Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS (Tables)

v3.23.2
INVESTMENTS (Tables)
 3 Months Ended
Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of June 30, 2023 and March 31, 2023, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of June 30, 2023:
Secured first lien debt
 $ 452,215  $ —  $ —  $ 452,215 
Secured second lien debt
 104,794  —  —  104,794 
Preferred equity
 214,258  —  — 

214,258 
Common equity/equivalents
 28,811  — 

31 
(A)
 28,780 
Total Investments as of June 30, 2023
 $ 800,078  $ —  $ 31  $ 800,047 
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of March 31, 2023:
Secured first lien debt
 $ 437,517  $ —  $ —  $ 437,517 
Secured second lien debt
 75,734  —  —  75,734 
Preferred equity
 222,585  —  —  222,585 
Common equity/equivalents
 17,707  —  27 
(A)
 17,680 
Total Investments as of March 31, 2023
 $ 753,543  $ —  $ 27  $ 753,516 
(A)Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability, as our investment was subject to certain restrictions.
The following table presents our investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy, and carried at fair value as of June 30, 2023 and March 31, 2023, by caption on our accompanying Consolidated Statements of Assets and Liabilities, and by security type:
Total Recurring Fair Value Measurements
Reported in Consolidated Statements
of Assets and Liabilities
Valued Using Level 3 Inputs
June 30, 2023 March 31, 2023
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 292,700  $ 279,748 
Secured second lien debt 54,340  50,842 
Preferred equity 167,220  164,534 
Common equity/equivalents(A)
1,487  1,724 
Total Non-Control/Non-Affiliate Investments 515,747  496,848 
Affiliate Investments
Secured first lien debt 159,515  157,769 
Secured second lien debt 50,454  24,892 
Preferred equity 47,038  58,051 
Common equity/equivalents 27,293  15,243 
Total Affiliate Investments 284,300  255,955 
Control Investments
Secured first lien debt —  — 
Secured second lien debt —  — 
Preferred equity —  — 
Common equity/equivalents —  713 
Total Control Investments —  713 
Total investments at fair value using Level 3 inputs $ 800,047  $ 753,516 
(A)Excludes our investment in Funko with a fair value of $31 thousand and $27 thousand as of June 30, 2023 and March 31, 2023, respectively, which was valued using Level 2 inputs.
Schedule of Fair Value Measurement Inputs and Valuation Techniques The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements
Fair Value as of Valuation
Technique/
Methodology		 Unobservable
Input		 Range / Weighted-Average as of
June 30,
2023		 March 31,
2023		 June 30,
2023		 March 31,
2023
Secured first
lien debt		 $ 452,215  $ 432,126  TEV EBITDA multiple
4.8x – 7.8x /
6.5x
4.4x – 7.7x /
6.4x
EBITDA
$1,319–$19,886 /
$9,876
$4,251 - $19,083/$10,764
Revenue multiple
0.3x – 0.6x /
0.3x
0.3x – 0.6x /
0.3x
Revenue
$15,375 – $103,488 /
$89,768
$15,483 – $109,615/$94,957
—  5,391  Yield Analysis Discount Rate N/A
19.4% – 19.9% / 19.7%
Secured second
lien debt		 104,794  62,750  TEV EBITDA multiple
5.3x – 9.0x /
 6.3x
5.4x – 6.6x /
6.2x
EBITDA
$6,411 – $37,766 /
$14,617
$4,112 – $6,379 / $5,501
—  12,984  Yield Analysis Discount Rate N/A
14.0% – 14.0% / 14.0%
Preferred
equity		 214,258  222,585  TEV EBITDA multiple
5.1x – 7.8x /
6.1x
4.4x – 7.7x /
5.9x
EBITDA
$2,940 – $19,886 /
$9,148
$4,251 – $19,083 / $9,486
Revenue multiple
0.3x – 0.6x /
0.4x
0.3x – 0.6x /
0.4x
Revenue
$15,375 – $103,488 /
$65,701
$15,483 – $109,615 / $69,247
Common equity/
equivalents(A)
28,780  17,680  TEV EBITDA multiple
4.8x – 9.0x /
5.7x
4.7x – 7.2x /
6.4x
EBITDA
$1,319 – $37,766 /
$15,785
$1,105 – $30,833 / $6,273
Total $ 800,047  $ 753,516 
(A)Fair value as of both June 30, 2023 and March 31, 2023 excludes our investment in Funko with a fair value of $31 thousand and $27 thousand, respectively, which was valued using Level 2 inputs.
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables provide our portfolio’s changes in fair value, broken out by security type, during the three months ended June 30, 2023 and 2022 for all investments for which the Adviser determines fair value using unobservable (Level 3) inputs.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

 Secured
First Lien
Debt		 Secured
Second Lien
Debt
Preferred
Equity
 Common
Equity/
Equivalents		 Total
Three Months ended June 30, 2023:
Fair value as of March 31, 2023
 $ 437,517  $ 75,734  $ 222,585  $ 17,680  $ 753,516 
Total gain (loss):
Net realized gain (loss)(A)
—  —  273  882  1,155 
Net unrealized appreciation (depreciation)(B)
(2) 4,060  (11,602) 6,813  (731)
Reversal of previously recorded (appreciation) depreciation upon realization(B)
—  —  —  (93) (93)
New investments, repayments and settlements(C):
Issuances / originations
 14,700  25,000  3,275  5,000  47,975 
Settlements / repayments
 —  —  —  —  — 
Sales(D)
—  —  (273) (1,502) (1,775)
Transfers
 —  —  —  —  — 
Fair value as of June 30, 2023
 $ 452,215  $ 104,794  $ 214,258  $ 28,780  $ 800,047 
Secured
First Lien
Debt
Secured
Second Lien
Debt
Preferred
Equity
Common
Equity/
Equivalents
 Total
Three Months ended June 30, 2022:
Fair value as of March 31, 2022
 $ 425,087  $ 67,958  $ 217,599  $ 3,678  $ 714,322 
Total gain (loss):
Net realized gain (loss)(A)
—  —  4,728  —  4,728 
Net unrealized appreciation (depreciation)(B)
(7,135) (27) 17,216  2,394  12,448 
Reversal of previously recorded (appreciation) depreciation upon realization(B)
—  —  (12,250) —  (12,250)
New investments, repayments and settlements(C):
Issuances / originations
 6,800  5  21,000  —  27,805 
Settlements / repayments
 (48,000) —  —  —  (48,000)
Sales
 —  —  (9,628) —  (9,628)
Transfers
 —  —  —  —  — 
Fair value as of June 30, 2022
 $ 376,752  $ 67,936  $ 238,665  $ 6,072  $ 689,425 
Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the respective periods ended June 30, 2023 and 2022.
(B)Included in net unrealized appreciation (depreciation) of investments on our accompanying Consolidated Statements of Operations for the respective periods ended June 30, 2023 and 2022.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, the amortization of discounts and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs, and other cost-basis adjustments.
(D)The three months ended June 30, 2023 includes $0.3 million of proceeds from the recapitalization of Old World Christmas, Inc. ("Old World").
Summary Investment Holdings
The following table summarizes our investments by security type as of June 30, 2023 and March 31, 2023:
June 30, 2023 March 31, 2023
Cost Fair Value Cost Fair Value
Secured first lien debt $ 486,139  63.3  % $ 452,215  56.5  % $ 471,439  65.4  % $ 437,517  58.1  %
Secured second lien debt 109,158  14.2  % 104,794  13.1  % 84,158  11.7  % 75,734  10.1  %
Total debt 595,297  77.5  % 557,009  69.6  % 555,597  77.1  % 513,251  68.2  %
Preferred equity 152,374  19.8  % 214,258  26.8  % 149,099  20.7  % 222,585  29.5  %
Common equity/equivalents 20,314  2.7  % 28,811  3.6  % 15,934  2.2  % 17,707  2.3  %
Total equity/equivalents 172,688  22.5  % 243,069  30.4  % 165,033  22.9  % 240,292  31.8  %
Total investments
 $ 767,985  100.0  % $ 800,078  100.0  % $ 720,630  100.0  % $ 753,543  100.0  %
Investments at fair value consisted of the following industry classifications as of June 30, 2023 and March 31, 2023:
June 30, 2023 March 31, 2023
Fair Value Percentage of
Total Investments		 Fair Value Percentage of Total Investments
Diversified/Conglomerate Services $ 296,479  37.1  % $ 268,954  35.7  %
Home and Office Furnishings, Housewares, and Durable Consumer Products 147,007  18.4  % 143,685  19.1  %
Hotels, Motels, Inns, and Gaming 61,185  7.6  % 58,713  7.8  %
Buildings and Real Estate 59,822  7.5  % 60,571  8.0  %
Leisure, Amusement, Motion Pictures, and Entertainment 39,948  5.0  % 47,616  6.3  %
Healthcare, Education, and Childcare 38,465  4.8  % 37,445  5.0  %
Mining, Steel, Iron and Non-Precious Metals 26,277  3.3  % 25,998  3.5  %
Aerospace and Defense 25,696  3.2  % 22,215  2.8  %
Chemicals, Plastics, and Rubber 25,454  3.1  % 24,891  3.3  %
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) 23,075  2.9  % 20,088  2.7  %
Telecommunications 16,800  2.1  % 18,987  2.5  %
Printing and Publishing 15,275  1.9  % —  —  %
Cargo Transport 14,487  1.8  % 14,707  2.0  %
Diversified/Conglomerate Manufacturing 10,077  1.3  % 9,646  1.3  %
Other < 2.0% 31  0.0  % 27  0.0  %
Total investments $ 800,078  100.0  % $ 753,543  100.0  %
Investments at fair value were included in the following geographic regions of the U.S. as of June 30, 2023 and March 31, 2023:
June 30, 2023 March 31, 2023
Location Fair Value Percentage of
Total Investments		 Fair Value Percentage of
Total Investments
Northeast
 $ 258,179  32.3  % $ 266,612  35.4  %
West
 215,362  26.9  % 197,989  26.3  %
South
 200,067  25.0  % 171,056  22.7  %
Midwest
 126,470  15.8  % 117,886  15.6  %
Total investments $ 800,078  100.0  % $ 753,543  100.0  %
Schedule of Investments Classified by Contractual Maturity Date
The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of June 30, 2023:

Amount
For the remaining nine months ending March 31, 2024
 $ 81,418 
For the fiscal years ending March 31:
2025 89,614 
2026 204,919 
2027 144,096 
2028 38,250 
Thereafter 37,000 
Total contractual repayments $ 595,297 
Investments in equity securities 172,688 
Total cost basis of investments held as of June 30, 2023:
 $ 767,985