equaled the decrease of the ending market value at December 31, 2017 of $15.72 per share from the ending market value at December 31, 2016 of $16.49 per share plus the declared and payable dividends of $1.52 per share for the year ended December 31, 2017, divided by the market value at December 31, 2016. For the year ended December 31, 2016, the total return based on market value equaled the increase of the ending market value at December 31, 2016 of $16.49 per share from the ending market value at December 31, 2015 of $14.25 per share plus the declared and payable dividends of $1.52 per share for the year ended December 31, 2016, divided by the market value at December 31, 2015. For the year ended December 31, 2015, the total return based on market value equaled the decrease of the ending market value at December 31, 2015 of $14.25 per share from the ending market value at December 31, 2014 of $15.61 per share plus the declared and payable dividends of $1.57 per share for the year ended December 31, 2015, divided by the market value at December 31, 2014. The Company's shares fluctuate in value. The Company's performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.

(5)
For the year ended December 31, 2017, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $1.52 per

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(6)
The ratios reflect an annualized amount.

(7)
For the year ended December 31, 2017, the ratio of operating expenses to average net assets consisted of 2.57% of base management fees, 2.18% of income based fees and capital gains incentive fees, net of the Fee Waiver (2.32% of income based fees and capital gains incentive fees excluding the Fee Waiver), 3.37% of the cost of borrowing and 1.33% of other operating expenses. For the year ended December 31, 2016, the ratio of operating expenses to average net assets consisted of 2.64% of base management fees, 2.29% of income based fees and capital gains incentive fees, 3.58% of the cost of borrowing and 1.08% of other operating expenses. For the year ended December 31, 2015, the ratio of operating expenses to average net assets consisted of 2.55% of base management fees, 2.31% of income based fees and capital gains incentive fees, 4.32% of the cost of borrowing and 0.33% of other operating expenses.

(8)
The ratio of net investment income to average net assets excludes income taxes related to realized gains and losses.

15.   SELECTED QUARTERLY DATA (Unaudited)

 
  2017  
 
  Q4   Q3   Q2   Q1  

Total investment income

  $ 307   $ 294   $ 284   $ 275  

Net investment income before net realized and unrealized gains (losses) and income based fees and capital gains incentive fees, net of waiver of income based fees (See Note 3)

  $ 185   $ 175   $ 154   $ 142  

Income based fees and capital gains incentive fees, net of waiver of income based fees (See Note 3)

  $ 45   $ 22   $ 30   $ 48  

Net investment income before net realized and unrealized gains (losses)

  $ 140   $ 153   $ 124   $ 94  

Net realized and unrealized gains (losses)

  $ 92   $ (14 )   54   $ 24  

Net increase in stockholders' equity resulting from operations

  $ 232   $ 139   $ 178   $ 118  

Basic and diluted earnings per common share

  $ 0.54   $ 0.33   $ 0.42   $ 0.28  

Net asset value per share as of the end of the quarter

  $ 16.65   $ 16.49   $ 16.54   $ 16.50  

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  2016  
 
  Q4   Q3   Q2   Q1  

Total investment income

  $ 261   $ 258   $ 245   $ 248  

Net investment income before net realized and unrealized gains (losses) and income based fees and capital gains incentive fees

  $ 157   $ 164   $ 144   $ 147  

Income based fees and capital gains incentive fees

  $ 19   $ 27   $ 39   $ 33  

Net investment income before net realized and unrealized gains (losses)

  $ 138   $ 137   $ 105   $ 114  

Net realized and unrealized gains (losses)

  $ (63 ) $ (28 ) $ 53   $ 18  

Net increase in stockholders' equity resulting from operations

  $ 75   $ 109   $ 158   $ 132  

Basic and diluted earnings per common share

  $ 0.24   $ 0.35   $ 0.50   $ 0.42  

Net asset value per share as of the end of the quarter

  $ 16.45   $ 16.59   $ 16.62   $ 16.50  

 

 
  2015  
 
  Q4   Q3   Q2   Q1  

Total investment income

  $ 262   $ 261   $ 249   $ 253  

Net investment income before net realized and unrealized gains and income based fees and capital gains incentive fees

  $ 151   $ 160   $ 145   $ 147  

Income based fees and capital gains incentive fees

  $ 4   $ 29   $ 36   $ 25  

Net investment income before net realized and unrealized gains

  $ 147   $ 131   $ 108   $ 122  

Net realized and unrealized gains

  $ (132 ) $ (14 ) $ 38   $ (21 )

Net increase in stockholders' equity resulting from operations

  $ 15   $ 117   $ 146   $ 101  

Basic and diluted earnings per common share

  $ 0.05   $ 0.37   $ 0.47   $ 0.32  

Net asset value per share as of the end of the quarter

  $ 16.46   $ 16.79   $ 16.80   $ 16.71  

16.   AMERICAN CAPITAL ACQUISITION

        On May 23, 2016, the Company entered into a definitive agreement (the "Merger Agreement") to acquire American Capital. On the Acquisition Date, the Company completed the American Capital Acquisition pursuant to the terms and conditions of the Merger Agreement. Pursuant to the Merger Agreement, American Capital shareholders received total consideration of approximately $18.06 per share comprised of: (i) $14.41 per share from the Company consisting of approximately $6.48 per share of cash (including a make-up dividend in the amount of $0.07 per share) and 0.483 shares of the Company's common stock for each American Capital share at a value of $7.93 per American Capital share (based on the closing price per share of the Company's common stock on the Acquisition Date), (ii) $2.45 per share of cash from American Capital's sale of American Capital Mortgage Management, LLC, and (iii) approximately $1.20 per share of cash as transaction support provided by Ares Capital Management acting solely on its own behalf. As of the Acquisition Date, the transaction was valued at approximately $4.2 billion. The total cash and stock consideration paid by the Company was $3.3 billion. In connection with the stock consideration, the Company issued approximately 112 shares of its common stock to American Capital's then-existing stockholders (including holders of outstanding in-the-money American Capital stock options), thereby resulting in the Company's then-existing stockholders owning approximately 73.7% of the combined company and then-existing American Capital stockholders owning approximately 26.3% of the combined company. In addition, in connection with the American Capital Acquisition, Ares Capital Management agreed to waive certain income based fees as described in Note 3.

        The American Capital Acquisition was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues. The fair value of the merger consideration paid by the Company was allocated to the assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition and did not give rise to

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goodwill. Since the fair value of the net assets acquired exceeded the fair value of the merger consideration paid by the Company, the Company recognized a deemed contribution from Ares Capital Management.

        The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the American Capital Acquisition:

Common stock issued by the Company

  $ 1,839  

Cash consideration paid by the Company

    1,502  

Deemed contribution from Ares Capital Management

    54  

Total purchase price

  $ 3,395  

Assets acquired:

       

Investments(1)

  $ 2,543  

Cash and cash equivalents

    961  

Other assets(2)

    117  

Total assets acquired

  $ 3,621  

Liabilities assumed(3)

    (226 )

Net assets acquired

  $ 3,395  

(1)
Investments acquired were recorded at fair value, which is also the Company's initial cost basis.

(2)
Other assets acquired in the American Capital Acquisition consisted of the following:

Receivable for open trades

  $ 45  

Escrows receivable

    41  

Interest receivable

    9  

Other assets

    22  

Total

  $ 117  
(3)
Liabilities assumed in the American Capital Acquisition consisted of the following:

Severance and other payroll related

  $ 95  

Lease abandonments

    55  

Long term incentive plan (see Note 13)

    31  

Escrows payable

    25  

Other liabilities

    20  

Total

  $ 226  

        During the year ended December 31, 2017, the Company incurred $45 in professional fees and other costs related to the American Capital Acquisition. For the year ended December 31, 2017, these costs included $4 of expenses related to a long term incentive plan liability assumed in the American Capital Acquisition (see Note 13). For the year ended December 31, 2017, these costs also included $18 in one-time investment banking fees incurred in January 2017 upon the closing of the American Capital Acquisition.

17.   LITIGATION

        The Company is party to certain lawsuits in the normal course of business. In addition, American Capital and Allied Capital were involved in various legal proceedings that the Company assumed in

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connection with the American Capital Acquisition and the Allied Acquisition, respectively. Furthermore, third parties may try to seek to impose liability on the Company in connection with the Company's activities or the activities of its portfolio companies. While the outcome of any such legal proceedings cannot at this time be predicted with certainty, the Company does not expect that these legal proceedings will materially affect its business, financial condition or results of operations.

        On May 20, 2013, the Company was named as one of several defendants in an action filed in the United States District Court for the Eastern District of Pennsylvania by the bankruptcy trustee of DSI Renal Holdings LLC ("DSI Renal") and two affiliate companies. On March 17, 2014, the motion by the Company and the other defendants to transfer the case to the United States District Court for the District of Delaware (the "Delaware Court") was granted. On May 6, 2014, the Delaware Court referred the matter to the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The complaint alleges, among other things, that each of the named defendants participated in a purported fraudulent transfer involving the restructuring of a subsidiary of DSI Renal. Among other things, the complaint seeks, jointly and severally from all defendants, (1) damages of approximately $425 million, of which the complaint states the Company's individual share is approximately $117 million, and (2) punitive damages. The defendants filed a motion to dismiss all claims on August 5, 2013. On July 20, 2017, the Bankruptcy Court issued an order granting the motion to dismiss certain claims and denying the motion to dismiss certain other claims, including the purported fraudulent transfer claims. The defendants answered the complaint on August 31, 2017. Under the operative scheduling order, discovery will continue until early 2019 with dispositive motions due on April 30, 2019. No trial date has been set. The Company is currently unable to assess with any certainty whether it may have any exposure in this matter. However, the Company believes the plaintiff's claims are without merit and intends to vigorously defend itself in this matter.

        On or about February 10, 2017, shareholders of American Capital filed a second consolidated amended putative shareholder class action complaint allegedly on behalf of holders of the common stock of American Capital against the former members of American Capital's board of directors and certain former American Capital officers (collectively, the "American Capital defendants"), as well as Elliott Management Corporation, Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc. (collectively "Elliott") in the Circuit Court for Montgomery County, Maryland challenging the American Capital Acquisition. This action is a consolidation of putative shareholder complaints filed against the directors of American Capital on June 24, 2016, July 12, 2016, July 21, 2016 and July 27, 2016, which were consolidated and in which an amended consolidated putative shareholder class action complaint was filed on August 18, 2016. The action alleges that the directors, officers and Elliott failed to adequately discharge their fiduciary duties to the public shareholders of American Capital by hastily commencing a sales process due to the board's manipulation by Elliott. In the alternative, the complaint alleges Elliott aided and abetted breaches of fiduciary duty by the American Capital directors and officers. The complaint also alleges that the directors and officers failed to obtain for the shareholders the highest value available in the marketplace for their shares in the American Capital Acquisition. The complaint further alleges that the merger was the product of a flawed process due to Elliott's continued manipulation, the use of deal protection devices in the American Capital Acquisition that precluded other bidders from making a higher offer to American Capital and the directors' conflicts of interest due to special benefits, including the full vesting of American Capital stock options and incentive awards or golden parachutes the directors received upon consummation of the proposed merger. Additionally, the complaint alleges that the registration statement, which was filed with the SEC on July 20, 2016 and included a joint proxy statement to American Capital's shareholders, is materially false and misleading because it omits material information concerning the financial and procedural fairness of the American Capital Acquisition. The complaint seeks to recover compensatory damages for all losses resulting from the alleged breaches of fiduciary duty and waste. The American Capital defendants filed their motion to dismiss the second consolidated amended complaint on March 3, 2017. Elliott filed its motion to

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dismiss the second consolidated amended complaint on April 14, 2017. Briefing on defendants' motions was completed on May 26, 2017. A hearing on the motions to dismiss was scheduled for June 9, 2017 before Judge Ronald Rubin of the Circuit Court for Montgomery County, Maryland (the "Court"); however, that hearing was stayed as to the American Capital defendants in light of the settlement described below.

        On June 9, 2017, the American Capital defendants reached an agreement in principle with plaintiffs regarding the proposed settlement of claims asserted against them in this action, and the American Capital defendants and plaintiffs subsequently executed a settlement term sheet (the "Term Sheet") on June 19, 2017. As set forth in the Term Sheet, the American Capital defendants have agreed to the proposed settlement solely to eliminate the burden, expense, distraction and uncertainties inherent in further litigation, and without admitting any liability or wrongdoing. The plaintiffs and American Capital defendants filed a stipulation of settlement and motion for preliminary approval of the settlement with the Court on August 3, 2017. On August 23, 2017, the Court entered an order preliminarily approving the settlement. On August 28, 2017, Elliott filed a cross claim against the American Capital defendants asserting claims for contribution, although the cross claim would not have been expected to result in any additional monetary liability for the American Capital defendants or American Capital.

        On October 11, 2017, the plaintiffs and Elliott advised the Court that they reached an agreement in principle to settle the remaining claims in the case, which would also resolve the cross claims against the American Capital defendants. Both the American Capital defendant settlement and Elliott settlement are subject to Court approval. The parties filed a joint stipulation on or about November 17, 2017, notice was sent to stockholders on December 18, 2017, and a final approval hearing to approve the settlements is scheduled for February 16, 2018. If both settlements are approved, then the case will be dismissed in its entirety.

        There can be no assurance that the Court will approve the proposed settlements. The proposed settlement by the American Capital defendants is not, and should not be construed as, an admission of wrongdoing or liability by any American Capital defendant.

        On August 3, 2017, American Capital and one of its former portfolio companies were awarded a judgment plus prejudgment interest by the United States District Court for the District of Maryland (the "District Court") following a bench trial in a case first filed by one of American Capital's insurance companies concerning coverage for bodily injury claims against American Capital and/or its former portfolio company. The District Court found that the carrier breached its duty to defend American Capital and its former portfolio company against more than 1,000 bodily injury claims and awarded damages plus prejudgment interest. American Capital's carrier filed a notice of appeal to the United States Court of Appeals for the Fourth Circuit; thereafter, American Capital and its former portfolio company filed a notice of cross appeal. The parties are now in the process of filing their respective briefs in appeal, which will be fully briefed by late April 2018. It is currently expected the appeal will be adjudicated in late 2018 at the earliest. American Capital's recovery will not be known until such time as the appeal is resolved.

18.   SUBSEQUENT EVENTS

        The Company's management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2017, except as disclosed below.

        In January 2018, the Company issued $600 aggregate principal amount of unsecured notes that mature on March 1, 2025 (the "2025 Notes"). The 2025 Notes bear interest at a rate of 4.25% per

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year, payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2018. The 2025 Notes may be redeemed in whole or in part at the Company's option at any time at the redemption prices as determined pursuant to the indenture governing the 2025 Notes.

        In January 2018, the SDLP's total available capital was increased from $2.9 billion to $6.4 billion. In connection with this expansion, Varagon and its clients agreed to make capital available to the SDLP of up to approximately $5.0 billion and the Company agreed to make capital available to the SDLP of up to approximately $1.4 billion. The Company will continue to provide capital to the SDLP in the form of SDLP Certificates, and Varagon and its clients will provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. Investment of any unfunded amount must be approved by the investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required).

        In February 2018, the Company's board of directors authorized an amendment to its $300 stock repurchase program to extend the expiration date of the program from February 28, 2018 to February 28, 2019. Under the stock repurchase program, the Company may repurchase up to $300 in the aggregate of its outstanding common stock in the open market at a price per share that meets certain thresholds below its net asset value per share, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any share repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions, except per share data)

 
  As of  
 
  June 30,
2018
  December 31,
2017
 
 
  (unaudited)
   
 

ASSETS

             

Investments at fair value

             

Non-controlled/non-affiliate company investments

  $ 8,995   $ 10,010  

Non-controlled affiliate company investments

    237     216  

Controlled affiliate company investments

    2,295     1,615  

Total investments at fair value (amortized cost of $11,435 and $11,905, respectively)

    11,527     11,841  

Cash and cash equivalents

    509     316  

Interest receivable

    89     93  

Receivable for open trades

    56     1  

Other assets

    116     96  

Total assets

  $ 12,297   $ 12,347  

LIABILITIES

             

Debt

  $ 4,542   $ 4,854  

Base management fees payable

    45     44  

Income based fees payable

    30     27  

Capital gains incentive fees payable

    117     79  

Accounts payable and other liabilities

    140     181  

Interest and facility fees payable

    69     64  

Payable for open trades

    84      

Total liabilities

    5,027     5,249  

Commitments and contingencies (Note 7)

             

STOCKHOLDERS' EQUITY

             

Common stock, par value $0.001 per share, 600 common shares authorized; 426 common shares issued and outstanding

         

Capital in excess of par value

    7,192     7,192  

Accumulated overdistributed net investment income

    (99 )   (81 )

Accumulated undistributed net realized gains on investments, foreign currency transactions, extinguishment of debt and other assets

    87     72  

Net unrealized gains (losses) on investments, foreign currency and other transactions

    90     (85 )

Total stockholders' equity

    7,270     7,098  

Total liabilities and stockholders' equity

  $ 12,297   $ 12,347  

NET ASSETS PER SHARE

  $ 17.05   $ 16.65  

   

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(unaudited)

 
  For the Three
Months
Ended
June 30,
  For the Six
Months
Ended
June 30,
 
 
  2018   2017   2018   2017  

INVESTMENT INCOME:

                         

From non-controlled/non-affiliate company investments:

                         

Interest income from investments (excluding payment-in-kind ("PIK") interest income)

  $ 199   $ 160   $ 396   $ 311  

PIK interest income from investments

    18     11     35     28  

Capital structuring service fees

    20     24     46     36  

Dividend income

    8     6     17     12  

Other income

    20     5     26     9  

Total investment income from non-controlled/non-affiliate company investments

    265     206     520     396  

From non-controlled affiliate company investments:

                         

Interest income from investments (excluding PIK interest income)

    4     3     8     6  

PIK interest income from investments

    1     1     2     2  

Total investment income from non-controlled affiliate company investments

    5     4     10     8  

From controlled affiliate company investments:

                         

Interest income from investments (excluding PIK interest income)

    34     52     63     108  

PIK interest income from investments

    6     4     12     7  

Capital structuring service fees

    5     5     8     5  

Dividend income

    16     10     29     28  

Other income

    2     3     8     7  

Total investment income from controlled affiliate company investments

    63     74     120     155  

Total investment income

    333     284     650     559  

EXPENSES:

                         

Interest and credit facility fees

    61     55     121     110  

Base management fees

    45     44     91     83  

Income based fees

    40     30     78     62  

Capital gain incentive fees

    18     10     38     26  

Administrative fees

    4     3     7     6  

Net professional fees and other costs related to the American Capital Acquisition

    (1 )   12     2     38  

Other general and administrative

    8     9     16     17  

Total expenses

    175     163     353     342  

Waiver of income based fees

    (10 )   (10 )   (20 )   (10 )

Total expenses, net of waiver of income based fees

    165     153     333     332  

NET INVESTMENT INCOME BEFORE INCOME TAXES

    168     131     317     227  

Income tax expense, including excise tax

    6     7     11     9  

NET INVESTMENT INCOME

    162     124     306     218  

REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:

                         

Net realized gains (losses):

                         

Non-controlled/non-affiliate company investments

    24     67     24     73  

Controlled affiliate company investments

    (2 )   45     (2 )   52  

Foreign currency and other transactions

    5     (2 )   (7 )   (13 )

Net realized gains

    27     110     15     112  

Net unrealized gains (losses):

                         

Non-controlled/non-affiliate company investments

    (6 )   (85 )   10     (99 )

Non-controlled affiliate company investments

    (4 )   (2 )   (2 )   (1 )

Controlled affiliate company investments

    70     43     148     74  

Foreign currency and other transactions

    5     (8 )   19     (4 )

Net unrealized gains (losses)

    65     (52 )   175     (30 )

Net realized and unrealized gains from investments, foreign currency and other transactions

    92     58     190     82  

REALIZED LOSSES ON EXTINGUISHMENT OF DEBT

        (4 )       (4 )

NET INCREASE IN STOCKHOLDERS' EQUITY RESULTING FROM OPERATIONS

  $ 254   $ 178   $ 496   $ 296  

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 10)

  $ 0.60   $ 0.42   $ 1.16   $ 0.70  

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)

    426     426     426     424  

   

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Healthcare Services                                      
Absolute Dental Management LLC and ADM Equity, LLC   Dental services provider   First lien senior secured loan ($19.0 par due 1/2022)   9.83% (Libor + 7.50%/Q)     1/5/2016   $ 19.0   $ 18.1 (2)(17)      
        First lien senior secured loan ($5.1 par due 1/2022)   9.83% (Libor + 7.50%/Q)     1/5/2016     5.1     4.8 (4)(17)      
        Class A preferred units (4,000,000 units)         1/5/2016     4.0     1.0 (2)      
        Class A common units (4,000,000 units)         1/5/2016         (2)      
                        28.1     23.9        
                                       
Acessa Health Inc. (fka HALT Medical, Inc.)   Medical supply provider   Common stock (569,823 shares)         6/22/2017     0.1            
                                       
ADCS Billings Intermediate Holdings, LLC(21)   Dermatology practice   First lien senior secured revolving loan ($3.3 par due 5/2022)   9.75% (Base Rate + 4.75%/Q)     5/18/2016     3.3     3.2 (2)(17)(20)      
                                       
ADG, LLC and RC IV GEDC Investor LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.0 par due 9/2022)   6.80% (Libor + 4.75%/M)     9/28/2016     1.0     1.0 (2)(17)      
        First lien senior secured revolving loan ($2.1 par due 9/2022)   6.84% (Libor + 4.75%/M)     9/28/2016     2.1     2.0 (2)(17)      
        First lien senior secured revolving loan ($0.6 par due 9/2022)   8.75% (Base Rate + 3.75%/M)     9/28/2016     0.6     0.6 (2)(17)      
        Second lien senior secured loan ($87.5 par due 3/2024)   11.09% (Libor + 9.00%/M)     9/28/2016     87.5     79.6 (2)(17)      
        Membership units (3,000,000 units)         9/28/2016     3.0     1.4 (2)      
                        94.2     84.6        
                                       
Air Medical Group Holdings, Inc. and Air Medical Buyer Corp.   Emergency air medical services provider   Senior subordinated loan ($182.7 par due 3/2026)   9.96% (Libor + 7.88%/M)     3/14/2018     182.7     182.7 (2)(17)      
        Warrant to purchase up to 115,733 units of common stock (expires 3/2028)         3/14/2018     0.9     1.5 (2)      
                        183.6     184.2        

                                     

F-129


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Alcami Holdings, LLC(7)(21)   Outsourced drug development services provider   First lien senior secured revolving loan ($7.7 par due 10/2019)   7.50% (Libor + 5.50%/M)     1/3/2017     7.7     7.7 (2)(17)      
        First lien senior secured revolving loan ($2.0 par due 10/2019)   7.55% (Libor + 5.50%/M)     1/3/2017     2.0     2.0 (2)(17)      
        First lien senior secured revolving loan ($15.9 par due 10/2019)   7.59% (Libor + 5.50%/M)     1/3/2017     15.9     15.9 (2)(17)      
        First lien senior secured loan ($10.0 par due 10/2020)   7.59% (Libor + 5.50%/M)     1/3/2017     10.0     10.0 (2)(17)      
        First lien senior secured loan ($95.2 par due 10/2020)   7.59% (Libor + 5.50%/M)     1/3/2017     95.2     95.2 (3)(17)      
        First lien senior secured loan ($0.2 par due 10/2020)   11.50% (Base Rate + 6.50%/M)     1/3/2017     0.2     0.2 (3)(17)      
        Senior subordinated loan ($25.0 par due 10/2020)   12.25%     1/3/2017     25.0     25.0 (2)      
        Senior subordinated loan ($30.0 par due 10/2020)   11.75%     1/3/2017     30.0     30.0 (2)      
        Senior subordinated loan ($30.0 par due 10/2020)   12.00%     1/3/2017     30.0     30.0 (2)      
        Senior subordinated loan ($38.9 par due 10/2020)   14.75% PIK     1/3/2017     38.9     38.9 (2)      
        Senior subordinated loan ($39.5 par due 10/2020)   15.25% PIK     1/3/2017     28.4     39.5 (2)      
        Series P-1 preferred membership units (100,000 units)         1/3/2017         81.6        
        Series P-2 preferred membership units (143,642 units)         1/3/2017         117.3        
        Series R preferred membership units (30,000 units)         1/3/2017         40.6        
        Series R-2 preferred membership units (54,936 units)         1/3/2017         73.4        
                        283.3     607.3        
                                       
Alegeus Technologies Holdings Corp.   Benefits administration and transaction processing provider   Preferred stock (2,997 shares)         12/13/2013     3.1     3.1        
        Common stock (3 shares)         12/13/2013                
                        3.1     3.1        
                                       
Alteon Health, LLC   Provider of physician management services   First lien senior secured loan ($3.0 par due 9/2022)   8.59% (Libor + 6.50%/M)     5/15/2017     3.0     2.6 (2)(17)      
                                       
American Academy Holdings, LLC(21)   Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals   First lien senior secured revolving loan ($0.9 par due 12/2022)   8.58% (Libor + 6.25%/Q)     12/15/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($109.9 par due 12/2022)   8.58% (Libor + 6.25%/Q)     12/15/2017     109.9     109.9 (2)(17)      
        First lien senior secured loan ($73.4 par due 12/2022)   8.58% (Libor + 6.25%/Q)     12/15/2017     73.4     73.4 (3)(17)      
        Senior subordinated loan ($77.5 par due 6/2023)   16.33% (Libor + 8.00% Cash, 6.00% PIK/Q)     12/15/2017     77.5     77.5 (2)(17)      
                        261.7     261.7        
                                       
Bambino CI Inc.(21)   Manufacturer and provider of single-use obstetrics products   First lien senior secured revolving loan ($2.8 par due 10/2022)   8.09% (Libor + 6.00%/M)     10/17/2017     2.8     2.8 (2)(17)      
        First lien senior secured loan ($31.0 par due 10/2023)   8.09% (Libor + 6.00%/M)     10/17/2017     31.0     31.0 (3)(17)      
                        33.8     33.8        
                                     

F-130


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC(21)   Correctional facility healthcare operator   First lien senior secured revolving loan ($4.1 par due 7/2019)   6.33% (Libor + 4.00%/Q)     7/23/2014     4.1     4.0 (2)(17)(20)      
        First lien senior secured loan ($6.5 par due 7/2021)   6.33% (Libor + 4.00%/Q)     7/23/2014     6.5     6.4 (2)(17)      
        Second lien senior secured loan ($135.0 par due 7/2022)   10.68% (Libor + 8.38%/Q)     7/23/2014     134.3     129.6 (2)(17)      
        Class A units (1,000,000 units)         8/19/2010         0.9 (2)      
                        144.9     140.9        
                                       
Comprehensive EyeCare Partners, LLC(21)   Vision care practice management company   First lien senior secured loan ($5.4 par due 2/2024)   6.83% (Libor + 4.50%/Q)     2/14/2018     5.4     5.4 (2)(17)      
                                       
Correctional Medical Group Companies, Inc.   Correctional facility healthcare operator   First lien senior secured loan ($48.8 par due 9/2021)   10.47% (Libor + 8.14%/Q)     9/29/2015     48.8     48.8 (3)(17)      
        First lien senior secured loan ($3.1 par due 9/2021)   10.71% (Libor + 8.38%/Q)     9/29/2015     3.1     3.1 (2)(17)      
                        51.9     51.9        
                                       
CSHM LLC(7)   Dental services provider   Class A membership units (1,979 units)         1/3/2017                
                                       
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.3 par due 12/2022)   10.25% (Base Rate + 5.25%/Q)     12/21/2016     1.3     1.3 (2)(17)      
        Class A preferred units (1,000,000 units)         12/21/2016     1.0     1.4 (2)      
                        2.3     2.7        
                                       
Datix Bidco Limited(8)   Global healthcare software company that provides software solutions for patient safety and risk management   First lien senior secured loan ($5.8 par due 4/2025)   7.02% (Libor + 4.50%/S)     4/27/2018     5.7     5.8 (2)(17)      
                                       
DCA Investment Holding, LLC(21)   Multi-branded dental practice management   First lien senior secured revolving loan       7/2/2015         (2)(19)      
        First lien senior secured loan ($18.6 par due 7/2021)   7.58% (Libor + 5.25%/Q)     7/2/2015     18.5     18.6 (4)(17)      
                        18.5     18.6        
                                       
Emerus Holdings, Inc.(21)   Freestanding 24-hour emergency care micro-hospitals operator   First lien senior secured revolving loan ($1.5 par due 9/2020)   6.60% (Libor + 4.50%/M)     3/14/2017     1.5     1.3 (2)(17)      
        First lien senior secured loan ($3.2 par due 9/2021)   6.60% (Libor + 4.50%/M)     3/14/2017     2.9     2.8 (2)(17)      
                        4.4     4.1        
                                       
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC   On-demand supply chain automation solutions provider to the healthcare industry   Second lien senior secured loan ($34.2 par due 6/2025)   10.33% (Libor + 8.00%/Q)     6/30/2017     33.9     34.4 (2)(17)      
        Second lien senior secured loan ($54.5 par due 6/2025)   12.00% (Base Rate + 7.00%/Q)     6/30/2017     54.1     54.8 (2)(17)      
        Series A preferred stock (110,425 shares)   13.08% PIK (Libor + 10.75%/Q)     6/30/2017     125.3     125.3 (2)(17)      
        Class A units (14,013,303 units)         6/30/2017     14.0     19.6 (2)      
                        227.3     234.1        
                                       
Greenphire, Inc. and RMCF III CIV XXIX, L.P   Software provider for clinical trial management   Limited partnership interest (99.90% interest)         12/19/2014     1.0     2.6 (2)      
                                     

F-131


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Hygiena Borrower LLC(21)   Adenosine triphosphate testing technology provider   First lien senior secured loan ($7.5 par due 8/2022)   6.33% (Libor + 4.00%/Q)     6/29/2018     7.5     7.5 (2)(17)      
        Second lien senior secured loan ($10.0 par due 8/2023)   10.08% (Libor + 7.75%/Q)     8/26/2016     10.0     9.9 (2)(17)      
        Second lien senior secured loan ($10.7 par due 8/2023)   10.08% (Libor + 7.75%/Q)     2/27/2017     10.7     10.6 (2)(17)      
        Second lien senior secured loan ($11.1 par due 8/2023)   10.08% (Libor + 7.75%/Q)     6/29/2018     11.1     11.0 (2)(17)      
                        39.3     39.0        
                                       
JDC Healthcare Management, LLC(21)   Dental services provider   First lien senior secured revolving loan ($0.5 par due 4/2022)   8.80% (Libor + 6.75%/M)     4/10/2017     0.5     0.5 (2)(17)      
        First lien senior secured revolving loan ($2.0 par due 4/2022)   8.84% (Libor + 6.75%/M)     4/10/2017     2.0     2.0 (2)(17)      
        First lien senior secured loan ($4.2 par due 4/2023)   9.01% (Libor + 6.75%/Q)     4/10/2017     4.2     4.1 (2)(17)      
        First lien senior secured loan ($9.9 par due 4/2023)   8.84% (Libor + 6.75%/M)     4/10/2017     9.9     9.7 (2)(17)      
        First lien senior secured loan ($19.8 par due 4/2023)   8.84% (Libor + 6.75%/M)     4/10/2017     19.8     19.4 (4)(17)      
                        36.4     35.7        
                                       
KBHS Acquisition, LLC (d/b/a Alita Care, LLC)(21)   Provider of behavioral health services   First lien senior secured revolving loan ($0.3 par due 3/2022)   7.06% (Libor + 5.00%/M)     3/17/2017     0.3     0.3 (2)(17)      
        First lien senior secured revolving loan ($2.2 par due 3/2022)   7.09% (Libor + 5.00%/M)     3/17/2017     2.2     2.2 (2)(17)      
        First lien senior secured revolving loan ($0.8 par due 3/2022)   7.02% (Libor + 5.00%/M)     3/17/2017     0.8     0.8 (2)(17)      
                        3.3     3.3        
                                       
Key Surgical LLC(21)   Provider of sterile processing, operating room and instrument care supplies for hospitals   First lien senior secured revolving loan ($0.6 par due 6/2022)   8.75% (Base
Rate + 3.75%/Q)
    6/1/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($17.4 par due 6/2023)   5.75% (EURIBOR +
4.75%/Q)
    6/1/2017     16.7     17.4 (2)(17)      
                        17.3     18.0        
                                       
MB2 Dental Solutions, LLC(21)   Dental services provider   First lien senior secured revolving loan ($2.1 par due 9/2023)   8.75%
(Base Rate +
3.75%/Q)
    9/29/2017     2.1     2.1 (2)(17)      
        First lien senior secured loan ($4.7 par due 9/2023)   7.05% (Libor + 4.75%/Q)     9/29/2017     4.7     4.7 (2)(17)      
                        6.8     6.8        
                                       
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC   Healthcare professional provider   First lien senior secured loan ($65.3 par due 1/2020)   7.57% (Libor + 5.50%/M)     7/26/2017     65.3     65.3 (2)(17)      
        First lien senior secured loan ($77.3 par due 1/2020)   7.59% (Libor + 5.50%/M)     7/26/2017     77.3     77.3 (2)(17)      
        First lien senior secured loan ($9.0 par due 1/2020)   7.57% (Libor + 5.50%/M)     7/26/2017     9.0     9.0 (4)(17)      
        First lien senior secured loan ($10.7 par due 1/2020)   7.59% (Libor + 5.50%/M)     7/26/2017     10.7     10.7 (4)(17)      
        Class A units (1,438,643 shares)         1/17/2014     1.5     1.1 (2)      
                        163.8     163.4        
                                     

F-132


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
MW Dental Holding Corp.(21)   Dental services provider   First lien senior secured revolving loan ($3.5 par due 4/2021)   9.08% (Libor + 6.75%/Q)     4/12/2011     3.5     3.5 (2)(17)      
        First lien senior secured loan ($9.1 par due 4/2021)   9.08% (Libor + 6.75%/Q)     3/19/2018     9.1     9.1 (2)(17)      
        First lien senior secured loan ($58.6 par due 4/2021)   9.08% (Libor + 6.75%/Q)     4/12/2011     58.6     58.6 (2)(17)      
        First lien senior secured loan ($46.5 par due 4/2021)   9.08% (Libor + 6.75%/Q)     4/12/2011     46.5     46.5 (3)(17)      
        First lien senior secured loan ($19.2 par due 4/2021)   9.08% (Libor + 6.75%/Q)     4/12/2011     19.2     19.2 (4)(17)      
                        136.9     136.9        
                                       
My Health Direct, Inc.   Healthcare scheduling exchange software solution provider   Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)         9/18/2014         (2)      
                                       
New Trident Holdcorp, Inc. and Trident Holding Company, LLC   Outsourced mobile diagnostic healthcare service provider   Second lien senior secured loan ($24.8 par due 7/2022)   8.09% (Libor + 6.00%/M)     8/1/2013     19.5     17.6 (2)(17)      
        Second lien senior secured loan ($86.2 par due 7/2020)         8/1/2013     77.9     33.0 (2)(13)(16)      
        Senior subordinated loan ($9.1 par due 7/2020)         11/29/2017     8.8     (2)(16)      
                        106.2     50.6        
                                       
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC   Anesthesia management services provider   Second lien senior secured loan ($72.8 par due 10/2023)   12.45% (Libor + 10.00%/Q)     4/19/2016     72.8     65.5 (2)(17)      
        Class A units (25,277 units)         4/19/2016     2.5     0.7 (2)      
                        75.3     66.2        
                                       
Nodality, Inc.   Biotechnology company   First lien senior secured loan ($2.9 par due 8/2016)         11/12/2015     2.1     (2)(16)      
        First lien senior secured loan ($13.9 par due 8/2016)         4/25/2014     9.7     (2)(16)      
        Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)         5/1/2016         (2)      
                        11.8            
                                       
NSM Sub Holdings Corp.(21)   Provider of customized mobility, rehab and adaptive seating systems   First lien senior secured revolving loan ($1.3 par due 10/2022)   9.00% (Base Rate + 4.00%/Q)     9/28/2017     1.3     1.3 (2)(17)      
        First lien senior secured loan ($4.9 par due 10/2022)   6.83% (Libor + 4.50%/Q)     6/1/2018     4.9     4.9 (2)(17)      
                        6.2     6.2        
                                       
nThrive, Inc. (fka Precyse Acquisition Corp.)   Provider of healthcare information management technology and services   Second lien senior secured loan ($10.0 par due 4/2023)   11.84% (Libor + 9.75%/M)     4/20/2016     9.7     9.8 (2)(17)      
                                       
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC   Provider of technology-enabled solutions to pharmacies   Limited liability company membership interest (1.57%)         11/21/2013     1.0     0.6 (2)      
                                       
Pathway Vet Alliance, LLC(21)   Operator of freestanding veterinary hospitals   First lien senior secured loan ($0.2 par due 10/2024)   6.34% (Libor + 4.25%/M)     10/4/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($0.1 par due 10/2024)   6.34% (Libor + 4.25%/M)     5/24/2018     0.1     0.1 (2)(17)      
        First lien senior secured loan ($1.4 par due 10/2024)   6.34% (Libor + 4.25%/M)     10/4/2017     1.4     1.4 (2)(17)      
                        1.7     1.7        
                                       
Patterson Medical Supply, Inc.   Distributor of rehabilitation supplies and equipment   Second lien senior secured loan ($78.0 par due 8/2023)   10.86% (Libor + 8.50%/Q)     9/2/2015     76.6     68.6 (2)(17)      
                                       
PhyMED Management LLC   Provider of anesthesia services   Second lien senior secured loan ($47.2 par due 5/2021)   11.07% (Libor + 8.75%/Q)     12/18/2015     46.8     45.8 (2)(17)      

                                     

F-133


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Practice Insight, LLC(21)   Revenue cycle management provider to the emergency healthcare industry   First lien senior secured revolving loan ($0.6 par due 8/2022)   9.00% (Base Rate + 4.00%/Q)     8/23/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($12.4 par due 8/2022)   7.09% (Libor + 5.00%/M)     8/23/2017     12.4     12.4 (2)(17)      
                        13.0     13.0        
                                       
ProVation Medical, Inc.   Provider of documentation and coding software for GI physicians   First lien senior secured loan ($13.1 par due 3/2024)   9.05% (Libor + 7.00%/M)     3/9/2018     12.9     13.0 (2)(17)      
                                       
RecoveryDirect Acquisition, L.L.C.(21)   Outpatient physical therapy provider   First lien senior secured revolving loan ($2.3 par due 1/2023)   6.55% (Libor + 4.50%/M)     1/3/2018     2.3     2.3 (2)(17)      
        First lien senior secured loan ($7.0 par due 1/2024)   6.83% (Libor + 4.50%/Q)     1/3/2018     7.0     7.0 (2)(17)      
        First lien senior secured loan ($14.9 par due 1/2024)   6.83% (Libor + 4.50%/Q)     1/3/2018     14.9     14.9 (2)(17)      
        First lien senior secured loan ($19.9 par due 1/2024)   6.83% (Libor + 4.50%/Q)     1/3/2018     19.9     19.9 (4)(17)      
                        44.1     44.1        
                                       
Respicardia, Inc.   Developer of implantable therapies to improve cardiovascular health   Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)         6/28/2012         (2)      
                                       
Salter Labs(21)   Developer, manufacturer and supplier of consumable products for medical device customers   First lien senior secured revolving loan ($0.6 par due 3/2020)   6.61% (Libor + 4.25%/Q)     2/8/2018     0.6     0.6 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 3/2020)   6.58% (Libor + 4.25%/Q)     2/8/2018     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 3/2020)   8.25% (Base Rate + 3.25%/Q)     2/8/2018     0.2     0.2 (2)(17)      
                        1.0     1.0        
                                       
SCSG EA Acquisition Company, Inc.(21)   Provider of outsourced clinical services to hospitals and health systems   First lien senior secured revolving loan ($0.1 par due 9/2022)   6.28% (Libor + 4.25%/Q)     9/1/2017     0.1     0.1 (2)(17)(20)      
        First lien senior secured revolving loan ($0.2 par due 9/2022)   6.61% (Libor + 4.25%/Q)     9/1/2017     0.2     0.2 (2)(17)(20)      
                        0.3     0.3        
                                       
SiroMed Physician Services, Inc. and SiroMed Equity Holdings, LLC(21)   Outsourced anesthesia provider   First lien senior secured loan ($17.5 par due 3/2024)   7.08% (Libor + 4.75%/Q)     3/26/2018     17.5     17.3 (2)(17)      
        Common units (171,784 units)         3/26/2018     4.6     4.7 (2)      
                        22.1     22.0        
                                       
Symmetry Surgical, Inc(21)   Marketer and distributor of medical devices focused on the general surgery market   First lien senior secured revolving loan ($2.0 par due 7/2021)   6.00% (Libor + 4.00%/M)     2/8/2018     2.0     2.0 (2)(17)      
                                       
Synergy HomeCare Franchising, LLC and NP/Synergy Holdings, LLC(21)   Franchisor of private-pay home care for the elderly   First lien senior secured loan ($16.1 par due 4/2024)   8.08% (Libor + 5.75%/Q)     4/2/2018     16.1     16.0 (2)(17)      
        Common units (550 units)         4/2/2018     0.6     0.6        
                        16.7     16.6        
                                       
TerSera Therapeutics LLC   Acquirer and developer of specialty therapeutic pharmaceutical products   First lien senior secured loan ($5.3 par due 3/2023)   7.58% (Libor + 5.25%/Q)     5/3/2017     5.2     5.3 (4)(17)      

                                     

F-134


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
U.S. Anesthesia Partners, Inc.   Anesthesiology service provider   Second lien senior secured loan ($71.8 par due 6/2025)   9.34% (Libor + 7.25%/M)     6/16/2017     70.9     71.8 (2)(17)      
                                       
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC(21)   Operator of urgent care clinics   Preferred units (7,696,613 units)         6/11/2015     7.7     3.3        
        Series A common units (2,000,000 units)         6/11/2015     2.0            
        Series C common units (5,288,427 units)         6/11/2015                
                        9.7     3.3        
                                       
VistaPharm, Inc. and Vertice Pharma UK Parent Limited(8)   Manufacturer and distributor of generic pharmaceutical products   Preferred shares (40,662 shares)         12/21/2015     0.3     0.7        
                                       
West Dermatology, LLC(21)   Dermatology Practice Platform   First lien senior secured revolving loan ($0.4 par due 4/2022)   7.53% (Libor + 5.50%/M)     2/8/2018     0.4     0.4 (2)(17)      
        First lien senior secured revolving loan ($2.5 par due 4/2022)   7.83% (Libor + 5.50%/M)     2/8/2018     2.5     2.5 (2)(17)      
        First lien senior secured loan ($0.8 par due 4/2023)   7.82% (Libor + 5.50%/Q)     4/2/2018     0.8     0.8 (2)(17)      
        First lien senior secured loan ($4.1 par due 4/2023)   7.83% (Libor + 5.50%/Q)     4/2/2018     4.1     4.1 (2)(17)      
        First lien senior secured loan ($7.7 par due 4/2023)   7.83% (Libor + 5.50%/Q)     4/2/2018     7.7     7.7 (2)(17)      
                        15.5     15.5        
                                       
WIRB—Copernicus Group, Inc(21)   Provider of regulatory, ethical, and safety review services for clinical research involving human subjects   First lien senior secured revolving loan       2/8/2018         (2)(19)      
                                       
WSHP FC Acquisition LLC(21)   Provider of biospecimen products   First lien senior secured revolving loan ($2.5 par due 3/2024)   8.94% (Libor + 6.50%/Q)     3/30/2018     2.5     2.5 (2)(17)      
        First lien senior secured loan ($28.6 par due 3/2024)   7.50% (Libor + 6.50%/Q)     3/30/2018     28.6     28.3 (2)(17)      
                        31.1     30.8        
                        2,339.5     2,562.5     35.24 %
                                       
Business Services                                      
1163227 B.C. Ltd(8)(21)   Lab testing services for nicotine containing products   First lien senior secured loan ($20.0 par due 6/2024)   8.00% (Libor + 6.25%/Q)     6/25/2018     19.7     19.9 (2)(17)      
                                       
Accommodations Plus Technologies LLC and Accommodations Plus Technologies Holdings LLC(21)   Provider of outsourced crew accommodations and logistics management solutions to the airline industry   First lien senior secured loan ($12.6 par due 5/2024)   7.12% (Libor + 5.00%/B)     5/11/2018     12.6     12.5 (2)(17)      
        Class A common units (236,358 units)         5/11/2018     4.6     4.6 (2)      
                        17.2     17.1        
                                     

F-135


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Accruent, LLC, Accruent Holding, LLC, Athena Parent, Inc. and Athena SuperHoldco, Inc.(21)   Real estate and facilities management software provider   First lien senior secured loan ($0.4 par due 7/2023)   7.07% (Libor + 4.75%/Q)     5/31/2018     0.4     0.4 (2)(17)      
        First lien senior secured loan ($0.5 par due 7/2023)   7.06% (Libor + 4.75%/Q)     5/31/2018     0.5     0.5 (2)(17)      
        Second lien senior secured loan ($3.5 par due 7/2024)   11.07% (Libor + 8.75%/Q)     7/28/2017     3.5     3.5 (2)(17)      
        Second lien senior secured loan ($85.3 par due 7/2024)   11.07% (Libor + 8.75%/Q)     7/28/2017     85.3     85.3 (2)(17)      
        Senior subordinated loan ($22.5 par due 7/2025)   11.50% PIK     7/28/2017     22.5     22.5 (2)      
        Senior subordinated loan ($80.2 par due 7/2025)   11.50% PIK     7/28/2017     80.2     80.2 (2)      
        Senior subordinated loan ($3.4 par due 7/2025)   11.56% (Libor + 9.25%/Q)     5/31/2018     3.4     3.4 (2)(17)      
        Common stock (3,464 shares)         7/28/2017     3.6     3.6 (2)      
        Warrant to purchase up to 11,380 shares of common stock (expires 7/2037)         7/28/2017         4.1 (2)      
                        199.4     203.5        
                                       
Achilles Acquisition LLC(21)   Benefits broker and outsourced workflow automation platform provider for brokers   First lien senior secured loan ($2.8 par due 6/2023)   8.09% (Libor + 6.00%/M)     6/6/2017     2.8     2.8 (2)(17)      
        First lien senior secured loan ($5.9 par due 6/2023)   8.09% (Libor + 6.00%/M)     2/2/2018     5.9     5.9 (2)(17)      
        First lien senior secured loan ($2.9 par due 6/2023)   8.09% (Libor + 6.00%/M)     6/6/2017     2.9     2.9 (4)(17)      
                        11.6     11.6        
                                       
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC(9)   Retail insurance advisor and brokerage   Membership interests (1.91% interest)         11/18/2016     11.0     14.2 (2)      
        Membership interests (0.95% interest)         11/18/2016     3.7     4.0 (2)      
                        14.7     18.2        
                                       
BeyondTrust Software, Inc.   Management software solutions provider   First lien senior secured loan ($45.9 par due 11/2023)   8.61% (Libor + 6.25%/Q)     11/21/2017     45.2     45.9 (3)(17)      
                                       
Brandtone Holdings Limited(8)   Mobile communications and marketing services provider   First lien senior secured loan ($4.8 par due 11/2018)         5/11/2015     4.5     (2)(16)      
        First lien senior secured loan ($3.2 par due 2/2019)         5/11/2015     2.9     (2)(16)      
        Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)         8/5/2016         (2)      
                        7.4            
                                       
CallMiner, Inc.   Provider of cloud-based conversational analytics solutions   Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)         7/23/2014         (2)      
                                       
Chesapeake Research Review, LLC and Schulman Associates Institutional Review Board, Inc.(21)   Provider of central institutional review boards over clinical trials   First lien senior secured loan ($16.3 par due 11/2023)   8.08% (Libor + 5.75%/Q)     11/7/2017     16.3     16.3 (2)(17)      
                                       
Clearwater Analytics, LLC(21)   Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software   First lien senior secured revolving loan ($0.3 par due 9/2022)   7.08% (Libor + 5.00%/M)     9/1/2016     0.3     0.3 (2)(17)      
                                       
CMW Parent LLC (fka Black Arrow, Inc.)   Multiplatform media firm   Series A units (32 units)         9/11/2015         (2)      

                                     

F-136


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited(7)(8)   Compliance, accounting and tax consulting services provider   Preferred stock (34,028,135 shares)         1/3/2017     2.3     21.5        
        Preferred stock (17,653,253 shares)         1/3/2017     21.6     8.7        
        Preferred stock (3,232,666 shares)         1/3/2017     4.0     4.3        
                        27.9     34.5        
                                       
Command Alkon Incorporated(21)   Software solutions provider to the ready-mix concrete industry   First lien senior secured revolving loan ($1.5 par due 9/2022)   9.00% (Base Rate + 4.00%/M)     9/1/2017     1.5     1.5 (2)(17)(20)      
        First lien senior secured loan ($20.5 par due 9/2023)   6.98% (Libor + 5.00%/M)     9/1/2017     20.5     20.5 (2)(17)      
        Second lien senior secured loan ($33.8 par due 3/2024)   10.98% (Libor + 9.00%/M)     9/1/2017     33.8     33.8 (2)(17)      
                        55.8     55.8        
                                       
Compusearch Software Systems, Inc.   Provider of enterprise software and services for organizations in the public sector   Second lien senior secured loan ($51.0 par due 11/2021)   11.09% (Libor + 8.75%/Q)     1/3/2017     51.0     51.0 (2)(17)      
                                       
Compuware Parent, LLC   Web and mobile cloud performance testing and monitoring services provider   Class A-1 common stock (4,132 units)         12/15/2014     2.3     2.8 (2)      
        Class B-1 common stock (4,132 units)         12/15/2014     0.5     0.6 (2)      
        Class C-1 common stock (4,132 units)         12/15/2014     0.3     0.4 (2)      
        Class A-2 common stock (4,132 units)         12/15/2014         (2)      
        Class B-2 common stock (4,132 units)         12/15/2014         (2)      
        Class C-2 common stock (4,132 units)         12/15/2014         (2)      
                        3.1     3.8        
                                       
Directworks, Inc. and Co-Exprise Holdings, Inc.   Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers   First lien senior secured loan ($1.8 par due 4/2018)         12/19/2014     1.3     0.2 (2)(16)      
        Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)         12/19/2014         (2)      
                        1.3     0.2        
                                       
Doxim Inc.(8)(21)   Enterprise content management provider   First lien senior secured loan ($10.2 par due 2/2024)   8.33% (Libor + 6.00%/Q)     2/28/2018     10.0     10.1 (2)(12)(17)      
                                       
DRB Holdings, LLC(21)   Provider of integrated technology solutions to car wash operators   First lien senior secured loan ($24.0 par due 10/2023)   7.59% (Libor + 5.50%/M)     10/6/2017     24.0     24.0 (2)(17)      
                                       
DTI Holdco, Inc. and OPE DTI Holdings, Inc.(21)   Provider of legal process outsourcing and managed services   First lien senior secured revolving loan ($1.3 par due 9/2021)   6.56% (Libor + 4.50%/M)     9/23/2016     1.3     1.3 (2)(17)      
        First lien senior secured revolving loan ($0.4 par due 9/2021)   6.56% (Libor + 4.50%/M)     9/23/2016     0.4     0.4 (2)(17)      
        First lien senior secured revolving loan ($0.5 par due 9/2021)   6.60% (Libor + 4.50%/M)     9/23/2016     0.5     0.5 (2)(17)      
        Class A common stock (7,500 shares)         8/19/2014     7.5     6.3 (2)      
        Class B common stock (7,500 shares)         8/19/2014         (2)      
                        9.7     8.5        

                                     

F-137


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Emergency Communications Network, LLC(21)   Provider of mission critical emergency mass notification solutions   First lien senior secured loan ($25.3 par due 6/2023)   8.34% (Libor + 6.25%/M)     6/1/2017     25.1     25.0 (2)(17)      
        First lien senior secured loan ($19.8 par due 6/2023)   8.34% (Libor + 6.25%/M)     6/1/2017     19.7     19.7 (4)(17)      
                        44.8     44.7        
                                       
Entertainment Partners, LLC and Entertainment Partners Canada Inc.(21)   Provider of entertainment workforce and production management solutions   First lien senior secured loan ($2.7 par due 5/2022)   7.24% (Libor + 5.50%/Q)     5/8/2017     2.6     2.7 (2)(8)(17)      
        First lien senior secured loan ($2.2 par due 5/2022)   7.25% (Libor + 5.50%/Q)     5/8/2017     2.1     2.2 (2)(8)(17)      
        First lien senior secured loan ($2.7 par due 5/2022)   7.43% (Libor + 5.50%/Q)     5/8/2017     2.6     2.7 (2)(8)(17)      
        First lien senior secured loan ($0.7 par due 5/2023)   8.12% (Libor + 5.75%/Q)     5/8/2017     0.7     0.7 (2)(17)      
        First lien senior secured loan ($26.1 par due 5/2023)   8.12% (Libor + 5.75%/Q)     5/8/2017     26.1     26.1 (3)(17)      
        First lien senior secured loan ($0.6 par due 5/2023)   8.09% (Libor + 5.75%/Q)     5/8/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($22.1 par due 5/2023)   8.09% (Libor + 5.75%/Q)     5/8/2017     22.1     22.1 (3)(17)      
        First lien senior secured loan ($0.7 par due 5/2023)   8.27% (Libor + 5.75%/Q)     5/8/2017     0.7     0.7 (2)(17)      
        First lien senior secured loan ($26.1 par due 5/2023)   8.27% (Libor + 5.75%/Q)     5/8/2017     26.1     26.1 (3)(17)      
                        83.6     83.9        
                                       
First Insight, Inc.   Software company providing merchandising and pricing solutions to companies worldwide   Warrant to purchase up to 122,827 units of Series C preferred stock (expires 3/2024)         3/20/2014         (2)      
                                       
Foundation Risk Partners, Corp.(21)   Full service independent insurance agency   First lien senior secured loan ($6.0 par due 11/2023)   7.07% (Libor + 4.75%/Q)     11/10/2017     6.0     6.0 (2)(17)      
        First lien senior secured loan ($1.8 par due 11/2023)   7.08% (Libor + 4.75%/Q)     11/10/2017     1.8     1.8 (2)(17)      
        First lien senior secured loan ($22.4 par due 11/2023)   7.11% (Libor + 4.75%/Q)     11/10/2017     22.4     22.2 (3)(17)      
        First lien senior secured loan ($0.1 par due 11/2023)   6.84% (Libor + 4.75%/Q)     11/10/2017     0.1     0.1 (3)(17)      
        Second lien senior secured loan ($27.5 par due 11/2024)   10.86% (Libor + 8.50%/Q)     11/10/2017     27.5     27.2 (2)(17)      
                        57.8     57.3        
                                       
GTCR-Ultra Acquisition, Inc. and GTCR-Ultra Holdings, LLC(21)   Provider of payment processing and merchant acquiring solutions   Class A-2 units (911 units)         8/1/2017     0.9     1.0 (2)      
        Class B units (2,878,372 units)         8/1/2017         (2)      
                        0.9     1.0        
                                       
HAI Acquisition Corporation and Aloha Topco, LLC(21)   Professional employer organization offering human resources, compliance and risk management services   First lien senior secured revolving loan ($4.7 par due 11/2023)   8.36% (Libor + 6.00%/Q)     11/1/2017     4.7     4.7 (2)(17)      
        First lien senior secured loan ($16.9 par due 11/2024)   8.36% (Libor + 6.00%/Q)     11/1/2017     16.9     16.7 (2)(17)      
        First lien senior secured loan ($49.9 par due 11/2024)   8.36% (Libor + 6.00%/Q)     11/1/2017     49.9     49.4 (3)(17)      
        Class A units (16,980 units)         11/1/2017     1.7     1.7 (2)      
                        73.2     72.5        
                                       
Help/Systems Holdings, Inc.(21)   Provider of IT operations management and cybersecurity software   First lien senior secured revolving loan ($0.2 par due 3/2023)   5.85% (Libor + 3.75%/M)     3/29/2018     0.2     0.2 (2)(17)      
                                     

F-138


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
IfByPhone Inc.   Voice-based marketing automation software provider   Warrant to purchase up to 124,300 shares of Series C preferred stock (expires 10/2022)         10/15/2012     0.1     0.1 (2)      
                                       
Implementation Management Assistance, LLC(21)   Revenue cycle consulting firm to the healthcare industry   First lien senior secured revolving loan ($1.5 par due 12/2023)   8.00% (Base Rate + 3.00%/Q)     12/13/2017     1.5     1.5 (2)(17)      
        First lien senior secured loan ($17.0 par due 12/2023)   6.83% (Libor + 4.50%/Q)     12/13/2017     17.0     16.9 (2)(17)      
                        18.5     18.4        
                                       
Infogix, Inc. and Infogix Parent Corporation(21)   Enterprise data analytics and integrity software solutions provider   Series A preferred stock (2,475 shares)         1/3/2017     2.5     2.5        
        Common stock (1,297,768 shares)         1/3/2017         0.7        
                        2.5     3.2        
                                       
Inmar, Inc.   Technology-driven solutions provider for retailers, wholesalers and manufacturers   Second lien senior secured loan ($28.3 par due 5/2025)   10.09% (Libor + 8.00%/M)     4/25/2017     27.9     28.3 (2)(17)      
                                       
InterVision Systems, LLC and InterVision Holdings, LLC   Provider of cloud based IT solutions, infrastructure and services   First lien senior secured loan ($9.9 par due 5/2022)   10.18% (Libor + 8.12%/M)     5/31/2017     9.9     9.8 (2)(17)      
        First lien senior secured loan ($24.7 par due 5/2022)   10.14% (Libor + 8.05%/M)     5/31/2017     24.7     24.5 (2)(17)      
        First lien senior secured loan ($10.0 par due 5/2022)   10.14% (Libor + 8.05%/M)     5/31/2017     10.0     9.9 (4)(17)      
        Class A membership units (1,000 units)         5/31/2017     1.0     1.1        
                        45.6     45.3        
                                       
iParadigms Holdings, LLC   Anti-plagiarism software provider to the education market   Second lien senior secured loan ($32.5 par due 7/2022)   9.58% (Libor + 7.25%/Q)     1/3/2017     31.9     32.5 (2)(17)      
                                       
iPipeline, Inc., Internet Pipeline, Inc., iPipeline Limited and iPipeline Holdings, Inc.(21)   Provider of SaaS-based software solutions to the insurance and financial services industry   First lien senior secured loan ($11.8 par due 8/2022)   8.60% (Libor + 6.50%/M)     12/18/2017     11.9     11.8 (2)(8)(17)      
        First lien senior secured loan ($7.5 par due 8/2022)   8.34% (Libor + 6.25%/M)     6/15/2017     7.4     7.5 (2)(17)      
        First lien senior secured loan ($9.0 par due 8/2022)   8.34% (Libor + 6.25%/M)     9/15/2017     9.0     9.0 (2)(17)      
        First lien senior secured loan ($16.2 par due 8/2022)   9.35% (Libor + 7.25%/M)     8/4/2015     16.2     16.2 (3)(17)      
        First lien senior secured loan ($14.5 par due 8/2022)   9.35% (Libor + 7.25%/M)     8/4/2015     14.5     14.5 (4)(17)      
        Preferred stock (1,100 shares)         8/4/2015     1.1     4.0 (2)      
        Common stock (668,781 shares)         8/4/2015         (2)      
                        60.1     63.0        
                                       
IQMS   Provider of enterprise resource planning and manufacturing execution software for small and midsized manufacturers   First lien senior secured loan ($4.0 par due 3/2022)   10.34%
(Libor +
8.25%/M)
    3/28/2017     4.0     4.0 (2)(17)      
        First lien senior secured loan ($18.7 par due 3/2022)   10.34% (Libor + 8.25%/M)     3/28/2017     18.7     18.7 (3)(17)      
        First lien senior secured loan ($14.9 par due 3/2022)   10.34% (Libor + 8.25%/M)     3/28/2017     14.9     14.9 (4)(17)      
                        37.6     37.6        
                                     

F-139


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
LLSC Holdings Corporation (dba Lawrence Merchandising Services)(7)   Marketing services provider   Series A preferred stock (9,000 shares)         1/3/2017     2.0            
        Common stock (1,000 shares)         1/3/2017                
                        2.0            
                                       
Masergy Holdings, Inc.(21)   Provider of software-defined solutions for enterprise global networks, cyber security, and cloud communications   First lien senior secured revolving loan       2/8/2018         (2)(19)      
                                       
Miles 33 (Finance) Limited(7)(8)   Software provider to the regional media industry and magazines   First lien senior secured loan ($3.6 par due 9/2018)   4.00% (EURIBOR +
3.50%M)
    1/3/2017     3.8     4.1     (17 )
        Senior subordinated loan ($15.4 par due 9/2021)   5.00% (EURIBOR +
4.50%/M)
    1/3/2017     11.0     9.1     (17 )
        Preferred stock (19,500,000 shares)         1/3/2017                
        Preferred stock (900,000 shares)         1/3/2017                
        Common stock (600,000 shares)         1/3/2017                
                        14.8     13.2        
                                       
Ministry Brands, LLC and MB Parent HoldCo, L.P. (dba Community Brands)(21)   Software and payment services provider to faith-based institutions   First lien senior secured revolving loan ($3.3 par due 12/2022)   9.00% (Base Rate + 4.00%/Q)     12/2/2016     3.3     3.3 (2)(17)      
        First lien senior secured loan ($4.9 par due 12/2022)   6.10% (Libor + 4.00%/M)     8/22/2017     4.9     4.9 (2)(17)      
        First lien senior secured loan ($10.6 par due 12/2022)   6.10% (Libor + 4.00%/M)     4/6/2017     10.6     10.6 (2)(17)      
        First lien senior secured loan ($14.6 par due 12/2022)   6.10% (Libor + 4.00%/M)     4/6/2017     14.5     14.6 (2)(17)      
        Second lien senior secured loan ($16.6 par due 6/2023)   11.75% (Libor + 9.25%/S)     12/2/2016     16.6     16.6 (2)(17)      
        Second lien senior secured loan ($17.9 par due 6/2023)   11.75% (Libor + 9.25%/S)     8/22/2017     17.9     17.9 (2)(17)      
        Second lien senior secured loan ($4.7 par due 6/2023)   11.75% (Libor + 9.25%/S)     4/6/2017     4.7     4.7 (2)(17)      
        Second lien senior secured loan ($9.2 par due 6/2023)   11.75% (Libor + 9.25%/S)     4/6/2017     9.2     9.2 (2)(17)      
        Second lien senior secured loan ($38.6 par due 6/2023)   10.50% (Libor + 8.00%/S)     4/18/2018     38.6     38.6 (2)(17)      
        Second lien senior secured loan ($90.0 par due 6/2023)   11.75% (Libor + 9.25%/S)     12/2/2016     89.4     90.0 (2)(17)      
        Class A units (500,000 units)         12/2/2016     5.0     6.6 (2)      
                        214.7     217.0        
                                       
MVL Group, Inc.(7)   Marketing research provider   Common stock (560,716 shares)         4/1/2010         (2)      
                                       
NAS, LLC, Nationwide Marketing Group, LLC and Nationwide Administrative Services, Inc.   Buying and marketing services organization for appliance, furniture and consumer electronics dealers   Second lien senior secured loan ($24.1 par due 12/2021)   11.06% (Libor + 8.75%/Q)     6/1/2015     24.1     24.1 (2)(17)      
        Second lien senior secured loan ($7.0 par due 12/2021)   11.11% (Libor + 8.75%/Q)     6/1/2015     7.0     7.0 (2)(17)      
                        31.1     31.1        
                                       
Novetta Solutions, LLC   Provider of advanced analytics solutions for the government, defense and commercial industries   First lien senior secured loan ($12.7 par due 10/2022)   7.10% (Libor + 5.00%/M)     1/3/2017     12.2     11.9 (2)(17)      
        Second lien senior secured loan ($31.0 par due 10/2023)   10.60% (Libor + 8.50%/M)     1/3/2017     28.5     26.4 (2)(17)      
                        40.7     38.3        

                                     

F-140


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
NSM Insurance Group, LLC   Insurance program administrator   First lien senior secured loan ($6.8 par due 5/2024)   6.82% (Libor + 4.50%/Q)     5/11/2018     6.8     6.7 (2)(17)      
        First lien senior secured loan ($13.2 par due 5/2024)   6.86% (Libor + 4.50%/Q)     5/11/2018     13.2     13.1 (2)(17)      
                        20.0     19.8        
                                       
PayNearMe, Inc.   Electronic cash payment system provider   Warrant to purchase up to 195,726 shares of Series E preferred stock (expires 3/2023)         3/14/2016     0.2     (2)      
                                       
PDI TA Holdings, Inc.(21)   Provider of enterprise management software for the convenience retail and petroleum wholesale markets   First lien senior secured loan ($0.4 par due 8/2023)   7.23% (Libor + 4.75%/Q)     4/11/2018     0.4     0.4 (2)(17)      
        First lien senior secured loan ($2.2 par due 8/2023)   6.37% (Libor + 4.75%/Q)     8/25/2017     2.2     2.2 (2)(17)      
        First lien senior secured loan ($2.7 par due 8/2023)   7.11% (Libor + 4.75%/Q)     8/25/2017     2.7     2.7 (2)(17)      
        First lien senior secured loan ($5.1 par due 8/2023)   7.22% (Libor + 4.75%/Q)     8/25/2017     5.1     5.1 (2)(17)      
        First lien senior secured loan ($21.2 par due 8/2023)   7.08% (Libor + 4.75%/Q)     8/25/2017     21.2     21.2 (2)(17)      
        Second lien senior secured loan ($8.2 par due 8/2024)   11.11% (Libor + 8.75%/Q)     8/25/2017     8.2     8.2 (2)(17)      
        Second lien senior secured loan ($1.9 par due 8/2024)   11.23% (Libor + 8.75%/Q)     8/25/2017     1.9     1.9 (2)(17)      
        Second lien senior secured loan ($6.5 par due 8/2024)   10.61% (Libor + 8.75%/Q)     8/25/2017     6.5     6.5 (2)(17)      
        Second lien senior secured loan ($16.7 par due 8/2023)   10.71% (Libor + 8.75%/S)     4/11/2018     16.7     16.7 (2)(17)      
        Second lien senior secured loan ($66.8 par due 8/2024)   11.07% (Libor + 8.75%/Q)     8/25/2017     66.8     66.8 (2)(17)      
                        131.7     131.7        
                                       
PHL Investors, Inc., and PHL Holding Co.(7)   Mortgage services   Class A common stock (576 shares)         7/31/2012     3.8     (2)      
                                       
PHNTM Holdings, Inc. and Planview Parent, Inc.   Provider of project and portfolio management software   First lien senior secured loan ($19.7 par due 1/2023)   7.34% (Libor + 5.25%/M)     1/27/2017     19.5     19.7 (2)(17)      
        First lien senior secured loan ($5.0 par due 1/2023)   7.34% (Libor + 5.25%/M)     1/27/2017     4.9     5.0 (4)(17)      
        First lien senior secured loan ($5.1 par due 1/2023)   7.34% (Libor + 5.25%/M)     12/7/2017     5.1     5.1 (2)(17)      
        Second lien senior secured loan ($62.0 par due 7/2023)   11.84% (Libor + 9.75%/M)     1/27/2017     61.3     62.0 (2)(17)      
        Class A common shares (990 shares)         1/27/2017     1.0     1.2 (2)      
        Class B common shares (168,329 shares)         1/27/2017         0.2 (2)      
                        91.8     93.2        
                                       
Poplicus Incorporated   Business intelligence and market analytics platform for companies that sell to the public sector   Warrant to purchase up to 2,402,991 shares of Series C preferred stock (expires 6/2025)         6/25/2015     0.1     (2)      
                                       
Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.   Provider of data visualization software for data analytics   Class A common shares (7,444.80 shares)         8/22/2016     7.4     7.6 (2)      
        Class B common shares (1,841,608.69 shares)         8/22/2016     0.1     0.1 (2)      
                        7.5     7.7        
                                       
R2 Acquisition Corp.   Marketing services   Common stock (250,000 shares)         5/29/2007     0.3     0.2 (2)      

                                     

F-141


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
SCM Insurance Services Inc.(8)(21)   Provider of claims management, claims investigation & support and risk management solutions for the Canadian property and casualty insurance industry   First lien senior secured revolving loan ($1.8 par due 8/2022)   9.00% (Base Rate + 4.00%/Q)     8/29/2017     1.8     1.7 (2)(17)      
        First lien senior secured loan ($20.4 par due 8/2024)   6.64% (Libor + 5.00%/M)     8/29/2017     21.4     19.9 (2)(17)      
        Second lien senior secured loan ($57.7 par due 3/2025)   10.64% (Libor + 9.00%/M)     8/29/2017     60.5     56.0 (2)(17)      
                        83.7     77.6        
                                       
Sparefoot, LLC(21)   PMS solutions and web services for the self-storage industry.   First lien senior secured revolving loan ($0.3 par due 4/2023)   6.35% (Libor + 4.25%/M)     4/13/2018     0.3     0.3 (2)(17)      
        First lien senior secured loan ($4.7 par due 4/2024)   6.34% (Libor + 4.25%/M)     4/13/2018     4.7     4.7 (2)(17)      
        Second lien senior secured loan ($6.1 par due 4/2025)   10.34% (Libor + 8.25%/M)     4/13/2018     6.0     6.0 (2)(17)      
                        11.0     11.0        
                                       
Sparta Systems, Inc., Project Silverback Holdings Corp. and Silverback Holdings, Inc.(21)   Quality management software provider   Second lien senior secured loan ($20.0 par due 8/2025)   10.34% (Libor + 8.25%/M)     8/21/2017     19.6     19.6 (2)(17)      
        Series B preferred shares (10,084 shares)         8/21/2017     1.1     0.8        
                        20.7     20.4        
                                       
Syntax USA Acquisition Corporation(8)(21)   Provider of cloud ERP hosting and consulting services for Oracle users   First lien senior secured revolving loan ($1.2 par due 4/2021)   6.24% (Libor + 4.25%/Q)     2/8/2018     1.2     1.1 (2)(17)      
                                       
Talari Networks, Inc.   Networking equipment provider   First lien senior secured loan ($6.0 par due 10/2019)   15.30% (Libor + 13.00%/M)     8/3/2015     5.6     6.1 (2)(15)(17)      
        Warrant to purchase up to 421,052 shares of Series D-1 preferred stock (expires 8/2022)         8/3/2015     0.1     (2)      
                        5.7     6.1        
                                       
The Gordian Group, Inc.(21)   Construction software and service provider   First lien senior secured loan ($8.1 par due 7/2019)   6.61% (Libor + 4.25%/Q)     1/3/2017     8.0     8.1 (3)(17)      
        First lien senior secured loan ($0.6 par due 7/2019)   6.61% (Libor + 4.25%/Q)     1/3/2017     0.6     0.6 (4)(17)      
        First lien senior secured loan ($5.9 par due 7/2019)   6.57% (Libor + 4.25%/Q)     1/3/2017     5.8     5.9 (3)(17)      
        First lien senior secured loan ($0.4 par due 7/2019)   6.57% (Libor + 4.25%/Q)     1/3/2017     0.4     0.4 (4)(17)      
        First lien senior secured loan ($8.0 par due 7/2019)   6.58% (Libor + 4.25%/Q)     1/3/2017     8.0     8.0 (3)(17)      
        First lien senior secured loan ($0.6 par due 7/2019)   6.58% (Libor + 4.25%/Q)     1/3/2017     0.6     0.6 (4)(17)      
        Common stock (526 shares)         11/30/2012         (2)      
                        23.4     23.6        

                                     

F-142


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
UL Holding Co., LLC(6)   Provider of collection and landfill avoidance solutions for food waste and unsold food products   Senior subordinated loan ($3.0 par due 5/2020)   10.00% PIK     4/30/2012     1.0     3.0 (2)      
        Senior subordinated loan ($0.4 par due 5/2020)         4/30/2012     0.1     0.4 (2)      
        Senior subordinated loan ($6.5 par due 5/2020)   10.00% PIK     4/30/2012     2.2     6.5 (2)      
        Senior subordinated loan ($0.5 par due 5/2020)         4/30/2012     0.2     0.5 (2)      
        Senior subordinated loan ($25.7 par due 5/2020)   10.00% PIK     4/30/2012     8.7     25.7 (2)      
        Senior subordinated loan ($3.8 par due 5/2020)         4/30/2012     1.3     3.8 (2)      
        Class C common units (758,546 units)         4/25/2008         (2)      
        Class A common units (533,351 units)         6/17/2011     5.0     1.4 (2)      
        Class B-5 common units (272,834 units)         6/17/2011     2.5     0.7 (2)      
        Warrant to purchase up to 719,044 shares of Class A units         5/2/2014         (2)      
        Warrant to purchase up to 28,663 shares of Class B-1 units         5/2/2014         (2)      
        Warrant to purchase up to 57,325 shares of Class B-2 units         5/2/2014         (2)      
        Warrant to purchase up to 29,645 shares of Class B-3 units         5/2/2014         (2)      
        Warrant to purchase up to 80,371 shares of Class B-5 units         5/2/2014         (2)      
        Warrant to purchase up to 59,655 shares of Class B-6 units         5/2/2014         (2)      
        Warrant to purchase up to 1,046,713 shares of Class C units         5/2/2014         (2)      
                        21.0     42.0        
                                       
Velocity Holdings Corp.   Hosted enterprise resource planning application management services provider   Common units (1,713,546 units)         12/13/2013     4.5     3.1        
                                       
Visual Edge Technology, Inc.(21)   Provider of outsourced office solutions with a focus on printer and copier equipment and other parts and supplies   First lien senior secured loan ($6.0 par due 8/2022)   7.75% (Libor + 5.75%/M)     8/31/2017     6.0     6.0 (2)(17)      
        First lien senior secured loan ($0.4 par due 8/2022)   7.65% (Libor + 5.75%/M)     8/31/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($16.8 par due 8/2022)   7.75% (Libor + 5.75%/M)     8/31/2017     16.7     16.8 (2)(17)      
        Senior subordinated loan ($52.5 par due 9/2024)   12.50% PIK     8/31/2017     49.0     52.5 (2)      
        Warrant to purchase up to 1,816,089 shares of common stock (expires 8/2027)         8/31/2017         2.6 (2)      
        Warrant to purchase up to 2,070,511 shares of preferred stock (expires 8/2027)         8/31/2017     3.9     4.1 (2)      
                        76.0     82.4        
                                     

F-143


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
VRC Companies, LLC(21)   Provider of records and information management services   First lien senior secured revolving loan ($0.6 par due 3/2022)   8.59% (Libor + 6.50%/M)     4/17/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($0.3 par due 3/2023)   8.59% (Libor + 6.50%/M)     10/3/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.4 par due 3/2023)   8.59% (Libor + 6.50%/M)     3/13/2018     0.4     0.4 (2)(17)      
                        1.3     1.3        
                                       
WorldPay Group PLC(8)   Payment processing company   C2 shares (73,974 shares)         10/21/2015         (24)      
                                       
Worldwide Facilities, LLC(21)   Specialty insurance wholesale broker   First lien senior secured loan ($0.9 par due 4/2024)   6.55% (Libor + 4.25%/Q)     5/3/2018     0.9     0.9 (2)(17)      
        First lien senior secured loan ($1.6 par due 4/2024)   6.61% (Libor + 4.25%/Q)     5/3/2018     1.6     1.6 (2)(17)      
                        2.5     2.5        
                                       
XIFIN, Inc.(21)   Revenue cycle management provider to labs   First lien senior secured revolving loan ($0.5 par due 11/2020)   8.75% (Base Rate + 3.75%/Q)     2/8/2018     0.5     0.5 (2)(17)(20)      
                                       
Zywave, Inc.(21)   Provider of software and technology-enabled content and analytical solutions to insurance brokers   First lien senior secured revolving loan ($0.5 par due 11/2022)   7.09% (Libor + 5.00%/M)     11/17/2016     0.5     0.5 (2)(17)      
        First lien senior secured revolving loan ($1.9 par due 11/2022)   9.00% (Base Rate + 4.00%/M)     11/17/2016     1.9     1.9 (2)(17)      
        Second lien senior secured loan ($27.0 par due 11/2023)   11.33% (Libor + 9.00%/Q)     11/17/2016     27.0     27.0 (2)(17)      
                        29.4     29.4        
                        1,838.9     1,861.9     25.61 %
                                       
Consumer Products                                      
Badger Sportswear Acquisition, Inc.   Provider of team uniforms and athletic wear   Second lien senior secured loan ($56.8 par due 3/2024)   11.09% (Libor + 9.00%/M)     9/6/2016     56.7     56.8 (2)(17)      
                                       
BRG Sports, Inc.   Designer, manufacturer and licensor of branded sporting goods   Preferred stock (2,009 shares)         1/3/2017                
        Common stock (6,566,655 shares)         1/3/2017         0.4        
                            0.4        
                                       
Consumer Health Parent LLC   Developer and marketer of over-the-counter cold remedy products   Preferred units (1,072 units)         12/15/2017     1.1     1.2 (2)      
        Series A units (1,072 units)         12/15/2017         0.1 (2)      
                        1.1     1.3        
                                       
Feradyne Outdoors, LLC and Bowhunter Holdings, LLC   Provider of branded archery and bowhunting accessories   Common units (421 units)         4/24/2014     4.2     0.9 (2)      
                                       
Implus Footcare, LLC   Provider of footwear and other accessories   First lien senior secured loan ($14.5 par due 4/2021)   8.84% (Libor + 6.75%/M)     6/1/2017     14.5     14.5 (2)(17)      
        First lien senior secured loan ($77.1 par due 4/2021)   8.84% (Libor + 6.75%/M)     6/1/2017     77.1     77.1 (2)(17)      
        First lien senior secured loan ($19.8 par due 4/2021)   8.84% (Libor + 6.75%/M)     6/1/2017     19.8     19.8 (4)(17)      
                        111.4     111.4        

                                     

F-144


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Indra Holdings Corp.   Designer, marketer, and distributor of rain and cold weather products   First lien senior secured loan ($10.0 par due 5/2021)   6.34% (Libor + 4.25%/M)     2/8/2018     6.3     6.5 (2)(17)      
        Second lien senior secured loan ($80.0 par due 11/2021)         5/1/2014     72.0     19.2 (2)(16)      
                        78.3     25.7        
                                       
Plantation Products, LLC, Seed Holdings, Inc. and Flora Parent, Inc.   Provider of branded lawn and garden products   Second lien senior secured loan ($2.0 par due 6/2021)   10.35% (Libor + 7.99%/Q)     12/23/2014     2.0     2.0 (2)(17)      
        Second lien senior secured loan ($54.0 par due 6/2021)   10.35% (Libor + 7.99%/Q)     12/23/2014     53.9     54.0 (3)(17)      
        Second lien senior secured loan ($10.0 par due 6/2021)   10.35% (Libor + 7.99%/Q)     12/23/2014     10.0     10.0 (4)(17)      
        Common stock (30,000 shares)         12/23/2014     3.0     6.0 (2)      
                        68.9     72.0        
                                       
Rug Doctor, LLC and RD Holdco Inc.(7)   Manufacturer and marketer of carpet cleaning machines   Second lien senior secured loan ($16.9 par due 10/2019)   12.18% (Libor + 9.75%/S)     1/3/2017     16.9     16.9 (2)(17)      
        Common stock (458,596 shares)         1/3/2017     14.0     20.3        
        Warrant to purchase up to 56,372 shares of common stock (expires 12/2023)         1/3/2017                
                        30.9     37.2        
                                       
S Toys Holdings LLC (fka The Step2 Company, LLC)(7)   Toy manufacturer   Common units (1,116,879 units)         4/1/2011         0.5        
        Class B common units (126,278,000 units)         10/30/2014         (2)      
        Warrant to purchase up to 3,157,895 units         4/1/2010                
                            0.5        
                                       
SHO Holding I Corporation   Manufacturer and distributor of slip resistant footwear   Second lien senior secured loan ($100.0 par due 4/2023)   10.86% (Libor + 8.50%/Q)     10/27/2015     98.3     88.0 (2)(17)      
                                       
Shock Doctor, Inc. and Shock Doctor Holdings, LLC(6)   Developer, marketer and distributor of sports protection equipment and accessories   Second lien senior secured loan ($89.4 par due 10/2021)   13.36% (Libor + 11.00%/Q)     4/22/2015     89.4     81.4 (2)(17)      
        Class A preferred units (50,000 units)         3/14/2014     5.0     1.4 (2)      
        Class C preferred units (50,000 units)         4/22/2015     5.0     1.4 (2)      
                        99.4     84.2        
                                       
Singer Sewing Company, SVP-Singer Holdings, LLC and SVP-Singer Holdings LP(7)(21)   Manufacturer of consumer sewing machines   First lien senior secured revolving loan ($70.3 par due 3/2023)   11.33% (Libor + 9.00%/Q)     7/26/2017     70.3     70.3 (2)(17)(20)      
        First lien senior secured loan ($178.0 par due 3/2023)   5.00% (Libor + 2.67%/Q)     7/26/2017     174.5     159.3 (2)(17)      
        Class A common units (6,500,000 units)         7/26/2017         (2)      
                        244.8     229.6        
                                     

F-145


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Varsity Brands Holding Co., Inc., Hercules Achievement, Inc., Hercules Achievement Holdings, Inc. and Hercules VB Holdings, Inc.   Leading manufacturer and distributor of textiles, apparel & luxury goods   Second lien senior secured loan ($72.7 par due 12/2025)   10.34% (Libor + 8.25%/M)     12/15/2017     72.7     72.7 (2)(17)      
        Second lien senior secured loan ($50.0 par due 12/2025)   10.34% (Libor + 8.25%/M)     12/15/2017     50.0     50.0 (3)(17)      
        Common stock (3,548,841 shares)         12/11/2014     3.7     9.1 (2)      
        Common stock (3,548,841 shares)         12/11/2014     1.0     9.1 (2)      
                        127.4     140.9        
                                       
Woodstream Group, Inc. and Woodstream Corporation(21)   Pet products manufacturer   First lien senior secured loan ($4.0 par due 5/2022)   8.58% (Libor + 6.25%/Q)     6/21/2017     4.0     4.0 (2)(17)      
        First lien senior secured loan ($8.0 par due 5/2022)   8.58% (Libor + 6.25%/Q)     6/21/2017     8.0     8.0 (4)(17)      
                        12.0     12.0        
                        933.4     860.9     11.84 %
                                       
Financial Services                                      
Callidus Capital Corporation(7)   Asset management services   Common stock (100 shares)         4/1/2010     3.0     1.7        
                                       
Ciena Capital LLC(7)(21)   Real estate and small business loan servicer   First lien senior secured revolving loan ($14.0 par due 9/2018)   6.00%     11/29/2010     14.0     14.0 (2)      
        Equity interests         11/29/2010     25.0     17.8 (2)      
                        39.0     31.8        
                                       
Commercial Credit Group, Inc.   Commercial equipment finance and leasing company   Senior subordinated loan ($28.0 par due 8/2022)   11.73% (Libor + 9.75%/M)     5/10/2012     28.0     28.0 (2)(17)      
                                       
DFC Global Facility Borrower II LLC(21)   Non-bank provider of alternative financial services   First lien senior secured revolving loan ($82.7 par due 9/2022)   12.73% (Libor + 10.75%/M)     9/27/2017     82.7     82.7 (2)(17)      
                                       
Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.(6)   Debt collection services provider   Common stock (180 shares)         1/11/2017         (2)      
                                       
Imperial Capital Group LLC   Investment services   Class A common units (24,945 units)         5/10/2007     6.1     10.5 (2)      
        2006 Class B common units (8,173 units)         5/10/2007         (2)      
                        6.1     10.5        
                                       
Ivy Hill Asset Management, L.P.(7)(9)   Asset management services   Member interest (100.00% interest)         6/15/2009     444.0     520.9        
                                       
Javlin Three LLC, Javlin Four LLC, and Javlin Five LLC(9)   Asset-backed financial services company   First lien senior secured loan ($16.5 par due 6/2017)   5.00%     6/24/2014     16.3     14.1 (2)      
                                       
LS DE LLC and LM LSQ Investors LLC(9)   Asset based lender   Senior subordinated loan ($3.0 par due 6/2021)   10.50%     6/15/2017     3.0     3.0 (2)      
        Senior subordinated loan ($27.0 par due 6/2021)   10.50%     6/25/2015     27.0     27.0 (2)      
        Membership units (3,275,000 units)         6/25/2015     3.3     3.9        
                        33.3     33.9        
                                       
NM GRC HOLDCO, LLC(21)   Regulatory compliance services provider to financial institutions   First lien senior secured loan ($61.1 par due 2/2024)   7.83% (Libor + 5.50%/Q)     2/9/2018     60.6     60.5 (2)(17)      
                                     

F-146


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Payment Alliance International, Inc.(21)   Reseller of ATM process services through 3rd party processing networks   First lien senior secured revolving loan ($2.5 par due 9/2021)   10.05% (Base Rate + 5.05%/M)     2/8/2018     2.5     2.5 (2)(17)      
                                       
Vela Trading Technologies, LLC(21)   Provider of market data software and content to global financial services clients   First lien senior secured revolving loan ($2.0 par due 6/2022)   9.32% (Libor + 7.00%/Q)     2/8/2018     2.0     2.0 (2)(17)      
        First lien senior secured loan ($5.0 par due 6/2022)   9.31% (Libor + 7.00%/Q)     4/17/2018     5.0     4.9 (2)(17)      
                        7.0     6.9        
                        722.5     793.5     10.91 %
                                       
Investment Funds and Vehicles                                      
ACAS Equity Holdings Corporation(7)(9)   Investment company   Common stock (589 shares)         1/3/2017     0.5     0.5        
                                       
ARES 2007-3R(7)(8)(9)   Investment vehicle   Subordinated notes ($20.0 par due 4/2021)         1/3/2017         0.1        
                                       
Blue Wolf Capital Fund II, L.P.(8)(9)   Investment partnership   Limited partnership interest (8.50% interest)         1/3/2017     3.0     3.7 (24)      
                                       
Cent CLO 2014-22 Limited(8)(9)   Investment vehicle   Subordinated notes ($45.4 par due 11/2026)   11.83%     1/3/2017     22.6     25.3        
                                       
Centurion CDO 8 Limited(8)(9)   Investment vehicle   Subordinated notes ($5.0 par due 3/2019)         1/3/2017                
                                       
CGMS 2015-3(8)(9)   Investment vehicle   Subordinated notes ($24.6 par due 7/2028)   9.20%     1/3/2017     18.9     18.7        
                                       
CoLTs 2005-1 Ltd.(7)(8)(9)   Investment vehicle   Preferred shares (360 shares)         1/3/2017                
                                       
CoLTs 2005-2 Ltd.(7)(8)(9)   Investment vehicle   Preferred shares (34,170,000 shares)         1/3/2017                
                                       
CREST Exeter Street Solar 2004-1(8)(9)   Investment vehicle   Preferred shares (3,500,000 shares)         1/3/2017                
                                       
Eaton Vance CDO X plc(8)(9)   Investment vehicle   Subordinated notes ($9.7 par due 2/2027)         1/3/2017         0.3        
                                       
European Capital UK SME Debt LP(7)(8)(9)(22)   Investment partnership   Limited partnership interest (45% interest)         1/3/2017     34.7     34.5        
                                       
Goldentree Loan Opportunities VII, Limited(8)(9)   Investment vehicle   Subordinated notes ($35.3 par due 4/2025)         1/3/2017     7.5     6.9        
                                       
Halcyon Loan Advisors Funding 2015-2 Ltd.(8)(9)   Investment vehicle   Subordinated notes ($21.7 par due 7/2027)   15.90%     1/3/2017     13.6     10.6        
                                       
HCI Equity, LLC(7)(8)(9)   Investment company   Member interest (100.00% interest)         4/1/2010         0.1 (24)      
                                       
Herbert Park B.V.(8)(9)   Investment vehicle   Subordinated notes ($5.4 par due 10/2026)         1/3/2017     0.9            
                                       
Imperial Capital Private Opportunities, LP(9)   Investment partnership   Limited partnership interest (80.00% interest)         5/10/2007         13.0 (2)      
                                       
Montgomery Lane, LLC and Montgomery Lane, Ltd.(7)(8)(9)   Investment company   Common stock (100 shares)         1/3/2017                
        Common stock (50,000 shares)         1/3/2017                
                                   
                                       
OAKC 2015-11(8)(9)   Investment vehicle   Subordinated notes ($17.8 par due 10/2028)   9.00%     1/3/2017     14.3     13.8        

                                     

F-147


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Partnership Capital Growth Fund I, L.P.(9)   Investment partnership   Limited partnership interest (25.00% interest)         6/16/2006         0.1 (2)(24)      
                                       
Partnership Capital Growth Investors III, L.P.(9)(22)   Investment partnership   Limited partnership interest (2.50% interest)         10/5/2011     2.4     4.0 (2)(24)      
                                       
PCG-Ares Sidecar Investment II, L.P.(9)(22)   Investment partnership   Limited partnership interest (100.00% interest)         10/31/2014     6.6     10.6 (2)      
                                       
PCG-Ares Sidecar Investment, L.P.(9)(22)   Investment partnership   Limited partnership interest (100.00% interest)         5/22/2014     4.4     4.2 (2)      
                                       
Piper Jaffray Merchant Banking Fund I, L.P.(9)(22)   Investment partnership   Limited partnership interest (2.00% interest)         8/16/2012     1.6     1.6 (24)      
                                       
Qualium Investissement(8)(9)   Investment partnership   Class A common stock (9,900,000 shares)         1/3/2017     5.2     6.1 (24)      
        Class B common stock (100,000 shares)         1/3/2017     0.1     0.1 (24)      
        Class C common stock (48,939 shares)         1/3/2017     0.1     0.1 (24)      
                        5.4     6.3        
                                       
Senior Direct Lending Program, LLC(7)(9)(23)   Co-investment vehicle   Subordinated certificates ($589.0 par due 12/2036)   10.34%
(Libor +
8.00%/Q)(18)
    7/27/2016     589.0     589.0 (17)      
        Member interest (87.50% interest)         7/27/2016         (17)      
                        589.0     589.0        
                                       
Vitesse CLO, Ltd.(8)(9)   Investment vehicle   Preferred shares (20,000,000 shares)         1/3/2017                
                                       
Voya CLO 2014-4 Ltd.(8)(9)   Investment vehicle   Subordinated notes ($26.7 par due 10/2026)   8.40%     1/3/2017     15.6     16.3        
                                       
VSC Investors LLC(9)   Investment company   Membership interest (1.95% interest)         1/24/2008     0.3     1.2 (2)(24)      
                        741.3     760.8     10.47 %
                                       
Manufacturing                                      
Chariot Acquisition, LLC(21)   Aftermarket golf cart parts and accessories   First lien senior secured loan ($18.3 par due 9/2021)   8.83% (Libor + 6.50%/Q)     1/3/2017     18.1     17.9 (3)(17)      
        First lien senior secured loan ($9.3 par due 9/2021)   8.83% (Libor + 6.50%/Q)     1/3/2017     9.2     9.1 (4)(17)      
                        27.3     27.0        
                                       
Dorner Holding Corp.(21)   Manufacturer of precision unit conveyors   First lien senior secured revolving loan ($0.2 par due 3/2022)   7.84% (Libor + 5.75%/M)     3/15/2017     0.2     0.2 (2)(17)      
                                       
ECI Purchaser Company, LLC   Manufacturer of equipment to safely control pressurized gases   First lien senior secured loan ($21.8 par due 12/2018)   7.75% (Libor + 5.25%/S)     7/26/2017     21.8     21.8 (2)(17)      
        First lien senior secured loan ($88.7 par due 12/2018)   7.72% (Libor + 5.25%/S)     7/26/2017     88.7     88.7 (2)(17)      
        First lien senior secured loan ($74.8 par due 12/2018)   7.72% (Libor + 5.25%/S)     7/26/2017     74.8     74.8 (3)(17)      
        First lien senior secured loan ($0.3 par due 12/2018)   7.75% (Libor + 5.25%/S)     7/26/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2018)   7.75% (Libor + 5.25%/S)     7/26/2017     0.2     0.2 (3)(17)      
                        185.8     185.8        
                                       
ETG Holdings, Inc.(7)   Industrial woven products   Common stock (3,000 shares)         1/3/2017                
                                     

F-148


Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Harvey Tool Company, LLC(21)   Cutting tool provider to the metalworking industry   First lien senior secured revolving loan ($0.9 par due 10/2023)   6.59% (Libor + 4.50%/M)     10/12/2017     0.9     0.9 (2)(17)(20)      
        First lien senior secured loan ($20.7 par due 10/2024)   7.08% (Libor + 4.75%/Q)     10/12/2017     20.7     20.7 (2)(17)      
        First lien senior secured loan ($19.9 par due 10/2024)   7.08% (Libor + 4.75%/Q)     10/12/2017     19.9     19.9 (4)(17)      
        Second lien senior secured loan ($43.7 par due 10/2025)   10.84% (Libor + 8.50%/Q)     10/12/2017     43.7     43.7 (2)(17)      
                        85.2     85.2        
                                       
Ioxus, Inc(6)   Energy storage devices   First lien senior secured loan ($9.7 par due 12/2019)   7.00% Cash, 5.00% PIK     4/29/2014     9.6     9.7 (2)      
        First lien senior secured loan ($1.2 par due 12/2019)         4/29/2014     1.2     1.2 (2)      
        Series CC preferred stock (67,330,609 shares)         1/27/2017     0.7     (2)      
        Warrant to purchase up to 3,038,730 shares of common stock (expires 1/2026)         1/28/2016         (2)      
        Warrant to purchase up to 1,210,235 shares of Series BB preferred stock (expires 8/2026)         8/24/2016         (2)      
        Warrant to purchase up to 336,653,045 shares of Series CC preferred stock (expires 1/2027)         1/27/2017         (2)      
                        11.5     10.9        
                                       
KPS Global LLC   Walk-in cooler and freezer systems   First lien senior secured loan ($1.6 par due 4/2022)   4.56% (Libor + 2.50%/M)     4/5/2017     1.6     1.6 (2)(17)      
        First lien senior secured loan ($10.5 par due 4/2022)   8.94% (Libor + 6.88%/M)     4/5/2017     10.5     10.4 (2)(17)      
        First lien senior secured loan ($5.2 par due 4/2022)   8.94% (Libor + 6.88%/M)     4/5/2017     5.2     5.2 (4)(17)      
                        17.3     17.2        
                                       
MacLean-Fogg Company and MacLean-Fogg Holdings, L.L.C.   Manufacturer and supplier for the power utility and automotive markets worldwide   Senior subordinated loan ($104.5 par due 10/2025)   10.50% Cash, 3.00% PIK     10/31/2013     104.5     104.5 (2)      
        Preferred units (70,183 units)   4.50% Cash, 9.25% PIK     10/9/2015     77.7     77.7        
                        182.2     182.2        
                                       
Medplast Holdings, Inc(21)   Manufacturer of molded plastic and elastomeric parts and assemblies   First lien senior secured revolving loan ($1.7 par due 12/2021)   6.59% (Libor + 4.50%/Q)     2/8/2018     1.7     1.7 (2)(17)      
        First lien senior secured revolving loan ($0.1 par due 12/2021)   8.50% (Base Rate + 3.50%/Q)     2/8/2018     0.1     0.1 (2)(17)      
                        1.8     1.8        
                                       
Nordco Inc.(21)   Railroad maintenance-of-way machinery   First lien senior secured revolving loan       8/26/2015         (2)(19)      
                                       
Pelican Products, Inc.   Flashlights   Second lien senior secured loan ($27.3 par due 5/2026)   9.73% (Libor + 7.75%/M)     5/4/2018     27.1     27.1 (2)(17)      
                                       
Sanders Industries Holdings, Inc. and SI Holdings, Inc.(21)   Elastomeric parts, mid-sized composite structures, and composite tooling   First lien senior secured loan ($54.9 par due 5/2020)   8.81% (Libor + 6.50%/Q)     7/21/2017     54.9     54.9 (2)(17)      
        First lien senior secured loan ($14.4 par due 5/2020)   8.81% (Libor + 6.50%/Q)     7/21/2017     14.4     14.4 (4)(17)      
        Common stock (1,500 shares)         5/30/2014     1.5     1.3 (2)      
                        70.8     70.6        

F-149



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Saw Mill PCG Partners LLC   Metal precision engineered components   Common units (1,000 units)         1/30/2007     1.0     (2)      
                                       
Sonny's Enterprises, LLC(21)   Manufacturer and supplier of car wash equipment, parts and supplies to the conveyorized car wash market   First lien senior secured revolving loan ($0.5 par due 12/2022)   6.59% (Libor + 4.50%/M)     11/30/2017     0.5     0.5 (2)(17)      
                                       
Sunk Rock Foundry Partners LP, Hatteras Electrical Manufacturing Holding Company and Sigma Electric Manufacturing Corporation(21)   Manufacturer of metal castings, precision machined components and sub-assemblies in the electrical products, power transmission and distribution and general industrial markets   First lien senior secured revolving loan ($1.4 par due 10/2022)   7.12% (Libor + 4.75%/Q)     10/31/2017     1.4     1.4 (2)(17)(20)      
        First lien senior secured revolving loan ($1.0 par due 10/2022)   7.20% (Libor + 4.75%/Q)     10/31/2017     1.0     1.0 (2)(17)(20)      
        First lien senior secured loan ($8.2 par due 10/2023)   7.11% (Libor + 4.75%/Q)     10/31/2017     8.2     8.1 (2)(17)      
        First lien senior secured loan ($9.3 par due 10/2023)   7.11% (Libor + 4.75%/Q)     10/31/2017     9.3     9.2 (2)(17)      
                        19.9     19.7        
                                       
TPTM Merger Corp.(21)   Time temperature indicator products   First lien senior secured loan ($13.3 par due 9/2020)   8.83% (Libor + 6.50%/Q)     12/11/2014     13.3     13.3 (3)(17)      
        First lien senior secured loan ($9.9 par due 9/2020)   8.83% (Libor + 6.50%/Q)     12/11/2014     9.9     9.9 (4)(17)      
                        23.2     23.2        
                        653.8     651.4     8.96 %
                                       
Other Services                                      
1A Smart Start, LLC(21)   Provider of ignition interlock devices   First lien senior secured revolving loan ($0.4 par due 8/2020)   6.50% (Libor + 4.50%/M)     2/8/2018     0.4     0.4 (2)(17)(20)      
        First lien senior secured revolving loan ($1.2 par due 8/2020)   6.59% (Libor + 4.50%/M)     2/8/2018     1.2     1.2 (2)(17)(20)      
                        1.6     1.6        
                                       
American Residential Services L.L.C.   Heating, ventilation and air conditioning services provider   Second lien senior secured loan ($67.0 par due 12/2022)   10.09% (Libor + 8.00%/M)     6/30/2014     66.8     63.0 (2)(17)      
                                       
Associated Asphalt Partners, LLC   Provider of asphalt terminalling, storage and distribution   First lien senior secured loan ($4.2 par due 4/2024)   7.34% (Libor + 5.25%/M)     3/30/2017     4.2     3.8 (2)(17)      
                                       
Capstone Logistics Acquisition, Inc.(21)   Outsourced supply chain solutions provider to operators of distribution centers   First lien senior secured revolving loan       2/8/2018         (2)(19)      
                                       
Champion Parent Corporation and Calera XVI, LLC(7)   Endurance sports media and event operator   First lien senior secured loan ($0.7 par due 11/2018)         11/30/2012         (2)(16)      
        First lien senior secured loan ($6.1 par due 11/2018)         11/30/2012     0.8     0.2 (2)(16)      
        Preferred shares (18,875 shares)         3/25/2016         (2)      
        Membership units (2,522,512 units)         11/30/2012         (2)      
        Common shares (114,000 shares)         3/25/2016         (2)      
                        0.8     0.2        
                                     

F-150



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC(6)(21)   Provider of outsourced healthcare linen management solutions   First lien senior secured revolving loan ($0.3 par due 12/2021)   8.82% (Libor + 6.75%/M)     3/13/2014     0.3     0.3 (2)(17)(20)      
        First lien senior secured revolving loan ($3.7 par due 12/2021)   8.84% (Libor + 6.75%/M)     3/13/2014     3.7     3.7 (2)(17)(20)      
        First lien senior secured loan ($11.9 par due 12/2021)   8.84% (Libor + 6.75%/M)     4/6/2017     11.9     11.9 (2)(17)      
        First lien senior secured loan ($1.0 par due 12/2021)   8.80% (Libor + 6.75%/M)     6/12/2018     1.0     1.0 (2)(17)      
        First lien senior secured loan ($5.0 par due 12/2021)   8.84% (Libor + 6.75%/M)     3/13/2014     5.0     5.0 (2)(17)      
        First lien senior secured loan ($5.2 par due 12/2021)   8.84% (Libor + 6.75%/M)     3/13/2014     5.2     5.2 (3)(17)      
        Class A preferred units (2,475,000 units)         3/13/2014     2.5     2.3 (2)      
        Class B common units (275,000 units)         3/13/2014     0.3     2.3 (2)      
                        29.9     31.7        
                                       
Empirix, Inc.(21)   Provider of hardware and software solutions and services for communications network management   First lien senior secured revolving loan       2/8/2018         (2)(19)      
                                       
Magento, Inc.(21)   eCommerce platform provider for the retail industry   First lien senior secured revolving loan       2/8/2018         (2)(19)      
                                       
Massage Envy, LLC and ME Equity LLC(21)   Franchisor in the massage industry   First lien senior secured loan ($1.1 par due 12/2024)   9.08% (Libor + 6.75%/Q)     1/24/2018     1.1     1.1 (2)(17)      
        First lien senior secured loan ($0.6 par due 12/2024)   9.07% (Libor + 6.75%/Q)     1/24/2018     0.6     0.6 (2)(17)      
        First lien senior secured loan ($0.7 par due 12/2024)   9.08% (Libor + 6.75%/M)     1/24/2018     0.7     0.7 (2)(17)      
        First lien senior secured loan ($0.7 par due 12/2024)   9.09% (Libor + 6.75%/M)     1/24/2018     0.7     0.7 (2)(17)      
        First lien senior secured loan ($0.6 par due 9/2020)   9.07% (Libor + 6.75%/Q)     7/27/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($0.5 par due 9/2020)   9.05% (Libor + 6.75%/M)     7/27/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($0.3 par due 9/2020)   9.08% (Libor + 6.75%/Q)     7/27/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.3 par due 9/2020)   9.05% (Libor + 6.75%/Q)     4/12/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.1 par due 9/2020)   9.08% (Libor + 6.75%/Q)     4/12/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($1.0 par due 9/2020)   9.07% (Libor + 6.75%/Q)     4/12/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($38.3 par due 9/2020)   9.06% (Libor + 6.75%/Q)     9/27/2012     38.3     38.3 (3)(17)      
        First lien senior secured loan ($18.6 par due 9/2020)   9.06% (Libor + 6.75%/Q)     9/27/2012     18.6     18.6 (4)(17)      
        Common stock (3,000,000 shares)         9/27/2012     3.0     5.1 (2)      
                        65.8     67.9        
                                       
Mckenzie Sports Products, LLC(21)   Designer, manufacturer and distributor of hunting-related supplies   First lien senior secured loan ($5.5 par due 9/2020)   7.84% (Libor + 5.75%/M)     9/18/2014     5.5     5.5 (3)(11)(17)      
        First lien senior secured loan ($84.5 par due 9/2020)   7.84% (Libor + 5.75%/M)     9/18/2014     84.5     84.5 (3)(11)(17)      
                        90.0     90.0        

                                     

F-151



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
MSHC, Inc.(21)   Heating, ventilation and air conditioning services provider   First lien senior secured revolving loan ($0.9 par due 7/2022)   8.25% (Base Rate + 3.25%/Q)     7/31/2017     0.9     0.9 (2)(17)      
        Second lien senior secured loan ($4.8 par due 7/2024)   10.58% (Libor + 8.25%/Q)     7/31/2017     4.8     4.8 (2)(17)      
        Second lien senior secured loan ($46.0 par due 7/2024)   10.58% (Libor + 8.25%/Q)     7/31/2017     46.0     46.0 (2)(17)      
                        51.7     51.7        
                                       
OpenSky Project, Inc. and OSP Holdings, Inc.   Social commerce platform operator   Warrant to purchase up to 159,496 shares of Series D preferred stock (expires 4/2025)         6/29/2015         (2)      
                                       
Osmose Utilities Services, Inc.(21)   Provider of structural integrity management services to transmission and distribution infrastructure   First lien senior secured revolving loan       1/3/2017         (2)(19)      
        Second lien senior secured loan ($51.4 par due 8/2023)   10.08% (Libor + 7.75%/Q)     9/3/2015     50.7     51.4 (2)(17)      
        Second lien senior secured loan ($34.0 par due 8/2023)   10.08% (Libor + 7.75%/Q)     1/3/2017     33.5     34.0 (2)(17)      
                        84.2     85.4        
                                       
Siteworx Holdings, LLC & Siteworx LLC(21)   Provider of design, web content management, eCommerce solutions and system integration   First lien senior secured revolving loan ($1.4 par due 1/2020)   6.25% (Base Rate + 1.25%/M)     2/16/2018     1.4     1.4 (2)(14)(17)      
        First lien senior secured loan ($3.4 par due 1/2020)   7.83% (Libor + 5.50%/M)     2/16/2018     3.4     3.4 (2)(14)(17)      
                        4.8     4.8        
                                       
SocialFlow, Inc.   Social media optimization platform provider   Warrant to purchase up to 215,331 shares of Series C preferred stock (expires 1/2026)         1/13/2016         (2)      
                                       
SoundCloud Limited(8)   Platform for receiving, sending, and distributing music   Common stock (73,422 shares)         8/15/2017     0.4     0.7 (2)      
                                       
Spin HoldCo Inc.   Laundry service and equipment provider   Second lien senior secured loan ($175.0 par due 5/2023)   9.82% (Libor + 7.50%/Q)     5/14/2013     175.0     175.0 (2)(17)      
                                       
TDG Group Holding Company and TDG Co-Invest, LP(21)   Operator of multiple franchise concepts primarily related to home maintenance or repairs   First lien senior secured loan ($9.4 par due 5/2024)   7.83% (Libor + 5.50%/Q)     5/31/2018     9.4     9.3 (2)(17)      
        Preferred units (2,871,000 units)         5/31/2018     2.9     2.9 (2)      
        Common units (29,000 units)         5/31/2018         (2)      
                        12.3     12.2        
                                       
Tyden Group Holding Corp.(8)   Producer and marketer of global cargo security, product identification and traceability products and utility meter products   Preferred stock (46,276 shares)         1/3/2017     0.4     0.4        
        Common stock (5,521,203 shares)         1/3/2017     2.0     3.9        
                        2.4     4.3        
                                     

F-152



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
VLS Recovery Services, LLC(21)   Provider of commercial and industrial waste processing and disposal services   First lien senior secured revolving loan ($0.5 par due 10/2023)   8.07% (Libor + 6.00%/M)     10/17/2017     0.5     0.5 (2)(17)(20)      
        First lien senior secured revolving loan ($1.1 par due 10/2023)   8.36% (Libor + 6.00%/M)     10/17/2017     1.1     1.1 (2)(17)(20)      
        First lien senior secured revolving loan ($0.5 par due 10/2023)   8.33% (Libor + 6.00%/M)     10/17/2017     0.5     0.5 (2)(17)(20)      
        First lien senior secured loan ($1.3 par due 10/2023)   7.97% (Libor + 6.00%/S)     10/17/2017     1.3     1.3 (2)(17)      
        First lien senior secured loan ($7.2 par due 10/2023)   8.33% (Libor + 6.00%/Q)     10/17/2017     7.2     7.2 (2)(17)      
        First lien senior secured loan ($9.7 par due 10/2023)   8.35% (Libor + 6.00%/Q)     10/17/2017     9.7     9.7 (2)(17)      
                        20.3     20.3        
                                       
WASH Multifamily Acquisition Inc. and Coinamatic Canada Inc.   Laundry service and equipment provider   Second lien senior secured loan ($3.7 par due 5/2023)   9.09% (Libor + 7.00%/M)     5/14/2015     3.7     3.7 (2)(8)(17)      
        Second lien senior secured loan ($21.3 par due 5/2023)   9.09% (Libor + 7.00%/M)     5/14/2015     21.0     21.1 (2)(17)      
                        24.7     24.8        
                        634.9     637.4     8.77 %
Power Generation                                      
Alphabet Energy, Inc.   Technology developer to convert waste-heat into electricity   First lien senior secured loan ($3.5 par due 8/2017)         12/16/2013     3.0     (2)(16)      
        Series 1B preferred stock (12,976 shares)         6/21/2016     0.2     (2)      
        Warrant to purchase up to 125,000 shares of Series 2 preferred stock (expires 12/2023)         6/30/2016     0.1     (2)      
                        3.3            
                                       
CPV Maryland Holding Company II, LLC   Gas turbine power generation facilities operator   Senior subordinated loan ($48.7 par due 12/2020)   6.00% Cash, 5.00% PIK     8/8/2014     48.7     43.3 (2)      
        Warrant to purchase up to 4 units of common stock (expires 8/2018)         8/8/2014         (2)      
                        48.7     43.3        
                                       
DGH Borrower LLC(21)   Developer, owner and operator of quick start, small-scale natural gas-fired power generation projects   First lien senior secured loan ($43.4 par due 6/2023)   8.82% (Libor + 6.50%/Q)     6/8/2018     43.4     43.2 (2)(17)      
                                       
Green Energy Partners, Stonewall LLC and Panda Stonewall Intermediate Holdings II LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($24.8 par due 11/2021)   7.83% (Libor + 5.50%/Q)     11/13/2014     24.7     24.7 (2)(17)      
        Senior subordinated loan ($20.9 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     20.9     20.5 (2)      
        Senior subordinated loan ($97.6 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     97.6     95.6 (2)      
                        143.2     140.8        

                                     

F-153



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Joule Unlimited Technologies, Inc. and Stichting Joule Global Foundation   Renewable fuel and chemical production developer   First lien senior secured loan ($7.8 par due 10/2018)         3/31/2015     5.9     (2)(16)      
        Warrant to purchase up to 32,051 shares of Series C-2 preferred stock (expires 7/2023)         7/25/2013         (2)(8)      
                        5.9            
                                       
Moxie Patriot LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($32.8 par due 12/2020)   8.08% (Libor + 5.75%/Q)     12/19/2013     32.7     32.8 (2)(17)      
                                       
Navisun LLC and Navisun Holdings LLC(7)(21)   Owner and operater of commercial and industrial solar projects   First lien senior secured loan ($17.1 par due 11/2023)   8.00% PIK     11/15/2017     17.1     17.1 (2)      
        Series A preferred units   10.50% PIK     11/15/2017     1.9     1.9 (2)      
        Class A units (550 units)         11/15/2017                
                        19.0     19.0        
                                       
Panda Liberty LLC (fka Moxie Liberty LLC)   Gas turbine power generation facilities operator   First lien senior secured loan ($49.9 par due 8/2020)   8.83% (Libor + 6.50%/Q)     4/6/2018     46.4     46.1 (2)(17)      
        First lien senior secured loan ($34.1 par due 8/2020)   8.83% (Libor + 6.50%/Q)     8/21/2013     34.0     31.6 (2)(17)      
                        80.4     77.7        
                                       
Panda Temple Power, LLC and T1 Power Holdings LLC(6)   Gas turbine power generation facilities operator   Second lien senior secured loan ($9.0 par due 2/2023)   10.05% (Libor + 8.00%/M)     3/6/2015     9.0     9.0 (2)(17)      
        Class A Common units (616,122 shares)         3/6/2015     15.0     10.3 (2)      
                        24.0     19.3        
                                       
PERC Holdings 1 LLC   Operator of recycled energy, combined heat and power, and energy efficiency facilities   Class B common units (21,653,543 units)         10/20/2014     21.7     28.6 (2)      
                                       
Riverview Power LLC   Operator of natural gas and oil fired power generation facilities   First lien senior secured loan ($94.3 par due 12/2022)   10.33% (Libor + 8.00%/Q)     12/29/2016     92.4     94.3 (2)(17)      
                        514.7     499.0     6.86 %
Restaurants and Food Services                                      
ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.(7)(21)   Restaurant owner and operator   First lien senior secured loan ($4.1 par due 12/2018)   20.33% PIK (Libor + 18.00%/Q)     12/22/2016     4.1     4.1 (2)(17)      
        First lien senior secured loan ($54.0 par due 12/2018)         11/27/2006     39.9     8.0 (2)(16)      
        Promissory note ($31.8 par due 12/2023)         11/27/2006     13.8     (2)      
        Warrant to purchase up to 0.95 units of Series D common stock (expires 12/2023)         12/18/2013         (2)      
                        57.8     12.1        
                                       
Cipriani USA Inc.   Manager and operator of banquet facilities, restaurants, hotels and other leisure properties   First lien senior secured loan ($67.1 par due 5/2023)   9.84% (Libor + 7.75%/M)     5/30/2018     67.1     66.4 (2)(17)      

                                     

F-154



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Cozzini Bros., Inc. and BH-Sharp Holdings LP(21)   Provider of commercial knife sharpening and cutlery services in the restaurant industry   First lien senior secured revolving loan ($1.0 par due 3/2023)   7.59% (Libor + 5.50%/M)     3/10/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($6.6 par due 3/2023)   7.59% (Libor + 5.50%/M)     3/10/2017     6.6     6.6 (2)(17)      
        First lien senior secured loan ($11.7 par due 3/2023)   7.59% (Libor + 5.50%/M)     3/10/2017     11.7     11.7 (4)(17)      
        Common units (2,950,000 units)         3/10/2017     3.0     3.0 (2)      
                        22.3     22.3        
                                       
FWR Holding Corporation(21)   Restaurant owner, operator, and franchisor   First lien senior secured revolving loan ($0.7 par due 8/2023)   7.96% (Libor + 6.00%/M)     8/21/2017     0.7     0.7 (2)(17)(20)      
        First lien senior secured loan ($0.3 par due 8/2023)   7.63% (Libor + 6.00%/M)     8/21/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.2 par due 8/2023)   8.44% (Libor + 6.00%/M)     8/21/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($2.0 par due 8/2023)   7.84% (Libor + 6.00%/S)     8/21/2017     2.0     2.0 (2)(17)      
        First lien senior secured loan ($2.0 par due 8/2023)   8.44% (Libor + 6.00%/S)     8/21/2017     2.0     2.0 (2)(17)      
                        5.2     5.2        
                                       
Garden Fresh Restaurant Corp. and GFRC Holdings LLC(21)   Restaurant owner and operator   First lien senior secured revolving loan       2/1/2017         (2)(19)      
        First lien senior secured loan ($24.9 par due 2/2022)   10.07% (Libor + 8.00%/B)     10/3/2013     24.9     24.9 (2)(17)      
                        24.9     24.9        
                                       
Global Franchise Group, LLC(21)   Worldwide franchisor of quick service restaurants   First lien senior secured loan ($8.1 par due 12/2019)   7.84% (Libor + 5.75%/M)     9/15/2017     8.1     8.1 (2)(17)      
                                       
Heritage Food Service Group, Inc. and WCI-HFG Holdings, LLC   Distributor of repair and replacement parts for commercial kitchen equipment   Second lien senior secured loan ($31.6 par due 10/2022)   10.60% (Libor + 8.50%/B)     10/20/2015     31.6     31.6 (2)(17)      
        Preferred units (3,000,000 units)         10/20/2015     3.0     3.6 (2)      
                        34.6     35.2        
                                       
Jim N Nicks Management, LLC(21)   Restaurant owner and operator   First lien senior secured revolving loan ($0.6 par due 7/2023)   7.34% (Libor + 5.25%/M)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured revolving loan ($1.2 par due 7/2023)   7.60% (Libor + 5.25%/M)     7/10/2017     1.2     1.2 (2)(17)      
        First lien senior secured revolving loan ($1.0 par due 7/2023)   7.61% (Libor + 5.25%/M)     7/10/2017     1.0     0.9 (2)(17)      
        First lien senior secured loan ($0.6 par due 7/2023)   7.34% (Libor + 5.25%/M)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($0.6 par due 7/2023)   7.61% (Libor + 5.25%/M)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($14.0 par due 7/2023)   7.34% (Libor + 5.25%/M)     7/10/2017     14.0     13.8 (4)(17)      
                        18.0     17.7        

                                     

F-155



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Orion Foods, LLC(7)   Convenience food service retailer   First lien senior secured loan ($1.2 par due 9/2015)         4/1/2010     1.2     0.4 (2)(16)      
        Second lien senior secured loan ($19.4 par due 9/2015)         4/1/2010         (2)(16)      
        Preferred units (10,000 units)         10/28/2010         (2)      
        Class A common units (25,001 units)         4/1/2010         (2)      
        Class B common units (1,122,452 units)         4/1/2010         (2)      
                        1.2     0.4        
                                       
OTG Management, LLC(21)   Airport restaurant operator   First lien senior secured revolving loan ($1.6 par due 8/2021)   11.33% (Libor + 9.00%/Q)     8/26/2016     1.6     1.6 (2)(17)      
        First lien senior secured revolving loan ($8.4 par due 8/2021)   11.67% (Libor + 9.00%/Q)     8/26/2016     8.4     8.4 (2)(17)      
        First lien senior secured loan ($12.6 par due 8/2021)   11.36% (Libor + 9.00%/Q)     8/26/2016     12.6     12.6 (2)(17)      
        First lien senior secured loan ($2.2 par due 8/2021)   11.37% (Libor + 9.00%/Q)     8/26/2016     2.2     2.2 (2)(17)      
        First lien senior secured loan ($2.5 par due 8/2021)   11.34% (Libor + 9.00%/Q)     8/26/2016     2.5     2.5 (2)(17)      
        First lien senior secured loan ($2.2 par due 8/2021)   11.31% (Libor + 9.00%/Q)     8/26/2016     2.2     2.2 (2)(17)      
        First lien senior secured loan ($1.0 par due 8/2021)   11.32% (Libor + 9.00%/Q)     8/26/2016     1.0     1.0 (2)(17)      
        First lien senior secured loan ($0.9 par due 8/2021)   11.33% (Libor + 9.00%/Q)     8/26/2016     0.9     0.9 (2)(17)      
        First lien senior secured loan ($48.9 par due 8/2021)   11.06% (Libor + 9.00%/B)     8/26/2016     48.9     48.9 (3)(17)      
        First lien senior secured loan ($48.9 par due 8/2021)   11.36% (Libor + 9.00%/B)     8/26/2016     48.9     48.9 (3)(17)      
        Senior subordinated loan ($27.5 par due 2/2022)   17.50% PIK     8/26/2016     27.4     27.5 (2)      
        Class A preferred units (3,000,000 units)         8/26/2016     30.0     37.1 (2)      
        Common units (3,000,000 units)         1/5/2011     3.0     8.5 (2)      
        Warrant to purchase up to 7.73% of common units         6/19/2008     0.1     18.8 (2)      
        Warrant to purchase 0.60% of the common units deemed outstanding (expires 12/2018)         8/29/2016         (2)      
                        189.7     221.1        
                                       
Restaurant Technologies, Inc.(21)   Provider of bulk cooking oil management services to the restaurant and fast food service industries   First lien senior secured revolving loan ($0.1 par due 11/2021)   6.84% (Libor + 4.75%/M)     11/23/2016     0.1     0.1 (2)(17)(20)      
        First lien senior secured revolving loan ($0.5 par due 11/2021)   6.78% (Libor + 4.75%/M)     11/23/2016     0.5     0.5 (2)(17)(20)      
        First lien senior secured revolving loan ($0.7 par due 11/2021)   8.75% (Base Rate + 3.75%/M)     11/23/2016     0.7     0.7 (2)(17)(20)      
                        1.3     1.3        
                                       
SFE Intermediate Holdco LLC(21)   Provider of outsourced foodservice to K-12 school districts   First lien senior secured loan ($6.7 par due 7/2023)   7.36% (Libor + 5.00%/Q)     7/31/2017     6.7     6.7 (4)(17)      

                                     

F-156



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Spectra Finance, LLC(21)   Venue management and food and beverage provider   First lien senior secured revolving loan ($6.7 par due 4/2023)   6.00% (Libor + 4.00%/M)     4/2/2018     6.7     6.6 (2)(17)(20)      
        First lien senior secured loan ($19.1 par due 4/2024)   6.83% (Libor + 4.50%/Q)     4/2/2018     19.1     18.9 (2)(17)      
                        25.8     25.5        
                        462.7     446.9     6.15 %
Education                                      
Campus Management Acquisition Corp.(6)   Education software developer   Preferred stock (485,159 shares)         2/8/2008     10.5     10.7 (2)      
                                       
Excelligence Holdings Corp.   Developer, manufacturer and retailer of educational products   First lien senior secured loan ($9.9 par due 4/2023)   8.09% (Libor + 6.00%/M)     4/17/2017     9.9     8.9 (4)(17)      
                                       
Flinn Scientific, Inc. and WCI-Quantum Holdings, Inc.   Distributor of instructional products, services and resources   First lien senior secured loan ($33.6 par due 10/2020)   6.94% (Libor + 5.00%/S)     7/26/2017     33.6     33.6 (2)(17)      
        First lien senior secured loan ($27.9 par due 10/2020)   7.45% (Libor + 5.00%/S)     7/26/2017     27.9     27.9 (2)(17)      
        Series A preferred stock (1,272 shares)         10/24/2014     1.0     1.3 (2)      
                        62.5     62.8        
                                       
Frontline Technologies Group Holding LLC, Frontline Technologies Blocker Buyer, Inc., Frontline Technologies Holdings, LLC and Frontline Technologies Parent, LLC(21)   Provider of human capital management ("HCM") and SaaS-based software solutions to employees and administrators of K-12 school organizations   First lien senior secured loan ($19.5 par due 9/2023)   8.59% (Libor + 6.50%/M)     9/19/2017     19.2     19.3 (2)(17)      
        Class A preferred units (4,574 units)         9/18/2017     4.6     3.6        
        Class B common units         9/18/2017                
                        23.8     22.9        
                                       
Infilaw Holding, LLC(21)   Operator of for-profit law schools   First lien senior secured revolving loan ($2.0 par due 2/2018)         8/25/2011     1.2     (2)(16)(20)      
                                       
Instituto de Banca y Comercio, Inc. & Leeds IV Advisors, Inc.(21)   Private school operator   First lien senior secured revolving loan ($9.9 par due 2/2019)   13.00% (Base Rate + 8.00%/S)     5/18/2017     9.9     9.9 (2)(17)      
        First lien senior secured loan ($3.4 par due 2/2019)   10.50% PIK (Libor + 9.00%/Q)     10/31/2015     3.4     3.4 (2)(17)      
        Senior preferred series A-1 shares (163,902 shares)         10/31/2015     119.4     14.8 (2)      
        Series B preferred stock (1,401,385 shares)         8/5/2010     4.0     (2)      
        Series C preferred stock (1,994,644 shares)         6/7/2010     0.5     (2)      
        Series B preferred stock (348,615 shares)         8/5/2010     1.0     (2)      
        Series C preferred stock (517,942 shares)         6/7/2010     0.1     (2)      
        Common stock (16 shares)         6/7/2010         (2)      
        Common stock (4 shares)         6/7/2010         (2)      
                        138.3     28.1        
                                       
Liaison Acquisition, LLC(21)   Provider of centralized applications services to educational associations   Second lien senior secured loan ($15.0 par due 8/2023)   11.31% (Libor + 9.25%/M)     2/9/2017     14.7     15.0 (2)(17)      
                                     

F-157



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
PIH Corporation and Primrose Holding Corporation(6)(21)   Franchisor of education-based early childhood centers   First lien senior secured revolving loan ($1.0 par due 12/2018)   7.63% (Libor + 5.50%/M)     12/13/2013     1.0     1.0 (2)(17)      
        First lien senior secured loan ($1.6 par due 12/2020)   7.60% (Libor + 5.50%/M)     12/15/2017     1.6     1.6 (2)(17)      
        Common stock (7,227 shares)         1/3/2017     10.7     21.0        
                        13.3     23.6        
                                       
R3 Education Inc., Equinox EIC Partners LLC and Sierra Education Finance Corp.   Medical school operator   Preferred stock (1,977 shares)         7/30/2008     0.5     0.5 (2)      
        Common membership interest (15.76% interest)         9/21/2007     15.8     21.2 (2)      
        Warrant to purchase up to 27,890 shares (expires 11/2019)         12/8/2009         11.8 (2)      
                        16.3     33.5        
                                       
Regent Education, Inc.   Provider of software solutions designed to optimize the financial aid and enrollment processes   Warrant to purchase up to 987 shares of common stock (expires 12/2026)         12/23/2016         (2)      
        Warrant to purchase up to 5,393,194 shares of common stock (expires 12/2026)         12/23/2016         (2)      
                                   
                                       
RuffaloCODY, LLC(21)   Provider of student fundraising and enrollment management services   First lien senior secured revolving loan       5/29/2013         (2)(19)      
                                     

F-158



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Severin Acquisition, LLC(21)   Provider of student information system software solutions to the K-12 education market   First lien senior secured revolving loan ($1.2 par due 7/2021)   7.09% (Libor + 4.75%/Q)     7/31/2015     1.2     1.2 (2)(17)      
        First lien senior secured revolving loan ($0.6 par due 7/2021)   7.06% (Libor + 4.75%/Q)     7/31/2015     0.6     0.6 (2)(17)      
        Second lien senior secured loan ($38.7 par due 7/2022)   11.11% (Libor + 8.75%/Q)     2/1/2017     38.0     38.7 (2)(17)      
        Second lien senior secured loan ($4.2 par due 7/2022)   11.11% (Libor + 8.75%/Q)     10/28/2015     4.1     4.2 (2)(17)      
        Second lien senior secured loan ($3.1 par due 7/2022)   11.36% (Libor + 9.00%/Q)     10/14/2016     3.1     3.1 (2)(17)      
        Second lien senior secured loan ($15.0 par due 7/2022)   11.11% (Libor + 8.75%/Q)     7/31/2015     14.8     15.0 (2)(17)      
        Second lien senior secured loan ($3.3 par due 7/2022)   11.61% (Libor + 9.25%/Q)     2/1/2016     3.2     3.3 (2)(17)      
        Second lien senior secured loan ($2.8 par due 7/2022)   11.61% (Libor + 9.25%/Q)     8/8/2016     2.8     2.8 (2)(17)      
        Second lien senior secured loan ($80.0 par due 7/2026)   9.34% (Libor + 7.00%/M)     6/12/2018     79.2     79.2 (2)(17)      
        Second lien senior secured loan ($5.5 par due 7/2022)   11.11% (Libor + 8.75%/Q)     1/3/2017     5.5     5.5 (2)(17)      
        Second lien senior secured loan ($3.1 par due 7/2022)   11.36% (Libor + 9.00%/Q)     1/3/2017     3.1     3.1 (2)(17)      
        Second lien senior secured loan ($20.0 par due 7/2022)   11.11% (Libor + 8.75%/Q)     1/3/2017     20.0     20.0 (2)(17)      
        Second lien senior secured loan ($4.4 par due 7/2022)   11.61% (Libor + 9.25%/Q)     1/3/2017     4.4     4.4 (2)(17)      
        Second lien senior secured loan ($2.8 par due 7/2022)   11.61% (Libor + 9.25%/Q)     1/3/2017     2.8     2.8 (2)(17)      
                        182.8     183.9        
                        473.3     389.4     5.36 %
Food and Beverage                                      
American Seafoods Group LLC and American Seafoods Partners LLC   Harvester and processor of seafood   Second lien senior secured loan ($66.2 par due 2/2024)   10.22% (Libor + 8.13%/M)     8/21/2017     66.0     66.2 (2)(17)      
        Class A units (77,922 units)         8/19/2015     0.1     0.1 (2)      
        Warrant to purchase up to 7,422,078 Class A units (expires 8/2035)         8/19/2015     7.4     10.3 (2)      
                        73.5     76.6        
                                       
CHG PPC Parent LLC   Diversified food products manufacturer   Second lien senior secured loan ($60.5 par due 3/2026)   9.59% (Libor + 7.50%/M)     3/30/2018     60.5     59.9 (2)(17)      
                                       
DecoPac, Inc.(21)   Supplier of cake decorating solutions and products to in-store bakeries   First lien senior secured revolving loan ($0.2 par due 9/2023)   6.42% (Libor + 4.25%/B)     9/29/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.6 par due 9/2023)   6.58% (Libor + 4.25%/B)     9/29/2017     0.6     0.6 (2)(17)      
                        0.8     0.8        
                                       
Edward Don & Company, LLC and VCP-EDC Co-Invest, LLC   Distributor of foodservice equipment and supplies   First lien senior secured loan ($47.4 par due 9/2022)   12.50% (Base Rate + 7.50%/Q)     3/31/2017     47.4     47.4 (2)(17)      
        First lien senior secured loan ($17.6 par due 9/2022)   10.50% (Libor + 8.50%/M)     1/5/2018     17.6     17.6 (2)(17)      
        Membership units (2,970,000 units)         6/9/2017     3.0     4.8        
                        68.0     69.8        
                                     

F-159



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Ferraro Fine Foods Corp. and Italian Fine Foods Holdings L.P.(21)   Specialty Italian food distributor   First lien senior secured revolving loan ($0.3 par due 5/2023)   6.35% (Libor + 4.25%/M)     5/9/2018     0.3     0.3 (2)(17)      
        First lien senior secured revolving loan ($1.3 par due 5/2023)   6.62% (Libor + 4.25%/M)     5/9/2018     1.3     1.3 (2)(17)      
        First lien senior secured loan ($9.4 par due 5/2024)   6.62% (Libor + 4.25%/Q)     5/9/2018     9.4     9.3 (2)(17)      
        Class A common units (2,724,000 units)         5/9/2018     2.7     2.7 (2)      
                        13.7     13.6        
                                       
FPI Holding Corporation(7)(21)   Distributor of fruits   First lien senior secured loan ($0.7 par due 6/2018)         1/3/2017     0.4     (16)      
                                       
Gehl Foods, LLC and GF Parent LLC   Producer of low-acid, aseptic food and beverage products   Class A preferred units (2,940 units)         5/13/2015     2.9     0.3 (2)      
        Class A common units (60,000 units)         5/13/2015     0.1     (2)      
        Class B common units (0.26 units)         5/13/2015         (2)      
                        3.0     0.3        
                                       
JWC/KI Holdings, LLC   Foodservice sales and marketing agency   Membership units (5,000 units)         11/16/2015     5.0     4.7 (2)      
                                       
Kettle Cuisine, LLC   Manufacturer of fresh refrigerated and frozen food products   Second lien senior secured loan ($28.5 par due 2/2022)   11.84% (Libor + 9.75%/M)     8/21/2015     28.5     28.5 (2)(17)      
                                       
NECCO Holdings, Inc. and New England Confectionery Company, Inc.(7)(21)   Producer and supplier of candy   First lien senior secured revolving loan ($19.9 par due 1/2018)         1/3/2017     7.9     2.9 (16)      
        First lien senior secured loan ($1.7 par due 8/2018)         11/20/2017     1.7     (16)      
        First lien senior secured loan ($11.6 par due 1/2018)         1/3/2017     0.9     1.6 (16)      
        First lien senior secured loan ($0.7 par due 11/2018)         11/20/2017     0.7     0.1 (16)      
        Common stock (860,189 shares)         1/3/2017                
                        11.2     4.6        
                                       
PCM Bmark, Inc. and BakeMark Holdings, Inc.   Manufacturer and distributor of specialty bakery ingredients   First lien senior secured loan ($0.8 par due 8/2023)   7.30% (Libor + 5.25%/M)     5/9/2018     0.8     0.8 (2)(17)      
                                       
RF HP SCF Investor, LLC(9)   Branded specialty food company   Membership interest (10.08% interest)         12/22/2016     12.5     15.2 (2)      
                                     

F-160



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Teasdale Foods, Inc.(21)   Provider of beans, sauces and hominy to the retail, foodservice and wholesale channels   First lien senior secured revolving loan ($0.4 par due 10/2020)   6.81% (Libor + 4.75%/M)     6/30/2017     0.4     0.4 (2)(17)      
        First lien senior secured revolving loan ($0.1 par due 10/2020)   8.75% (Base Rate + 3.75%/M)     6/30/2017     0.1     0.1 (2)(17)      
        ($0.6 par due 10/2020)   7.09% (Libor + 4.75%/M)     6/27/2018     0.6     0.6 (2)(17)      
        Second lien senior secured loan ($33.6 par due 10/2021)   10.84% (Libor + 8.75%/M)     1/3/2017     33.6     32.6 (2)(17)      
        Second lien senior secured loan ($31.5 par due 10/2021)   10.84% (Libor + 8.75%/M)     1/3/2017     31.5     30.6 (2)(17)      
        Second lien senior secured loan ($21.3 par due 10/2021)   10.84% (Libor + 8.75%/M)     1/3/2017     21.3     20.6 (2)(17)      
                        87.5     84.9        
                        365.4     359.7     4.95 %
Oil and Gas                                      
Penn Virginia Holding Corp.   Exploration and production company   Second lien senior secured loan ($90.1 par due 9/2022)   9.10% (Libor + 7.00%/M)     9/28/2017     90.1     90.1 (2)(17)      
                                       
Petroflow Energy Corporation and TexOak Petro Holdings LLC(6)   Oil and gas exploration and production company   First lien senior secured loan ($10.9 par due 6/2019)   9.98% (Libor + 8.00%/M)     6/29/2016     9.7     9.8 (2)(17)      
        Second lien senior secured loan ($25.6 par due 12/2019)         6/29/2016     21.9     (2)(16)      
        Common units (202,000 units)         6/29/2016     11.1            
                        42.7     9.8        
                                       
Sundance Energy, Inc.   Oil and gas producer   Second lien senior secured loan ($60.7 par due 4/2023)   10.37% (Libor + 8.00%/Q)     4/23/2018     59.5     60.1 (2)(17)      
                                       
VPROP Operating, LLC and Vista Proppants and Logistics, LLC   Sand-based proppant producer and distributor to the oil and natural gas industry   First lien senior secured loan ($28.4 par due 8/2021)   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)     8/1/2017     28.2     28.4 (2)(17)      
        First lien senior secured loan ($35.4 par due 8/2021)   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)     11/9/2017     35.4     35.4 (2)(17)      
        First lien senior secured loan ($15.2 par due 3/2021)   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)     3/1/2017     15.2     15.2 (2)(17)      
        First lien senior secured loan ($75.9 par due 3/2021)   11.38% (Libor + 8.50% Cash, 1.00% PIK/Q)     3/1/2017     75.9     75.9 (3)(17)      
        Common units (997,864 units)         11/9/2017     9.7     11.6 (2)      
                        164.4     166.5        
                        356.7     326.5     4.49 %
Automotive Services                                      
A.U.L. Corp.(21)   Provider of vehicle service contracts ("VSCs") and limited warranties for passenger vehicles   First lien senior secured loan ($7.7 par due 6/2023)   7.13% (Libor + 5.00%/M)     6/7/2017     7.7     7.7 (2)(17)      
                                       
AEP Holdings, Inc. and Arrowhead Holdco Company   Distributor of non-discretionary, mission-critical aftermarket replacement parts   First lien senior secured loan ($44.3 par due 8/2021)   7.92% (Libor + 5.75%/B)     6/28/2018     43.5     44.3 (2)(17)      
        Common stock (3,467 shares)         8/31/2015     3.5     4.1 (2)      
                        47.0     48.4        
                                       
ChargePoint, Inc.   Developer and operator of electric vehicle charging stations   Warrant to purchase up to 809,126 shares of Series E preferred stock (expires 12/2024)         12/30/2014     0.3     2.1 (2)      
                                     

F-161



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Dent Wizard International Corporation and DWH Equity Investors, L.P.   Automotive reconditioning services   Second lien senior secured loan ($50.0 par due 10/2020)   10.08% (Libor + 8.00%/M)     4/7/2015     50.0     50.0 (2)(17)      
        Class A common stock (10,000 shares)         4/7/2015     0.2     0.4 (2)      
        Class B common stock (20,000 shares)         4/7/2015     0.4     0.9 (2)      
                        50.6     51.3        
                                       
Eckler Industries, Inc. and Eckler Purchaser LLC(7)(21)   Restoration parts and accessories provider for classic automobiles   First lien senior secured loan ($17.2 par due 5/2022)         7/12/2012     17.0     17.2 (2)(16)      
        Class A preferred units (67,972 units)         7/12/2012     15.9     1.0 (2)      
        Class A common units (67,972 units)         7/12/2012     0.5     (2)      
                        33.4     18.2        
                                       
ESCP PPG Holdings, LLC(6)   Distributor of new equipment and aftermarket parts to the heavy-duty truck industry   Class A units (3,500,000 units)         12/14/2016     3.5     2.5 (2)      
                                       
Mavis Tire Express Services Corp. and Mavis Tire Express Services TopCo, L.P.(21)   Auto parts retailer   Second lien senior secured loan ($0.5 par due 3/2026)   9.58% (Libor + 7.50%/M)     3/20/2018     0.5     0.5 (2)(17)      
        Second lien senior secured loan ($109.4 par due 3/2026)   9.58% (Libor + 7.50%/M)     3/20/2018     107.1     108.3 (2)(17)      
        Class A units (12,400,000 units)         3/20/2018     12.4     12.5 (2)      
                        120.0     121.3        
                                       
Simpson Performance Products, Inc.   Provider of motorsports safety equipment   First lien senior secured loan ($10.0 par due 2/2020)   9.89% (Libor + 7.56%/Q)     2/20/2015     10.0     10.0 (2)(17)      
        First lien senior secured loan ($18.3 par due 2/2020)   9.89% (Libor + 7.56%/Q)     2/20/2015     18.3     18.3 (3)(17)      
                        28.3     28.3        
                                       
SK SPV IV, LLC   Collision repair site operators   Series A common stock (12,500 units)         8/18/2014     0.6     2.5 (2)      
        Series B common stock (12,500 units)         8/18/2014     0.6     2.5 (2)      
                        1.2     5.0        
                        292.0     284.8     3.92 %
Wholesale Distribution                                      
DFS Holding Company, Inc.   Distributor of maintenance, repair, and operations parts, supplies, and equipment to the foodservice industry   First lien senior secured loan ($4.6 par due 2/2022)   7.09% (Libor + 5.00%/M)     3/1/2017     4.6     4.5 (2)(17)      
        First lien senior secured loan ($105.4 par due 2/2022)   7.59% (Libor + 5.50%/M)     7/26/2017     105.4     103.3 (2)(17)      
        First lien senior secured loan ($74.8 par due 2/2022)   7.59% (Libor + 5.50%/M)     7/26/2017     74.8     73.3 (3)(17)      
                        184.8     181.1        
                                       
KHC Holdings, Inc. and Kele Holdco, Inc.(21)   Catalog-based distribution services provider for building automation systems   First lien senior secured revolving loan ($2.5 par due 10/2020)   6.35% (Libor + 4.25%/M)     1/3/2017     2.5     2.5 (2)(17)      
        First lien senior secured loan ($66.1 par due 10/2022)   8.33% (Libor + 6.00%/Q)     1/3/2017     66.1     66.1 (3)(17)      
        Common stock (30,000 shares)         1/3/2017     3.1     3.0        
                        71.7     71.6        
                                     

F-162



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
PetIQ, LLC   Distributor and manufacturer of pet prescription medications and health products   First lien senior secured revolving loan ($18.0 par due 1/2023)   7.23% (Libor + 5.25%/M)     1/17/2018     18.0     18.0 (2)(17)      
                        274.5     270.7     3.72 %
Containers and Packaging                                      
GS Pretium Holdings, Inc.   Manufacturer and supplier of high performance plastic containers   Common stock (500,000 shares)         6/2/2014     0.5     0.7 (2)      
                                       
ICSH Parent, Inc. and Vulcan Container Services Holdings, Inc.   Industrial container manufacturer, reconditioner and servicer   Second lien senior secured loan ($63.6 par due 4/2025)   10.09% (Libor + 8.00%/M)     4/28/2017     63.0     64.3 (2)(17)      
        Series A common stock (24,900 shares)         4/28/2017     2.5     4.8 (2)      
                        65.5     69.1        
                                       
LBP Intermediate Holdings LLC(21)   Manufacturer of paper and corrugated foodservice packaging   First lien senior secured revolving loan ($0.2 par due 7/2020)   7.84% (Libor + 5.50%/Q)     7/10/2015     0.2     0.2 (2)(17)(20)      
        First lien senior secured loan ($11.8 par due 7/2020)   7.83% (Libor + 5.50%/Q)     7/10/2015     11.8     11.8 (3)(17)      
        First lien senior secured loan ($5.0 par due 7/2020)   7.83% (Libor + 5.50%/Q)     7/10/2015     5.0     5.0 (4)(17)      
                        17.0     17.0        
                                       
Microstar Logistics LLC, Microstar Global Asset Management LLC, and MStar Holding Corporation   Keg management solutions provider   Second lien senior secured loan ($78.5 par due 7/2019)   9.59% (Libor + 7.50%/M)     12/14/2012     78.5     78.5 (2)(17)      
        Second lien senior secured loan ($54.0 par due 7/2019)   9.59% (Libor + 7.50%/M)     12/14/2012     54.0     54.0 (3)(17)      
        Second lien senior secured loan ($10.0 par due 7/2019)   9.59% (Libor + 7.50%/M)     12/14/2012     10.0     10.0 (4)(17)      
        Common stock (54,710 shares)         12/14/2012     4.9     7.7 (2)      
                        147.4     150.2        
                                       
NSI Holdings, Inc.(6)   Manufacturer of plastic containers for the wholesale nursery industry   Series A preferred stock (2,192 shares)         1/3/2017                
                                       
Ranpak Corp.   Manufacturer and marketer of paper-based protective packaging systems and materials   Second lien senior secured loan ($8.0 par due 10/2022)   9.34% (Libor + 7.25%/M)     1/3/2017     7.7     8.0 (2)(17)      
                        238.1     245.0     3.37 %
Aerospace and Defense                                      
Cadence Aerospace, LLC(21)   Aerospace precision components manufacturer   First lien senior secured revolving loan       11/14/2017         (2)(19)      
        First lien senior secured loan ($32.3 par due 11/2023)   8.86% (Libor + 6.50%/Q)     11/14/2017     32.0     32.3 (2)(17)      
                        32.0     32.3        
                                       
Jazz Acquisition, Inc.   Designer and distributor of aftermarket replacement components to the commercial airlines industry   Second lien senior secured loan ($25.0 par due 6/2022)   9.08% (Libor + 6.75%/Q)     1/3/2017     20.2     23.0 (2)(17)      
                                       
MB Aerospace Holdings II Corp.   Aerospace engine components manufacturer   Second lien senior secured loan ($68.4 par due 1/2026)   10.83% (Libor + 8.50%/Q)     1/22/2018     68.4     68.4 (2)(17)      
                        120.6     123.7     1.70 %
Environmental Services                                      
MPH Energy Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (3.13% interest)         1/8/2014         (2)      
                                     

F-163



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
RE Community Holdings GP, LLC and RE Community Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (2.86% interest)         3/1/2011         (2)      
        Limited partnership interest (2.49% interest)         3/1/2011         (2)      
                                   
                                       
Soil Safe, Inc. and Soil Safe Acquisition Corp.(7)(21)   Provider of soil treatment, recycling and placement services   First lien senior secured revolving loan       1/3/2017         (2)(19)      
        First lien senior secured loan ($20.0 par due 1/2020)   8.34% (Libor + 6.25%/M)     1/3/2017     20.0     20.0 (2)(17)      
        Second lien senior secured loan ($12.7 par due 6/2020)   10.75% (Libor + 7.75%/M)     1/3/2017     12.7     12.7 (2)(17)      
        Senior subordinated loan ($39.9 par due 12/2020)   16.50% PIK     1/3/2017     39.9     39.9 (2)      
        Senior subordinated loan ($33.9 par due 12/2020)   14.50% PIK     1/3/2017     33.9     33.9 (2)      
        Senior subordinated loan ($33.3 par due 12/2020)         1/3/2017     11.5     6.3 (2)(16)      
        Common stock (810 shares)         1/3/2017                
                        118.0     112.8        
                        118.0     112.8     1.55 %
Printing, Publishing and Media                                      
Capital Sports Holdings Inc.(8)   Owner and operator of a National Hockey League team   Second lien senior secured loan ($15.2 par due 6/2024)   7.00% (CDOR + 5.25%/Q)     6/22/2018     14.7     15.1 (2)(17)      
                                       
Connoisseur Media, LLC   Owner and operator of radio stations   First lien senior secured loan ($19.8 par due 6/2019)   8.71% (Libor + 6.38%/Q)     7/26/2017     19.8     19.8 (2)(17)      
        First lien senior secured loan ($34.6 par due 6/2019)   8.73% (Libor + 6.38%/Q)     7/26/2017     34.6     34.6 (2)(17)      
        First lien senior secured loan ($14.8 par due 6/2019)   8.73% (Libor + 6.38%/Q)     7/26/2017     14.8     14.8 (4)(17)      
                        69.2     69.2        
                                       
Earthcolor Group, LLC   Printing management services   Limited liability company interests (9.30%)         5/18/2012                
                                       
Roark-Money Mailer LLC   Marketer, advertiser and distributor of coupons in the mail industry   Membership units (35,000 units)         1/3/2017                
                                       
The Teaching Company Holdings, Inc.   Education publications provider   Preferred stock (10,663 shares)         9/29/2006     1.1     1.2 (2)      
        Common stock (15,393 shares)         9/29/2006         (2)      
                        1.1     1.2        
                        85.0     85.5     1.18 %
Chemicals                                      
AMZ Holding Corp.(21)   Specialty chemicals manufacturer   First lien senior secured loan ($0.1 par due 6/2022)   9.00% (Base Rate + 4.00%/Q)     6/27/2017     0.1     0.1 (4)(17)      
        First lien senior secured loan ($12.1 par due 6/2022)   7.09% (Libor + 5.00%/Q)     6/27/2017     12.1     12.1 (4)(17)      
                        12.2     12.2        
                                       
Genomatica, Inc.   Developer of a biotechnology platform for the production of chemical products   Warrant to purchase 322,422 shares of Series D preferred stock (expires 3/2023)         3/28/2013         (2)      
                                     

F-164



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
K2 Pure Solutions Nocal, L.P.(21)   Chemical producer   First lien senior secured revolving loan ($1.5 par due 2/2021)   9.22% (Libor + 7.13%/M)     8/19/2013     1.5     1.5 (2)(17)      
        First lien senior secured loan ($39.4 par due 2/2021)   8.09% (Libor + 6.00%/M)     8/19/2013     39.4     39.4 (3)(17)      
        First lien senior secured loan ($12.8 par due 2/2021)   8.09% (Libor + 6.00%/M)     8/19/2013     12.8     12.8 (4)(17)      
                        53.7     53.7        
                        65.9     65.9     0.91 %
Health Clubs                                      
Athletic Club Holdings, Inc.   Premier health club operator   First lien senior secured loan ($35.0 par due 10/2020)   10.49% (Libor + 8.50%/M)     10/11/2007     35.0     35.0 (3)(17)      
                                       
CFW Co-Invest, L.P. and NCP Curves, L.P.   Health club franchisor   Limited partnership interest (4,152,165 shares)         7/31/2012     4.2     8.5 (2)      
        Limited partnership interest (2,218,235 shares)         7/31/2012         (2)(8)      
                        4.2     8.5        
                                       
Movati Athletic (Group) Inc.(8)(21)   Premier health club operator   First lien senior secured loan ($0.6 par due 10/2022)   6.24% (Libor + 4.50%/Q)     10/5/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($2.9 par due 10/2022)   6.36% (Libor + 4.50%/S)     10/5/2017     3.0     2.9 (2)(17)      
                        3.6     3.5        
                                       
Sunshine Sub, LLC(21)   Premier health club operator   First lien senior secured loan ($9.8 par due 5/2024)   6.84% (Libor + 4.75%/M)     5/25/2018     9.8     9.7 (2)(17)      
                        52.6     56.7     0.78 %
Farming and Agriculture                                      
QC Supply, LLC(21)   Specialty distributor and solutions provider to the swine and poultry markets   First lien senior secured revolving loan ($9.0 par due 12/2021)   8.10% (Libor + 6.00%/M)     12/29/2016     9.0     8.8 (2)(17)      
        First lien senior secured loan ($8.7 par due 12/2022)   8.10% (Libor + 6.00%/M)     12/29/2016     8.7     8.5 (2)(17)      
        First lien senior secured loan ($11.2 par due 12/2022)   8.10% (Libor + 6.00%/M)     12/29/2016     11.2     10.9 (2)(17)      
        First lien senior secured loan ($14.8 par due 12/2022)   8.10% (Libor + 6.00%/M)     12/29/2016     14.8     14.4 (4)(17)      
                        43.7     42.6        
                        43.7     42.6     0.59 %
Computers and Electronics                                      
Everspin Technologies, Inc.   Designer and manufacturer of computer memory solutions   Warrant to purchase up to 18,461 shares of common stock (expires 10/2026)         10/7/2016     0.4     (2)(24)      
                                       
Imaging Business Machines, L.L.C. and Scanner Holdings Corporation(7)   Provider of high-speed intelligent document scanning hardware and software   Senior subordinated loan ($8.3 par due 6/2022)   14.00%     1/3/2017     8.1     8.3 (2)      
        Senior subordinated loan ($8.3 par due 6/2022)   14.00%     1/3/2017     8.1     8.3 (2)      
        Series A preferred stock (66,424,135 shares)         1/3/2017         7.9        
        Class A common stock (33,173 shares)         1/3/2017                
        Class B common stock (134,214 shares)         1/3/2017                
                        16.2     24.5        
                                     

F-165



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Zemax Software Holdings, LLC(21)   Provider of optical illumination design software to design engineers   First lien senior secured loan ($17.0 par due 6/2024)   8.09% (Libor + 5.75%/Q)     6/25/2018     17.0     17.0 (2)(17)      
                        33.6     41.5     0.57 %
Hotel Services                                      
Pyramid Management Advisors, LLC and Pyramid Investors, LLC(21)   Hotel Operator   First lien senior secured revolving loan ($0.6 par due 7/2021)   8.83% (Libor + 6.75%/M)     4/12/2018     0.6     0.6 (2)(17)      
        First lien senior secured loan ($17.1 par due 7/2021)   8.84% (Libor + 6.75%/M)     4/12/2018     17.1     17.1 (2)(17)      
        Membership units (996,833 units)         7/15/2016     1.0     0.9 (2)      
                        18.7     18.6        
                        18.7     18.6     0.26 %
Retail                                      
Fashion Holding Luxembourg SCA (Modacin/Camaeiu)(7)(8)   Retailer of women's clothing   Preferred stock (241,776,675 shares)         1/3/2017                
                                       
Paper Source, Inc. and Pine Holdings, Inc.(21)   Retailer of fine and artisanal paper products   First lien senior secured revolving loan ($0.8 par due 9/2019)   9.75% (Base Rate + 5.00%/Q)     9/23/2013     0.8     0.8 (2)(17)      
        First lien senior secured loan ($9.3 par due 9/2019)   8.58% (Libor + 6.25%/Q)     9/23/2013     9.3     9.2 (4)(17)      
        Class A common stock (36,364 shares)         9/23/2013     6.0     3.1 (2)      
                        16.1     13.1        
                                       
Things Remembered, Inc. and TRM Holdco Corp.(6)(21)   Personalized gifts retailer   First lien senior secured revolving loan ($0.4 par due 2/2019)   10.31% (Libor + 8.00%/M)     1/30/2018     0.4     0.4 (2)(17)      
        First lien senior secured revolving loan ($0.9 par due 2/2019)   12.00% (Base Rate + 7.00%/M)     1/30/2018     0.9     0.9 (2)(17)      
        First lien senior secured loan ($13.0 par due 3/2020)         8/30/2016     10.4     0.7 (2)(16)      
        Common stock (10,631,940 shares)         8/30/2016     6.1     (2)      
                        17.8     2.0        
                        33.9     15.1     0.21 %
Telecommunications                                      
CHL, LTD.   Repair and service solutions provider for cable, satellite and telecommunications based service providers   Warrant to purchase up to 120,000 shares of Series A common stock (expires 5/2020)         1/3/2017                
        Warrant to purchase up to 280,000 shares of Series B common stock (expires 5/2020)         1/3/2017                
        Warrant to purchase up to 80,000 shares of Series C common stock (expires 5/2020)         1/3/2017                
                                   
                                       
Kore Wireless Group Inc.(21)   Wireless network data provider   First lien senior secured revolving loan       2/8/2018         (2)(19)      
                                       
LTG Acquisition, Inc.   Designer and manufacturer of display, lighting and passenger communication systems for mass transportation markets   Class A membership units (5,000 units)         1/3/2017     5.1     1.1        
                                       
Startec Equity, LLC(7)   Communication services   Member interest         4/1/2010                
                                     

F-166



As of June 30, 2018
(dollar amounts in millions)
(unaudited)

Company(1)
  Business Description   Investment   Interest(5)(10)   Acquisition Date   Amortized Cost   Fair
Value
  Percentage
of Net
Assets
 
Telular Corporation(21)   Provider of monitoring solutions enabling data connectivity over both cellular and satellite communication networks   First lien senior secured revolving loan ($3.4 par due 6/2019)   8.25% (Base Rate + 3.25%/Q)     2/8/2018     3.4     3.4 (2)(17)      
                                       
TowerCo IV Finance LLC(21)   Owner and operator of cellular telecommunications towers   First lien senior secured revolving loan ($0.3 par due 10/2021)   5.85% (Libor + 3.75%/M)     2/8/2018     0.3     0.3 (2)(17)      
        First lien senior secured revolving loan ($7.0 par due 10/2021)   5.80% (Libor + 3.75%/M)     2/8/2018     7.0     7.0 (2)(17)      
                        7.3     7.3        
                        15.8     11.8     0.16 %
Commercial Real Estate Financial                                      
ACAS Real Estate Holdings Corporation(7)   Real estate holding company   Common stock (1,000 shares)         1/3/2017     2.6     2.1        
                                       
NECCO Realty Investments LLC(7)   Real estate holding company   Membership units (7,450 units)         1/3/2017                
                        2.6     2.1     0.03 %
Housing and Building Materials                                      
Halex Holdings, Inc.(7)(21)   Manufacturer of flooring installation products   First lien senior secured revolving loan ($1.9 par due 12/2018)         1/24/2017     1.9            
        Common stock (51,853 shares)         1/3/2017                
                        1.9            
                        1.9         %
Total Investments                     $ 11,434.0   $ 11,526.7     158.56 %

F-167


Derivative Instruments

Foreign currency forward contracts

Description
  Notional Amount
to be Purchased
  Notional Amount
to be Sold
  Counterparty   Settlement Date   Unrealized Appreciation /
(Depreciation)
 

Foreign currency forward contract

  $ 4   CAD 5   Bank of Montreal   July 6, 2018   $  

Foreign currency forward contract

  $ 23   CAD 30   Bank of Montreal   July 13, 2018      

Foreign currency forward contract

  $ 80   CAD 103   Bank of Montreal   August 16, 2018     2  

Foreign currency forward contract

  $ 20   CAD 26   Bank of Montreal   September 21, 2018      

Foreign currency forward contract

  $ 19   15   Bank of Montreal   July 13, 2018     1  

Foreign currency forward contract

  $ 8   6   Bank of Montreal   August 16, 2018      

Foreign currency forward contract

  $ 28   24   Bank of Montreal   September 25, 2018      

Foreign currency forward contract

  $ 104   £ 76   Bank of Montreal   August 16, 2018     3  

Total, net

                      $ 6  

Interest rate swap

Description
  Payment Terms   Counterparty   Maturity Date   Notional
Amount
  Value   Upfront
Payments/
Receipts
  Unrealized Appreciation /
(Depreciation)
 

Interest rate swap

  Pay Fixed 2.0642%   Receive Floating One-Month LIBOR of 2.06%   Bank of Montreal   January 4, 2021   $ 395   $ 6   $   $ 6  

Total

                                    $ 6  

(1)
Other than the Company's investments listed in footnote 7 below (subject to the limitations set forth therein), the Company does not "Control" any of its portfolio companies, for the purposes of the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). In general, under the Investment Company Act, the Company would "Control" a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company. All of the Company's portfolio company investments, which as of June 30, 2018 represented 159% of the Company's net assets or 94% of the Company's total assets, are subject to legal restrictions on sales.

(2)
These assets are pledged as collateral for the Revolving Credit Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Revolving Credit Facility (see Note 5 to the consolidated financial statements).

(3)
These assets are owned by the Company's consolidated subsidiary Ares Capital CP Funding LLC ("Ares Capital CP"), are pledged as collateral for the Revolving Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than Ares Capital CP's obligations under the Revolving Funding Facility (see Note 5 to the consolidated financial statements).

(4)
These assets are owned by the Company's consolidated subsidiary Ares Capital JB Funding LLC ("ACJB"), are pledged as collateral for the SMBC Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than ACJB's obligations under the SMBC Funding Facility (see Note 5 to the consolidated financial statements).

(5)
Investments without an interest rate are non-income producing.

(6)
As defined in the Investment Company Act, the Company is deemed to be an "Affiliated Person" because it owns 5% or more of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management

F-168


 
  For the six months ended June 30, 2018   As of June 30, 2018  
(in millions)
Company
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
  Net realized
gains (losses)
  Net
unrealized
gains (losses)
  Fair
Value
 

Campus Management Acquisition Corp.

  $   $   $   $   $   $   $   $   $ (0.3 ) $ 10.7  

Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC

  $ 3.0   $ 0.1   $   $ 1.1   $   $   $ 0.1   $   $ 0.4   $ 31.8  

ESCP PPG Holdings, LLC

  $   $   $   $   $   $   $   $   $ (0.3 ) $ 2.5  

Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.

  $   $   $   $   $   $   $   $   $   $  

Ioxus, Inc

  $   $ 0.5   $   $ 0.6   $   $   $   $   $ (0.1 ) $ 10.9  

NSI Holdings, Inc.

  $   $   $   $   $   $   $   $   $   $  

Petroflow Energy Corporation and TexOak Petro Holdings LLC

  $   $ 2.0   $   $ 0.2   $   $   $   $ 0.2   $ (0.5 ) $ 9.8  

PIH Corporation and Primrose Holding Corporation

  $   $   $   $ 0.1   $   $   $   $   $ 3.3   $ 23.7  

Shock Doctor, Inc. and Shock Doctor Holdings, LLC

  $   $   $   $ 5.7   $   $   $ 0.3   $   $ (1.9 ) $ 84.2  

Panda Temple Power, LLC and T1 Power Holdings LLC

  $   $   $   $ 0.3   $   $   $   $   $ 0.6   $ 19.3  

Things Remembered, Inc. and TRM Holdco Corp.

  $ 2.8   $ 1.3   $   $ 0.1   $   $   $   $   $ (0.8 ) $ 2.0  

UL Holding Co., LLC

  $   $   $   $ 1.7   $   $   $   $   $ (2.2 ) $ 42.0  

  $ 5.8   $ 3.9   $   $ 9.8   $   $   $ 0.4   $ 0.2   $ (1.8 ) $ 236.9  
(7)
As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" and "Control" this portfolio company because it owns more than 25% of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company

F-169


 
  For the six months ended June 30, 2018   As of
June 30,
2018
 
(in millions)
Company
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
  Net realized
gains (losses)
  Net
unrealized
gains (losses)
  Fair
Value
 

ACAS Equity Holdings Corporation

  $   $   $   $   $   $   $   $   $ 0.1   $ 0.5  

ACAS Real Estate Holdings Corporation

  $   $   $   $   $   $   $   $   $   $ 2.1  

ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.

  $   $   $   $ 0.4   $   $   $   $   $ (4.3 ) $ 12.1  

Alcami Holdings, LLC

  $   $ 0.5   $   $ 18.4   $   $   $ 1.0   $   $ 157.1   $ 607.2  

Ares IIIR/IVR CLO Ltd.

  $   $   $   $   $   $   $   $   $   $  

Callidus Capital Corporation

  $   $   $   $   $   $   $   $   $   $ 1.7  

Champion Parent Corporation and Calera XVI, LLC

  $   $   $   $   $   $   $   $   $   $ 0.3  

Ciena Capital LLC

  $   $   $   $ 0.4   $   $   $   $   $ (0.5 ) $ 31.8  

CoLTS 2005-1

  $   $   $   $   $   $   $   $   $   $  

CoLTS 2005-2

  $   $   $   $   $   $   $   $   $   $  

Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited

  $   $   $   $   $   $   $   $   $ (6.1 ) $ 34.5  

CSHM LLC

  $   $   $   $   $   $   $   $   $   $  

Eckler Industries, Inc. and Eckler Purchaser LLC

  $   $   $   $   $   $   $   $ (2.0 ) $ 3.3   $ 18.2  

ETG Holdings, Inc.

  $   $   $   $   $   $   $   $   $   $  

European Capital UK SME Debt LP

  $ 2.3   $ 8.8   $   $   $   $ 0.7   $   $   $ (0.9 ) $ 34.5  

Fashion Holding Luxembourg SCA (Modacin/Camaeiu)

  $   $   $   $   $   $   $   $   $   $  

FPI Holding Corporation

  $   $   $   $   $   $   $   $   $ (2.0 ) $  

Halex Holdings, Inc.

  $ 0.8   $   $   $   $   $   $   $   $   $  

HCI Equity, LLC

  $   $   $   $   $   $   $   $   $   $ 0.1  

Imaging Business Machines, L.L.C. and Scanner Holdings Corporation

  $   $   $   $ 1.2   $   $   $ 0.3   $   $ 3.4   $ 24.5  

Ivy Hill Asset Management, L.P.

  $ 263.0   $ 63.0   $   $ 1.0   $   $ 28.0   $   $   $ 5.7   $ 520.8  

LLSC Holdings Corporation (dba Lawrence Merchandising Services)

  $   $ 17.2   $   $   $   $   $ 0.1   $   $ (1.0 ) $  

Miles 33 (Finance) Limited

  $   $ 0.3   $   $ 1.5   $   $   $   $ 0.1   $ (5.6 ) $ 13.1  

Montgomery Lane, LLC and Montgomery Lane, Ltd.

  $   $   $   $   $   $   $   $   $ (0.6 ) $  

MVL Group, Inc.

  $   $   $   $   $   $   $   $   $   $  

Navisun LLC and Navisun Holdings LLC

  $ 15.7   $   $   $ 0.4   $ 0.2   $   $ 0.1   $   $   $ 19.1  

NECCO Holdings, Inc. and New England Confectionery Company, Inc.

  $ 14.0   $ 14.8   $   $   $   $   $   $   $ (5.7 ) $ 4.6  

NECCO Realty Investments LLC

  $   $   $   $   $   $   $   $   $   $  

Orion Foods, LLC

  $   $   $   $   $   $   $   $   $   $ 0.5  

PHL Investors, Inc., and PHL Holding Co.

  $   $   $   $   $   $   $   $   $   $  

Rug Doctor, LLC and RD Holdco Inc.

  $   $   $   $ 1.0   $   $   $   $   $ 9.5   $ 37.2  

S Toys Holdings LLC (fka The Step2 Company, LLC)

  $   $   $   $   $   $   $   $   $   $ 0.5  

Senior Direct Lending Program, LLC

  $ 155.2   $ 53.3   $   $ 38.7   $ 6.0   $   $ 2.0   $   $   $ 589.0  

Singer Sewing Company, SVP-Singer Holdings, LLC and SVP-Singer Holdings LP

  $ 70.2   $   $   $ 4.5   $ 1.3   $   $ 4.5   $   $ (6.5 ) $ 229.5  

Soil Safe, Inc. and Soil Safe Acquisition Corp.

  $   $ 2.0   $   $ 7.2   $   $   $ 0.2   $   $ 2.3   $ 112.8  

Startec Equity, LLC

  $   $   $   $   $   $   $   $   $   $  

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

  $   $ 0.1   $   $   $   $   $   $   $   $  

  $ 521.2   $ 160.0   $   $ 74.7   $ 7.5   $ 28.7   $ 8.2   $ (1.9 ) $ 148.2   $ 2,294.6  

*
Together with Varagon Capital Partners ("Varagon") and its clients, the Company has co-invested through the Senior Direct Lending Program LLC (d/b/a the "Senior Direct Lending Program" or the "SDLP"). The SDLP has been capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required); therefore, although the Company owns more than 25% of the voting securities of the SDLP, the Company does not believe that it has control over the SDLP (for purposes of the Investment Company Act or otherwise) because, among other things, these "voting securities" do not afford the Company the right to elect directors of the SDLP or any other special rights (see Note 4 to the consolidated financial statements).

F-170


(8)
Non-U.S. company or principal place of business outside the U.S. and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets. Pursuant to Section 55(a) of the Investment Company Act, 14% of the Company's total assets are represented by investments at fair value and other assets that are considered "non-qualifying assets" as of June 30, 2018.

(9)
Exception from the definition of investment company under Section 3(c) of the Investment Company Act and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(10)
Variable rate loans to the Company's portfolio companies bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate ("LIBOR") or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower's option, which reset annually (A), semi-annually (S), quarterly (Q), bi-monthly (B), monthly (M) or daily (D). For each such loan, the Company has provided the interest rate in effect on the date presented.

(11)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.00% on $69.5 aggregate principal amount of a "first out" tranche of the portfolio company's senior term debt previously syndicated by the Company into "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.

(12)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.00% on $38.9 aggregate principal amount of a "first out" tranche of the portfolio company's first lien senior secured loans, 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.

(13)
The Company sold a participating interest of approximately $9.1 aggregate principal amount of the portfolio company's second lien senior secured term loan as a "first out" tranche. As the transaction did not qualify as a "true sale" in accordance with U.S. generally accepted accounting principles, the Company recorded a corresponding $8.8 secured borrowing included in "accounts payable and other liabilities" in the accompanying consolidated balance sheet.

(14)
The Company sold a participating interest of approximately $2.5 aggregate principal amount of the portfolio company's first lien senior secured term loan. As the transaction did not qualify as a "true sale" in accordance with U.S. generally accepted accounting principles, the Company recorded a corresponding $2.5 secured borrowing included in "accounts payable and other liabilities" in the accompanying consolidated balance sheet.

(15)
The Company is entitled to receive a fixed fee upon the occurrence of certain events as defined in the credit agreement governing the Company's debt investment in the portfolio company. The fair value of such fee is included in the fair value of the debt investment.

(16)
Loan was on non-accrual status as of June 30, 2018.

(17)
Loan includes interest rate floor feature.

(18)
In addition to the interest earned based on the stated contractual interest rate of this security, the certificates entitle the holders thereof to receive a portion of the excess cash flow from the SDLP's loan portfolio, after expenses, which may result in a return to the Company greater than the contractual stated interest rate.

(19)
As of June 30, 2018, no amounts were funded by the Company under this first lien senior secured revolving loan; however, there were letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(20)
As of June 30, 2018, in addition to the amounts funded by the Company under this first lien senior secured revolving loan, there were also letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(21)
As of June 30, 2018, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 7 to the consolidated financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.
(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total
undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

1163227 B.C. Ltd

  $ 3.9   $   $ 3.9   $   $   $ 3.9  

1A Smart Start, LLC

    3.5     (1.6 )   1.9             1.9  

A.U.L. Corp.

    1.2         1.2             1.2  

Accommodations Plus Technologies LLC

    4.1         4.1             4.1  

Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc.

    20.6         20.6             20.6  

Achilles Acquisition LLC

    7.8         7.8             7.8  

ADCS Billings Intermediate Holdings, LLC

    5.0     (3.3 )   1.7             1.7  

ADF Capital, Inc.

    1.3         1.3             1.3  

ADG, LLC

    13.7     (3.7 )   10.0             10.0  

Alcami Holdings, LLC

    30.0     (25.6 )   4.4             4.4  

American Academy Holdings, LLC

    7.0     (0.9 )   6.1             6.1  

AMZ Holding Corp.

    3.4         3.4             3.4  

Avetta, LLC

    7.0         7.0             7.0  

Bambino CI Inc.

    9.6     (2.8 )   6.8             6.8  

Cadence Aerospace, LLC

    14.3     (0.5 )   13.8             13.8  

Capstone Logistics Acquisition, Inc.

    2.0     (1.1 )   0.9             0.9  

Care Hospice, Inc

    2.3         2.3             2.3  

CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC

    7.5     (6.0 )   1.5             1.5  

Chariot Acquisition, LLC

    1.0         1.0             1.0  

Chesapeake Research Review, LLC

    5.8         5.8             5.8  

F-171


(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total
undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

Ciena Capital LLC

    20.0     (14.0 )   6.0     (6.0 )        

Clearwater Analytics, LLC

    5.0     (0.3 )   4.7             4.7  

Command Alkon Incorporated

    3.4     (1.6 )   1.8             1.8  

Comprehensive EyeCare Partners, LLC

    6.1         6.1             6.1  

Corepoint Health, LLC

    4.3         4.3             4.3  

Cozzini Bros., Inc. and BH-Sharp Holdings LP

    24.2     (1.0 )   23.2             23.2  

Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC

    18.5     (4.9 )   13.6             13.6  

CST Buyer Company

    4.2         4.2             4.2  

D4C Dental Brands, Inc.

    5.0     (1.3 )   3.7             3.7  

DCA Investment Holding, LLC

    5.8         5.8             5.8  

DecoPac, Inc.

    8.1     (0.8 )   7.3             7.3  

DFC Global Facility Borrower II LLC

    115.0     (82.7 )   32.3             32.3  

DGH Borrower LLC

    26.5         26.5             26.5  

Dorner Holding Corp.

    3.3     (0.2 )   3.1             3.1  

Doxim Inc.

    5.9         5.9             5.9  

DRB Holdings, LLC

    9.9         9.9             9.9  

DTI Holdco, Inc. and OPE DTI Holdings, Inc.

    8.8     (2.2 )   6.6             6.6  

Eckler Industries, Inc.

    2.0         2.0     (2.0 )        

Emergency Communications Network, LLC

    6.5         6.5             6.5  

Emerus Holdings, Inc.

    4.5     (1.5 )   3.0             3.0  

Empirix Inc.

    1.9     (0.1 )   1.8             1.8  

EN Engineering, LLC

    5.0         5.0             5.0  

Entertainment Partners, LLC and Entertainment Partners Canada Inc.

    28.0         28.0             28.0  

Episerver, Inc.

    0.8         0.8             0.8  

ExteNet Systems, Inc.

    2.0         2.0             2.0  

Ferraro Fine Foods Corp.

    8.0     (1.6 )   6.4             6.4  

FM:Systems Group, LLC

    1.5         1.5             1.5  

Foundation Risk Partners, Corp.

    12.0         12.0             12.0  

FPI Holding Corporation

    2.6         2.6             2.6  

Frontline Technologies Group Holding LLC

    8.4         8.4             8.4  

FWR Holding Corporation

    2.9     (0.7 )   2.2             2.2  

Garden Fresh Restaurant Corp.

    7.5     (2.7 )   4.8             4.8  

Gastro Health Holdco, LLC

    3.4         3.4             3.4  

Gentle Communications, LLC

    5.0         5.0             5.0  

Global Franchise Group, LLC

    1.2         1.2             1.2  

GraphPAD Software, LLC

    1.1         1.1             1.1  

GTCR-Ultra Acquisition, Inc. and GTCR-Ultra Holdings, LLC

    2.0         2.0             2.0  

HAI Acquisition Corporation

    19.0     (4.7 )   14.3             14.3  

Halex Holdings, Inc.

    2.0     (1.9 )   0.1             0.1  

Harvey Tool Company, LLC

    38.7     (1.0 )   37.7             37.7  

Help/Systems Holdings, Inc.

    5.0     (0.2 )   4.8             4.8  

Hosting.com, Inc.

    1.5         1.5             1.5  

Hygiena Borrower LLC

    15.1         15.1             15.1  

Implementation Management Assistance, LLC

    16.6     (1.5 )   15.1             15.1  

Infilaw Holding, LLC

    6.5     (6.5 )                

Infogix, Inc.

    5.3         5.3             5.3  

Instituto de Banca y Comercio, Inc.

    10.8     (9.9 )   0.9     (0.8 )       0.1  

iPipeline, Inc.

    4.0         4.0             4.0  

JDC Healthcare Management, LLC

    11.0     (2.5 )   8.5             8.5  

Jim N Nicks Management, LLC

    9.7     (2.8 )   6.9             6.9  

K2 Pure Solutions Nocal, L.P.

    5.0     (1.5 )   3.5             3.5  

KBHS Acquisition, LLC (d/b/a Alita Care, LLC)

    5.0     (3.3 )   1.7             1.7  

Key Surgical LLC

    2.8     (0.6 )   2.2             2.2  

KHC Holdings, Inc.

    6.9     (2.5 )   4.4             4.4  

KORE Wireless Group Inc.

    2.5     (0.1 )   2.4             2.4  

LBP Intermediate Holdings LLC

    0.9     (0.3 )   0.6             0.6  

Liaison Acquisition, LLC

    3.9         3.9             3.9  

Lone Wolf Real Estate Technologies Inc.

    3.0         3.0             3.0  

Magento, Inc.

    7.5     (0.2 )   7.3             7.3  

Masergy Holdings, Inc.

    2.5         2.5             2.5  

Massage Envy, LLC

    7.5         7.5             7.5  

Mavis Tire Express Services Corp.

    17.1         17.1             17.1  

MB2 Dental Solutions, LLC

    3.5     (2.1 )   1.4             1.4  

McKenzie Sports Products, LLC

    4.5         4.5             4.5  

Medplast Holdings, Inc

    2.0     (1.8 )   0.2             0.2  

Ministry Brands, LLC

    10.9     (3.3 )   7.6             7.6  

Movati Athletic (Group) Inc.

    2.4         2.4             2.4  

MSHC, Inc.

    30.5     (0.9 )   29.6             29.6  

F-172


(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total
undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

MW Dental holding Corp.

    24.9     (3.5 )   21.4             21.4  

National Intergovernmental Purchasing Alliance Company

    9.0         9.0             9.0  

Navisun LLC

    28.1         28.1             28.1  

NECCO Holdings, Inc.

    25.4     (19.9 )   5.5     (5.1 )       0.4  

NM GRC HOLDCO, LLC

    20.7         20.7             20.7  

Nordco Inc.

    12.5         12.5             12.5  

NSM Sub Holdings Corp.

    7.2     (1.3 )   5.9             5.9  

Osmose Utilities Services, Inc.

    6.0     (1.0 )   5.0             5.0  

OTG Management, LLC

    12.3     (10.0 )   2.3             2.3  

Palermo Finance Corporation

    0.2         0.2             0.2  

Paper Source, Inc.

    2.5     (0.8 )   1.7             1.7  

Park Place Technologies, LLC

    5.4         5.4             5.4  

Pathway Vet Alliance LLC

    2.1         2.1             2.1  

Payment Alliance International, Inc.

    4.2     (2.5 )   1.7             1.7  

PDI TA Holdings, Inc.

    35.1         35.1             35.1  

Pegasus Intermediate Holdings, LLC

    5.0         5.0             5.0  

PIH Corporation and Primrose Holding Corporation

    3.3     (1.0 )   2.3             2.3  

Plusgrade L.P.

    1.5         1.5             1.5  

Practice Insight, LLC

    2.9     (0.6 )   2.3             2.3  

Pyramid Management Advisors, LLC

    7.0     (0.6 )   6.4             6.4  

QC Supply, LLC

    17.9     (9.0 )   8.9             8.9  

R1 RCM Inc.

    10.0         10.0             10.0  

RecoveryDirect Acquisition, L.L.C.

    8.0     (2.3 )   5.7             5.7  

Restaurant Technologies, Inc.

    5.4     (1.7 )   3.7             3.7  

Retriever Medical/Dental Payments LLC

    3.5         3.5             3.5  

RMP Group, Inc.

    1.8         1.8             1.8  

RuffaloCODY, LLC

    7.7     (0.2 )   7.5             7.5  

Salter Labs

    1.7     (1.0 )   0.7             0.7  

Sanders Industries Holdings, Inc.

    10.0         10.0             10.0  

SCM Insurance Services Inc.

    4.1     (1.8 )   2.3             2.3  

SCSG EA Acquisition Company, Inc.

    4.0     (0.5 )   3.5             3.5  

Securelink, Inc

    3.0         3.0             3.0  

Severin Acquisition, LLC

    2.9     (1.8 )   1.1             1.1  

SFE Intermediate Holdco LLC

    3.8         3.8             3.8  

Shift PPC LLC

    3.6         3.6             3.6  

Singer Sewing Company

    90.0     (71.5 )   18.5             18.5  

SiroMed Physician Services, Inc.

    7.1         7.1             7.1  

Siteworx Holdings, LLC

    1.5     (1.4 )   0.1             0.1  

Soil Safe, Inc. and Soil Safe Acquisition Corp.

    10.5     (3.6 )   6.9             6.9  

Sonny's Enterprises, LLC

    1.8     (0.5 )   1.3             1.3  

SpareFoot, LLC

    1.4     (0.3 )   1.1             1.1  

Sparta Systems, Inc.

    6.5         6.5             6.5  

Spectra Finance, LLC

    24.1     (6.8 )   17.3             17.3  

St. Croix Acquisition Corp.

    2.0         2.0             2.0  

Storm UK Holdco Limited and Storm US Holdco Inc.

    1.1         1.1             1.1  

Sunk Rock Foundry Partners LP

    10.0     (2.6 )   7.4             7.4  

Sunshine Sub, LLC

    7.7         7.7             7.7  

Symmetry Surgical Inc.

    3.1     (2.0 )   1.1             1.1  

Synergy HomeCare Franchising, LLC

    4.2         4.2             4.2  

Syntax USA Acquisition Corporation

    3.3     (1.2 )   2.1             2.1  

TDG Group Holding Company

    3.5         3.5             3.5  

Teasdale Foods, Inc.

    0.8     (0.5 )   0.3             0.3  

Telestream Holdings Corporation

    2.3         2.3             2.3  

Telular Corporation

    5.0     (3.4 )   1.6             1.6  

The Gordian Group, Inc.

    1.1         1.1             1.1  

Things Remembered, Inc

    2.3     (1.3 )   1.0             1.0  

Tidi Products, LLC

    2.3         2.3             2.3  

Total Community Options, Inc.

    4.2         4.2             4.2  

Towerco IV Finance, LLC

    17.0     (7.3 )   9.7             9.7  

TPTM Merger Corp.

    4.3         4.3             4.3  

U.S. Acute Care Solutions, LLC

    1.7         1.7             1.7  

Urgent Cares of America Holdings I, LLC

    10.0         10.0             10.0  

Utility Pipeline, LTD.

    3.0         3.0             3.0  

Vela Trading Technologies, LLC

    3.5     (2.0 )   1.5             1.5  

Veson Nautical LLC

    2.5         2.5             2.5  

Visual Edge Technology, Inc.

    4.9         4.9             4.9  

VLS Recovery Services, LLC

    20.8     (2.4 )   18.4             18.4  

VRC Companies, LLC

    2.6     (0.6 )   2.0             2.0  

WatchFire Enterprises, Inc.

    2.0         2.0             2.0  

West Dermatology, LLC

    10.8     (2.9 )   7.9             7.9  

WIRB—Copernicus Group, Inc

    3.0         3.0             3.0  

Woodstream Group, Inc. and Woodstream Corporation

    4.7         4.7             4.7  

F-173


(in millions)
Portfolio Company
  Total revolving
and delayed draw
loan
commitments
  Less: drawn
commitments
  Total
undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

Worldwide Facilities LLC

    2.7         2.7             2.7  

Wrench Group LLC

    2.8         2.8             2.8  

WSHP FC Acquisition LLC

    11.8     (2.5 )   9.3             9.3  

XIFIN, Inc.

    4.6     (0.5 )   4.1             4.1  

Zemax Software Holdings, LLC

    4.1         4.1             4.1  

Zywave, Inc.

    11.5     (2.4 )   9.1             9.1  

  $ 1,421.7   $ (383.9 ) $ 1,037.8   $ (13.9 ) $   $ 1,023.9  
(22)
As of June 30, 2018, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:
(in millions)
Portfolio Company
  Total private
equity
commitments
  Less: funded
private equity
commitments
  Total
unfunded
private equity
commitments
  Less: private
equity
commitments
substantially at
the
discretion of the
Company
  Total net
adjusted
unfunded
private
equity
commitments
 

Partnership Capital Growth Investors III, L.P.

  $ 5.0   $ (4.9 ) $ 0.1   $   $ 0.1  

PCG-Ares Sidecar Investment, L.P. and PCG-Ares Sidecar Investment II, L.P.

    50.0     (12.2 )   37.8     (37.8 )    

Piper Jaffray Merchant Banking Fund I, L.P.

    2.0     (1.9 )   0.1         0.1  

European Capital UK SME Debt LP

    59.3     (50.7 )   8.6     (8.6 )    

  $ 116.3   $ (69.7 ) $ 46.6   $ (46.4 ) $ 0.2  
(23)
As of June 30, 2018, the Company had commitments to co-invest in the SDLP for its portion of the SDLP's commitment to fund delayed draw loans of up to $24. See Note 4 to the consolidated financial statements for more information on the SDLP.

(24)
Other than the investments noted by this footnote, the fair value of the Company's investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 8 to the consolidated financial statements for more information regarding the fair value of the Company's investments.

(25)
As of June 30, 2018, the net estimated unrealized loss for federal tax purposes was $0.7 billion based on a tax cost basis of $12.2 billion. As of June 30, 2018, the estimated aggregate gross unrealized loss for federal income tax purposes was $1.3 billion and the estimated aggregate gross unrealized gain for federal income tax purposes was $0.6 billion.

F-174


Table of Contents

ARES CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Healthcare Services                                      
Absolute Dental Management LLC and ADM Equity, LLC   Dental services provider   First lien senior secured loan ($18.8 par due 1/2022)   11.08% (Libor + 9.39%/Q)     1/5/2016   $ 18.8   $ 17.6 (2)(17)      
        First lien senior secured loan ($5.0 par due 1/2022)   11.08% (Libor + 9.39%/Q)     1/5/2016     5.0     4.7 (4)(17)      
        Class A preferred units (4,000,000 units)         1/5/2016     4.0     0.9 (2)      
        Class A common units (4,000,000 units)         1/5/2016         (2)      
                        27.8     23.2        
                                       
Acessa Health Inc. (fka HALT Medical, Inc.)   Medical supply provider   Common stock (569,823 shares)         6/22/2017     0.1            
                                       
ADCS Billings Intermediate Holdings, LLC(21)   Dermatology practice   First lien senior secured revolving loan       5/18/2016         (19)      
                                       
ADG, LLC and RC IV GEDC Investor LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.0 par due 9/2022)   6.14% (Libor + 4.75%/Q)     9/28/2016     1.0     1.0 (2)(17)      
        First lien senior secured revolving loan ($1.4 par due 9/2022)   6.24% (Libor + 4.75%/Q)     9/28/2016     1.4     1.3 (2)(17)      
        First lien senior secured revolving loan ($8.5 par due 9/2022)   6.32% (Libor + 4.75%/Q)     9/28/2016     8.5     8.3 (2)(17)      
        First lien senior secured revolving loan ($0.6 par due 9/2022)   8.25% (Base Rate + 3.75%/Q)     9/28/2016     0.6     0.6 (2)(17)      
        Second lien senior secured loan ($87.5 par due 3/2024)   10.57% (Libor + 9.00%/Q)     9/28/2016     87.5     81.4 (2)(17)      
        Membership units (3,000,000 units)         9/28/2016     3.0     1.9 (2)      
                        102.0     94.5        
                                       
Alcami Holdings, LLC(8)(21)   Outsourced drug development services provider   First lien senior secured revolving loan ($2.0 par due 10/2019)   6.89% (Libor + 5.50%/Q)     1/3/2017     2.0     2.0 (2)(17)      
        First lien senior secured revolving loan ($15.9 par due 10/2019)   6.96% (Libor + 5.50%/Q)     1/3/2017     15.9     15.9 (2)(17)      
        First lien senior secured revolving loan ($7.7 par due 10/2019)   7.06% (Libor + 5.50%/Q)     1/3/2017     7.7     7.7 (2)(17)      
        First lien senior secured loan ($10.0 par due 10/2020)   7.07% (Libor + 5.50%/Q)     1/3/2017     10.0     10.0 (2)(17)      
        First lien senior secured loan ($95.7 par due 10/2020)   7.07% (Libor + 5.50%/Q)     1/3/2017     95.7     95.7 (3)(17)      
        First lien senior secured loan ($0.2 par due 10/2020)   11.00% (Base Rate + 6.50%/Q)     1/3/2017     0.2     0.2 (3)(17)      
        Senior subordinated loan ($30.0 par due 10/2020)   11.75%     1/3/2017     30.0     30.0 (2)      
        Senior subordinated loan ($30.0 par due 10/2020)   12.00%     1/3/2017     30.0     30.0 (2)      
        Senior subordinated loan ($25.0 par due 10/2020)   12.25%     1/3/2017     25.0     25.0 (2)      
        Senior subordinated loan ($36.1 par due 10/2020)   14.75% PIK     1/3/2017     36.1     36.1 (2)      
        Senior subordinated loan ($36.6 par due 10/2020)   15.25% PIK     1/3/2017     22.8     36.6 (2)      
        Series R preferred membership units (30,000 units)         1/3/2017         54.1        
        Series R-2 preferred membership units (54,936 units)         1/3/2017         99.0        
                        275.4     442.3        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Alegeus Technologies Holdings Corp.   Benefits administration and transaction processing provider   Preferred stock (2,997 shares)         12/13/2013     3.1     2.8        
        Common stock (3 shares)         12/13/2013                
                        3.1     2.8        
                                       
Alteon Health, LLC   Provider of physician management services   First lien senior secured loan ($3.5 par due 9/2022)   7.00% (Libor + 5.50%/Q)     5/15/2017     3.5     3.3 (2)(17)      
                                       
American Academy Holdings, LLC(21)   Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals   First lien senior secured revolving loan ($0.9 par due 12/2022)   9.75% (Base Rate + 5.25%/Q)     12/15/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($0.5 par due 12/2022)   7.84% (Libor + 6.25%/Q)     12/15/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($199.8 par due 12/2022)   8.01% (Libor + 6.25%/Q)     12/15/2017     199.8     197.8 (2)(17)      
        Senior subordinated loan ($75.0 par due 6/2023)   15.76% (Libor + 14.00%/Q)     12/15/2017     75.0     73.5 (2)(17)      
                        276.2     272.7        
                                       
Argon Medical Devices, Inc.   Manufacturer and marketer of single-use specialty medical devices   Second lien senior secured loan ($9.0 par due 6/2022)   11.07% (Libor + 9.50%/Q)     12/23/2015     8.8     9.0 (2)(17)      
                                       
AwarePoint Corporation   Healthcare technology platform developer   First lien senior secured loan ($8.1 par due 12/2019)   13.98% (Libor + 12.50%/M)     9/5/2014     8.0     6.5 (2)(15)(17)      
        Warrant to purchase up to 3,213,367 shares of Series 1 preferred stock (expires 9/2024)         11/14/2014         0.4 (2)      
                        8.0     6.9        
                                       
Bambino CI Inc.(21)   Manufacturer and provider of single-use obstetrics products   First lien senior secured revolving loan ($1.1 par due 10/2022)   7.49% (Libor + 6.00%/Q)     10/17/2017     1.1     1.1 (2)(17)      
        First lien senior secured loan ($43.7 par due 10/2023)   7.49% (Libor + 6.00%/Q)     10/17/2017     43.7     43.3 (2)(17)      
                        44.8     44.4        
                                       
CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC(21)   Correctional facility healthcare operator   First lien senior secured revolving loan ($4.5 par due 7/2019)   5.69% (Libor + 4.00%/Q)     7/23/2014     4.5     4.1 (2)(17)(20)      
        First lien senior secured loan ($6.5 par due 7/2021)   5.69% (Libor + 4.00%/Q)     7/23/2014     6.5     5.9 (2)(17)      
        Second lien senior secured loan ($135.0 par due 7/2022)   9.86% (Libor + 8.38%/Q)     7/23/2014     134.2     112.0 (2)(17)      
        Class A units (1,000,000 units)         8/19/2010         0.9 (2)      
                        145.2     122.9        
                                       
Correctional Medical Group Companies, Inc.   Correctional facility healthcare operator   First lien senior secured loan ($48.8 par due 9/2021)   9.62% (Libor + 8.62%/Q)     9/29/2015     48.8     48.8 (3)(17)      
        First lien senior secured loan ($3.1 par due 9/2021)   9.62% (Libor + 8.62%/Q)     9/29/2015     3.1     3.1 (2)(17)      
                        51.9     51.9        
                                       
CSHM LLC(8)   Dental services provider   Class A membership units (1,979 units)         1/3/2017                
                                       
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC(21)   Dental services provider   Class A preferred units (1,000,000 units)         12/21/2016     1.0     1.1 (2)      
                                       
DCA Investment Holding, LLC(21)   Multi-branded dental practice management   First lien senior secured revolving loan       7/2/2015         (19)      
        First lien senior secured loan ($18.7 par due 7/2021)   6.94% (Libor + 5.25%/Q)     7/2/2015     18.6     18.4 (4)(17)      
                        18.6     18.4        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Drayer Physical Therapy Institute LLC   Outpatient physical therapy provider   First lien senior secured loan ($12.3 par due 7/2018)   10.50% (Base Rate + 6.00%/Q)     7/26/2017     12.3     12.3 (2)(17)      
        First lien senior secured loan ($114.6 par due 7/2018)   10.50% (Base Rate + 6.00%/Q)     7/26/2017     114.6     114.6 (2)(17)      
                        126.9     126.9        
                                       
Emerus Holdings, Inc.(21)   Freestanding 24-hour emergency care micro-hospitals operator   First lien senior secured revolving loan ($0.3 par due 9/2020)   8.00% (Base Rate + 3.50%/Q)     3/14/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($2.3 par due 9/2021)   6.07% (Libor + 4.50%/Q)     3/14/2017     2.0     2.1 (2)(17)      
                        2.3     2.4        
                                       
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC   On-demand supply chain automation solutions provider to the healthcare industry   Second lien senior secured loan ($103.7 par due 6/2025)   9.69% (Libor + 8.00%/Q)     6/30/2017     102.8     103.7 (2)(17)      
        Series A perpetual preferred stock (110,425 shares)   12.44% PIK (Libor + 10.75%/Q)     6/30/2017     117.4     117.4 (2)(17)      
        Class A units (14,013,303 units)         6/30/2017     14.0     16.9 (2)      
                        234.2     238.0        
                                       
Greenphire, Inc. and RMCF III CIV XXIX, L.P   Software provider for clinical trial management   Limited partnership interest (99.90% interest)         12/19/2014     1.0     2.4 (2)      
                                       
Heartland Dental, LLC   Detanl services provider   Second lien senior secured loan ($27.8 par due 7/2024)   9.75% (Libor + 8.50%/Q)     7/31/2017     27.4     27.8 (2)(17)      
                                       
Hygiena Borrower LLC(21)   Adenosine triphosphate testing technology provider   Second lien senior secured loan ($10.0 par due 8/2023)   10.69% (Libor + 9.00%/Q)     8/26/2016     10.0     10.0 (2)(17)      
        Second lien senior secured loan ($10.7 par due 8/2023)   10.69% (Libor + 9.00%/Q)     2/27/2017     10.7     10.7 (2)(17)      
                        20.7     20.7        
                                       
Intermedix Corporation   Revenue cycle management provider to the emergency healthcare industry   First lien senior secured loan ($72.3 par due 12/2019)   6.16% (Libor + 4.75%/Q)     7/26/2017     72.3     70.8 (2)(17)      
        First lien senior secured loan ($35.2 par due 12/2019)   6.16% (Libor + 4.75%/Q)     7/26/2017     35.2     34.5 (3)(17)      
        First lien senior secured loan ($9.3 par due 12/2019)   6.16% (Libor + 4.75%/Q)     7/26/2017     9.3     9.1 (4)(17)      
        First lien senior secured loan ($80.8 par due 12/2019)   6.35% (Libor + 4.75%/Q)     7/26/2017     80.8     79.2 (2)(17)      
        First lien senior secured loan ($39.3 par due 12/2019)   6.35% (Libor + 4.75%/Q)     7/26/2017     39.3     38.5 (3)(17)      
        First lien senior secured loan ($10.4 par due 12/2019)   6.35% (Libor + 4.75%/Q)     7/26/2017     10.4     10.2 (4)(17)      
        Second lien senior secured loan ($112.0 par due 6/2020)   9.94% (Libor + 8.25%/Q)     12/27/2012     112.0     107.5 (2)(17)      
                        359.3     349.8        
                                       
JDC Healthcare Management, LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.5 par due 4/2022)   7.82% (Libor + 6.25%/Q)     4/10/2017     1.5     1.5 (2)(17)      
        First lien senior secured loan ($9.9 par due 4/2023)   7.82% (Libor + 6.25%/Q)     4/10/2017     9.9     9.7 (2)(17)      
        First lien senior secured loan ($19.9 par due 4/2023)   7.82% (Libor + 6.25%/Q)     4/10/2017     19.9     19.5 (4)(17)      
                        31.3     30.7        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
KBHS Acquisition, LLC (d/b/a Alita Care, LLC)(21)   Provider of behavioral health services   First lien senior secured revolving loan ($0.2 par due 3/2022)   6.43% (Libor + 5.00%/Q)     3/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.1 par due 3/2022)   6.46% (Libor + 5.00%/Q)     3/17/2017     0.1     0.1 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 3/2022)   6.50% (Libor + 5.00%/Q)     3/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 3/2022)   6.56% (Libor + 5.00%/Q)     3/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.8 par due 3/2022)   6.57% (Libor + 5.00%/Q)     3/17/2017     0.8     0.8 (2)(17)      
        First lien senior secured revolving loan ($0.3 par due 3/2022)   8.50% (Base Rate + 4.00%/Q)     3/17/2017     0.3     0.3 (2)(17)      
                        1.8     1.8        
                                       
Key Surgical LLC(21)   Provider of sterile processing, operating room and instrument care supplies for hospitals   First lien senior secured revolving loan ($0.9 par due 6/2022)   6.35% (Libor + 4.75%/Q)     6/1/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($18.0 par due 6/2023)   5.75% (EURIBOR + 4.75%/Q)     6/1/2017     16.9     18.0 (2)(17)      
        First lien senior secured loan ($4.4 par due 6/2023)   6.23% (Libor + 4.75%/Q)     6/1/2017     4.3     4.4 (4)(17)      
                        22.1     23.3        
                                       
MB2 Dental Solutions, LLC(21)   Dental services provider   First lien senior secured revolving loan ($1.3 par due 9/2023)   8.25% (Base Rate + 3.75%/Q)     9/29/2017     1.3     1.3 (2)(17)      
        First lien senior secured loan ($4.7 par due 9/2023)   6.44% (Libor + 4.75%/Q)     9/29/2017     4.7     4.7 (2)(17)      
                        6.0     6.0        
                                       
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC   Healthcare professional provider   First lien senior secured loan ($65.3 par due 1/2020)   6.96% (Libor + 5.50%/Q)     7/26/2017     65.3     64.6 (2)(17)      
        First lien senior secured loan ($79.0 par due 1/2020)   7.07% (Libor + 5.50%/Q)     7/26/2017     79.0     78.3 (2)(17)      
        First lien senior secured loan ($9.0 par due 1/2020)   6.96% (Libor + 5.50%/Q)     7/26/2017     9.0     9.0 (4)(17)      
        First lien senior secured loan ($11.0 par due 1/2020)   7.07% (Libor + 5.50%/Q)     7/26/2017     11.0     10.8 (4)(17)      
        Class A units (1,438,643 shares)         1/17/2014     1.5     1.0 (2)      
                        165.8     163.7        
                                       
MW Dental Holding Corp.(21)   Dental services provider   First lien senior secured revolving loan ($9.7 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     9.7     9.7 (2)(17)      
        First lien senior secured loan ($44.4 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     44.4     44.4 (2)(17)      
        First lien senior secured loan ($46.8 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     46.8     46.8 (3)(17)      
        First lien senior secured loan ($19.3 par due 4/2018)   9.19% (Libor + 7.50%/Q)     4/12/2011     19.3     19.3 (4)(17)      
                        120.2     120.2        
                                       
My Health Direct, Inc.   Healthcare scheduling exchange software solution provider   Warrant to purchase up to 4,548 shares of Series D preferred stock (expires 9/2024)         9/18/2014         (2)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
New Trident Holdcorp, Inc. and Trident Holding Company, LLC   Outsourced mobile diagnostic healthcare service provider   First lien senior secured loan ($19.9 par due 7/2019)   7.44% (Libor + 5.75%/Q)     8/1/2013     15.9     16.0 (2)(17)      
        Second lien senior secured loan ($80.0 par due 7/2020)       8/1/2013     79.3     44.2 (2)(14)(16)      
        Senior subordinated loan ($8.9 par due 7/2020)       11/29/2017     8.8     (2)(16)      
                        104.0     60.2        
                                       
NMSC Holdings, Inc. and ASP NAPA Holdings, LLC   Anesthesia management services provider   Second lien senior secured loan ($72.8 par due 10/2023)   11.69% (Libor + 10.00%/Q)     4/19/2016     72.8     67.0 (2)(17)      
        Class A units (25,277 units)         4/19/2016     2.5     1.3 (2)      
                        75.3     68.3        
                                       
Nodality, Inc.   Biotechnology company   First lien senior secured loan ($2.3 par due 8/2016)       11/12/2015     2.1     (2)(16)      
        First lien senior secured loan ($10.9 par due 8/2016)       4/25/2014     9.7     (2)(16)      
        Warrant to purchase up to 3,736,255 shares of common stock (expires 3/2026)         5/1/2016         (2)      
                        11.8            
                                       
nThrive, Inc. (fka Precyse Acquisition Corp.)   Provider of healthcare information management technology and services   Second lien senior secured loan ($10.0 par due 4/2023)   11.32% (Libor + 9.75%/Q)     4/20/2016     9.7     10.0 (2)(17)      
                                       
OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC(21)   Provider of technology-enabled solutions to pharmacies   First lien senior secured loan ($5.9 par due 11/2018)   9.19% (Libor + 7.50%/Q)     11/21/2013     5.9     5.9 (4)(17)      
        Limited liability company membership interest (1.57%)         11/21/2013     1.0     0.8 (2)      
                        6.9     6.7        
                                       
Pathway Partners Vet Management Company LLC(21)   Owner and operator of veterinary hospitals   First lien senior secured loan ($0.3 par due 10/2024)   6.07% (Libor + 4.50%/Q)     10/4/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($6.0 par due 10/2024)   6.07% (Libor + 4.50%/Q)     10/4/2017     6.0     6.0 (2)(17)      
                        6.3     6.3        
                                       
Patterson Medical Supply, Inc.   Distributor of rehabilitation supplies and equipment   Second lien senior secured loan ($78.0 par due 8/2023)   9.98% (Libor + 8.50%/Q)     9/2/2015     76.4     72.5 (2)(17)      
                                       
PhyMED Management LLC   Provider of anesthesia services   Second lien senior secured loan ($47.2 par due 5/2021)   10.21% (Libor + 8.75%/Q)     12/18/2015     46.8     45.3 (2)(17)      
                                       
Practice Insight, LLC(21)   Revenue cycle management provider to the emergency healthcare industry   First lien senior secured revolving loan ($0.6 par due 8/2022)   8.50% (Base Rate + 4.00%/Q)     8/23/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($12.7 par due 8/2022)   6.48% (Libor + 5.00%/Q)     8/23/2017     12.7     12.7 (2)(17)      
                        13.3     13.3        
                                       
Respicardia, Inc.   Developer of implantable therapies to improve cardiovascular health   Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)         6/28/2012         (2)      
                                       
Sarnova HC, LLC, Tri-Anim Health Services, Inc., and BEMS Holdings, LLC   Distributor of emergency medical service and respiratory products   Second lien senior secured loan ($54.0 par due 7/2022)   11.07% (Libor + 9.50%/Q)     1/29/2016     54.0     54.0 (2)(17)      
                                       
TerSera Therapeutics LLC   Acquirer and developer of specialty therapeutic pharmaceutical products   First lien senior secured loan ($5.3 par due 3/2023)   6.94% (Libor + 5.25%/Q)     5/3/2017     5.2     5.3 (4)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Transaction Data Systems, Inc.   Pharmacy management software provider   Second lien senior secured loan ($35.3 par due 6/2022)   10.35% (Libor + 9.00%/Q)     6/15/2015     35.3     35.3 (2)(17)      
        Second lien senior secured loan ($3.8 par due 6/2022)   10.35% (Libor + 9.00%/Q)     12/19/2017     3.8     3.8 (2)(17)      
                        39.1     39.1        
                                       
U.S. Anesthesia Partners, Inc.   Anesthesiology service provider   Second lien senior secured loan ($71.8 par due 6/2025)   8.82% (Libor + 7.25%/Q)     6/16/2017     70.8     71.8 (2)(17)      
                                       
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC(21)   Operator of urgent care clinics   Preferred units (7,696,613 units)         6/11/2015     7.7     0.5        
        Series A common units (2,000,000 units)         6/11/2015     2.0            
        Series C common units (5,288,427 units)         6/11/2015                
                        9.7     0.5        
                                       
VistaPharm, Inc. and Vertice Pharma UK Parent Limited(21)   Manufacturer and distributor of generic pharmaceutical products   First lien senior secured loan ($7.8 par due 12/2021)   7.86% (Libor + 6.00%/Q)     11/6/2017     7.8     7.7 (2)(17)      
        Preferred shares (40,662 shares)         12/21/2015     0.3     0.5 (9)      
                        8.1     8.2        
                        2,622.8     2,668.6     37.60 %
                                       
Business Services                                      
Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc.(21)   Real estate and facilities management software provider   First lien senior secured revolving loan ($0.7 par due 7/2023)   6.36% (Libor + 4.75%/Q)     7/28/2017     0.7     0.7 (2)(17)      
        Second lien senior secured loan ($13.2 par due 7/2024)   10.13% (Libor + 8.75%/Q)     7/28/2017     13.2     13.2 (2)(17)      
        Second lien senior secured loan ($0.5 par due 7/2024)   10.36% (Libor + 8.75%/Q)     7/28/2017     0.5     0.5 (2)(17)      
        Second lien senior secured loan ($2.6 par due 7/2024)   10.16% (Libor + 8.75%/Q)     7/28/2017     2.6     2.6 (2)(17)      
        Second lien senior secured loan ($58.4 par due 7/2024)   10.13% (Libor + 8.75%/Q)     7/28/2017     58.4     58.4 (2)(17)      
        Senior subordinated loan ($21.2 par due 7/2025)   11.50% PIK     7/28/2017     21.2     20.4 (2)      
        Senior subordinated loan ($75.7 par due 7/2025)   11.50% PIK     7/28/2017     75.7     72.8 (2)      
        Common stock (3,464 shares)         5/16/2016     3.6     2.7 (2)      
        Warrant to purchase up to 11,380 shares of common stock (expires 7/2037)         7/28/2017         3.3 (2)      
                        175.9     174.6        
                                       
Achilles Acquisition LLC(21)   Benefits broker and outsourced workflow automation platform provider for brokers   First lien senior secured loan ($3.0 par due 6/2023)   7.69% (Libor + 6.00%/Q)     6/6/2017     3.0     3.0 (2)(17)      
        First lien senior secured loan ($10.2 par due 6/2023)   7.69% (Libor + 6.00%/Q)     6/6/2017     10.2     10.2 (4)(17)      
                        13.2     13.2        
                                       
Acrisure, LLC, Acrisure Investors FO, LLC and Acrisure Investors SO, LLC   Retail insurance advisor and brokerage   Membership interests (10,793,504 units)         11/18/2016     10.8     10.8 (2)      
        Membership interests (2,698,376 units)         11/18/2016     2.7     2.7 (2)      
                        13.5     13.5        
                                       
BeyondTrust Software, Inc.   Management software solutions provider   First lien senior secured loan ($46.2 par due 11/2023)   7.89% (Libor + 6.25%/Q)     11/21/2017     45.5     45.7 (3)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Brandtone Holdings Limited(9)   Mobile communications and marketing services provider   First lien senior secured loan ($4.7 par due 11/2018)       5/11/2015     4.5     (2)(16)      
        First lien senior secured loan ($3.1 par due 2/2019)       5/11/2015     2.9     (2)(16)      
        Warrant to purchase up to 184,003 units of convertible preferred shares (expires 8/2026)         5/11/2015         (2)      
                        7.4            
                                       
CallMiner, Inc.   Provider of cloud-based conversational analytics solutions   Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)         7/23/2014         (2)      
                                       
Chesapeake Research Review, LLC and Schulman Associates Institutional Review Board, Inc.(21)   Provider of central institutional review boards over clinical trials   First lien senior secured revolving loan ($0.6 par due 11/2023)   7.14% (Libor + 5.75%/Q)     11/7/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($30.8 par due 11/2023)   7.14% (Libor + 5.75%/Q)     11/7/2017     30.8     30.5 (2)(17)      
                        31.4     31.1        
                                       
Clearwater Analytics, LLC(21)   Provider of integrated cloud-based investment portfolio management, accounting, reporting and analytics software   First lien senior secured revolving loan ($0.4 par due 9/2022)   9.00% (Libor + 7.50%/Q)     9/1/2016     0.4     0.4 (2)(17)      
                                       
CMW Parent LLC (fka Black Arrow, Inc.)   Multiplatform media firm   Series A units (32 units)         9/11/2015         (2)      
                                       
Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited(8)(9)   Compliance, accounting and tax consulting services provider   Preferred stock (34,028,135 shares)         1/3/2017     2.3     9.9        
        Preferred stock (17,653,253 shares)         1/3/2017     21.6     26.0        
        Preferred stock (3,232,666 shares)         1/3/2017     4.0     4.7        
                        27.9     40.6        
                                       
Command Alkon Incorporated(21)   Software solutions provider to the ready-mix concrete industry   First lien senior secured revolving loan ($1.5 par due 9/2022)   8.50% (Base Rate + 4.00%/Q)     9/1/2017     1.5     1.5 (2)(17)(20)      
        First lien senior secured loan ($25.6 par due 9/2023)   6.48% (Libor + 5.00%/Q)     9/1/2017     25.6     25.3 (2)(17)      
        Second lien senior secured loan ($33.8 par due 3/2024)   10.48% (Libor + 9.00%/Q)     9/1/2017     33.8     33.4 (2)(17)      
                        60.9     60.2        
                                       
Compusearch Software Systems, Inc.   Provider of enterprise software and services for organizations in the public sector   Second lien senior secured loan ($51.0 par due 11/2021)   10.16% (Libor + 8.75%/Q)     1/3/2017     51.0     51.0 (2)(17)      
                                       
Compuware Parent, LLC   Web and mobile cloud performance testing and monitoring services provider   Class A-1 common stock (4,132 units)         12/15/2014     2.2     2.2 (2)      
        Class B-1 common stock (4,132 units)         12/15/2014     0.4     0.4 (2)      
        Class C-1 common stock (4,132 units)         12/15/2014     0.3     0.3 (2)      
        Class A-2 common stock (4,132 units)         12/15/2014         (2)      
        Class B-2 common stock (4,132 units)         12/15/2014         (2)      
        Class C-2 common stock (4,132 units)         12/15/2014         (2)      
                        2.9     2.9        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Convergint Technologies LLC   Integrated services provider for security, fire and life safety   Second lien senior secured loan ($25.0 par due 12/2020)   10.27% (Libor + 8.50%/Q)     12/18/2017     25.0     25.0 (2)(17)      
        Second lien senior secured loan ($3.0 par due 12/2020)   10.12% (Libor + 8.50%/Q)     1/3/2017     3.0     3.0 (2)(17)      
        Second lien senior secured loan ($6.0 par due 12/2020)   9.98% (Libor + 8.50%/Q)     1/3/2017     6.0     6.0 (2)(17)      
        Second lien senior secured loan ($14.0 par due 12/2020)   10.00% (Libor + 8.50%/Q)     1/3/2017     14.0     14.0 (2)(17)      
        Second lien senior secured loan ($8.0 par due 12/2020)   10.27% (Libor + 8.50%/Q)     1/3/2017     8.0     8.0 (2)(17)      
        Second lien senior secured loan ($8.0 par due 12/2020)   9.45% (Libor + 8.00%/Q)     1/3/2017     8.0     8.0 (2)(17)      
        Second lien senior secured loan ($11.0 par due 12/2020)   9.50% (Libor + 8.00%/Q)     1/3/2017     11.0     11.0 (2)(17)      
        Second lien senior secured loan ($75.0 par due 12/2020)   9.61% (Libor + 8.00%/Q)     1/3/2017     75.0     75.0 (2)(17)      
                        150.0     150.0        
                                       
Directworks, Inc. and Co-Exprise Holdings, Inc.   Provider of cloud-based software solutions for direct materials sourcing and supplier management for manufacturers   First lien senior secured loan ($1.8 par due 4/2018)       12/19/2014     1.3     0.2 (2)(16)      
        Warrant to purchase up to 1,875,000 shares of Series 1 preferred stock (expires 12/2024)         12/19/2014         (2)      
                        1.3     0.2        
                                       
DRB Holdings, LLC(21)   Provider of integrated technology solutions to car wash operators   First lien senior secured loan ($36.7 par due 10/2023)   7.10% (Libor + 5.75%/Q)     10/6/2017     36.7     36.3 (2)(17)      
                                       
DTI Holdco, Inc. and OPE DTI Holdings, Inc.(21)   Provider of legal process outsourcing and managed services   First lien senior secured loan ($4.1 par due 10/2023)   6.63% (Libor + 5.25%/Q)     9/23/2016     4.1     4.1 (4)(17)      
        Class A common stock (7,500 shares)         8/19/2014     7.5     6.9 (2)      
        Class B common stock (7,500 shares)         8/19/2014         (2)      
                        11.6     11.0        
                                       
Emergency Communications Network, LLC(21)   Provider of mission critical emergency mass notification solutions   First lien senior secured loan ($37.9 par due 6/2023)   7.82% (Libor + 6.25%/Q)     6/1/2017     37.7     37.5 (2)(17)      
        First lien senior secured loan ($19.9 par due 6/2023)   7.82% (Libor + 6.25%/Q)     6/1/2017     19.8     19.8 (4)(17)      
                        57.5     57.3        
                                       
EN Engineering, L.L.C.(21)   National utility services firm providing engineering and consulting services to natural gas, electric power and other energy and industrial end markets   First lien senior secured revolving loan       6/30/2015         (19)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Entertainment Partners, LLC and Entertainment Partners Canada Inc.(21)   Provider of entertainment workforce and production management solutions   First lien senior secured loan ($7.9 par due 5/2022)   6.85% (Libor + 5.50%/Q)     5/8/2017     7.3     7.9 (2)(9)(17)      
        First lien senior secured loan ($4.2 par due 5/2023)   7.15% (Libor + 5.75%/Q)     5/8/2017     4.2     4.1 (2)(17)      
        First lien senior secured loan ($26.1 par due 5/2023)   7.15% (Libor + 5.75%/Q)     5/8/2017     26.1     25.8 (3)(17)      
        First lien senior secured loan ($3.6 par due 5/2023)   7.44% (Libor + 5.75%/Q)     5/8/2017     3.6     3.6 (2)(17)      
        First lien senior secured loan ($22.5 par due 5/2023)   7.44% (Libor + 5.75%/Q)     5/8/2017     22.5     22.2 (3)(17)      
        First lien senior secured loan ($4.2 par due 5/2023)   7.34% (Libor + 5.75%/Q)     5/8/2017     4.2     4.1 (2)(17)      
        First lien senior secured loan ($26.1 par due 5/2023)   7.34% (Libor + 5.75%/Q)     5/8/2017     26.1     25.8 (3)(17)      
                        94.0     93.5        
                                       
First Insight, Inc.   Software company providing merchandising and pricing solutions to companies worldwide   Warrant to purchase up to 122,827 units of Series C preferred stock (expires 3/2024)         3/20/2014         (2)      
                                       
Flexera Software LLC   Provider of software and software applications that manages application usage, compliance and security risk   Second lien senior secured loan ($5.0 par due 4/2021)   8.57% (Libor + 7.00%/Q)     1/3/2017     4.8     5.0 (2)(17)      
                                       
Foundation Risk Partners, Corp.(21)   Full service independent insurance agency   First lien senior secured loan ($23.5 par due 11/2023)   6.16% (Libor + 4.75%/Q)     11/10/2017     23.5     23.3 (3)(17)      
        Second lien senior secured loan ($27.5 par due 11/2024)   9.91% (Libor + 8.50%/Q)     11/10/2017     27.5     27.2 (2)(17)      
                        51.0     50.5        
                                       
Graphpad Software, LLC(21)   Provider of data analysis, statistics, and visualization software solutions for scientific research applications   First lien senior secured revolving loan ($0.6 par due 12/2023)   7.66% (Libor + 6.00%/Q)     12/21/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($8.8 par due 12/2023)   7.66% (Libor + 6.00%/Q)     12/21/2017     8.8     8.7 (2)(17)      
                        9.4     9.3        
                                       
GTCR-Ultra Acquisition, Inc. and GTCR-Ultra Holdings, LLC(21)   Provider of payment processing and merchant acquiring solutions   First lien senior secured loan ($8.9 par due 8/2024)   7.37% (Libor + 6.00%/Q)     8/1/2017     8.9     8.9 (4)(17)      
        Class A-2 units (911 units)         8/1/2017     0.9     1.0 (2)      
        Class B units (2,878,372 units)         8/1/2017         (2)      
                        9.8     9.9        
                                       
HAI Acquisition Corporation and Aloha Topco, LLC(21)   Professional employer organization provider of human resources, compliance and risk management services   First lien senior secured revolving loan ($4.7 par due 11/2023)   7.38% (Libor + 6.00%/Q)     11/1/2017     4.7     4.7 (2)(17)      
        First lien senior secured loan ($81.4 par due 11/2024)   9.50% (Base Rate + 5.00%/Q)     11/1/2017     81.4     80.6 (2)(17)      
        Class A units (16,980 units)         11/1/2017     1.7     1.7 (2)      
                        87.8     87.0        
                                       
IfByPhone Inc.   Voice-based marketing automation software provider   Warrant to purchase up to 124,300 shares of Series C preferred stock (expires 10/2022)         10/15/2012     0.1     0.1 (2)      
                                       
Implementation Management Assistance, LLC(21)   Revenue cycle consulting firm to the healthcare industry   First lien senior secured loan ($8.0 par due 12/2023)   5.46% (Libor + 4.00%/Q)     12/13/2017     8.0     7.9 (2)(17)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Infogix, Inc. and Infogix Parent Corporation   Enterprise data analytics and integrity software solutions provider   First lien senior secured loan ($51.6 par due 12/2021)   8.44% (Libor + 6.75%/Q)     1/3/2017     51.6     51.6 (2)(12)(17)      
        First lien senior secured loan ($34.9 par due 12/2021)   8.44% (Libor + 6.75%/Q)     1/3/2017     34.9     34.9 (3)(12)(17)      
        Series A preferred stock (2,475 shares)         1/3/2017     2.5     2.9        
        Common stock (1,297,768 shares)         1/3/2017         0.3        
                        89.0     89.7        
                                       
Inmar, Inc.   Technology-driven solutions provider for retailers, wholesalers and manufacturers   Second lien senior secured loan ($28.3 par due 5/2025)   9.42% (Libor + 8.00%/Q)     4/25/2017     27.9     28.3 (2)(17)      
                                       
InterVision Systems, LLC and InterVision Holdings, LLC   Provider of cloud based IT solutions, infrastructure and services   First lien senior secured loan ($24.7 par due 5/2022)   9.79% (Libor + 7.95%/Q)     5/31/2017     24.7     24.7 (2)(17)      
        First lien senior secured loan ($10.0 par due 5/2022)   9.79% (Libor + 7.95%/Q)     5/31/2017     10.0     10.0 (4)(17)      
        Class A membership units (1,000 units)         5/31/2017     1.0     1.4        
                        35.7     36.1        
                                       
iParadigms Holdings, LLC   Anti-plagiarism software provider to the education market   Second lien senior secured loan ($37.5 par due 7/2022)   8.94% (Libor + 7.25%/Q)     1/3/2017     36.8     36.7 (2)(17)      
                                       
iPipeline, Inc., Internet Pipeline, Inc., iPipeline Limited and iPipeline Holdings, Inc.(21)   Provider of SaaS-based software solutions to the insurance and financial services industry   First lien senior secured loan ($7.5 par due 8/2022)   7.74% (Libor + 6.25%/Q)     6/15/2017     7.4     7.5 (2)(17)      
        First lien senior secured loan ($9.1 par due 8/2022)   7.74% (Libor + 6.25%/Q)     9/15/2017     9.1     9.1 (2)(17)      
        First lien senior secured loan ($46.4 par due 8/2022)   8.60% (Libor + 7.25%/Q)     8/4/2015     46.4     46.4 (3)(17)      
        First lien senior secured loan ($14.7 par due 8/2022)   8.60% (Libor + 7.25%/Q)     8/4/2015     14.7     14.7 (4)(17)      
        First lien senior secured loan ($12.2 par due 8/2022)   8.07% (Libor + 6.50%/Q)     12/18/2017     12.0     12.2 (2)(9)(17)      
        Preferred stock (1,100 shares)         8/4/2015     1.1     3.5 (2)      
        Common stock (668,781 shares)         8/4/2015         (2)      
                        90.7     93.4        
                                       
IQMS   Provider of enterprise resource planning and manufacturing execution software for small and midsized manufacturers   First lien senior secured loan ($4.0 par due 3/2022)   9.82% (Libor + 8.25%/Q)     3/28/2017     4.0     4.0 (2)(17)      
        First lien senior secured loan ($18.8 par due 3/2022)   9.82% (Libor + 8.25%/Q)     3/28/2017     18.8     18.8 (3)(17)      
        First lien senior secured loan ($15.0 par due 3/2022)   9.82% (Libor + 8.25%/Q)     3/28/2017     15.0     15.0 (4)(17)      
                        37.8     37.8        
                                       
Iron Bow Technologies, LLC   Provider and value added reseller of information technology products and solutions   Second lien senior secured loan ($10.0 par due 2/2021)   13.11% (Libor + 10.00% Cash, 1.75% PIK/Q)     1/3/2017     10.0     10.0 (2)(17)      
                                       
IronPlanet, Inc.   Online auction platform provider for used heavy equipment   Warrant to purchase to up to 133,333 shares of Series C preferred stock (expires 9/2023)         9/23/2013     0.2     0.4 (2)      
                                       
LLSC Holdings Corporation (dba Lawrence Merchandising Services)(8)   Marketing services provider   Series A preferred stock (9,000 shares)         1/3/2017     19.2     18.2        
        Common stock (1,000 shares)         1/3/2017                
                        19.2     18.2        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Miles 33 (Finance) Limited(8)(9)   Software provider to the regional media industry and magazines   First lien senior secured loan ($0.4 par due 9/2018)   7.00% (EURIBOR + 3.50% Cash, 3.00% PIK/Q)     1/3/2017     0.3     0.4        
        First lien senior secured loan ($4.1 par due 9/2018)   7.00% (EURIBOR + 3.50% Cash, 3.00% PIK/Q)     1/3/2017     3.7     4.1        
        Senior subordinated loan ($17.4 par due 9/2021)   5.00% (EURIBOR + 4.50%/Q)     1/3/2017     9.9     13.4        
        Preferred stock (19,500,000 shares)         1/3/2017                
        Preferred stock (900,000 shares)         1/3/2017                
        Common stock (600,000 shares)         1/3/2017                
                        13.9     17.9        
                                       
Ministry Brands, LLC and MB Parent HoldCo, L.P.(21)   Software and payment services provider to faith-based institutions   First lien senior secured revolving loan ($10.9 par due 12/2022)   6.57% (Libor + 5.00%/Q)     12/2/2016     10.9     10.9 (2)(17)      
        First lien senior secured loan ($1.7 par due 12/2022)   6.57% (Libor + 5.00%/Q)     8/22/2017     1.7     1.7 (2)(17)      
        First lien senior secured loan ($1.4 par due 12/2022)   6.38% (Libor + 5.00%/Q)     8/22/2017     1.4     1.4 (2)(17)      
        First lien senior secured loan ($10.6 par due 12/2022)   6.38% (Libor + 5.00%/Q)     4/6/2017     10.6     10.6 (2)(17)      
        First lien senior secured loan ($16.7 par due 12/2022)   6.38% (Libor + 5.00%/Q)     4/6/2017     16.5     16.7 (2)(17)      
        Second lien senior secured loan ($4.6 par due 6/2023)   10.82% (Libor + 9.25%/Q)     8/22/2017     4.6     4.6 (2)(17)      
        Second lien senior secured loan ($1.6 par due 6/2023)   10.60% (Libor + 9.25%/Q)     8/22/2017     1.6     1.6 (2)(17)      
        Second lien senior secured loan ($5.1 par due 6/2023)   10.63% (Libor + 9.25%/Q)     8/22/2017     5.1     5.1 (2)(17)      
        Second lien senior secured loan ($16.6 par due 6/2023)   10.63% (Libor + 9.25%/Q)     12/2/2016     16.6     16.6 (2)(17)      
        Second lien senior secured loan ($4.7 par due 6/2023)   10.63% (Libor + 9.25%/Q)     4/6/2017     4.7     4.7 (2)(17)      
        Second lien senior secured loan ($9.2 par due 6/2023)   10.63% (Libor + 9.25%/Q)     4/6/2017     9.2     9.2 (2)(17)      
        Second lien senior secured loan ($90.0 par due 6/2023)   10.63% (Libor + 9.25%/Q)     12/2/2016     89.3     90.0 (2)(17)      
        Class A units (500,000 units)         12/2/2016     5.0     6.8 (2)      
                        177.2     179.9        
                                       
MVL Group, Inc.(8)   Marketing research provider   Common stock (560,716 shares)         4/1/2010         (2)      
                                       
NAS, LLC, Nationwide Marketing Group, LLC and Nationwide Administrative Services, Inc.   Buying and marketing services organization for appliance, furniture and consumer electronics dealers   Second lien senior secured loan ($24.1 par due 12/2021)   10.32% (Libor + 9.00%/Q)     6/1/2015     24.1     24.1 (2)(17)      
                                       
Novetta Solutions, LLC   Provider of advanced analytics solutions for the government, defense and commercial industries   First lien senior secured loan ($12.7 par due 10/2022)   6.70% (Libor + 5.00%/Q)     1/3/2017     12.3     12.1 (2)(17)      
        Second lien senior secured loan ($31.0 par due 10/2023)   10.20% (Libor + 8.50%/Q)     1/3/2017     28.4     27.9 (2)(17)      
                        40.7     40.0        
                                       
Palermo Finance Corporation(21)   Provider of mission-critical integrated public safety software and services to local, state and federal agencies   First lien senior secured revolving loan       4/17/2017         (19)      
        First lien senior secured loan ($11.0 par due 4/2023)   5.85% (Libor + 4.50%/Q)     4/17/2017     10.9     11.0 (4)(17)      
        Second lien senior secured loan ($54.3 par due 10/2023)   9.85% (Libor + 8.50%/Q)     4/17/2017     54.3     54.3 (2)(17)      
                        65.2     65.3        
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Park Place Technologies, LLC   Provider of third party hardware maintenance and support services for IT data centers   Second lien senior secured loan ($41.5 par due 12/2022)   10.54% (Libor + 9.00%/Q)     1/3/2017     41.5     41.5 (2)(17)      
                                       
PayNearMe, Inc.   Electronic cash payment system provider   Warrant to purchase up to 195,726 shares of Series E preferred stock (expires 3/2023)         3/11/2016     0.2     (5)      
                                       
PDI TA Holdings, Inc.(21)   Provider of enterprise management software for the convenience retail and petroleum wholesale markets   First lien senior secured revolving loan ($0.9 par due 8/2023)   8.25% (Base Rate + 3.75%/Q)     8/25/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($3.7 par due 8/2023)   6.32% (Libor + 4.75%/Q)     8/25/2017     3.7     3.7 (2)(17)      
        First lien senior secured loan ($26.4 par due 8/2023)   6.21% (Libor + 4.75%/Q)     8/25/2017     26.4     26.1 (2)(17)      
        Second lien senior secured loan ($8.2 par due 8/2024)   10.32% (Libor + 8.75%/Q)     8/25/2017     8.2     8.1 (2)(17)      
        Second lien senior secured loan ($66.8 par due 8/2024)   10.21% (Libor + 8.75%/Q)     8/25/2017     66.8     66.1 (2)(17)      
                        106.0     104.9        
                                       
PHL Investors, Inc., and PHL Holding Co.(8)   Mortgage services   Class A common stock (576 shares)         7/31/2012     3.8     (2)      
                                       
PHNTM Holdings, Inc. and Planview Parent, Inc.   Provider of project and portfolio management software   First lien senior secured loan ($5.1 par due 1/2023)   6.82% (Libor + 5.25%/Q)     12/7/2017     5.1     5.1 (2)(17)      
        First lien senior secured loan ($31.6 par due 1/2023)   6.82% (Libor + 5.25%/Q)     1/27/2017     31.1     31.6 (2)(17)      
        First lien senior secured loan ($5.0 par due 1/2023)   6.82% (Libor + 5.25%/Q)     1/27/2017     4.9     5.0 (4)(17)      
        Second lien senior secured loan ($62.0 par due 7/2023)   11.32% (Libor + 9.75%/Q)     1/27/2017     61.2     62.0 (2)(17)      
        Class A common shares (990 shares)         1/27/2017     1.0     1.1 (2)      
        Class B common shares (168,329 shares)         1/27/2017         0.2 (2)      
                        103.3     105.0        
                                       
Poplicus Incorporated   Business intelligence and market analytics platform for companies that sell to the public sector   Warrant to purchase up to 2,402,991 shares of Series C preferred stock (expires 6/2025)         6/25/2015     0.1     (5)      
                                       
PowerPlan, Inc. and Project Torque Ultimate Parent Corporation   Fixed asset financial management software provider   Second lien senior secured loan ($30.0 par due 2/2023)   10.57% (Libor + 9.00%/Q)     2/23/2015     29.8     30.0 (2)(17)      
        Second lien senior secured loan ($50.0 par due 2/2023)   10.57% (Libor + 9.00%/Q)     2/23/2015     49.7     50.0 (3)(17)      
        Class A common stock (1,697 shares)         2/23/2015     1.7     3.3 (2)      
        Class B common stock (989,011 shares)         2/23/2015         (2)      
                        81.2     83.3        
                                       
Project Alpha Intermediate Holding, Inc. and Qlik Parent, Inc.   Provider of data visualization software for data analytics   Class A common shares (7,444 shares)         8/22/2016     7.4     7.6 (2)      
        Class B common shares (1,841,608.69 shares)         8/22/2016     0.1     (2)      
                        7.5     7.6        
                                       
R2 Acquisition Corp.   Marketing services   Common stock (250,000 shares)         5/29/2007     0.2     0.3 (2)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
SCM Insurance Services Inc.(9)(21)   Provider of claims management, claims investigation & support and risk management solutions for the Canadian property and casualty insurance industry   First lien senior secured loan ($21.5 par due 8/2024)   6.35% (Libor + 5.00%/Q)     8/29/2017     21.5     21.2 (2)(17)      
        Second lien senior secured loan ($60.5 par due 3/2025)   10.35% (Libor + 9.00%/Q)     8/29/2017     60.5     59.9 (2)(17)      
                        82.0     81.1        
                                       
Shift PPC LLC(21)   Digital solutions provider   First lien senior secured loan ($1.7 par due 12/2021)   7.57% (Libor + 6.00%/Q)     12/22/2016     1.7     1.7 (4)(17)      
        First lien senior secured loan ($3.3 par due 12/2021)   7.69% (Libor + 6.00%/Q)     12/22/2016     3.3     3.3 (4)(17)      
        First lien senior secured loan ($5.0 par due 12/2021)   7.84% (Libor + 6.00%/Q)     12/22/2016     5.0     5.0 (4)(17)      
                        10.0     10.0        
                                       
Sparta Systems, Inc., Project Silverback Holdings Corp. and Silverback Holdings, Inc.(21)   Quality management software provider   Second lien senior secured loan ($20.0 par due 8/2025)   9.69% (Libor + 8.25%/Q)     8/21/2017     19.6     19.8 (2)(17)      
        Series B preferred shares (10,084 shares)         8/21/2017     1.1     1.1        
                        20.7     20.9        
                                       
Talari Networks, Inc.   Networking equipment provider   First lien senior secured loan ($6.0 par due 10/2019)   10.88% (Libor + 9.50%/M)     8/3/2015     6.0     5.7 (5)(17)      
        Warrant to purchase up to 421,052 shares of Series D-1 preferred stock (expires 8/2022)         8/3/2015     0.1     0.1 (5)      
                        6.1     5.8        
                                       
The Gordian Group, Inc.(21)   Construction software and service provider   First lien senior secured loan ($8.4 par due 7/2019)   6.14% (Libor + 4.50%/Q)     1/3/2017     8.3     8.4 (3)(17)      
        First lien senior secured loan ($3.2 par due 7/2019)   6.14% (Libor + 4.50%/Q)     1/3/2017     3.1     3.2 (4)(17)      
        First lien senior secured loan ($8.9 par due 7/2019)   5.86% (Libor + 4.50%/Q)     1/3/2017     8.8     8.9 (3)(17)      
        First lien senior secured loan ($3.4 par due 7/2019)   5.86% (Libor + 4.50%/Q)     1/3/2017     3.3     3.4 (4)(17)      
        First lien senior secured loan ($7.8 par due 7/2019)   5.95% (Libor + 4.50%/Q)     1/3/2017     7.6     7.8 (3)(17)      
        First lien senior secured loan ($2.9 par due 7/2019)   5.95% (Libor + 4.50%/Q)     1/3/2017     2.9     2.9 (4)(17)      
                        34.0     34.6        
                                       
The Greeley Company, Inc. and HCP Acquisition Holdings, LLC(8)   Healthcare compliance advisory services   Senior subordinated loan ($10.5 par due 3/2017)         3/5/2013         (2)(16)      
        Class A units (14,293,110 units)         6/26/2008         (2)      
                                   
                                     

F-187


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
UL Holding Co., LLC (7)   Provider of collection and landfill avoidance solutions for food waste and unsold food products   Senior subordinated loan ($2.8 par due 5/2020)   10.00% PIK     4/30/2012     0.9     2.8 (2)      
        Senior subordinated loan ($0.4 par due 5/2020)         4/30/2012     0.1     0.4 (2)      
        Senior subordinated loan ($6.2 par due 5/2020)   10.00% PIK     4/30/2012     1.9     6.2 (2)      
        Senior subordinated loan ($0.5 par due 5/2020)         4/30/2012     0.2     0.5 (2)      
        Senior subordinated loan ($24.5 par due 5/2020)   10.00% PIK     4/30/2012     7.6     24.5 (2)      
        Senior subordinated loan ($3.8 par due 5/2020)         4/30/2012     1.2     3.8 (2)      
        Class A common units (533,351 units)         6/17/2011     5.0     2.8 (2)      
        Class B-5 common units (272,834 units)         6/17/2011     2.5     1.4 (2)      
        Class C common units (758,546 units)         4/25/2008         (2)      
        Warrant to purchase up to 719,044 shares of Class A units         5/2/2014         (2)      
        Warrant to purchase up to 28,663 shares of Class B-1 units         5/2/2014         (2)      
        Warrant to purchase up to 57,325 shares of Class B-2 units         5/2/2014         (2)      
        Warrant to purchase up to 29,645 shares of Class B-3 units         5/2/2014         (2)      
        Warrant to purchase up to 80,371 shares of Class B-5 units         5/2/2014         (2)      
        Warrant to purchase up to 59,655 shares of Class B-6 units         5/2/2014         (2)      
        Warrant to purchase up to 1,046,713 shares of Class C units         5/2/2014         (2)      
                        19.4     42.4        
                                       
Velocity Holdings Corp.   Hosted enterprise resource planning application management services provider   Common units (1,713,546 units)         12/13/2013     4.5     3.4        
                                       
Visual Edge Technology, Inc.   Provider of outsourced office solutions with a focus on printer and copier equipment and other parts and supplies   First lien senior secured loan ($1.2 par due 8/2022)   7.32% (Libor + 5.75%/Q)     8/31/2017     1.2     1.2 (2)(17)      
        First lien senior secured loan ($3.8 par due 8/2022)   7.13% (Libor + 5.75%/Q)     8/31/2017     3.8     3.8 (2)(17)      
        First lien senior secured loan ($10.0 par due 8/2022)   7.23% (Libor + 5.75%/Q)     8/31/2017     10.0     10.0 (2)(17)      
        Senior subordinated loan ($41.5 par due 9/2024)   12.50% PIK     8/31/2017     37.6     39.0 (2)      
        Warrant to purchase up to 1,816,089 shares of common stock (expires 8/2027)         8/31/2017         0.9 (2)      
        Warrant to purchase up to 2,070,511 shares of preferred stock (expires 8/2027)         8/31/2017     4.1     4.4 (2)      
                        56.7     59.3        
                                     

F-188


Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
VRC Companies, LLC(21)   Provider of records and information management services   First lien senior secured revolving loan ($0.8 par due 3/2022)   10.00% (Base Rate + 5.50%/Q)     4/17/2017     0.8     0.8 (2)(17)      
        First lien senior secured loan ($1.4 par due 3/2023)   7.82% (Libor + 6.50%/Q)     4/17/2017     1.4     1.4 (2)(17)      
        First lien senior secured loan ($0.2 par due 3/2023)   8.03% (Libor + 6.50%/Q)     4/17/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($0.4 par due 3/2023)   7.93% (Libor + 6.50%/Q)     10/3/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($0.3 par due 3/2023)   7.98% (Libor + 6.50%/Q)     10/3/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.3 par due 3/2023)   8.03% (Libor + 6.50%/Q)     10/3/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($5.5 par due 3/2023)   8.12% (Libor + 6.50%/Q)     4/17/2017     5.5     5.5 (2)(17)      
                        8.9     8.9        
                                       
WorldPay Group PLC(9)   Payment processing company   C2 shares (73,974 shares)         10/21/2015         (24)      
                                       
Zywave, Inc.(21)   Provider of software and technology-enabled content and analytical solutions to insurance brokers   First lien senior secured revolving loan ($1.3 par due 11/2022)   6.57% (Libor + 5.00%/Q)     11/17/2016     1.3     1.3 (2)(17)      
        First lien senior secured revolving loan ($1.0 par due 11/2022)   8.50% (Base Rate + 4.00%/Q)     11/17/2016     1.0     1.0 (2)(17)      
        Second lien senior secured loan ($27.0 par due 11/2023)   10.42% (Libor + 9.00%/Q)     11/17/2016     27.0     27.0 (2)(17)      
                        29.3     29.3        
                        2,235.8     2,267.3     31.94 %
                                       
Consumer Products                                      
Badger Sportswear Acquisition, Inc.   Provider of team uniforms and athletic wear   Second lien senior secured loan ($56.8 par due 3/2024)   10.46% (Libor + 9.00%/Q)     9/6/2016     56.7     56.8 (2)(17)      
                                       
BRG Sports, Inc.   Designer, manufacturer and licensor of branded sporting goods   Preferred stock (2,009 shares)         1/3/2017                
        Common stock (6,566,655 shares)         1/3/2017         0.3        
                            0.3        
                                       
Consumer Health Parent LLC   Developer and marketer of over-the-counter cold remedy products   Preferred units (1,072 units)         12/15/2017     1.1     1.1 (2)      
        Series A units (1,072 units)         12/15/2017         (2)      
                        1.1     1.1        
                                       
Feradyne Outdoors, LLC and Bowhunter Holdings, LLC   Provider of branded archery and bowhunting accessories   Common units (421 units)         4/24/2014     4.2     1.0 (2)      
                                       
Implus Footcare, LLC   Provider of footwear and other accessories   First lien senior secured loan ($14.6 par due 4/2021)   8.44% (Libor + 6.75%/Q)     6/1/2017     14.6     14.6 (2)(17)      
        First lien senior secured loan ($77.5 par due 4/2021)   8.44% (Libor + 6.75%/Q)     6/1/2017     77.5     77.5 (2)(17)      
        First lien senior secured loan ($19.9 par due 4/2021)   8.44% (Libor + 6.75%/Q)     6/1/2017     19.9     19.9 (4)(17)      
                        112.0     112.0        
                                       
Indra Holdings Corp.   Designer, marketer, and distributor of rain and cold weather products   Second lien senior secured loan ($80.0 par due 11/2021)       5/1/2014     76.9     43.6 (2)(16)      
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Plantation Products, LLC, Seed Holdings, Inc. and Flora Parent, Inc.   Provider of branded lawn and garden products   Second lien senior secured loan ($2.0 par due 6/2021)   9.41% (Libor + 7.99%/Q)     12/23/2014     2.0     2.0 (2)(17)      
        Second lien senior secured loan ($54.0 par due 6/2021)   9.41% (Libor + 7.99%/Q)     12/23/2014     53.8     54.0 (3)(17)      
        Second lien senior secured loan ($10.0 par due 6/2021)   9.41% (Libor + 7.99%/Q)     12/23/2014     10.0     10.0 (4)(17)      
        Common stock (30,000 shares)         12/23/2014     3.0     6.0 (2)      
                        68.8     72.0        
                                       
Rug Doctor, LLC and RD Holdco Inc.(8)   Manufacturer and marketer of carpet cleaning machines   Second lien senior secured loan ($16.9 par due 12/2018)   11.42% (Libor + 9.75%/Q)     1/3/2017     16.9     16.9 (2)(17)      
        Common stock (458,596 shares)         1/3/2017     14.0     10.8        
        Warrant to purchase up to 56,372 shares of common stock (expires 12/2023)         1/3/2017                
                        30.9     27.7        
                                       
S Toys Holdings LLC (fka The Step2 Company, LLC)(8)   Toy manufacturer   Class B common units (126,278,000 units)         10/30/2014         0.5 (2)      
        Common units (1,116,879 units)         4/1/2011                
        Warrant to purchase up to 3,157,895 units         4/1/2010                
                            0.5        
                                       
SHO Holding I Corporation   Manufacturer and distributor of slip resistant footwear   Second lien senior secured loan ($100.0 par due 4/2023)   9.92% (Libor + 8.50%/Q)     10/27/2015     98.2     92.0 (2)(17)      
                                       
Shock Doctor, Inc. and Shock Doctor Holdings, LLC (7)   Developer, marketer and distributor of sports protection equipment and accessories   Second lien senior secured loan ($89.4 par due 10/2021)   11.86% (Libor + 10.50%/Q)     4/22/2015     89.4     82.3 (2)(17)      
        Class A preferred units (50,000 units)         3/14/2014     5.0     1.9 (2)      
        Class C preferred units (50,000 units)         4/22/2015     5.0     1.9 (2)      
                        99.4     86.1        
                                       
Singer Sewing Company   Manufacturer of consumer sewing machines   First lien senior secured loan ($174.5 par due 12/2017)   9.19% (Libor + 7.00% Cash, 0.50% PIK/Q)     7/26/2017     174.5     165.7 (2)(17)      
                                       
Varsity Brands Holding Co., Inc., Hercules Achievement, Inc., Hercules Achievement Holdings, Inc. and Hercules VB Holdings, Inc.   Leading manufacturer and distributor of textiles, apparel & luxury goods   Second lien senior secured loan ($122.7 par due 12/2025)   9.82% (Libor + 8.25%/Q)     12/15/2017     122.7     122.7 (2)(17)      
        Common stock (3,548,841 shares)         12/11/2014     3.8     6.1 (2)      
        Common stock (3,548,841 shares)         12/11/2014     4.3     6.1 (2)      
                        130.8     134.9        
                                       
Woodstream Group, Inc. and Woodstream Corporation(21)   Pet products manufacturer   First lien senior secured loan ($1.0 par due 5/2022)   7.69% (Libor + 6.25%/Q)     6/21/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($2.0 par due 5/2022)   7.69% (Libor + 6.25%/Q)     6/21/2017     2.0     2.0 (4)(17)      
        First lien senior secured loan ($3.1 par due 5/2022)   7.89% (Libor + 6.25%/Q)     6/21/2017     3.1     3.1 (2)(17)      
        First lien senior secured loan ($6.2 par due 5/2022)   7.89% (Libor + 6.25%/Q)     6/21/2017     6.2     6.2 (4)(17)      
                        12.3     12.3        
                        865.8     806.0     11.36 %
                                     

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Table of Contents

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Other Services                                      
American Residential Services L.L.C.   Heating, ventilation and air conditioning services provider   Second lien senior secured loan ($67.0 par due 12/2022)   9.57% (Libor + 8.00%/Q)     6/30/2014     66.7     66.3 (2)(17)      
                                       
Associated Asphalt Partners, LLC   Provider of asphalt terminalling, storage and distribution   First lien senior secured loan ($4.2 par due 4/2024)   6.82% (Libor + 5.25%/Q)     3/30/2017     4.2     3.8 (2)(17)      
                                       
Champion Parent Corporation and Calera XVI, LLC(8)   Endurance sports media and event operator   First lien senior secured revolving loan ($0.7 par due 11/2018)       11/30/2012         (2)(16)      
        First lien senior secured loan ($5.9 par due 11/2018)       11/30/2012     0.9     0.2 (2)(16)      
        Preferred shares (18,875 shares)         3/25/2016         (2)      
        Membership units (2,522,512 units)         11/30/2012         (2)      
        Common shares (114,000 shares)         3/25/2016         (2)      
                        0.9     0.2        
                                       
Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC (7)(21)   Provider of outsourced healthcare linen management solutions   First lien senior secured revolving loan ($2.0 par due 12/2021)   7.82% (Libor + 6.25%/Q)     3/13/2014     2.0     2.0 (2)(17)(20)      
        First lien senior secured loan ($12.0 par due 12/2021)   7.82% (Libor + 6.25%/Q)     4/6/2017     12.0     12.0 (2)(17)      
        First lien senior secured loan ($5.0 par due 12/2021)   7.82% (Libor + 6.25%/Q)     3/13/2014     5.0     5.0 (2)(17)      
        First lien senior secured loan ($5.2 par due 12/2021)   7.82% (Libor + 6.25%/Q)     3/13/2014     5.2     5.2 (3)(17)      
        Class A preferred units (2,475,000 units)         3/13/2014     2.5     3.9 (2)      
        Class B common units (275,000 units)         3/13/2014     0.3     0.4 (2)      
                        27.0     28.5        
                                       
CST Buyer Company (d/b/a Intoxalock)(21)   Provider of ignition interlock devices   First lien senior secured loan ($11.3 par due 3/2023)   7.75% (Libor + 6.25%/Q)     3/1/2017     11.0     11.3 (2)(17)      
                                       
Dwyer Acquisition Parent, Inc. and TDG Group Holding Company   Operator of multiple franchise concepts primarily related to home maintenance or repairs   Senior subordinated loan ($52.7 par due 2/2020)   11.00%     8/15/2014     52.7     52.7 (2)      
        Senior subordinated loan ($23.5 par due 2/2020)   11.00%     5/1/2017     23.5     23.5 (2)      
        Senior subordinated loan ($31.5 par due 2/2020)   11.00%     6/12/2015     31.5     31.5 (2)      
        Common stock (32,843 shares)         8/15/2014     2.2     5.1 (2)      
                        109.9     112.8        
                                       
Massage Envy, LLC and ME Equity LLC(21)   Franchisor in the massage industry   First lien senior secured revolving loan ($0.5 par due 9/2020)   8.44% (Libor + 6.75%/Q)     6/28/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($0.3 par due 9/2020)   8.23% (Libor + 6.75%/Q)     4/12/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($1.0 par due 9/2020)   8.24% (Libor + 6.75%/Q)     4/12/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($0.1 par due 9/2020)   10.00% (Base Rate + 5.50%/Q)     4/12/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($0.3 par due 9/2020)   8.11% (Libor + 6.75%/Q)     7/27/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.5 par due 9/2020)   8.23% (Libor + 6.75%/Q)     7/27/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($38.5 par due 9/2020)   8.37% (Libor + 6.75%/Q)     9/27/2012     38.5     38.5 (3)(17)      
        First lien senior secured loan ($18.7 par due 9/2020)   8.37% (Libor + 6.75%/Q)     9/27/2012     18.7     18.7 (4)(17)      
        Common stock (3,000,000 shares)         9/27/2012     3.0     4.2 (2)      
                        62.9     64.1        

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Table of Contents


As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
McKenzie Sports Products, LLC(21)   Designer, manufacturer and distributor of hunting-related supplies   First lien senior secured revolving loan ($0.9 par due 9/2020)   7.25% (Base Rate + 2.75%/Q)     9/18/2014     0.9     0.9 (3)(17)      
        First lien senior secured loan ($0.8 par due 9/2020)   7.44% (Libor + 5.75%/Q)     9/18/2014     0.8     0.8 (3)(13)(17)      
        First lien senior secured loan ($2.5 par due 9/2020)   5.32% (Libor + 3.75%/Q)     9/18/2014     2.5     2.5 (3)(17)      
        First lien senior secured loan ($2.2 par due 9/2020)   5.44% (Libor + 3.75%/Q)     9/18/2014     2.2     2.2 (3)(17)      
        First lien senior secured loan ($84.5 par due 9/2020)   7.44% (Libor + 5.75%/Q)     9/18/2014     84.5     84.5 (3)(13)(17)      
                        90.9     90.9        
                                       
MSHC, Inc.(21)   Heating, ventilation and air conditioning services provider   First lien senior secured revolving loan ($0.1 par due 7/2022)   7.75% (Base Rate + 3.25%/Q)     7/31/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($1.1 par due 7/2023)   5.92% (Libor + 4.25%/Q)     7/31/2017     1.1     1.1 (2)(17)      
        First lien senior secured loan ($3.2 par due 7/2023)   5.94% (Libor + 4.25%/Q)     7/31/2017     3.1     3.2 (2)(17)      
        Second lien senior secured loan ($46.0 par due 7/2024)   9.94% (Libor + 8.25%/Q)     7/31/2017     46.0     46.0 (2)(17)      
                        50.3     50.4        
                                       
OpenSky Project, Inc. and OSP Holdings, Inc.   Social commerce platform operator   Warrant to purchase up to 159,496 shares of Series D preferred stock (expires 4/2025)         6/29/2015         (2)      
                                       
Osmose Utilities Services, Inc.(21)   Provider of structural integrity management services to transmission and distribution infrastructure   First lien senior secured revolving loan       1/3/2017         (19)      
        Second lien senior secured loan ($25.0 par due 8/2023)   9.44% (Libor + 7.75%/Q)     9/3/2015     24.6     25.0 (2)(17)      
        Second lien senior secured loan ($34.0 par due 8/2023)   9.44% (Libor + 7.75%/Q)     1/3/2017     33.4     34.0 (2)(17)      
                        58.0     59.0        
                                       
SocialFlow, Inc.   Social media optimization platform provider   Warrant to purchase up to 215,331 shares of Series C preferred stock (expires 1/2026)         1/13/2016         (5)      
                                       
SoundCloud Limited(9)   Platform for receiving, sending, and distributing music   Common stock (73,422 shares)         8/15/2017     0.4     0.7 (2)      
                                       
Spin HoldCo Inc.   Laundry service and equipment provider   Second lien senior secured loan ($175.0 par due 5/2023)   9.21% (Libor + 7.75%/Q)     6/23/2017     175.0     175.0 (2)(17)      
                                       
Tyden Cayman Holdings Corp.(9)   Producer and marketer of global cargo security, product identification and traceability products and utility meter products   Preferred stock (46,276 shares)         1/3/2017     0.4     0.4        
        Common stock (5,521,203 shares)         1/3/2017     2.0     2.9        
                        2.4     3.3        
                                       
VLS Recovery Services, LLC(21)   Provider of commercial and industrial waste processing and disposal services   First lien senior secured revolving loan ($1.6 par due 10/2023)   7.53% (Libor + 6.00%/Q)     10/17/2017     1.6     1.6 (2)(17)(20)      
        First lien senior secured loan ($23.9 par due 10/2023)   7.53% (Libor + 6.00%/Q)     10/17/2017     23.9     23.7 (2)(17)      
        First lien senior secured loan ($7.4 par due 10/2023)   7.35% (Libor + 6.00%/Q)     10/17/2017     7.4     7.4 (2)(17)      
        First lien senior secured loan ($0.1 par due 10/2023)   9.50% (Base Rate + 5.00%/Q)     10/17/2017     0.1     0.1 (2)(17)      
                        33.0     32.8        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
WASH Multifamily Acquisition Inc. and Coinamatic Canada Inc.   Laundry service and equipment provider   Second lien senior secured loan ($3.7 par due 5/2023)   8.57% (Libor + 7.00%/Q)     5/14/2015     3.7     3.7 (2)(17)      
        Second lien senior secured loan ($21.3 par due 5/2023)   8.57% (Libor + 7.00%/Q)     5/14/2015     21.0     21.1 (2)(17)      
                        24.7     24.8        
                                       
Wrench Group LLC(21)   Provider of essential home services to residential customers   First lien senior secured loan ($4.0 par due 3/2022)   6.19% (Libor + 4.50%/Q)     1/31/2017     4.0     4.0 (2)(17)      
        First lien senior secured loan ($4.3 par due 3/2022)   5.85% (Libor + 4.50%/Q)     12/15/2017     4.3     4.3 (2)(17)      
                        8.3     8.3        
                        725.6     732.2     10.32 %
Manufacturing                                      
Chariot Acquisition, LLC(21)   Aftermarket golf cart parts and accessories   First lien senior secured loan ($18.4 par due 9/2021)   7.91% (Libor + 6.25%/Q)     1/3/2017     18.2     18.0 (3)(17)      
        First lien senior secured loan ($9.4 par due 9/2021)   7.91% (Libor + 6.25%/Q)     1/3/2017     9.3     9.2 (4)(17)      
                        27.5     27.2        
                                       
Component Hardware Group, Inc.(21)   Commercial equipment   First lien senior secured revolving loan ($1.9 par due 7/2019)   6.19% (Libor + 4.50%/Q)     7/1/2013     1.9     1.9 (2)(17)      
        First lien senior secured loan ($7.9 par due 7/2019)   6.19% (Libor + 4.50%/Q)     7/1/2013     7.9     7.9 (4)(17)      
                        9.8     9.8        
                                       
Dorner Holding Corp.(21)   Manufacturer of precision unit conveyors   First lien senior secured revolving loan ($1.3 par due 3/2022)   7.32% (Libor + 5.75%/Q)     3/15/2017     1.3     1.3 (2)(17)      
        First lien senior secured loan ($4.4 par due 3/2023)   7.32% (Libor + 5.75%/Q)     3/15/2017     4.4     4.4 (2)(17)      
                        5.7     5.7        
                                       
ECI Purchaser Company, LLC   Manufacturer of equipment to safely control pressurized gases   First lien senior secured loan ($21.8 par due 12/2018)   7.09% (Libor + 5.25%/Q)     7/26/2017     21.8     21.5 (2)(17)      
        First lien senior secured loan ($88.7 par due 12/2018)   6.92% (Libor + 5.25%/Q)     7/26/2017     88.7     87.8 (2)(17)      
        First lien senior secured loan ($74.8 par due 12/2018)   6.92% (Libor + 5.25%/Q)     7/26/2017     74.8     74.0 (3)(17)      
        First lien senior secured loan ($0.3 par due 12/2018)   7.09% (Libor + 5.25%/Q)     7/26/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2018)   7.09% (Libor + 5.25%/Q)     7/26/2017     0.2     0.2 (3)(17)      
                        185.8     183.8        
                                       
ETG Holdings, Inc.(8)   Industrial woven products   Common stock (3,000 shares)         1/3/2017                
                                       
Harvey Tool Company, LLC(21)   Cutting tool provider to the metalworking industry   First lien senior secured revolving loan ($1.8 par due 10/2023)   5.96% (Libor + 4.50%/Q)     10/12/2017     1.8     1.7 (2)(17)      
        First lien senior secured loan ($40.8 par due 10/2024)   6.11% (Libor + 4.75%/Q)     10/12/2017     40.8     40.4 (2)(17)      
        Second lien senior secured loan ($43.7 par due 10/2025)   10.02% (Libor + 8.50%/Q)     10/12/2017     43.7     43.2 (2)(17)      
                        86.3     85.3        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Ioxus, Inc(7)   Energy storage devices   First lien senior secured loan ($10.2 par due 12/2019)   12.00% PIK     4/29/2014     10.0     10.2 (2)(15)      
        First lien senior secured loan ($1.0 par due 12/2019)       4/29/2014     1.0     1.0 (2)(15)      
        Series CC preferred stock (67,330,609 shares)         1/27/2017     0.7     (2)      
        Warrant to purchase up to 3,038,730 shares of common stock (expires 1/2026)         1/28/2016         (2)      
        Warrant to purchase up to 1,210,235 shares of Series BB preferred stock (expires 8/2026)         1/28/2016         (2)      
        Warrant to purchase up to 336,653,045 shares of Series CC preferred stock (expires 1/2027)         1/27/2017         (2)      
                        11.7     11.2        
                                       
KPS Global LLC   Walk-in cooler and freezer systems   First lien senior secured loan ($1.7 par due 4/2022)   3.93% (Libor + 2.50%/Q)     4/5/2017     1.7     1.7 (2)(17)      
        First lien senior secured loan ($11.2 par due 4/2022)   7.18% (Libor + 5.75%/Q)     4/5/2017     11.2     11.0 (2)(17)      
        First lien senior secured loan ($5.6 par due 4/2022)   7.18% (Libor + 5.75%/Q)     4/5/2017     5.6     5.5 (4)(17)      
                        18.5     18.2        
                                       
MacLean-Fogg Company and MacLean-Fogg Holdings, L.L.C.   Manufacturer and supplier for the power utility and automotive markets worldwide   Senior subordinated loan ($103.0 par due 10/2025)   10.50% Cash, 3.00% PIK     10/31/2013     103.0     103.0 (2)      
        Preferred units (70,183 units)   4.50% Cash, 9.25% PIK     10/9/2015     76.3     76.3        
                        179.3     179.3        
                                       
Niagara Fiber Intermediate Corp.(21)   Insoluble fiber filler products   First lien senior secured revolving loan ($0.9 par due 5/2018)       5/8/2014         (2)(16)      
        First lien senior secured loan ($5.9 par due 5/2018)       5/8/2014     0.2     (2)(16)      
        First lien senior secured loan ($0.6 par due 5/2018)       5/8/2014         (2)(16)      
                        0.2            
                                       
Nordco Inc.(21)   Railroad maintenance-of-way machinery   First lien senior secured revolving loan       8/26/2015         (19)      
                                       
Pelican Products, Inc.   Flashlights   Second lien senior secured loan ($40.0 par due 4/2021)   9.94% (Libor + 8.25%/Q)     4/11/2014     40.0     39.6 (2)(17)      
                                       
Sanders Industries Holdings, Inc. and SI Holdings, Inc.(21)   Elastomeric parts, mid-sized composite structures, and composite tooling   First lien senior secured loan ($56.5 par due 5/2020)   7.38% (Libor + 6.00%/Q)     7/21/2017     56.5     55.4 (2)(17)      
        First lien senior secured loan ($14.8 par due 5/2020)   7.38% (Libor + 6.00%/Q)     7/21/2017     14.8     14.5 (4)(17)      
        Common stock (1,500 shares)         5/30/2014     1.5     0.8 (2)      
                        72.8     70.7        
                                       
Saw Mill PCG Partners LLC   Metal precision engineered components   Common units (1,000 units)         1/30/2007     1.0     (2)      
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Sonny's Enterprises, LLC(21)   Manufacturer and supplier of car wash equipment, parts and supplies to the conveyorized car wash market   First lien senior secured revolving loan ($1.0 par due 12/2022)   6.30% (Libor + 4.75%/Q)     11/30/2017     1.0     1.0 (2)(17)      
        First lien senior secured loan ($0.9 par due 12/2022)   6.44% (Libor + 4.75%/Q)     12/5/2017     0.9     0.9 (2)(17)      
        First lien senior secured loan ($0.4 par due 12/2022)   6.44% (Libor + 4.75%/Q)     6/1/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2022)   6.44% (Libor + 4.75%/Q)     5/3/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($0.2 par due 12/2022)   6.44% (Libor + 4.75%/Q)     9/28/2017     0.2     0.2 (2)(17)      
                        2.7     2.7        
                                       
Sunk Rock Foundry Partners LP, Hatteras Electrical Manufacturing Holding Company and Sigma Electric Manufacturing Corporation(21)   Manufacturer of metal castings, precision machined components and sub-assemblies in the electrical products, power transmission and distribution and general industrial markets   First lien senior secured revolving loan ($1.5 par due 10/2022)   6.16% (Libor + 4.75%/Q)     10/31/2017     1.5     1.5 (2)(17)      
        First lien senior secured loan ($16.4 par due 10/2023)   6.13% (Libor + 4.75%/Q)     10/31/2017     16.4     16.2 (2)(17)      
        First lien senior secured loan ($9.3 par due 10/2023)   6.13% (Libor + 4.75%/Q)     10/31/2017     9.3     9.2 (2)(17)      
                        27.2     26.9        
                                       
TPTM Merger Corp.(21)   Time temperature indicator products   First lien senior secured loan ($10.5 par due 9/2018)   9.98% (Libor + 8.42%/Q)     9/12/2013     10.5     10.5 (3)(17)      
        First lien senior secured loan ($6.2 par due 9/2018)   9.98% (Libor + 8.42%/Q)     9/12/2013     6.2     6.2 (4)(17)      
        First lien senior secured loan ($6.5 par due 9/2018)   10.11% (Libor + 8.42%/Q)     9/12/2013     6.5     6.5 (3)(17)      
        First lien senior secured loan ($3.8 par due 9/2018)   10.11% (Libor + 8.42%/Q)     9/12/2013     3.8     3.8 (4)(17)      
                        27.0     27.0        
                                       
WP CPP Holdings, LLC   Precision engineered castings   Second lien senior secured loan ($19.7 par due 4/2021)   9.13% (Libor + 7.75%/Q)     1/3/2017     18.8     19.3 (2)(17)      
                        714.3     706.7     9.96 %
Investment Funds and Vehicles                                      
ACAS Equity Holdings Corporation(8)(10)   Investment company   Common stock (589 shares)         1/3/2017     0.5     0.4        
                                       
Ares IIIR/IVR CLO Ltd.(8)(9)(10)   Investment vehicle   Subordinated notes ($20.0 par due 4/2021)         1/3/2017         0.1        
                                       
Blue Wolf Capital Fund II, L.P.(9)(10)   Investment partnership   Limited partnership interest (8.50% interest)         1/3/2017     3.0     3.5 (24)      
                                       
Carlyle Global Market Strategies CLO 2013-3(9)(10)   Investment vehicle   Subordinated notes ($5.0 par due 10/2030)   15.00%     1/3/2017     2.6     3.2        
                                       
Cent CLO 2014-22 Limited(9)(10)   Investment vehicle   Subordinated notes ($45.4 par due 11/2026)   11.75%     1/3/2017     23.6     22.7        
                                       
Centurion CDO 8 Limited(9)(10)   Investment vehicle   Subordinated notes ($5.0 par due 3/2019)         1/3/2017                
                                       
CGMS 2015-3A(9)(10)   Investment vehicle   Subordinated notes ($24.6 par due 7/2028)   10.00%     1/3/2017     19.2     18.9        
                                       
CoLTs 2005-1 Ltd.(8)(9)(10)   Investment vehicle   Preferred shares (360 shares)         1/3/2017                
                                       
CoLTs 2005-2 Ltd.(8)(9)(10)   Investment vehicle   Preferred shares (34,170,000 shares)         1/3/2017                
                                       
CREST Exeter Street Solar 2004-1(9)(10)   Investment vehicle   Preferred shares (3,500,000 shares)         1/3/2017                
                                       
Eaton Vance CDO X plc(9)(10)   Investment vehicle   Subordinated notes ($15.0 par due 2/2027)   3.00%     1/3/2017     4.1     6.4        
                                       
European Capital UK SME Debt LP(8)(9)(10)(22)   Investment partnership   Limited partnership interest (45% interest)         1/3/2017     41.1     41.7        
                                     

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Table of Contents


As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Flagship CLO V(9)(10)   Investment vehicle   Subordinated notes ($0.0 par due 9/2019)         1/3/2017                
                                       
Goldentree Loan Opportunities VII, Limited(9)(10)   Investment vehicle   Subordinated notes ($35.3 par due 4/2025)   4.25%     1/3/2017     18.7     19.1        
                                       
Halcyon Loan Advisors Funding 2015-2 Ltd.(9)(10)   Investment vehicle   Subordinated notes ($21.7 par due 7/2027)   16.35%     1/3/2017     14.0     11.3        
                                       
HCI Equity, LLC(8)(9)(10)   Investment company   Member interest (100.00% interest)         4/1/2010         0.1 (24)      
                                       
Herbert Park B.V.(9)(10)   Investment vehicle   Subordinated notes ($5.4 par due 10/2026)         1/3/2017     0.9     0.5        
                                       
Imperial Capital Private Opportunities, LP(10)   Investment partnership   Limited partnership interest (80.00% interest)         5/10/2007     1.0     15.1 (2)      
                                       
LightPoint CLO VII, Ltd.(9)(10)   Investment vehicle   Subordinated notes ($9.0 par due 5/2021)         1/3/2017                
                                       
Montgomery Lane, LLC and Montgomery Lane, Ltd.(8)(9)(10)   Investment company   Common stock (100 shares)         1/3/2017         0.6        
        Common stock (50,000 shares)         1/3/2017                
                            0.6        
                                       
OAKC 2015-11(9)(10)   Investment vehicle   Subordinated notes ($17.8 par due 10/2028)   9.50%     1/3/2017     14.3     13.0        
                                       
Partnership Capital Growth Fund I, L.P.(10)   Investment partnership   Limited partnership interest (25.00% interest)         6/16/2006         0.1 (2)(24)      
                                       
Partnership Capital Growth Investors III, L.P.(10)(22)   Investment partnership   Limited partnership interest (2.50% interest)         10/5/2011     2.5     3.5 (2)(24)      
                                       
PCG-Ares Sidecar Investment II, L.P.(10)(22)   Investment partnership   Limited partnership interest (100.00% interest)         10/31/2014     7.5     11.7 (2)      
                                       
PCG-Ares Sidecar Investment, L.P.(10)(22)   Investment partnership   Limited partnership interest (100.00% interest)         5/22/2014     4.4     5.1 (2)      
                                       
Piper Jaffray Merchant Banking Fund I, L.P.(10)(22)   Investment partnership   Limited partnership interest (2.00% interest)         8/16/2012     1.5     1.6 (24)      
                                       
Qualium Investissement(9)(10)   Investment partnership   Class A common stock (9,900,000 shares)         1/3/2017     5.9     6.5 (24)      
        Class B common stock (100,000 shares)         1/3/2017     0.1     0.1 (24)      
        Class C common stock (48,939 shares)         1/3/2017     0.1     0.1 (24)      
                        6.1     6.7        
                                       
Senior Direct Lending Program, LLC(8)(10)(23)   Co-investment vehicle   Subordinated certificates ($487.1 par due 12/2036)   9.34% (Libor + 8.00%/Q)(18)     7/27/2016     487.1     487.1        
        Member interest (87.50% interest)         7/27/2016                
                        487.1     487.1        
                                       
Vitesse CLO, Ltd.(9)(10)   Investment vehicle   Preferred shares (20,000,000 shares)         1/3/2017                
                                       
Voya CLO 2014-4 Ltd.(9)(10)   Investment vehicle   Subordinated notes ($26.7 par due 10/2026)   10.50%     1/3/2017     17.0     18.6        
                                       
VSC Investors LLC(10)   Investment company   Membership interest (1.95% interest)         1/24/2008     0.3     1.3 (2)(24)      
                        669.4     692.3     9.75 %
Financial Services                                      
Callidus Capital Corporation(8)   Asset management services   Common stock (100 shares)         4/1/2010     3.0     1.7        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Ciena Capital LLC(8)(21)   Real estate and small business loan servicer   First lien senior secured revolving loan ($14.0 par due 12/2017)   6.00%     11/29/2010     14.0     14.0 (2)      
        Equity interests         11/29/2010     25.0     18.3 (2)      
                        39.0     32.3        
                                       
Commercial Credit Group, Inc.   Commercial equipment finance and leasing company   Senior subordinated loan ($28.0 par due 8/2022)   11.11% (Libor + 9.75%/Q)     5/10/2012     28.0     28.0 (2)(17)      
                                       
DFC Global Facility Borrower II LLC(21)   Non-bank provider of alternative financial services   First lien senior secured revolving loan ($75.0 par due 9/2022)   12.11% (Libor + 10.75%/Q)     9/27/2017     75.0     75.0 (2)(17)      
                                       
Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.(7)   Debt collection services provider   Common stock (180 shares)         1/11/2017         (2)      
                                       
Gordian Group, LLC   Provider of products, services and software to organizations pursuing efficient and effective procurement and information solutions   Common stock (526 shares)         11/30/2012         (2)      
                                       
Imperial Capital Group LLC   Investment services   Class A common units (24,945 units)         5/10/2007     6.1     10.2 (2)      
        2006 Class B common units (8,173 units)         5/10/2007         (2)      
                        6.1     10.2        
                                       
Ivy Hill Asset Management, L.P.(8)(10)   Asset management services   Member interest (100.00% interest)         6/15/2009     244.0     315.1        
                                       
Javlin Three LLC, Javlin Four LLC, and Javlin Five LLC(10)   Asset-backed financial services company   First lien senior secured loan ($18.6 par due 6/2017)   11.36% (Libor + 10.00%/Q)     6/24/2014     18.6     16.8 (2)(17)      
                                       
LS DE LLC and LM LSQ Investors LLC(10)   Asset based lender   Senior subordinated loan ($3.0 par due 6/2021)   10.50%     6/15/2017     3.0     3.0 (2)      
        Senior subordinated loan ($27.0 par due 6/2021)   10.50%     6/25/2015     27.0     27.0 (2)      
        Membership units (3,275,000 units)         6/25/2015     3.3     3.9        
                        33.3     33.9        
                        447.0     513.0     7.23 %
Food and Beverage                                      
American Seafoods Group LLC and American Seafoods Partners LLC   Harvester and processor of seafood   Second lien senior secured loan ($87.0 par due 2/2024)   9.57% (Libor + 8.13%/Q)     8/21/2017     86.8     87.0 (2)(17)      
        Class A units (77,922 units)         8/19/2015     0.1     0.1 (2)      
        Warrant to purchase up to 7,422,078 Class A units (expires 8/2035)         8/19/2015     7.4     10.1 (2)      
                        94.3     97.2        
                                       
Bakemark Holdings, Inc.   Manufacturer and distributor of specialty bakery ingredients   First lien senior secured loan ($1.7 par due 8/2023)   6.94% (Libor + 5.25%/Q)     8/14/2017     1.7     1.7 (2)(17)      
                                       
DecoPac, Inc.(21)   Supplier of cake decorating solutions and products to in-store bakeries   First lien senior secured revolving loan ($2.3 par due 9/2023)   5.94% (Libor + 4.25%/Q)     9/29/2017     2.3     2.2 (2)(17)      
        First lien senior secured revolving loan ($0.3 par due 9/2023)   5.89% (Libor + 4.25%/Q)     9/29/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($8.4 par due 9/2024)   5.94% (Libor + 4.25%/Q)     9/29/2017     8.4     8.3 (2)(17)      
                        11.0     10.8        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Eagle Family Foods Group LLC   Manufacturer and producer of milk products   First lien senior secured loan ($0.2 par due 12/2021)   5.69% (Libor + 4.00%/Q)     8/29/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($7.9 par due 12/2021)   10.74% (Libor + 9.05%/Q)     9/11/2017     7.8     7.5 (2)(17)      
        First lien senior secured loan ($1.4 par due 12/2021)   10.74% (Libor + 9.05%/Q)     8/22/2016     1.4     1.3 (2)(17)      
        First lien senior secured loan ($20.2 par due 12/2021)   10.74% (Libor + 9.05%/Q)     8/22/2016     20.2     19.2 (3)(17)      
        First lien senior secured loan ($54.8 par due 12/2021)   10.74% (Libor + 9.05%/Q)     12/31/2015     54.5     52.0 (3)(17)      
                        84.1     80.2        
                                       
Edward Don & Company, LLC and VCP-EDC Co-Invest, LLC   Distributor of foodservice equipment and supplies   First lien senior secured loan ($47.6 par due 9/2022)   10.00% (Libor + 8.50%/Q)     3/31/2017     47.6     47.6 (2)(17)      
        Membership units (2,970,000 units)         6/9/2017     3.0     3.4        
                        50.6     51.0        
                                       
FPI Holding Corporation(8)(21)   Distributor of fruits   First lien senior secured loan ($0.7 par due 6/2018)       1/3/2017     0.4     0.4 (16)      
                                       
Gehl Foods, LLC and GF Parent LLC   Producer of low-acid, aseptic food and beverage products   First lien senior secured loan ($120.7 par due 6/2019)   7.88% (Libor + 6.50%/Q)     7/26/2017     120.7     120.7 (2)(17)      
        Class A preferred units (2,940 units)         5/13/2015     2.9     1.9 (2)      
        Class A common units (60,000 units)         5/13/2015     0.1     (2)      
        Class B common units (0.26 units)         5/13/2015         (2)      
                        123.7     122.6        
                                       
JWC/KI Holdings, LLC   Foodservice sales and marketing agency   Membership units (5,000 units)         11/16/2015     5.0     5.3 (2)      
                                       
Kettle Cuisine, LLC   Manufacturer of fresh refrigerated and frozen food products   Second lien senior secured loan ($28.5 par due 2/2022)   11.21% (Libor + 9.75%/Q)     8/21/2015     28.5     28.5 (2)(17)      
                                       
NECCO Holdings, Inc. and New England Confectionery Company, Inc.(8)(21)   Producer and supplier of candy   First lien senior secured revolving loan ($21.7 par due 1/2018)       1/3/2017     9.7     9.2 (16)      
        First lien senior secured loan ($0.6 par due 8/2018)       11/20/2017     0.6     (16)      
        First lien senior secured loan ($10.9 par due 1/2018)       1/3/2017     0.9     1.3 (16)      
        First lien senior secured loan ($0.7 par due 1/2018)       11/20/2017     0.7     0.1 (16)      
        Common stock (860,189 shares)         1/3/2017                
                        11.9     10.6        
                                       
RF HP SCF Investor, LLC(10)   Branded specialty food company   Membership interest (10.08% interest)         12/22/2016     12.5     14.4 (2)      
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Teasdale Foods, Inc.(21)   Provider of beans, sauces and hominy to the retail, foodservice and wholesale channels   First lien senior secured revolving loan ($0.2 par due 10/2020)   6.18% (Libor + 4.75%/Q)     6/30/2017     0.2     0.2 (2)(17)      
        First lien senior secured revolving loan ($0.2 par due 10/2020)   8.25% (Base Rate + 3.75%/Q)     6/30/2017     0.2     0.2 (2)(17)      
        Second lien senior secured loan ($33.6 par due 10/2021)   10.44% (Libor + 8.75%/Q)     1/3/2017     33.6     33.3 (2)(17)      
        Second lien senior secured loan ($21.3 par due 10/2021)   10.11% (Libor + 8.75%/Q)     1/3/2017     21.3     21.1 (2)(17)      
        Second lien senior secured loan ($31.5 par due 10/2021)   10.13% (Libor + 8.75%/Q)     1/3/2017     31.5     31.2 (2)(17)      
                        86.8     86.0        
                        510.5     508.7     7.17 %
Power Generation                                      
Alphabet Energy, Inc.   Technology developer to convert waste-heat into electricity   First lien senior secured loan ($3.4 par due 8/2017)         12/16/2013     3.3     0.4 (2)(16)      
        Series 1B preferred stock (12,976 shares)         6/21/2016     0.2     (2)      
        Warrant to purchase up to 125,000 shares of Series 2 preferred stock (expires 12/2023)         6/30/2016     0.1     (2)      
                        3.6     0.4        
                                       
CPV Maryland Holding Company II, LLC   Gas turbine power generation facilities operator   Senior subordinated loan ($46.1 par due 12/2020)   5.00% Cash, 5.00% PIK     8/8/2014     46.1     42.4 (2)      
        Warrant to purchase up to 4 units of common stock (expires 8/2018)         8/8/2014         (2)      
                        46.1     42.4        
                                       
DESRI VI Management Holdings, LLC   Wind power generation facility operator   Senior subordinated loan ($13.9 par due 12/2021)   10.00%     12/24/2014     13.9     13.9 (2)      
                                       
Green Energy Partners, Stonewall LLC and Panda Stonewall Intermediate Holdings II LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($24.9 par due 11/2021)   7.19% (Libor + 5.50%/Q)     11/13/2014     24.8     24.4 (2)(17)      
        Senior subordinated loan ($20.2 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     20.2     19.5 (2)      
        Senior subordinated loan ($94.6 par due 12/2021)   8.00% Cash, 5.25% PIK     11/13/2014     94.6     91.3 (2)      
                        139.6     135.2        
                                       
Joule Unlimited Technologies, Inc. and Stichting Joule Global Foundation   Renewable fuel and chemical production developer   First lien senior secured loan ($8.3 par due 10/2018)       3/31/2015     7.9     0.4 (2)(16)      
        Warrant to purchase up to 32,051 shares of Series C-2 preferred stock (expires 7/2023)         7/25/2013         (2)(9)      
                        7.9     0.4        
                                       
Moxie Patriot LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($33.9 par due 12/2020)   7.44% (Libor + 5.75%/Q)     12/19/2013     33.8     33.4 (2)(17)      
Navisun LLC and Navisun Holdings LLC(8)(21)   Owner and operater of commercial and industrial solar projects   First lien senior secured loan ($2.6 par due 11/2023)   8.00% PIK     11/15/2017     2.6     2.6 (2)      
        Series A Preferred units (1,000 units)   10.50% PIK     11/15/2017     0.3     0.3 (2)      
        Class A units (550 units)         11/15/2017         (2)      
                        2.9     2.9        
                                       
Panda Liberty LLC (fka Moxie Liberty LLC)   Gas turbine power generation facilities operator   First lien senior secured loan ($5.0 par due 8/2020)   8.19% (Libor + 6.50%/Q)     5/8/2017     4.6     4.6 (2)(17)      
        First lien senior secured loan ($34.4 par due 8/2020)   8.19% (Libor + 6.50%/Q)     8/21/2013     34.2     31.6 (2)(17)      
                        38.8     36.2        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Panda Temple Power II, LLC   Gas turbine power generation facilities operator   First lien senior secured loan ($19.6 par due 4/2019)   7.69% (Libor + 6.00%/Q)     4/3/2013     19.6     17.4 (2)(17)      
                                       
Panda Temple Power, LLC   Gas turbine power generation facilities operator   First lien senior secured revolving loan ($2.3 par due 4/2018)   10.35% (Libor + 9.00%/Q)     4/28/2017     2.3     2.3 (2)(17)      
        First lien senior secured loan ($24.8 par due 3/2022)       3/6/2015     23.6     18.4 (2)(16)      
                        25.9     20.7        
                                       
PERC Holdings 1 LLC   Operator of recycled energy, combined heat and power, and energy efficiency facilities   Class B common units (21,653,543 units)         10/20/2014     21.7     24.0 (2)      
                                       
Riverview Power LLC   Operator of natural gas and oil fired power generation facilities   First lien senior secured loan ($98.1 par due 12/2022)   9.69% (Libor + 8.00%/Q)     12/29/2016     95.9     98.2 (2)(17)      
                        449.7     425.1     5.99 %
Restaurants and Food Services                                      
ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.(8)(21)   Restaurant owner and operator   First lien senior secured loan ($3.7 par due 12/2018)   19.67% PIK (Libor + 18.00%/Q)     12/22/2016     3.7     3.7 (2)(17)      
        First lien senior secured loan ($49.3 par due 12/2018)       11/27/2006     39.9     12.3 (2)(16)      
        Promissory note ($29.2 par due 12/2023)         11/27/2006     13.8     (2)      
        Warrant to purchase up to 0.95 units of Series D common stock (expires 12/2023)         12/18/2013         (2)      
                        57.4     16.0        
                                       
Benihana, Inc.(21)   Restaurant owner and operator   First lien senior secured revolving loan ($0.5 par due 7/2018)   8.57% (Libor + 7.00%/Q)     8/21/2012     0.5     0.5 (2)(17)(20)      
        First lien senior secured revolving loan ($1.1 par due 7/2018)   8.69% (Libor + 7.00%/Q)     8/21/2012     1.1     1.1 (2)(17)(20)      
        First lien senior secured revolving loan ($1.0 par due 7/2018)   10.25% (Base Rate + 5.75%/Q)     8/21/2012     1.0     0.9 (2)(17)(20)      
        First lien senior secured loan ($0.3 par due 1/2019)   8.59% (Libor + 7.00%/Q)     12/28/2016     0.3     0.3 (2)(17)      
        First lien senior secured loan ($4.7 par due 1/2019)   8.59% (Libor + 7.00%/Q)     8/21/2012     4.7     4.5 (4)(17)      
                        7.6     7.3        
                                       
Cozzini Bros., Inc. and BH-Sharp Holdings LP(21)   Provider of commercial knife sharpening and cutlery services in the restaurant industry   First lien senior secured loan ($1.9 par due 3/2023)   7.07% (Libor + 5.50%/Q)     3/10/2017     1.9     1.9 (2)(17)      
        First lien senior secured loan ($1.2 par due 3/2023)   6.92% (Libor + 5.50%/Q)     3/10/2017     1.2     1.2 (2)(17)      
        First lien senior secured loan ($19.3 par due 3/2023)   6.92% (Libor + 5.50%/Q)     3/10/2017     19.3     19.3 (4)(17)      
        Common units (2,950,000 units)         3/10/2017     3.0     2.8 (2)      
                        25.4     25.2        
                                       
FWR Holding Corporation(21)   Restaurant owner, operator, and franchisor   First lien senior secured revolving loan ($0.3 par due 8/2023)   7.57% (Libor + 6.00%/Q)     8/21/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($0.2 par due 8/2023)   7.60% (Libor + 6.00%/Q)     8/21/2017     0.2     0.2 (2)(17)      
        First lien senior secured loan ($2.0 par due 8/2023)   7.32% (Libor + 6.00%/Q)     8/21/2017     2.0     2.0 (2)(17)      
        First lien senior secured loan ($2.0 par due 8/2023)   7.48% (Libor + 6.00%/Q)     8/21/2017     2.0     2.0 (2)(17)      
                        4.5     4.5        
                                     

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Table of Contents


As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Garden Fresh Restaurant Corp. and GFRC Holdings LLC(8)(21)   Restaurant owner and operator   First lien senior secured revolving loan ($0.1 par due 2/2022)   9.50% (Libor + 8.00%/Q)     2/1/2017     0.1     0.1 (2)(17)(20)      
        First lien senior secured loan ($24.9 par due 2/2022)   9.50% (Libor + 8.00%/Q)     10/3/2013     24.9     24.9 (2)(17)      
                        25.0     25.0        
                                       
Global Franchise Group, LLC(21)   Worldwide franchisor of quick service restaurants   First lien senior secured loan ($8.7 par due 12/2019)   7.44% (Libor + 5.75%/Q)     9/15/2017     8.7     8.6 (2)(17)      
                                       
Heritage Food Service Group, Inc. and WCI-HFG Holdings, LLC   Distributor of repair and replacement parts for commercial kitchen equipment   Second lien senior secured loan ($31.6 par due 10/2022)   9.92% (Libor + 8.50%/Q)     10/20/2015     31.6     31.6 (2)(17)      
        Preferred units (3,000,000 units)         10/20/2015     3.0     3.6 (2)      
                        34.6     35.2        
                                       
Hojeij Branded Foods, LLC(21)   Leading operator of airport concessions across the U.S.   First lien senior secured loan ($0.3 par due 7/2022)   7.29% (Libor + 6.00%/Q)     7/20/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($6.3 par due 7/2022)   7.57% (Libor + 6.00%/Q)     7/20/2017     6.2     6.3 (4)(17)      
                        6.5     6.6        
                                       
Jim N Nicks Management, LLC(21)   Restaurant owner and operator   First lien senior secured revolving loan ($1.2 par due 7/2023)   6.71% (Libor + 5.25%/Q)     7/10/2017     1.2     1.2 (2)(17)      
        First lien senior secured revolving loan ($0.5 par due 7/2023)   6.64% (Libor + 5.25%/Q)     7/10/2017     0.5     0.5 (2)(17)      
        First lien senior secured loan ($0.6 par due 7/2023)   6.63% (Libor + 5.25%/Q)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($0.6 par due 7/2023)   6.94% (Libor + 5.25%/Q)     7/10/2017     0.6     0.6 (2)(17)      
        First lien senior secured loan ($14.1 par due 7/2023)   6.94% (Libor + 5.25%/Q)     7/10/2017     14.1     13.8 (4)(17)      
                        17.0     16.7        
                                       
Orion Foods, LLC(8)   Convenience food service retailer   First lien senior secured loan ($1.2 par due 9/2015)       4/1/2010     1.2     0.5 (2)(16)      
        Second lien senior secured loan ($19.4 par due 9/2015)       4/1/2010         (2)(16)      
        Preferred units (10,000 units)         10/28/2010         (2)      
        Class A common units (25,001 units)         4/1/2010         (2)      
        Class B common units (1,122,452 units)         4/1/2010         (2)      
                        1.2     0.5        
                                       
OTG Management, LLC(21)   Airport restaurant operator   First lien senior secured revolving loan ($8.4 par due 8/2021)   9.85% (Libor + 8.50%/Q)     8/26/2016     8.4     8.4 (2)(17)      
        First lien senior secured loan ($4.9 par due 8/2021)   9.88% (Libor + 8.50%/Q)     8/26/2016     4.9     4.9 (2)(17)      
        First lien senior secured loan ($1.6 par due 8/2021)   9.91% (Libor + 8.50%/Q)     8/26/2016     1.6     1.6 (2)(17)      
        First lien senior secured loan ($2.2 par due 8/2021)   9.98% (Libor + 8.50%/Q)     8/26/2016     2.2     2.2 (2)(17)      
        First lien senior secured loan ($97.8 par due 8/2021)   9.88% (Libor + 8.50%/Q)     8/26/2016     97.8     97.8 (3)(17)      
        Senior subordinated loan ($25.3 par due 2/2022)   17.50% PIK     8/26/2016     25.1     25.3 (2)      
        Class A preferred units (3,000,000 units)         8/26/2016     30.0     34.7 (2)      
        Common units (3,000,000 units)         1/5/2011     3.0     9.1 (2)      
        Warrant to purchase up to 7.73% of common units (expires 6/2018)         6/19/2008     0.1     (2)      
        Warrant to purchase 0.60% of the common units deemed outstanding (expires 12/2018)         8/29/2016         19.9 (2)      
                        173.1     203.9        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Restaurant Holding Company, LLC   Fast food restaurant operator   First lien senior secured loan ($31.7 par due 2/2019)   9.32% (Libor + 7.75%/Q)     3/13/2014     31.6     30.7 (3)(17)      
                                       
Restaurant Technologies, Inc.(21)   Provider of bulk cooking oil management services to the restaurant and fast food service industries   First lien senior secured revolving loan ($0.2 par due 11/2021)   6.32% (Libor + 4.75%/Q)     11/23/2016     0.2     0.2 (2)(17)(20)      
        First lien senior secured revolving loan ($0.4 par due 11/2021)   6.30% (Libor + 4.75%/Q)     11/23/2016     0.4     0.4 (2)(17)(20)      
                        0.6     0.6        
                                       
SFE Intermediate Holdco LLC(21)   Provider of outsourced foodservice to K-12 school districts   First lien senior secured revolving loan ($0.8 par due 7/2022)   6.50% (Libor + 5.00%/Q)     7/31/2017     0.8     0.8 (2)(17)      
        First lien senior secured loan ($6.8 par due 7/2023)   6.38% (Libor + 5.00%/Q)     7/31/2017     6.7     6.8 (4)(17)      
                        7.5     7.6        
                        400.7     388.4     5.47 %
Automotive Services                                      
A.U.L. Corp.(21)   Provider of vehicle service contracts ("VSCs") and limited warranties for passenger vehicles   First lien senior secured revolving loan ($0.4 par due 6/2023)   9.00% (Base Rate + 4.50%/Q)     6/7/2017     0.4     0.4 (2)(17)      
        First lien senior secured loan ($7.8 par due 6/2023)   6.75% (Libor + 5.00%/Q)     6/7/2017     7.8     7.8 (2)(17)      
                        8.2     8.2        
                                       
AEP Holdings, Inc. and Arrowhead Holdco Company   Distributor of non-discretionary, mission-critical aftermarket replacement parts   First lien senior secured loan ($0.1 par due 8/2021)   7.09% (Libor + 5.75%/Q)     7/21/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($3.0 par due 8/2021)   7.13% (Libor + 5.75%/Q)     7/21/2017     3.0     3.0 (2)(17)      
        First lien senior secured loan ($1.5 par due 8/2021)   7.23% (Libor + 5.75%/Q)     7/21/2017     1.5     1.5 (2)(17)      
        Common stock (3,467 shares)         8/31/2015     3.5     4.3 (2)      
                        8.1     8.9        
                                       
ChargePoint, Inc.   Developer and operator of electric vehicle charging stations   Warrant to purchase up to 809,126 shares of Series E preferred stock (expires 12/2024)         12/30/2014     0.3     2.1 (2)      
                                       
Dent Wizard International Corporation and DWH Equity Investors, L.P.   Automotive reconditioning services   Second lien senior secured loan ($50.0 par due 10/2020)   10.24% (Libor + 8.75%/Q)     4/7/2015     50.0     50.0 (2)(17)      
        Class A common stock (10,000 shares)         4/7/2015     0.2     0.5 (2)      
        Class B common stock (20,000 shares)         4/7/2015     0.4     1.0 (2)      
                        50.6     51.5        
                                       
Eckler Industries, Inc.(21)   Restoration parts and accessories provider for classic automobiles   First lien senior secured revolving loan ($2.0 par due 12/2017)       7/12/2012     2.0     1.5 (2)(16)      
        First lien senior secured loan ($6.6 par due 12/2017)       7/12/2012     6.6     4.9 (2)(16)      
        First lien senior secured loan ($24.3 par due 12/2017)       7/12/2012     24.3     18.0 (2)(16)      
        Series A preferred stock (1,800 shares)         7/12/2012     1.8     (2)      
        Common stock (20,000 shares)         7/12/2012     0.2     (2)      
                        34.9     24.4        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
EcoMotors, Inc.   Engine developer   First lien senior secured loan ($9.4 par due 3/2018)       9/1/2015     9.1     0.1 (2)(16)      
        Warrant to purchase up to 321,888 shares of Series C preferred stock (expires 12/2022)         12/28/2012         (2)      
        Warrant to purchase up to 70,000 shares of Series C preferred stock (expires 2/2025)         2/24/2015         (2)      
                        9.1     0.1        
                                       
ESCP PPG Holdings, LLC(7)   Distributor of new equipment and aftermarket parts to the heavy-duty truck industry   Class A units (3,500,000 units)         12/14/2016     3.5     2.8 (2)      
                                       
Mavis Tire Supply LLC   Auto parts retailer   First lien senior secured loan ($38.5 par due 10/2020)   6.67% (Libor + 5.25%/Q)     7/26/2017     38.5     38.5 (2)(17)      
        First lien senior secured loan ($2.0 par due 10/2020)   6.67% (Libor + 5.25%/Q)     10/18/2017     2.0     2.0 (2)(17)      
        First lien senior secured loan ($179.0 par due 10/2020)   6.67% (Libor + 5.25%/Q)     7/26/2017     179.0     179.0 (2)(17)      
                        219.5     219.5        
                                       
Simpson Performance Products, Inc.   Provider of motorsports safety equipment   First lien senior secured loan ($10.0 par due 2/2020)   9.25% (Libor + 7.59%/Q)     2/20/2015     10.0     10.0 (2)(17)      
        First lien senior secured loan ($18.3 par due 2/2020)   9.25% (Libor + 7.59%/Q)     2/20/2015     18.3     18.3 (3)(17)      
                        28.3     28.3        
                                       
SK SPV IV, LLC   Collision repair site operators   Series A common stock (12,500 units)         8/18/2014     0.6     3.2 (2)      
        Series B common stock (12,500 units)         8/18/2014     0.6     3.2 (2)      
                        1.2     6.4        
                        363.7     352.2     4.96 %
Education                                      
Campus Management Acquisition Corp.(7)   Education software developer   Preferred stock (485,159 shares)         2/8/2008     10.5     11.0 (2)      
                                       
Excelligence Holdings Corp.   Developer, manufacturer and retailer of educational products   First lien senior secured loan ($10.0 par due 4/2023)   7.35% (Libor + 6.00%/Q)     4/17/2017     10.0     9.6 (4)(17)      
                                       
Flinn Scientific, Inc. and WCI-Quantum Holdings, Inc.   Distributor of instructional products, services and resources   First lien senior secured loan ($32.0 par due 10/2020)   6.50% (Libor + 5.00%/Q)     7/26/2017     32.0     32.0 (2)(17)      
        First lien senior secured loan ($38.7 par due 10/2020)   6.37% (Libor + 5.00%/Q)     7/26/2017     38.7     38.7 (2)(17)      
        Series A preferred stock (1,272 shares)         10/24/2014     1.0     1.2 (2)      
                        71.7     71.9        
                                       
Frontline Technologies Group Holding LLC, Frontline Technologies Blocker Buyer, Inc., Frontline Technologies Holdings, LLC and Frontline Technologies Parent, LLC(21)   Provider of human capital management ("HCM") and SaaS-based software solutions to employees and administrators of K-12 school organizations   First lien senior secured loan ($39.6 par due 9/2023)   8.09% (Libor + 6.50%/Q)     9/19/2017     39.1     39.0 (2)(17)      
        Class A preferred units (4,574 units)         9/18/2017     4.6     4.8        
        Class B units (499,050 units)         9/18/2017                
                        43.7     43.8        
                                       
Infilaw Holding, LLC(21)   Operator of for-profit law schools   First lien senior secured revolving loan ($4.5 par due 2/2018)       8/25/2011     3.5     (2)(16)(20)      
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Instituto de Banca y Comercio, Inc. & Leeds IV Advisors, Inc.(21)   Private school operator   First lien senior secured revolving loan ($11.8 par due 12/2018)   12.50% (Base Rate + 8.00%/Q)     5/18/2017     11.8     11.8 (2)(17)      
        First lien senior secured loan ($3.2 par due 12/2018)   10.50% (Libor + 9.00%/Q)     10/31/2015     3.2     3.2 (2)(17)      
        Senior preferred series A-1 shares (163,902 shares)         10/31/2015     119.4     25.2 (2)      
        Series B preferred stock (1,401,385 shares)         8/5/2010     4.0     (2)      
        Series C preferred stock (1,994,644 shares)         6/7/2010     0.5     (2)      
        Series B preferred stock (348,615 shares)         8/5/2010     1.0     (2)      
        Series C preferred stock (517,942 shares)         6/7/2010     0.1     (2)      
        Common stock (16 shares)         6/7/2010         (2)      
        Common stock (4 shares)         6/7/2010         (2)      
                        140.0     40.2        
                                       
Liaison Acquisition, LLC(21)   Provider of centralized applications services to educational associations   Second lien senior secured loan ($15.0 par due 8/2023)   10.81% (Libor + 9.25%/Q)     2/9/2017     14.7     15.0 (2)(17)      
                                       
PIH Corporation and Primrose Holding Corporation(7)(21)   Franchisor of education-based early childhood centers   First lien senior secured revolving loan ($0.6 par due 12/2018)   6.63% (Libor + 5.25%/Q)     12/13/2013     0.6     0.6 (2)(17)      
        First lien senior secured revolving loan ($0.4 par due 12/2018)   8.75% (Base Rate + 4.25%/Q)     12/13/2013     0.4     0.4 (2)(17)      
        First lien senior secured loan ($1.6 par due 12/2018)   7.07% (Libor + 5.50%/Q)     12/15/2017     1.6     1.6 (2)(17)      
        Common stock (7,227 shares)         1/3/2017     10.7     17.8        
                        13.3     20.4        
                                       
R3 Education Inc., Equinox EIC Partners LLC and Sierra Education Finance Corp.   Medical school operator   Preferred stock (1,977 shares)         7/30/2008     0.5     0.5 (2)      
        Common membership interest (15.76% interest)         9/21/2007     15.8     26.2 (2)      
        Warrant to purchase up to 27,890 shares (expires 11/2019)         12/8/2009         9.1 (2)      
                        16.3     35.8        
                                       
Regent Education, Inc.   Provider of software solutions designed to optimize the financial aid and enrollment processes   Warrant to purchase up to 987 shares of common stock (expires 12/2026)         12/23/2016         (2)      
        Warrant to purchase up to 5,393,194 shares of common stock (expires 12/2026)         12/23/2016         (2)      
                                   
                                       
RuffaloCODY, LLC(21)   Provider of student fundraising and enrollment management services   First lien senior secured revolving loan       5/29/2013         (19)      
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Severin Acquisition, LLC(21)   Provider of student information system software solutions to the K-12 education market   Second lien senior secured loan ($38.7 par due 7/2022)   10.32% (Libor + 8.75%/Q)     2/1/2017     37.9     38.7 (2)(17)      
        Second lien senior secured loan ($3.1 par due 7/2022)   10.57% (Libor + 9.00%/Q)     10/14/2016     3.1     3.1 (17)      
        Second lien senior secured loan ($4.2 par due 7/2022)   10.32% (Libor + 8.75%/Q)     10/28/2015     4.1     4.2 (2)(17)      
        Second lien senior secured loan ($15.0 par due 7/2022)   10.32% (Libor + 8.75%/Q)     7/31/2015     14.8     15.0 (2)(17)      
        Second lien senior secured loan ($3.3 par due 7/2022)   10.82% (Libor + 9.25%/Q)     2/1/2016     3.2     3.3 (2)(17)      
        Second lien senior secured loan ($2.8 par due 7/2022)   10.82% (Libor + 9.25%/Q)     8/8/2016     2.8     2.8 (17)      
        Second lien senior secured loan ($3.1 par due 7/2022)   10.57% (Libor + 9.00%/Q)     1/3/2017     3.1     3.1 (17)      
        Second lien senior secured loan ($5.5 par due 7/2022)   10.32% (Libor + 8.75%/Q)     1/3/2017     5.5     5.5 (2)(17)      
        Second lien senior secured loan ($20.0 par due 7/2022)   10.32% (Libor + 8.75%/Q)     1/3/2017     20.0     20.0 (2)(17)      
        Second lien senior secured loan ($4.4 par due 7/2022)   10.82% (Libor + 9.25%/Q)     1/3/2017     4.4     4.4 (2)(17)      
        Second lien senior secured loan ($2.8 par due 7/2022)   10.82% (Libor + 9.25%/Q)     1/3/2017     2.8     2.8 (17)      
                        101.7     102.9        
                        425.4     350.6     4.94 %
Wholesale Distribution                                      
DFS Holding Company, Inc.   Distributor of maintenance, repair, and operations parts, supplies, and equipment to the foodservice industry   First lien senior secured loan ($4.7 par due 2/2022)   6.69% (Libor + 5.00%/Q)     3/1/2017     4.7     4.6 (2)(17)      
        First lien senior secured loan ($188.7 par due 2/2022)   7.19% (Libor + 5.50%/Q)     7/26/2017     188.7     186.8 (2)(17)      
                        193.4     191.4        
                                       
Flow Solutions Holdings, Inc.   Distributor of high value fluid handling, filtration and flow control products   Second lien senior secured loan ($6.0 par due 10/2018)   10.57% (Libor + 9.00%/Q)     12/16/2014     6.0     6.0 (2)(17)      
        Second lien senior secured loan ($29.5 par due 10/2018)   10.57% (Libor + 9.00%/Q)     12/16/2014     29.5     29.5 (2)(17)      
                        35.5     35.5        
                                       
KHC Holdings, Inc. and Kele Holdco, Inc.(21)   Catalog-based distribution services provider for building automation systems   First lien senior secured revolving loan ($0.7 par due 10/2020)   5.80% (Libor + 4.25%/Q)     1/3/2017     0.7     0.7 (2)(17)      
        First lien senior secured loan ($66.2 par due 10/2022)   7.69% (Libor + 6.00%/Q)     1/3/2017     66.2     66.2 (3)(17)      
        Common stock (30,000 shares)         1/3/2017     3.1     3.1        
                        70.0     70.0        
                        298.9     296.9     4.18 %
Oil and Gas                                      
Moss Creek Resources, LLC   Exploration and production company   Senior subordinated loan ($30.0 par due 4/2022)   9.50% (Libor + 8.00%/Q)     5/5/2017     29.7     30.0 (2)(17)      
                                       
Penn Virginia Holding Corp.   Exploration and production company   Second lien senior secured loan ($90.1 par due 9/2022)   8.57% (Libor + 7.00%/Q)     9/28/2017     90.1     88.3 (2)(17)      
                                       
Petroflow Energy Corporation and TexOak Petro Holdings LLC(7)   Oil and gas exploration and production company   First lien senior secured loan ($12.8 par due 6/2019)   3.36% (Libor + 2.00%/Q)     6/29/2016     11.7     12.4 (2)(17)      
        Second lien senior secured loan ($24.7 par due 12/2019)       6/29/2016     21.9     (2)(16)      
        Common units (202,000 units)         6/29/2016     11.1            
                        44.7     12.4        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
VPROP Operating, LLC and Vista Proppants and Logistics, LLC   Sand based proppant producer and distributor to the oil and natural gas industry   First lien senior secured loan ($28.2 par due 8/2021)   10.98% (Libor + 9.50%/Q)     8/1/2017     28.1     28.2 (2)(17)      
        First lien senior secured loan ($35.3 par due 8/2021)   10.74% (Libor + 8.50% Cash, 1.00%
PIK/Q)
    11/9/2017     35.3     35.3 (2)(17)      
        First lien senior secured loan ($15.2 par due 3/2021)   10.98% (Libor + 8.50% Cash, 1.00%
PIK/Q)
    3/1/2017     15.2     15.2 (2)(17)      
        First lien senior secured loan ($75.5 par due 3/2021)   10.98% (Libor + 8.50% Cash, 1.00%
PIK/Q)
    3/1/2017     75.5     75.5 (3)(17)      
        Common units (997,864 units)         11/9/2017     9.7     9.7 (2)      
                        163.8     163.9        
                        328.3     294.6     4.15 %
Containers and Packaging                                      
GS Pretium Holdings, Inc.   Manufacturer and supplier of high performance plastic containers   Common stock (500,000 shares)         6/2/2014     0.5     0.8 (2)      
                                       
ICSH Parent, Inc. and Vulcan Container Services Holdings, Inc.   Industrial container manufacturer, reconditioner and servicer   Second lien senior secured loan ($63.6 par due 4/2025)   9.38% (Libor + 8.00%/Q)     4/28/2017     62.9     63.6 (2)(17)      
        Series A common stock (24,900 shares)         4/28/2017     2.5     3.3 (2)      
                        65.4     66.9        
                                       
LBP Intermediate Holdings LLC(21)   Manufacturer of paper and corrugated foodservice packaging   First lien senior secured revolving loan       7/10/2015         (19)      
        First lien senior secured loan ($11.8 par due 7/2020)   7.19% (Libor + 5.50%/Q)     7/10/2015     11.8     11.8 (3)(17)      
        First lien senior secured loan ($5.0 par due 7/2020)   7.19% (Libor + 5.50%/Q)     7/10/2015     5.0     5.0 (4)(17)      
                        16.8     16.8        
                                       
Microstar Logistics LLC, Microstar Global Asset Management LLC, and MStar Holding Corporation   Keg management solutions provider   Second lien senior secured loan ($78.5 par due 12/2018)   9.05% (Libor + 7.50%/Q)     12/14/2012     78.5     78.5 (2)(17)      
        Second lien senior secured loan ($54.0 par due 12/2018)   9.05% (Libor + 7.50%/Q)     12/14/2012     54.0     54.0 (3)(17)      
        Second lien senior secured loan ($10.0 par due 12/2018)   9.05% (Libor + 7.50%/Q)     12/14/2012     10.0     10.0 (4)(17)      
        Common stock (50,000 shares)         12/14/2012     4.0     6.8 (2)      
                        146.5     149.3        
                                       
NSI Holdings, Inc.(7)   Manufacturer of plastic containers for the wholesale nursery industry   Series A preferred stock (2,192 shares)         1/3/2017                
                                       
Ranpak Corp.   Manufacturer and marketer of paper-based protective packaging systems and materials   Second lien senior secured loan ($13.3 par due 10/2022)   8.75% (Libor + 7.25%/Q)     1/3/2017     12.8     13.3 (2)(17)      
                        242.0     247.1     3.48 %
Environmental Services                                      
MPH Energy Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (3.13% interest)         1/8/2014         (2)      
                                       
RE Community Holdings GP, LLC and RE Community Holdings, LP   Operator of municipal recycling facilities   Limited partnership interest (2.86% interest)         3/1/2011         (2)      
        Limited partnership interest (2.49% interest)         3/1/2011         (2)      
                                   
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Soil Safe, Inc. and Soil Safe Acquisition Corp.(8)(21)   Provider of soil treatment, recycling and placement services   First lien senior secured revolving loan       1/3/2017         (19)      
        First lien senior secured loan ($22.0 par due 1/2020)   8.00% (Libor + 6.25%/Q)     1/3/2017     22.0     22.0 (2)(17)      
        Second lien senior secured loan ($12.7 par due 6/2020)   10.75% (Libor + 7.75%/Q)     1/3/2017     12.7     12.7 (2)(17)      
        Senior subordinated loan ($36.7 par due 12/2020)   16.50% PIK     1/3/2017     36.7     36.7 (2)      
        Senior subordinated loan ($31.5 par due 12/2020)   14.50% PIK     1/3/2017     31.5     31.5 (2)      
        Senior subordinated loan ($30.5 par due 12/2020)       1/3/2017     11.5     4.0 (16)      
        Common stock (810 shares)         1/3/2017                
                        114.4     106.9        
                                       
Storm UK Holdco Limited and Storm US Holdco Inc.(9)(21)   Provider of water infrastructure software solutions for municipalities / utilities and engineering consulting firms   First lien senior secured revolving loan ($0.1 par due 5/2022)   9.00% (Base Rate + 4.50%/Q)     5/5/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($1.6 par due 5/2023)   6.89% (Libor + 5.50%/Q)     5/5/2017     1.6     1.5 (2)(17)      
                        1.7     1.6        
                                       
Waste Pro USA, Inc   Waste management services   Second lien senior secured loan ($75.2 par due 10/2020)   9.05% (Libor + 7.50%/Q)     10/15/2014     75.2     75.2 (3)(17)      
                        191.3     183.7     2.59 %
Printing, Publishing and Media                                      
Connoisseur Media, LLC   Owner and operator of radio stations   First lien senior secured loan ($21.0 par due 6/2019)   7.74% (Libor + 6.38%/Q)     7/26/2017     21.0     20.8 (2)(17)      
        First lien senior secured loan ($0.1 par due 6/2019)   9.88% (Base Rate + 5.38%/Q)     7/26/2017     0.1     0.1 (2)(17)      
        First lien senior secured loan ($0.7 par due 6/2019)   8.07% (Libor + 6.38%/Q)     7/26/2017     0.7     0.6 (2)(17)      
        First lien senior secured loan ($0.3 par due 6/2019)   8.07% (Libor + 6.38%/Q)     7/26/2017     0.3     0.3 (4)(17)      
        First lien senior secured loan ($41.4 par due 6/2019)   7.76% (Libor + 6.38%/Q)     7/26/2017     41.4     41.0 (2)(17)      
        First lien senior secured loan ($17.8 par due 6/2019)   7.76% (Libor + 6.38%/Q)     7/26/2017     17.8     17.6 (4)(17)      
                        81.3     80.4        
                                       
Earthcolor Group, LLC   Printing management services   Limited liability company interests (9.30%)         5/18/2012                
                                       
EDS Group(8)(9)   Provider of print and digital services   Common stock (2,432,750 shares)         1/3/2017         2.7        
                                       
Roark-Money Mailer LLC   Marketer, advertiser and distributor of coupons in the mail industry   Membership units (35,000 units)         1/3/2017                
                                       
The Teaching Company Holdings, Inc.   Education publications provider   Preferred stock (10,663 shares)         9/29/2006     1.1     2.4 (2)      
        Common stock (15,393 shares)         9/29/2006         (2)      
                        1.1     2.4        
                        82.4     85.5     1.20 %
Chemicals                                      
AMZ Holding Corp.(21)   Specialty chemicals manufacturer   First lien senior secured loan ($12.2 par due 6/2022)   6.57% (Libor + 5.00%/Q)     6/27/2017     12.2     12.2 (4)(17)      
                                       
Genomatica, Inc.   Developer of a biotechnology platform for the production of chemical products   Warrant to purchase 322,422 shares of Series D preferred stock (expires 3/2023)         3/28/2013         (2)      
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
K2 Pure Solutions Nocal, L.P.(21)   Chemical producer   First lien senior secured revolving loan ($1.5 par due 2/2021)   8.70% (Libor + 7.13%/Q)     8/19/2013     1.5     1.5 (2)(17)      
        First lien senior secured loan ($40.0 par due 2/2021)   7.57% (Libor + 6.00%/Q)     8/19/2013     40.0     40.0 (3)(17)      
        First lien senior secured loan ($13.0 par due 2/2021)   7.57% (Libor + 6.00%/Q)     8/19/2013     13.0     13.0 (4)(17)      
                        54.5     54.5        
                        66.7     66.7     0.94 %
Retail                                      
Fashion Holding Luxembourg SCA (Modacin/Camaeiu)(8)(9)   Retailer of women's clothing   Preferred stock (241,776,675 shares)         1/3/2017                
                                       
Galls, LLC   Distributor of public safety, private security and defense products in the United States   Second lien senior secured loan ($2.0 par due 8/2021)   9.71% (Libor + 8.25%/Q)     8/25/2017     2.0     2.0 (2)(17)      
        Second lien senior secured loan ($7.1 par due 8/2021)   9.85% (Libor + 8.25%/Q)     8/25/2017     7.1     7.1 (2)(17)      
        Second lien senior secured loan ($1.9 par due 8/2021)   9.94% (Libor + 8.25%/Q)     8/25/2017     1.9     1.9 (2)(17)      
        Second lien senior secured loan ($14.3 par due 8/2021)   9.94% (Libor + 8.25%/Q)     1/3/2017     14.3     14.3 (2)(17)      
        Second lien senior secured loan ($26.0 par due 8/2021)   9.94% (Libor + 8.25%/Q)     1/3/2017     26.0     26.0 (2)(17)      
                        51.3     51.3        
                                       
Paper Source, Inc. and Pine Holdings, Inc.(21)   Retailer of fine and artisanal paper products   First lien senior secured loan ($9.6 par due 9/2019)   7.94% (Libor + 6.25%/Q)     9/23/2013     9.6     9.4 (4)(17)      
        Class A common stock (36,364 shares)         9/23/2013     6.0     3.1 (2)      
                        15.6     12.5        
                                       
Things Remembered, Inc. and TRM Holdco Corp.(7)(21)   Personalized gifts retailer   First lien senior secured loan ($12.3 par due 3/2020)       8/30/2016     10.5     1.5 (2)(16)      
        Common stock (10,631,940 shares)         8/30/2016     6.1     (2)      
                        16.6     1.5        
                        83.5     65.3     0.92 %
Aerospace and Defense                                      
Cadence Aerospace, LLC(21)   Aerospace precision components manufacturer   First lien senior secured revolving loan ($0.7 par due 11/2022)   7.91% (Libor + 6.50%/Q)     11/14/2017     0.7     0.7 (2)(17)(20)      
        First lien senior secured loan ($32.5 par due 11/2023)   7.91% (Libor + 6.50%/Q)     11/14/2017     32.2     32.2 (2)(17)      
                        32.9     32.9        
                                       
Jazz Acquisition, Inc.   Designer and distributor of aftermarket replacement components to the commercial airlines industry   Second lien senior secured loan ($25.0 par due 6/2022)   8.44% (Libor + 6.75%/Q)     1/3/2017     19.8     22.5 (2)(17)      
                        52.7     55.4     0.78 %
Health Clubs                                      
Athletic Club Holdings, Inc.   Premier health club operator   First lien senior secured loan ($35.0 par due 10/2020)   10.07% (Libor + 8.50%/Q)     10/11/2007     35.0     35.0 (3)(17)      
                                       
CFW Co-Invest, L.P., NCP Curves, L.P. and Curves International Holdings, Inc.   Health club franchisor   Limited partnership interest (4,152,165 shares)         7/31/2012     4.2     4.4 (2)      
        Limited partnership interest (2,218,235 shares)         7/31/2012     2.2     9.7 (2)(9)      
        Common stock (1,680 shares)         11/12/2014         (2)(9)      
                        6.4     14.1        
                                     

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As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
Movati Athletic (Group) Inc.(9)(21)   Premier health club operator   First lien senior secured loan ($0.3 par due 10/2022)   5.90% (Libor + 4.50%/Q)     10/5/2017     0.3     0.3 (2)(17)      
        First lien senior secured loan ($3.1 par due 10/2022)   5.91% (Libor + 4.50%/Q)     10/5/2017     3.0     3.0 (2)(17)      
                        3.3     3.3        
                        44.7     52.4     0.74 %
Farming and Agriculture                                      
QC Supply, LLC(21)   Specialty distributor and solutions provider to the swine and poultry markets   First lien senior secured revolving loan ($4.0 par due 12/2021)   7.57% (Libor + 6.00%/Q)     12/29/2016     4.0     3.9 (2)(17)      
        First lien senior secured loan ($2.5 par due 12/2022)   7.57% (Libor + 6.00%/Q)     12/29/2016     2.5     2.4 (2)(17)      
        First lien senior secured loan ($11.2 par due 12/2022)   7.57% (Libor + 6.00%/Q)     12/29/2016     11.2     11.0 (2)(17)      
        First lien senior secured loan ($14.9 par due 12/2022)   7.57% (Libor + 6.00%/Q)     12/29/2016     14.9     14.6 (4)(17)      
                        32.6     31.9        
                        32.6     31.9     0.45 %
Hotel Services                                      
Pyramid Management Advisors, LLC and Pyramid Investors, LLC   Hotel Operator   First lien senior secured loan ($3.0 par due 7/2021)   8.69% (Libor + 7.00%/Q)     7/15/2016     3.0     3.0 (2)(17)      
        First lien senior secured loan ($19.5 par due 7/2021)   11.37% (Libor + 10.06%/Q)     7/15/2016     19.5     19.5 (3)(17)      
        Membership units (996,833 units)         7/15/2016     1.0     0.8 (2)      
                        23.5     23.3        
                        23.5     23.3     0.33 %
Computers and Electronics                                      
Everspin Technologies, Inc.   Designer and manufacturer of computer memory solutions   Warrant to purchase up to 18,461 shares of common stock (expires 10/2026)         6/5/2015     0.4     (5)(24)      
                                       
Imaging Business Machines, L.L.C. and Scanner Holdings Corporation(8)   Provider of high-speed intelligent document scanning hardware and software   Senior subordinated loan ($8.3 par due 6/2022)   14.00%     1/3/2017     8.1     8.3 (2)      
        Senior subordinated loan ($8.3 par due 6/2022)   14.00%     1/3/2017     8.1     8.3 (2)      
        Series A preferred stock (66,424,135 shares)         1/3/2017         4.5        
        Class A common stock (33,173 shares)         1/3/2017                
        Class B common stock (134,214 shares)         1/3/2017                
                        16.2     21.1        
                        16.6     21.1     0.30 %
Telecommunications                                      
Adaptive Mobile Security Limited(9)   Developer of security software for mobile communications networks   First lien senior secured loan ($0.9 par due 10/2018)   12.00% (EURIBOR + 8.00% Cash, 2.00% PIK/M)     10/17/2016     0.8     0.8 (2)(17)      
        First lien senior secured loan ($0.8 par due 7/2018)   12.00% (EURIBOR + 8.00% Cash, 2.00% PIK/M)     1/16/2015     0.7     0.7 (2)(17)      
        First lien senior secured loan ($0.3 par due 10/2018)   12.00% (EURIBOR + 8.00% Cash, 2.00% PIK/M)     1/16/2015     0.3     0.3 (2)(17)      
                        1.8     1.8        
                                     

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Table of Contents


As of December 31, 2017
(dollar amounts in millions)

Company(1)
  Business Description   Investment   Interest(6)(12)   Acquisition
Date
  Amortized
Cost
  Fair
Value
  Percentage
of Net
Assets
 
CHL, LTD.   Repair and service solutions provider for cable, satellite and telecommunications based service providers   Warrant to purchase up to 120,000 shares of Series A common stock (expires 5/2020)         1/3/2017                
        Warrant to purchase up to 280,000 shares of Series B common stock (expires 5/2020)         1/3/2017                
        Warrant to purchase up to 80,000 shares of Series C common stock (expires 5/2020)         1/3/2017                
                                   
                                       
LTG Acquisition, Inc.   Designer and manufacturer of display, lighting and passenger communication systems for mass transportation markets   Class A membership units (5,000 units)         1/3/2017     5.1     1.7        
Startec Equity, LLC(8)   Communication services   Member interest         4/1/2010                
                        6.9     3.5     0.05 %
Commercial Real Estate Financial                                      
ACAS Real Estate Holdings Corporation(8)   Real estate holding company   Common stock (1,000 shares)         1/3/2017     2.6     2.1        
                                       
NECCO Realty Investments LLC(8)   Real estate holding company   Membership units (7,450 units)         1/3/2017                
                        2.6     2.1     0.03 %
Housing and Building Materials                                      
Halex Holdings, Inc.(8)(21)   Manufacturer of flooring installation products   First lien senior secured revolving loan ($1.1 par due 12/2018)         1/24/2017     1.1            
        Common stock (51,853 shares)         1/3/2017                
                        1.1            
                        1.1         %
Total Investments                     $ 11,904.5   $ 11,840.6     166.83 %

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Table of Contents


As of December 31, 2017
(dollar amounts in millions)

Derivative Instruments

Foreign currency forward contracts

Description
  Notional Amount
to be Purchased
  Notional Amount
to be Sold
  Counterparty   Settlement Date   Unrealized
Appreciation /
(Depreciation)
 

Foreign currency forward contract

  $ 3     CAD4   Bank of Montreal   January 4, 2018   $  

Foreign currency forward contract

  $ 8     CAD10   Bank of Montreal   January 16, 2018      

Foreign currency forward contract

  $ 81     CAD103   Bank of Montreal   February 16, 2018     (1 )

Foreign currency forward contract

  $ 18   15   Bank of Montreal   January 16, 2018      

Foreign currency forward contract

  $ 9   8   Bank of Montreal   February 15, 2018      

Foreign currency forward contract

  $ 2   2   Bank of Montreal   March 15, 2018      

Foreign currency forward contract

  $ 90   £ 68   Bank of Montreal   February 15, 2018     (2 )

Foreign currency forward contract

  $ 12   £ 9   Bank of Montreal   February 16, 2018      

Total

                      $ (3 )

Interest rate swap

Description
  Payment Terms   Counterparty   Maturity Date   Notional Amount   Value   Upfront
Payments/
Receipts
  Unrealized
Appreciation /
(Depreciation)
 

Interest rate swap

  Pay Fixed 2.0642%   Receive Floating One-Month LIBOR of 1.50%   Bank of Montreal   January 4, 2021   $ 395   $ (1 ) $   $ (1 )

Total

                                    $ (1 )

(1)
Other than the Company's investments listed in footnote 8 below (subject to the limitations set forth therein), the Company does not "Control" any of its portfolio companies, for the purposes of the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). In general, under the Investment Company Act, the Company would "Control" a portfolio company if the Company owned more than 25% of its outstanding voting securities (i.e., securities with the right to elect directors) and/or had the power to exercise control over the management or policies of such portfolio company. All of the Company's portfolio company investments, which as of December 31, 2017 represented 167% of the Company's net assets or 96% of the Company's total assets, are subject to legal restrictions on sales.

(2)
These assets are pledged as collateral for the Revolving Credit Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Revolving Credit Facility (see Note 5 to the consolidated financial statements).

(3)
These assets are owned by the Company's consolidated subsidiary Ares Capital CP Funding LLC ("Ares Capital CP"), are pledged as collateral for the Revolving Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than Ares Capital CP's obligations under the Revolving Funding Facility (see Note 5 to the consolidated financial statements).

(4)
These assets are owned by the Company's consolidated subsidiary Ares Capital JB Funding LLC ("ACJB"), are pledged as collateral for the SMBC Funding Facility (as defined below) and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than ACJB's obligations under the SMBC Funding Facility (see Note 5 to the consolidated financial statements).

(5)
These assets are owned by the Company's consolidated subsidiary Ares Venture Finance, L.P. ("AVF LP"), are pledged as collateral for the SBA-guaranteed debentures (the "SBA Debentures") and, as a result, are not directly available to the creditors of the Company to satisfy any obligations of the Company other than AVF LP's obligations (see Note 5 to the consolidated financial statements). AVF LP operates as a Small Business Investment Company ("SBIC") under the provisions of Section 301(c) of the Small Business Investment Act of 1958, as amended.

(6)
Investments without an interest rate are non-income producing.

(7)
As defined in the Investment Company Act, the Company is deemed to be an "Affiliated Person" because it owns 5% or more of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management

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As of December 31, 2017
(dollar amounts in millions)

 
  For the year ended December 31, 2017    
 
 
  As of
December 31,
2017
 
 
   
   
   
   
   
   
   
  Net
realized
gains
(losses)
  Net
unrealized
gains
(losses)
 
 
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
 
(in millions)
Company
  Fair Value  

Campus Management Acquisition Corp.

  $   $   $   $   $   $   $   $   $ 0.7   $ 11.0  

Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC

  $ 14.0   $ 0.8   $   $ 1.1   $ 0.1   $   $ 0.2   $   $ 1.0   $ 28.5  

ESCP PPG Holdings, LLC

  $   $   $   $   $   $   $   $   $ (0.9 ) $ 2.8  

Financial Asset Management Systems, Inc. and FAMS Holdings, Inc.

  $ 3.0   $ 3.0   $   $   $   $   $   $   $   $  

Ioxus, Inc

  $   $   $   $ 1.3   $   $   $   $   $ (0.1 ) $ 11.2  

Multi-Ad Services, Inc.

  $   $   $   $   $   $   $   $ 0.1   $   $  

NSI Holdings, Inc.

  $   $   $   $   $   $   $   $   $   $  

Petroflow Energy Corporation and TexOak Petro Holdings LLC

  $   $ 2.6   $ 1.8   $ 0.4   $   $   $   $ 0.2   $ (4.8 ) $ 12.4  

PIH Corporation and Primrose Holding Corporation

  $ 17.0   $ 6.2   $   $   $   $ 1.4   $   $   $ 7.0   $ 20.4  

Shock Doctor, Inc. and Shock Doctor Holdings, LLC

  $   $   $   $ 10.7   $   $   $ 0.1   $   $ (9.1 ) $ 86.1  

Things Remembered, Inc. and TRM Holdco Corp.

  $ 5.1   $ 5.0   $ 0.3   $ 0.1   $   $   $ 0.1   $   $ (1.9 ) $ 1.5  

UL Holding Co., LLC

  $   $   $   $ 3.3   $   $   $   $   $ 6.3   $ 42.4  

  $ 39.1   $ 17.6   $ 2.1   $ 16.9   $ 0.1   $ 1.4   $ 0.4   $ 0.3   $ (1.8 ) $ 216.3  
(8)
As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" and "Control" this portfolio company because it owns more than 25% of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company

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As of December 31, 2017
(dollar amounts in millions)

 
  For the year ended December 31, 2017    
 
 
  As of
December 31,
2017
 
 
   
   
   
   
   
   
   
  Net
realized
gains
(losses)
  Net
unrealized
gains
(losses)
 
 
  Purchases
(cost)
  Redemptions
(cost)
  Sales
(cost)
  Interest
income
  Capital
structuring
service fees
  Dividend
income
  Other
income
 
(in millions)
Company
  Fair Value  

10th Street, LLC and New 10th Street, LLC

  $   $ 53.3   $ 0.6   $ 2.0   $   $   $   $ 34.5   $ (34.7 ) $  

ACAS 2007-1 CLO

  $   $   $   $   $   $   $   $   $   $  

ACAS Equity Holdings Corporation

  $ 0.5   $   $   $   $   $   $   $   $ (0.1 ) $ 0.4  

ACAS Real Estate Holdings Corporation

  $ 2.6   $   $   $   $   $   $   $   $ (0.5 ) $ 2.1  

ADF Capital, Inc., ADF Restaurant Group, LLC, and ARG Restaurant Holdings, Inc.

  $   $   $   $ 0.6   $   $   $ 0.1   $   $ (15.9 ) $ 16.0  

Alcami Holdings, LLC

  $ 273.1   $ 5.5   $ 0.3   $ 29.8   $   $   $ 2.1   $   $ 166.8   $ 442.3  

AllBridge Financial, LLC

  $   $   $   $   $   $ 0.4   $   $   $ (0.4 ) $  

Ares IIIR/IVR CLO Ltd.

  $   $ 5.2   $   $ 0.4   $   $   $   $ 0.5   $ 0.1   $ 0.1  

Bellotto Holdings Limited

  $ 193.6   $ 193.6   $   $   $   $   $   $ 58.1   $   $  

Callidus Capital Corporation

  $   $   $   $   $   $   $   $   $   $ 1.7  

Ciena Capital LLC

  $   $   $ 10.0   $ 0.8   $   $   $   $   $ 10.6   $ 32.3  

CoLTS 2005-1

  $   $   $   $   $   $   $   $   $   $  

CoLTS 2005-2

  $   $   $   $   $   $   $   $   $   $  

Columbo Midco Limited, Columbo Bidco Limited and Columbo Topco Limited

  $ 27.9   $   $   $   $   $   $   $   $ 12.7   $ 40.6  

Community Education Centers, Inc. and CEC Parent Holdings LLC

  $   $ 36.2   $ 38.1   $ 1.2   $   $ 8.4   $ 0.1   $ 24.3   $ (10.9 ) $  

Competitor Group, Inc., Calera XVI, LLC and Champion Parent Corporation

  $ 0.5   $ 18.6   $ 42.8   $   $   $   $   $ (20.1 ) $ 17.3   $ 0.2  

CSHM LLC

  $   $   $   $   $   $   $   $   $   $  

EDS Group

  $ 11.8   $ 12.1   $   $ 0.4   $   $   $   $ 3.3   $ 2.7   $ 2.7  

ETG Holdings, Inc.

  $   $   $   $   $   $   $   $   $   $  

European Capital Private Debt LP

  $ 97.9   $ 0.3   $ 97.7   $   $   $   $   $ 1.1   $   $  

European Capital UK SME Debt LP

  $ 46.8   $ 4.8   $ 0.8   $   $   $   $   $ 0.1   $ 0.6   $ 41.7  

Fashion Holding Luxembourg SCA (Modacin/Camaeiu)

  $   $   $   $   $   $   $   $   $   $  

FPI Holding Corporation

  $ 0.4   $   $   $   $   $   $   $   $ (1.0 ) $ 0.4  

Garden Fresh Restaurant Corp. and GFRC Holdings LLC

  $ 14.6   $ 12.3   $ 18.9   $ 3.6   $   $   $ 0.2   $   $ 2.0   $ 25.0  

Halex Holdings, Inc.

  $ 1.1   $   $   $   $   $   $   $ 2.4   $ (2.0 ) $  

HALT Medical, Inc.

  $ 0.7   $   $ 0.6   $   $   $   $   $   $   $  

Hard 8 Games, LLC

  $ 9.4   $   $ 9.4   $   $   $   $   $ 4.6   $   $  

HCI Equity, LLC

  $   $   $   $   $   $   $   $   $   $ 0.1  

Imaging Business Machines, L.L.C. and Scanner Holdings Corporation

  $ 16.1   $   $   $ 2.4   $   $   $ 0.6   $   $ 5.0   $ 21.1  

Ivy Hill Asset Management, L.P.

  $ 228.6   $ 155.5   $   $   $   $ 40.0   $   $   $ 12.8   $ 315.1  

LLSC Holdings Corporation (dba Lawrence Merchandising Services)

  $ 19.2   $   $   $   $   $   $ 0.2   $   $ (1.0 ) $ 18.2  

Miles 33 (Finance) Limited

  $ 15.2   $ 1.5   $ 0.6   $ 2.0   $   $   $   $ 0.2   $ 3.9   $ 17.9  

Montgomery Lane, LLC and Montgomery Lane, Ltd.

  $ 2.2   $ 2.3   $   $   $   $   $   $ 1.1   $ 0.6   $ 0.6  

MVL Group, Inc.

  $   $ 0.2   $   $   $   $   $   $ 0.1   $   $  

Navisun LLC and Navisun Holdings LLC

  $ 2.9   $   $   $   $   $   $   $   $   $ 2.9  

NECCO Holdings, Inc.

  $ 60.4   $ 41.9   $ 7.1   $   $   $   $   $   $ (1.3 ) $ 10.6  

NECCO Realty Investments LLC

  $ 32.7   $ 27.4   $ 6.4   $ 1.2   $   $   $   $ 13.0   $   $  

Orion Foods, LLC

  $   $   $   $   $   $   $   $   $   $ 0.5  

Pillar Processing LLC and PHL Investors, Inc.

  $   $   $   $   $   $   $   $   $   $  

Rug Doctor, LLC and RD Holdco Inc.

  $ 30.9   $   $   $ 1.9   $   $   $   $   $ (3.2 ) $ 27.7  

S Toys Holdings LLC (fka The Step2 Company, LLC)

  $   $   $   $   $   $   $   $ 6.8   $ (5.7 ) $ 0.5  

Senior Direct Lending Program, LLC

  $ 221.4   $ 2.0   $ 2.1   $ 52.3   $ 9.1   $   $ 1.5   $   $   $ 487.1  

Senior Secured Loan Fund LLC

  $   $ 1,938.4   $   $ 69.3   $ 0.9   $   $ 4.5   $ (17.5 ) $ 24.2   $  

Soil Safe, Inc. and Soil Safe Acquisition Corp.

  $ 110.6   $ 4.2   $ 1.0   $ 13.0   $   $   $ 0.1   $   $ (7.6 ) $ 106.9  

Startec Equity, LLC

  $   $   $   $   $   $   $   $   $   $  

The Greeley Company, Inc. and HCP Acquisition Holdings, LLC

  $   $   $ 12.8   $   $   $   $   $ (12.3 ) $ 12.4   $  

  $ 1,421.1   $ 2,515.3   $ 249.2   $ 180.9   $ 10.0   $ 48.8   $ 9.4   $ 100.2   $ 187.4   $ 1,614.7  

*
Together with Varagon Capital Partners ("Varagon and its clients"), the Company has co-invested through the Senior Direct Lending Program LLC (d/b/a the "Senior Direct Lending Program" or the "SDLP"). The SDLP has been capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required); therefore, although the Company owns more than 25% of the voting securities of the SDLP, the Company does not believe that it has control over the SDLP (for purposes of the Investment Company Act or otherwise) because, among other things,

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As of December 31, 2017
(dollar amounts in millions)

(9)
Non-U.S. company or principal place of business outside the U.S. and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets. Pursuant to Section 55(a) of the Investment Company Act, 12% of the Company's total assets are represented by investments at fair value and other assets that are considered "non-qualifying assets" as of December 31, 2017.

(10)
Exception from the definition of investment company under Section 3(c) of the Investment Company Act and as a result is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company's total assets.

(11)
Variable rate loans to the Company's portfolio companies bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate ("LIBOR") or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower's option, which reset annually (A), semi-annually (S), quarterly (Q), bi-monthly (B), monthly (M) or daily (D). For each such loan, the Company has provided the interest rate in effect on the date presented.

(12)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 1.75% on $63 aggregate principal amount of a "first out" tranche of the portfolio company's senior term debt previously syndicated by the Company into "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.

(13)
In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest amount of 2.00% on $73 aggregate principal amount of a "first out" tranche of the portfolio company's first lien senior secured loans, 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.

(14)
The Company sold a participating interest of approximately $9 of aggregate principal amount of the portfolio company's second lien senior secured term loan as a "first out" tranche. As the transaction did not qualify as a "true sale" in accordance with U.S. generally accepted accounting principles, the Company recorded a corresponding $9 secured borrowing included in "accounts payable and other liabilities" in the accompanying consolidated balance sheet."

(15)
The Company is entitled to receive a fixed fee upon the occurrence of certain events as defined in the credit agreement governing the Company's debt investment in the portfolio company. The fair value of such fee is included in the fair value of the debt investment.

(16)
Loan was on non-accrual status as of December 31, 2017.

(17)
Loan includes interest rate floor feature.

(18)
In addition to the interest earned based on the stated contractual interest rate of this security, the certificates entitle the holders thereof to receive a portion of the excess cash flow from the SDLP's loan portfolio, after expenses, which may result in a return to the Company greater than the contractual stated interest rate.

(19)
As of December 31, 2017, no amounts were funded by the Company under this first lien senior secured revolving loan; however, there were letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(20)
As of December 31, 2017, in addition to the amounts funded by the Company under this first lien senior secured revolving loan, there were also letters of credit issued and outstanding through a financial intermediary under the loan. See Note 7 to the consolidated financial statements for further information on letters of credit commitments related to certain portfolio companies.

(21)
As of December 31, 2017, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 7 to the consolidated financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.
(in millions)
Portfolio Company
  Total revolving
and delayed
draw loan
commitments
  Less: drawn
commitments
  Total undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

A.U.L. Corp.

  $ 1.3   $ (0.4 ) $ 0.9   $   $   $ 0.9  

Accruent, LLC, Accruent Holding, LLC and Athena Parent, Inc.

    9.9     (0.7 )   9.2             9.2  

Achilles Acquisition LLC

    1.1         1.1             1.1  

ADCS Billings Intermediate Holdings, LLC

    5.0         5.0             5.0  

ADF Pizza I LLC

    1.3         1.3             1.3  

ADG, LLC

    13.7     (11.5 )   2.2             2.2  

Alcami Holdings, LLC

    30.0     (25.6 )   4.4             4.4  

American Academy Holdings, LLC

    7.0     (0.9 )   6.1             6.1  

AMZ Holding Corp.

    3.4         3.4             3.4  

Bambino CI Inc.

    9.6     (1.1 )   8.5             8.5  

Benihana, Inc.

    3.2     (3.1 )   0.1             0.1  

Cadence Aerospace, LLC

    14.3     (1.5 )   12.8             12.8  

CCS Intermediate Holdings, LLC and CCS Group Holdings, LLC

    7.5     (6.4 )   1.1             1.1  

Chariot Acquisition, LLC

    1.0         1.0             1.0  

Chesapeake Research Review, LLC

    5.8     (0.6 )   5.2             5.2  

Ciena Capital LLC

    20.0     (14.0 )   6.0     (6.0 )        

Clearwater Analytics, LLC

    5.0     (0.5 )   4.5             4.5  

Command Alkon Incorporated

    3.3     (1.6 )   1.7             1.7  

Component Hardware Group, Inc

    3.7     (1.9 )   1.8             1.8  

Cozzini Bros., Inc. and BH-Sharp Holdings LP

    16.0         16.0             16.0  

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As of December 31, 2017
(dollar amounts in millions)

(in millions)
Portfolio Company
  Total revolving
and delayed
draw loan
commitments
  Less: drawn
commitments
  Total undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

Crown Health Care Laundry Services, LLC and Crown Laundry Holdings, LLC

    5.0     (2.6 )   2.4             2.4  

CST Buyer Company

    4.2         4.2             4.2  

D4C Dental Brands, Inc.

    5.0         5.0             5.0  

DCA Investment Holding, LLC

    5.8     (0.1 )   5.7             5.7  

DecoPac, Inc.

    8.1     (2.6 )   5.5             5.5  

DFC Global Facility Borrower II LLC

    40.0         40.0             40.0  

Dorner Holding Corp.

    3.3     (1.3 )   2.0             2.0  

DRB Holdings, LLC

    9.9         9.9             9.9  

DTI Holdco, Inc. and OPE DTI Holdings, Inc.

    8.8         8.8             8.8  

Eckler Industries, Inc.

    4.0     (2.0 )   2.0     (2.0 )        

Emergency Communications Network, LLC

    6.5         6.5             6.5  

Emerus Holdings, Inc.

    2.0     (0.3 )   1.7             1.7  

EN Engineering, LLC

    5.0     (1.2 )   3.8             3.8  

Entertainment Partners, LLC and Entertainment Partners Canada Inc.

    28.0         28.0             28.0  

Foundation Risk Partners, Corp.

    19.9         19.9             19.9  

FPI Holding Corporation

    2.6         2.6             2.6  

Frontline Technologies Group Holding LLC

    8.4         8.4             8.4  

FWR Holding Corporation

    3.3     (0.3 )   3.0             3.0  

Garden Fresh Restaurant Corp.

    7.5     (2.9 )   4.6             4.6  

Gentle Communications, LLC

    5.0         5.0             5.0  

Global Franchise Group, LLC

    1.2         1.2             1.2  

GraphPAD Software, LLC

    1.1     (0.6 )   0.5             0.5  

GTCR-Ultra Acquisition, Inc. and GTCR-Ultra Holdings, LLC

    2.0         2.0             2.0  

HAI Acquisition Corporation

    19.0     (4.7 )   14.3             14.3  

Halex Holdings, Inc.

    2.0     (1.1 )   0.9             0.9  

Harvey Tool Company, LLC

    35.5     (1.8 )   33.7             33.7  

Hojeij Branded Foods, LLC

    2.9         2.9             2.9  

Hygiena Borrower LLC

    5.3         5.3             5.3  

Implementation Management Assistance, LLC

    24.1         24.1             24.1  

Infilaw Holdings, LLC

    11.5     (11.5 )                

Instituto de Banca y Comercio, Inc.

    11.8     (11.8 )                

iPipeline, Inc.

    4.0         4.0             4.0  

JDC Healthcare Management, LLC

    13.9     (1.5 )   12.4             12.4  

Jim N Nicks Management, LLC

    9.7     (1.7 )   8.0             8.0  

K2 Pure Solutions Nocal, L.P.

    5.0     (1.5 )   3.5             3.5  

KBHS Acquisition, LLC (d/b/a Alita Care, LLC)

    5.0     (1.8 )   3.2             3.2  

Key Surgical LLC

    2.8     (0.9 )   1.9             1.9  

KHC Holdings, Inc.

    6.9     (0.7 )   6.2             6.2  

Lakeland Tours, LLC

    1.9     (1.9 )                

LBP Intermediate Holdings LLC

    0.9     (0.1 )   0.8             0.8  

Liaison Acquisition, LLC

    3.9         3.9             3.9  

Massage Envy, LLC

    5.0     (0.5 )   4.5             4.5  

Massage Envy, LLC and ME Equity LLC

    0.6         0.6             0.6  

MB2 Dental Solutions, LLC

    3.5     (1.3 )   2.2             2.2  

McKenzie Sports Products, LLC

    4.5     (0.9 )   3.6             3.6  

Ministry Brands, LLC

    19.5     (10.9 )   8.6             8.6  

Movati Athletic (Group) Inc.

    2.8         2.8             2.8  

MSHC, Inc.

    9.8     (0.1 )   9.7             9.7  

MW Dental Holding Corp.

    10.0     (9.7 )   0.3             0.3  

Navisun LLC

    42.4         42.4             42.4  

NECCO Holdings, Inc.

    25.0     (21.7 )   3.3     (3.3 )        

Niagara Fiber Intermediate Corp.

    1.2     (0.9 )   0.3             0.3  

Nordco Inc.

    12.5         12.5             12.5  

NSM Sub Holdings Corp.

    5.0         5.0             5.0  

OmniSYS Acquisition Corporation, OmniSYS, LLC, and OSYS Holdings, LLC

    2.5         2.5             2.5  

Osmose Utilities Services, Inc.

    6.0     (1.0 )   5.0             5.0  

OTG Management, LLC

    13.6     (8.4 )   5.2             5.2  

Palermo Finance Corporation

    1.1     (0.2 )   0.9             0.9  

Paper Source, Inc.

    3.3         3.3             3.3  

Pathway Partners Vet Management Company LLC

    2.4         2.4             2.4  

PDI TA Holdings, Inc.

    12.5     (0.9 )   11.6             11.6  

Pegasus Intermediate Holdings, LLC

    5.0         5.0             5.0  

PIH Corporation and Primrose Holding Corporation

    3.3     (1.0 )   2.3             2.3  

Practice Insight, LLC

    2.9     (0.6 )   2.3             2.3  

QC Supply, LLC

    24.2     (4.0 )   20.2             20.2  

Restaurant Technologies, Inc.

    5.4     (1.1 )   4.3             4.3  

Retriever Medical/Dental Payments LLC

    3.5         3.5             3.5  

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As of December 31, 2017
(dollar amounts in millions)

(in millions)
Portfolio Company
  Total revolving
and delayed
draw loan
commitments
  Less: drawn
commitments
  Total undrawn
commitments
  Less:
commitments
substantially at
discretion of the
Company
  Less: unavailable
commitments due
to borrowing base
or other covenant
restrictions
  Total net adjusted
undrawn revolving
and delayed draw
commitments
 

RuffaloCODY, LLC

    7.7     (0.2 )   7.5             7.5  

Sanders Industries Holdings, Inc.

    15.0         15.0             15.0  

SCM Insurance Services Inc.

    4.3         4.3             4.3  

SCSG EA Acquisition Company, Inc.

    4.0         4.0             4.0  

Severin Acquisition, LLC

    2.9         2.9             2.9  

SFE Intermediate Holdco LLC

    3.8     (0.8 )   3.0             3.0  

Shift PPC LLC

    3.6         3.6             3.6  

Sigma Electric Manufacturing Corporation

    10.0     (1.5 )   8.5             8.5  

Soil Safe, Inc. and Soil Safe Acquisition Corp.

    10.5     (4.6 )   5.9             5.9  

Sonny's Enterprises, LLC

    1.8     (1.0 )   0.8             0.8  

Sparta Systems, Inc.

    6.5         6.5             6.5  

Storm UK Holdco Limited and Storm US Holdco Inc.

    1.1     (0.1 )   1.0             1.0  

Teasdale Foods, Inc.

    0.8     (0.4 )   0.4             0.4  

The Gordian Group, Inc.

    1.1         1.1             1.1  

Things Remembered, Inc.

    2.4         2.4             2.4  

Towne Holdings, Inc.

    1.0         1.0             1.0  

TPTM Merger Corp.

    2.5         2.5             2.5  

Urgent Cares of America Holdings I, LLC

    10.0         10.0             10.0  

VistaPharm, Inc.

    2.5         2.5             2.5  

VLS Recovery Services, LLC

    22.1     (1.8 )   20.3             20.3  

VRC Companies, LLC

    1.9     (0.8 )   1.1             1.1  

Woodstream Group, Inc. and Woodstream Corporation

    4.7         4.7             4.7  

Wrench Group LLC

    4.6         4.6             4.6  

Zemax, LLC

    3.0         3.0             3.0  

Zywave, Inc.

    11.4     (2.4 )   9.0             9.0  

  $ 881.5   $ (201.5 ) $ 680.0   $ (11.3 ) $   $ 668.7  
(22)
As of December 31, 2017, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:
(in millions)
Company
  Total private
equity
commitments
  Less: funded
private equity
commitments
  Total
unfunded
private equity
commitments
  Less: private
equity
commitments
substantially at
the discretion of the
Company
  Total net
adjusted
unfunded
private
equity
commitments
 

Partnership Capital Growth Investors III, L.P.

  $ 5.0   $ (4.5 ) $ 0.5   $   $ 0.5  

PCG-Ares Sidecar Investment, L.P. and PCG-Ares Sidecar Investment II, L.P.

    50.0     (12.1 )   37.9     (37.9 )    

Piper Jaffray Merchant Banking Fund I, L.P.

    2.0     (1.8 )   0.2         0.2  

European Capital UK SME Debt LP

    54.0     (44.0 )   10.0     (10.0 )    

  $ 111.0   $ (62.4 ) $ 48.6   $ (47.9 ) $ 0.7  
(23)
As of December 31, 2017, the Company had commitments to co-invest in the SDLP for its portion of the SDLP's commitment to fund delayed draw loans of up to $19. See Note 4 to the consolidated financial statements for more information on the SDLP.

(24)
Other than the investments noted by this footnote, the fair value of the Company's investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 8 to the consolidated financial statements for more information regarding the fair value of the Company's investments.

(25)
As of December 31, 2017, the net estimated unrealized loss for federal tax purposes was $0.8 billion based on a tax cost basis of $12.7 billion. As of December 31, 2017, the estimated aggregate gross unrealized loss for federal income tax purposes was $1.3 billion and the estimated aggregate gross unrealized gain for federal income tax purposes was $0.5 billion.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(in millions, except per share data)

(unaudited)

 
   
   
   
   
  Accumulated
Undistributed
Net Realized
Gains on
Investments,
Foreign
Currency
Transactions,
Extinguishment
of Debt and
Other Assets
  Net
Unrealized
Gains
(Losses)
on
Investments,
Foreign
Currency
and Other
Transactions
   
 
 
  Common Stock    
  Accumulated
Overdistributed
Net Investment
Income
   
 
 
  Capital in
Excess of
Par Value
  Total
Stockholders'
Equity
 
 
  Shares   Amount  

Balance at December 31, 2017

    426   $   $ 7,192   $ (81 ) $ 72   $ (85 ) $ 7,098  

Net increase in stockholders' equity resulting from operations

                306     15     175     496  

Dividends declared and payable ($0.76 per share)

                (324 )           (324 )

Balance at June 30, 2018

    426   $   $ 7,192   $ (99 ) $ 87   $ 90   $ 7,270  

   

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(unaudited)

 
  For the Six
Months
Ended June 30,
 
 
  2018   2017  

OPERATING ACTIVITIES:

             

Net increase in stockholders' equity resulting from operations

  $ 496   $ 296  

Adjustments to reconcile net increase in stockholders' equity resulting from operations:

             

Net realized gains on investments and foreign currency and other transactions

    (15 )   (112 )

Net unrealized (gains) losses on investments, foreign currency and other transactions

    (175 )   30  

Realized losses on extinguishment of debt

        4  

Net accretion of discount on investments

    (7 )   (5 )

PIK interest and dividends

    (49 )   (37 )

Collections of payment-in-kind interest and dividends

        47  

Amortization of debt issuance costs

    9     9  

Net accretion of discount on notes payable

    3     3  

Acquisition of American Capital, net of cash acquired

        (2,381 )

Proceeds from sales and repayments of investments

    3,462     2,802  

Purchases of investments

    (2,883 )   (2,730 )

Changes in operating assets and liabilities:

             

Interest receivable

    4     12  

Other assets

    (4 )   (17 )

Base management fees payable

    1     10  

Income based fees payable

    2     (12 )

Capital gains incentive fees payable

    38     25  

Accounts payable and other liabilities

    (47 )   (99 )

Interest and facility fees payable

    5     9  

Net cash provided by (used in) operating activities

    840     (2,146 )

FINANCING ACTIVITIES:

             

Net proceeds from issuance of common stock

        1,839  

Borrowings on debt

    3,247     7,090  

Repayments and repurchases of debt

    (3,561 )   (6,124 )

Debt issuance costs

    (9 )   (28 )

Dividends paid

    (324 )   (318 )

Net cash (used in) provided by financing activities

    (647 )   2,459  

CHANGE IN CASH AND CASH EQUIVALENTS

    193     313  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

    316     223  

CASH AND CASH EQUIVALENTS, END OF PERIOD

  $ 509   $ 536  

Supplemental Information:

             

Interest paid during the period

  $ 97   $ 85  

Taxes, including excise tax, paid during the period

  $ 18   $ 19  

Dividends declared and payable during the period

  $ 324   $ 324  

Deemed contribution from Ares Capital Management (see Note 14)

        $ 54  

   

See accompanying notes to consolidated financial statements.

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ARES CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2018
(unaudited)
(in millions, except per share data, percentages and as otherwise indicated;
for example, with the word "billion" or otherwise)

1.     ORGANIZATION

        Ares Capital Corporation (the "Company") is a specialty finance company that is a closed-end, non-diversified management investment company incorporated in Maryland. The Company has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "Investment Company Act"). The Company has elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code") and operates in a manner so as to qualify for the tax treatment applicable to RICs.

        The Company's investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in first lien senior secured loans (including "unitranche" loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, the Company also makes equity investments.

        The Company is externally managed by Ares Capital Management LLC ("Ares Capital Management" or the Company's "investment adviser"), a subsidiary of Ares Management, L.P. ("Ares Management"), a publicly traded, leading global alternative asset manager, pursuant to an investment advisory and management agreement. Ares Operations LLC ("Ares Operations" or the Company's "administrator"), a subsidiary of Ares Management, provides certain administrative and other services necessary for the Company to operate.

2.     SIGNIFICANT ACCOUNTING POLICIES

        The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles ("GAAP"), and include the accounts of the Company and its consolidated subsidiaries. The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification ("ASC") 946. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the results of the operations and financial condition as of and for the periods presented. All significant intercompany balances and transactions have been eliminated.

        Interim financial statements are prepared in accordance with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period presented, have been included. The current period's results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2018.

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        Cash and cash equivalents include funds from time to time deposited with financial institutions and short-term, liquid investments in a money market account. Cash and cash equivalents are carried at cost which approximates fair value.

        The Company places its cash and cash equivalents with financial institutions and, at times, cash held in money market accounts may exceed the Federal Deposit Insurance Corporation insured limit.

        Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized.

        Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Company looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available (i.e., substantially all of the Company's investments) are valued at fair value as determined in good faith by the Company's board of directors, based on, among other things, the input of the Company's investment adviser, audit committee and independent third-party valuation firms that have been engaged at the direction of the Company's board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing 12-month period (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. The valuation process is conducted at the end of each fiscal quarter, and a portion of the Company's investment portfolio at fair value is subject to review by an independent valuation firm each quarter. In addition, the Company's independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, the Company's investment valuation process within the context of performing the integrated audit.

        As part of the valuation process, the Company may take into account the following types of factors, if relevant, in determining the fair value of the Company's investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company considers the pricing indicated by the external event to corroborate its valuation.

        Because there is not a readily available market value for most of the investments in its portfolio, the Company values substantially all of its portfolio investments at fair value as determined in good faith by its board of directors, as described herein. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of the Company's investments may differ significantly from the values that would have been used had a ready

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market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.

        In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

        The Company's board of directors undertakes a multi-step valuation process each quarter, as described below:

        See Note 8 for more information on the Company's valuation process.

        Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.

        Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.

        Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

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        The Company has loans in its portfolio that contain payment-in-kind ("PIK") provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan and recorded as interest income. To maintain the Company's status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends, even though the Company has not yet collected the cash.

        The Company's investment adviser seeks to provide assistance to its portfolio companies and in return the Company may receive fees for capital structuring services. These fees are fixed based on contractual terms, are generally only available to the Company as a result of the Company's underlying investments, are normally paid at the closing of the investments, are generally non-recurring and non-refundable and are recognized as revenue when earned upon closing of the investment. The services that the Company's investment adviser provides vary by investment, but generally include reviewing existing credit facilities, arranging bank financing, arranging equity financing, structuring financing from multiple lenders, structuring financing from multiple equity investors, restructuring existing loans, raising equity and debt capital, and providing general financial advice, which concludes upon closing of the investment. Any services of the above nature subsequent to the closing would generally generate a separate fee payable to the Company. In certain instances where the Company is invited to participate as a co-lender in a transaction and does not provide significant services in connection with the investment, a portion of loan fees paid to the Company in such situations will be deferred and amortized over the estimated life of the loan.

        Other income includes amendment fees that are fixed based on contractual terms and are generally non-recurring and non-refundable and are recognized as revenue when earned upon closing of the transaction. Other income also includes fees for management and consulting services, loan guarantees, commitments, and other services rendered by the Company to portfolio companies. Such fees are fixed based on contractual terms and are recognized as income as services are rendered.

        The Company's books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

        Results of operations based on changes in foreign exchange rates are separately disclosed in the statement of operations, if any. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

        The Company does not utilize hedge accounting and as such values its derivatives at fair value with the unrealized gains or losses recorded in "net unrealized gains (losses) from foreign currency and other transactions" in the Company's consolidated statement of operations.

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        The Company's offering costs are charged against the proceeds from equity offerings when proceeds are received.

        Debt issuance costs are amortized over the life of the related debt instrument using the straight line method or the effective yield method, depending on the type of debt instrument.

        The Company has elected to be treated as a RIC under the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must (among other requirements) meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders at least 90% of its investment company taxable income, as defined by the Code, for each year. The Company (among other requirements) has made and intends to continue to make the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal corporate-level income taxes.

        Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year taxable income will be in excess of estimated dividend distributions for the current year, the Company accrues excise tax, if any, on estimated excess taxable income as such taxable income is earned.

        Certain of the Company's consolidated subsidiaries are subject to U.S. federal and state corporate-level income taxes.

        Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the Company's board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such capital gains for investment.

        The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Company's board of directors authorizes, and the Company declares, a cash dividend, then the Company's stockholders who have not "opted out" of the Company's dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of the Company's common stock, rather than receiving the cash dividend. The Company intends to use primarily newly issued shares to implement the dividend reinvestment plan (so long as the Company is trading at a premium to net asset value). If the Company's shares are trading at a discount to net asset value and the Company is otherwise permitted under applicable law to purchase such shares, the Company may purchase shares in the open market in connection with the Company's obligations under the dividend reinvestment plan. However, the Company reserves the right to issue new shares of the Company's common stock in connection with the Company's obligations under the dividend reinvestment plan even if the Company's shares are trading below net asset value.

        The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of actual and contingent assets and

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liabilities at the date of the financial statements and the reported amounts of income or loss and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation of investments.

3.     AGREEMENTS

        The Company is party to an investment advisory and management agreement (the "investment advisory and management agreement") with Ares Capital Management. Subject to the overall supervision of the Company's board of directors, Ares Capital Management provides investment advisory and management services to the Company. For providing these services, Ares Capital Management receives fees from the Company consisting of a base management fee, a fee based on the Company's net investment income ("income based fee") and a fee based on the Company's net capital gains ("capital gains incentive fee"). The investment advisory and management agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

        The base management fee is calculated at an annual rate of 1.5% based on the average value of the Company's total assets (other than cash or cash equivalents but including assets purchased with borrowed funds) at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears. In connection with the Company's board of directors approving the modification of the asset coverage requirement applicable to senior securities from 200% to 150% effective on June 21, 2019 (unless the Company receives earlier stockholder approval), the investment advisory and management agreement will be amended prior to June 21, 2019 (or such earlier date) to reduce the Company's annual base management fee from 1.5% to 1.0% on all assets financed using leverage over 1.0x debt to equity. See Note 5 for additional information.

        The income based fee is calculated and payable quarterly in arrears based on the Company's pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the quarter. Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the administration agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the income based fee and capital gains incentive fee accrued under GAAP). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash. The Company's investment adviser is not under any obligation to reimburse the Company for any part of the income based fees it received that was based on accrued interest that the Company never actually received.

        Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses, unrealized capital appreciation, unrealized capital depreciation or income tax expense related to realized gains and losses. Because of the structure of the income based fee, it is possible that the Company may pay such fees in a quarter where the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the hurdle rate (as defined below) for a quarter, the Company will pay the applicable income based fee even if the Company has incurred a loss in that quarter due to realized and/or unrealized capital losses.

        Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company's net assets (defined as total assets less indebtedness and before taking into account any income based fees and capital gains incentive fees payable during the period) at the end of the

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immediately preceding calendar quarter, is compared to a fixed "hurdle rate" of 1.75% per quarter. If market credit spreads rise, the Company may be able to invest its funds in debt instruments that provide for a higher return, which may increase the Company's pre-incentive fee net investment income and make it easier for the Company's investment adviser to surpass the fixed hurdle rate and receive an income based fee based on such net investment income. To the extent the Company has retained pre-incentive fee net investment income that has been used to calculate the income based fee, it is also included in the amount of the Company's total assets (other than cash and cash equivalents but including assets purchased with borrowed funds) used to calculate the 1.5% base management fee.

        The Company pays its investment adviser an income based fee with respect to the Company's pre-incentive fee net investment income in each calendar quarter as follows:

        These calculations are adjusted for any share issuances or repurchases during the quarter.

        In connection with the Company's acquisition of American Capital, Ltd., a Delaware corporation ("American Capital") (the "American Capital Acquisition"), Ares Capital Management agreed to waive, for each of the first ten calendar quarters beginning with the second quarter of 2017 and ending with the third quarter of 2019, the lesser of (x) $10 of income based fees and (y) the amount of income based fees for such quarter, in each case, to the extent earned and payable by the Company in such quarter pursuant to and as calculated under the Company's investment advisory and management agreement (the "Fee Waiver"). See Note 14 for additional information regarding the American Capital Acquisition.

        The capital gains incentive fee is determined and payable in arrears as of the end of each calendar year (or, upon termination of the investment advisory and management agreement, as of the termination date) and is calculated at the end of each applicable year by subtracting (a) the sum of the Company's cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (b) the Company's cumulative aggregate realized capital gains, in each case calculated from October 8, 2004 (the date the Company completed its initial public offering). Realized capital gains and losses include gains and losses on investments and foreign currencies, gains and losses on extinguishment of debt and from other assets, as well as any income tax and other expenses related to cumulative aggregate realized gains and losses. If such amount is positive at the end of such year, then the capital gains incentive fee for such year is equal to 20% of such amount, less the aggregate amount of capital gains incentive fees paid in all prior years. If such amount is negative, then there is no capital gains incentive fee for such year.

        The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.

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        The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company's portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

        The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company's portfolio as of the applicable capital gains incentive fee calculation date and (b) the accreted or amortized cost basis of such investment.

        Notwithstanding the foregoing, as a result of an amendment to the capital gains incentive fee under the investment advisory and management agreement that was adopted on June 6, 2011, if the Company is required by GAAP to record an investment at its fair value as of the time of acquisition instead of at the actual amount paid for such investment by the Company (including, for example, as a result of the application of the asset acquisition method of accounting), then solely for the purposes of calculating the capital gains incentive fee, the "accreted or amortized cost basis" of an investment shall be an amount (the "Contractual Cost Basis") equal to (1) (x) the actual amount paid by the Company for such investment plus (y) any amounts recorded in the Company's financial statements as required by GAAP that are attributable to the accretion of such investment plus (z) any other adjustments made to the cost basis included in the Company's financial statements, including PIK interest or additional amounts funded (net of repayments) minus (2) any amounts recorded in the Company's financial statements as required by GAAP that are attributable to the amortization of such investment, whether such calculated Contractual Cost Basis is higher or lower than the fair value of such investment (as determined in accordance with GAAP) at the time of acquisition.

        There was no capital gains incentive fee earned by the Company's investment adviser as calculated under the investment advisory and management agreement (as described above) for the three and six months ended June 30, 2018. However, in accordance with GAAP, the Company had cumulatively accrued a capital gains incentive fee of $117 as of June 30, 2018, of which $117 is not currently due under the investment advisory and management agreement. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the investment advisory and management agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 20% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods. As of June 30, 2018, the Company has paid capital gains incentive fees since inception totaling $57. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future.

        The Company defers cash payment of any income based fees and capital gains incentive fees otherwise earned by the Company's investment adviser if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to the Company's stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fees and capital gains incentive fees payable during the period) is less than 7.0% of the Company's net assets (defined as total assets less

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indebtedness) at the beginning of such period. Any deferred income based fees and capital gains incentive fees are carried over for payment in subsequent calculation periods to the extent such payment is payable under the investment advisory and management agreement.

        For the three and six months ended June 30, 2018, base management fees were $45 and $91, respectively, and income based fees were $30 and $58, respectively. The income based fees for the three and six months ended June 30, 2018 were net of the Fee Waiver of $10 and $20, respectively. For the three and six months ended June 30, 2018, the capital gains incentive fees calculated in accordance with GAAP were $18 and $38, respectively. For the three and six months ended June 30, 2017, base management fees were $44 and $83, respectively, and income based fees were $20 and $52, respectively. The income based fees for the three and six months ended June 30, 2017 were net of the Fee Waiver of $10. For the three and six months ended June 30, 2017, the capital gains incentive fees calculated in accordance with GAAP were $10 and $26, respectively. For the six months ended June 30, 2017, $11 of capital gains incentive fees calculated in accordance with GAAP were recorded in connection with the American Capital Acquisition as a result of the fair value of the net assets acquired exceeding the fair value of the merger consideration paid by the Company.

        The services of all investment professionals and staff of the Company's investment adviser, when and to the extent engaged in providing investment advisory and management services to the Company, and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Company's investment adviser. Under the investment advisory and management agreement, the Company bears all other costs and expenses of its operations and transactions, including, but not limited to, those relating to: organization; calculation of the Company's net asset value (including, but not limited to, the cost and expenses of any independent valuation firm); expenses incurred by the Company's investment adviser payable to third parties, including agents, consultants or other advisers in monitoring the Company's financial and legal affairs and in monitoring the Company's investments (including the cost of consultants hired to develop information technology systems designed to monitor the Company's investments) and performing due diligence on the Company's prospective portfolio companies; interest payable on indebtedness, if any, incurred to finance the Company's investments (including payments to third party vendors for financial information services); offerings of the Company's common stock and other securities; investment advisory and management fees; administration fees; fees payable to third parties, including agents, consultants or other advisers, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting with and marketing to financial sponsors, regardless of whether such transactions are ultimately consummated; transfer agent and custodial fees; registration fees; listing fees; taxes; independent directors' fees and expenses; costs of preparing and filing reports or other documents with the SEC; the costs of any reports, proxy statements or other notices to stockholders, including printing costs; to the extent the Company is covered by any joint insurance policies, the Company's allocable portion of the insurance premiums for such policies; direct costs and expenses of administration, including auditor and legal costs; and all other expenses incurred by the Company or its administrator in connection with administering the Company's business as described in more detail under "Administration Agreement" below.

        The Company is party to an administration agreement, referred to herein as the "administration agreement", with its administrator, Ares Operations. Pursuant to the administration agreement, Ares Operations furnishes the Company with office equipment and clerical, bookkeeping and record keeping services at the Company's office facilities. Under the administration agreement, Ares Operations also performs, or oversees the performance of, the Company's required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations, being responsible for the financial records that the Company is

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required to maintain and preparing reports to its stockholders and reports filed with the Securities and Exchange Commission (the "SEC"). In addition, Ares Operations assists the Company in determining and publishing its net asset value, assists the Company in providing managerial assistance to its portfolio companies, oversees the preparation and filing of the Company's tax returns and the printing and dissemination of reports to its stockholders, and generally oversees the payment of its expenses and the performance of administrative and professional services rendered to the Company by others. Payments under the administration agreement are equal to an amount based upon its allocable portion of Ares Operations' overhead and other expenses (including travel expenses) incurred by Ares Operations in performing its obligations under the administration agreement, including the Company's allocable portion of the compensation, rent and other expenses of certain of its officers (including the Company's chief compliance officer, chief financial officer, chief accounting officer, general counsel, secretary, treasurer and assistant treasurer) and their respective staffs. The administration agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

        For the three and six months ended June 30, 2018, the Company incurred $4 and $7 million, respectively, in administrative fees. As of June 30, 2018 and December 31, 2017, a total of $4 and $4, respectively, in administrative fees were unpaid and included in "accounts payable and other liabilities" in the accompanying consolidated balance sheet. For the three and six months ended June 30, 2017, the Company incurred $3 and $6, respectively, in administrative fees. In addition, for the three and six months ended June 30, 2017, the Company incurred an additional $2 and $5, respectively, in administrative fees related to the integration of the American Capital Acquisition. These acquisition-related expenses are included in "net professional fees and other costs related to the American Capital Acquisition" in the consolidated statement of operations.

4.     INVESTMENTS

        As of June 30, 2018 and December 31, 2017, investments consisted of the following:

 
  As of  
 
  June 30, 2018   December 31, 2017  
 
  Amortized Cost(1)   Fair Value   Amortized Cost(1)   Fair Value  

First lien senior secured loans

  $ 4,739   $ 4,626   $ 5,337   $ 5,197  

Second lien senior secured loans

    3,618     3,449     3,885     3,744  

Subordinated certificates of the SDLP(2)

    589     589     487     487  

Senior subordinated loans

    1,059     1,077     978     995  

Collateralized loan obligations

    93     92     115     114  

Preferred equity securities

    496     679     485     532  

Other equity securities

    841     1,015     618     772  

Total

  $ 11,435   $ 11,527   $ 11,905   $ 11,841  

(1)
The amortized cost represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.

(2)
The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans to 20 and 19 different borrowers as of June 30, 2018 and December 31, 2017, respectively.

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        The industrial and geographic compositions of the Company's portfolio at fair value as of June 30, 2018 and December 31, 2017 were as follows:

 
  As of  
 
  June 30, 2018   December 31, 2017  

Industry

             

Healthcare Services

    22.2 %   22.5 %

Business Services

    16.1     19.2  

Consumer Products

    7.5     6.8  

Financial Services

    6.9     4.3  

Investment Funds and Vehicles(1)

    6.6     5.8  

Manufacturing

    5.7     6.0  

Other Services

    5.5     6.2  

Power Generation

    4.3     3.6  

Restaurants and Food Services

    3.9     3.3  

Education

    3.4     3.0  

Food and Beverage

    3.1     4.3  

Oil and Gas

    2.8     2.5  

Automotive Services

    2.5     3.0  

Wholesale Distribution

    2.3     2.5  

Containers and Packaging

    2.1     2.1  

Other

    5.1     4.9  

Total

    100.0 %   100.0 %

(1)
Includes the Company's investment in the SDLP, which had made first lien senior secured loans to 20 and 19 different borrowers as of June 30, 2018 and December 31, 2017, respectively. The portfolio companies in the SDLP are in industries similar to the companies in the Company's portfolio.
 
  As of  
 
  June 30, 2018   December 31, 2017  

Geographic Region

             

West(1)

    29.0 %   23.9 %

Midwest

    23.9     25.3  

Southeast

    23.1     28.5  

Mid Atlantic

    16.0     15.0  

Northeast

    5.0     3.9  

International

    3.0     3.4  

Total

    100.0 %   100.0 %

(1)
Includes the Company's investment in the SDLP, which represented 5.1% and 4.1% of the total investment portfolio at fair value as of June 30, 2018 and December 31, 2017, respectively.

        As of June 30, 2018, 2.7% of total investments at amortized cost (or 0.8% of total investments at fair value) were on non-accrual status. As of December 31, 2017, 3.1% of total investments at amortized cost (or 1.4% of total investments at fair value) were on non-accrual status.

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Co-Investment Programs

        The Company has established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle market companies. Varagon was formed in 2013 as a lending platform by American International Group, Inc. and other partners. The joint venture is called the SDLP. In July 2016, the Company and Varagon and its clients completed the initial funding of the SDLP. The SDLP may generally commit and hold individual loans of up to $300. The Company and other accounts managed by the Company's investment adviser and its affiliates may directly co-invest with the SDLP to accommodate larger transactions. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required).

        The Company provides capital to the SDLP in the form of subordinated certificates (the "SDLP Certificates"), and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and SDLP Certificates. As of June 30, 2018 and December 31, 2017, the Company and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates.

        As of June 30, 2018 and December 31, 2017, the Company and Varagon and its clients had agreed to make capital available to the SDLP of $6,400 and $2,925, respectively, in the aggregate, of which $1,444 and $591, respectively, is to be made available from the Company. This capital will only be committed to the SDLP upon approval of transactions by the investment committee of the SDLP as discussed above. Below is a summary of the funded capital and unfunded capital commitments of the SDLP.

 
  As of  
 
  June 30,
2018
  December 31,
2017
 

Total capital funded to the SDLP(1)

  $ 2,928   $ 2,319  

Total capital funded to the SDLP by the Company(1)

  $ 589   $ 487  

Total unfunded capital commitments to the SDLP(2)

  $ 115   $ 92  

Total unfunded capital commitments to the SDLP by the Company(2)

  $ 24   $ 19  

(1)
At principal amount.

(2)
These commitments have been approved by the investment committee of the SDLP and will be funded as the transactions are completed.

        The SDLP Certificates pay a coupon of LIBOR plus 8.0% and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

        The amortized cost and fair value of the SDLP Certificates held by the Company were $589 and $589, respectively, as of June 30, 2018. The Company's yield on its investment in the SDLP at amortized cost and fair value was 15.0% and 15.0%, respectively, as of June 30, 2018. The amortized cost and fair value of the SDLP Certificates held by the Company were $487 and $487, respectively, as of December 31, 2017. The Company's yield on its investment in the SDLP at amortized cost and fair value was 14.5% and 14.5%, respectively, as of December 31, 2017. For the three and six months ended June 30, 2018, the Company earned interest income of $20 and $39, respectively, from its investment in

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the SDLP Certificates. For the three and six months ended June 30, 2017, the Company earned interest income of $11 and $21, respectively, from its investment in the SDLP Certificates. The Company is also entitled to certain fees in connection with the SDLP. For the three and six months ended June 30, 2018, in connection with the SDLP, the Company earned capital structuring service and other fees totaling $5 and $8, respectively. For the three and six months ended June 30, 2017, in connection with the SDLP, the Company earned capital structuring service and other fees totaling $5 and $6, respectively.

        As of June 30, 2018 and December 31, 2017, the SDLP's portfolio was comprised entirely of first lien senior secured loans to U.S. middle-market companies and were in industries similar to the companies in the Company's portfolio. As of June 30, 2018 and December 31, 2017, none of the loans were on non-accrual status. Below is a summary of the SDLP's portfolio.

 
  As of  
 
  June 30,
2018
  December 31,
2017
 

Total first lien senior secured loans(1)

  $ 2,760   $ 2,316  

Largest loan to a single borrower(1)

  $ 249   $ 200  

Total of five largest loans to borrowers(1)

  $ 1,087   $ 947  

Number of borrowers in the SDLP

    20     19  

Commitments to fund delayed draw loans(2)

  $ 115   $ 92  

(1)
At principal amount.

(2)
As discussed above, these commitments have been approved by the investment committee of the SDLP.

        The Company and General Electric Capital Corporation and GE Global Sponsor Finance LLC (collectively, "GE") had previously co-invested in first lien senior secured loans of middle market companies through the SSLP. The SSLP was capitalized as transactions were completed. All portfolio decisions and generally all other decisions in respect of the SSLP were approved by an investment committee of the SSLP consisting of representatives of the Company and GE (with approval from a representative of each required). The Company provided capital to the SSLP in the form of subordinated certificates (the "SSLP Certificates"). GE provided capital to the SSLP in the form of senior notes and the SSLP Certificates.

        As of June 30, 2017, the Company's investment in the SSLP Certificates at amortized cost and fair value was $1.9 billion and $1.9 billion, respectively. As of June 30, 2017, the SSLP had $1.2 billion in cash and GE's senior notes outstanding totaled $601. In July 2017, the SSLP made its monthly waterfall distribution from this cash, which fully repaid the senior notes of the SSLP with the remaining amounts distributed to the holders of the SSLP Certificates. From this distribution, the Company received $474 in respect of the Company's SSLP Certificates. After this distribution, the Company's amortized cost in its SSLP Certificates was $1.5 billion.

        In addition, in July 2017, the Company and GE agreed to an effective termination of the SSLP whereby on July 26, 2017, the Company purchased the remaining $1.6 billion in aggregate principal amount of first lien senior secured loans outstanding at par plus accrued and unpaid interest and fees from the SSLP (the "SSLP Loan Sale") and assumed the SSLP's remaining unfunded loan commitments totaling $50. Upon completion of the SSLP Loan Sale, the SSLP made a liquidation distribution to the holders of the SSLP Certificates (the "SSLP Liquidation Distribution"), of which the Company received $1.5 billion. In connection with the SSLP Liquidation Distribution, the Company recognized an $18 realized loss. After completion of the transactions above, the operations of the SSLP

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were effectively terminated pursuant to the terms of the documents governing the SSLP and the SSLP no longer has an obligation to fund existing commitments and other amounts in respect of its former portfolio companies.

        For the three and six months ended June 30, 2017, the Company earned interest income of $29 and $63, respectively, from its investment in the SSLP Certificates. The Company was also entitled to certain fees in connection with the SSLP. For the three and six months ended June 30, 2017, in connection with the SSLP, the Company earned capital structuring service, sourcing and other fees totaling $3 and $5, respectively.

        Ivy Hill Asset Management, L.P. ("IHAM") is an asset management services company and an SEC-registered investment adviser. The Company has made investments in IHAM, its wholly owned portfolio company, and previously made investments in certain vehicles managed by IHAM. As of June 30, 2018, IHAM had assets under management of approximately $5.0 billion. As of June 30, 2018, IHAM managed 23 vehicles and served as the sub-manager/sub-servicer for two other vehicles (these vehicles managed or sub-managed/sub-serviced by IHAM are collectively referred to as the "IHAM Vehicles"). IHAM earns fee income from managing the IHAM Vehicles and has also invested in certain of these vehicles as part of its business strategy. As of June 30, 2018 and December 31, 2017, IHAM had total investments of $451 and $229, respectively. For the three and six months ended June 30, 2018, IHAM had management and incentive fee income of $6 and $12, respectively, and other investment-related income of $12 and $27, respectively. For the three and six months ended June 30, 2017, IHAM had management and incentive fee income of $8 and $16, respectively, and other investment-related income of $6 and $13, respectively.

        In connection with the American Capital Acquisition, which was completed on January 3, 2017 (the "Acquisition Date"), American Capital Asset Management, LLC ("ACAM"), a wholly owned portfolio company of American Capital, merged with and into IHAM, with IHAM remaining as the surviving entity as a wholly owned portfolio company of the Company. As a result of the merger of IHAM and ACAM, the Company's investment in IHAM increased by $179, which was recorded as an equity capital contribution in the amount of the fair value of the net assets of ACAM as of the Acquisition Date. In January 2017, as a result of sales of certain assets previously held by ACAM, IHAM made a distribution to the Company of $103, which was recorded as a return of the Company's equity capital contribution discussed above. See Note 14 for additional information regarding the American Capital Acquisition.

        The amortized cost and fair value of the Company's investment in IHAM was $444 and $521, respectively, as of June 30, 2018, and $244 and $315, respectively, as of December 31, 2017. For the three and six months ended June 30, 2018, the Company received distributions from IHAM of $15 and $28, respectively. The distributions for the three and six months ended June 30, 2018, included dividend income of $15 and $28, respectively. Additionally, in February 2018, the Company provided a $63 subordinated revolving loan and a $200 equity capital contribution to IHAM to help support IHAM's acquisition of a portfolio of middle market loans. For the three and six months ended June 30, 2017, the Company received distributions from IHAM of $62 and $73 (excluding the $103 return of capital discussed above), respectively. The distributions for the three and six months ended June 30, 2017, included dividend income of $10 and $20, respectively.

        From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, the Company. For any such sales or purchases by the IHAM Vehicles to or from the Company, the IHAM Vehicles must obtain approval from third parties unaffiliated with the Company or IHAM, as applicable. During the six months ended June 30, 2018 and 2017, IHAM or certain of the IHAM Vehicles purchased $453 and $32, respectively, of investments from the Company. For the six

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months ended June 30, 2018 and 2017, the Company recorded $0 and $0, respectively, of net realized losses from these sales.

        IHAM is party to an administration agreement, referred to herein as the "IHAM administration agreement," with Ares Operations. Pursuant to the IHAM administration agreement, Ares Operations provides IHAM with, among other things, office facilities, equipment, clerical, bookkeeping and record keeping services, services relating to the marketing and sale of interests in vehicles managed by IHAM, services of, and oversight of, custodians, depositories, accountants, attorneys, underwriters and such other persons in any other capacity deemed to be necessary. Under the IHAM administration agreement, IHAM reimburses Ares Operations for all of the actual costs associated with such services, including Ares Operations' allocable portion of the compensation, rent and other expenses of its officers, employees and respective staff in performing its obligations under the IHAM administration agreement.

5.     DEBT

        In accordance with the Investment Company Act, the Company is currently allowed to borrow amounts such that its asset coverage, calculated pursuant to the Investment Company Act, is at least 200% after such borrowing. On June 21, 2018, the Company's board of directors, including a "required majority" (as such term is defined in Section 57(o) of the Investment Company Act) of the Company's board of directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act, as amended by the Small Business Credit Availability Act. As a result, effective on June 21, 2019 (unless the Company receives earlier stockholder approval), the Company's asset coverage requirement applicable to senior securities will be reduced to 150%. As of June 30, 2018, the aggregate amount outstanding of the senior securities issued by the Company was $4,643. As of June 30, 2018, the Company's asset coverage was 255%.

        The Company's outstanding debt as of June 30, 2018 and December 31, 2017 was as follows:

 
  As of  
 
  June 30, 2018   December 31, 2017  
 
  Total
Aggregate
Principal
Amount
Committed/
Outstanding(1)
  Principal
Amount
Outstanding
  Carrying
Value
  Total
Aggregate
Principal
Amount
Committed/
Outstanding(1)
  Principal
Amount
Outstanding
  Carrying
Value
 

Revolving Credit Facility

  $ 2,133 (2) $ 414   $ 414   $ 2,108   $ 395   $ 395  

Revolving Funding Facility

    1,000             1,000     600     600  

SMBC Funding Facility

    400             400     60     60  

SBA Debentures

            (3)   50          

2018 Convertible Notes

            (4)   270     270     270 (5)

2019 Convertible Notes

    300     300     299 (5)   300     300     298 (5)

2022 Convertible Notes

    388     388     370 (5)   388     388     368 (5)

2018 Notes

    750     750     749 (6)   750     750     748 (6)

2020 Notes

    600     600     598 (7)   600     600     597 (7)

2022 Notes

    600     600     594 (8)   600     600     593 (8)

2023 Notes

    750     750     743 (9)   750     750     743 (9)

2025 Notes

    600     600     593 (10)            

2047 Notes

    230     230     182 (11)   230     230     182 (11)

Total

  $ 7,751   $ 4,632   $ 4,542   $ 7,446   $ 4,943   $ 4,854  

(1)
Subject to borrowing base, leverage and other restrictions. Represents the total aggregate amount committed or outstanding, as applicable, under such instrument.

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(2)
Provides for a feature that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility (as defined below) to a maximum of $3,133.

(3)
See below for more information on the termination of the undrawn SBA Debenture (as defined below) commitments.

(4)
See below for more information on the repayment of the 2018 Convertible Notes (as defined below) at maturity.

(5)
Represents the aggregate principal amount outstanding of the Convertible Unsecured Notes (as defined below). As of June 30, 2018, the total unamortized debt issuance costs and the unaccreted discount for the 2019 Convertible Notes and the 2022 Convertible Notes (each as defined below) were $1 and $18, respectively. As of December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount for the 2018 Convertible Notes, the 2019 Convertible Notes and the 2022 Convertible Notes were $0, $2 and $20, respectively.

(6)
Represents the aggregate principal amount outstanding of the 2018 Notes (as defined below) less unamortized debt issuance costs and plus the net unamortized premium that was recorded upon the issuances of the 2018 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs less the net unamortized premium was $1 and $2, respectively.

(7)
Represents the aggregate principal amount outstanding of the 2020 Notes (as defined below) less unamortized debt issuance costs and the net unaccreted discount recorded upon the issuances of the 2020 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs and the net unaccreted discount was $2 and $3, respectively.

(8)
Represents the aggregate principal amount outstanding of the 2022 Notes (as defined below), less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2022 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount was $6 and $7, respectively.

(9)
Represents the aggregate principal amount outstanding of the 2023 Notes (as defined below), less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2023 Notes. As of June 30, 2018 and December 31, 2017, the total unamortized debt issuance costs and the unaccreted discount was $7 and $7, respectively.

(10)
Represents the aggregate principal amount outstanding of the 2025 Notes (as defined below), less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2025 Notes. As of June 30, 2018, the total unamortized debt issuance costs and the unaccreted discount was $7.

(11)
Represents the aggregate principal amount outstanding of the 2047 Notes (as defined below) less the unaccreted purchased discount recorded as a part of the Allied Acquisition (as defined below). As of June 30, 2018 and December 31, 2017, the total unaccreted purchased discount was $48 and $48, respectively. The carrying value represents the outstanding principal amount of the 2047 Notes less the unaccreted purchased discount recorded as a part of the Allied Acquisition.

        The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all the Company's outstanding debt as of June 30, 2018 were 4.2% and 4.5 years, respectively, and as of December 31, 2017 were 4.1% and 4.3 years, respectively.

        The Company is party to a senior secured revolving credit facility (as amended and restated, the "Revolving Credit Facility"), which allows the Company to borrow up to $2,133 at any one time outstanding. The Revolving Credit Facility consists of a $414 term loan tranche with a stated maturity date of March 30, 2023 and a $1,719 revolving tranche. For $1,624 of the revolving tranche, the end of the revolving period and the stated maturity date are March 30, 2022 and March 30, 2023, respectively. For $50 of the revolving tranche, the end of the revolving period and the stated maturity date are

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January 4, 2021 and January 4, 2022, respectively. For the remaining $45 of the revolving tranche, the end of the revolving period and the stated maturity date are May 4, 2019 and May 4, 2020, respectively. The Revolving Credit Facility also provides for a feature that allows the Company, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of $3,133. The Revolving Credit Facility generally requires payments of interest at the end of each LIBOR interest period, but no less frequently than quarterly, on LIBOR based loans, and monthly payments of interest on other loans. From the end of the revolving period to the stated maturity date as applicable for each revolving tranche, the Company is required to repay outstanding principal amounts under such revolving tranche on a monthly basis in an amount equal to 1/12th of the outstanding principal amount at the end of the revolving period.

        Under the Revolving Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders' equity, (e) maintaining a ratio of total assets (less total liabilities other than indebtedness) to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not less than 2.0:1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Credit Facility. Amounts available to borrow under the Revolving Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company's portfolio that are pledged as collateral. As of June 30, 2018, the Company was in compliance in all material respects with the terms of the Revolving Credit Facility.

        As of June 30, 2018 and December 31, 2017, there was $414 and $395 outstanding, respectively, under the Revolving Credit Facility. As of June 30, 2018, the Revolving Credit Facility also provides for a sub-limit for the issuance of letters of credit for up to an aggregate amount of $150. As of June 30, 2018 and December 31, 2017, the Company had $45 and $44, respectively, in letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued. As of June 30, 2018, there was $1,674 available for borrowing (net of letters of credit issued) under the Revolving Credit Facility.

        Since March 30, 2018, the interest rate charged on the Revolving Credit Facility is based on an applicable spread of either 1.75% or 1.875% over LIBOR or 0.75% or 0.875% over an "alternate base rate" (as defined in the agreements governing the Revolving Credit Facility), in each case, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. Prior to March 30, 2018, the interest rate charged on the Revolving Credit Facility was based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over an "alternate base rate" (as defined in the agreements governing the Revolving Credit Facility), in each case, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of June 30, 2018, the interest rate in effect was LIBOR plus 1.75%. As of June 30, 2018, the one, two, three and six month LIBOR was 2.09%, 2.17%, 2.34% and 2.50%, respectively. As of December 31, 2017, the one, two, three and six month LIBOR was 1.56%, 1.62%, 1.69% and 1.84%, respectively. In addition to the stated interest expense on the Revolving Credit Facility, the Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the Revolving Credit Facility. The Company is also required to pay a letter of credit fee of either 2.00% or 2.125% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing

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base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility.

        In December 2017, the Company entered into an interest rate swap agreement to effectively fix the interest rate in connection with $395 of the term loan tranche of the Revolving Credit Facility. See Note 6 for more information on the interest rate swap.

        The Revolving Credit Facility is secured by certain assets in the Company's portfolio and excludes investments held by Ares Capital CP under the Revolving Funding Facility, those held by ACJB under the SMBC Funding Facility (as defined below) and those held by AVF LP (as defined below) under the SBA Debentures (as defined below), each as described below, and certain other investments.

        For the three and six months ended June 30, 2018 and 2017, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Credit Facility were as follows:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
 
  2018   2017   2018   2017  

Stated interest expense

  $ 4   $ 4   $ 7   $ 8  

Facility fees

    2     2     4     3  

Amortization of debt issuance costs

    1     1     2     2  

Total interest and credit facility fees expense

  $ 7   $ 7   $ 13   $ 13  

Cash paid for interest expense

  $ 3   $ 4   $ 7   $ 8  

Average stated interest rate

    3.75 %   2.92 %   3.55 %   2.73 %

Average outstanding balance

  $ 418   $ 597   $ 407   $ 601  

        The Company's consolidated subsidiary, Ares Capital CP Funding LLC ("Ares Capital CP"), is party to a revolving funding facility (as amended, the "Revolving Funding Facility"), which allows Ares Capital CP to borrow up to $1,000 at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are January 3, 2019 and January 3, 2022, respectively.

        Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by Ares Capital CP. Ares Capital CP is also subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests, loans with fixed rates and loans with certain investment ratings, as well as restrictions on portfolio company leverage, which may also affect the borrowing base and therefore amounts available to borrow. The Company and Ares Capital CP are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Revolving Funding Facility. As of June 30, 2018, the Company and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.

        As of June 30, 2018, there were no outstanding amounts under the Revolving Funding Facility. As of December 31, 2017, there was $600 outstanding under the Revolving Funding Facility. Since October 2, 2017, the interest rate charged on the Revolving Funding Facility was based on LIBOR plus 2.15% per annum or a "base rate" (as defined in the agreements governing the Revolving Funding Facility) plus 1.15% per annum. From January 4, 2017 to October 1, 2017, the interest rate charged on

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the Revolving Funding Facility was based on LIBOR plus 2.30% per annum or a "base rate" plus 1.30% per annum. Prior to and including January 3, 2017, the interest rate charged on the Revolving Funding Facility was based on an applicable spread ranging from 2.25% to 2.50% over LIBOR or ranging from 1.25% to 1.50% over a "base rate" in each case, determined monthly based on the composition of the borrowing base relative to outstanding borrowings under the Revolving Funding Facility. Ares Capital CP is also required to pay a commitment fee between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility. Ares Capital CP is also required to pay a commitment termination premium in an amount equal to 1.00% of any commitment reduction prior to January 3, 2018 and 0.50% for any commitment reduction prior to July 3, 2018.

        For the three and six months ended June 30, 2018 and 2017, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Funding Facility were as follows:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
 
  2018   2017   2018   2017  

Stated interest expense

  $ 3   $ 5   $ 6   $ 9  

Facility fees

    1     1     3     1  

Amortization of debt issuance costs

    1     1     2     2  

Total interest and credit facility fees expense

  $ 5   $ 7   $ 11   $ 12  

Cash paid for interest expense

  $ 3   $ 4   $ 7   $ 6  

Average stated interest rate

    4.11 %   3.39 %   3.97 %   3.26 %

Average outstanding balance

  $ 293   $ 572   $ 292   $ 569  

        The Company's consolidated subsidiary, Ares Capital JB Funding LLC ("ACJB"), is party to a revolving funding facility (as amended, the "SMBC Funding Facility") with ACJB, as the borrower, and Sumitomo Mitsui Banking Corporation ("SMBC"), as the administrative agent, collateral agent and lender, that allows ACJB to borrow up to $400 at any one time outstanding. The SMBC Funding Facility is secured by all of the assets held by ACJB. The end of the reinvestment period and the stated maturity date for the SMBC Funding Facility are September 14, 2018 and September 14, 2023, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement.

        Amounts available to borrow under the SMBC Funding Facility are subject to a borrowing base that applies an advance rate to assets held by ACJB. The Company and ACJB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the SMBC Funding Facility. As of June 30, 2018, the Company and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility.

        As of June 30, 2018 there were no outstanding amounts under the SMBC Funding Facility. As of December 31, 2017, there was $60 outstanding under the SMBC Funding Facility.The interest rate charged on the SMBC Funding Facility is based on an applicable spread of either 1.75% or 2.00% over LIBOR or 0.75% or 1.00% over a "base rate" (as defined in the agreements governing the SMBC Funding Facility), in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. As of June 30, 2018, the interest rate in effect was LIBOR plus 2.00%. As of December 31, 2017, the interest rate in effect was LIBOR plus 2.00%. ACJB

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is required to pay a commitment fee of between 0.35% and 0.875% per annum depending on the size of the unused portion of the SMBC Funding Facility.

        For the three and six months ended June 30, 2018 and 2017, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the SMBC Funding Facility were as follows:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
 
  2018   2017   2018   2017  

Stated interest expense

  $   $ 1   $   $ 1  

Facility fees

    1         1      

Amortization of debt issuance costs

            1     1  

Total interest and credit facility fees expense

  $ 1   $ 1   $ 2   $ 2  

Cash paid for interest expense

  $   $ 1   $ 1   $ 1  

Average stated interest rate

    3.94 %   2.81 %   3.84 %   2.70 %

Average outstanding balance

  $ 16   $ 106   $ 13   $ 113  

        In April 2015, the Company's consolidated subsidiary, Ares Venture Finance, L.P. ("AVF LP"), received a license from the Small Business Administration ("SBA") to operate as a Small Business Investment Company ("SBIC") under the provisions of Section 301(c) of the Small Business Investment Act of 1958, as amended.

        The license from the SBA allowed AVF LP to obtain leverage by issuing SBA-guaranteed debentures (the "SBA Debentures"), subject to issuance of a capital commitment by the SBA and other customary procedures. Leverage through the SBA Debentures was subject to required capitalization thresholds. The original amount committed to AVF LP by the SBA was $75. In September 2017, AVF LP fully repaid the $25 of the aggregate principal amount of the SBA Debentures outstanding at the time. In April 2018, AVF LP surrendered its license to operate as a SBIC and the undrawn SBA Debenture commitments of $50 were terminated.

        For the three and six months ended June 30, 2017, the components of interest expense, cash paid for interest expense, average stated interest rate and average outstanding balances for the SBA Debentures were as follows:

 
  For the Three
Months Ended
June 30, 2017
  For the Six
Months Ended
June 30, 2017
 

Stated interest expense

  $   $ 1  

Amortization of debt issuance costs

         

Total interest and credit facility fees expense

  $   $ 1  

Cash paid for interest expense

  $   $  

Average stated interest rate

    3.48 %   3.48 %

Average outstanding balance

  $ 25   $ 25  

        The Company has issued $300 aggregate principal amount of unsecured convertible notes that mature on January 15, 2019 (the "2019 Convertible Notes") and $388 aggregate principal amount of unsecured convertible notes that mature on February 1, 2022 (the "2022 Convertible Notes" and

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together with the 2019 Convertible Notes, the "Convertible Unsecured Notes"). The Convertible Unsecured Notes mature upon their respective maturity dates unless previously converted or repurchased in accordance with their terms. The Company does not have the right to redeem the Convertible Unsecured Notes prior to maturity. The 2019 Convertible Notes and the 2022 Convertible Notes bear interest at a rate of 4.375% and 3.75%, respectively, per year, payable semi-annually.

        In certain circumstances, the Convertible Unsecured Notes will be convertible into cash, shares of the Company's common stock or a combination of cash and shares of its common stock, at the Company's election, at their respective conversion rates (listed below as of June 30, 2018) subject to customary anti-dilution adjustments and the requirements of their respective indenture (the "Convertible Unsecured Notes Indentures"). Prior to the close of business on the business day immediately preceding their respective conversion date (listed below), holders may convert their Convertible Unsecured Notes only under certain circumstances set forth in the Convertible Unsecured Notes Indentures. On or after their respective conversion dates until the close of business on the scheduled trading day immediately preceding their respective maturity date, holders may convert their Convertible Unsecured Notes at any time. In addition, if the Company engages in certain corporate events as described in their respective Convertible Unsecured Notes Indenture, holders of the Convertible Unsecured Notes may require the Company to repurchase for cash all or part of the Convertible Unsecured Notes at a repurchase price equal to 100% of the principal amount of the Convertible Unsecured Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the required repurchase date.

        Certain key terms related to the convertible features for each of the Convertible Unsecured Notes as of June 30, 2018 are listed below.

 
  2019
Convertible Notes
  2022
Convertible Notes
 

Conversion premium

  15.0 % 15.0 %

Closing stock price at issuance

  $17.53   $16.86  

Closing stock price date

  July 15, 2013   January 23, 2017  

Conversion price(1)

  $19.99   $19.39  

Conversion rate (shares per one thousand dollar principal amount)(1)

  50.0292   51.5756  

Conversion dates

  July 15, 2018   August 1, 2021  

(1)
Represents conversion price and conversion rate, as applicable, as of June 30, 2018, taking into account certain de minimis adjustments that will be made on the conversion date.

        As of June 30, 2018, the principal amounts of each series of the Convertible Unsecured Notes exceeded the value of the underlying shares multiplied by the per share closing price of the Company's common stock.

        The Convertible Unsecured Notes Indentures contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) of the Investment Company Act and to provide financial information to the holders of the Convertible Unsecured Notes under certain circumstances. These covenants are subject to important limitations and exceptions that are described in the Convertible Unsecured Notes Indentures. As of June 30, 2018, the Company was in compliance in all material respects with the terms of the Convertible Unsecured Notes Indentures.

        The Convertible Unsecured Notes are accounted for in accordance with ASC 470-20. Upon conversion of any of the other Convertible Unsecured Notes, the Company intends to pay the outstanding principal amount in cash and to the extent that the conversion value exceeds the principal amount, the Company has the option to pay in cash or shares of the Company's common stock (or a

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combination of cash and shares) in respect of the excess amount, subject to the requirements of the Convertible Unsecured Notes Indentures. The Company has determined that the embedded conversion options in the Convertible Unsecured Notes are not required to be separately accounted for as a derivative under GAAP. In accounting for the Convertible Unsecured Notes, the Company estimated at the time of issuance separate debt and equity components for each of the Convertible Unsecured Notes. An original issue discount equal to the equity components of the Convertible Unsecured Notes was recorded in "capital in excess of par value" in the accompanying consolidated balance sheet. Additionally, the issuance costs associated with the Convertible Unsecured Notes were allocated to the debt and equity components in proportion to the allocation of the proceeds and accounted for as debt issuance costs and equity issuance costs, respectively.

        The debt and equity component percentages, the issuance costs and the equity component amounts for each of the Convertible Unsecured Notes are listed below.

 
  2019
Convertible Notes
  2022
Convertible Notes
 

Debt and equity component percentages, respectively(1)

    99.8% and 0.2 %   96.0% and 4.0 %

Debt issuance costs(1)

  $ 4   $ 9  

Equity issuance costs(1)

  $   $  

Equity component, net of issuance costs(2)

  $ 1   $ 15  

(1)
At time of issuance.

(2)
At time of issuance and as of June 30, 2018.

        In addition to the original issue discount equal to the equity component of the 2019 Convertible Notes, the 2019 Convertible Notes were issued at a discount. The Company records interest expense comprised of both stated interest expense as well as accretion of any original issue discount.

        As of June 30, 2018, the components of the carrying value of the Convertible Unsecured Notes, the stated interest rate and the effective interest rate were as follows:

 
  2019
Convertible Notes
  2022
Convertible Notes
 

Principal amount of debt

  $ 300   $ 388  

Original issue discount, net of accretion

    (1 )   (12 )

Debt issuance costs

        (6 )

Carrying value of debt

  $ 299   $ 370  

Stated interest rate

    4.375 %   3.750 %

Effective interest rate(1)

    4.7 %   4.5 %

(1)
The effective interest rate of the debt component of the Convertible Unsecured Notes is equal to the stated interest rate plus the accretion of original issue discount.

        In January 2018, the Company repaid in full the $270 aggregate principal amount of unsecured convertible notes (the "2018 Convertible Notes") upon their maturity. The 2018 Convertible Notes bore interest at a rate of 4.75% per year, payable semi-annually.

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        For the three and six months ended June 30, 2018 and 2017, the components of interest expense and cash paid for interest expense for the Convertible Unsecured Notes, as well as any other convertible unsecured notes outstanding during the periods presented are listed below.

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
 
  2018   2017   2018   2017  

Stated interest expense

  $ 7   $ 10   $ 14   $ 21  

Amortization of debt issuance costs

    1     1     1     1  

Accretion of original issue discount

    1     1     3     3  

Total interest expense

  $ 9   $ 12   $ 18   $ 25  

Cash paid for interest expense

  $   $   $ 20   $ 17  

        The Company has issued $750 in aggregate principal amount of unsecured notes that mature on November 30, 2018 (the "2018 Notes"). The 2018 Notes bear interest at a rate of 4.875% per year, payable semi-annually and all principal is due upon maturity. The 2018 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, as determined pursuant to the indenture governing the 2018 Notes, and any accrued and unpaid interest. $600 in aggregate principal amount of the 2018 Notes were issued at a discount to the principal amount and $150 in aggregate principal amount of the 2018 Notes were issued at a premium to the principal amount.

        The Company has issued $600 in aggregate principal amount of unsecured notes that mature on January 15, 2020 (the "2020 Notes"). The 2020 Notes bear interest at a rate of 3.875% per year, payable semi-annually and all principal is due upon maturity. The 2020 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2020 Notes, and any accrued and unpaid interest. $400 in aggregate principal amount of the 2020 Notes were issued at a discount to the principal amount and $200 in aggregate principal amount of the 2020 Notes were issued at a premium to the principal amount.

        The Company has issued $600 in aggregate principal amount of unsecured notes that mature on January 19, 2022 (the "2022 Notes"). The 2022 Notes bear interest at a rate of 3.625% per year, payable semi-annually and all principal is due upon maturity. The 2022 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2022 Notes, and any accrued and unpaid interest. The 2022 Notes were issued at a discount to the principal amount.

        The Company has issued $750 in aggregate principal amount of unsecured notes that mature on February 10, 2023 (the "2023 Notes"). The 2023 Notes bear interest at a rate of 3.500% per year, payable semi-annually and all principal is due upon maturity. The 2023 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make

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whole" premium, if applicable, as determined pursuant to the indenture governing the 2023 Notes, and any accrued and unpaid interest. The 2023 Notes were issued at a discount to the principal amount.

        The Company has issued $600 in aggregate principal amount of unsecured notes that mature on March 1, 2025 (the "2025 Notes"). The 2025 Notes bear interest at a rate of 4.250% per year, payable semi-annually and all principal is due upon maturity. The 2025 Notes may be redeemed in whole or in part at any time at the Company's option at a redemption price equal to par plus a "make whole" premium, if applicable, as determined pursuant to the indenture governing the 2025 Notes, and any accrued and unpaid interest. The 2025 Notes were issued at a discount to the principal amount.

        As part of the acquisition of Allied Capital Corporation ("Allied Capital") in April 2010 (the "Allied Acquisition"), the Company assumed $230 aggregate principal amount of unsecured notes due on April 15, 2047 (the "2047 Notes" and together with the 2018 Notes, the 2020 Notes, the 2022 Notes, the 2023 Notes and the 2025 Notes, the "Unsecured Notes"). The 2047 Notes bear interest at a rate of 6.875%, payable quarterly and all principal is due upon maturity. The 2047 Notes may be redeemed in whole or in part at any time or from time to time at the Company's option, at a par redemption price of $25.00 per security plus accrued and unpaid interest.

        For the three and six months ended June 30, 2018 and 2017, the components of interest expense and cash paid for interest expense for the Unsecured Notes, as well as any other unsecured notes outstanding during the periods presented are listed below.

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
 
  2018   2017   2018   2017  

Stated interest expense

  $ 37   $ 27   $ 74   $ 54  

Amortization of debt issuance costs

    2     1     3     3  

Accretion of purchase discount

                 

Total interest expense

  $ 39   $ 28   $ 77   $ 57  

Cash paid for interest expense

  $ 22   $ 27   $ 62   $ 53  

        The Unsecured Notes contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) of the Investment Company Act and to provide financial information to the holders of such notes under certain circumstances. These covenants are subject to important limitations and exceptions set forth in the indentures governing such notes. As of June 30, 2018, the Company was in compliance in all material respects with the terms of the respective indentures governing each of the Unsecured Notes.

        The Convertible Unsecured Notes and the Unsecured Notes are the Company's unsecured senior obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Convertible Unsecured Notes and the Unsecured Notes; equal in right of payment to the Company's existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of its secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities.

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6.     DERIVATIVE INSTRUMENTS

        The Company enters into forward currency contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company's investments denominated in foreign currencies. As of June 30, 2018 and December 31, 2017, the counterparty to these forward currency contracts was Bank of Montreal. Net unrealized gains or losses on foreign currency contracts are included in "net unrealized gains (losses) from foreign currency and other transactions" and net realized gains or losses on forward currency contracts are included in "net realized gains (losses) from foreign currency transactions" in the accompanying consolidated statement of operations.

        Forward currency contracts and interest rate swaps are considered undesignated derivative instruments.

        Certain information related to the Company's foreign currency forward contracts is presented below as of June 30, 2018 and December 31, 2017.

 
  As of June 30, 2018
Description
  Notional
Amount
  Maturity Date   Gross
Amount
of Recognized
Assets
  Gross
Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Foreign currency forward contract

  CAD 5     7/6/2018   $   $   Other Assets

Foreign currency forward contract

  CAD 30     7/13/2018           Other Assets

Foreign currency forward contract

  CAD 103     8/16/2018     2       Other Assets

Foreign currency forward contract

  CAD 26     9/21/2018           Accounts payable and other liabilities

Foreign currency forward contract

  15     7/13/2018     1       Other Assets

Foreign currency forward contract

  6     8/16/2018           Other Assets

Foreign currency forward contract

  24     9/25/2018           Other Assets

Foreign currency forward contract

  £ 76     8/16/2018     3       Other Assets

Total

              $ 6   $    

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  As of December 31, 2017
Description
  Notional
Amount
  Maturity
Date
  Gross Amount
of Recognized
Assets
  Gross Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Foreign currency forward contract

  CAD 4   1/4/2018   $   $   Other Assets

Foreign currency forward contract

  CAD 10   1/16/2018           Other Assets

Foreign currency forward contract

  CAD 103   2/16/2018         (1 ) Accounts payable and other liabilities

Foreign currency forward contract

  15   1/16/2018           Accounts payable and other liabilities

Foreign currency forward contract

  8   2/15/2018           Accounts payable and other liabilities

Foreign currency forward contract

  2   3/15/2018           Accounts payable and other liabilities

Foreign currency forward contract

  £ 68   2/15/2018         (2 ) Accounts payable and other liabilities

Foreign currency forward contract

  £ 9   2/16/2018           Accounts payable and other liabilities

Total

            $   $ (3 )  

        In December 2017, in connection with $395 of the term loan tranche of the Revolving Credit Facility the Company entered into a three-year interest rate swap agreement to mitigate our exposure to adverse fluctuations in interest rates for a total notional amount of $395 and a maturity date of January 4, 2021. Under the interest rate swap agreement, the Company pays a fixed interest rate of 2.06% and receives a floating rate based on the prevailing one-month LIBOR. As of June 30, 2018 and December 31, 2017, the one-month LIBOR rate in effect was 2.06% and 1.50%, respectively. For the three and six months ended June 30, 2018, the Company recognized $0 and $1, respectively, in realized losses and $2 and $6, respectively, in unrealized gains related to this swap agreement. As of June 30, 2018 and December 31, 2017, this swap agreement had a fair value of $6 and $(1), respectively, which is included in the "other assets" and "accounts payable and other liabilities", respectively, in the accompanying consolidated balance sheet. Net realized gains or losses on the interest rate swap are included in "net realized gains (losses) from foreign currency and other transactions." Net unrealized gains or losses on the interest rate swap are included in "net unrealized gains (losses) from foreign currency and other transactions."

        Certain information related to the Company's interest rate swap is presented below as of June 30, 2018 and December 31, 2017.

 
  As of June 30, 2018
Description
  Payment Terms   Notional
Amount
  Maturity
Date
  Gross Amount
of Recognized
Assets
  Gross Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Interest rate swap

  Pay Fixed 2.0642%   Receive Floating One-Month LIBOR of 2.06%   $ 395     1/4/2021   $ 6   $   Other assets

Total

                      $ 6   $    

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  As of December 31, 2017
Description
  Payment Terms   Notional
Amount
  Maturity
Date
  Gross Amount
of Recognized
Assets
  Gross Amount
of Recognized
Liabilities
  Balance Sheet
Location of
Net Amounts

Interest rate swap

  Pay Fixed 2.0642%   Receive Floating One-Month LIBOR of 1.50%   $ 395     1/4/2021   $   $ (1 ) Accounts payable and other liabilities

Total

                      $   $ (1 )  

7.     COMMITMENTS AND CONTINGENCIES

        The Company has various commitments to fund investments in its portfolio as described below. As of June 30, 2018 and December 31, 2017, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) the Company's discretion:

 
  As of  
 
  June 30, 2018   December 31, 2017  

Total revolving and delayed draw loan commitments

  $ 1,422   $ 881  

Less: drawn commitments

    (384 )   (201 )

Total undrawn commitments

    1,038     680  

Less: commitments substantially at discretion of the Company

    (14 )   (11 )

Less: unavailable commitments due to borrowing base or other covenant restrictions

         

Total net adjusted undrawn revolving and delayed draw loan commitments

  $ 1,024   $ 669  

        Included within the total revolving and delayed draw loan commitments as of June 30, 2018 and December 31, 2017 were delayed draw loan commitments totaling $348 and $251, respectively. The Company's commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels).

        Also included within the total revolving and delayed draw loan commitments as of June 30, 2018 were commitments to issue up to $190 in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of June 30, 2018, the Company had $26 in letters of credit issued and outstanding under these commitments on behalf of portfolio companies. For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $13 expire in 2018 and $13 expire in 2019. As of June 30, 2018, the Company recorded a liability of $5 for certain letters of credit issued and outstanding and none of the other letters of credit issued and outstanding were recorded as a liability on the Company's balance sheet as such other letters of credit are considered in the valuation of the investments in the portfolio company.

        The Company also has commitments to co-invest in the SDLP for the Company's portion of the SDLP's commitments to fund delayed draw loans to certain portfolio companies of the SDLP. See Note 4 for more information.

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        As of June 30, 2018 and December 31, 2017, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:

 
  As of  
 
  June 30, 2018   December 31, 2017  

Total private equity commitments

  $ 116   $ 111  

Less: funded private equity commitments

    (70 )   (62 )

Total unfunded private equity commitments

    46     49  

Less: private equity commitments substantially at discretion of the Company

    (46 )   (48 )

Total net adjusted unfunded private equity commitments

  $   $ 1  

        In the ordinary course of business, the Company may sell certain of its investments to third party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales) the Company has, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future.

        In addition, in the ordinary course of business, the Company may guarantee certain obligations in connection with its portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable.

8.     FAIR VALUE OF FINANCIAL INSTRUMENTS

        The Company follows ASC 825-10, which provides companies the option to report selected financial assets and liabilities at fair value. ASC 825-10 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of the company's choice to use fair value on its earnings. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet. The Company has not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value. With the exception of the line items entitled "other assets" and "debt," which are reported at amortized cost, all assets and liabilities approximate fair value on the balance sheet. The carrying value of the lines titled "interest receivable," "receivable for open trades," "payable for open trades," "accounts payable and other liabilities," "base management fees payable," "income based fees payable," "capital gains incentive fees payable" and "interest and facility fees payable" approximate fair value due to their short maturity.

        The Company also follows ASC 820-10, which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Company to assume that the portfolio investment is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820-10, the Company has considered its principal market as the market in which the Company exits its portfolio

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investments with the greatest volume and level of activity. ASC 820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below:

        In addition to using the above inputs in investment valuations, the Company continues to employ the net asset valuation policy approved by the Company's board of directors that is consistent with ASC 820-10 (see Note 2). Consistent with the Company's valuation policy, it evaluates the source of inputs, including any markets in which the Company's investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. The Company's valuation policy considers the fact that because there is not a readily available market value for most of the investments in the Company's portfolio, the fair value of the investments must typically be determined using unobservable inputs.

        The Company's portfolio investments (other than as described below in the following paragraph) are typically valued using two different valuation techniques. The first valuation technique is an analysis of the enterprise value ("EV") of the portfolio company. Enterprise value means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The primary method for determining EV uses a multiple analysis whereby appropriate multiples are applied to the portfolio company's EBITDA (generally defined as net income before net interest expense, income tax expense, depreciation and amortization). EBITDA multiples are typically determined based upon review of market comparable transactions and publicly traded comparable companies, if any. The Company may also employ other valuation multiples to determine EV, such as revenues or, in the case of certain portfolio companies in the power generation industry, kilowatt capacity. The second method for determining EV uses a discounted cash flow analysis whereby future expected cash flows of the portfolio company are discounted to determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions). The EV analysis is performed to determine the value of equity investments, the value of debt investments in portfolio companies where the Company has control or could gain control through an option or warrant security, and to determine if there is credit impairment for debt investments. If debt investments are credit impaired, an EV analysis may be used to value such debt investments; however, in addition to the methods outlined above, other methods such as a liquidation or wind-down analysis may be utilized to estimate enterprise value. The second valuation technique is a yield analysis, which is typically performed for non-credit impaired debt investments in portfolio companies where the Company does not own a controlling equity position. To determine fair value using a yield analysis, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the enterprise value of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Company depends on primary market data, including newly funded transactions, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

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        For other portfolio investments such as investments in the SDLP Certificates, discounted cash flow analysis is the primary technique utilized to determine fair value. Expected future cash flows associated with the investment are discounted to determine a present value using a discount rate that reflects estimated market return requirements.

        The following tables summarize the significant unobservable inputs the Company used to value the majority of its investments categorized within Level 3 as of June 30, 2018 and December 31, 2017. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company's determination of fair values.

 
  As of June 30, 2018  
 
   
   
  Unobservable Input  
Asset Category
  Fair Value   Primary Valuation
Techniques
  Input   Estimated Range   Weighted
Average
 

First lien senior secured loans

  $ 4,626   Yield analysis   Market yield   4.8%—18.7%     9.0 %

Second lien senior secured loans

    3,449   Yield analysis   Market yield   8.0%—21.7%     11.5 %

Subordinated certificates of the SDLP

    589   Discounted cash flow analysis   Discount rate   11.5%—12.5%     12.0 %

Senior subordinated loans

    1,077   Yield analysis   Market yield   10.0%—17.5%     12.7 %

Collateralized loan obligations

    92   Discounted cash flow analysis   Discount rate   3.7%—15.9%     9.8 %

            Constant prepayment rate   10.0%—30.0%     20.0 %

            Constant default rate   1.0%—2.5%     2.0 %

Preferred equity securities

    679   EV market multiple analysis   EBITDA multiple   3.0x—26.8x     12.7x  

Other equity securities and other

    998   EV market multiple analysis   EBITDA multiple   3.0x—21.0x     10.5x  

Total investments

  $ 11,510                    

 

 
  As of December 31, 2017  
 
   
   
  Unobservable Input  
Asset Category
  Fair Value   Primary Valuation
Techniques
  Input   Estimated Range   Weighted
Average
 

First lien senior secured loans

  $ 5,197   Yield analysis   Market yield   4.2%—19.8%     8.7 %

Second lien senior secured loans

    3,744   Yield analysis   Market yield   8.7%—17.5%     10.9 %

Subordinated certificates of the SDLP

    487   Discounted cash flow analysis   Discount rate   11.5%—12.5%     12.0 %

Senior subordinated loans

    995   Yield analysis   Market yield   9.7%—17.5%     13.2 %

Collateralized loan obligations

    114   Discounted cash flow analysis   Discount rate   4.3%—16.4%     10.2 %

            Constant prepayment rate   18.7%—27.1%     21.8 %

            Constant default rate   1.8%—2.6%     2.3 %

Preferred equity securities

    532   EV market multiple analysis   EBITDA multiple   3.0x—19.0x     11.2x  

Other equity securities and other

    755   EV market multiple analysis   EBITDA multiple   3.5x—19.0x     10.4x  

Total investments

  $ 11,824                    

        Changes in market yields, discount rates or EBITDA multiples, each in isolation, may change the fair value of certain of the Company's investments. Generally, an increase in market yields or discount rates or decrease in EBITDA multiples may result in a decrease in the fair value of certain of the Company's investments.

        Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of the Company's investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.

        In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

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        The following table presents fair value measurements of cash and cash equivalents, investments and derivatives as of June 30, 2018:

 
  Fair Value Measurements Using  
 
  Total   Level 1   Level 2   Level 3  

Cash and cash equivalents

  $ 509   $ 509   $   $  

Investments not measured at net asset value

  $ 11,510   $   $   $ 11,510  

Investments measured at net asset value(1)

  $ 17                    

Total investments

  $ 11,527                    

Derivatives

  $ 12   $   $ 12   $  

(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

        The following table presents fair value measurements of cash and cash equivalents, investments and derivatives as of December 31, 2017:

 
  Fair Value Measurements Using  
 
  Total   Level 1   Level 2   Level 3  

Cash and cash equivalents

  $ 316   $ 316   $   $  

Investments not measured at net asset value

  $ 11,824   $   $   $ 11,824  

Investments measured at net asset value(1)

  $ 17                    

Total investments

  $ 11,841                    

Derivatives

  $ (4 ) $   $ (4 ) $  

(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

        Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur.

        The following table presents changes in investments that use Level 3 inputs as of and for the three and six months ended June 30, 2018:

 
  As of and For the
Three Months Ended
June 30, 2018
 

Balance as of March 31, 2018

  $ 12,182  

Net realized gains

    22  

Net unrealized gains

    60  

Purchases

    1,365  

Sales

    (862 )

Redemptions

    (1,286 )

Payment-in-kind interest and dividends

    25  

Net accretion of discount on securities

    4  

Net transfers in and/or out of Level 3

     

Balance as of June 30, 2018

  $ 11,510  

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  As of and For the
Six Months Ended
June 30, 2018
 

Balance as of December 31, 2017

  $ 11,824  

Net realized gains

    22  

Net unrealized gains

    155  

Purchases

    2,969  

Sales

    (1,164 )

Redemptions

    (2,352 )

Payment-in-kind interest and dividends

    49  

Net accretion of discount on securities

    7  

Net transfers in and/or out of Level 3

     

Balance as of June 30, 2018

  $ 11,510  

        As of June 30, 2018, the net unrealized appreciation on the investments that use Level 3 inputs was $73. For the six months ended June 30, 2018, there were no net transfers out of Level 3.

        For the three and six months ended June 30, 2018, the total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to the Company's Level 3 assets still held as of June 30, 2018, and reported within the net unrealized gains (losses) from investments, foreign currency and other transactions in the Company's consolidated statement of operations was $41 and $113, respectively.

        The following table presents changes in investments that use Level 3 inputs as of and for the three and six months ended June 30, 2017:

 
  As of and For the
Three Months
Ended June 30, 2017
 

Balance as of March 31, 2017

  $ 11,385  

Net realized gains

    112  

Net unrealized losses

    (41 )

Purchases

    1,888  

Sales

    (575 )

Redemptions

    (1,312 )

Payment-in-kind interest and dividends

    17  

Net accretion of discount on securities

    2  

Net transfers in and/or out of Level 3

     

Balance as of June 30, 2017

  $ 11,476  

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  As of and For the
Six Months Ended
June 30, 2017
 

Balance as of December 31, 2016

  $ 8,813  

Net realized gains

    125  

Net unrealized losses

    (23 )

Investments acquired as part of the American Capital Acquisition

    2,527  

Purchases

    2,793  

Sales

    (993 )

Redemptions

    (1,808 )

Payment-in-kind interest and dividends

    37  

Net accretion of discount on securities

    5  

Net transfers in and/or out of Level 3

     

Balance as of June 30, 2017

  $ 11,476  

        As of June 30, 2017, the net unrealized depreciation on the investments that use Level 3 inputs was $250. For the six months ended June 30, 2017, the net transfers out of Level 3 were due to privately held equity investments converting to publicly traded stock.

        For the three and six months ended June 30, 2017, the total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to the Company's Level 3 assets still held as of June 30, 2017, and reported within the net unrealized gains (losses) from investments, foreign currency and other transactions in the Company's consolidated statement of operations were $61 and $46, respectively.

        Following are the carrying and fair values of the Company's debt obligations as of June 30, 2018 and December 31, 2017. Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company's marketplace credit ratings, or market quotes, if available.

 
  As of  
 
  June 30, 2018   December 31, 2017  
 
  Carrying
value(1)
  Fair
value
  Carrying
value(1)
  Fair
value
 

Revolving Credit Facility

  $ 414   $ 414   $ 395   $ 395  

Revolving Funding Facility

            600     600  

SMBC Funding Facility

            60     60  

2018 Convertible Notes (principal amount outstanding of $0 and $270, respectively)

            270 (2)   270  

2019 Convertible Notes (principal amount outstanding of $300)

    299 (2)   302     298 (2)   307  

2022 Convertible Notes (principal amount outstanding of $388)

    370 (2)   392     368 (2)   398  

2018 Notes (principal amount outstanding of $750)

    749 (3)   757     748 (3)   767  

2020 Notes (principal amount outstanding of $600)

    598 (4)   603     597 (4)   611  

2022 Notes (principal amount outstanding of $600)

    594 (5)   586     593 (5)   603  

2023 Notes (principal amount outstanding of $750)

    743 (6)   717     743 (6)   740  

2025 Notes (principal amount outstanding of $600 and $0, respectively)

    593 (7)   578          

2047 Notes (principal amount outstanding of $230)

    182 (8)   230     182 (8)   231  

  $ 4,542 (9) $ 4,579   $ 4,854 (9) $ 4,982  

(1)
The Revolving Credit Facility, the Revolving Funding Facility and the SMBC Funding Facility carrying values are the same as the principal amounts outstanding.

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(2)
Represents the aggregate principal amount outstanding of the Convertible Unsecured Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuances of such notes.

(3)
Represents the aggregate principal amount outstanding of the 2018 Notes less unamortized debt issuance costs plus the net unamortized premium recorded upon the issuances of the 2018 Notes.

(4)
Represents the aggregate principal amount outstanding of the 2020 Notes less unamortized debt issuance costs and the net unaccreted discount recorded upon the issuances of the 2020 Notes.

(5)
Represents the aggregate principal amount outstanding of the 2022 Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2022 Notes.

(6)
Represents the aggregate principal amount outstanding of the 2023 Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2023 Notes.

(7)
Represents the aggregate principal amount outstanding of the 2025 Notes less unamortized debt issuance costs and the unaccreted discount recorded upon the issuance of the 2025 Notes.

(8)
Represents the aggregate principal amount outstanding of the 2047 Notes less the unaccreted purchased discount.

(9)
Total principal amount of debt outstanding totaled $4,632 and $4,943 as of June 30, 2018 and December 31, 2017, respectively.

        The following table presents fair value measurements of the Company's debt obligations as of June 30, 2018 and December 31, 2017:

 
  As of  
Fair Value Measurements Using
  June 30,
2018
  December 31,
2017
 

Level 1

  $ 230   $ 231  

Level 2

    4,349     4,751  

Total

  $ 4,579   $ 4,982  

9.     STOCKHOLDERS' EQUITY

        There were no sales of the Company's equity securities for the six months ended June 30, 2018 and 2017. See Note 11 for information regarding shares of common stock issued or purchased in accordance with the Company's dividend reinvestment plan.

        In connection with the American Capital Acquisition, the Company issued 112 shares valued at approximately $1,839.

        The Company is authorized under its stock repurchase program to purchase up to $300 in the aggregate of its outstanding common stock in the open market at certain thresholds below its net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any share repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. The Company cannot assure stockholders that any shares will be repurchased under the program. The expiration date of the stock repurchase program is February 28, 2019. The program may be suspended, extended, modified or discontinued at any time.

        As of June 30, 2018, the Company had repurchased a total of 0.5 shares of its common stock in the open market under the stock repurchase program since the program's inception in September 2015,

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at an average price of $13.92 per share, including commissions paid, leaving approximately $293 available for additional repurchases under the program. During the six months ended June 30, 2018 and 2017, the Company did not repurchase any shares of the Company's common stock under the stock repurchase program.

10.   EARNINGS PER SHARE

        The following information sets forth the computations of basic and diluted net increase in stockholders' equity resulting from operations per share for the three and six months ended June 30, 2018 and 2017:

 
  For the Three
Months Ended
June 30,
  For the Six
Months Ended
June 30,
 
 
  2018   2017   2018   2017  

Net increase in stockholders' equity resulting from operations available to common stockholders

  $ 254   $ 178   $ 496   $ 296  

Weighted average shares of common stock outstanding—basic and diluted

    426     426     426     424  

Basic and diluted net increase in stockholders' equity resulting from operations per share

  $ 0.60   $ 0.42   $ 1.16   $ 0.70  

        For the purpose of calculating diluted net increase in stockholders' equity resulting from operations per share, the average closing price of the Company's common stock for the three and six months ended June 30, 2018 was less than the conversion price for each of the Convertible Unsecured Notes outstanding as of June 30, 2018, as well as any other convertible unsecured notes outstanding during the period. For the three and six months ended June 30, 2017, the average closing price of the Company's common stock was less than the conversion price for each of the Convertible Unsecured Notes outstanding as of June 30, 2017, as well as any other convertible unsecured notes outstanding during the period. Therefore, for all periods presented in the financial statements, the underlying shares for the intrinsic value of the embedded options in the Convertible Unsecured Notes and any other convertible unsecured notes outstanding during the periods presented had no impact on the computation of diluted net increase in stockholders' equity resulting from operations per share.

11.   DIVIDENDS AND DISTRIBUTIONS

        The following table summarizes the Company's dividends declared and payable during the six months ended June 30, 2018 and 2017:

Date declared
  Record date   Payment date   Per share
amount
  Total
amount
 

May 2, 2018

  June 15, 2018   June 29, 2018   $ 0.38   $ 162  

February 13, 2018

  March 15, 2018   March 30, 2018     0.38     162  

Total declared and payable for the six months ended June 30, 2018

          $ 0.76   $ 324  

May 3, 2017

  June 15, 2017   June 30, 2017   $ 0.38   $ 162  

February 22, 2017

  March 15, 2017   March 31, 2017     0.38     162  

Total declared and payable for the six months ended June 30, 2017

          $ 0.76   $ 324  

        The Company has a dividend reinvestment plan, whereby the Company may buy shares of its common stock in the open market or issue new shares in order to satisfy dividend reinvestment

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requests. When the Company issues new shares in connection with the dividend reinvestment plan, the issue price is equal to the closing price of its common stock on the dividend payment date. Dividend reinvestment plan activity for the six months ended June 30, 2018 and 2017, was as follows:

 
  For the Six Months
Ended June 30,
 
 
  2018   2017  

Shares issued

        0.4  

Average issue price per share

  $   $ 17.38  

Shares purchased by plan agent to satisfy dividends declared and payable during the period for stockholders

    0.9 (1)   0.6 (2)

Average purchase price per share

  $ 16.14   $ 16.53  

(1)
Shares were purchased in April 2018 and July 2018.

(2)
Shares were purchased in July 2017.

12.   RELATED PARTY TRANSACTIONS

        In accordance with the investment advisory and management agreement, the Company bears all costs and expenses of the operation of the Company and reimburses its investment adviser or its affiliates for certain of such costs and expenses paid for by the investment adviser or its affiliates on behalf of the Company. For the three and six months ended June 30, 2018, the Company's investment adviser or its affiliates incurred and the Company reimbursed such expenses totaling $1 and $3, respectively. For the three and six months ended June 30, 2017, the Company's investment adviser or its affiliates incurred and the Company reimbursed such expenses totaling $1 and $2, respectively. The Company's investment adviser reimbursed the Company approximately $0.5 for certain rent and utilities incurred by the Company during the first quarter of 2018. In addition, the Company's investment adviser reimbursed the Company approximately $2.2, $3.0, $3.2 and $2.9 of rent and utilities for the years ended 2017, 2016, 2015 and 2014, respectively, for an aggregate reimbursement to the Company of $11.8. Beginning April 1, 2018, the Company's investment adviser will bear such rent and utilities expenses.

        The Company is party to office leases pursuant to which it is leasing office facilities from third parties. For certain of these office leases, the Company has also entered into separate subleases with Ares Management LLC, the sole member of Ares Capital Management, and IHAM, pursuant to which Ares Management LLC and IHAM sublease office space from the Company. Effective March 31, 2018, Ares Management LLC and IHAM collectively subleased the full amount of these leases. Prior to March 31, 2018, these parties subleased a portion of these leases. For the three and six months ended June 30, 2018, amounts payable to the Company under these subleases totaled $3 and $5, respectively. For the three and six months ended June 30, 2017, amounts payable to the Company under these subleases totaled $2 and $4, respectively.

        Prior to April 1, 2018, Ares Management LLC was a party to separate subleases with the Company, pursuant to which the Company subleased certain office spaces from Ares Management LLC. For the three and six months ended June 30, 2018, amounts payable to Ares Management LLC under these subleases totaled $0. For the three and six months ended June 30, 2017, amounts payable to Ares Management LLC under these subleases totaled $0. These subleases are no longer in place.

        The Company has also entered into agreements with Ares Management LLC and IHAM, pursuant to which Ares Management LLC and IHAM are entitled to use the Company's proprietary portfolio management software. For the three and six months ended June 30, 2018, amounts payable to the

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Company under these agreements totaled $0. For the three and six months ended June 30, 2017, amounts payable to the Company under these agreements totaled $0.

        As part of the American Capital Acquisition, the Company assumed a long term incentive plan liability related to certain employees of a subsidiary of ACAM, which is now a subsidiary of IHAM. The liability is determined based on the fair value of certain investments acquired in the American Capital Acquisition. As of June 30, 2018, the remaining liability amount was estimated to be $1 and is included within accounts payable and other liabilities in the Company's consolidated balance sheet. This liability is paid on an annual basis based on exited investments in a given calendar year and the value received upon their exit. During the six months ended June 30, 2018, the Company paid $27 of the liability.

        See Notes 3, 4, 6 and 14 for descriptions of other related party transactions.

13.   FINANCIAL HIGHLIGHTS

        The following is a schedule of financial highlights as of and for the six months ended June 30, 2018 and 2017:

 
  As of and For
the Six Months
Ended June 30,
 
 
  2018   2017  

Per Share Data:

             

Net asset value, beginning of period(1)

  $ 16.65   $ 16.45  

Issuances of common stock (see Note 14)

        (0.01 )

Deemed contribution from Ares Capital Management (See Note 14)

        0.12  

Issuances of convertible notes

        0.04  

Net investment income for period(2)

    0.72     0.51  

Net realized and unrealized gains for period(2)

    0.44     0.19  

Net increase in stockholders' equity

    1.16     0.85  

Total distributions to stockholders

    (0.76 )   (0.76 )

Net asset value at end of period(1)

  $ 17.05   $ 16.54  

Per share market value at end of period

  $ 16.45   $ 16.38  

Total return based on market value(3)

    9.48 %   3.94 %

Total return based on net asset value(4)

    6.99 %   5.51 %

Shares outstanding at end of period

    426     426  

Ratio/Supplemental Data:

             

Net assets at end of period

  $ 7,270   $ 7,051  

Ratio of operating expenses to average net assets, excluding the Fee Waiver(5)(6)

    9.91 %   10.78 %

Ratio of operating expenses to average net assets, net of the Fee Waiver(5)(6)

    9.35 %   10.47 %

Ratio of net investment income to average net assets(5)(7)

    8.58 %   6.79 %

Portfolio turnover rate(5)

    23 %   52 %

(1)
The net assets used equals the total stockholders' equity on the consolidated balance sheet.

(2)
Weighted average basic per share data.

(3)
For the six months ended June 30, 2018, the total return based on market value equaled the increase of the ending market value at June 30, 2018 of $16.45 per share from the ending market value at December 31, 2017 of $15.72 per share plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2018, divided by the market value at December 31, 2017. For the six months ended June 30, 2017, the total return based on market value equaled the

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(4)
For the six months ended June 30, 2018, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2018, divided by the beginning net asset value for the period. For the six months ended June 30, 2017, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $0.76 per share for the six months ended June 30, 2017, divided by the beginning net asset value for the period. These calculations are adjusted for shares issued in connection with the dividend reinvestment plan, the issuance of common stock in connection with any equity offerings and the equity components of any convertible notes issued during the period. The Company's performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.

(5)
The ratios reflect an annualized amount.

(6)
For the six months ended June 30, 2018, the ratio of operating expenses to average net assets consisted of 2.56% of base management fees, 2.70% of income based fees and capital gains incentive fees, net of the Fee Waiver (3.26% of income based fees and capital gains incentive fees, excluding the Fee Waiver), 3.41% of the cost of borrowing and 0.68% of other operating expenses. For the six months ended June 30, 2017, the ratio of operating expenses to average net assets consisted of 2.61% of base management fees, 2.43% of income based fees and capital gains incentive fees, net of Fee Waiver (2.74% of income based fees and capital gains incentive fees, excluding the Fee Waiver), 3.49% of the cost of borrowing and 1.94% of other operating expenses. See Note 3 for more information on the Fee Waiver.

(7)
The ratio of net investment income to average net assets excludes income taxes related to realized gains and losses.

14.   AMERICAN CAPITAL ACQUISITION

        On May 23, 2016, the Company entered into a definitive agreement (the "Merger Agreement") to acquire American Capital. On the Acquisition Date, the Company completed the American Capital Acquisition pursuant to the terms and conditions of the Merger Agreement. Pursuant to the Merger Agreement, American Capital shareholders received total consideration of approximately $18.06 per share comprised of: (i) $14.41 per share from the Company consisting of approximately $6.48 per share of cash (including a make-up dividend in the amount of $0.07 per share) and 0.483 shares of the Company's common stock for each American Capital share at a value of $7.93 per American Capital share (based on the closing price per share of the Company's common stock on the Acquisition Date), (ii) $2.45 per share of cash from American Capital's sale of American Capital Mortgage Management, LLC, and (iii) approximately $1.20 per share of cash as transaction support provided by Ares Capital Management acting solely on its own behalf. As of the Acquisition Date, the transaction was valued at approximately $4.2 billion. The total cash and stock consideration paid by the Company was $3.3 billion. In connection with the stock consideration, the Company issued approximately 112 shares of its common stock to American Capital's then-existing stockholders (including holders of outstanding in-the-money American Capital stock options), thereby resulting in the Company's then-existing stockholders owning approximately 73.7% of the combined company and then-existing American Capital stockholders owning approximately 26.3% of the combined company. In addition, in

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connection with the American Capital Acquisition, Ares Capital Management agreed to waive certain income based fees as described in Note 3.

        The American Capital Acquisition was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues. The fair value of the merger consideration paid by the Company was allocated to the assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition and did not give rise to goodwill. Since the fair value of the net assets acquired exceeded the fair value of the merger consideration paid by the Company, the Company recognized a deemed contribution from Ares Capital Management.

        The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the American Capital Acquisition:

Common stock issued by the Company

  $ 1,839  

Cash consideration paid by the Company

    1,502  

Deemed contribution from Ares Capital Management

    54  

Total purchase price

  $ 3,395  

Assets acquired:

       

Investments(1)

  $ 2,543  

Cash and cash equivalents

    961  

Other assets(2)

    117  

Total assets acquired

  $ 3,621  

Liabilities assumed(3)

    (226 )

Net assets acquired

  $ 3,395  

(1)
Investments acquired were recorded at fair value, which is also the Company's initial cost basis.

(2)
Other assets acquired in the American Capital Acquisition consisted of the following:

Receivable for open trades

  $ 45  

Escrows receivable

    41  

Interest receivable

    9  

Other assets

    22  

Total

  $ 117  
(3)
Liabilities assumed in the American Capital Acquisition consisted of the following:

Severance and other payroll related

  $ 95  

Lease abandonments

    55  

Long term incentive plan (see Note 12)

    31  

Escrows payable

    25  

Other liabilities

    20  

Total

  $ 226  

        During the three and six months ended June 30, 2018, the Company incurred a net expense of $(1) and $2, respectively, in professional fees and other costs related to the American Capital Acquisition. During the three and six months ended June 30, 2017, the Company incurred $12 and $38, respectively, in net professional fees and other costs related to the American Capital Acquisition,

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including $18 in one-time investment banking fees incurred in January 2017 upon the closing of the American Capital Acquisition.

15.   LITIGATION

        The Company is party to certain lawsuits in the normal course of business. In addition, American Capital and Allied Capital were involved in various legal proceedings that the Company assumed in connection with the American Capital Acquisition and the Allied Acquisition, respectively. Furthermore, third parties may try to seek to impose liability on the Company in connection with the Company's activities or the activities of its portfolio companies. While the outcome of any such legal proceedings cannot at this time be predicted with certainty, the Company does not expect that these legal proceedings will materially affect its business, financial condition or results of operations.

        On May 20, 2013, the Company was named as one of several defendants in an action filed in the United States District Court for the Eastern District of Pennsylvania by the bankruptcy trustee of DSI Renal Holdings LLC ("DSI Renal") and two affiliate companies. On March 17, 2014, the motion by the Company and the other defendants to transfer the case to the United States District Court for the District of Delaware (the "Delaware Court") was granted. On May 6, 2014, the Delaware Court referred the matter to the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The complaint alleges, among other things, that each of the named defendants participated in a purported fraudulent transfer involving the restructuring of a subsidiary of DSI Renal. Among other things, the complaint seeks, jointly and severally from all defendants, (1) damages of approximately $425, of which the complaint states the Company's individual share is approximately $117, and (2) punitive damages. The defendants filed a motion to dismiss all claims on August 5, 2013. On July 20, 2017, the Bankruptcy Court issued an order granting the motion to dismiss certain claims and denying the motion to dismiss certain other claims, including the purported fraudulent transfer claims. The defendants answered the complaint on August 31, 2017. Under the operative scheduling order, discovery will continue until early 2019 with dispositive motions due on April 30, 2019. No trial date has been set. The Company is currently unable to assess with any certainty whether it may have any exposure in this matter. However, the Company believes the plaintiff's claims are without merit and intends to vigorously defend itself in this matter.

        On August 3, 2017, American Capital and one of its former portfolio companies were awarded a judgment plus prejudgment interest by the United States District Court for the District of Maryland (the "District Court") following a bench trial in a case first filed by one of American Capital's insurance companies concerning coverage for bodily injury claims against American Capital and/or its former portfolio company. The District Court found that the carrier breached its duty to defend American Capital and its former portfolio company against more than 1,000 bodily injury claims and awarded American Capital damages plus prejudgment interest. American Capital's carrier filed a notice of appeal to the United States Court of Appeals for the Fourth Circuit; thereafter, American Capital and its former portfolio company filed a notice of cross appeal. The appeal has been fully briefed and oral argument has been scheduled in September 2018. It is currently expected the appeal will be adjudicated in late 2018 at the earliest. American Capital's recovery, if any, will not be known until such time as the appeal is resolved.

16.   SUBSEQUENT EVENTS

        The Company's management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the six months ended June 30, 2018.

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PART C

Other information

ITEM 25.    FINANCIAL STATEMENTS AND EXHIBITS

(1)
Financial Statements

              The following statements of the Company are included in Part A of this Registration Statement:

ARES CAPITAL CORPORATION

   

Audited Annual Financial Statements

 
 

Reports of Independent Registered Public Accounting Firm

  F-2

Consolidated Balance Sheet as of December 31, 2017 and 2016

  F-5

Consolidated Statement of Operations for the years ended December 31, 2017, 2016 and 2015

  F-6

Consolidated Schedules of Investments as of December 31, 2017 and 2016

  F-7

Consolidated Statement of Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015

  F-76

Consolidated Statement of Cash Flows for the years ended December 31, 2017, 2016 and 2015

  F-77

Notes to Consolidated Financial Statements

  F-78

Interim Unaudited Financial Statements

   

Consolidated Balance Sheet as of June 30, 2018 (unaudited) and December 31, 2017

  F-127

Consolidated Statement of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited)

  F-128

Consolidated Schedule of Investments as of June 30, 2018 (unaudited) and December 31, 2017

  F-129

Consolidated Statement of Stockholders' Equity for the six months ended June 30, 2018 (unaudited)

  F-217

Consolidated Statement of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)

  F-218

Notes to Consolidated Financial Statements (unaudited)

  F-219
(2)
Exhibits
(a)   Articles of Amendment and Restatement, as amended(1)

(b)

 

Second Amended and Restated Bylaws, as amended(2)

(c)

 

Not Applicable

(d)(1)

 

Form of Stock Certificate(3)

(d)(2)

 

Statement of Eligibility of Trustee on Form T-1(4)

(d)(3)

 

Form of Subscription Certificate(5)

(d)(4)

 

Indenture, dated June 16, 2006, between Allied Capital Corporation and The Bank of New York, as trustee(6)

(d)(5)

 

Form of Note under the Indenture, dated June 16, 2006, between Allied Capital Corporation and The Bank of New York, as trustee (contained in Exhibit (d)(4) to this Registration Statement)(6)

(d)(6)

 

Third Supplemental Indenture, dated as of March 28, 2007, between Allied Capital Corporation and The Bank of New York, as trustee(7)

(d)(7)

 

Form of 6.875% Notes due 2047(7)

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(d)(8)   Fourth Supplemental Indenture, dated as of April 1, 2010, among Ares Capital Corporation, Allied Capital Corporation and The Bank of New York Mellon, as trustee(8)

(d)(9)

 

Indenture, dated as of October 21, 2010, between Ares Capital Corporation and U.S. Bank National Association, as trustee(9)

(d)(10)

 

Fourth Supplemental Indenture, dated as of November 19, 2013, relating to the 4.875% Senior Notes due 2018, between Ares Capital Corporation and U.S. Bank National Association, as trustee(10)

(d)(11)

 

Form of 4.875% Senior Notes due 2018(10)

(d)(12)

 

Fifth Supplemental Indenture, dated as of November 21, 2014, relating to the 3.875% Notes due 2020, between Ares Capital Corporation and U.S. Bank National Association, as trustee(11)

(d)(13)

 

Form of 3.875% Notes due 2020(11)

(d)(14)

 

Sixth Supplemental Indenture, dated as of September 19, 2016, relating to the 3.625% Notes due 2022, between Ares Capital Corporation and U.S. Bank National Association, as trustee(12)

(d)(15)

 

Form of 3.625% Notes due 2022(12)

(d)(16)

 

Seventh Supplemental Indenture, dated as of August 10, 2017, relating to the 3.500% Notes due 2023, between Ares Capital Corporation and U.S. Bank National Association, as trustee(13)

(d)(17)

 

Form of 3.500% Notes due 2023(13)

(d)(18)

 

Eighth Supplemental Indenture, dated as of January 11, 2018, relating to the 4.250% Notes due 2025, between Ares Capital Corporation and U.S. Bank National Association, as trustee(14)

 

 

Form of 4.250% Notes due 2025(14)

(d)(19)

 

Indenture, dated as of July 19, 2013, between Ares Capital Corporation and U.S. Bank National Association, as trustee(15)

(d)(20)

 

Form of 4.375% Convertible Senior Notes due 2019(15)

(d)(21)

 

Indenture, dated as of January 27, 2017, between Ares Capital Corporation and U.S. Bank National Association, as Trustee(16)

(d)(22)

 

Form of 3.75% Convertible Senior Notes due 2022(16)

(e)

 

Dividend Reinvestment Plan of Ares Capital Corporation(17)

(f)

 

Not Applicable

(g)(1)

 

Restated Investment Advisory and Management Agreement, dated as of June 6, 2011, between Registrant and Ares Capital Management LLC(18)

(g)(2)

 

Transaction Support and Fee Waiver Agreement, dated May 23, 2016, between Ares Capital Corporation and Ares Capital Management LLC(19)

(h)(1)

 

Form of Underwriting Agreement for Equity Securities*

(h)(2)

 

Form of Underwriting Agreement for Debt Securities*

(h)(3)

 

Form of Equity Distribution Agreement*

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(i)   Not Applicable

(j)(1)

 

Amended and Restated Custodian Agreement, dated as of May 15, 2009, between Ares Capital Corporation and U.S. Bank National Association(20)

(j)(2)

 

Amendment No. 1, dated as of December 19, 2014, to the Amended and Restated Custodian Agreement dated as of May 15, 2009, by and among Ares Capital Corporation and U.S. Bank National Association(21)

(k)(1)

 

Amended and Restated Administration Agreement, dated as of June 1, 2007, between Ares Capital Corporation and Ares Operations LLC(22)

(k)(2)

 

Trademark License Agreement between Ares Capital Corporation and Ares Management LLC(23)

(k)(3)

 

Form of Indemnification Agreement between Ares Capital Corporation and directors and certain officers(24)

(k)(4)

 

Form of Indemnification Agreement between Ares Capital Corporation and members of Ares Capital Management LLC investment committee(24)

(k)(5)

 

Amended and Restated Purchase and Sale Agreement, dated as of January 22, 2010, among Ares Capital Corporation, as seller, and Ares Capital CP Funding Holdings LLC, as purchaser(25)

(k)(6)

 

Amendment No. 1 to Amended and Restated Purchase and Sale Agreement, dated as of June 7, 2012, among Ares Capital Corporation, as seller, and Ares Capital CP Funding Holdings LLC, as purchaser(26)

(k)(7)

 

Second Tier Purchase and Sale Agreement, dated as of January 22, 2010, among Ares Capital CP Funding Holdings LLC, as seller, and Ares Capital CP Funding LLC, as purchaser(25)

(k)(8)

 

Amendment No. 1 to Second Tier Purchase and Sale Agreement, dated as of June 7, 2012, among Ares Capital CP Funding Holdings LLC, as seller, and Ares Capital CP Funding LLC, as purchaser(26)

(k)(9)

 

Amended and Restated Sale and Servicing Agreement, dated as of January 22, 2010, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer, Wachovia Bank, National Association, as note purchaser, U.S. Bank National Association, as trustee and collateral custodian, and Wells Fargo Securities, LLC, as agent(25)

(k)(10)

 

Amendment No. 1 to the Amended and Restated Sale and Servicing Agreement, dated as of May 6, 2010, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer, Wells Fargo Bank, National Association, as successor by merger to Wachovia Bank, as note purchaser, U.S. Bank National Association, as trustee and collateral custodian, and Wells Fargo Securities, LLC, as agent(27)

(k)(11)

 

Amendment No. 2 to the Amended and Restated Sale and Servicing Agreement, dated as of January 18, 2011, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer, Wells Fargo Bank, National Association, as successor by merger to Wachovia Bank, as note purchaser, U.S. Bank National Association, as trustee and collateral custodian, and Wells Fargo Securities, LLC, as agent(28)

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(k)(12)   Amendment No. 3 to the Amended and Restated Sale and Servicing Agreement, dated as of October 13, 2011, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer and as transferor, Wells Fargo Bank, National Association (as successor by merger to Wachovia Bank, National Association), as note purchaser, U.S. Bank National Association, as trustee, collateral custodian and bank, and Wells Fargo Securities, LLC, as agent(29)

(k)(13)

 

Amendment No. 4 to the Amended and Restated Sale and Servicing Agreement, dated as of January 18, 2012, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Wells Fargo Bank, National Association (as successor by merger to Wachovia Bank, National Association), as note purchaser, Wells Fargo Securities, LLC, as agent, and U.S. Bank National Association, as collateral custodian, trustee and bank(30)

(k)(14)

 

Amendment No. 5 to the Amended and Restated Sale and Servicing Agreement, dated as of June 7, 2012, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Wells Fargo Bank, National Association (as successor by merger to Wachovia Bank, National Association), as note purchaser, Wells Fargo Securities, LLC, as agent, and U.S. Bank National Association, as collateral custodian, trustee and bank(26)

(k)(15)

 

Amendment No. 6 to the Loan and Servicing Agreement, dated as of January 25, 2013, among Ares Capital CP Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Wells Fargo Securities, LLC, as agent, and Wells Fargo Bank, National Association, as swingline lender, and the other lenders party thereto(31)

(k)(16)

 

Amendment No. 8 to Loan and Servicing Agreement, dated as of January 3, 2017, among Ares Capital CP Funding LLC, Ares Capital Corporation, Wells Fargo Bank, National Association, as swingline lender, as a lender and as the successor agent, Wells Fargo Securities, LLC, as the resigning agent, Bank of America, N.A., as a lender and U.S. Bank National Association, as trustee, bank and collateral custodian(33)

(k)(17)

 

Omnibus Amendment, dated as of May 14, 2014, among Ares Capital CP Funding LLC, Ares Capital CP Funding Holdings LLC, Ares Capital Corporation, Wells Fargo Bank, National Association, as swingline lender and as a lender, Wells Fargo Securities, LLC, as agent, and U.S. Bank National Association, as trustee, bank and collateral custodian (amending the Loan and Servicing Agreement, dated as of January 22, 2010, the Amended and Restated Purchase and Sale Agreement, dated as of January 22, 2010, and the Second Tier Purchase and Sale Agreement, dated as of January 22, 2010)(32)

(k)(18)

 

Eighth Amended and Restated Senior Secured Credit Agreement, dated as of March 30, 2018, among Ares Capital Corporation, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent(34)

(k)(19)

 

Loan and Servicing Agreement, dated as of January 20, 2012, among Ares Capital JB Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Sumitomo Mitsui Banking Corporation, as administrative agent, collateral agent and lender, and U.S. Bank National Association, as collateral custodian and bank(35)

(k)(20)

 

Purchase and Sale Agreement, dated as of January 20, 2012, between Ares Capital JB Funding LLC, as purchaser, and Ares Capital Corporation, as seller(35)

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(k)(21)   Omnibus Amendment No. 1, dated as of September 14, 2012, among Ares Capital JB Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Sumitomo Mitsui Banking Corporation, as administrative agent, lender and collateral agent, and U.S. Bank National Association, as collateral custodian and bank (amending the Loan and Servicing Agreement, dated as of January 20, 2012, and the Purchase and Sale Agreement, dated as of January 20, 2012)(36)

(k)(22)

 

Omnibus Amendment No. 2, dated as of December 20, 2013, among Ares Capital JB Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Sumitomo Mitsui Banking Corporation, as administrative agent, lender and collateral agent, and U.S. Bank National Association, as collateral custodian and bank (amending the Loan and Servicing Agreement, dated as of January 20, 2012, and the Purchase and Sale Agreement, dated as of January 20, 2012)(37)

(k)(23)

 

Omnibus Amendment No. 3, dated as of June 30, 2015, among Ares Capital JB Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Sumitomo Mitsui Banking Corporation, as administrative agent, lender and collateral agent, and U.S. Bank National Association, as collateral custodian and bank (amending the Loan and Servicing Agreement, dated as of January 20, 2012, and the Purchase and Sale Agreement, dated as of January 20, 2012)(38)

(k)(24)

 

Omnibus Amendment No. 4, dated as of August 24, 2017, among Ares Capital JB Funding LLC, as borrower, Ares Capital Corporation, as servicer and transferor, Sumitomo Mitsui Banking Corporation, as administrative agent, lender and collateral agent, and U.S. Bank National Association, as collateral custodian and bank (amending the Loan and Servicing Agreement, dated as of January 20, 2012)(39)

(l)(1)

 

Opinion and Consent of Venable LLP, Maryland counsel for Ares Capital Corporation*

(l)(2)

 

Opinion and Consent of Proskauer Rose LLP, counsel for Ares Capital Corporation*

(m)

 

Not Applicable

(n)(1)

 

Consent of independent registered public accounting firm for Ares Capital Corporation*

(n)(2)

 

Report of independent registered public accounting firm for Ares Capital Corporation, regarding "senior securities" table contained herein(4)

(p)

 

Not Applicable

(q)

 

Not Applicable

(r)

 

Code of Ethics(24)

99.1

 

Statement of Computation of Ratio of Earnings to Fixed Charges*

99.2

 

Form of Preliminary Prospectus Supplement For Common Stock Offerings(40)

99.3

 

Form of Preliminary Prospectus Supplement For Preferred Stock Offerings(40)

99.4

 

Form of Preliminary Prospectus Supplement For Debt Offerings(40)

99.5

 

Form of Preliminary Prospectus Supplement For Rights Offerings(40)

99.6

 

Form of Preliminary Prospectus Supplement For Warrant Offerings(40)

99.7

 

Form of Preliminary Prospectus Supplement For Unit Offerings(40)

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99.8   Form of Preliminary Prospectus Supplement For Retail Notes Offerings(41)

99.9

 

Form of Preliminary Prospectus Supplement For Institutional Notes Offerings(41)

*
Filed herewith.

(1)
Incorporated by reference to Exhibit 3.1 to the Registrant's Form 10-K (File No. 814-00663) for the year ended December 31, 2016, filed on February 22, 2017.

(2)
Incorporated by reference to Exhibit 3.2 to the Registrant's Form 10-Q (File No. 814-00663) for the quarter ended June 30, 2010, filed on August 5, 2010.

(3)
Incorporated by reference to Exhibit (d) to the Registrant's pre-effective Amendment No. 2 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-114656), filed on September 28, 2004.

(4)
Incorporated by reference to Exhibits (d)(2) and (n)(2), as applicable, to the Registrant's Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-223482), filed on March 6, 2018.

(5)
Incorporated by reference to Exhibit (d)(4) to the Registrant's pre-effective Amendment No. 2 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-149139), filed on April 9, 2008.

(6)
Incorporated by reference to Exhibit d.2 to Allied Capital's Registration Statement under the Securities Act of 1933, as amended, on Form N 2/A (File No. 333-133755), filed on June 21, 2006.

(7)
Incorporated by reference to Exhibits d.8 and d.9, as applicable, to Allied Capital's post-effective Amendment No. 3 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2/A (File No. 333-133755), filed on March 28, 2007.

(8)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on April 7, 2010.

(9)
Incorporated by reference to Exhibit 4.1 to the Registrant's Form 8-K (File No. 814-00663), filed on October 22, 2010.

(10)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on November 19, 2013.

(11)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on November 21, 2014.

(12)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on September 19, 2016.

(13)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on August 10, 2017.

(14)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on January 11, 2018.

(15)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on July 19, 2013.

(16)
Incorporated by reference to Exhibits 4.1 and 4.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on January 23, 2017.

(17)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on February 27, 2012.

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(18)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on June 8, 2011.

(19)
Incorporated by reference to Exhibits 2.1 and 99.1, as applicable to the Registrant's Form 8-K (File No. 814-00663), filed on May 26, 2016.

(20)
Incorporated by reference to Exhibit (j) to the Registrant's pre-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-158211), filed on May 28, 2009.

(21)
Incorporated by reference to Exhibit 10.5 to the Registrant's Form 10-K (File No. 814-00663) for the year ended December 31, 2014, filed on February 26, 2015.

(22)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q (File No. 814-00663) for the quarter ended June 30, 2007, filed on August 9, 2007.

(23)
Incorporated by reference to Exhibit (k)(3) to the Registrant's pre-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-114656), filed on September 17, 2004.

(24)
Incorporated by reference to Exhibits (k)(3), (k)(4) and (r), as applicable, to the Registrant's Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-188175), filed on April 26, 2013.

(25)
Incorporated by reference to Exhibits 10.2 through 10.4, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on January 25, 2010.

(26)
Incorporated by reference to Exhibits 10.1 through 10.3, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on June 8, 2012.

(27)
Incorporated by reference to Exhibit 10.5 to the Registrant's Form 10-Q (File No. 814-00663) for the quarter ended March 31, 2010, filed on May 10, 2010.

(28)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on January 19, 2011.

(29)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on October 14, 2011.

(30)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on January 19, 2012.

(31)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on January 28, 2013.

(32)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on May 15, 2014.

(33)
Incorporated by reference to Exhibits 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on January 4, 2017.

(34)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on April 4, 2018.

(35)
Incorporated by reference to Exhibits 10.1 and 10.2, as applicable, to the Registrant's Form 8-K (File No. 814-00663), filed on January 24, 2012.

(36)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on September 17, 2012.

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(37)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on December 23, 2013.

(38)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on July 1, 2015.

(39)
Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K (File No. 814-00663), filed on August 28, 2017.

(40)
Incorporated by reference to Exhibit 99.4 to the Registrant's pre-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-181563), filed on July 19, 2012.

(41)
Incorporated by reference to Exhibits 99.8 and 99.9, as applicable, to the Registrant's pre-effective Amendment No. 2 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2 (File No. 333-195748), filed on June 26, 2014.

ITEM 26.    MARKETING ARRANGEMENTS

              The information contained under the heading "Plan of Distribution" on this Registration Statement is incorporated herein by reference and any information concerning any underwriters for a particular offering will be contained in the prospectus supplement related to that offering.

ITEM 27.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Commission registration fee

  $ 373,500 *

FINRA filing fee

  $ 143,000  

Accounting fees and expenses

  $ 140,000 (1)

Legal fees and expenses

  $ 350,000 (1)

Printing

  $ 75,000 (1)

Miscellaneous fees and expenses

  $ 25,000 (1)

Total

  $ 1,106,500 (1)

*
This amount has been offset against a filing fee associated with unsold securities registered under a previous registration statement.

(1)
These amounts are estimates.

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ITEM 28.    PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

Direct Subsidiaries

              The following list sets forth each of our subsidiaries, the state or country under whose laws the subsidiary is organized, and the percentage of voting securities or membership interests owned by us in such subsidiary:

10th Street Equity, LLC (Delaware)

    100 %

A.C. Corporation (Delaware)

    100 %

AC Notes Holdings LLC (Delaware)

    100 %

A.C., LP (Delaware)

    100 %

ACAS, LLC (Delaware)

    100 %

Allied Asset Holdings, LLC (Delaware)

    100 %

ARCC ABB LLC (Delaware)

    100 %

ARCC AIP Holdings, LLC (Delaware)

    100 %

ARCC API Corp. (Delaware)

    100 %

ARCC Balko LLC (Delaware)

    100 %

ARCC BM LLC (Delaware)

    100 %

ARCC C&C Holdco, LLC (Delaware)

    99.5 %

ARCC CCS, Inc. (Delaware)

    100 %

ARCC OTG Preferred Corp. (f/k/a ARCC CG Corp.) (Delaware)

    100 %

ARCC CIC Flex Corporation (Delaware)

    100 %

ARCC CLPB Corporation (Delaware)

    100 %

ARCC CP LLC (Delaware)

    100 %

ARCC Crescent LLC (Delaware)

    100 %

ARCC CR LLC (Delaware)

    100 %

ARCC ECG LLC (Delaware)

    100 %

ARCC ED Corp. (Delaware)

    100 %

ARCC EF Corp. (Delaware)

    100 %

ARCC FD Corp. (Delaware)

    100 %

ARCC FL Corp. (Delaware)

    100 %

ARCC FM Corp. (Delaware)

    100 %

ARCC GAC LLC (Delaware)

    100 %

ARCC GF, LLC (Delaware)

    100 %

ARCC GF1 Corp. (Delaware)

    100 %

ARCC H8 Corp. (Delaware)

    100 %

ARCC HBF LLC (Delaware)

    100 %

ARCC HT Corp. (f/k/a ARCC Sage Inc.) (Delaware)

    100 %

ARCC Imperial Corporation (Delaware)

    100 %

ARCC Imperial POF LLC (f/k/a Amerex Equity LLC) (Delaware)

    100 %

ARCC Imperial LLC (Delaware)

    100 %

ARCC LSQ LLC (Delaware)

    100 %

ARCC MCF I, LLC (f/k/a Dynamic Equity, LLC) (Delaware)

    100 %

ARCC MCF 2 LLC (Delaware)

    100 %

ARCC NIP Holdings, LLC (Delaware)

    100 %

ARCC NPA Corp. (f/k/a ARCC PSSI Corp.) (Delaware)

    100 %

ARCC NR LLC (Delaware)

    100 %

ARCC NV1 Corp. (Delaware)

    100 %

ARCC NV2 Corp. (Delaware)

    100 %

ARCC OTG Corp. (Delaware)

    100 %

ARCC PCGI III AIV Blocker, Inc. (Delaware)

    100 %

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ARCC PCP G.P., LLC (Delaware)

    100 %

ARCC PCP L.P. (Cayman Islands)

    100 %

ARCC PF LLC (Delaware)

    100 %

ARCC PH Corp. (Delaware)

    100 %

ARCC PJMB LLC (Delaware)

    100 %

ARCC PT Corp. (Delaware)

    100 %

ARCC RB LLC (Delaware)

    100 %

ARCC S2 LLC (f/k/a/ AC Postle, LLC) (Delaware)

    100 %

ARCC SC LLC (Delaware)

    100 %

ARCC SHC LLC (Delaware)

    100 %

ARCC SK Blocker Corp. (Delaware)

    100 %

ARCC UAS Corp. (Delaware)

    100 %

ARCC Universal Corp. (Delaware)

    100 %

ARCC VP LLC (Delaware)

    100 %

ARCC VS Corp. (Delaware)

    100 %

Ares Capital CP Funding Holdings LLC (Delaware)

    100 %

Ares Capital JB Funding LLC (Delaware)

    100 %

Ares Venture Finance GP LLC (Delaware)

    100 %

Ares Venture Finance, L.P. (Delaware)

    100 %

Calder Equity, LLC (Delaware)

    100 %

Crescent Equity Corp. (Delaware)

    86.26 %

GlobalCom Equity, LLC (Delaware)

    100 %

Ivy Hill Asset Management GP, LLC (Delaware)

    100 %

Multiad Equity Corp. (Delaware)

    86.26 %

NPH, Inc. (Maryland)

    100 %

S2 Equity Corp. (Delaware)

    86.26 %

Slate Equity, LLC (Delaware)

    100 %

Stag Equity, LLC (Delaware)

    100 %

Startec Equity, LLC (Delaware)

    100 %

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Indirect Subsidiaries

              The following list sets forth each of our indirect subsidiaries, the state under whose laws the subsidiary is organized, and the percentage of voting securities or membership interests owned by the sole member of such subsidiary:

AC Corporate Holdings, Inc. (Delaware)

    100 %

ACAS CRE CDO 2007-1 Depositor, LLC (Delaware)

    100 %

ACAS CRE Services, LLC (Delaware)

    100 %

ACAS Real Estate Holdings Corporation (Delaware)

    100 %

ACE Acquisition Holdings, LLC (Delaware)

    100 %

Allied Crescent Equity, LLC (Delaware)

    100 %

American Capital Agent Services, LLC (Delaware)

    100 %

Ares Capital CP Funding LLC (Delaware)

    100 %

Capital Placement Holdings, Inc. (Delaware)

    100 %

Crescent Sliver Equity LLC (Delaware)

    100 %

ECAS 2016 Ltd. (Guernsey)

    100 %

ECAS S.AR.L. (Luxembourg)

    100 %

ECAS II S.AR.L. (Luxembourg)

    100 %

European Capital Limited (Guernsey)

    100 %

European Capital S.A. Sicar (Luxembourg)

    100 %

HCI Equity, LLC (Illinois)

    100 %

PCP GHS Holdings Inc. (Delaware)

    100 %

              Each of our direct and indirect subsidiaries listed above is consolidated for financial reporting purposes.

              In addition, we may be deemed to control certain portfolio companies. See "Portfolio Companies" in the Prospectus.

ITEM 29.    NUMBER OF HOLDERS OF SECURITIES

              The following table sets forth the approximate number of record holders of our common stock and each class of our senior securities (including bank loans) as of June 30, 2018.

TITLE OF CLASS
  NUMBER OF
RECORD HOLDERS

Common stock, $0.001 par value

  1,505 (including Cede & Co.)

Revolving Credit Facility

  26

Revolving Funding Facility

  2

SMBC Funding Facility

  1

2019 Convertible Notes

  56

2022 Convertible Notes

  43

2018 Notes

  67

2020 Notes

  54

January 2022 Notes

  59

2023 Notes

  67

2025 Notes

  56

2047 Notes

  71

ITEM 30.    INDEMNIFICATION

              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

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for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active and deliberate dishonesty established by a final adjudication as being material to the cause of action. Our 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 Investment Company Act.

              Our charter authorizes us, to the maximum extent permitted by Maryland law and subject to the requirements of the Investment Company Act, to obligate us to indemnify 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, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her status as a present or former director or officer and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our bylaws obligate us, to the maximum extent permitted by Maryland law and the Investment Company Act, to indemnify 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, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee and who is made or threatened to be made a party to a proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in that capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit us to, with the approval of the board of directors or a duly authorized committee thereof, 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 Investment Company 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 our bylaws, we have entered into indemnification agreements with each of our current directors and certain of our officers and with members of our investment adviser's investment committee and we intend to enter into indemnification agreements with each of our future directors, members of our investment adviser's investment committee and certain of our officers. The indemnification agreements attempt to provide these directors and senior officers the maximum indemnification permitted under Maryland law and the Investment Company Act. The agreements provide, among other things, for the advancement of expenses and indemnification for liabilities which such person may incur by reason of his or her status as a present or former director or officer or member of our investment adviser'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 adviser's investment committee.

              Maryland law requires a corporation (unless its charter provides otherwise, which our 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. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation's receipt of

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(a) 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 (b) 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.

              The investment advisory and management agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, our investment adviser Ares Capital Management and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of our investment adviser's services under the investment advisory and management agreement or otherwise as our investment adviser.

              The administration agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, Ares Operations and its officers, manager, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of Ares Operations' services under the administration agreement or otherwise as our administrator.

              Insofar as indemnification for liability arising under the Securities Act may be permitted to directors, officers and controlling persons of ours pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of ours in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

ITEM 31.    BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

              A description of any other business, profession, vocation or employment of a substantial nature in which Ares Capital Management, and each partner, director or executive officer of Ares Capital Management, is or has been, during the past two fiscal years, engaged in for his or her own account or in the capacity of director, officer, employee, partner or trustee, is set forth in Part A of this Registration Statement in the sections entitled "Management." Additional information regarding Ares Capital Management and its officers and directors are set forth in its Form ADV, as filed with the Securities and Exchange Commission (SEC File No. 801-63168), and is incorporated herein by reference.

ITEM 32.    LOCATION OF ACCOUNTS AND RECORDS

              All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder are maintained at the offices of:

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ITEM 33.    MANAGEMENT SERVICES

              Not Applicable.

ITEM 34.    UNDERTAKINGS

              The Registrant undertakes:

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SIGNATURES

              Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, in the State of New York, on the 8th day of August 2018.

    ARES CAPITAL CORPORATION

 

 

By:

 

/s/ R. KIPP DEVEER

R. Kipp deVeer
Chief Executive Officer

              Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. This document may be executed by the signatories hereto on any number of counterparts, all of which constitute one and the same instrument.

SIGNATURE
 
TITLE
 
DATE

 

 

 

 

 

 

 
/s/ R. KIPP DEVEER

R. Kipp deVeer
  Chief Executive Officer and Director
(principal executive officer)
  August 8, 2018

/s/ PENNI F. ROLL

Penni F. Roll

 

Chief Financial Officer
(principal financial officer)

 

August 8, 2018

/s/ SCOTT C. LEM

Scott C. Lem

 

Chief Accounting Officer,
Vice President and Treasurer
(principal accounting officer)

 

August 8, 2018

*

Michael J Arougheti

 

Co-Chairman and Director

 

August 8, 2018

*

Steve Bartlett

 

Director

 

August 8, 2018

*

Ann Torre Bates

 

Director

 

August 8, 2018

*

Daniel G. Kelly, Jr.

 

Director

 

August 8, 2018

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SIGNATURE
 
TITLE
 
DATE

 

 

 

 

 

 

 
*

Steven B. McKeever
  Director   August 8, 2018

*

Robert L. Rosen

 

Director

 

August 8, 2018

*

Bennett Rosenthal

 

Co-Chairman and Director

 

August 8, 2018

*

Eric B. Siegel

 

Director

 

August 8, 2018

*By:

 

/s/ JOSHUA M. BLOOMSTEIN

Joshua M. Bloomstein
Attorney-in-fact

 

 

 

 

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