N-2: Initial filing of a registration statement on Form N-2 for closed-end investment companies
Published on June 12, 2024
As filed with the U.S. Securities and Exchange Commission on
June 1
2024 2
,Securities Act File No.
File
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 |
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Pre-Effective Amendment No. |
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Post-Effective Amendment No. |
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(Exact name of registrant as specified in charter)
th
Streetrd
Floor(Address and telephone number, including area code, of principal executive offices)
HPS Advisors, LLC
th
Streetrd
Floor(Name and address of agent for service)
COPIES TO:
Richard Horowitz, Esq.
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036
Approximate Date of Commencement of Proposed Public Offering
| Check box if the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans. |
| Check box if any securities being registered on this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (“Securities Act”), other than securities offered in connection with a dividend reinvestment plan. |
| Check box if this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto. |
| Check box if this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act. |
| Check box if this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act. |
It is proposed that this filing will become effective (check appropriate box):
| when declared effective pursuant to Section 8(c) of the Securities Act. |
| immediately upon filing pursuant to paragraph (b) of Rule 486. |
| on |
| 60 days after filing pursuant to paragraph (a) of Rule 486. |
| on (date) pursuant to paragraph (a) of Rule 486. |
If appropriate, check the following box:
| This [post-effective] amendment designates a new effective date for a previously filed [post-effective amendment] [registration statement]. |
| This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: |
| This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: |
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This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: |
| This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: |
Check each box that appropriately characterizes the Registrant:
| Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (“1940 Act”)). |
| Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the 1940 Act). |
| Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the 1940 Act). |
| A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form). |
| Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act). |
| Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 1934 (“Exchange Act”). |
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If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. |
| New Registrant (registered or regulated under the 1940 Act for less than 12 calendar months preceding this filing). |
Explanatory Note
Pursuant to the registration statement (File
No. 333-270667)
dated June 30, 2023, as amended, on Form N-2
filed by HPS Corporate Lending Fund (the “Registrant”) and the registration statement (File No. 333-259453)
dated January 26, 2022, as amended, on Form N-2
filed by the Registrant, a total of $8,000,000,0000 common shares of beneficial interest, par value $0.01 per share, were previously registered. This Registration Statement has registered an additional $7,000,000,000 of common shares, resulting in a total of $15,000,000,000 in registered common shares. Prospectus
HPS Corporate Lending Fund
Class S, Class D, Class I and Class F Shares
Maximum Offering of $15,000,000,000
HPS Corporate Lending Fund is a Delaware statutory trust that seeks to invest primarily in newly originated senior secured debt and other securities of private U.S. companies within the upper middle market. Our investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. Throughout this prospectus, we refer to HPS Corporate Lending Fund as the “Fund,” “HLEND,” “we,” “us” or “our.”
We are a
non-diversified,
closed-end
management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We are externally managed by our adviser, HPS Advisors, LLC (the “Adviser”), a wholly-owned subsidiary of HPS Investment Partners, LLC (“HPS”). We have elected to be treated for federal income tax purposes, and intend to qualify annually, as a regulated investment company under the Internal Revenue Code of 1986, as amended. We are offering on a continuous basis up to $15,000,000,000 of our common shares of beneficial interest (the “Common Shares”). We are offering to sell any combination of four classes of Common Shares, Class S shares, Class D shares, Class I shares and Class F shares, with a dollar value up to the maximum offering amount. The share classes have different ongoing shareholder servicing and/or distribution fees. The purchase price per share for each class of Common Shares will equal our net asset value (“NAV”) per share, as of the effective date of the monthly share purchase date. This is a “best efforts” offering, which means that HPS Securities, LLC, the managing dealer (the “Managing Dealer”) for this offering, will use its best efforts to sell shares, but is not obligated to purchase or sell any specific amount of shares in this offering.
The Fund has been granted exemptive relief by the SEC to offer multiple classes of our Common Shares.
Investing in our Common Shares involves a high degree of risk. See “Risk Factors” beginning on page 34 of this prospectus. Also consider the following:
| • | We have limited prior operating history and there is no assurance that we will achieve our investment objective. |
| • | You should not expect to be able to sell your shares regardless of how we perform. |
| • | You should consider that you may not have access to the money you invest for an extended period of time. |
| • | We do not intend to list our shares on any securities exchange, and we do not expect a secondary market in our shares to develop prior to any listing. |
| • | Because you may be unable to sell your shares, you will be unable to reduce your exposure in any market downturn. |
| • | We have implemented a share repurchase program, but only a limited number of shares will be eligible for repurchase and repurchases will be subject to available liquidity and other significant restrictions. |
| • | An investment in our Common Shares is not suitable for you if you need access to the money you invest. See “ Suitability Standards ” and “ Share Repurchase Program. ” |
| • | You will bear substantial fees and expenses in connection with your investment. See “ Fees and Expenses. ” |
| • | We cannot guarantee that we will make distributions, and if we do, we may fund such distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, proceeds from this offering or return of capital, and we have no limits on the amounts we may pay from such sources. |
| • | Distributions may also be funded in significant part, directly or indirectly, from temporary waivers or expense reimbursements borne by the Adviser or its affiliates, that may be subject to reimbursement to the Adviser or its affiliates. The repayment of any amounts owed to the Adviser or its affiliates will reduce future distributions to which you would otherwise be entitled. |
| • | We use and continue to expect to use leverage, which will magnify the potential for loss on amounts invested and may increase the risk of investing in us. The risks of investment in a highly leverage fund include volatility and possible distribution restrictions. |
| • | We invest primarily in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “ junk, ” have predominantly speculative characteristics with respect to the issuer ’ s capacity to pay interest and repay principal. They may also be illiquid and difficult to value. |
Neither the Securities and Exchange Commission nor any state securities regulator 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. Securities regulators have also not passed upon whether this offering can be sold in compliance with existing or future suitability or conduct standards including the ‘Regulation Best Interest’ standard to any or all purchasers.
The use of forecasts in this offering is prohibited. Any oral or written predictions about the amount or certainty of any cash benefits or tax consequences that may result from an investment in our Common Shares is prohibited. No one is authorized to make any statements about this offering different from those that appear in this prospectus.
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Price to the Public (1)
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Proceeds to Us, Before Expenses (2)
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Maximum Offering (3)
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$ | 15,000,000,000 | $ | 15,000,000,000 | ||||
Class S Shares, per Share |
$ | 25.42 | $ | 3,750,000,000 | ||||
Class D Shares, per Share |
$ | 25.42 | $ | 3,750,000,000 | ||||
Class I Shares, per Share |
$ | 25.42 | $ | 3,750,000,000 | ||||
Class F Shares, per Share |
$ | 25.42 | $ | 3,750,000,000 | ||||
| (1) | Class D shares, Class I shares and Class F shares were initially offered at $25.00 per share and Class S shares were initially offered at $25.11 per share, and are currently being offered on a monthly basis at a price per share equal to the NAV per share for such class. The table reflects the NAV per share of each class as of April 30, 2024. |
| (2) | Neither the Fund nor the Managing Dealer will charge upfront sales load with respect to Class S shares, Class D shares, Class I shares or Class F shares; however, if you buy Class S shares, Class D shares, Class I shares or Class F shares through certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares, a 2.0% cap on NAV for Class D shares, a 2.0% cap on NAV for Class I shares and a 2.0% cap on NAV for Class F shares. We also pay the following shareholder servicing and/or distribution fees to the Managing Dealer and/or a participating broker, subject to Financial Industry Regulatory Authority, Inc. (“FINRA”) limitations on underwriting compensation: (a) for Class S shares, a shareholder servicing and/or distribution fee equal to 0.85% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class S shares, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class D shares, and (c) for Class F shares, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class F shares, in each case, payable monthly. No shareholder servicing or distribution fees are paid with respect to the Class I shares. The total amount that will be paid over time for other underwriting compensation depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our investments. We also pay or reimburse certain organization and offering expenses, including, subject to FINRA limitations on underwriting compensation, certain wholesaling expenses. See “Plan of Distribution” and “Use of Proceeds.” The total underwriting compensation and total organization and offering expenses will not exceed 10% and 15%, respectively, of the gross proceeds from this offering. Proceeds are calculated before deducting shareholder servicing or distribution fees or organization and offering expenses payable by us, which are paid over time. |
| (3) | The table assumes that all shares are sold in the primary offering, with 1/4 of the gross offering proceeds from the sale of Class S shares, 1/4 from the sale of Class D shares, 1/4 from the sale of Class I shares and 1/4 from the sale of Class F shares. The number of shares of each class sold and the relative proportions in which the classes of shares are sold are uncertain and may differ significantly from this assumption. |
This prospectus contains important information you should know before investing in the Common Shares. Please read this prospectus before investing and keep it for future reference. We also file periodic and current reports, proxy statements and other information about us with the U.S. Securities and Exchange Commission (the “SEC”). This information is available free of charge by contacting us at 40 West 57 or visiting our corporate website located at . Information on our website is not incorporated into or a part of this prospectus. The SEC also maintains a website at that contains this information.
th
Street, 33rd
Floor, New York, NY 10019, calling us at 212-287-6767
www.hlend.com
http://www.sec.gov
The date of this prospectus is June 12, 2024
SUITABILITY STANDARDS
Common Shares offered through this prospectus are suitable only as a long-term investment for persons of adequate financial means such that they do not have a need for liquidity in this investment. We have established financial suitability standards for initial shareholders in this offering which require that a purchaser of shares have either:
| • | a gross annual income of at least $70,000 and a net worth of at least $70,000, or |
| • | a net worth of at least $250,000. |
For purposes of determining the suitability of an investor, net worth in all cases should be calculated excluding the value of an investor’s home, home furnishings and automobiles. In the case of sales to fiduciary accounts, these minimum standards must be met by the beneficiary, the fiduciary account or the donor or grantor who directly or indirectly supplies the funds to purchase the shares if the donor or grantor is the fiduciary.
In addition, we will not sell shares to investors in the states named below unless they meet special suitability standards set forth below:
Alabama
California
Idaho
Iowa
non-traded
BDCs to 10% of such investor’s liquid net worth (liquid net worth should be determined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities). Kansas
Kentucky
Maine
Massachusetts
non-traded
real estate investment trusts, and in other illiquid direct participation programs. Missouri
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Nebraska
New Jersey
non-publicly
traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) may not exceed ten percent (10%) of his or her liquid net worth. New Mexico
non-traded
business development companies. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities. North Dakota
Ohio
non-traded
BDC. “Liquid net worth” is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings and automobiles, minus total liabilities) comprised of cash, cash equivalents and readily marketable securities. Oklahoma
Oregon—
Pennsylvania—
Puerto Rico—
non-traded
business development companies. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings and automobiles minus total liabilities) consisting of cash, cash equivalents and readily marketable securities. Tennessee
Vermont
non-accredited
Vermont investors may not purchase an amount in this offering that exceeds 10% of the investor’s liquid net worth. For these purposes, “liquid net worth” is defined as an investor’s total assets (not including home, home furnishings or automobiles) minus total liabilities. You should purchase these securities only if you can afford the complete loss of your investment. The Adviser, those selling shares on our behalf and participating brokers and registered investment advisers recommending the purchase of shares in this offering are required to make every reasonable effort to determine
ii
that the purchase of shares in this offering is a suitable and appropriate investment for each investor based on information provided by the investor regarding the investor’s financial situation and investment objectives and must maintain records for at least six years after the information is used to determine that an investment in our shares is suitable and appropriate for each investor. In making this determination, the participating broker, registered investment adviser, authorized representative or other person selling shares will, based on a review of the information provided by the investor, consider whether the investor:
| • | meets the minimum income and net worth standards established in the investor’s state; |
| • | can reasonably benefit from an investment in our Common Shares based on the investor’s overall investment objectives and portfolio structure; |
| • | is able to bear the economic risk of the investment based on the investor’s overall financial situation; and |
| • | has an apparent understanding of the following: |
| • | the fundamental risks of the investment; |
| • | the risk that the investor may lose its entire investment; |
| • | the lack of liquidity of our shares; |
| • | the background and qualification of our Adviser; and |
| • | the tax consequences of the investment. |
In addition to investors who meet the minimum income and net worth requirements set forth above, our shares may be sold to financial institutions that qualify as “institutional investors” under the state securities laws of the state in which they reside. “Institutional investor” is generally defined to include banks, insurance companies, investment companies as defined in the 1940 Act, pension or profit sharing trusts and certain other financial institutions. A financial institution that desires to purchase shares will be required to confirm that it is an “institutional investor” under applicable state securities laws.
In addition to the suitability standards established herein, (i) a participating broker may impose additional suitability requirements and investment concentration limits to which an investor could be subject and (ii) various states may impose additional suitability standards, investment amount limits and alternative investment limitations.
Broker-dealers must comply with Regulation Best Interest, which, among other requirements, enhances the existing standard of conduct for broker-dealers and establishes a “best interest” obligation for broker-dealers and their associated persons when making recommendations of any securities transaction or investment strategy involving securities to a retail customer. The obligations of Regulation Best Interest are in addition to, and may be more restrictive than, the suitability requirements listed above. Certain states, including Massachusetts, have adopted or may adopt state-level standards that seek to further enhance the broker-dealer standard of conduct to a fiduciary standard for all broker-dealer recommendations made to retail customers in their states. In comparison to the standards of Regulation Best Interest, the Massachusetts fiduciary standard, for example, requires broker-dealers to adhere to the duties of utmost care and loyalty to customers. The Massachusetts standard requires a broker-dealer to make recommendations without regard to the financial or any other interest of any party other than the retail customer, and that broker-dealers must make all reasonably practicable efforts to avoid conflicts of interest, eliminate conflicts that cannot reasonably be avoided, and mitigate conflicts that cannot reasonably be avoided or eliminated. When making such a recommendation to a retail customer, a broker-dealer must, among other things, act in the best interest of the retail customer at the time a recommendation is made, without placing its interests ahead of its retail customer’s interests. A broker-dealer may satisfy the best interest standard imposed by Regulation Best Interest by meeting disclosure, care, conflict of interest and compliance obligations. Regulation Best Interest and state fiduciary standards of care also require registered investment advisers and
iii
registered broker-dealers to provide a brief summary to retail investors. This relationship summary, referred to as Form CRS, is not a prospectus. Regulation Best Interest imposes a duty of care for broker-dealers to evaluate reasonably available alternatives in the best interests of their clients. There are likely alternatives to us that are reasonably available to you, through your broker or otherwise, and those alternatives may be less costly or have a lower investment risk. Among other alternatives, listed BDCs may be reasonable alternatives to an investment in our Common Shares, and may feature characteristics like lower cost, less complexity, and lesser or different risks. Investments in listed securities also often involve nominal or zero commissions at the time of initial purchase. Investors should refer to this prospectus for detailed information about this offering before deciding to purchase Common Shares. Currently, there is no administrative or case law interpreting Regulation Best Interest and the full scope of its applicability on brokers participating in our offering cannot be determined at this time.
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ABOUT THIS PROSPECTUS
Please carefully read the information in this prospectus and any accompanying prospectus supplements, which we refer to collectively as the “prospectus.” You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may only be used where it is legal to sell these securities. You should not assume that the information contained in this prospectus is accurate as of any date later than the date hereof or such other dates as are stated herein or as of the respective dates of any documents or other information incorporated herein by reference.
We disclose the NAV per share of each class of our Common Shares for each month when available on our website at
. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider that information to be part of this prospectus.
www.hlend.com
The words “we,” “us,” “our” and the “Fund” refer to HPS Corporate Lending Fund, together with its consolidated subsidiaries.
Unless otherwise noted, numerical information relating to HPS is approximate as of March 31, 2024.
Citations included herein to industry sources are used only to demonstrate third-party support for certain statements made herein to which such citations relate. Information included in such industry sources that do not relate to supporting the related statements made herein are not part of this prospectus and should not be relied upon.
MULTI-CLASS EXEMPTIVE RELIEF
This prospectus relates to our Common Shares of Class S, Class D, Class I and Class F. We have been granted exemptive relief by the SEC to offer multiple classes of Common Shares.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements. In light of the significant uncertainties inherent in these forward looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved.
You should carefully review the “Risk Factors” section of this prospectus for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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PROSPECTUS SUMMARY
This prospectus summary highlights certain information contained elsewhere in this prospectus and contains a summary of material information that a prospective investor should know before investing in our Common Shares. This is only a summary and it may not contain all of the information that is important to you. Before deciding to invest in this offering, you should carefully read this entire prospectus, including the “Risk Factors” section.
Q: |
What is HPS Corporate Lending Fund (“HLEND”)? |
A: |
HLEND (or the Fund) is a fund externally managed by HPS Advisors, LLC (the “Adviser”), a wholly-owned subsidiary of HPS Investment Partners, LLC (“HPS”), that seeks to invest primarily in newly originated senior secured debt and other securities of private U.S. companies within the upper middle market. We are a Delaware statutory trust and a non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We also have elected to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). |
Q: |
Who are the Adviser and HPS Investment Partners, LLC? |
A: |
As of June 30, 2023, HPS Advisors, LLC serves as our investment adviser and prior to that date, HPS served as our investment adviser. The Adviser is a wholly-owned subsidiary of HPS and has access to the same resources and investment personnel for the management of the Fund that HPS utilizes for the management of other funds and accounts. These resources and personnel enable our Adviser and Administrator (as defined below) to fulfill their obligations under the amended and restated investment advisory agreement between the Fund and the Adviser (as amended and/or restated from time to time, the “Advisory Agreement”) and the second amended and restated administration agreement between the Fund and the Administrator (as amended and/or restated from time to time, the “Administration Agreement”). HPS is a leading global credit-focused alternative investment firm with $112 billion of total assets under management as of March 31, 2024. HPS invests primarily in non-investment grade credit and manages various strategies across the capital structure that include privately negotiated senior debt; privately negotiated junior capital solutions in debt, preferred equity and common equity formats; liquid credit, including syndicated leveraged loans, collateralized loan obligations (“CLOs”) and high yield bonds; asset-based finance; and real estate. Established in 2007, HPS has approximately 200 investment professionals and over 660 total employees, working from fourteen offices globally as of March 31, 2024. HPS was established as a unit of Highbridge Capital Management, LLC (“HCM”), a subsidiary of J.P. Morgan Asset Management (“JPMAM”). In March 2016, the principals of HPS acquired HPS from JPMAM, which retained HCM’s hedge fund strategies. In June 2018, affiliates of Dyal Capital Partners, a division of Blue Owl Capital Inc., made a passive minority investment in HPS. In February 2022, an affiliate of The Guardian Life Insurance Company of America made a passive minority investment in HPS. |
Since its inception in 2007, HPS has committed approximately $131 billion
1
in privately originated transactions across more than 760 investments. Our objective is to bring HPS’s leading credit investment platform to the non-exchange
traded BDC industry. Q: |
What is your investment objective? |
A: |
Our investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. |
|
1 |
As of December 31, 2023. Based on the total face value committed to private credit investments that are part of the Strategic Investment Partners strategy, the Specialty Direct Lending strategy, the Core Senior Lending strategy, and any additional private credit investments made by HLEND, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are part of the Special Situations or Asset Value strategies. |
1
Q: |
What is your investment strategy? |
A: |
Our investment strategy focuses primarily on newly originated, privately negotiated senior credit investments in high-quality, established upper middle market companies and, in select situations, companies in special situations. We use the term “upper middle market companies” to generally mean companies with earnings before interest expense, income tax expense, depreciation and amortization (or “EBITDA”) of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually, at the time of investment. We have and may continue to invest in smaller or larger companies if the opportunity presents attractive investment characteristics and risk-adjusted returns. While our investment strategy primarily focuses on companies in the United States, we also intend to leverage HPS’s global presence to invest in companies in Europe, Australia and other locations outside the U.S., subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.” In addition to corporate level obligations, our investments in these companies may also opportunistically include private asset-based financings such as equipment financings, financings against mission-critical corporate assets and mortgage loans. We may also selectively make investments that represent equity in portfolios of loans, receivables or other debt instruments. We may also participate in programmatic investments in partnership with one or more unaffiliated banks or other financial institutions, where our partner assumes senior exposure to each investment, and we participate in the junior exposure. |
Our investment strategy also includes a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. We intend to use these investments to maintain liquidity for our share repurchase program and manage cash before investing subscription proceeds into originated loans, while also seeking attractive investment returns. We may also invest in publicly traded securities of larger corporate issuers on an opportunistic basis when market conditions create compelling potential return opportunities, subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.”
Q: |
What types of investments do you make? |
A: |
Under normal circumstances, we invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in credit and credit-related instruments issued by corporate issuers (including loans, notes, bonds and other corporate debt securities). |
Our investments in newly originated secured debt have taken and may continue to take the form of loans, notes, bonds, other corporate debt securities, assignments, participations, total return swaps and other derivatives. We seek to invest primarily in first lien senior secured debt and unitranche loans but may also invest in second lien and subordinated debt. A portion of the Fund’s investments may also be composed of “covenant-lite loans,” although such loans are not expected to comprise a significant portion of the Fund’s portfolio. We also have the ability to acquire investments through secondary transactions, including through loan portfolios, receivables, contractual obligations to purchase subsequently originated loans and other debt instruments. Although not expected to be a primary component of our investment strategy, we may also make certain opportunistic investments in instruments other than secured debt with a view to enhancing returns, such as mezzanine debt, (“PIK”) notes, convertible debt and other unsecured debt instruments, structured debt that is not secured by financial or other assets, financings and equity in loan portfolios or portfolios of receivables (“Opportunistic Investments”), in each case taking into account availability of leverage for such investments and our target risk/return profile. We may, to a limited extent, invest in junior debt (whether secured or unsecured), including mezzanine loans, as part of our investment strategy and upon approval of each such investment by our portfolio management team. We may also invest in preferred equity, or our debt investments may be accompanied by equity-related securities (such as options or warrants) and/or select common equity investments. While we expect our assets to be primarily directly originated, we may also invest in structured products or broadly syndicated transactions where HPS and/or its affiliates seek an anchor-like or otherwise influential role in certain traded instruments as part of our liquid portfolio.
payment-in-kind
debtor-in-possession
2
Our liquid credit instruments have included and may continue to include senior secured loans, senior secured bonds, high yield bonds and structured credit instruments.
The loans within the portfolio are typically floating rate instruments that often pay current income on a quarterly basis, and we look to generate return from a combination of ongoing interest income, original issue discount, closing payments, commitment fees, prepayments and related fees. Our investments generally have stated terms of three to seven years, and the expected average life of our investments is generally two to three years. However, there is no limit to the maturity or duration of any investment that we may hold in our portfolio. We expect most of our debt investments to be unrated. When rated by a nationally recognized statistical ratings organization, our investments would generally carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investor Service, Inc. or lower than
“BBB-”
by Standard & Poor’s Rating Services). Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be illiquid and difficult to value. We have, and may in the future, enter into interest rate, foreign exchange, and/or other derivative arrangements to hedge against interest rate, currency, and/or other credit related risks through the use of futures, swaps, options and forward contracts. These hedging activities are subject to the applicable legal and regulatory compliance requirements; however, there can be no assurance any hedging strategy employed will be successful. We have and may also seek to borrow capital in local currency as a means of hedging
non-U.S.
dollar denominated investments. Our investments are subject to a number of risks. See “Investment Objective and Strategies” and “Risk Factors.”
Q: |
What is an originated loan? |
|
A: |
An originated loan is a loan where we lend directly to the borrower and hold the loan generally on our own or in a small group with funds and accounts advised by HPS and/or its affiliates, and/or third-party investors. This is distinct from a syndicated loan, which is generally originated by a bank and then syndicated, or sold, in several pieces to other investors. Originated loans are generally held until maturity or until they are refinanced by the borrower. Syndicated loans often have liquid markets and can be traded by investors. |
Q: |
Why do you invest in liquid credit investments in addition to originated loans? |
|
A: |
The allocation to liquid credit investments within the Fund’s portfolio is expected to (i) provide the Fund with sufficient liquidity in order to meet the Fund’s share repurchase requirements, and (ii) allow the Fund to seek attractive investment returns prior to investing subscription proceeds into newly originated loans. |
Q: |
What potential competitive strengths does HPS offer? |
|
A: |
HPS is a leading global, credit-focused alternative investment firm that seeks to provide creative capital solutions and generate attractive risk-adjusted returns for its clients. The scale and breadth of HPS’s platform offers the flexibility to invest in companies large and small across the capital structure through both standard and highly customized structures. At its core, HPS shares a common thread of intellectual rigor and investment discipline that enables it to create value for its clients, who have entrusted HPS with approximately $112 billion of assets under management as of March 31, 2024. |
3
HPS is a leading provider of credit solutions to middle and upper middle market companies. Since its inception in 2007, HPS has committed approximately $131 billion
2
in privately originated transactions across more than 760 investments. We benefit from the following key competitive strengths of HPS in pursuing our investment strategy: | • | Scaled Capital with an Ability to Speak for the Full Debt Quantum |
| • | Diversified Sourcing Network 3 HPS believes that its ability to source from non-sponsor channels significantly reduces the level of competitive intensity and allows it to focus on structuring improved economics, stricter financial covenants and stronger loan documentation. In addition, the direct dialogue with management teams can result in a better understanding of the underlying borrowers and better positioning to actively manage investments throughout their life. HPS is also actively engaged with financial sponsors, and its exposure to sponsor transactions tends to increase in times of public market dislocation (when certainty of capital and speed of execution with a single counterparty is often sought after and highly valued). HPS believes that the ability to flex in and out of both sponsor and non-sponsor markets allows the Fund to remain nimble and optimize its opportunity set across different market dynamics. While HPS seeks to source investments from non-sponsor channels for the Fund, as of February 29, 2024, the Fund has sourced only a minority of its overall private credit investments from non-sponsor channels. The Fund may not, in the future, obtain its desired allocation to investments from the non-sponsor channel, which could adversely impact returns. |
| • | Breadth of HPS ’ s Credit Investment Platform non-investment grade credit opportunities across the capital |
|
2 |
As of December 31, 2023. Based on the total face value committed to private credit investments that are part of the Strategic Investment Partners strategy, the Specialty Direct Lending strategy, the Core Senior Lending strategy, and any additional private credit investments made by HLEND, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are part of the Special Situations or Asset Value strategies. |
|
3 |
As of December 31, 2023. Based on all investments made since inception by funds and accounts across HPS’s Direct Lending Platform, including Specialty Direct Lending, Core Senior Lending and HLEND strategies. |
4
structure. As a multi-strategy credit platform, seeking opportunities across both private and liquid credit, HPS employs an open-architecture framework under which investment teams can apply shared knowledge and insights when evaluating new investment opportunities. HPS’s team of approximately 200 investment professionals managed approximately $112 billion as of March 31, 2024. HPS believes that its multi-strategy approach provides a differentiated vantage point to evaluate relative value and better positions the firm to provide borrowers with a comprehensive and diverse set of potential financing solutions, which may enable the Fund to see more investment opportunities. In addition, HPS believes that its global footprint enables the Fund to view and potentially benefit from relative value opportunities across geographies. |
| • | Willingness to Navigate Complexity to Evaluate a Mispriced Opportunity. |
| • | Focus on the Upper Middle Market upper-end of the middle market. As HPS believes that the market is in its later stages of the existing credit cycle, the Adviser intends to position the portfolio by focusing on larger, more resilient companies that generally generate $75 million to $1 billion of EBITDA annually or $250 million to $5 billion in revenue annually. In comparison, the S&P LCD definition of middle market is defined as companies with $50 million of EBITDA or less. HPS believes the upper end of the middle market has a favorable supply/demand dynamic, with substantial demand resulting from regulatory driven structural shifts in the financial landscape and limited supply as most other direct lending providers focus on small to middle market borrowers. HPS also believes that this segment of the market can offer greater downside protection, as larger businesses typically possess the benefits of scale and a greater critical mass through diversification of customers and supplier base. As a result of these dynamics, HPS believes that it can generally negotiate commensurate or better terms with respect to borrowers in that segment and that those borrowers can provide the Fund with increased downside protection, resulting in attractive risk-adjusted returns compared to the smaller-end and core-middle market. |
| • | Emphasis on Capital Preservation. |
5
Q: |
What is the market opportunity? |
|
A: |
Private credit as an asset class has grown considerably since the global financial crisis of 2008, and it is estimated that the total market size of private credit has grown to reach $1.6 trillion in 2023. 4 We expect this growth to continue and, along with the factors outlined below, to provide a robust backdrop to what HPS believes will be a significant number of attractive investment opportunities aligned to our investment strategy. |
| • | Senior Secured Loans Offer Attractive Investment Characteristics |
| • | Regulatory Actions Continue to Drive Demand towards Private Financing. non-investment grade credit commitments on their balance sheets, particularly with respect to middle and upper middle market-sized issuers. Instead, many commercial banks have adopted an “underwrite-and-distribute” 5 . Access to the syndicated leveraged loan market has also become challenging for both first time issuers and smaller scale issuers, who previously had access to the capital markets. Issuers of tranche sizes representing less than $500 million account for approximately 5% of the new issue market as of March 31, 2024 as compared to over 49% in 20006 . HPS believes that these regulatory actions have caused a shift in the role that commercial banks play in the direct lending market for middle to upper middle market borrowers, creating a void in the financing marketplace. This void has been filled by direct lending platforms which seek to provide borrowers an alternative “originate and retain” solution. In response, corporate borrower behavior has increasingly shifted to a more conscious assessment of the benefits that direct lending platforms of strategic financing partners can offer. |
| • | Volatility in Credit Markets has made Availability of Capital Less Predictable. |
|
4 |
Source: Preqin, Preqin Special Report: The Future of Alternatives in 2028. |
|
5 |
Source: S&P LCD Quarterly Leveraged Lending Review 4Q 2022, Primary Investor Market: Banks vs. Non-Bank. |
|
6 |
Source: S&P LCD Middle Market Deal Size Category Factsheet 1Q 2024. |
6
environment where direct lenders can often negotiate loans with attractive returns and creditor protections. |
| • | Increasingly Larger Borrowers Are Finding Value in Private Solutions |
Q: |
How do you identify investments? |
|
A: |
We believe that much of the value HPS creates for our private investment portfolio comes on the front end through the diversity of its sourcing capabilities. To source transactions, HPS leverages the breadth of its global credit platform and its shared knowledge and insights gleaned across both private and public credit to cast a wide net to drive transaction flow. HPS seeks to generate investment opportunities across its various sourcing channels, including financial intermediaries such as investment banks and debt advisory firms, direct relationships with companies and management teams, private equity sponsors and formal partnerships and strategic arrangements with select financial institutions. We believe that this multi-pronged approach to sourcing provides a significant pipeline of investment opportunities for us that could contribute to our portfolio with attractive investment economics and risk/reward profile. |
Q: |
How do you evaluate and manage directly originated investments? |
|
A: |
The Adviser and HPS evaluate and manage directly originated investments by adhering to the core principles of rigorous fundamental analysis, thorough due diligence, active portfolio monitoring and risk management. |
| • | Rigorous Investment Screening and Selection. e.g. value-add products or services). When evaluating a loan, our investment team (the “Investment Team”) expects to focus on a combination of business stability, asset values and contractual loan protections. This process seeks to prioritize the Investment Team’s time spent and resources allocated by focusing on screening for opportunities where the borrower may place greater emphasis on certain non-economic characteristics, such as certainty of scaled capital, creative financing solutions, an ability to understand complexity of capital structure or business risk and/or confidentiality of operating and financial performance. HPS believes that when facing these characteristics, we have a competitive edge over certain syndicated financing solutions or other competitive direct lending platforms (both of which typically have a lower cost of capital). This rigorous selection process helps the Investment Team focus on situations where the Adviser believes we have a competitive edge to capitalize on an investment opportunity. |
7
| • | Fundamental Analysis and Due Diligence. in-depth due diligence and full credit analysis on transaction drivers, investment thesis, review of business, industry and borrower risks and mitigants, undertaking a competitive analysis, management calls/meetings, reviewing and performing financial analysis of historical results, preparing detailed models with financial forecasts, examining legal structure/terms/collateral, performing relative value analysis, employing external consultants and/or other considerations that the Investment Team deems appropriate. HPS generally seeks to employ a “cradle to grave” approach with respect to its investments such that the Investment Team is responsible for sourcing the investment, investment due diligence, and monitoring the investment until the investment is exited. HPS believes that this is a distinctive approach that can lead to (i) greater connectivity between HPS and a borrower’s management teams, (ii) enhanced access to the borrower details and (iii) increased accountability to help reduce the inherent risk of knowledge loss in circumstances where the sourcing, diligence and monitoring roles are fragmented. |
| • | Structuring and Negotiating Downside Protection Mechanisms. |
| • | Disciplined Approach. |
Q: |
How are investments allocated to the Fund? |
|
A: |
HPS provides investment management services to investment funds and client accounts. The Adviser shares any investment and sale opportunities with its and HPS’s other clients and us in accordance with applicable law, including the Investment Advisers Act of 1940, as amended (the “Advisers Act”), firm-wide allocation policies (any such policy that covers the Adviser and HPS, a “firm-wide” policy), and an exemptive order from the SEC permitting co-investment activities (as further described below), which generally provide for sharing eligible investments pro rata |
As a BDC regulated under the 1940 Act, we are subject to certain limitations relating to
co-investments
and joint transactions with affiliates, which, in certain circumstances, limit the Fund’s ability to make investments or enter into other transactions alongside other clients. We and the Adviser have received an exemptive order from the SEC that permits us, among other things, to co-invest
with certain other persons, including certain affiliates of the Adviser and certain funds and accounts managed and controlled by the Adviser and its affiliates, subject to certain terms and conditions. Pursuant to such order, our board of trustees (the “Board” and each member of the Board, a “Trustee”) has established objective criteria (“Board 8
Criteria”) clearly defining , based on investment strategy). The based on available capital in the asset class being allocated. If the Adviser determines that such investment is not appropriate for us, the investment will not be allocated to us, but the Adviser will be required to report such investment and the rationale for its determination for us to not participate in the investment to the Board at the next quarterly board meeting.
co-investment
opportunities in which the Fund will have the opportunity to participate with other public or private funds sponsored or managed by the Adviser or HPS that target similar assets. If an investment falls within the Board Criteria, the Adviser must offer an opportunity for us to participate. We may determine to participate or not to participate, depending on whether the Adviser determines that the investment is appropriate for us (e.g.
co-investment
would generally be allocated to us, the Adviser’s other clients and the HPS funds that target similar assets pro rata
Q: |
Does the Fund use leverage? |
|
A: |
Yes, we currently use and intend to continue to use leverage to seek to enhance our returns. Our leverage levels will vary over time in response to general market conditions, the size and compositions of our investment portfolio and the views of our Adviser and Board. We expect that our debt to equity ratio will generally range between 0.8x and 1.25x. While our leverage employed may be greater or less than these levels from time to time, it will never exceed the limitations set forth in the 1940 Act, which currently allows us to borrow up to a 2:1 debt to equity ratio. |
Our leverage has taken and may continue to take the form of revolving or term loans from financial institutions, secured or unsecured bonds, securitization of portions of our investment portfolio via collateralized loan obligations or preferred shares. When determining whether to borrow money and assessing the various borrowing structure alternatives, we analyze the maturity, rate structure and covenant package of the proposed borrowings in the context of our investment portfolio,
pre-existing
borrowings and market outlook. The use of leverage magnifies returns, including losses. See “Risk Factors.”
Q: |
What is a BDC? |
|
A: |
Congress created the business development company, or BDC, through the Small Business Investment Incentive Act of 1980 to facilitate capital investment in small and middle market companies. Closed-end investment companies organized in the U.S. that elect to be treated as BDCs under the 1940 Act are subject to specific provisions of the law, most notably that at least 70% of their total assets must be “qualifying assets”. Qualifying assets are generally defined as privately offered debt or equity securities of U.S. private companies or U.S. publicly traded companies with market capitalizations less than $250 million. |
BDCs may be exchange-traded, public
non-traded,
or private placements. They can be internally or externally managed. BDCs typically elect to be treated as “regulated investment companies” for U.S. tax purposes, which are generally not subject to entity level taxes on distributed income. See “Investment Objective and Strategies—Regulation as a BDC.” Q: |
What is a non-exchange traded, perpetual-life BDC? |
|
A: |
A non-exchange traded BDC’s shares are not listed for trading on a stock exchange or other securities market. The term “perpetual-life” is used to differentiate our structure from other BDCs who have a finite offering period and/or have a predefined time period to pursue a liquidity event or to wind down the fund. In contrast, in a perpetual-life BDC structure like ours, we expect to offer common shares continuously at a price equal the monthly net asset value (“NAV”) per share and we have an indefinite duration, with no obligation to effect a liquidity event at any time. We generally intend to offer our common shareholders an opportunity to have their shares repurchased on a quarterly basis, subject to an aggregate cap of 5% of |
9
| shares outstanding. However, the determination to repurchase shares in any given quarter is fully at the Board’s discretion, so investors may not always have access to liquidity when they desire it. See “Risk Factors.” |
Q: |
How does an investment in HLEND differ from an investment in a listed BDC or private BDC with a finite life? |
|
A: |
An investment in our common shares of beneficial interest (“Common Shares”) differs from an investment in a listed or exchange traded BDC in several ways, including: |
| • | Pricing. |
| • | Liquidity |
| • | Oversight non-traded BDCs are subject to the requirements of the 1940 Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unlike the offering of a listed BDC, the Fund’s offering will be registered in every state in which we are offering and selling shares. As a result, we include certain limits in our governing documents that are not typically provided for in the charter of a listed BDC. For example, our Declaration of Trust (as amended or restated from time to time, the “Declaration of Trust”) limits the fees we can pay to the Adviser. |
A listed BDC is subject to the governance requirements of the exchange on which its shares are traded, including requirements relating to its board, audit committee, independent trustee oversight of executive compensation and the trustee nomination process, code of conduct, shareholder meetings, related party transactions, shareholder approvals and voting rights. Although we expect to follow many of these same governance guidelines, there is no requirement that we do so.
An investment in our Common Shares differs from an investment in a BDC offered through private placement in several ways, including:
| • | Eligible Investors. |
| • | Investment funding |
| • | Investment period. |
10
originating new investments to the extent we raise additional capital. We will also be regularly recycling capital from our existing investors into new investments. In contrast, some privately placed BDCs have a finite offering period and an associated designated time period for investment. In addition, some privately placed BDCs have either a finite life or time period by which a liquidity event must occur or fund operations must be wound down, which may limit the ability of the fund to recycle investments. |
Q: |
For whom may an investment in the Fund be appropriate? |
|
A: |
An investment in our shares may be appropriate for you if you: |
| • | meet the minimum suitability requirements described under “Suitability Standards” above, which generally require that a potential investor has either (i) both net worth and annual net income of $70,000 or (ii) net worth of at least $250,000; |
| • | seek to allocate a portion of your financial assets to a direct investment vehicle with an income-oriented portfolio of primarily U.S. credit investments; |
| • | seek to receive current income through regular distribution payments while obtaining the potential benefit of long-term capital appreciation; and |
| • | can hold your shares as a long-term investment without the need for near-term or rapid liquidity. |
We cannot assure you that an investment in our shares will allow you to realize any of these objectives. An investment in our shares is only intended for investors who do not need the ability to sell their shares quickly in the future since we are not obligated to offer to repurchase any of our Common Shares in any particular quarter. See “Share Repurchase Program.”
Q: |
Is HPS investing in the Fund? |
|
A: |
Yes, as of April 1, 2024, HPS, its affiliates and employees held approximately $27.34 million of our Common Shares. |
Q: |
Is there any minimum investment required? |
|
A: |
Yes, to purchase Class S, Class D or Class F shares in this offering, you must make a minimum initial investment in our Common Shares of $2,500. To purchase Class I shares in this offering, you must make a minimum initial investment of $1,000,000, unless waived or reduced by the Managing Dealer. The Managing Dealer waives or reduces to $10,000 or less Class I investment minimums for certain categories of investors. See “Plan of Distribution.” All subsequent purchases of Class S, Class D, Class F or Class I shares, except for those made under our distribution reinvestment plan, are subject to a minimum investment size of $500 per transaction. The Managing Dealer can waive the initial or subsequent minimum investment at its discretion. |
Q: |
How is the Fund’s value established? |
|
A: |
The Fund’s NAV is determined based on the value of our assets less the carrying value of our liabilities, including accrued fees and expenses, as of any date of determination. |
The Adviser, as the Fund’s valuation designee pursuant to Rule
2a-5
under the 1940 Act, subject to the Board’s oversight, is responsible for the determination of the fair value of each of our investments and the NAV per share of each of our outstanding classes of shares each month. Investments for which market quotations are readily available will typically be valued at those market quotations. We utilize several factors, including source and number of quotations, to validate that the market quotations are representative of fair value. Investments that are not publicly traded or for which market prices are not readily available are 11
valued based on the input of the Adviser and independent third-party valuation firms engaged at the direction of the Board to review our investments. The Adviser and independent valuation firms use a variety of approaches to establish the fair value these investments in good faith. The approaches used generally include an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions to establish the enterprise value and also consider recent transaction prices and other factors in the valuation. Independent valuation firms retained by the Fund prepare
quarter-end
valuations of each investment that was (i) originated or purchased prior to the first calendar day of the quarter and (ii) is not a de minimis investment, as determined by the Adviser. The NAV per share of a class of our outstanding Common Shares is determined by dividing the NAV of that share class by the total number of Common Shares outstanding in that class as of the date of determination. The NAV per share of each share class can vary due to, among other things, differences in the amount of servicing fees carried by each class and the number of Common Shares outstanding in each class. See “Determination of Net Asset Value.”
Q: |
How can I purchase shares? |
|
A: |
Subscriptions to purchase our Common Shares may be made on an ongoing basis, but investors may only purchase our Common Shares pursuant to accepted subscription orders as of the first business day of each month. A subscription must be received in good order at least five business days prior to the first business day of the month (unless waived by the Managing Dealer) and include the full subscription funding amount to be accepted. |
A shareholder will not know our NAV per share applicable on the effective date of the share purchase. However, the NAV per share applicable to a purchase of shares will generally be available within 20 business days after the effective date of the share purchase. At that time, the actual number of shares purchases based on the shareholder’s subscription amount will be determined, and the shares will be credited to the shareholder’s account as of the effective date of the share purchase. Notice of each share transaction, together with information relevant for personal and tax records, will be furnished to shareholders (or their financial representatives) as soon as practicable, but no later than seven business days after our NAV is determined.
Investors, in determining which class of shares to purchase, should consider any ongoing account-based fees payable to outside financial service providers that may apply to shares held in
fee-based
accounts, as well as the total length of time that the investor will hold the shares. See “How to Subscribe” for more details.
Q: |
When will my subscription be accepted? |
|
A: |
Completed subscription requests will not be accepted by us any earlier than two business days before the first day of each month. |
Q: |
Can I withdraw a subscription to purchase shares once I have made it? |
|
A: |
Yes, you may withdraw a subscription after submission at any time before we have accepted the subscription, which we will generally not do any earlier than two business days before the first day of each month. You may withdraw your purchase request by notifying the transfer agent, through your financial intermediary or directly on the toll-free, automated telephone line at 1-888-484-1944. |
Q: |
What is the per share purchase price? |
|
A: |
Common Shares will be sold at the then-current NAV per share, as described above. |
12
Q: |
When is the NAV per share available? |
|
A: |
We report our NAV per share as of the last day of each month on our website within 20 business days of the last day of each month. Because subscriptions must be submitted at least five business days prior to the first day of each month, you will not know the NAV per share at which you will be subscribing at the time you subscribe. |
For example, if you are subscribing on November 1, your subscription must be submitted at least five business days prior to November 1. The purchase price for your shares will be the NAV per share determined as of October 31. The NAV per share as of October 31 will generally be available within 20 business days from October 31.
Q: |
Can I invest through my Individual Retirement Account (“IRA”), Simplified Employee Pension Plan (“SEP”) or other after-tax deferred account? |
|
A: |
Yes, if you meet the suitability standards described under “Suitability Standards” above, you may invest via an IRA, SEP or other after-tax deferred account. If you would like to invest through one of these account types, you should contact your custodian, trustee or other authorized person for the account to subscribe. They will process the subscription and forward it to us, and we will send the confirmation and notice of our acceptance back to them. |
Please be aware that in purchasing shares, custodians or directors of, or any other person providing advice to, employee pension benefit plans or IRAs may be subject to the fiduciary duties imposed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or other applicable laws. These additional fiduciary duties may require the custodian, trustee, director, or any other person providing investment advice to employee pension benefit plans or IRAs to provide information about the services provided and fees received, separate and apart from the disclosures in this prospectus. In addition, prior to purchasing shares, the trustee or custodian of an employee pension benefit plan or an IRA should determine that such an investment would be permissible under the governing instruments of such plan or account and applicable law.
Q: |
How often does the Fund pay distributions? |
|
A: |
We have declared distributions each month beginning in February 2022 through the date of this prospectus and expect to continue to pay regular monthly distributions. Any distributions we make will be at the discretion of our Board, who will consider, among other things, our earnings, cash flow, capital needs and general financial condition, as well as our desire to comply with the RIC requirements, which generally require us to make aggregate annual distributions to our shareholders of at least 90% of our net investment income. As a result, our distribution rates and payment frequency may vary from time to time and there is no assurance we will pay distributions in any particular amount, if at all. See “Description of our Common Shares” and “Certain U.S. Federal Income Tax Considerations.” |
The per share amount of distributions on Class I, Class D, Class F and Class S shares will generally differ because of different class-specific shareholder servicing and/or distribution fees that are deducted from the gross distributions for each share class.
Q: |
Can I reinvest distributions in the Fund? |
|
A: |
Yes, we have adopted a distribution reinvestment plan whereby shareholders (other than those located in specific states or who are clients of selected participating brokers, as outlined below) will have their cash distributions automatically reinvested in additional shares of the same class of our Common Shares to which the distribution relates unless they elect to receive their distributions in cash. The purchase price for shares purchased under our distribution reinvestment plan will be equal to the then current NAV per share of the |
13
| relevant class of Common Shares. Shareholders will not pay transaction related charges when purchasing shares under our distribution reinvestment plan, but all outstanding Class S, Class D and Class F shares, including those purchased under our distribution reinvestment plan, will be subject to ongoing servicing fees. |
Shareholders located in Alabama, Arkansas, California, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon, Tennessee, Vermont and Washington, as well as those who are clients of certain participating brokers that do not permit automatic enrollment in our distribution reinvestment plan, will automatically receive their distributions in cash unless they elect to participate in our distribution reinvestment plan and have their cash distributions reinvested in additional Common Shares. See “Description of Our Common Shares” and “Distribution Reinvestment Plan.”
Q: |
How can I change my distribution reinvestment plan election? |
|
A: |
Participants may terminate their participation in the distribution reinvestment plan or shareholders may elect to participate in our distribution reinvestment plan with five business days’ prior written notice by contacting our Transfer Agent, U.S. Bancorp Fund Services, LLC (d/b/a U.S. Bank Global Fund Services) (“U.S. Bank Global Fund Services”), at HPS Corporate Lending Fund, c/o U.S. Bank Global Fund Services, 615 East Michigan Street, Milwaukee, WI 53202. |
Q: |
How will distributions be taxed? |
|
A: |
We have elected to be treated for federal income tax purposes, and intend to qualify annually, as a RIC under the Code. A RIC is generally not subject to U.S. federal corporate income taxes on the net taxable income that it currently distributes to its shareholders. |
Distributions of ordinary income and of net short-term capital gains, if any, will generally be taxable to U.S. shareholders as ordinary income to the extent such distributions are paid out of our current or accumulated earnings and profits. Distributions, if any, of net capital gains properly reported as “capital gain dividends” will be taxable as long-term capital gains, regardless of the length of time the shareholder has owned our shares. A distribution of an amount in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be treated by a shareholder as a return of capital which will be applied against and reduce the shareholder’s basis in his or her shares. To the extent that the amount of any such distribution exceeds the shareholder’s basis in his or her shares, the excess will be treated by the shareholder as gain from a sale or exchange of the shares. Distributions paid by us will generally not be eligible for the dividends received deduction allowed to corporations or for the reduced rates applicable to certain qualified dividend income received by
non-corporate
shareholders. Distributions will be treated in the manner described above regardless of whether such distributions are paid in cash or invested in additional shares pursuant to our distribution reinvestment plan. Shareholders receiving distributions in the form of additional shares will generally be treated as receiving a distribution in the amount of the fair market value of the distributed shares. The additional shares received by a shareholder pursuant to our distribution reinvestment plan will have a new holding period commencing on the day following the day on which the shares were credited to the shareholder’s account.
Because each investor’s tax position is different, you should consult with your tax advisor on the tax consequences to you of investing in the Fund. In particular,
non-U.S.
investors should consult their tax advisors regarding potential withholding taxes on distributions that they receive. See “Certain U.S. Federal Income Tax Considerations.” Q: |
Can I sell, transfer or otherwise liquidate my shares post purchase? |
|
A: |
The purchase of our Common Shares is intended to be a long-term investment. We do not intend to list our shares on a national securities exchange, and do not expect a public market to develop for our shares in the |
14
| foreseeable future. We also do not intend to complete a liquidity event within any specific period, and there can be no assurance that we will ever complete a liquidity event. We intend to conduct quarterly share repurchase offers in accordance with the 1940 Act to provide limited liquidity to our shareholders. Our share repurchase program will be the only liquidity initiative that we offer to our shareholders. |
Because of the lack of a trading market for our shares, you may not be able to sell your shares promptly or at a desired price. If you are able to sell your shares, you may have to sell them at a discount to the purchase price of your shares.
Our Common Shares are freely transferable, except where a transfer is restricted by federal and state securities laws or by contract. We will generally not charge you to facilitate transfers of your shares, other than for necessary and reasonable costs actually incurred by us.
Q: |
Can I request that my shares be repurchased? |
|
A: |
Yes, subject to limitations. We have commenced a share repurchase program pursuant to which we intend to conduct quarterly repurchase offers to allow our shareholders to tender their shares at a price equal to the NAV per share for the applicable class of shares on each date of repurchase. Our Board may amend, suspend or terminate the share repurchase program at any time if it deems such action to be in our best interest and the best interest of our shareholders. As a result, share repurchases may not be available each quarter. Upon a suspension of our share repurchase program, our Board will consider at least quarterly whether the continued suspension of our share repurchase program remains in our best interest and the best interest of our shareholders. However, our Board is not required to authorize the recommencement of our share repurchase program within any specified period of time. Our Board may also determine to terminate our share repurchase program if required by applicable law or in connection with a transaction in which our shareholders receive liquidity for their Common Shares, such as a sale or merger of the Fund or listing of our Common Shares on a national securities exchange. |
Under our share repurchase program, to the extent we offer to repurchase shares in any particular quarter, we intend to limit the number of shares to be repurchased to no more than 5% of our outstanding Common Shares as of the last day of the immediately preceding quarter. In the event the number of shares tendered exceeds the repurchase offer amount, shares will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted in the next quarterly tender offer, or upon the recommencement of the share repurchase program, as applicable.
Under our share repurchase program, to the extent we offer to repurchase shares in any particular quarter, we expect to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The
one-year
holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at our discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by the Fund for the benefit of remaining shareholders. We intend to conduct the repurchase offers in accordance with the requirements of Rule 13e-4
promulgated under the Exchange Act and the 1940 Act. All shares purchased by us pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares. Most of our assets consist of instruments that cannot generally be readily liquidated without impacting our ability to realize full value upon their disposition. Therefore, we may not always have sufficient liquid resources to make repurchase offers. In order to provide liquidity for share repurchases, we intend to generally maintain under normal circumstances an allocation to syndicated loans and other liquid investments. We may fund repurchase requests from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and we have no limits on the amounts we may pay from such
15
sources. Should making repurchase offers, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a whole, or should we otherwise determine that investing our liquid assets in originated loans or other illiquid investments rather than repurchasing our shares is in the best interests of the Fund as a whole, then we may choose to offer to repurchase fewer shares than described above, or none at all. See “Share Repurchase Program.”
Q: |
What fees do you pay to the Adviser? |
|
A: |
Pursuant to the Advisory Agreement, the Adviser is responsible for, among other things, identifying investment opportunities, monitoring our investments and determining the composition of our portfolio. We pay the Adviser a fee for its services under the Advisory Agreement consisting of two components: a management fee and an incentive fee. |
| • | The management fee is payable monthly in arrears at an annual rate of 1.25% of the value of our net assets as of the beginning of the first calendar day of the applicable month. |
| • | The incentive fee consists of two components as follows: |
| • | The first part of the incentive fee is based on income, whereby we pay the Adviser quarterly in arrears 12.5% of its Pre-Incentive Fee Net Investment Income Returns (as defined below) for each calendar quarter subject to a 5.0% annualized hurdle rate, with a catch-up. |
“Pre-Incentive
Fee Net Investment Income Returns” means dividends, cash interest or other distributions or other cash income and any third-party fees received from portfolio companies (such as upfront fees, commitment fees, origination fee, amendment fees, ticking fees and break-up
fees, as well as prepayments premiums, but excluding fees for providing managerial assistance) accrued during the month, minus operating expenses for the month (including the management fee, taxes, any expenses payable under the Advisory Agreement and an administration agreement with our administrator, any expense of securitizations, and interest expense or other financing fees and any dividends paid on preferred shares, but excluding incentive fees and shareholder servicing and/or distribution fees). Pre-Incentive
Fee Net Investment Income Returns includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero-coupon
securities), accrued income that we have not yet received in cash. Pre-Incentive
Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive
Fee Net Investment Income Returns. | • | The second part of the incentive fee is based on realized capital gains, whereby we pay the Adviser at the end of each calendar year in arrears 12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains. |
For purposes of computing the Fund’s incentive fee on income and the incentive fee on capital gains, the calculation methodology looks through derivative financial instruments or swaps as if we owned the reference assets directly.
See “Advisory Agreement and Administrative Agreement.”
Q: |
How will I be kept up to date about how my investment is doing? |
|
A: |
We and/or your financial advisor, participating broker or financial intermediary, as applicable, will provide you with periodic updates on the performance of your investment with us, including: |
| • | three quarterly financial reports and an annual report; |
16
| • | quarterly investor statements; |
| • | in the case of certain U.S. shareholders, an annual Internal Revenue Service (“IRS”) Form 1099-DIV or IRS Form 1099-B, if required, and, in the case of non-U.S. shareholders, an annual IRS Form 1042-S; and |
| • | confirmation statements (after transactions affecting your balance, except reinvestment of distributions in us and certain transactions through minimum account investment or withdrawal programs). |
Depending on legal requirements, we may post this information on our website, , when available, or provide this information to you via U.S. mail or other courier, electronic delivery, or some combination of the foregoing. Information about us is also available on the SEC’s website at . In addition, our monthly NAV per share will be posted on our website promptly after it has become available (in all cases prior to the twentieth business day of the following month).
www.hlend.com
www.sec.gov
Q: |
What type of tax reporting will I receive on the Fund, and when will I receive it? |
|
A: |
As promptly as possible after the end of each calendar year, we intend to send to each of our U.S. shareholders an annual IRS Form 1099-DIV or IRS Form 1099-B, if required, and, in the case of non-U.S. shareholders, an annual IRS Form 1042-S. |
Q: |
What are the tax implications for non-U.S. investors in the Fund? |
|
A: |
Because we are a corporation for U.S. federal income tax purposes, a non-U.S. investor in the Fund will generally not be treated as engaged in a trade or business in the U.S. solely as a result of investing in the Fund, unless the Fund is treated as a “United States real property holding corporation” for U.S. federal income tax purposes. Although there can be no assurance in this regard, we do not currently expect to be a United States real property holding corporation for U.S. federal income tax purposes. |
Subject to the exceptions described below, dividends paid to a
non-U.S.
investor in the Fund will generally be subject to a U.S. tax of 30% (or lower treaty rate), which will generally be withheld from such dividends. However, dividends paid by the Fund that are “interest-related dividends”, “capital gain dividends” or “short-term capital gain dividends” will generally be exempt from such withholding tax to the extent we properly report such dividends to shareholders. For these purposes, interest-related dividends, capital gain dividends and short-term capital gain dividends generally represent distributions of certain U.S.-source interest or capital gains that would not have been subject to U.S. federal withholding tax at source if received directly by a non-U.S.
investor, and that satisfy certain other requirements. Notwithstanding the above, the Fund may be required to withhold from dividends that are otherwise exempt from U.S. federal withholding tax (or taxable at a reduced treaty rate) unless the non-U.S.
investor certifies its status under penalties of perjury or otherwise establishes an exemption. A
non-U.S.
investor is generally exempt from U.S. federal income tax on capital gain dividends and any gains realized upon the sale or exchange of shares in the Fund. This section assumes that income from the Fund is not “effectively connected” with a U.S. trade or business carried on by a
non-U.S.
investor. Non-U.S.
investors, and in particular, non-U.S.
investors who are engaged in a U.S. trade or business, should consult with their tax advisors on the consequences to them of investing in the Fund. See “Certain U.S. Federal Income Tax Considerations.” Q: |
What are the tax implications for tax-exempt U.S. investors in the Fund? |
|
A: |
Because we are a corporation for U.S. federal income tax purposes, U.S. tax-exempt investors in the Fund will generally not derive “unrelated business taxable income” for U.S. federal income tax purposes (“UBTI”) solely as a result of their investment in the Fund. A U.S. tax-exempt investor, however, may |
17
| derive UBTI from its investment in the Fund if the investor incurs indebtedness in connection with its purchase of shares in the Fund. Tax-exempt investors should consult their tax advisors with respect to the consequences of investing in the Fund. |
Q: |
What is the difference between the four classes of Common Shares being offered? |
|
A: |
We are offering to the public four classes of Common Shares—Class S shares, Class D shares, Class I shares and Class F shares. The differences among the share classes relate to ongoing shareholder servicing and/or distribution fees, with Class S shares, Class D shares and Class F shares subject to ongoing and shareholder servicing and/or distribution fee of 0.85%, 0.25% and 0.50%, respectively and Class I shares not subject to a shareholder servicing and/or distribution fee. In addition, although neither the Fund nor the Managing Dealer will charge upfront sales loads with respect to Class S shares, Class D shares, Class I shares or Class F shares, if you buy Class S shares, Class D shares, Class I shares or Class F shares through certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares, a 2.0% cap on NAV for Class D shares, a 2.0% cap on NAV for Class I shares and a 2.0% cap on NAV for Class F shares. See “Description of Our Common Shares” and “Plan of Distribution” in our N-2 registration statement for a discussion of the differences between our Class S, Class D, Class I and Class F shares. See “Description of Our Common Shares” and “Plan of Distribution” for a discussion of the differences between our Class S, Class D, Class I and Class F shares. |
Assuming a constant net asset value per share of $25.00, we expect that a
one-time
investment in 400 shares of each class of our shares (representing an aggregate net asset value of $10,000 for each class) would be subject to the following shareholder servicing and/or distribution fees: |
Annual Shareholder Servicing and/or Distribution Fees |
Total Over Five Years |
|||||||
Class S |
$ | 85 | $ | 425 | ||||
Class D |
$ | 25 | $ | 125 | ||||
Class I |
$ | 0 | $ | 0 | ||||
Class F |
$ | 50 | $ | 250 | ||||
Class S shares are available through brokerage and transaction-based accounts. Class D shares are generally available for purchase in this offering only (1) through
fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class D shares, (2) through participating brokers that have alternative fee arrangements with their clients to provide access to Class D shares, (3) through transaction/ brokerage platforms at participating brokers, (4) through certain registered investment advisers, (5) through bank trust departments or any other organization or person authorized to act in a fiduciary capacity for its clients or customers or (6) other categories of investors that we name in an amendment or supplement to this prospectus. Class F shares are generally available for purchase in this offering only through the participating broker with whom the Fund was launched on an exclusive basis in 2022 (the “Founding Distributor”). In this context, Class F Shares can be purchased (1) through fee-based
programs, also known as wrap accounts, sponsored by the Founding Distributor, (2) in instances where the Founding Distributor has alternative fee arrangements with its clients to provide access to Class F shares, (3) through transaction/brokerage platforms at the Founding Distributor, or (4) by other categories of investors that we name in an amendment or supplement to this prospectus. Class I shares are generally available for purchase in this offering only (1) through fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class I shares, (2) by endowments, foundations, pension funds and other institutional investors, (3) through participating brokers that have alternative fee arrangements with their clients to provide access to Class I shares, (4) through 18
transaction/brokerage platforms at participating brokers, (5) by our executive officers and Trustees and their immediate family members, as well as officers and employees of the Adviser or other affiliates and their immediate family members, and, if approved by our Board, joint venture partners, consultants and other service providers, or (6) by other categories of investors that we name in an amendment or supplement to this prospectus. In certain cases, where a holder of Class S, Class D or Class F shares exits a relationship with a participating broker for this offering and does not enter into a new relationship with a participating broker for this offering, such holder’s shares may be exchanged into an equivalent NAV amount of Class I shares. We may also offer Class I shares to certain feeder vehicles primarily created to hold our Class I shares, which in turn offer interests in themselves to investors; we expect to conduct such offerings pursuant to exceptions to registration under the Securities Act and not as a part of this offering. Such feeder vehicles may have additional costs and expenses, which would be disclosed in connection with the offering of their interests. We may also offer Class I shares to other investment vehicles. Before making your investment decision, please consult with your investment adviser regarding your account type and the classes of Common Shares you may be eligible to purchase.
If you are eligible to purchase all four classes of shares, you should be aware that Class I shares have no shareholder servicing or distribution fees, which will reduce the NAV or distributions of the other share classes. However, Class I shares do not receive shareholder services. Before making your investment decision, please consult with your investment adviser regarding your account type and the classes of Common Shares you may be eligible to purchase.
Q: |
Are there ERISA considerations in connection with investing in the Fund? |
|
A: |
We intend to conduct our affairs so that our assets should not be deemed to constitute “plan assets” under the ERISA, and certain U.S. Department of Labor regulations promulgated thereunder, as modified by Section 3(42) of ERISA (the “Plan Asset Regulations”). In this regard, generally, we intend to take one of the following approaches: (1) in the event that each class of Common Shares is considered a “publicly-offered security” within the meaning of the Plan Asset Regulations (“Publicly-Offered Security”), we will not limit “benefit plan investors” from investing in the Common Shares, and (2) in the event one or more classes of Common Shares does not constitute a Publicly-Offered Security, (a) we will limit investment in each class of Common Shares by “benefit plan investors” to less than 25% of the total value of each class of our Common Shares, within the meaning of the Plan Asset Regulations (including any class that constitutes a Publicly-Offered Security), or (b) we will prohibit “benefit plan investors” from owning any class that does not constitute a Publicly-Offered Security. |
In addition, each prospective investor that is, or is acting on behalf of any individual retirement account, employee benefit plan, or similar plan or account that is subject to ERISA, or any entity whose underlying assets are considered to include the foregoing (each a “Plan”), must independently determine that our Common Shares are an appropriate investment for the Plan, taking into account its obligations under ERISA, and applicable similar laws, and the facts and circumstances of each investing Plan.
Prospective investors should carefully review the matters discussed under “Risk Factors” and “Restrictions on Share Ownership” and should consult with their own advisors as to the consequences of making an investment in the Fund.
Q: |
What is the role of the Fund’s Board of Trustees? |
|
A: |
We operate under the direction of our Board, the members of which are accountable to us and our shareholders as fiduciaries. We have six Trustees, four of whom have been determined to be independent of us, the Adviser and its affiliates (“Independent Trustees”). Our Independent Trustees are responsible for, among other things, reviewing the performance of the Adviser, approving the compensation paid to the Adviser and its affiliates, oversight of the valuation process used to establish the Fund’s NAV and oversight |
19
| of the investment allocation process to the Fund. The names and biographical information of our Trustees are provided under “Management of the Fund—Trustees and Executive Officers.” |
Q: |
Are there any risks involved in buying your shares? |
|
A: |
Investing in our Common Shares involves a high degree of risk. If we are unable to effectively manage the impact of these risks, we may not meet our investment objective and, therefore, you should purchase our shares only if you can afford a complete loss of your investment. An investment in our Common Shares involves significant risks and is intended only for investors with a long-term investment horizon and who do not require immediate liquidity or guaranteed income. Some of the more significant risks relating to an investment in our Common Shares include those listed below: |
| • | We have limited prior operating history and there is no assurance that we will achieve our investment objective. |
| • | You should not expect to be able to sell your shares regardless of how we perform. |
| • | You should consider that you may not have access to the money you invest for an extended period of time. |
| • | We do not intend to list our shares on any securities exchange, and we do not expect a secondary market in our shares to develop prior to any listing. |
| • | Because you may be unable to sell your shares, you will be unable to reduce your exposure in any market downturn. |
| • | We have implemented a share repurchase program, but only a limited number of shares will be eligible for repurchase and repurchases will be subject to available liquidity and other significant restrictions. |
| • | An investment in our Common Shares is not suitable for you if you need access to the money you invest. See “Suitability Standards” and “Share Repurchase Program.” |
| • | You will bear substantial fees and expenses in connection with your investment. See “Fees and Expenses.” |
| • | We cannot guarantee that we will make distributions, and if we do, we may fund such distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, or return of capital, and although we generally expect to fund distributions from cash flow from operations, we have not established limits on the amounts we may pay from such sources. A return of capital (1) is a return of the original amount invested, (2) does not constitute earnings or profits and (3) will have the effect of reducing a shareholder’s tax basis such that when a shareholder sells its shares the sale may be subject to taxes even if the shares are sold for less than the original purchase price. |
| • | Distributions may also be funded in significant part, directly or indirectly, from temporary waivers or expense reimbursements borne by the Adviser or its affiliates, that may be subject to reimbursement to the Adviser or its affiliates. The repayment of any amounts owed to the Adviser or its affiliates will reduce future distributions to which you would otherwise be entitled. |
| • | We use and continue to expect to use leverage, which will magnify the potential for loss on amounts invested and may increase the risk of investing in us. The risks of investment in a highly leverage fund include volatility and possible distribution restrictions. |
| • | We invest primarily in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect |
20
to the issuer’s capacity to pay interest and repay principal. They may also be illiquid and difficult to value. |
Q: |
Do you currently own any investments? |
|
A: |
Yes. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the financial statements included herein, our periodic reports under the Exchange Act and www.hlend.com |
Q: |
What is a “best efforts” offering? |
|
A: |
Our Common Shares are offered on a “best efforts” basis. A “best efforts” offering means the Managing Dealer and the participating brokers are only required to use their best efforts to sell the shares. When shares are offered to the public on a “best efforts” basis, no underwriter, broker or other person has a firm commitment or obligation to purchase any of the shares. Therefore, we cannot guarantee that any minimum number of shares will be sold. |
Q: |
What is the expected term of this offering? |
|
A: |
We have registered a total of $15,000,000,000 in Common Shares and have sold approximately $6,603,000,000 in Common Shares as of May 1, 2024. It is our intent, however, to conduct a continuous offering for an extended period of time, by filing for additional offerings of our shares, subject to regulatory approval and continued compliance with the rules and regulations of the SEC and applicable state laws. |
We endeavor to take all reasonable actions to avoid interruptions in the continuous offering of our Common Shares. There can be no assurance, however, that we will not need to suspend our continuous offering while the SEC and, where required, state securities regulators, review such filings for additional offerings of our Common Shares until such filings are declared effective, if at all.
Q: |
What is a regulated investment company, or RIC? |
|
A: |
We have elected to be treated for federal income tax purposes, and intend to qualify annually, as a RIC under the Code. |
In general, a RIC is a company that:
| • | is a BDC or registered investment company that combines the capital of many investors to acquire securities; |
| • | offers the benefits of a securities portfolio under professional management; |
| • | s |
| • | is generally not subject to U.S. federal corporate income taxes on its net taxable income that it currently distributes to its shareholders, which substantially eliminates the “double taxation” ( i.e. |
Q: |
Who administers the Fund? |
|
A: |
HPS (the “Administrator”) provides or oversees the performance of administrative and compliance services. We reimburse the Administrator for its costs, expenses and our allocable portion of compensation (including salaries, bonuses and benefits) of the Administrator’s personnel and the Administrator’s overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement. See “Advisory Agreement and Administration Agreement—Administration Agreement.” |
21
Q: |
What are the offering and servicing costs? |
|
A: |
Neither the Fund nor the Managing Dealer will charge upfront sales load with respect to Class S shares, Class D shares, Class I or Class F shares; however, if you buy Class S shares, Class D shares, Class I shares or Class F shares through certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares, a 2.0% cap on NAV for Class D shares, a 2.0% cap on NAV for Class I shares and a 2.0% cap on NAV for Class F shares. Please consult your selling agent for additional information. |
Subject to Financial Industry Regulatory Authority, Inc. (“FINRA”) limitations on underwriting compensation, we pay the following shareholder servicing and/or distribution fees to the Managing Dealer and/or a participating broker: (a) for Class S shares, a shareholder servicing and/or distribution fee equal to 0.85% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class S shares, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class D shares, and (c) for Class F shares, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class F shares, in each case, payable monthly. No shareholder servicing or distribution fees are paid with respect to the Class I shares. The shareholder servicing and/or distribution fees are payable to the Managing Dealer, but the Managing Dealer anticipates that all or a portion of the shareholder servicing and/or distribution fees will be retained by, or reallowed (paid) to, participating brokers. The total amount that will be paid over time for other underwriting compensation depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our investments. We also pay or reimburse certain organization and offering expenses, including, subject to FINRA limitations on underwriting compensation, certain wholesaling expenses. See “Plan of Distribution” and “Use of Proceeds.” The total underwriting compensation and total organization and offering expenses will not exceed 10% and 15%, respectively, of the gross proceeds from this offering.
As our investment adviser prior to June 30, 2023, HPS agreed to advance all of our organization and offering expenses on our behalf (including legal, accounting, printing, mailing, subscription processing and filing fees and expenses and other offering expenses, including costs associated with technology integration between the Fund’s systems and those of our participating brokers, reasonable bona fide due diligence expenses of participating brokers supported by detailed and itemized invoices, costs in connection with preparing sales materials and other marketing expenses, design and website expenses, fees and expenses of our escrow agent and transfer agent, fees to attend retail seminars sponsored by participating brokers and costs, expenses and reimbursements for travel, meals, accommodations, entertainment and other similar expenses related to meetings or events with prospective investors, brokers, registered investment advisors or financial or other advisors, but excluding the shareholder servicing and/or distribution fee) through February 3, 2022, the date on which we broke escrow for our initial offering of Common Shares. On such date, the Fund became obligated to reimburse HPS for such advanced expenses and HPS subsequently requested reimbursement of these expenses and was paid pursuant to the Expense Support and Conditional Reimbursement Agreement we previously entered into with HPS. After such date, the Fund bears all such expenses, subject to the Expense Support and Conditional Reimbursement Agreement it has entered into with the Adviser (the “Expense Support Agreement”) and the expense support and conditional reimbursement agreement it previously entered into with HPS (for such expenses incurred prior to June 30, 2023) (the “Prior Expense Support Agreement” and together with the Expense Support Agreement, the “Expense Support Agreements”). Pursuant to the Expense Support Agreements, HPS was, and the Adviser is, obligated to advance all of our Other Operating Expenses (as defined below) to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Fund’s NAV. We were and are obligated to reimburse HPS and the Adviser, respectively, for such advanced expenses only if certain conditions are met. See “Plan of Distribution” and “Expense Support and Conditional Reimbursement Agreement.” For purposes hereof, “Other Operating Expenses” means our total organization
22
and offering expenses, professional fees, trustee fees, administration fees, and other general and administrative expenses (including our allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement).
Q: |
What are our expected operating expenses? |
|
A: |
We expect to incur operating expenses in the form of our management and incentive fees, shareholder servicing and/or distribution fees, interest expense on our borrowings and other expenses, including the fees we pay to our Administrator. See “Fees and Expenses.” |
Q: |
What are our policies related to conflicts of interests with the Adviser and its affiliates? |
|
A: |
The Adviser and its affiliates are subject to certain conflicts of interest with respect to the services the Adviser and the Administrator provide for us. These conflicts arise primarily from the involvement of the Adviser and HPS in other activities that may conflict with our activities. You should be aware that individual conflicts will not necessarily be resolved in favor of our interest. |
| • | Conflicts of Interest Generally. co-investment order from the SEC. Subject to the limitations of the 1940 Act, the Fund may invest in loans or other securities, the proceeds of which may refinance or otherwise repay debt or securities of companies whose debt is owned by other funds and accounts sponsored or managed by the Adviser or HPS. |
| • | Relationship among the Fund, the Adviser and the Investment Team |
HPS or its affiliates, principals or employees (the “Affiliated Group”) will invest for their own accounts and manage accounts for other individuals or entities, including entities in which the Affiliated Group or its trustees or employees may hold an interest, either directly in managed accounts or indirectly through investments in private investment entities. Any of such accounts will pay different fees, invest with leverage or utilize different investment strategies than the Fund. In addition, the Fund may enter into transactions with such accounts, and the Affiliated Group may invest in the same securities and instruments on behalf of such accounts that the Fund invests in, in each case to the extent permitted by the 1940 Act. The Affiliated Group or its personnel will have income or other incentives to favor such accounts.
23
| • | Co-Investment Transactions.co-invest with certain other persons, including certain affiliated accounts managed and controlled by the Adviser. Subject to the 1940 Act and the conditions of the co-investment order issued by the SEC, the Fund may, under certain circumstances, co-invest with certain affiliated accounts in investments that are suitable for the Fund and one or more of such affiliated accounts. Even though the Fund and any such affiliated account co-invest in the same securities, conflicts of interest may still arise. If the Adviser is presented with co-investment opportunities that generally fall within the Fund’s investment objective and other Board-established criteria and those of one or more affiliated accounts advised by the Adviser, whether focused on a debt strategy or otherwise, the Adviser will allocate such opportunities among the Fund and such affiliated accounts in a manner consistent with the exemptive order and the firm-wide allocation policies and procedures. |
To the extent consistent with applicable law and/or exemptive relief issued to the Fund, in addition to such
co-investments,
the Fund and HPS or an affiliated account may, as part of unrelated transactions, invest in either the same or different tiers of a portfolio company’s capital structure or in an affiliate of such portfolio company. To the extent the Fund holds investments in the same portfolio company or in an affiliate thereof that are different (including with respect to their relative seniority) than those held by HPS or an affiliated account, the Adviser may be presented with decisions when the interests of the two co-investors
are in conflict. | • | Competition among the Accounts Sponsored or Managed by HPS and Its Affiliates |
Conflicts could arise after the Affiliated Group Account, on the one hand, and the Fund, on the other hand, make investments in the same issuer with respect to the issuer’s strategy, growth and financing alternatives and with respect to the manner and timing of the Fund’s exit from the investment compared to the Affiliated Group Account’s exit. The Affiliated Group Accounts may make decisions that are more beneficial to themselves than to the Fund. Further, investments may benefit one or more of the Affiliated Group Accounts disproportionately to their benefit to the Fund. Conversely, the interests of one or more of the Affiliated Group Accounts in one or more investments may, in the future, be adverse to that of the Fund, and the Adviser may be incentivized not to undertake certain actions on behalf of the Fund in connection with such investments, including the exercise of certain rights the Fund may have, in view of the investment by the Affiliated Group in such investments.
In addition, subject to applicable law, the Affiliated Group and one or more Affiliated Group Accounts (including the Fund), expect to invest, from time to time, in different instruments or classes of securities of the same issuer, including where the Fund and/or any Affiliated Group Account control the majority of such instrument or class of securities. In these circumstances, actions taken on behalf of the Fund may be adverse to the mezzanine investors, and vice versa, creating a conflict of interest for the Adviser and HPS. In addition, if an Affiliated Group Account holds voting securities (for example, equity) of an issuer in which the Fund holds , regarding whether an Affiliate Group Account agrees to waive certain covenants or make certain amendments). Conversely, if the Fund holds voting securities of an issuer, the Adviser’s vote on behalf of the Fund on a matter may end up benefiting Affiliated Group Accounts and harming the Fund, especially with the
non-voting
securities (for example, secured debt) of such issuer, HPS or the Adviser, acting on behalf of such Affiliated Group Account may vote on certain matters in a manner that has an adverse effect on the positions held by the Fund (e.g.
24
benefit of hindsight (, if the Fund agrees to certain covenants, waivers or amendments, but the issuer and the Fund’s investment in such issuer end up getting further impaired).
e.g.
For the foregoing reasons, among others, the Affiliated Group and its portfolio managers, including the Investment Team, are generally expected to have a conflict of interest between acting in the best interests of the Fund and such other Affiliated Group Accounts. The Adviser and HPS have developed policies and procedures that provide that they will allocate investment opportunities and make purchase and sale decisions among the Fund, HPS’s clients and the Adviser’s other clients in a manner that they consider, in their discretion and consistent with their fiduciary obligation to their clients, to be reasonable.
Future investment activities by the Adviser on behalf of other clients and HPS on behalf of its clients may give rise to additional conflicts of interest and demands on the Adviser’s and HPS’s time and resources.
See “Conflicts of Interest” for additional information about conflicts of interest that could impact the Fund.
Q: |
Who can help answer my questions? |
|
A: |
If you have more questions about this offering or if you would like additional copies of this prospectus, you should contact your financial advisor or our transfer agent at HPS Corporate Lending Fund, c/o U.S. Bank Global Fund Services, 615 East Michigan Street Milwaukee, WI 53202, or at 1-888-484-1944. |
25
FEES AND EXPENSES
| Class S Shares |
Class F Shares |
Class D Shares |
Class I Shares |
|||||||||||||
Shareholder transaction expense ( |
||||||||||||||||
Maximum sales load (1)
|
% | % | % | % | ||||||||||||
Maximum Early Repurchase Deduction (2)
|
% | % | % | % | ||||||||||||
Annual expenses ( (3)
|
||||||||||||||||
Base management fees (4)
|
% | % | % | % | ||||||||||||
Incentive fees (5)
|
% | % | % | % | ||||||||||||
Shareholder servicing and/or distribution fees (6)
|
% | % | % | % | ||||||||||||
Interest payment on borrowed funds (7)
|
% | % | % | % | ||||||||||||
Other expenses (8)
|
% | % | % | % | ||||||||||||
Total annual expenses |
% | % | % | % |
| (1) | Neither the Fund nor the Managing Dealer will charge upfront sales load with respect to Class S shares, Class D shares, Class I shares or Class F shares; however, if you buy Class S shares, Class D shares, Class I shares or Class F shares through certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares, a 2.0% cap on NAV for Class D shares, a 2.0% cap on NAV for Class I shares and a 2.0% cap on NAV for Class F shares. Please consult your selling agent for additional information. |
| (2) | Under our share repurchase program, to the extent we offer to repurchase shares in any particular quarter, we expect to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be subject to a fee of 2.0% of such NAV. The one-year holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at our discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by the Fund for the benefit of remaining shareholders. |
| (3) | Estimated average net assets of $7. 2 billion for the fiscal year ending December 31, 2024 was employed as the denominator for the expense ratio computation. Actual net assets will depend on the number of shares we actually sell, realized gains/losses, unrealized appreciation/depreciation and share repurchase activity, if any. |
| (4) |
| (5) | We may have capital gains and investment income that could result in the payment of an incentive fee. The incentive fees, if any, are divided into two parts: |
| • | The first part of the incentive fee is based on income, whereby we pay the Adviser quarterly in arrears 12.5% of our Pre-Incentive Fee Net Investment Income Returns (as defined below) for each calendar quarter subject to a 5.0% annualized hurdle rate, with a catch-up. |
| • | The second part of the incentive is based on realized capital gains, whereby we pay the Adviser at the end of each calendar year in arrears 12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital |
26
depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains. |
As we cannot predict whether we will meet the necessary performance targets, we have assumed no incentive fee for this chart. We expect the incentive fees we pay to increase to the extent we earn greater income or generate capital gains through our investments in portfolio companies. If we achieved an annualized total return of 5.0% for each quarter made up entirely of net investment income, no incentive fees would be payable to the Adviser because the hurdle rate was not exceeded. If instead we achieved a total return of 5.0% in a calendar year made up of entirely realized capital gains net of all realized capital losses and unrealized capital depreciation, an incentive fee equal to 0.63% of our net assets would be payable. See “Advisory Agreement and Administration Agreement” for more information concerning the incentive fees.
| (6) | Subject to FINRA limitations on underwriting compensation, we also pay the following shareholder servicing and/or distribution fees to the Managing Dealer and/or a participating broker: (a) for Class S shares, a shareholder servicing and/or distribution fee equal to 0.85% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class S shares, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class D shares, and (c) for Class F shares, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV as of the beginning of the first calendar day of the month for the Class F shares, in each case, payable monthly. No shareholder servicing or distribution fees are paid with respect to the Class I shares. The total amount that will be paid over time for other underwriting compensation depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our investments. We will cease paying the shareholder servicing and/or distribution fee on the Class S shares, Class D shares and Class F shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of our assets or (iii) the date following the completion of the primary portion of this offering on which, in the aggregate, underwriting compensation from all sources in connection with this offering, including the shareholder servicing and/or distribution fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. In addition, as required by exemptive relief that allows us to offer multiple classes of shares, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer and the applicable selling agent), we will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class S shares, Class D shares and Class F shares in such shareholder’s account. We may modify this requirement if permitted by applicable exemptive relief. At the end of such month, the applicable Class S shares, Class D shares or Class F shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class S, Class D shares or Class F shares. See “Plan of Distribution” and “Use of Proceeds.” The total underwriting compensation and total organization and offering expenses will not exceed 10% and 15%, respectively, of the gross proceeds from this offering. |
| (7) | We may borrow funds to make investments, including before we have fully invested the proceeds of this continuous offering. To the extent that we determine it is appropriate to borrow funds to make investments, the costs associated with such borrowing will be indirectly borne by shareholders. The figure in the table assumes that we borrow for investment purposes an amount equal to 100% of our estimated average net assets for the fiscal year ending December 31, 2024, and that the average annual cost of borrowings, including the amortization of cost associated with obtaining borrowings and unused commitment fees on the |
27
| amount borrowed is 8. 95 %. Our ability to incur leverage depends, in large part, the amount of money we are able to raise through the sale of shares registered in this offering and the availability of financing in the market. |
| (8) | “Other expenses” include accounting, legal and auditing fees, custodian and transfer agent fees, reimbursement of expenses to our Administrator, organization and offering expenses, insurance costs and fees payable to our Trustees, as discussed in “Advisory Agreement and Administration Agreement.” Other expenses represent the estimated annual other expenses of the Fund and its subsidiaries based on annualized other expenses for the current fiscal year ending December 31, 2024 and estimated average net assets of $7. 2 billion for the fiscal year ending December 31, 2024. |
We have entered into the Expense Support Agreement with the Adviser. Pursuant to the Expense Support Agreement, the Adviser is obligated to advance all of our Other Operating Expenses (each, a “Required Expense Payment”) to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Fund’s NAV. Any Required Expense Payment must be paid by the Adviser to us in any combination of cash or other immediately available funds and/or offset against amounts due from us to the Adviser or its affiliates. The Adviser may elect to pay certain additional expenses on our behalf (each, a “Voluntary Expense Payment” and together with a Required Expense Payment, the “Expense Payments”), provided that no portion of the payment will be used to pay any interest expense or distribution and/or shareholder servicing fees of the Fund. Any Voluntary Expense Payment that the Adviser has committed to pay must be paid by the Adviser to us in any combination of cash or other immediately available funds no later than forty-five days after such commitment was made in writing, and/or offset against amounts due from us to the Adviser or its affiliates. The Adviser will be entitled to reimbursement of an Expense Payment from us if Available Operating Funds (as defined below under “Expense Support and Conditional Reimbursement Agreement”) exceed the cumulative distributions accrued to the Fund’s shareholders, among other conditions. See “Expense Support and Conditional Reimbursement Agreement” for additional information regarding the Expense Support Agreement. Because the Adviser’s obligation to make Voluntary Expense Payments is voluntary, the table above does not reflect the impact of any Voluntary Expense Payments from the Adviser.
Example:
Class S shares
| 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of investment income: |
$ | $ | $ | $ | ||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of capital gains: |
$ | $ | $ | $ | ||||||||||||
Class F shares
| 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of investment income: |
$ | $ | $ | $ | ||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of capital gains: |
$ | $ | $ | $ | ||||||||||||
Class D shares
| 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of investment income: |
$ | $ | $ | $ | ||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of capital gains: |
$ | $ | $ | $ | ||||||||||||
Class I shares
| 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of investment income: |
$ | $ | $ | $ | ||||||||||||
Total cumulative expenses you would pay on a $1,000 investment assuming a reinvested 5.0% net return comprised solely of capital gains: |
$ | $ | $ | $ | ||||||||||||
While the examples assume a 5.0% annual return on investment after management fees and expenses, but before incentive fees, our performance will vary and may result in an annual return that is greater or less than this. If we achieve sufficient returns on our investments to trigger a quarterly incentive fee on income and/or if we achieve net realized capital gains in excess of 5.0%, both our returns to our shareholders and our expenses would be higher. See “Advisory Agreement and Administration Agreement” for information concerning incentive fees.
These examples should not be considered a representation of your future expenses.
29
FINANCIAL HIGHLIGHTS
The following table of financial highlights is intended to help a prospective investor understand the Fund’s financial performance for the periods shown. The financial data set forth in the following table as of and for the years ended December 31, 2023 and December 31, 2022 are derived from our consolidated financial statements, which have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm whose report thereon is included in this prospectus or the Fund’s Annual Report on Form or upon request. The financial data at and for the three months ended March 31, 2024 has been derived from unaudited financial data. You should read these financial highlights in conjunction with our consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus.
10-K
for the fiscal years ended December 31, 2023 and December 31, 2022, which may be obtained from www.sec.gov
The following are the financial highlights for the three months ended March 31, 2024:
Three Months Ended March 31, 2024 |
||||||||||||||||
Class I |
Class D |
Class F |
Class S |
|||||||||||||
Per Share Data: |
||||||||||||||||
Net asset value, beginning of period |
$ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 25.06 | ||||||||
Net investment income (1)
|
0.74 | 0.72 | 0.71 | 0.68 | ||||||||||||
Net unrealized and realized gain (loss) (2)
|
0.21 | 0.21 | 0.20 | 0.21 | ||||||||||||
Net increase (decrease) in net assets resulting from operations |
0.95 | 0.93 | 0.91 | 0.89 | ||||||||||||
Distributions from net investment income (3)
|
(0.65 | ) | (0.63 | ) | (0.61 | ) | (0.59 | ) | ||||||||
Distributions from net realized gains (3)
|
— | — | — | — | ||||||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(0.65 | ) | (0.63 | ) | (0.61 | ) | (0.59 | ) | ||||||||
Total increase (decrease) in net assets |
0.30 | 0.30 | 0.30 | 0.30 | ||||||||||||
Net asset value, end of period |
$ | 25.36 | $ | 25.36 | $ | 25.36 | $ | 25.36 | ||||||||
Shares outstanding, end of period |
66,048,340 | 32,172,817 | 143,301,946 | 4,849,688 | ||||||||||||
Total return based on NAV (4)
|
3.80 | % | 3.74 | % | 3.68 | % | 3.59 | % | ||||||||
Ratios: |
||||||||||||||||
Ratio of net expenses to average net assets (5)
|
9.21 | % | 9.47 | % | 9.72 | % | 9.99 | % | ||||||||
Ratio of net investment income to average net assets (5)
|
12.02 | % | 11.77 | % | 11.53 | % | 11.17 | % | ||||||||
Portfolio turnover rate |
8.90 | % | 8.90 | % | 8.90 | % | 8.90 | % | ||||||||
Supplemental Data: |
||||||||||||||||
Net assets, end of period |
$ | 1,674,789 | $ | 815,793 | $ | 3,633,652 | $ | 122,976 | ||||||||
Asset coverage ratio |
261.9 | % | 261.9 | % | 261.9 | % | 261.9 | % | ||||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
30
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9 to the consolidated financial statements included elsewhere in this prospectus). |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Fund’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any. |
| (5) | For the three months ended March 31, 2024, amounts are annualized except for excise tax, and capital gains incentive fee. |
The following are the financial highlights for the three months ended March 31, 2023:
Three Months Ended March 31, 2023 |
||||||||||||
Class I |
Class D |
Class F |
||||||||||
Per Share Data: |
||||||||||||
Net asset value, beginning of period |
$ | 23.88 | $ | 23.88 | $ | 23.88 | ||||||
Net investment income (1)
|
0.67 | 0.65 | 0.64 | |||||||||
Net unrealized and realized gain (loss) (2)
|
0.42 | 0.43 | 0.42 | |||||||||
Net increase (decrease) in net assets resulting from operations |
1.09 | 1.08 | 1.06 | |||||||||
Distributions from net investment income (3)
|
(0.57 | ) | (0.56 | ) | (0.54 | ) | ||||||
Distributions from net realized gains (3)
|
— | — | — | |||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(0.57 | ) | (0.56 | ) | (0.54 | ) | ||||||
Early repurchase deduction fees (6)
|
— | — | — | |||||||||
Total increase (decrease) in net assets |
0.52 | 0.52 | 0.52 | |||||||||
Net asset value, end of period |
$ | 24.40 | $ | 24.40 | $ | 24.40 | ||||||
Shares outstanding, end of period |
36,656,322 | 18,969,647 | 95,841,639 | |||||||||
Total return based on NAV (4)
|
4.60 | % | 4.53 | % | 4.47 | % | ||||||
Ratios: |
||||||||||||
Ratio of net expenses to average net assets (5)
|
8.90 | % | 9.18 | % | 9.39 | % | ||||||
Ratio of net investment income to average net assets (5)
|
11.23 | % | 11.01 | % | 10.71 | % | ||||||
Portfolio turnover rate |
1.77 | % | 1.77 | % | 1.77 | % | ||||||
Supplemental Data: |
||||||||||||
Net assets, end of period |
$ | 894,448 | $ | 462,874 | $ | 2,338,568 | ||||||
Asset coverage ratio |
223.2 | % | 223.2 | % | 223.2 | % | ||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions. |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Fund’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any. |
| (5) | For the three months ended March 31, 2023, amounts are annualized except for non-recurring expenses. |
| (6) | The per share amount rounds to less than $0.01 per share. |
31
The following are the financial highlights for the years ended December 31, 2023 and December 31, 2022:
For the Years Ended December 31, |
||||||||||||||||||||||||||||
2023 |
2022 |
|||||||||||||||||||||||||||
Class I |
Class D |
Class F |
Class S (8)
|
Class I |
Class D |
Class F |
||||||||||||||||||||||
Per Share Data: |
||||||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 23.88 | $ | 23.88 | $ | 23.88 | $ | 25.11 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||||||||||
Net investment income (1)
|
2.86 | 2.80 | 2.74 | 0.63 | 2.21 | 2.19 | 2.20 | |||||||||||||||||||||
Net unrealized and realized gain (loss) (2)
|
1.09 | 1.09 | 1.08 | 0.06 | (1.50 | ) | (1.49 | ) | (1.51 | ) | ||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
3.95 | 3.89 | 3.82 | 0.69 | 0.71 | 0.70 | 0.69 | |||||||||||||||||||||
Distributions from net investment income (3)
|
(2.77 | ) | (2.71 | ) | (2.64 | ) | (0.74 | ) | (1.83 | ) | (1.82 | ) | (1.81 | ) | ||||||||||||||
Distributions from net realized gains (3)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(2.77 | ) | (2.71 | ) | (2.64 | ) | (0.74 | ) | (1.83 | ) | (1.82 | ) | (1.81 | ) | ||||||||||||||
Early repurchase deduction fees (7)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Total increase (decrease) in net assets |
1.18 | 1.18 | 1.18 | (0.05 | ) | (1.12 | ) | (1.12 | ) | (1.12 | ) | |||||||||||||||||
Net asset value, end of period |
$ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 23.88 | $ | 23.88 | $ | 23.88 | ||||||||||||||
Shares outstanding, end of period |
52,457,511 | 28,192,719 | 125,381,461 | 857,879 | 35,101,879 | 17,538,259 | 92,059,512 | |||||||||||||||||||||
Total return based on NAV (4)
|
17.28 | % | 16.99 | % | 16.70 | % | 2.78 | % | 2.93 | % | 2.89 | % | 2.85 | % | ||||||||||||||
Ratios: |
||||||||||||||||||||||||||||
Ratio of net expenses to average net assets (5)(6)
|
9.68 | % | 10.02 | % | 10.18 | % | 10.68 | % | 3.11 | % | 3.09 | % | 3.28 | % | ||||||||||||||
Ratio of net investment income to average net assets (5)(6)
|
11.73 | % | 11.57 | % | 11.24 | % | 10.20 | % | 9.95 | % | 9.88 | % | 9.91 | % | ||||||||||||||
Portfolio turnover rate |
9.31 | % | 9.31 | % | 9.31 | % | 9.31 | % | 6.82 | % | 6.82 | % | 6.82 | % | ||||||||||||||
Supplemental Data: |
||||||||||||||||||||||||||||
Net assets, end of period |
$ | 1,314,775 | $ | 706,613 | $ | 3,142,475 | $ | 21,501 | $ | 838,207 | $ | 418,798 | $ | 2,198,267 | ||||||||||||||
Asset coverage ratio |
223.2 | % | 223.2 | % | 223.2 | % | 223.2 | % | 247.4 | % | 247.4 | % | 247.4 | % | ||||||||||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (please refer to “Note 9. Net Assets” to the consolidated financial statements included elsewhere in this prospectus). |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Fund’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fees, if any. |
32
| (5) | For the year ended December 31, 2022, amounts are annualized except for non-recurring expenses. For the year ended December 31, 2022, the ratio of total operating expenses to average net assets was 5.42%, 5.55% and 5.93% on Class I, Class D and Class F, respectively, on an annualized basis, excluding the effect of expense support/(recoupment), distribution and/or shareholder servicing fees waiver, and management fee and income based incentive fee waivers by the Adviser which represented 2.30%, 2.46% and 2.66% on Class I, Class D and Class F, respectively, of average net assets. |
| (6) | For the year ended December 31, 2023, amounts are annualized except for excise tax, and capital gains incentive fee. |
| (7) | The per share amount rounds to less than $0.01 per share. |
| (8) | Class S Shares commenced operations on October 1, 2023. |
33
RISK FACTORS
Investing in our Common Shares involves a number of significant risks. The following information is a discussion of the material risk factors associated with an investment in our Common Shares specifically, as well as those factors generally associated with an investment in a company with investment objectives, investment policies, capital structure or trading markets similar to ours. In addition to the other information contained in this prospectus, you should consider carefully the following information before making an investment in our Common Shares. The risks below are not the only risks we face, but do represent all known material risks and uncertainties that we believe are most significant to our business, operating results, financial condition, prospects and forward-looking statements. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events occur our business, financial condition and results of operations could be materially and adversely affected. In such cases, the NAV of our Common Shares could decline, and you may lose all or part of your investment.
Risks Relating to Our Business and Structure
The Fund Has Limited Operating History.
non-diversified,
closed-end
management investment company that has elected to be regulated as a BDC with limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision. There can be no assurance that the results achieved by similar strategies managed by HPS or its affiliates will be achieved for the Fund. Past performance should not be relied upon as an indication of future results. Moreover, the Fund is subject to all of the business risks and uncertainties associated with any new business, including the risk that it will not achieve its investment objective and that the value of an investor’s investment could decline substantially or that the investor will suffer a complete loss of its investment in the Fund. Prior to the commencement of the Fund’s operations, the Adviser and the members of the Investment Team had no prior experience managing a BDC, and the investment philosophy and techniques used by the Adviser to manage a BDC may differ from the investment philosophy and techniques previously employed by the Adviser, its affiliates, and the members of the Investment Team in identifying and managing past investments. In addition, the 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to the other types of investment vehicles. For example, under the 1940 Act, BDCs are required to invest at least 70% of their total assets primarily in securities of qualifying U.S. private companies or thinly traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt investments that mature in one year or less from the time of investment. The Adviser’s and the members of the Investment Team’s limited experience in managing a portfolio of assets under such constraints may hinder their respective ability to take advantage of attractive investment opportunities and, as a result, achieve the Fund’s investment objective.
The Fund May Not be Able to Meet
its
Investment Objective
.
The Fund is Dependent on the Investment Team.
An Investment in the Fund is Illiquid and There are Restrictions on Withdrawal.
Our Common Shares are illiquid investments for which there is not and will likely not be a secondary market. Liquidity for our Common Shares will be limited to participation in our share repurchase program, which we have no obligation to maintain. When we make quarterly repurchase offers pursuant to the share repurchase program, we will offer to repurchase Common Shares at a price that is estimated to be equal to our net asset value per share on the last day of such quarter, which may be lower than the price that you paid for our Common Shares. As a result, to the extent you paid a price that includes the related sales load and to the extent you have the ability to sell your Common Shares pursuant to our share repurchase program, the price at which you may sell Common Shares may be lower than the amount you paid in connection with the purchase of Common Shares in the offering.
Shareholders Have No Right to Control the Fund
’
s Operations.
day-to-day
The Fund
’
s Assets are Subject to Recourse.
The Fund Borrows Money, Which Magnifies the Potential for Gain or Loss on Amounts and May Increase the Risk of Investing With Us.
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 distribution payments on our Common Shares. There can be no assurance that a leveraging strategy will be successful.
As of March 31, 2024, we had approximately
$1,936.6
million of outstanding borrowings under our credit facilities (collectively, the “Credit Facilities”), $1,600.0 million in aggregate principal amount outstanding of unsecured notes comprised of $170 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “November 2025 Notes”), $155 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “November 2027 Notes”), $276 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “March 2026 Notes”), $124 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “March 2028 Notes”), $75 million in aggregate principal amount of its Series , we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us).
2023-B
Senior Notes, Tranche A (the “September 2027 Notes”), $250 million in aggregate principal amount of its Series 2023-B
Senior Notes, Tranche B (the “September 2028 Notes”), $550 million in aggregate principal amount of its 6.75% notes due in 2029 (the “January 2029 Notes,” together with the November 2025 Notes, the November 2027 Notes, the March 2026 Notes, the March 2028 Notes, the September 2027 Notes and the September 2028 Notes, the “Unsecured Notes”), and $323.0 million in aggregate principal amount outstanding of the 2023 CLO Secured Notes. The weighted average stated interest rate on our principal amount of outstanding indebtedness as of March 31, 2024 was 8.30
% (excluding deferred financing costs, deferred issuance costs and unused fees). We intend to continue borrowing under the Credit Facilities in the future and we may increase the size of the Credit 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 Adviser’s and our Board’s 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 1940 Act, equals at least 150% after such borrowing (i.e.
The Credit Facilities, the Unsecured Notes and debt securitization issuances 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 Credit 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.
8.30
% (excluding deferred financing costs, deferred issuance costs and unused fees) as of March 31, 2024, together with (a) our total value of net assets as of March 31, 2024; (b) approximately $3,859.6
million in aggregate principal amount of indebtedness outstanding as of March 31, 2024 and (c) hypothetical annual returns on our portfolio of minus 10% to plus 10%.Assumed Return on Portfolio (Net of Expenses) (1)
|
||||||||||||||||||||
-10% |
-5% |
0% |
5% |
10% |
||||||||||||||||
Corresponding Return to Common Shareholders (2)
|
( |
)% |
( |
)% |
( |
)% |
% |
% |
||||||||||||
| (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 March 31, 2024. As a result, it has not been updated to take into account any changes in assets or leverage since March 31, 2024. |
| (2) | In order to compute the “Corresponding Return to Common Shareholders,” the “Assumed Return on Portfolio” is multiplied by the total value of our assets at March 31, 2024 to obtain an assumed return to us. From this amount, the interest expense (calculated by multiplying the weighted average stated interest rate of 8.30 % by the approximately $3,859.6 |
Based on our outstanding indebtedness of
$3,859.6
million as of March 31, 2024 and the effective weighted average annual interest rate of 8.30%
as of that date (excluding deferred financing costs, deferred issuance costs and unused fees), our investment portfolio would have been required to experience an annual return of at least
3.07%
to cover annual interest payments on the outstanding debt. There Can be No Assurance the Fund Will be Able to Obtain Leverage.
investment-by-investment
The Fund has incurred and expects in the future that it will continue to incur indebtedness collateralized by the Fund’s assets. As a BDC, with certain limited exceptions, the Fund will only be permitted to borrow amounts such that the Fund’s asset coverage ratio, as defined in the 1940 Act, equals at least 150% (equivalent to $2 of debt outstanding for each $1 of equity) after such borrowing. If the Fund is unable to obtain and maintain the desired amount of borrowings on favorable terms, the Adviser may seek to realize the Fund’s investments earlier than originally expected.
The Fund is Subject to Risks Relating to the Availability of Asset-Based Leverage.
deal-by-deal
The Fund is Subject to Risks Relating to Use of Leverage.
may be required to harvest investments prematurely or in unfavorable market conditions to service its debt obligations, and in such circumstances the recovery the Fund receives from such harvests may be significantly diminished as compared to the Fund’s expected return on such investments; (v) limitation on the Fund’s flexibility to make distributions to shareholders or result in the sale of assets that are pledged to secure the indebtedness; (vi) increased interest expense if interest rate levels were to increase significantly; (vii) during the term of any borrowing, the Fund’s returns may be materially reduced by increased costs attributable to regulatory changes; and (viii) banks and dealers that provide financing to the Fund may apply discretionary margin, haircut, financing and collateral valuation policies. Changes by banks and dealers in any of the foregoing may result in large margin calls, loss of financing and forced liquidations of positions at disadvantageous prices. There can also be no assurance that the Fund will have sufficient cash flow or be able to liquidate sufficient assets to meet its debt service obligations. As a result, the Fund’s exposure to losses, including a potential loss of principal, as a result of which shareholders could potentially lose all or a portion of their investments in the Fund, may be increased due to the use of leverage and the illiquidity of the investments generally. Similar risks and consequences apply with respect to indebtedness related to a particular asset or portfolio of assets.
To the extent that the Fund enters into multiple financing arrangements, such arrangements may contain cross-default provisions that could magnify the effect of a default. If a cross-default provision were exercised, this could result in a substantial loss for the Fund.
As a BDC, we generally are required to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any preferred shares that we may issue in the future, of at least 150%. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets we hold, we may raise $200 from borrowing and issuing senior securities. In addition, while any senior securities remain outstanding, we are required to make provisions to prohibit any distribution to our shareholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. If this ratio were to fall below 150%, we could not incur additional debt and could be required to sell a portion of our investments to repay some debt when it is disadvantageous to do so. This could have a material adverse effect on our operations and investment activities. Moreover, our ability to make distributions to you may be significantly restricted or we may not be able to make any such distributions whatsoever. The amount of leverage that we employ is subject to oversight by our Board, a majority of whom are Independent Trustees with no material interests in such transactions.
Although borrowings by the Fund have the potential to enhance overall returns that exceed the Fund’s cost of funds, they will further diminish returns (or increase losses on capital) to the extent overall returns are less than the Fund’s cost of funds. In addition, borrowings by the Fund may be secured by the shareholders’ investments as well as by the Fund’s assets and the documentation relating to such borrowing may provide that during the continuance of a default under such borrowing, the interests of the investors may be subordinated to such borrowing.
The Fund is Subject to Risks Relating to Seller Financing.
i.e.
one-off
financing solutions on a case-by-case
The Fund is Subject to Risks Relating to Obtaining a Rating from One or More Credit Rating Agencies.
The Adviser May be Required to Expedite Investment Decisions.
The Fund is Subject to Risks Relating to Insurance.
While HPS and the Adviser expect to allocate insurance expenses in a manner they determine to be fair and equitable, taking into account any factors they deem relevant to the allocation of such expenses, because of the uncertainty of whether claims will arise in the future and the timing and the amount that may be involved in any such claim, the determination of how to allocate such expenses may require HPS and the Adviser to take into consideration facts and circumstances that are subjective in nature. It is unlikely that HPS or the Adviser will be able to accurately allocate the expenses of any such insurance policies based on the actual claims related to a particular client, including the Fund.
The Fund is Subject to Risks Relating to Indemnification.
circumstances. Subject to the limits on indemnification under Section 17(h) of the 1940 Act, the Declaration of Trust provides that the Fund shall not indemnify such persons to the extent liability and losses are the result of, negligence or misconduct in the case of an Interested Trustee, officer, employee, controlling person or agent of the Fund, or gross negligence or willful misconduct in the case of an Independent Trustee. Subject to the limits on indemnification under Section 17(i) of the 1940 Act, the Advisory Agreement provides that the Adviser shall not be protected against any liability to the Fund or its shareholders by reason of willful misfeasance, bad faith or gross negligence on the Adviser’s part in the performance of its duties or by reason of the reckless disregard of its duties and obligations. The Fund also indemnifies certain service providers, including the Administrator and the Fund’s auditors, as well as consultants and sourcing, operating and joint venture partners. Such liabilities may be material and may have an adverse effect on the returns to the shareholders. The indemnification obligation of the Fund would be payable from the assets of the Fund. The application of the indemnification and exculpation standards may result in shareholders bearing a broader indemnification obligation in certain cases than they would in the absence of such standards.As a result of these considerations, even though such provisions will not act as a waiver on the part of any investor of any of its rights which are not permitted to be waived under applicable law, the Fund may bear significant financial losses even where such losses were caused by the negligence or other conduct of such indemnified persons.
The Fund is Subject to Risks Relating to Certain Proceedings and Investigations.
non-monetary
remedies or sanctions that could negatively impact the Adviser, its affiliates and/or the Fund. In addition, such actions and proceedings may involve claims of strict liability or similar risks against the Fund in certain jurisdictions or in connection with certain types of activities. In some cases, the expense of such investigations, actions or proceedings and paying any amounts pursuant to settlements or judgments would be borne by the Fund. The Fund is Not Registered as an Investment Company Under the 1940 Act
.
non-U.S.,
securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this registration statement. Any representation to the contrary is a criminal offense. The Fund is Subject to Risks Relating to Portfolio Valuation.
Valuation of the types of assets in which the Fund invests are inherently subjective. In addition, the Adviser may have an interest in determining higher valuations in order to be able to present better performance to
40
prospective investors. In certain cases, the Fund may hold an investment in an issuer experiencing distress or going through bankruptcy. In such a situation, the Adviser may continue to place a favorable valuation on such investment due to the Adviser’s determination that the investment is sufficiently secured despite the distressed state or bankruptcy of the issuer. However, no assurances can be given that this assumption is justified or that such valuations will be accurate in the long term. In addition, an investment in a portfolio company may not be permanently , bankruptcy or partial sale) which establishes an objective basis for such revised valuation. In these circumstances, the Adviser has an interest in delaying any such write-offs or write-downs to maintain a higher management fee base and thus, management fees paid to the Adviser.
written-off
or permanently written down despite its distressed state or covenant breach until such portfolio company experiences a material corporate event (e.g.
In addition, the Adviser relies on third-party valuation agents to verify the value of certain investments. An investment may not have a readily ascertainable market value and accordingly, could potentially make it difficult to determine a fair value of an investment and may yield an inaccurate valuation. Further, because of the Adviser’s knowledge of the investment, the valuation agent may defer to the Adviser’s valuation even where such valuation may not be accurate or the determination thereof involved a conflict of interest. An inaccurate valuation of one or more investments could have a substantial impact on the Fund.
The Fund is Subject to Risks Relating to Rights Against Third Parties, Including Third-Party Service Providers.
day-to-day
The Fund is Subject to Risks Relating to Lack of Diversification.
non-diversified
investment company within the meaning of the 1940 Act, which means that the Fund is not limited by the 1940 Act with respect to the proportion of its assets that it may invest in securities of a single issuer. To the extent that the Fund assumes large positions in the securities of a small number of issuers, its net asset value may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. The Fund may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond the Fund’s asset diversification requirements as a RIC under the Code, the Fund does not have fixed guidelines for diversification, and its investments could be concentrated in relatively few portfolio companies. Although the Fund is classified as a non-diversified
investment company within the meaning of the 1940 Act, it maintains the flexibility to operate as a diversified investment company. To the extent that the Fund operates as a non-diversified
investment company, it may be subject to greater risk. The Fund does not have fixed guidelines for diversification by industry or type of security, and investments may be concentrated in only a few industries or types of securities. Further, if the expected amount of leverage is not obtained or deployed, the Fund may be more concentrated in an investment than originally anticipated. As a result, the Fund’s investments may be concentrated and the poor performance of a single investment may have pronounced negative consequences to the Fund and the aggregate returns realized by the shareholders.
The Fund is Subject to Risks Relating to Consultation with Sourcing and Operating Partners.
The Fund is Subject to Risks Relating to the Timing of Realization of Investments.
The Fund May be Required to Disclose Information Regarding Shareholders.
The Fund is Subject to Operational Risks.
The Fund is Subject to Risks Relating to Exposure to Material
Non-Public
Information. non-public
information with respect to issuers of publicly-traded securities or other securities in connection with, among other examples, acquisitions, refinancings, restructurings of such issuers which HPS reviews or participates in, oftentimes unrelated to its affiliate’s management of the Fund. In such circumstances, the Fund may be prohibited, by law, contract or by virtue of HPS’s policies and procedures, from (i) selling all or a portion of a position in such issuer, thereby potentially incurring trading losses as a result, (ii) establishing an initial position or taking any greater position in such issuer, and (iii) pursuing other investment opportunities related to such issuer. 42
The Fund is Subject to Risks Relating to Technology Systems.
e-mail
or posting on a web-based
reporting site or other internet service, in lieu of or in addition to sending such communications as hard copies via fax or mail. These programs or systems may be subject to certain defects, failures or interruptions, including, but not limited to, those caused by ‘hacking’ or other security breaches, computer ‘worms,’ viruses and power failures. Such failures could cause settlement of trades to fail, lead to inaccurate accounting, recording or processing of trades and cause inaccurate reports, which may affect the Fund’s ability to monitor its investment portfolio and its risks. Any such defect or failure could cause the Fund to suffer financial loss, disruption of its business, liability to clients or third parties, regulatory intervention or reputational damage. The Fund is Subject to Risks Relating to Cybersecurity.
Moreover, the increased use of mobile and cloud technologies due to the proliferation of remote work resulting from the
COVID-19
pandemic could heighten these and other operational risks as certain aspects of the security of such technologies may be complex and unpredictable. Reliance on mobile or cloud technology or any failure by mobile technology and cloud service providers to adequately safeguard their systems and prevent cyber-attacks could disrupt our operations, the operations of a portfolio company or the operations of our or their service providers and result in misappropriation, corruption or loss of personal, confidential or proprietary information or the inability to conduct ordinary business operations. In addition, there is a risk that encryption and other protective measures may be circumvented, particularly to the extent that new computing technologies increase the speed and computing power available. Extended periods of remote working, whether by us, our portfolio companies, or our service providers, could strain technology resources, introduce operational risks and otherwise heighten the risks described above. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts. Accordingly, the risks described above are heightened under the current conditions. While the Adviser and HPS have implemented various measures to manage risks associated with cybersecurity breaches, including establishing a business continuity plan and systems designed to prevent
cyber-attacks, there are inherent limitations in such plans and systems, including the possibility that certain risks (including any ongoing breaches) have not been identified. Similar types of cybersecurity risks also are present for portfolio companies in which the Fund invests, which could affect their business and financial performance, resulting in material adverse consequences for such issuers, and causing the Fund’s investments in such portfolio companies to lose value.
In addition, cybersecurity has become a top priority for global lawmakers and regulators around the world, and some jurisdictions have proposed or enacted laws requiring companies to notify regulators and individuals of data security breaches involving certain types of personal data. Compliance with such laws and regulations may result in cost increases due to system changes and the development of new administrative processes. If the Fund or the Adviser or certain of their affiliates, fail to comply with the relevant and increasing laws and regulations, the Fund could suffer financial losses, a disruption of our businesses, liability to investors, regulatory intervention or reputational damage.
The Fund is Subject to Risks Associated with Sourcing, Operating or Joint Venture Partners.
pre-agreed
amount of investments negotiated by the sourcing partner and/or joint venture partner and/or the Adviser may commit to invest in one or more transactions for which the sourcing partner and/or joint venture partner led the due diligence and negotiation processes and the Adviser is given only a limited opportunity to perform due diligence and participate in negotiation of transactional terms. Shareholders should be aware that sourcing, operating and joint venture partners are not expected to owe any fiduciary duties to the Fund or the shareholders. The Fund may pay retainers, closing, monitoring, performance or other fees to sourcing, operating and joint venture partners. Such retainer fees may be netted against a closing fee, if applicable, in connection with the related investment. However, if no such investment is consummated, the Fund will bear any retainer amounts as an expense. In addition, to the extent the compensation of a sourcing, operating or joint venture partner is based on the performance of the relevant investments, the sourcing, operating or joint venture partner may have an incentive to seek riskier investments than it would have under a different compensation structure. In this regard, a sourcing, operating or joint venture partner may receive incentive compensation at the expense of the Fund. The expenses of sourcing, operating and joint venture partners may be substantial. In certain circumstances, the Fund or a portfolio company in which the Fund invests may pay fees to sourcing, operating and/or joint venture partners in consideration for services, including where the Adviser may have otherwise provided those services without charge. In other circumstances, sourcing, operating and/or joint venture partners may receive certain third-party fees (such as upfront fees, commitment fees, origination fees, amendment fees, ticking fees and
break-up
fees as well as prepayment premiums) in respect of an investment, and no such fees will offset or otherwise reduce the management fee payable by the shareholders. The existence of such fees may result in the Fund paying fees twice, once to the Adviser in the form of management fees and once to the sourcing, operating or joint venture partners to service or manage the same assets. Sourcing, operating and/or joint venture partners may invest in the Fund. Joint venture investments involve various risks, including the risk that the Fund will not be able to implement investment decisions or exit strategies because of limitations on the Fund’s control under applicable agreements with joint venture partners, the risk that a joint venture partner may become bankrupt or may at any time have economic or business interests or goals that are inconsistent with those of the Fund, the risk that a joint venture partner may be in a position to take action contrary to the Fund’s objectives, the risk of liability based upon the actions of a joint venture partner and the risk of disputes or litigation with such partner and the inability to enforce fully all rights (or the
incurrence of additional risk in connection with enforcement of rights) one partner may have against the other, including in connection with foreclosure on partner loans, because of risks arising under applicable law, and tax and regulatory risks related to the joint venture’s structure, which may adversely affect the Fund’s
pre-tax
returns. In addition, the Fund may, in certain cases, be liable for actions of its joint venture partners. The joint ventures in which we participate may sometimes be allocated investment opportunities that might have otherwise gone entirely to the Fund, which may reduce our return on equity. Additionally, our joint venture investments may be held on an unconsolidated basis and at times may be highly leveraged. Such leverage would not count toward the investment limits imposed on us by the 1940 Act. The Fund is Subject to Risks Relating to Electronic Delivery of Certain Documents.
tax-related
information and documents; and (iv) drawdown notices and other notices, requests, demands, consents or other communications and any financial statements, reports, schedules, certificates or opinions required to be provided to the shareholders under any agreements. There are certain costs and possible risks associated with electronic delivery. Moreover, the Adviser cannot provide any assurance that these communication methods are secure and will not be responsible for any computer viruses, problems or malfunctions resulting from the use of such communication methods. See “
—Technology Systems
”
“
Cybersecurity
The Fund is Subject to Risks Relating to Handling of Mail.
The Fund is Subject to General Credit Risks
.
The
Prices of the Fund
’
s Investments Can be Volatile
.
The Fund is Subject to Risks Relating to Syndication and/or Transfer of Investments
.
In addition, the Fund will also bear the risk of any inability to syndicate or otherwise transfer such Assets or such amount thereof as originally intended, which could result in the Fund owning a greater interest therein than anticipated.
The Fund May Need to Raise Additional Capital
.
The Fund is Subject to Counterparty Risks
.
The Fund is Dependent on Key Personnel
.
Investors May be Required to Return Distributions to Satisfy Unpaid Debts of the Fund
.
The Board May Make Certain Changes in the Fund
’
s Investment Objective, Operating Policies or Strategies Without Prior Notice or Investor Approval.
The Board May Make Certain Changes to the Fund
’
s Declaration of Trust Without Prior Investor Approval.
The Fund is Subject to Risks Relating to Allocation of Investment Opportunities and Related Conflicts.
co-investing
with Other HPS Investors or affiliates of the Adviser in HPS-originated
loans and financings except for pursuant to the co-investment
exemptive relief granted by the SEC which delineates the requirements the Adviser must comply with for the Fund to invest with Other HPS Investors. Any such
co-investments
are subject to certain conditions, including that co-investments
are made in a manner consistent with the Fund’s investment objectives and strategies, certain Board-established criteria, and the other applicable conditions of the co-investment
exemptive relief. Under the terms of the relief, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our Independent Trustees must reach certain conclusions in connection with a co-investment
transaction, including that: (i) the terms of the proposed transaction are reasonable and fair to the Fund and its shareholders and do not involve overreaching in respect of the Fund or its shareholders on the part of any person concerned; and (ii) the transaction is consistent with the interests of the Fund’s shareholders and is consistent with the Fund’s then-current investment objectives and strategies. As a result of the relief, there could be significant overlap in the Fund’s investment portfolio and the investment portfolios of Other HPS Investors, including, in some cases, proprietary accounts of HPS. Because investments are allocated across multiple Other HPS Investors, the Fund will at times receive a lower allocation to an investment than desired; likewise, the Fund may also be limited in the degree to which it is able to participate in selling opportunities that it may otherwise wish to pursue due to allocations, including
non-pro
rata allocations, to Other HPS Investors. If the Adviser identifies an investment and the Fund is unable to rely on the
co-investment
relief for that particular opportunity, the Adviser will be required to determine which of its and its affiliates’ accounts should make the investment at the potential exclusion of other accounts. In such circumstances, the Adviser will adhere to firm-wide investment allocation policies in order to determine the account to which to allocate investment opportunities. Accordingly, it is possible that the Fund may not be given the opportunity to participate in investments made by other accounts. The Fund is Subject to Risks Relating to Distributions.
year-to-year
status, compliance with applicable BDC regulations, compliance with debt financing agreements and such other factors as the Board may deem relevant from time to time. The distributions the Fund pays to investors in a year may exceed the Fund’s taxable income for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes.
Investors who periodically receive the payment of a distribution from a RIC consisting of a return of capital for U.S. federal income tax purposes may be under the impression that they are receiving a distribution of RIC’s net ordinary income or capital gains when they are not. Accordingly, investors should read carefully any written disclosure accompanying a distribution from the Fund and the information about the specific tax characteristics of the Fund’s distributions provided to investors after the end of each calendar year, and should not assume that the source of any distribution is the Fund’s net ordinary income or capital gains. To the extent that the Fund’s distributions contain a return of capital, such distributions should not be considered the dividend yield or total return of an investment in the Common Shares. The amount treated as a
tax-free
return of capital will reduce a shareholder’s adjusted tax basis in the Common Shares, thereby increasing the shareholder’s potential taxable gain or reducing the potential loss on the sale of Common Shares. The Board Has the Discretion to Not Repurchase Common Shares, to Suspend the Share Repurchase Program, and to Cease Repurchases.
The Timing of Repurchase May be Disadvantageous.
Investing in Large Private U.S. Borrowers May Limit Our Ability to Achieve High Growth Rates During Times of Economic Expansion.
We Face Risks Associated With the Deployment of Our Capital.
In the event we are unable to find suitable investments such cash may be maintained for longer periods which would be dilutive to overall investment returns. This could cause a substantial delay in the time it takes for your investment to realize its full potential return and could adversely affect our ability to pay regular distributions of cash flow from operations to shareholders. It is not anticipated that the temporary investment of such cash into money market accounts or other similar temporary investments pending deployment into investments will generate significant interest, and investors should understand that such low interest payments on the temporarily invested cash may adversely affect overall returns. In the event we fail to timely invest the net proceeds of sales of our Common Shares or do not deploy sufficient capital to meet our targeted leverage, our results of operations and financial condition may be adversely affected.
Transactions Denominated in Foreign Currencies Subject Us to Foreign Currency Risks.
Our Investments in Foreign Companies or Investments Denominated in Foreign Currencies May Involve Significant Risks in Addition to the Risks Inherent in U.S. and U.S.
Dollar Denominated Investments.
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. Such disruptions may result in, amongst other things, write-offs, the
re-pricing
of credit risk, the failure of financial institutions or worsening general economic conditions, any of which could materially and adversely impact the broader financial and credit markets and reduce the availability of debt and equity capital for the market as a whole and financial services firms in particular. There can be no assurance these market conditions will not occur or worsen in the future, including as a result of the Russia-Ukraine war and more recently the Israel-Hamas war, health epidemics and pandemics, rising interest rates or renewed inflationary pressure. Equity capital may be difficult to raise during such periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional Common Shares at a price less than net asset value without first obtaining approval for such issuance from our shareholders and our Independent Trustees.
Volatility and dislocation in the capital markets can also create a challenging environment in which to raise or access debt capital. Such conditions 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 we have raised over the last year has been at higher rates than we have raised debt at in the past due to the higher interest rate environment we have been experiencing. The debt capital that will be available to us in the future, if at all, may continue to be at a higher cost, including as a result of the current interest rate environment, and on less favorable terms and conditions than what we have historically experienced. 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 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 adversely affect the pace of our investment activity and economic activity generally. 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, and any required sale of all or a portion of our investments as a result, could have a material adverse effect on our business, financial condition or results of operations.
We are Exposed to Risks Associated With Changes in Interest Rates, Including the Current Elevated Interest Rate Environment.
Because we borrow money and may issue debt securities or preferred shares 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 shares and the rate at which we invest these funds. In this period of rising interest rates, our interest income will increase as the majority of our portfolio bears interest at variable rates while our cost of funds will also increase, to a lesser extent, with the net impact being an increase to our net investment income. Conversely, if interest rates decrease, we may earn less interest income from investments and our cost of funds will also decrease, potentially resulting in lower net investment income. In the current economic environment, we may take on fixed rate liabilities, such as the Unsecured Notes, which will remain at the elevated interest rate even if interest rates decrease. Thus, the decrease in our investment income would not be offset by decreased borrowing costs, potentially affecting the Fund’s future distributions to shareholders. From time to time, we may also enter into certain hedging transactions to mitigate our exposure to changes in interest rates and to more closely align the interest rates of the Fund’s liabilities with the Fund’s investment portfolio. 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. However, we cannot assure you that such transactions will be successful in mitigating our exposure to interest rate risk. 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.
Rising interest rates may also increase the cost of debt for our underlying portfolio companies, which could adversely impact their financial performance and ability to meet ongoing obligations to us. Also, an increase in interest rates available to investors could make an investment in our Common Shares less attractive if we are not able to pay distributions at a level that provides a similar return, which could reduce the value of our Common Shares.
The Fund is Subject to Risks Relating to Volatility in the Banking Sector.
Deposit Insurance Corporation (“FDIC”), and in May 2023, JPMorgan Chase acquired a substantial majority of assets and assumed certain liabilities of First Republic Bank. Following these high-profile events, several other U.S. and
non-U.S.
banking institutions experienced sell-offs and/or significant declines to their share prices, with several being placed on “watch lists,” suffering ratings downgrades and/or receiving emergency funding from governments. The impact of the banking sector’s volatility on the financial system and broader economy could be significant. If the banking institutions used by the Fund fail or are impacted by such volatility, such events could have a material adverse effect on the Fund and its Shareholders (including loss of capital held at such banking institutions and/or an inability to meet its obligations to other counterparties). A large percentage of the Fund’s assets may be held by a limited number of banking institutions (or even a single banking institution). If a banking institution at which the Fund maintains deposit accounts or securities accounts fails, any cash or other assets in such accounts may be temporarily inaccessible or permanently lost by the Fund. Generally, the Fund would be an unsecured creditor with respect to cash balances in excess of $250,000 held at a single banking institution insured by the FDIC, and therefore the Fund may not ultimately recover any such excess amounts. In addition, FDIC deposit insurance does not extend to certain other assets held by a banking institution (e.g., bond investments, U.S. Treasury bills or notes).
If a banking institution that provides all or a part of a credit facility, other borrowings and/or other services to the Fund fails, the Fund could be unable to draw funds under such credit facilities and may not be able to obtain replacement credit facilities or other services from other lending institutions with similar terms. If the Fund’s credit facilities and accounts are provided by the same banking institution, and such banking institution fails, the Fund could face significant difficulties in funding any near-term obligations it has in respect of its investments or otherwise. Even if the banking institutions used by the Fund remain solvent, continued volatility in the banking sector could cause or intensify an economic recession and make it more difficult for the Fund to obtain or refinance its credit facilities and other indebtedness at all or on as favorable terms as could otherwise have been obtained.
Similarly, the banking institutions that the portfolio companies in which the Fund may invest have depositor or lending arrangements may fail. This would have a material adverse effect on such portfolio companies, the Fund and its Shareholders, including by preventing such portfolio companies from making principal and interest payments or other applicable payments owed with respect to the Fund’s investments. Generally, neither the Adviser nor the Administrator have a meaningful role in selecting the banking institutions used by the portfolio companies in which the Fund invests. Instead, the Adviser and the Administrator generally rely on the management team of the portfolio companies to select appropriate banking services.
Risks Relating to the Fund’s Investments
Our investments may be risky and, subject to compliance with our 80% test, there is no limit on the amount of any such investments in which we may invest.
The Fund is Subject to General Risks.
e.g.
The Fund
’
s Portfolio Companies May be Highly Leveraged.
may add additional risk with respect to a portfolio company, and could (i) limit its ability to borrow money for its working capital, capital expenditures, debt service requirements, strategic initiatives or other purposes; (ii) require it to dedicate a substantial portion of its cash flow from operations to the repayment of its indebtedness, thereby reducing funds available to it for other purposes; (iii) make it more highly leveraged than some of its competitors, which may place it at a competitive disadvantage; and/or (iv) subject it to restrictive financial and operating covenants, which may preclude it from favorable business activities or the financing of future operations or other capital needs. In some cases, proceeds of debt incurred by a portfolio company could be paid as a dividend to shareholders rather than retained by the portfolio company for its working capital. Leveraged companies are often more sensitive to declines in revenues, increases in expenses, and adverse business, political, or financial developments or economic factors such as a significant rise in interest rates, a severe downturn in the economy or deterioration in the condition of such companies or their industries. 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.
If a portfolio company is unable to generate sufficient cash flow to meet principal and interest payments to its lenders, it may be forced to take other actions to satisfy such obligations under its indebtedness. These alternative measures may include reducing or delaying capital expenditures, selling assets, seeking additional capital, or restructuring or refinancing indebtedness. Any of these actions could significantly reduce the value of the Fund’s investment(s) in such portfolio company. If such strategies are not successful and do not permit the portfolio company to meet its scheduled debt service obligations, the portfolio company may also be forced into liquidation, dissolution or insolvency, and the value of the Fund’s investment in such portfolio company could be significantly reduced or even eliminated.
The Fund is Subject to Risks Relating to Issuer/Borrower Fraud.
The Fund is Subject to Risks Due to its Reliance on Portfolio Company Management.
day-to-day
The Fund is Subject to Risks Relating to Environmental Matters.
environmental claims arising in respect of its investments. Furthermore, changes in environmental laws or regulations or the environmental condition of an investment may create liabilities that did not exist at the time of its acquisition and that could not have been foreseen. Even in cases where the Fund are indemnified by the seller with respect to an investment against liabilities arising out of violations of environmental laws and regulations, there can be no assurance as to the financial viability of the seller to satisfy such indemnities or the ability of the Fund to achieve enforcement of such indemnities. See also “
” below.
—The Fund is Subject to Risks from Provision of Managerial Assistance and Control Person Liability
The Value of Certain Portfolio Investments May Not be Readily Determinable
non-binding
nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information. The Fund expects to retain the services of one or more independent service providers to review the valuation of these loans and securities. The types of factors that may be taken into account in determining the fair value of investments generally include, as appropriate, comparison to publicly-traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value of a portfolio company, 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 and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, determinations of fair value may differ materially from the values that would have been used if a ready market for these loans and securities existed. The Fund’s net asset value could be adversely affected if determinations regarding the fair value of the Fund’s investments were materially higher than the values that the Fund ultimately realizes upon the disposal of such loans and securities. In addition, the method of calculating the management fee and incentive fee may result in conflicts of interest between the Adviser, on the one hand, and investors on the other hand, with respect to the valuation of investments. The Fund May Elect Not to or May be Unable to Make
Follow-On
Investments in Portfolio Companies.
“follow-on”
investments, in order to: | • | increase or maintain in whole or in part the Fund’s voting percentage; |
| • | exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or |
| • | attempt to preserve or enhance the value of the Fund’s investment. |
The Fund may elect not to make
follow-on
investments or otherwise lack sufficient funds to make those investments. The Fund has the discretion to make any
follow-on
investments, subject to the availability of capital resources. The failure to make follow-on
investments may, in some circumstances, jeopardize the continued viability of a portfolio company and the Fund’s initial investment, or may result in a missed opportunity for the Fund to increase its participation in a successful operation. Even if the Fund has sufficient capital to make a desired
follow-on
investment, it may elect not to make a follow-on
investment because it may not want to increase its concentration of risk, because it prefers other opportunities or because it is inhibited by compliance with BDC requirements, or compliance with the requirements for maintenance of its RIC status. The Fund May Be Subject to Risks Due to Not Holding Controlling Equity Interests in Portfolio Companies
The Fund is Subject to Risks Relating to Defaults by Portfolio Companies
The Fund is Subject to Risks Relating to Third Party Litigation
.
Inflation May Adversely Affect the Business, Results of Operations and Financial Condition of Our Portfolio Companies.
The Fund is Subject to Risks Related to Reliance on Projections.
Economic Conditions May Have Adverse Effects on the Fund and the Portfolio Companies.
for the Fund, could prevent the Fund from successfully meeting its investment objective or could require the Fund to dispose of investments at a loss while such unfavorable market conditions prevail. In addition, the investment opportunities of the Fund may be dependent in part upon the consummation of leveraged buyouts and other private equity sponsored transactions, recapitalizations, refinancings, acquisitions and structured transactions. If fewer of these transactions occur than the Adviser expects, there may be limited investment opportunities for the Fund. Periods of prolonged market stability may also adversely affect the investment opportunities available to the Fund.
The Fund is Subject to Risks Relating to Reduced Investment Opportunities.
The Fund is Subject to Risks Relating to Investments in Undervalued
Assets
.
The Fund may incur substantial losses related to assets purchased on the belief that they were undervalued by their sellers, if they were not in fact undervalued at the time of purchase. In addition, the Fund may be required to hold such assets for a substantial period of time before realizing their anticipated value, and there is no assurance that the value of the assets would not decline further during such time. Moreover, during this period, a portion of the Fund’s assets would be committed to those assets purchased, thus preventing the Fund from investing in other opportunities. In addition, the Fund may finance such purchases with borrowed funds and thus will have to pay interest on such borrowed amounts during the holding period.
The Fund Operates in a Competitive Debt Environment.
non-traditional
participants, such as private credit funds, hedge funds, private equity funds, mezzanine funds, and other private investors, as well as BDCs, and debt-focused competitors, such as issuers of CLOs and other structured loan funds. In addition, given the Fund’s target investment size and investment type, the Adviser expects a large number of competitors for investment opportunities. Some of these competitors may have access to greater amounts of capital and to capital that may be committed for longer periods of time or may have different return thresholds than the Fund, and thus these competitors may have advantages not shared by the Fund. In addition, competitors may have incurred, or may in the future incur, leverage to finance their debt investments at levels or on terms more favorable than those available to the Fund. Furthermore, competitors may offer loan terms that are more favorable to borrowers, such as less onerous borrower financial and other covenants, borrower rights to cure defaults, and other terms more favorable to borrowers than current or historical norms. Strong competition for investments could result in fewer investment opportunities for the Fund, as certain of these competitors have established or are establishing investment vehicles that target the same or similar investments that the Fund intends to purchase. Over the past several years, many investment funds have been formed with investment objectives similar to those of the Fund, and many such existing funds have grown in size and have added larger successor funds to their platform. These and other investors may make competing offers for investment opportunities identified by the Adviser which may affect the Fund’s ability to participate in attractive investment opportunities and/or cause the Fund to incur additional risks when competing for investment opportunities. Moreover, identifying attractive investment opportunities is difficult and involves a high degree of uncertainty. The Adviser may identify an
investment that presents an attractive investment opportunity but may not be able to complete such investment in a manner that meets the objectives of the Fund. The Fund may incur significant expenses in connection with the identification of investment opportunities and investigating other potential investments that are ultimately not consummated, including expenses related to due diligence, transportation and legal, accounting and other professional services as well as the fees of other third-party service providers.
The Fund is Subject to Risks Relating to Illiquidity of the Fund
’
s Assets and Distributions In Kind.
The Fund is Subject to Risks Relating to Priority of Repayment of Debt Investments
.
Even where the senior loans held by the Fund are secured by a perfected lien over a substantial portion of the assets of a portfolio company and its subsidiaries, the portfolio company and its subsidiaries will often be able to incur a substantial amount of additional indebtedness, which may have an exclusive lien over particular assets. For example, debt and other liabilities incurred by
non-guarantor
subsidiaries of portfolio companies will be structurally senior to the debt held by the Fund. Accordingly, any such debt and other liabilities of such subsidiaries would, in the event of liquidation, dissolution, insolvency, reorganization or bankruptcy of such subsidiary, be repaid in full before any distributions to an obligor of the loans held by the Fund. Furthermore, these other assets over which other lenders have a lien may be substantially more liquid or valuable than the assets over which the Fund has a lien. The Fund invests in second-lien secured debt, which compounds the risks described in this paragraph. The Fund is Subject to Risks Relating to Certain Guarantees
.
The Fund is Subject to Risks Relating to Secured Loans
.
The Fund is Subject to Risks Relating to Senior Secured Debt and Unitranche Debt.
The Fund is Subject to Business and Credit Risks
.
zero-coupon
obligations or interest that is paid-in-kind
i.e.
i.e.
Business risks may be more significant in smaller portfolio companies or those that are embarking on a
build-up
or operating turnaround strategy. Such companies may have no or short operating histories, new technologies and products and their management teams may have limited experience working together, all of which enhance the difficulty of evaluating these investment opportunities. The management of such companies will need to implement and maintain successful finance personnel and other operational strategies and resources in order to become and remain successful. Other substantial operational risks to which such companies are subject include uncertain market acceptance of the company’s services, a potential regulatory risk for new or untried and/or untested business models (if applicable), products and services to the extent they relate to regulated activities in the relevant jurisdiction, high levels of competition among similarly situated companies, lower capitalizations and fewer financial resources and the potential for rapid organizational or strategic change. Such companies will have no or short operating histories on which to judge future performance and in many cases, if operating, will have negative cash flow. The Fund
’
s Investments May be Affected by Force Majeure Events.
i.e.
The Fund is Subject to Risks Relating to Infectious Disease and Pandemics
(COVID-19),
or other similarly infectious diseases may have material adverse impacts on the Fund, the Adviser, their respective affiliates and portfolio companies. Actual pandemics, or fear of pandemics, can trigger market disruptions or economic turndowns with the consequences described above. The Adviser cannot predict the likelihood of disease outbreaks occurring in the future nor how such outbreaks may affect the Fund’s investments. The outbreak of disease epidemics may result in the closure of the Adviser’s and/or a portfolio company’s offices or other businesses, including office buildings, retail stores and other commercial venues and could also result in (a) the lack of availability or price volatility of raw materials or component parts necessary to a portfolio company’s business which may adversely affect the ability of a portfolio company to perform its obligations, (b) disruption of regional or global trade markets and/or the availability of capital, (c) the availability of leverage, including an inability to obtain indebtedness at all or to the Fund’s desired degree, and less favorable timing of repayment and other terms with respect to such leverage, (d) trade or travel restrictions which impact a portfolio company’s business and/or (e) a general economic decline and have an adverse impact on the Fund’s value, the Fund’s investments, or the Fund’s ability to make new investments.
If a future pandemic occurs (including a recurrence of
COVID-19)
during a period when the Fund expects to be harvesting its investments, the Fund may not achieve its investment objective or may not be able to realize its investments within the Fund’s term. The Fund May Invest in Loans with Limited Amortization Requirements
.
The Fund is Subject to Risks Relating to Potential Early Redemption of Some Investments.
Fund could increase. There is no assurance that the Fund will be able to reinvest proceeds received from prepayments in assets that satisfy its investment objective, and any delay in reinvesting such proceeds may materially affect the performance of the Fund. Conversely, if the prepayment does not occur within the expected timeframe or if the debt does not otherwise become liquid, the Fund may continue in operation for longer than expected or the Fund may make distributions in kind.
The Fund is Subject to Risks Relating to Licensing Requirements
.
The Fund is Subject to Risks Relating to Minority Investments and Joint Ventures
.
co-invest
with other parties through partnerships, joint ventures or other entities and the Adviser may share management fees, incentive fees and/or other forms of compensation with such parties. The Adviser expects that in some cases the Fund will have control over, or significant influence on, the decision making of joint ventures. However, in other cases, in particular with respect to certain terms, amendments and waivers related to the underlying loans, the joint venture partner may have controlling or blocking rights (including because certain decisions require unanimous approval of the joint venture partners) or a tie vote among joint venture partners may be resolved by an appointed third party. Where a joint venture partner or third party has controlling or blocking rights or decision-making power with respect to a joint venture matter, there can be no assurance that the matter will be resolved in the manner desired by the Fund. In addition, these types of voting arrangements may slow the decision-making process and hinder the joint venture’s ability to act quickly.Cooperation among joint venture partners or
co-investors
on existing and future business decisions will be an important factor for the sound operation and financial success of any joint venture or other business in which the Fund is involved. In particular, a joint venture partner or co-investor
may have economic or business interests or goals that are inconsistent with those of the Fund, and the Fund may not be in a position to limit or otherwise protect the value of one or more of the Fund’s investments. Disputes among joint venture partners or co-investors
over obligations, expenses or other matters could have an adverse effect on the financial conditions or results of operations of the relevant businesses. In addition, the Fund may in certain circumstances be liable for actions of its joint venture partners. In certain cases, conflicts of interest may arise between the Fund and a joint venture partner, for example, because the joint venture partner has invested in a different level of the issuer’s capital structure or because the joint venture partner has different investment goals or timelines. There can be no assurance that a joint venture partner with divergent interests from the Fund will cause the joint venture to be managed in a manner that is
favorable to the Fund. In addition, it is anticipated that the Fund could be invested in debt instruments issued by a joint venture entity while one or more Other HPS Investors will be invested in equity interests in such entity or vice versa, which presents certain potential conflicts of interest with respect to the capital structure of such entity.
The Fund is Subject to Risks from Provision of Managerial Assistance and Control Person Liability
.
The Fund is Subject to Risks of Investments in Certain Countries.
A portion of the Fund’s assets have been and continue to be invested in loans denominated in currencies other than the U.S. dollar or the price of which is determined with references to such currencies. As a result, any fluctuation in exchange rates will affect the value of investments. The Fund generally expects to employ hedging techniques designed to reduce the risk of adverse movements in currency exchange rates. Furthermore, the Fund may incur costs in connection with conversions between various currencies.
Investments in corporations or assets in certain countries may require significant government approvals under corporate, securities, exchange control, foreign investment and other similar laws. In addition, such investments may give rise to taxes in local jurisdictions, for which a shareholder may not be entitled to any corresponding credit or tax benefit to a shareholder. Such investments may also give rise to tax filing obligations for shareholders in these jurisdictions, although the Adviser may structure such investments so as to prevent such obligations from being imposed on shareholders. Also, some governments from time to time may impose restrictions intended to prevent capital flight, which may, for example, involve punitive taxation (including high withholding taxes) on certain securities or asset transfers or the imposition of exchange controls making it difficult or impossible to exchange or repatriate the local currency. In addition, the laws of various countries governing business organizations, bankruptcy and insolvency may make legal action difficult and provide little, if any, legal protection for investors.
The availability of information within developing countries and emerging market jurisdictions, including information concerning their economies and the securities of companies in such countries, and the amount of government supervision and regulation of private companies in developing countries, generally is more limited than is the case in more developed countries. The accounting, auditing and financial reporting standards and practices of certain countries may not be equivalent to those employed in more developed countries and may
differ in fundamental respects. Accordingly, the Fund’s ability to conduct due diligence in connection with their investments and to monitor the investments may be adversely affected by these factors. The Fund may not be in a position to take legal or management control of its investments in certain countries. It may have limited legal recourse in the event of a dispute, and remedies might have to be pursued in the courts of the country in question where it may be difficult to obtain and enforce a judgment.
The Fund is Subject to Risks Relating to its Hedging Strategy and Policies.
The Fund is Subject to Risks Relating to Derivatives.
The Fund
’
s Ability to Enter into Transactions Involving Derivatives and Financial Commitment Transactions May be Limited.
18f-4
under the 1940 Act, regarding the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery obligations (including reverse repurchase agreements and similar financing transactions), became effective. Under the newly adopted rule, BDCs that make significant use of derivatives are subject to a value-at-risk
has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. Under the final rule, when the Fund trades reverse repurchase agreements or similar financing transactions, including certain tender option bonds, the Fund needs to aggregate the amount of indebtedness associated with the reverse repurchase agreements or similar financing transactions with the aggregate amount of any other senior securities representing indebtedness (, bank borrowings, if applicable) when calculating our asset coverage ratio. The Fund currently operates as a “limited derivatives user,” and these requirements may limit the Fund’s ability to use derivatives and/or enter into certain other financial contracts.
e.g.
Changes in Interest Rates May Adversely Affect the Fund
’
s Investments.
The Fund is Subject to Risks Relating to Contingent Liabilities.
The Fund is Subject to Risks Relating to High Yield Debt.
The Fund is Subject to Risks Relating to Investments in Unsecured Debt.
The Fund is Subject to Risks Relating to Subordinated Loans.
credit rating agency. If a borrower declares bankruptcy, the Fund may not have full or any recourse to the assets of the borrower, or the assets of the borrower may not be sufficient to satisfy the loan. Further, the Adviser’s ability to amend the terms of the Fund’s loans, assign its loans, accept prepayments, exercise its remedies (through “standstill periods”) and control decisions made in bankruptcy proceedings may be limited by intercreditor arrangements. In addition, the risks associated with subordinated loan securities include a greater possibility that adverse changes in the financial condition of the obligor or in general economic conditions (including a sustained period of rising interest rates or an economic downturn) may adversely affect the borrower’s ability to pay principal and interest on its loan. Many obligors on subordinated loan securities are highly leveraged, and specific developments affecting such obligors, including reduced cash flow from operations or the inability to refinance debt at maturity, may also adversely affect such obligors’ ability to meet debt service obligations. The level of risk associated with investments in subordinated loans increases if such investments are loans of distressed or below investment grade issuers. Default rates for subordinated loan securities have historically been higher than has been the case for investment grade securities.
The Fund is Subject to Risks Relating to
Non-Recourse
Obligations.
non-recourse
obligations of issuers. Such obligations are payable solely from proceeds collected in respect of collateral pledged by an issuer to secure such obligations. None of the owners, officers, directors or incorporators of the issuers, board members, any of their respective affiliates or any other person or entity will be obligated to make payments on the obligations. Consequently, the Fund, as holder of the obligations, must rely solely on distributions of proceeds of collateral debt obligations and other collateral pledged to secure obligations for payments due in respect of principal thereof and interest thereon. If distributions of such proceeds are insufficient to make payments on the obligations, no other assets will be available for such payments and following liquidation of all the collateral, the obligations of the issuers to make such payments will be extinguished. The Fund is Subject to Risks Relating to Publicly-Traded Securities.
non-public
information regarding the issuers of those securities or as a result of other policies of HPS or its affiliates. Accordingly, there can be no assurance that the Fund will make investments in public securities or other publicly traded instruments or, if it does, as to the amount it will invest. The inability to sell such securities or instruments in these circumstances could materially adversely affect the investment results of the Fund. The Fund is Subject to Risks Associated with Originating Loans to Companies in Distressed Situations.
addition, lower-rated investments may be thinly traded and there may be no established secondary or public market. The level of analytical sophistication, both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties is unusually high. There is no assurance that the Fund will correctly evaluate the value of the assets collateralizing the Fund’s loans or the prospects for a successful reorganization or similar action.
The Fund is Subject to Risks Associated with Investments that May Become Distressed.
non-U.S.
portfolio companies may be subject to various laws enacted in the countries of their issuance for the protection of creditors. These considerations will differ depending on the country in which each portfolio company is located or domiciled. Troubled company and other asset-based investments require active monitoring and may, at times, require participation in business strategy or reorganization proceedings by the Adviser and/or its affiliates. To the extent that the Adviser and/or its affiliates becomes involved in such proceedings, the Fund may have participated more actively in the affairs of the company than that assumed generally by a passive investor. In addition, involvement by the Adviser and/or its affiliates in an issuer’s or portfolio company’s reorganization proceedings could result in the imposition of restrictions limiting the Fund’s ability to liquidate its position in the issuer and/or portfolio company. Such investments would likely take more time to realize before generating any returns and may not generate income during the course of reorganization.
The Fund is Subject to Risks Associated with Management of Distressed Investments.
future Affiliated Group Accounts that may compete or conflict with the advice given to the Fund, including with respect to the timing or nature of actions relating to certain investments.
The Fund is Subject to Risks Associated with Acquisitions of Portfolios of Loans
.
The Fund is Subject to Risks Associated with Revolver, Delayed-Draw and Line of Credit Investments
It is possible that a revolver, delayed-draw or line of credit investment would be bifurcated into separate investments, with certain investors (which may or may not include the Fund) participating in the initial drawdowns and other investors (which may or may not include the Fund) participating in the later drawdowns. In this situation, it is possible that investors that participate in the initial funding of an investment may receive certain economic benefits in connection with such initial funding, such as original issue discount, closing payments, or commitment fees and these benefits are expected to be allocated based on participation in the initial funding, regardless of participation in future funding obligations. Conversely, the investors participating only in the later funding obligations will have the benefit of the most recent portfolio company performance information in evaluating their investment whereas the investors that participated in the initial drawdowns (which may or may not include the Fund) will be obligated in any event to fund such later funding obligations. In certain cases, the Fund may participate in the initial funding of an investment, but may not participate in later-arising funding obligations (, the revolver, delayed-draw or line of credit portions) related to such investment, including because of capacity limitations that an investment vehicle may have for making new revolver, delayed-draw investments or lines of credit or because HPS or any of its affiliates forms a new investment fund focused on investing in revolvers, delayed-draw investments and lines of credit. As a result, the Fund may be allocated a smaller or larger portion of revolver, delayed-draw investments or lines of credit than other investors participating in the loan. Where the Fund and any other participating investors have not participated in each funding of an investment on a pro rata basis, conflicts of interest may arise between the Fund and the other investors as the interests of the Fund and the other investors may not be completely aligned with respect to such investment. In addition, a revolver, delayed draw investment or line of credit may be senior to the rest of the loan or to the initial funding, and as a result, the interests of the Fund may not be aligned with other participating investors. There can be no assurance that the Fund will adequately reserve for its contingent liabilities and that such liabilities will not have an adverse effect on the Fund.
i.e.
The Fund is Subject to Risks Associated with Subordinated Debt Tranches.
CLOs, including CLOs for which the Fund acts as the collateral manager. To the extent permitted by applicable law, the Fund may also invest in securities issued by CLOs for which HPS or its subsidiary acts as the collateral manager. Investments in CLO securities are complex and are subject to a number of risks related to, among other things, changes in interest rates, the rate of defaults and recoveries in the collateral pool, prepayment rates, terms of loans purchased to replace loans in the collateral pool which have
pre-paid,
the exercise of remedies by more senior tranches and the possibility that no market will exist when the Fund seeks to sell its interests in CLO securities. If a CLO fails to satisfy one of the coverage tests provided in its indenture, all distributions on those CLO securities held by the Fund will cease until that CLO brings itself back into compliance with such coverage tests. CLO securities represent leveraged investments in the underlying collateral held by the CLO issuer. The use of leverage creates risk for the holders because the leverage increases their exposure to losses with respect to the collateral. As a result, the occurrence of defaults with respect to only a small portion of the collateral could result in the substantial or complete loss of the investment in the CLO securities. Payments of principal of, and interest on, debt issued by CLOs, and dividends and other distributions on subordinated and equity tranches of a CLO, are subject to priority of payments. CLO equity is subordinated to the prior payment of all obligations under debt securities. Further, in the event of default under any debt securities issued by a CLO, and to the extent that any elimination, deferral or reduction in payments on debt securities occurs, such elimination will be borne first by CLO equity and then by the debt securities in reverse order of seniority. Thus, the greatest risk of loss relating to defaults on the collateral held by CLOs is borne by the CLO equity. The Fund is Subject to Risks Associated with Forming CLOs.
non-recourse
or limited-recourse basis to purchasers. If we create a CLO, we will depend in part on distributions from the CLO’s assets out of its earnings and cash flows to enable us to make distributions to shareholders. The ability of a CLO to make distributions will be subject to various limitations, including the terms and covenants of the debt it issues. Also, a CLO may take actions that delay distributions in order to preserve ratings and to keep the cost of present and future financings lower or the CLO may be obligated to retain cash or other assets to satisfy over-collateralization requirements commonly provided for holders of the CLO’s debt, which could impact our ability to receive distributions from the CLO. If we do not receive cash flow from any such CLO that is necessary to satisfy the annual distribution requirement for maintaining RIC status, and we are unable to obtain cash from other sources necessary to satisfy this requirement, we may not maintain our qualification as a RIC, which would have a material adverse effect on an investment in the shares.
In addition, a decline in the credit quality of loans in a CLO due to poor operating results of the relevant borrower, declines in the value of loan collateral or increases in defaults, among other things, may force a CLO to sell certain assets at a loss, reducing their earnings and, in turn, cash potentially available for distribution to us for distribution to shareholders. To the extent that any losses are incurred by the CLO in respect of any collateral, such losses will be borne first by us as owner of equity interests in the CLO.
The collateral manager for a CLO that we create may be the Fund, the Adviser or an affiliate, and such collateral manager may be entitled to receive compensation for structuring and/or management services. To the extent the Adviser or an affiliate other than the Fund serves as collateral manager and the Fund is obligated to compensate the Adviser or the affiliate for such services, we, the Adviser or the affiliate will implement offsetting arrangements to assure that we, and indirectly, our shareholders, pay no additional fees to the Adviser or the affiliate in connection therewith. To the extent the Fund serves as collateral manager, the Fund will receive no fees for providing such collateral management services.
The Fund is Subject to Risks Associated with Covenant-Lite Loans.
structural protections, a portion of the Fund’s investments has been, and may continue to be, composed of
so-called
“covenant-lite loans.” Generally, covenant-lite loans either do not have certain maintenance covenants that would require the issuer to maintain debt service or other financial ratios or do not contain common restrictions on the ability of the issuer to change significantly its operations or to enter into other significant transactions that could affect its ability to repay such loans. Ownership of covenant-lite loans may expose the Fund to different risks, including with respect to liquidity, price volatility and ability to restructure loans, than is the case with loans that have financial maintenance covenants. As a result, the Fund’s exposure to losses may be increased, which could result in an adverse impact on the issuer’s ability to comply with its obligations under the loan. The Fund is Subject to Risks Associated with Investing in Equity.
The Fund is Subject to Risks Associated with Investing in Convertible Securities.
The Fund is Subject to Risks Associated with Investing in Structured Credit Instruments.
The Fund is Subject to Risks Associated with Assignments and Participations
lender under the loan or credit agreement with respect to the loan obligation. In contrast, participations acquired in a portion of a loan obligation held by a selling institution typically result in a contractual relationship only with such selling institution, not with the obligor. Therefore, holders of indirect participation interests are subject to additional risks not applicable to a holder of a direct assignment interest in a loan. In purchasing a participation, the Fund generally would have no right to enforce compliance by the obligor with the terms of the loan or credit agreement or other instrument evidencing such loan obligation, nor any rights of
set-off
against the obligor, and the Fund may not directly benefit from the collateral supporting the loan obligation in which it has purchased the participation. As a result, the Fund would assume the credit risk of both the obligor and the selling institution, which would remain the legal owner of record of the applicable loan. In the event of the insolvency of the selling institution, the Fund may be treated as a general creditor of the selling institution in respect of the participation, may not benefit from any set-off
exercised by the selling institution against the obligor and may be subject to any set-off
exercised by the obligor against the selling institution. Assignments and participations are typically sold strictly without recourse to the selling institution, and the selling institution generally will make no representations or warranties about the underlying loan, the portfolio companies, the terms of the loans or any collateral securing the loans. Certain loans have restrictions on assignments and participations which may negatively impact the Fund’s ability to exit from all or part of its investment in a loan. In addition, if a participation interest is purchased from a selling institution that does not itself retain any portion of the applicable loan, such selling institution may have limited interests in monitoring the terms of the loan agreement and the continuing creditworthiness of the borrower. The Fund is Subject to Risks Relating to Fraudulent Conveyances and Voidable Preferences by Issuers.
In addition, it is possible a court may invalidate, in whole or in part, the indebtedness underlying an investment of the Fund as a fraudulent conveyance, subordinate such indebtedness to existing or future creditors of the obligor or recover amounts previously paid by the obligor in satisfaction of such indebtedness. Moreover, in the event of the insolvency of an issuer of a portfolio company, payments made on its indebtedness could be subject to avoidance as a “preference” if made within a certain period of time (which may be as long as one year) before the portfolio company becomes a debtor in a bankruptcy case.
Even if the Fund does not engage in conduct that would form the basis for a successful cause of action based upon fraudulent conveyance or preference law, there can be no assurance as to whether any lending institution or other party from which the Fund may acquire such indebtedness, or any prior holder of such indebtedness, has not engaged in any such conduct (or any other conduct that would subject such indebtedness to disallowance or subordination under insolvency laws) and, if it did engage in such conduct, as to whether such creditor claims could be asserted in a U.S. court (or in the courts of any other country) against the Fund so that the Fund’s claim against the issuer would be disallowed or subordinated.
The Fund is Subject to Risks Related to Bankruptcy
.
inherent in the bankruptcy process. First, many events in a bankruptcy are adversarial and beyond the control of the creditors. While creditors generally are afforded an opportunity to object to significant actions, there can be no assurance that a court would not approve actions which may be contrary to the interests of the Fund. Reorganizations can be contentious and adversarial. Participants may use the threat of, as well as actual, litigation as a negotiating technique. Second, the duration of a bankruptcy case can only be roughly estimated. The bankruptcy process can involve substantial legal, professional and administrative costs to the company and the Fund, it is subject to unpredictable and lengthy delays, and during the process the company’s competitive position may erode, key management may depart and the company may not be able to invest adequately. In some cases, the company may not be able to reorganize and may be required to liquidate assets. Any of these factors may adversely affect the return on a creditor’s investment. Third, U.S. bankruptcy law permits the classification of “substantially similar” claims in determining the classification of claims in a reorganization for purpose of voting on a plan of reorganization. Because the standard for classification is vague, there exists a significant risk that the Fund’s influence with respect to a class of securities can be lost by the inflation of the number and the amount of claims in, or other gerrymandering of, the class. Fourth, in the early stages of the bankruptcy process it is often difficult to estimate the extent of, or even to identify, any contingent claims that might be made. In addition, certain administrative costs and claims that have priority by law over the claims of certain creditors (for example, claims for taxes) may be substantial. Fifth, a bankruptcy may result in creditors and equity holders losing their ranking and priority as such if they are considered to have taken over management and functional operating control of a debtor. Sixth, the Fund may purchase creditor claims subsequent to the commencement of a bankruptcy case, and it is possible that such purchase may be disallowed by a court if it determines that the purchaser has taken unfair advantage of an unsophisticated seller, which may result in the rescission of the transaction (presumably at the original purchase price) or forfeiture by the purchaser.
Further, several judicial decisions in the United States have upheld the right of borrowers to sue lenders or bondholders on the basis of various evolving legal theories (collectively termed “lender liability”). Generally, lender liability is founded upon the premise that an institutional lender or bondholder has violated an implied or contractual duty of good faith and fair dealing owed to the borrower or issuer or has assumed a degree of control over the borrower or issuer resulting in the creation of a fiduciary duty owed to the borrower or issuer or its other creditors or shareholders. Because of the nature of certain of the investments, the Fund could be subject to allegations of lender liability. Because of the potential of HPS or its affiliates to have investments in several positions in the same, different or overlapping levels of a portfolio company’s capital structure, the Fund may be subject to claims from creditors of a portfolio company that the investments should be equitably subordinated to the payment of other obligations of the portfolio company by reason of the conduct of the Fund or HPS and its affiliates. In addition, under certain circumstances, a U.S. bankruptcy court could also recharacterize claims held by the Fund as equity interests, and thereby subject such claims to the lower priority afforded equity claims in certain restructuring scenarios.
The Fund is Subject to Risks Related to Exit Financing.
The Fund is Subject to Risks Related to Bankruptcy Involving
Non-U.S.
Companies.The Fund is Subject to Risks Relating to Creditors
’
Committee and/or Board Participation
.
The Fund is Subject to Risks of Investments in Special Situations.
in-depth
research coverage and, therefore, may present an increased risk of loss to the Fund. The Fund is Subject to Risks Associated with Real Estate.
—The Fund is Subject to Risks Associated with Subordinated Debt Tranches
The Fund is Subject to Risks Associated with Investments in Portfolio Companies in Regulated Industries.
industries that are subject to greater amounts of regulation than other industries generally. These more highly regulated industries may include, among others, energy and power, gaming and healthcare. Investments in borrowers that are subject to a high level of governmental regulation pose additional risks relative to loans to other companies generally. Changes in applicable laws or regulations, or in the interpretations of these laws and regulations, could result in increased compliance costs or the need for additional capital expenditures. If a portfolio company fails to comply with these requirements, it could also be subject to civil or criminal liability and the imposition of fines. A portfolio company also could be materially and adversely affected as a result of statutory or regulatory changes or judicial or administrative interpretations of existing laws and regulations that impose more comprehensive or stringent requirements on such company. Governments have considerable discretion in implementing regulations that could impact a portfolio company’s business, and governments may be influenced by political considerations and may make decisions that adversely affect a portfolio company’s business. Additionally, certain portfolio companies may have a unionized workforce or employees who are covered by a collective bargaining agreement, which could subject any such portfolio company’s activities and labor relations matters to complex laws and regulations relating thereto. Moreover, a portfolio company’s operations and profitability could suffer if it experiences labor relations problems. A work stoppage at one or more of any such portfolio company’s facilities could have a material adverse effect on its business, results of operations and financial condition. Any such problems additionally may bring scrutiny and attention to the Fund, which could adversely affect the Fund’s ability to implement its investment objective.
The Fund is Subject to Risks Associated with Investments in Original Issue Discount and Instruments.
Payment-In-Kind
non-cash
income in taxable and accounting income prior to receipt of cash, including the following: | • | the higher interest rates on PIK instruments reflect the payment deferral and increased credit risk associated with these instruments, and PIK instruments generally represent a significantly higher credit risk than coupon loans; |
| • | original issue discount and PIK instruments may have unreliable valuations because the accruals require judgments about collectability of the deferred payments and the value of any associated collateral; |
| • | an election to defer PIK interest payments by adding them to the principal on such instruments increases our future investment income which increases our net assets and, as such, increases the Adviser’s future base management fees which, thus, increases the Adviser’s future income incentive fees at a compounding rate; |
| • | market prices of PIK instruments and other zero-coupon instruments are affected to a greater extent by interest rate changes, and may be more volatile than instruments that pay interest periodically in cash. While PIK instruments are usually less volatile than zero-coupon debt instruments, PIK instruments are generally more volatile than cash pay securities; |
| • | the deferral of PIK interest on an instrument increases the loan-to-value |
| • | even if the conditions for income accrual under accounting principles generally accepted in the United States (“GAAP”) are satisfied, a borrower could still default when actual payment is due upon the maturity of such loan; |
| • | for accounting purposes, cash distributions to investors representing original issue discount income do not come from paid-in capital, although they may be paid from the offering proceeds. Thus, although a distribution of original issue discount income may come from the cash invested by investors, the 1940 Act does not require that investors be given notice of this fact; |
| • | the required recognition of original issue discount or PIK interest for U.S. federal income tax purposes may have a negative impact on liquidity, as it represents a non-cash component of our investment company taxable income that may require cash distributions to shareholders in order to maintain our ability to maintain tax treatment as a RIC for U.S. federal income tax purposes; and |
| • | original issue discount may create a risk of non-refundable cash payments to the Adviser based on non-cash accruals that may never be realized. |
In addition, the part of the incentive fee payable by us that relates to our net investment income is computed and paid on income that may include interest that accrues prior to being received in cash, such as original issue discount, market discount, and income arising from debt instruments with PIK interest or
zero-coupon
securities. If a portfolio company defaults on a loan that provides for such accrued interest, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible, and the Adviser will have no obligation to refund any fees it received in respect of such accrued income. The Fund is Subject to Risks Arising from Entering into a TRS Agreement.
A TRS is subject to market risk, liquidity risk and risk of imperfect correlation between the value of the TRS and the loans underlying the TRS. In addition, we may incur certain costs in connection with the TRS that could in the aggregate be significant. A TRS is also subject to the risk that a counterparty will default on its payment obligations thereunder or that we will not be able to meet our obligations to the counterparty.
The Fund is Subject to Risks Associated with Repurchase Agreements.
The Fund is Subject to Risks Relating to Securities Lending Agreements.
credit, consist of possible delay in recovery of the securities or possible loss of rights in the collateral should the borrower fail financially. However, such loans will be made only to brokers and other financial institutions that are believed by the Adviser to be of high credit standing. Securities loans are made to broker-dealers pursuant to agreements requiring that loans be continuously secured by collateral consisting of U.S. government securities, cash or cash equivalents (, negotiable certificates of deposit, bankers’ acceptances or letters of credit) maintained on a daily basis in an amount at least equal at all times to the market value of the securities lent. If the Fund enters into a securities lending arrangement, the Adviser, as part of its responsibilities under the Advisory Agreement, will invest the Fund’s cash collateral in accordance with the Fund’s investment objective and strategies. The Fund will pay the borrower of the securities a fee based on the amount of the cash collateral posted in connection with the securities lending program. The borrower will pay to the Fund, as the lender, an amount equal to any dividends or interest received on the securities lent.
e.g.
mark-to-market
The Fund may invest the cash collateral received only in accordance with its investment objective, subject to the Fund’s agreement with the borrower of the securities. In the case of cash collateral, the Fund expects to pay a rebate to the borrower. The reinvestment of cash collateral will result in a form of effective leverage for the Fund.
Although voting rights or rights to consent with respect to the loaned securities pass to the borrower, the Fund, as the lender, will retain the right to call the loans and obtain the return of the securities loaned at any time on reasonable notice, and it will do so in order that the securities may be voted by the Fund if the holders of such securities are asked to vote upon or consent to matters materially affecting the investment. The Fund may also call such loans in order to sell the securities involved. When engaged in securities lending, the Fund’s performance will continue to reflect changes in the value of the securities loaned and will also reflect the receipt of interest through investment of cash collateral by the Fund in permissible investments.
The Fund is Subject to Risks Relating to Asset-Based Financing
.
Further, the Fund may invest in loans to Fund Issuers that are unsecured but linked to financial tests based upon the value or cash flows of one or more of such Fund Issuer’s assets (including Underlying Portfolio Companies) or the distributions realized by the Fund Issuer from such assets (including Underlying Portfolio Companies). Similar to the above, the assets held by such Fund Issuers may be largely illiquid and, if pledged as collateral, may require consents and other steps in order to be foreclosed upon and sold. In addition, the cash flows produced by the assets held by such Fund Issuer may be irregular and/or insufficient to repay any or all of the amounts outstanding under such asset-based loan.
If a Fund Issuer defaults under its asset-based loan, the Fund will have to determine whether to accelerate the amounts due under the loan or enter into a workout negotiation or restructuring with the Fund Issuer. A workout negotiation or restructuring may entail a substantial reduction in the interest rate, a substantial write-down of principal, and/or a substantial change to the terms, conditions and covenants of such loans. If a loan is accelerated, the Fund may have difficulties foreclosing and ultimately selling any pledged collateral, including an Underlying Portfolio Company. If any such collateral is sold, it is possible that the proceeds of such sale or disposition will not be equal to the amount of principal and interest owed to the Fund. On the other hand, if the Fund elects not to sell any of the assets of the Fund Issuer and instead decide to collect the cash flows from the Underlying Portfolio Companies or other assets of the Fund Issuer, the cash flows produced may be irregular and/or insufficient to repay any or all of the amounts outstanding under such asset-based loan. As a result, upon any
non-performance
or default under any such asset-based loans made by the Fund, the Fund may fail to recover some or all of its capital and/or expected returns, even if the loans are collateralized. In addition, the Fund’s asset-based loans may be subject to refinancing options, prepayment options or similar provisions that could result in the Fund Issuer repaying the principal on an obligation held by the Fund earlier than expected. As a consequence, if the Fund is not able to negotiate favorable prepayment premiums and/or
non-call
periods, the Fund’s ability to achieve its investment objective may be affected. Fund Issuers may also be permitted to issue additional indebtedness that would increase the overall leverage and fixed charges to which such Fund Issuers are subject. Such additional indebtedness could have structural or contractual priority, either as to specific collateral (including Underlying Portfolio Companies) or generally, over the ranking of the investment by the Fund. In the event of any default, restructuring or insolvency of any Underlying Portfolio Company or other assets pledged as collateral, the Fund could be subordinated to, or be required to share on a ratable basis, with any recoveries in favor of the holders of such other or additional indebtedness.
Risks Relating to Certain Regulatory Matters
The Fund is Subject to Risks Relating to Regulations Governing the Fund
’
s Operation as a BDC.
The Fund Must Invest a Sufficient Portion of Assets in Qualifying Assets.
The Fund believes that most of the investments that it may acquire in the future will constitute qualifying assets. However, the Fund may be precluded from investing in what it believes to be attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If the Fund does not invest a sufficient portion of its assets in qualifying assets, it could violate the 1940 Act provisions applicable to BDCs. As a result of such violation, specific rules under the 1940 Act could prevent the Fund, for example, from making
follow-on
investments in existing portfolio companies (which could result in the dilution of its position) or could require the Fund to dispose of investments at inappropriate times in order to come into compliance with the 1940 Act. If the Fund needs to dispose of such investments quickly, it could be difficult to dispose of such investments on favorable terms. The Fund may not be able to find a buyer for such investments and, even if a buyer is found, the Fund may have to sell the investments at a substantial loss. Any such outcomes would have a material adverse effect on the Fund’s business, financial condition, results of operations and cash flows.
If the Fund does not maintain its status as a BDC, it would be subject to regulation as a registered
closed-end
management investment company under the 1940 Act. As a registered closed-end
management investment company, the Fund would be subject to substantially more regulatory restrictions under the 1940 Act which would significantly decrease its operating flexibility. As a Public Company, We Are Subject to Regulations Not Applicable to Private Companies, Such as Provisions of the Sarbanes-Oxley Act. Efforts to Comply With Such Regulations Will Involve Significant Expenditures, and
Non-Compliance
With Such Regulations May Adversely Affect Us.
Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until there is a public market for our shares, which is not expected to occur.
New or Modified Laws or Regulations Governing Our Operations May Adversely Affect Our Business.
by-laws
at the U.S. federal, state, and local levels. These laws and regulations, as well as their interpretation, may change from time to time, including as the result of interpretive guidance or other directives from the U.S. President and others in the executive branch, and new laws, regulations, and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on the Fund’s business. The effects of such laws and regulations on the financial services industry will depend, in large part, upon the extent to which regulators exercise the authority granted to them and the approaches taken in implementing regulations. President Biden may support an enhanced regulatory agenda that imposes greater costs on all sectors and on financial services companies in particular. Future legislative and regulatory proposals directed at the financial services industry that are proposed or pending in the U.S. Congress may negatively impact the operations, cash flows or financial condition of the Fund or its portfolio companies, impose additional costs on portfolio companies or the Fund intensify the regulatory supervision of the Fund or its portfolio companies or otherwise adversely affect the Fund’s business or the business of its portfolio companies. Laws that apply to the Fund, either now or in the future, are often highly complex and may include licensing requirements. The licensing process can be lengthy and can be expected to subject the Fund to increased regulatory oversight. Failure, even if unintentional, to comply fully with applicable laws may result in sanctions, fines, or limitations on the ability of the Fund or the Adviser to do business in the relevant jurisdiction or to procure required licenses in other jurisdictions, all of which could have a material adverse effect on the Fund. In addition, if the Fund does not comply with applicable laws and regulations, it could lose any licenses that it then holds for the conduct of its business and may be subject to civil fines and criminal penalties.
75
Additionally, changes to the laws and regulations governing Fund operations, including those associated with RICs, may cause the Fund to alter its investment strategy in order to avail itself of new or different opportunities or result in the imposition of corporate-level taxes on us. Such changes could result in material differences to the Fund’s strategies and plans and may shift the Fund’s investment focus from the areas of expertise of the Adviser to other types of investments in which the Adviser may have little or no expertise or experience. Any such changes, if they occur, could have a material adverse effect on the Fund’s results of operations and the value of an investor’s investment. If the Fund invests in commodity interests in the future, the Adviser may determine not to use investment strategies that trigger additional regulation by the CFTC or may determine to operate subject to CFTC regulation, if applicable. If the Adviser or the Fund were to operate subject to CFTC regulation, the Fund may incur additional expenses and would be subject to additional regulation.
In addition, certain regulations applicable to debt securitizations implementing credit risk retention requirements that have taken effect in both the U.S. and in Europe may adversely affect or prevent the Fund from entering into securitization transactions. These risk retention rules will increase the Fund’s cost of funds under, or may prevent the Fund from completing, future securitization transactions. In particular, the U.S. Risk Retention Rules require the sponsor (directly or through a majority-owned affiliate) of a debt securitization, such as CLOs, in the absence of an exemption, to retain an economic interest in the credit risk of the assets being securitized in the form of an eligible horizontal residual interest, an eligible vertical interest, or a combination thereof, in accordance with the requirements of the U.S. Risk Retention Rules. Given the more attractive financing costs associated with these types of debt securitizations as opposed to other types of financing available (such as traditional senior secured facilities), this increases our financing costs, which increases the financing costs ultimately borne by the Fund’s investors.
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 by the Biden Administration could negatively impact our operations, cash flows or financial condition, impose additional costs on us, intensify the regulatory supervision of the Fund or otherwise adversely affect the Fund’s business, financial condition and results of operations. We Are Subject to Risks Related to Corporate Social Responsibility.
Our brand and reputation may be negatively impacted if we fail to act responsibly in a number of areas, such as considering ESG factors in our investment processes. Adverse incidents with respect to ESG activities could impact the value of our brand and our relationships with shareholders, which could adversely affect our business and results of operations.
Additionally, new regulatory initiatives related to ESG could adversely affect our business. The SEC has proposed rules that, in addition to other matters, would establish a framework for reporting of climate-related risks. For example, the SEC has announced that it may require disclosure of certain , the holding out of a product as having green or sustainable characteristics where this is not, in fact, the case). We are, and our portfolio companies may be, or could in the future become subject to the risk that similar measures might be introduced in other jurisdictions in the future. At this time, there is uncertainty regarding the scope of such proposals or when they would become
ESG-related
matters. There is a risk that a significant reorientation in the market following the implementation of these and further measures could be adverse to our portfolio companies if they are perceived to be less valuable as a consequence of, for example, their carbon footprint or “greenwashing” (i.e.
effective (if at all). Compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we or our portfolio companies conduct our businesses and adversely affect our profitability. On the other hand, certain state governments have begun to challenge the use of ESG factors in investment decisions, potentially setting up conflicting standards for the Fund to address.
Changes to the Dodd-Frank Act May Adversely Impact the Fund.
The Fund is Subject to Risks Relating to Laws, Regulations and Policies.
Pay-to-Play
so-called
“pay-to-play”
pay-to-play
non-compliance
could have an adverse effect on the Fund. The Fund is Subject to Risks Relating to Government Policies, Changes in Laws, and International Trade.
In addition, governmental policies could create uncertainty for the global financial system and such uncertainty may increase the risks inherent to the Fund and its activities. For example, in March 2018, the United States imposed an additional 25% tariff under Section 232 of the Trade Expansion Act of 1962, as amended, on steel products imported into the United States. Furthermore, in May 2019, the United States imposed a 25% tariff on certain imports from China, and China reacted with tariffs on certain imports from the United States. These tariffs and restrictions, as well as other changes in U.S. trade policy, have resulted in, and may continue to trigger, retaliatory actions by affected countries, including imposing trade sanctions on certain U.S. products. A “trade war” of this nature has the potential to increase costs, decrease margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the revenues and profitability of companies whose businesses rely on imports and exports. Prospective shareholders should realize that any significant changes in governmental policies (including tariffs and other policies involving international trade) could have a material adverse impact on the Fund and its investments.
The Fund is Subject to Risks Relating to General Data Protection Regulations.
current European privacy laws. It has superseded the existing Data Protection Directive, which is the key European legislation governing the use of personal data relating to living individuals. The GDPR provides enhanced rights to individuals with respect to the privacy of their personal data and applies not only to organizations with a presence in the European Union which use or hold data relating to living individuals, but also to those organizations that offer services to individual European Union investors. In addition, although regulatory behavior and penalties under the GDPR remain an area of considerable scrutiny, it does increase the sanctions for serious breaches to the greater of €20 million or 4% of worldwide revenue, the impact of which could be significant. Compliance with the GDPR may require additional measures, including updating policies and procedures and reviewing relevant IT systems, which may create additional costs and expenses for the Fund and therefore the shareholders. The Fund may have indemnification obligations in respect of, or be required to pay the expenses relating to, any litigation or action as a result of any purported breach of the GDPR. Shareholders other than individuals in the European Union may not be afforded the protections of the GDPR.
The Replacement of LIBOR With an Alternative Reference Rate May Result in an Overall Increase to Borrowing Costs or Cause Other Disruptions, Which Could Have a Material Adverse Effect on Our Results of Operations, Financial Condition and Cash Flow.
Certain of the Fund’s investments and/or other indebtedness of the Fund’s portfolio companies have interest rates with a LIBOR reference. As a result, the transition away from LIBOR may adversely impact the Fund and/or the Fund’s portfolio companies. Even if replacement conventions (, SOFR) are adopted in the lending and bond markets, it is uncertain whether they might affect the Fund’s floating-rate investments, including by:
e.g.
| • | adversely impacting the pricing, liquidity, value of, return on and trading for a broad array of financial products, including any LIBOR-linked securities, loans and derivatives that may be included in the Fund’s assets; |
| • | requiring extensive changes to documentation that governs or references LIBOR or LIBOR-based products, including, for example, pursuant to time-consuming renegotiations of documentation to modify the terms of investments; |
| • | resulting in disputes, litigation or other actions with portfolio companies, or other counterparties, regarding the interpretation and enforceability of provisions in the Fund’s LIBOR-based investments, such as fallback language or other related provisions, including, in the case of fallbacks to the alternative reference rates, any economic, legal, operational or other impact resulting from the fundamental differences between LIBOR and the various alternative reference rates; or |
| • | causing the Fund to incur additional costs in relation to any of the above factors. |
In addition to the Fund and portfolio companies potentially needing to renegotiate some of those instruments to address a transition away from LIBOR, there also may be different conventions that arise in different but related market segments, which could result in mismatches between different assets and liabilities and, in turn, cause possible unexpected gains and/or losses for the Fund or portfolio companies. Some of these replacement rates may also be subject to compounding or similar adjustments that cause the amount of any payment referencing a replacement rate not to be determined until the end of the relevant calculation period, rather than at the beginning, which could lead to administrative challenges for the Fund. Furthermore, the determination of such replacement rate may require further negotiation and there can be no assurance that an agreement between the parties will be reached.
If the transition from LIBOR results in an overall increase to borrowing costs, higher interest expense could negatively affect the financial results and valuations of our funds’ portfolio companies. There is no guarantee that
78
a transition from LIBOR to an alternative will not result in significant increases or volatility in risk-free benchmark rates or borrowing costs to borrowers, any of which could have a material adverse effect on our results of operations, financial condition and cash flow.
The Fund is Subject to Risks Arising from Potential Controlled Group Liability.
i.e.
The Fund is Subject to Risks Arising from Compliance with the SEC
’
s Regulation Best Interest
Federal Income Tax Risks
The Fund is Subject to RIC Qualification Risks
The Fund May Experience Difficulty with Paying Required Distributions
zero-coupon
securities, debt instruments with PIK interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash
compensation such as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash. Further, we may elect to amortize market discount and include such amounts in our taxable income in the current year, instead of upon disposition, as an election not to do so would limit our ability to deduct interest expenses for tax purposes. Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our shareholders in order to satisfy the annual distribution requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may not qualify for or maintain RIC tax treatment and thus may become subject to corporate-level income tax. The resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.
Some Investments May be Subject to Corporate-Level Income Tax
Certain Portfolio Investments May Present Special Tax Issues
Legislative or Regulatory Tax Changes Could Adversely Affect Investors
The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in a Fund. Each prospective shareholder should read this entire registration statement and consult with its advisors before deciding whether to invest in the Fund. In addition, as the Fund’s investment program develops and changes over time, an investment in the Fund may be subject to additional and different risk factors.
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USE OF PROCEEDS
We intend to use the net proceeds from this offering to (1) make investments in accordance with our investment strategy and policies, (2) reduce borrowings and repay indebtedness incurred under various financing agreements we may enter into and (3) fund repurchases under our share repurchase program. Generally, our policy is to pay distributions and operating expenses from cash flow from operations, however, we are not restricted from funding these items from proceeds from this offering or other sources and may choose to do so, particularly in the earlier part of this offering.
We seek to invest the net proceeds received in this offering as promptly as practicable after receipt thereof, and in any event generally within 90 days of each subscription closing. However, depending on market conditions and other factors, including the availability of investments that meet our investment objective, we may be unable to invest such proceeds within the time period we anticipate. Pending such investment, we may have a greater allocation to syndicated loans or other liquid investments than we otherwise would or we may make investments in cash or cash equivalents (such as U.S. government securities or certain high quality debt instruments).
We estimate that we will incur approximately $10.7 million of organizational and offering expenses (excluding the shareholder servicing and/or distribution fee) in connection with the offering, or approximately 0.07% of the gross proceeds, assuming maximum gross proceeds of $15,000,000,000. Pursuant to the Expense Support Agreement, the Adviser is obligated to advance all of our Other Operating Expenses to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Fund’s NAV. We will be obligated to reimburse the Adviser for such advanced expenses only if certain conditions are met. See “Expense Support and Conditional Reimbursement Agreement.” Any reimbursements will not exceed actual expenses incurred by the Adviser and its affiliates.
The following tables set forth our estimate of how we intend to use the gross proceeds from this offering. Information is provided assuming that the Fund sells the maximum number of shares registered in this offering, or 590,086,546 shares. The amount of net proceeds may be more or less than the amount depicted in the table below depending on the public offering price of our shares and the actual number of shares we sell in this offering. The table below assumes that shares are sold at the current offering price of $25.42 per share. Such amount is subject to increase or decrease based upon our NAV per share.
The following tables present information about the net proceeds raised in this offering for each class, assuming that we sell the maximum primary offering amount of $15,000,000,000. The tables assume that 1/4 of our gross offering proceeds are from the sale of Class S shares, 1/4 of our gross offering proceeds are from the sale of Class D shares, 1/4 of our gross offering proceeds are from the sale of Class I shares and 1/4 of our gross offering proceeds are from the sale of Class F shares. The number of shares of each class sold and the relative proportions in which the classes of shares are sold are uncertain and may differ significantly from what is shown in the tables below. Because amounts in the following tables are estimates, they may not accurately reflect the actual receipt or use of the gross proceeds from this offering. Amounts expressed as a percentage of net proceeds or gross proceeds may be higher or lower due to rounding.
The following table presents information regarding the use of proceeds raised in this offering with respect to Class S shares.
| Maximum Offering of $3,750,000,000 in Class S Shares |
||||||||
| Gross Proceeds (1)
|
$ | 3,750,000,000 | 100.00 | % | ||||
| Upfront Sales Load (2)
|
$ | — | 0 | % | ||||
| Organization and Offering Expenses (3)
|
$ | 2,673,000 | 0.07 | % | ||||
| Net Proceeds Available for Investment |
$ | 3,747,327,000 | 99.93 | % | ||||
| |
|
|
|
|||||
81
The following table presents information regarding the use of proceeds raised in this offering with respect to Class D shares.
| Maximum Offering of $3,750,000,000 in Class D Shares |
||||||||
| Gross Proceeds (1)
|
$ |
3,750,000,000 |
100 |
% | ||||
| Upfront Sales Load (2)
|
$ |
— |
0 |
% | ||||
| Organization and Offering Expenses (3)
|
$ |
2,673,000 |
0.07 |
% | ||||
| Net Proceeds Available for Investment |
$ |
3,747,327,000 |
99.93 |
% | ||||
| |
|
|
|
|||||
The following table presents information regarding the use of proceeds raised in this offering with respect to Class I shares.
| Maximum Offering of $3,750,000,000 in Class I Shares |
||||||||
| Gross Proceeds (1)
|
$ |
3,750,000,000 |
100 |
% | ||||
| Upfront Sales Load (2)
|
$ |
— |
0 |
% | ||||
| Organization and Offering Expenses (3)
|
$ |
2,673,000 |
0.07 |
% | ||||
| Net Proceeds Available for Investment |
$ |
3,747,327,000 |
99.93 |
% | ||||
| |
|
|
|
|||||
The following table presents information regarding the use of proceeds raised in this offering with respect to Class F shares.
| Maximum Offering of $3,750,000,000 in Class F Shares |
||||||||
| Gross Proceeds (1)
|
$ |
3,750,000,000 |
100 |
% | ||||
| Upfront Sales Load (2)
|
$ |
— |
0 |
% | ||||
| Organization and Offering Expenses (3)
|
$ |
2,673,000 |
0.07 |
% | ||||
| Net Proceeds Available for Investment |
$ |
3,747,327,000 |
99.93 |
% | ||||
| |
|
|
|
|||||
(1) |
We intend to conduct a continuous offering of an unlimited number of Common Shares over an unlimited time period by filing a new registration statement prior to the end of the three-year period described in Rule 415 under the Securities Act; however, in certain states this offering is subject to annual extensions. |
(2) |
Neither the Fund nor the Managing Dealer will charge upfront sales load with respect to Class S shares, Class D shares, Class I shares or Class F shares; however, if you buy Class S shares, Class D shares, Class I shares or Class F shares through certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares, a 2.0% cap on NAV for Class D shares, a 2.0% cap on NAV for Class I shares and a 2.0% cap on NAV for Class F shares. We pay the following shareholder servicing and/or distribution fees to the Managing Dealer and/or a participating broker, subject to FINRA limitations on underwriting compensation: (a) for Class S shares only, a shareholder servicing and/or distribution fee equal to 0.85% per annum of the aggregate NAV for the Class S shares, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV for the Class D shares, and (c) for Class F shares only, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV for the Class F shares, in each case, payable monthly. The total amount that will be paid over time for shareholder servicing and/or distribution fees depends on the average length of time for which shares remain outstanding, the term over which such amount is measured and the performance of our investments, and is not expected to be paid from sources other than cash flow from operating activities. We will cease paying the shareholder servicing and/or distribution fee on the Class S shares, Class D shares and Class F shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity, or the |
82
| sale or other disposition of all or substantially all of our assets or (iii) the date following the completion of the primary portion of this offering on which, in the aggregate, underwriting compensation from all sources in connection with this offering, including the shareholder servicing and/or distribution fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. In addition, as required by exemptive relief that allows us to offer multiple classes of shares, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer and the applicable selling agent), we will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class S shares, Class D shares and Class F shares in such shareholder’s account. We may modify this requirement if permitted by applicable exemptive relief. At the end of such month, the applicable Class S shares, Class D shares or Class F shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class S, Class D or Class F shares. See “Plan of Distribution.” |
| (3) | The organization and offering expense numbers shown above represent our estimates of expenses to be incurred by us in connection with this offering and include estimated wholesaling expenses reimbursable by us. See “Plan of Distribution” for examples of the types of organization and offering expenses we may incur. |
83
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion and analysis of our financial condition and results of operations should be read in conjunction with “Financial Highlights” and our consolidated financial statements and related notes appearing elsewhere in this prospectus. The information in this section contains forward-looking statements, which relate to future events, our future performance or financial condition and involves numerous risks and uncertainties. Please see “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of uncertainties, risk and assumptions associated with these statements. Actual results could differ materially from those implied or expressed in any forward-looking statements. Dollar amounts are in thousands, except per share data, percentages and as otherwise noted.
Overview and Investment Framework
We are an externally managed,
non-diversified
closed-end
management investment company that has elected to be treated as a BDC under the 1940 Act. Formed as a Delaware statutory trust on December 23, 2020 that commenced operations on February 3, 2022, we are externally managed by the Adviser, which is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. Our Adviser is registered as an investment adviser with the SEC and a wholly-owned subsidiary of HPS. We have elected to be treated, and intend to qualify annually, as a RIC under the Code. Under our Advisory Agreement, we have agreed to pay the Adviser an annual management fee as well as an incentive fee based on our investment performance. Also, under the Administration Agreement, we have agreed to reimburse the Administrator for the allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including, but not limited to, our allocable portion of the costs of compensation (including salaries, bonuses and benefits) and related expenses of our chief compliance officer, chief financial officer and their respective staffs.
Our investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. Our investment strategy focuses primarily on newly originated, privately negotiated senior credit investments in high-quality, established upper middle market companies and, in select situations, companies in special situations. We use the term upper middle market companies to generally mean companies with “EBITDA” of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually at the time of investment. We have and may continue to invest in smaller or larger companies if the opportunity presents attractive investment characteristics and risk-adjusted returns. While our investment strategy primarily focuses on companies in the United States, we also intend to leverage HPS’s global presence to invest in companies in Europe, Australia and other locations outside the U.S., subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.” We also include a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. We intend to use these investments to maintain liquidity for our share repurchase program and to manage cash while seeking attractive returns before investing subscription proceeds into originated loans. We invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in credit and credit-related instruments issued by corporate issuers (including loans, notes, bonds and other corporate debt securities). If we change our 80% test, we will provide shareholders with at least 60 days’ prior notice of such change. Although not expected to be a primary component of our investment strategy, in select situations, we may also make certain Opportunistic Investments, in each case taking into account availability of leverage for such investments and our target risk/return profile. In addition, we may also participate in programmatic investments through partnerships or joint ventures with one or more unaffiliated banks or other financial institutions, including structures where a partner assumes senior exposure to each investment, and we participate in the junior exposure.
84
Subject to the limitations of the 1940 Act, we may invest in loans or other securities, the proceeds of which may refinance or otherwise repay debt or securities of companies whose debt is owned by other funds and accounts sponsored or managed by the Adviser or HPS. We expect to invest in
co-investment
transactions with other funds and accounts sponsored or managed by the Adviser or HPS. To seek to enhance our returns, we employ leverage as market conditions permit and at the discretion of the Adviser, but we are subject to the limitations set forth in the 1940 Act, which currently allows us to borrow up to a 2:1 debt to equity ratio. We intend to use leverage in the form of borrowings, including loans from certain financial institutions and the issuance of debt securities. We may also use leverage in the form of the issuance of preferred shares, but do not currently intend to do so. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. Any such leverage, if incurred, would be expected to increase our total capital available for investment.
To finance investments, we have in the past and may in the future securitize certain of our secured loans or other investments, including through the formation of one or more CLOs, while retaining all or most of the subordinated notes issued in the securitization.
Key Components of Our Results of Operations
Investments
We focus primarily on senior secured loans and securities of private U.S. companies. Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to private companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make.
Revenues
We generate revenues in the form of interest and fee income on debt investments, capital gains, and dividend income from our equity investments in our portfolio companies. Our senior and subordinated debt investments are expected to bear interest at a fixed or floating rate. Interest on debt securities is generally payable monthly or quarterly. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid PIK interest generally will become due at the maturity date. In addition, we may generate revenue from various fees in the ordinary course of business such as in the form of structuring, consent, waiver, amendment, syndication and other miscellaneous fees. Original issue discounts and market discounts or premiums will be capitalized, and we will accrete or amortize such amounts as interest income. We will record prepayment premiums on loans and debt securities as interest income. Dividend income, if any, will be recognized on an accrual basis to the extent that we expect to collect such amounts.
Expenses
Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. We bear all other costs and expenses of our operations, administration and transactions, including, but not limited to:
| • | investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Advisory Agreement; |
85
| • | our allocable portion of compensation (including salaries, bonuses, and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals at the Administrator that performs duties for us; and (iii) any internal audit group personnel of HPS or any of its affiliates; |
| • | all other expenses of the Fund’s operations, administrations and transactions. |
As our investment adviser prior to June 30, 2023, HPS agreed to advance all of our organization and offering expenses on our behalf through February 3, 2022, the date on which we broke escrow for our initial offering of Common Shares. On such date, the Fund became obligated to reimburse HPS for such advanced expenses and HPS subsequently requested reimbursement of these expenses and was paid pursuant to the Prior Expense Support Agreement. After such date, the Fund bears all such expenses, subject to the Expense Support Agreement. Pursuant to the Expense Support Agreement, the Adviser is obligated to advance all of our Other Operating Expenses to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Fund’s NAV. We are obligated to reimburse the Adviser for such advanced expenses (including any additional expenses the Adviser elects to pay on our behalf), subject to certain conditions. Any reimbursements will not exceed actual expenses incurred by the Adviser and its affiliates.
From time to time, the Adviser, the Administrator or their affiliates may pay third-party providers for goods or services. We will reimburse the Adviser, the Administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, the Adviser and the Administrator may defer or waive fees and/or rights to be reimbursed for expenses. All of the foregoing expenses are ultimately borne by our shareholders.
Expense Support and Conditional Reimbursement Agreement
We have entered into an Expense Support and Conditional Reimbursement Agreement with the Adviser. For additional information see “Note 3. Fees, Expenses, Agreements and Related Party Transactions” to the consolidated financial statements included elsewhere in this prospectus.
Portfolio and Investment Activity
Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated):
As of and for the three months ended March 31, |
||||||||
2024 |
2023 |
|||||||
Total investments, beginning of period |
$ | 9,203,801 | $ | 5,860,186 | ||||
New investments purchased |
1,418,820 | 984,699 | ||||||
Payment-in-kind |
16,483 | 4,669 | ||||||
Net accretion of discount on investments |
27,075 | 8,903 | ||||||
Net realized gain (loss) on investments |
(9,949 | ) | (10,731 | ) | ||||
Investments sold or repaid |
(850,253 | ) | (128,455 | ) | ||||
Total investments, end of period |
$ | 9,805,977 | $ | 6,719,271 | ||||
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The following table presents certain selected information regarding our investment portfolio:
March 31, 2024 |
December 31, 2023 |
|||||||
Weighted average yield on debt and income producing investments, at amortized cost (1)
|
12.2 | % | 12.2 | % | ||||
Weighted average yield on debt and income producing investments, at fair value (1)
|
12.0 | % | 12.1 | % | ||||
Weighted average yield on total portfolio, at amortized cost (2)
|
12.1 | % | 12.0 | % | ||||
Weighted average yield on total portfolio, at fair value (2)
|
12.0 | % | 11.9 | % | ||||
Number of portfolio companies |
243 | 239 | ||||||
Weighted average EBITDA (3)
|
$ | 198 | $ | 193 | ||||
Weighted average loan-to-value (4)
|
40 | % | 39 | % | ||||
Percentage of debt investments bearing a floating rate, at fair value |
99.0 | % | 98.6 | % | ||||
Percentage of debt investments bearing a fixed rate, at fair value |
1.0 | % | 1.4 | % | ||||
| (1) | Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts and less any annual amortization of premiums, as applicable, on accruing (i) debt and (ii) other income producing securities, divided by (b) total accruing (i) debt and (ii) other income producing securities (at fair value or amortized cost, as applicable). Actual yields earned over the life of each investment could differ materially from the yields presented above. |
| (2) | Computed as the annual stated interest rate or yield plus the annual accretion of discounts and less any annual amortization of premiums, as applicable, on all investments of the Fund, divided by total investments of the Fund (at fair value or amortized cost, as applicable). Actual yields earned over the life of each investment could differ materially from the yields presented above. |
| (3) | Calculated with respect to all level 3 investments in the investment portfolio for which fair value is determined by the Adviser (in its capacity as the investment adviser of the Fund, with assistance, at least quarterly, from a third-party valuation firm, and overseen by the Fund’s Board), and excludes quoted assets and investments with no reported EBITDA or where EBITDA, in the Adviser’s judgement made in its discretion, was not a material component of the original investment thesis, such as LTV-based loans, NAV-based loans or reorganized equity. Weighted average EBITDA is weighted based on the fair value of the total applicable level 3 investments. Figures are derived from the most recent financial statements from portfolio companies. |
| (4) | Calculated with respect to all level 3 debt investments in the investment portfolio for which fair value is determined by the Adviser (in its capacity as the investment adviser of the Fund, with assistance, at least quarterly, from a third-party valuation firm, and overseen by the Fund’s Board), and excludes quoted assets. LTV is calculated as net debt through each respective investment tranche in which the Fund holds an investment divided by enterprise value or value of underlying collateral of the portfolio company. Weighted average LTV is weighted based on the fair value of the total applicable level 3 debt investments. Figures are derived from the most recent financial statements from portfolio companies. |
87
Our investments consisted of the following:
March 31, 2024 |
December 31, 2023 |
|||||||||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
|||||||||||||||||||
First lien debt |
$ | 9,453,479 | $ | 9,557,342 | 96.37 | % | $ | 8,919,865 | $ | 9,002,695 | 96.93 | % | ||||||||||||
Second lien debt |
36,422 | 36,495 | 0.37 | 64,782 | 67,087 | 0.72 | ||||||||||||||||||
Other secured debt |
63,720 | 63,719 | 0.64 | — | — | — | ||||||||||||||||||
Unsecured debt |
29,523 | 29,670 | 0.30 | 28,901 | 29,101 | 0.31 | ||||||||||||||||||
Structured finance investments |
25,186 | 26,974 | 0.27 | 28,427 | 29,868 | 0.32 | ||||||||||||||||||
Investments in joint ventures |
158,113 | 163,291 | 1.65 | 125,513 | 124,003 | 1.33 | ||||||||||||||||||
Equity investments |
39,534 | 40,081 | 0.40 | 36,313 | 36,656 | 0.39 | ||||||||||||||||||
Total |
$ | 9,805,977 | $ | 9,917,572 | 100.00 | % | $ | 9,203,801 | $ | 9,289,410 | 100.00 | % | ||||||||||||
As of March 31, 2024 and December 31, 2023, the Fund had certain investments in three portfolio companies on
non-accrual
status. The following table shows the fair value of our performing and non-accrual
debt investments as of March 31, 2024 and December 31, 2023: March 31, 2024 |
December 31, 2023 |
|||||||||||||||
Fair Value |
Percentage |
Fair Value |
Percentage |
|||||||||||||
Performing |
$ | 9,687,939 | 99.73 | % | $ | 9,098,383 | 99.67 | % | ||||||||
Non-accrual
(1)
|
26,261 | 0.27 | 30,368 | 0.33 | ||||||||||||
Total |
$ | 9,714,200 | 100.00 | % | $ | 9,128,751 | 100.00 | % | ||||||||
| (1) | Investments on non-accrual represented 0.32% and 0.40% of amortized cost of total debt investments as of March 31, 2024 and December 31, 2023, respectively |
The table below describes investments by industry composition based on fair value:
March 31, 2024 |
December 31, 2023 |
|||||||
Software and Computer Services |
14.03 | % | 15.86 | % | ||||
Industrial Support Services |
13.20 | 11.45 | ||||||
Medical Equipment and Services |
10.74 | 8.64 | ||||||
Health Care Providers |
9.63 | 10.36 | ||||||
Consumer Services |
6.58 | 6.76 | ||||||
Media |
5.92 | 6.52 | ||||||
Non-life Insurance |
5.57 | 5.72 | ||||||
General Industrials |
5.02 | 4.36 | ||||||
Aerospace and Defense |
3.99 | 5.12 | ||||||
Pharmaceuticals and Biotechnology |
2.66 | 2.89 | ||||||
Industrial Engineering |
2.49 | 2.74 | ||||||
Investment Banking and Brokerage Services |
2.34 | 1.73 | ||||||
Travel and Leisure |
2.06 | 3.57 | ||||||
Food Producers |
1.73 | 1.64 | ||||||
Investments in joint ventures |
1.65 | 1.33 | ||||||
Retailers |
1.56 | 1.22 | ||||||
Industrial Transportation |
1.18 | 0.36 | ||||||
Personal Care, Drug and Grocery Stores |
1.17 | 1.29 | ||||||
Electricity |
1.06 | 0.90 | ||||||
88
March 31, 2024 |
December 31, 2023 |
|||||||
Automobiles and Parts |
1.01 | 1.22 | ||||||
Asset Based Lending and Fund Finance |
0.86 | 0.23 | ||||||
Personal Goods |
0.74 | 0.82 | ||||||
Technology Hardware and Equipment |
0.73 | 0.76 | ||||||
Finance and Credit Services |
0.61 | 0.64 | ||||||
Construction and Materials |
0.57 | 0.62 | ||||||
Oil, Gas and Coal |
0.47 | 0.48 | ||||||
Telecommunications Service Providers |
0.46 | 0.76 | ||||||
Gas, Water and Multi-Utilities |
0.43 | 0.47 | ||||||
Real Estate Investment and Services |
0.40 | 0.43 | ||||||
Structured Finance |
0.27 | 0.32 | ||||||
Industrial Metals and Mining |
0.25 | 0.13 | ||||||
Alternative Energy |
0.16 | 0.18 | ||||||
Chemicals |
0.15 | 0.16 | ||||||
Telecommunications Equipment |
0.15 | 0.16 | ||||||
Household Goods and Home Construction |
0.07 | 0.07 | ||||||
Life Insurance |
0.06 | 0.06 | ||||||
Leisure Goods |
0.02 | 0.02 | ||||||
Electronic and Electrical Equipment |
0.01 | 0.01 | ||||||
Total |
100.00 | % | 100.00 | % | ||||
The table below describes investments by geographic composition based on fair value:
March 31, 2024 |
December 31, 2023 |
|||||||
Australia |
1.84 | % | 2.87 | % | ||||
Austria |
0.88 | — | ||||||
Canada |
0.74 | 0.84 | ||||||
France |
0.84 | 0.41 | ||||||
Germany |
0.72 | 0.77 | ||||||
Italy |
1.34 | 1.48 | ||||||
Luxembourg |
0.07 | — | ||||||
Norway |
0.25 | 0.27 | ||||||
Singapore |
0.32 | 0.35 | ||||||
Spain |
0.33 | 0.36 | ||||||
Taiwan |
0.42 | 0.43 | ||||||
United Kingdom |
4.44 | 4.78 | ||||||
United States |
87.81 | 87.44 | ||||||
Total |
100.00 | % | 100.00 | % | ||||
Our Adviser monitors the financial trends of each portfolio company on an ongoing basis to determine if it is meeting its respective business plan and to assess the appropriate course of action for each company. Our Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include, but are not limited to, the following:
| • | assessment of success in adhering to the portfolio company’s business plan and compliance with covenants; |
| • | periodic or regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor to discuss financial position, requirements and accomplishments; |
| • | comparisons to our other portfolio companies in the industry, if any; |
89
| • | attendance at and participation in board meetings or presentations by portfolio companies; and |
| • | review of monthly and quarterly financial statements and financial projections of portfolio companies. |
ULTRA III, LLC
On June 1, 2023, the Fund entered into a limited liability company agreement (the “LLC Agreement”) with the Capital One Member (“COM”) to establish a joint venture to make certain unitranche loans to U.S. middle-market companies. The joint venture is called ULTRA III, LLC (“ULTRA III”).
As of March 31, 2024, the Fund and COM have committed to contribute up to $400.0 million and $57.1 million, respectively, of capital to ULTRA III. As of March 31, 2024, the Fund had contributed $164.7 million and COM had contributed $23.5 million of capital and $235.3 million and $33.6 million of capital remained uncalled from the Fund and COM, respectively. The Fund and COM own 87.5% and 12.5%, respectively, of the membership interests of ULTRA III. All portfolio decisions and generally all other decisions in respect of ULTRA III must be approved by a credit committee of ULTRA III consisting of representatives of the Fund and COM (generally with approval from a representative of each required). The Fund and COM have equal voting rights with respect to the joint venture. The Fund does not consolidate the ULTRA III joint venture.
The following table is a summary of ULTRA III’s portfolio as of March 31, 2024 and December 31, 2023.
March 31, 2024 |
December 31, 2023 |
|||||||
Total senior secured debt investments at fair value |
$ | 521,572 | $ | 361,715 | ||||
Number of portfolio companies |
3 | 2 | ||||||
Weighted average yield on debt investments, at amortized cost (1)
|
12.2 | % | 12.0 | % | ||||
Weighted average yield on debt investments, at fair value (1)
|
12.1 | % | 12.0 | % | ||||
Percentage of debt investments bearing a floating rate, at fair value |
100 | % | 100 | % | ||||
Percentage of debt investments bearing a fixed rate, at fair value |
— | % | — | % | ||||
Percentage of assets on non-accrual
(2)
|
— | % | — | % | ||||
| (1) | Computed as the annual stated interest rate or yield plus the annual accretion of discounts and less any annual amortization of premiums, as applicable, on accruing debt securities, divided by total accruing debt securities (at fair value or amortized cost, as applicable). Actual yields earned over the life of each investment could differ materially from the yields presented above. |
| (2) | As a percentage of fair value of investments of ULTRA III. ULTRA III had no assets on non-accrual as of March 31, 2024 and December 31, 2023. |
90
Results of Operations
The following table represents our operating results:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Total investment income |
$ | 313,502 | $ | 178,776 | ||||
Total expenses |
145,505 | 82,158 | ||||||
Net investment income before excise tax |
167,997 | 96,618 | ||||||
Excise tax expense |
(15 | ) | (5 | ) | ||||
Net investment income after excise tax |
168,012 | 96,623 | ||||||
Net realized gain (loss) |
(6,273 | ) | (11,429 | ) | ||||
Net change in unrealized appreciation (depreciation) |
53,911 | 73,835 | ||||||
Net increase (decrease) in net assets resulting from operations |
$ | 215,650 | $ | 159,029 | ||||
Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. As a result, comparisons may not be meaningful.
Investment Income
Investment income was as follows:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Interest income |
$ | 291,764 | $ | 173,642 | ||||
Payment-in-kind |
18,030 | 4,730 | ||||||
Dividend Income |
2,614 | — | ||||||
Other income |
1,094 | 404 | ||||||
Total investment income |
$ | 313,502 | $ | 178,776 | ||||
Total investment income increased to $313.5 million for the three months ended March 31, 2024 from $178.8 million for the same period in the prior year primarily driven by our deployment of capital, increased benchmark interest rates, the increased balance of our investments and by increased dividend income from ULTRA III. The size of our investment portfolio at fair value was $9,917.6 million and our weighted average yield on debt and income producing securities at fair value was 12.0%.
91
Expenses
Expenses were as follows:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Interest expense |
$ | 86,093 | $ | 49,963 | ||||
Management fees |
18,339 | 11,188 | ||||||
Income based incentive fee |
25,565 | 14,248 | ||||||
Capital gains incentive fee |
5,954 | — | ||||||
Distribution and shareholder servicing fees |
||||||||
Class D |
497 | 275 | ||||||
Class F |
4,309 | 2,835 | ||||||
Class S |
184 | — | ||||||
Professional fees |
756 | 919 | ||||||
Board of Trustees’ fees |
149 | 141 | ||||||
Administrative service expenses |
822 | 573 | ||||||
Other general & administrative |
2,384 | 1,651 | ||||||
Amortization of continuous offering costs |
453 | 365 | ||||||
Excise tax expense |
(15 | ) | (5 | ) | ||||
Total expenses (including excise tax expense) |
$ | 145,490 | $ | 82,153 | ||||
Interest Expense
Total interest expense (including unused fees and amortization of deferred financing costs) increased to $86.1 million for the three months ended March 31, 2024 from $50.0 million for the same period in the prior year primarily driven by increased borrowings under the Credit Facilities, Unsecured Notes, and debt securitization issuances. The average principal debt outstanding increased to $3,870.4 million for the three months ended March 31, 2024 from $2,672.4 million for the same period in the prior year.
Management Fees
Management fees increased to $18.3 million for the three months ended March 31, 2024 from $11.2 million for the same period in the prior year primarily due to an increase in net assets. Management fees are payable monthly in arrears at an annual rate of 1.25% of the value of our net assets as of the beginning of the first calendar day of the applicable month.
Income Based Incentive Fee
Income based incentive fees increased to $25.6 million for the three months ended March 31, 2024 from $14.2 million for the same period in the prior year primarily due to our deployment of capital and an increase in
Pre-Incentive
Fee Net Investment Income Returns. Capital Gains Incentive Fees
U.S. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or
92
appreciation. If such amount is positive at the end of a period, then GAAP requires the Fund to record a capital gains incentive fee equal to 12.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods.
Capital gains based incentive fees increased to $6.0 million for the three months ended March 31, 2024, from $0.0 million for the same period in the prior year primarily due to net unrealized gains on investments. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less in the prior period. If such cumulative amount is negative, then there is no accrual.
Other Expenses
Organization costs and offering costs include expenses incurred in our initial formation and our continuous offering. Professional fees include legal, audit, tax, valuation, and other professional fees incurred related to the management of the Fund. Administrative service expenses represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers, their respective staff and other
non-investment
professionals that perform duties for us. Other general and administrative expenses include insurance, filing, research, our sub-administrator,
subscriptions and other costs. Total other expenses increased to $9.6 million for the three months ended March 31, 2024, from $6.8 million for the same period in the prior year primarily driven by an increase of distribution and shareholder servicing fees, administrative service expenses and other general and administrative expenses due to servicing a growing portfolio.
Under the terms of the Administration Agreement and Advisory Agreement, we reimburse the Administrator and Adviser, respectively, for services performed for us. In addition, pursuant to the terms of these agreements, the Administrator and Adviser may delegate its obligations under these agreements to an affiliate or to a third party and we reimburse the Administrator and Adviser for any services performed for us by such affiliate or third party. For the three months ended March 31, 2024, the Administrator charged $0.8 million, an increase from $0.6 million for the same period in the prior year, for certain costs and expenses allocable to the Fund under the terms of the Administration Agreement.
Shareholder servicing and/or distributions fees increased to $5.0 million for the three months ended March 31, 2024 from $3.1 million for the same period in the prior year primarily due to an increase in shares outstanding.
We entered into an Expense Support Agreement with the Adviser. For additional information see “Note 3. Fees, Expenses, Agreements and Related Party Transactions” to the consolidated financial statements included elsewhere in this prospectus.
Income Taxes, Including Excise Taxes
We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify each taxable year for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of the sum of our investment company taxable income, as defined by the Code (without regard to the deduction for dividends paid), and net
tax-exempt
income (if any) for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our shareholders, which generally relieve us from corporate-level U.S. federal income taxes. 93
Depending on the level of taxable income earned in a tax year, we may carry forward taxable income (including net capital gains, if any) in excess of current year distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year distributions from such income, we will accrue excise tax on estimated excess taxable income.
For the three months ended March 31, 2024 and 2023, we incurred U.S. federal excise tax of $(0.0) million and $(0.0) million, respectively.
Net Realized Gain (Loss)
Net realized gains and losses were comprised of the following:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Non-controlled/non-affiliated |
$ | (9,949 | ) | $ | (10,731 | ) | ||
Foreign currency forward contracts |
167 | (529 | ) | |||||
Foreign currency transactions |
3,509 | (169 | ) | |||||
Net realized gain (loss) |
$ | (6,273 | ) | $ | (11,429 | ) | ||
For the three months ended March 31, 2024, we generated net realized gains (losses) of $(6.3) million, driven by net realized losses on sales of debt investments, primarily syndicated loans and bonds, of $(2.4) million and foreign currency realized losses of $(7.5) million on investments (included in realized losses on investments) primarily due to an AUD portfolio company repayment. Realized losses were partially offset by $3.5 million gains in foreign currency transactions, as a result of repayments of foreign borrowings and conversions of foreign cash balances, primarily attributable to fluctuations in the AUD and EUR exchange rates.
non-controlled/non-affiliated
For the three months ended March 31, 2023, we generated net realized gains (losses) of $(11.4) million, which was primarily comprised of net realized losses on broadly syndicated loans, the restructuring of a debt investment and foreign currency forwards contracts.
Net Change in Unrealized Appreciation (Depreciation)
Net change in unrealized appreciation (depreciation) was comprised of the following:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Non-controlled/non-affiliated |
$ | 19,345 | $ | 77,873 | ||||
Non-controlled/affiliated investments |
(46 | ) | — | |||||
Controlled/affiliated investments |
6,688 | — | ||||||
Foreign currency forward contracts |
12,494 | (2,505 | ) | |||||
Translation of assets and liabilities in foreign currencies |
15,430 | (1,533 | ) | |||||
Net change in unrealized appreciation (depreciation) |
$ | 53,911 | $ | 73,835 | ||||
For the three months ended March 31, 2024, the fair value of our debt investments increased due to spread tightening in both the public and private credit markets. For the three months ended March 31, 2024, we generated foreign currency unrealized losses of $(21.1) million on investments (included in unrealized gains on investments) primarily as a result of fluctuations in the AUD, GBP and EUR
non-controlled/non-affiliated
94
exchange rates. For the three months ended March 31, 2023, the fair value of our debt investments increased due to spread tightening in both the public and private credit markets.
Interest Rate Swaps
We use interest rate swaps to mitigate interest rate risk associated with the Fund’s fixed rate liabilities. We have designated certain interest rate swaps to be in a hedge accounting relationship. See “” to the consolidated financial statements included elsewhere in this prospectus for additional disclosure regarding our accounting for derivative instruments designated in a hedge accounting relationship. See our schedule of investments for additional disclosure regarding these derivative instruments. See “
” to the consolidated financial statements included elsewhere in this prospectus for additional disclosure regarding the carrying value of our debt.
Item 8. Consolidated Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 2. Significant Accounting Policies
Item 8. Consolidated Financial
Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 7. Borrowings
Financial Condition, Liquidity and Capital Resources
We generate cash primarily from the net proceeds of our continuous offering of Common Shares, proceeds from net borrowings on our credit facilities, unsecured debt issuances, debt securitization issuances, income earned and repayments on principal on our debt investments. The primary uses of our cash and cash equivalents are for (i) originating and purchasing debt investments, (ii) funding the costs of our operations (including fees paid to our Adviser and expense reimbursements paid to our Administrator), (iii) debt service, repayment and other financing costs of our borrowings, (iv) funding repurchases under our share repurchase program and (v) cash distributions to our shareholders.
As of March 31, 2024 and December 31, 2023, we had several asset-based leverage facilities, a corporate-level revolving credit facility, unsecured note issuances and a debt securitization issuance. From time to time, we may enter into additional credit facilities, increase the size of our existing credit facilities and/or issue debt securities, including additional unsecured notes and debt securitizations. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. As of March 31, 2024 and December 31, 2023, we had an aggregate amount of $3,859.6 million and $4,210.4 million, respectively, of debt outstanding and our asset coverage ratio was 261.9% and 223.2%, respectively. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage.
Cash and cash equivalents as of March 31, 2024, taken together with our $2,963.4 million of available capacity under our credit facilities (subject to borrowing base availability) and the continuous offering of our Common Shares is expected to be sufficient for our investing activities and to conduct our operations in the near term. This determination is based in part on our expectations for the timing of funding investment purchases and the timing and amount of future proceeds from sales of our Common Shares and the use of existing and future financing arrangements. As of March 31, 2024, we had significant amounts payable and commitments for existing and new investments, which we planned to fund using proceeds from offering our Common Shares and available borrowing capacity under our credit facilities. Additionally, we held $1,056.5 million of syndicated loans and other liquid investments as of March 31, 2024, which could provide additional liquidity if necessary.
Although we were able to close on credit facilities and issue debt securities during the three months ended March 31, 2024, any disruption in the financial markets or any other negative economic development could restrict our access to financing in the future. We may not be able to find new financing for future investments or liquidity needs and, even if we are able to obtain such financing, such financing may not be on as favorable terms as we could have obtained in the past. These factors may limit our ability to make new investments and adversely impact our results of operations.
95
As of March 31, 2024, we had $300.7 million in cash and cash equivalents. During the three months ended March 31, 2024, cash used in operating activities was $351.9 million, primarily as a result of funding portfolio investments of $1,416.8 million and partially offset by proceeds from sale of investments and principal repayments of $848.2 million and other operating uses of $216.7 million. Cash provided by financing activities was $463.8 million during the period, primarily as a result of new share issuances related to $983.0 million of subscriptions and net borrowings (repayments) of $(334.0) million.
Equity
The following table summarizes transactions in common shares of beneficial interest during the three months ended March 31, 2024:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
14,309,134 | $ | 360,098 | |||||
Share transfers between classes |
53,163 | 1,333 | ||||||
Distributions reinvested |
538,118 | 13,526 | ||||||
Share repurchases |
(1,309,587 | ) | (33,211 | ) | ||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
13,590,828 | $ | 341,746 | |||||
CLASS D |
||||||||
Subscriptions |
3,843,517 | $ | 96,497 | |||||
Share transfers between classes |
116,731 | 2,927 | ||||||
Distributions reinvested |
436,170 | 10,964 | ||||||
Share repurchases |
(416,320 | ) | (10,558 | ) | ||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
3,980,098 | $ | 99,830 | |||||
CLASS F |
||||||||
Subscriptions |
17,020,539 | $ | 428,057 | |||||
Share transfers between classes |
(226,825 | ) | (5,691 | ) | ||||
Distributions reinvested |
1,748,096 | 43,940 | ||||||
Share repurchases |
(621,324 | ) | (15,757 | ) | ||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
17,920,486 | $ | 450,549 | |||||
CLASS S |
||||||||
Subscriptions |
3,911,922 | $ | 98,389 | |||||
Share transfers between classes |
56,931 | 1,431 | ||||||
Distributions reinvested |
22,956 | 578 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
3,991,809 | $ | 100,398 | |||||
Total net increase (decrease) |
39,483,221 | $ | 992,523 | |||||
96
The following table summarizes transactions in common shares of beneficial interest during the three months ended March 31, 2023:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
903,666 | $ | 21,893 | |||||
Share transfers between classes |
675,921 | 16,465 | ||||||
Distributions reinvested |
352,176 | 8,526 | ||||||
Share repurchases |
(377,320 | ) | (9,207 | ) | ||||
Early repurchase deduction |
— | 15 | ||||||
Net increase (decrease) |
1,554,443 | $ | 37,692 | |||||
CLASS D |
||||||||
Subscriptions |
1,249,379 | $ | 30,400 | |||||
Share transfers between classes |
— | — | ||||||
Distributions reinvested |
182,009 | 4,406 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | 8 | ||||||
Net increase (decrease) |
1,431,388 | $ | 34,814 | |||||
CLASS F |
||||||||
Subscriptions |
4,126,357 | $ | 100,409 | |||||
Share transfers between classes |
(675,921 | ) | (16,465 | ) | ||||
Distributions reinvested |
1,012,997 | 24,524 | ||||||
Share repurchases |
(681,306 | ) | (16,624 | ) | ||||
Early repurchase deduction |
— | 39 | ||||||
Net increase (decrease) |
3,782,127 | $ | 91,883 | |||||
Total net increase (decrease) |
6,767,958 | $ | 164,389 | |||||
Distributions and Distribution Reinvestment
The following table summarizes our distributions declared and payable for the three months ended March 31, 2024 (dollar amounts in thousands, except per share amounts), and the record date for each distribution was the last calendar day of the month in which such distribution was declared:
Class I |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 30, 2024 |
|
February 29, 2024 |
|
$ | 0.1600 | $ | 0.0550 | $ | — | $ | 0.2150 | $ | 11,811 | |||||||||||
February 29, 2024 |
|
March 29, 2024 |
|
0.1600 | 0.0550 | — | 0.2150 | 13,391 | ||||||||||||||||
March 26, 2024 |
|
April 30, 2024 |
|
0.1600 | 0.0550 | — | 0.2150 | 14,482 | ||||||||||||||||
Total |
$ | 0.4800 | $ | 0.1650 | $ | — | $ | 0.6450 | $ | 39,684 | ||||||||||||||
97
Class D |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 30, 2024 |
|
February 29, 2024 |
|
$ | 0.1547 | $ | 0.0550 | $ | — | $ | 0.2097 | $ | 6,514 | |||||||||||
February 29, 2024 |
|
March 29, 2024 |
|
0.1550 | 0.0550 | — | 0.2100 | 6,670 | ||||||||||||||||
March 26, 2024 |
|
April 30, 2024 |
|
0.1547 | 0.0550 | — | 0.2097 | 6,834 | ||||||||||||||||
Total |
$ | 0.4644 | $ | 0.1650 | $ | — | $ | 0.6294 | $ | 20,018 | ||||||||||||||
Class F |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 30, 2024 |
|
February 29, 2024 |
|
$ | 0.1494 | $ | 0.0550 | $ | — | $ | 0.2044 | $ | 26,889 | |||||||||||
February 29, 2024 |
|
March 29, 2024 |
|
0.1500 | 0.0550 | — | 0.2050 | 28,278 | ||||||||||||||||
March 26, 2024 |
|
April 30, 2024 |
|
0.1493 | 0.0550 | — | 0.2043 | 29,404 | ||||||||||||||||
Total |
$ | 0.4487 | $ | 0.1650 | $ | — | $ | 0.6137 | $ | 84,571 | ||||||||||||||
Class S |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 30, 2024 |
|
February 29, 2024 |
|
$ | 0.1420 | $ | 0.0550 | $ | — | $ | 0.1970 | $ | 357 | |||||||||||
February 29, 2024 |
|
March 29, 2024 |
|
0.1431 | 0.0550 | — | 0.1981 | 743 | ||||||||||||||||
March 26, 2024 |
|
April 30, 2024 |
|
0.1418 | 0.0550 | — | 0.1968 | 954 | ||||||||||||||||
Total |
$ | 0.4269 | $ | 0.1650 | $ | — | $ | 0.5919 | $ | 2,054 | ||||||||||||||
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees. |
98
The following table summarizes our distributions declared and payable for the three months ended March 31, 2023 (dollar amounts in thousands, except per share amounts), and the record date for each distribution was the last calendar day of the month in which such distribution was declared:
Class I |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
|
February 28, 2023 |
|
$ | 0.1600 | $ | 0.0210 | $ | — | $ | 0.1810 | $ | 6,441 | |||||||||||
February 28, 2023 |
|
March 31, 2023 |
|
0.1600 | 0.0300 | — | 0.1900 | 6,980 | ||||||||||||||||
March 28, 2023 |
|
April 28, 2023 |
|
0.1600 | 0.0430 | — | 0.2030 | 7,518 | ||||||||||||||||
Total |
$ | 0.4800 | $ | 0.0940 | $ | — | $ | 0.5740 | $ | 20,939 | ||||||||||||||
Class D |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
|
February 28, 2023 |
|
$ | 0.1549 | $ | 0.0210 | $ | — | $ | 0.1759 | $ | 3,173 | |||||||||||
February 28, 2023 |
|
March 31, 2023 |
|
0.1553 | 0.0300 | — | 0.1853 | 3,351 | ||||||||||||||||
March 28, 2023 |
|
April 28, 2023 |
|
0.1548 | 0.0430 | — | 0.1978 | 3,752 | ||||||||||||||||
Total |
$ | 0.4650 | $ | 0.0940 | $ | — | $ | 0.5590 | $ | 10,276 | ||||||||||||||
Class F |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
|
February 28, 2023 |
|
$ | 0.1499 | $ | 0.0210 | $ | — | $ | 0.1709 | $ | 16,003 | |||||||||||
February 28, 2023 |
|
March 31, 2023 |
|
0.1507 | 0.0300 | — | 0.1807 | 16,992 | ||||||||||||||||
March 28, 2023 |
|
April 28, 2023 |
|
0.1496 | 0.0430 | — | 0.1926 | 18,590 | ||||||||||||||||
Total |
$ | 0.4502 | $ | 0.0940 | $ | — | $ | 0.5442 | $ | 51,585 | ||||||||||||||
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees |
With respect to distributions, we have adopted an “opt out” distribution reinvestment plan for shareholders. As a result, in the event of a declared cash distribution or other distribution, each shareholder that has not “opted out” of the distribution reinvestment plan will have their distributions automatically reinvested in additional shares rather than receiving cash distributions. Shareholders who receive distributions in the form of shares will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.
99
Sources of distributions, other than net investment income and realized gains on a U.S. GAAP basis, include required adjustments to U.S. GAAP net investment income in the current period to determine taxable income available for distributions. The following table reflects the sources of cash distributions on a U.S. GAAP basis that we declared on our Common Shares during the three months ended March 31, 2024:
Class I |
Class D |
Class F |
Class S |
|||||||||||||||||||||||||||||
Source of Distribution |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
||||||||||||||||||||||||
Net investment income |
$ | 0.6450 | $ | 39,684 | $ | 0.6294 | $ | 20,018 | $ | 0.6137 | $ | 84,571 | $ | 0.5919 | $ | 2,054 | ||||||||||||||||
Net realized gains |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total |
$ | 0.6450 | $ | 39,684 | $ | 0.6294 | $ | 20,018 | $ | 0.6137 | $ | 84,571 | $ | 0.5919 | $ | 2,054 | ||||||||||||||||
The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Fund has declared on its Common Shares during the three months ended March 31, 2023:
Class I |
Class D |
Class F |
||||||||||||||||||||||
Source of Distribution |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
||||||||||||||||||
Net investment income |
$ | 0.5740 | $ | 20,939 | $ | 0.5590 | $ | 10,276 | $ | 0.5442 | $ | 51,585 | ||||||||||||
Net realized gains |
— | — | — | — | — | — | ||||||||||||||||||
Total |
$ | 0.5740 | $ | 20,939 | $ | 0.5590 | $ | 10,276 | $ | 0.5442 | $ | 51,585 | ||||||||||||
Share Repurchase Program
At the discretion of the Board, we have commenced a share repurchase program in which we may repurchase, in each quarter, up to 5% of the NAV of our Common Shares outstanding (by number of shares) as of the close of the previous calendar quarter. The Board may amend, suspend or terminate the share repurchase program if it deems such action to be in the best interest of shareholders, such as when a repurchase offer would place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a whole that would outweigh the benefit of the repurchase offer. As a result, share repurchases may not be available each quarter. We intend to conduct such repurchase offers in accordance with the requirements of Rule
13e-4
promulgated under the Securities Exchange Act of 1934, as amended, and the 1940 Act. All shares purchased pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares. Under the share repurchase program, to the extent we offer to repurchase shares in any particular quarter, it is expected to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The
one-year
holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at our discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by us for the benefit of remaining shareholders. The following table further summarizes the share repurchases completed during the three months ended March 31, 2024:
Repurchase Deadline Request |
Percentage of Outstanding Shares the Fund Offered to Repurchase (1)
|
Repurchase Pricing Date |
Amount Repurchased (all classes) (2)
|
Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Purchased (1)
|
|||||||||||||||
March 1, 2024 |
5.00 | % | March 31, 2024 | $ | 59,526 | 2,347,231 | 1.13 | % | ||||||||||||
100
The following table further summarizes the share repurchases completed during the three months ended March 31, 2023:
Repurchase Deadline Request |
Percentage of Outstanding Shares the Fund Offered to Repurchase (1)
|
Repurchase Pricing Date |
Amount Repurchased (all classes) (2)
|
Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Purchased (1)
|
|||||||||||||||
March 2, 2023 |
5.00 | % | March 31, 2023 | $ | 25,836 | 1,058,869 | 0.73 | % | ||||||||||||
| (1) | Percentage is based on total shares as of the close of the previous calendar quarter. All repurchase requests were satisfied in full. |
| (2) | Amounts not inclusive of Early Repurchase Deduction. |
Borrowings
Our outstanding debt obligations were as follows:
March 31, 2024 |
||||||||||||||||||||
|
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 603,407 | $ | 603,407 | $ | 196,593 | $ | 22,937 | ||||||||||
HLEND B Funding Facility (3)
|
1,250,000 | 316,767 | 316,767 | 933,233 | 422,167 | |||||||||||||||
HLEND C Funding Facility |
750,000 | 487,500 | 487,500 | 262,500 | 46,103 | |||||||||||||||
HLEND D Funding Facility |
500,000 | 125,000 | 125,000 | 375,000 | 237,750 | |||||||||||||||
HLEND E Funding Facility |
300,000 | — | — | 300,000 | — | |||||||||||||||
Revolving Credit Facility (3)
|
1,300,000 | 403,964 | 403,964 | 896,036 | 896,036 | |||||||||||||||
November 2025 Notes (4)
|
170,000 | 170,000 | 167,908 | — | — | |||||||||||||||
November 2027 Notes (4)
|
155,000 | 155,000 | 152,776 | — | — | |||||||||||||||
March 2026 Notes (5)
|
276,000 | 276,000 | 272,703 | — | — | |||||||||||||||
March 2028 Notes (5)
|
124,000 | 124,000 | 121,825 | — | — | |||||||||||||||
September 2027 Notes (6)
|
75,000 | 75,000 | 74,467 | — | — | |||||||||||||||
September 2028 Notes (6)
|
250,000 | 250,000 | 248,524 | — | — | |||||||||||||||
January 2029 Notes (7)
|
550,000 | 550,000 | 531,455 | — | — | |||||||||||||||
2023 CLO Secured Notes (8)
|
323,000 | 323,000 | 319,810 | — | — | |||||||||||||||
Total |
$ | 6,823,000 | $ | 3,859,638 | $ | 3,826,106 | $ | 2,963,362 | $ | 1,624,993 | ||||||||||
| (1) | The unused portion is the amount upon which commitment fees, if any, are based. |
| (2) | The amount available reflects any limitations related to each respective credit facility’s borrowing base. |
| (3) | The Fund may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. |
Under the HLEND A Funding Facility, as of March 31, 2024, the Fund had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 7.5 million |
| • | Australian Dollars (AUD) of 94.4 million |
| • | British Pounds (GBP) of 42.9 million |
Under the HLEND B Funding Facility, as of March 31, 2024, the Fund had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 3.4 million |
101
| • | Australian Dollars (AUD) of 25.5 million |
| • | British Pounds (GBP) of 90.3 million |
Under the Revolving Credit Facility, as of March 31, 2024, the Fund had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 180.6 million |
| • | Australian Dollars (AUD) of 73.2 million |
| • | Canadian Dollars (CAD) of 47.1 million |
| • | British Pounds (GBP) of 64.2 million |
| (4) | The carrying value of the Fund’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.0) million and $(1.3) million, respectively, as of March 31, 2024 and includes the change in the notes carrying value of $(1.0) million and $(0.9) million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (5) | The carrying value of the Fund’s March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.6) million and $(0.9) million, respectively, as of March 31, 2024 and includes the change in the notes carrying value of $(1.7) million and $(1.3) million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (6) | The carrying value of the Fund’s September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.3) million, respectively, as of March 31, 2024 and includes the change in the notes carrying value of $0.1 million and $0.9 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (7) | The carrying value of the Fund’s January 2029 Notes are presented net of unamortized debt issuance costs of $(12.2) million as of March 31, 2024 and includes the change in the notes carrying value of $(6.4) million as a result of the qualifying fair value hedge relationship as described above. |
| (8) | The carrying value of the Fund’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.2) million as of March 31, 2024. |
December 31, 2023 |
||||||||||||||||||||
|
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 615,838 | $ | 615,838 | $ | 184,162 | $ | 38,218 | ||||||||||
HLEND B Funding Facility (4)
|
1,000,000 | 513,747 | 513,747 | 486,253 | 356,891 | |||||||||||||||
HLEND C Funding Facility |
750,000 | 487,500 | 487,500 | 262,500 | 12,576 | |||||||||||||||
HLEND D Funding Facility |
500,000 | 195,000 | 195,000 | 305,000 | 205,018 | |||||||||||||||
Revolving Credit Facility (5)
|
1,275,000 | 1,025,294 | 1,025,294 | 249,706 | 249,706 | |||||||||||||||
November 2025 Notes (6)
|
170,000 | 170,000 | 168,749 | — | — | |||||||||||||||
November 2027 Notes (6)
|
155,000 | 155,000 | 154,366 | — | — | |||||||||||||||
March 2026 Notes (7)
|
276,000 | 276,000 | 274,716 | — | — | |||||||||||||||
March 2028 Notes (7)
|
124,000 | 124,000 | 123,588 | — | — | |||||||||||||||
September 2027 Notes (8)
|
75,000 | 75,000 | 75,545 | — | — | |||||||||||||||
September 2028 Notes (8)
|
250,000 | 250,000 | 252,814 | — | — | |||||||||||||||
2023 CLO Secured Notes (9)
|
323,000 | 323,000 | 319,743 | — | — | |||||||||||||||
Total |
$ | 5,698,000 | $ | 4,210,379 | $ | 4,206,900 | $ | 1,487,621 | $ | 862,409 | ||||||||||
| (1) | The unused portion is the amount upon which commitment fees, if any, are based. |
| (2) | The amount available reflects any limitations related to each respective credit facility’s borrowing base. |
| (3) | The Fund may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated |
102
| in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Fund had outstanding borrowings denominated in Euros (EUR) of 7.5 million, in Australian Dollars (AUD) of 156.0 million, and in British Pounds (GBP) of 42.9 million. |
| (4) | The Fund may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Fund had outstanding borrowings denominated in Euros (EUR) of 3.4 million, in Australian Dollars (AUD) of 108.0 million, and in British Pounds (GBP) of 90.3 million. |
| (5) | The Fund may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Fund had outstanding borrowings denominated in Euros (EUR) of 312.1 million, in Australian Dollars (AUD) of 95.2 million, in Canadian Dollars (CAD) of 47.1 million and in British Pounds (GBP) of 64.2 million. |
| (6) | The carrying value of the Fund’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.2) million and $(1.4) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $(0.0) million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (7) | The carrying value of the Fund’s March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.8) million and $(0.9) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $0.6 million and $0.5 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (8) | The carrying value of the Fund’s September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (9) | The carrying value of the Fund’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023. |
A summary of our contractual payment obligations under our credit facilities, unsecured notes and debt securitization issuances as of March 31, 2024, is as follows:
March 31, 2024 |
||||||||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
After 5 years |
||||||||||||||||
HLEND A Funding Facility |
$ | 603,407 | $ | — | $ | 603,407 | $ | — | $ | — | ||||||||||
HLEND B Funding Facility |
316,767 | — | — | 316,767 | — | |||||||||||||||
HLEND C Funding Facility |
487,500 | — | — | — | 487,500 | |||||||||||||||
HLEND D Funding Facility |
125,000 | — | — | 125,000 | — | |||||||||||||||
HLEND E Funding Facility |
— | — | — | — | — | |||||||||||||||
Revolving Credit Facility |
403,964 | — | — | 403,964 | — | |||||||||||||||
November 2025 Notes |
170,000 | — | 170,000 | — | — | |||||||||||||||
November 2027 Notes |
155,000 | — | — | 155,000 | — | |||||||||||||||
March 2026 Notes |
276,000 | — | 276,000 | — | — | |||||||||||||||
March 2028 Notes |
124,000 | — | — | 124,000 | — | |||||||||||||||
September 2027 Notes |
75,000 | — | — | 75,000 | — | |||||||||||||||
September 2028 Notes |
250,000 | — | — | 250,000 | — | |||||||||||||||
January 2029 Notes |
550,000 | — | — | 550,000 | — | |||||||||||||||
2023 CLO Secured Notes |
323,000 | — | — | — | 323,000 | |||||||||||||||
Total |
$ | 3,859,638 | $ | — | $ | 1,049,407 | $ | 1,999,731 | $ | 810,500 | ||||||||||
For additional information on our debt obligations see “” to the consolidated financial statements included elsewhere in this prospectus.
Note 7. Borrowings
103
Off-Balance
Sheet Arrangements Portfolio Company Commitments
Our investment portfolio contains and is expected to continue to contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of March 31, 2024 and December 31, 2023, we had unfunded delayed draw term loans, revolvers and preferred equity investments with an aggregate principal amount of $886.6 million and $760.7 million, respectively.
Other Commitments and Contingencies
From time to time, we may become a party to certain legal proceedings incidental to the normal course of its business. As of March 31, 2024, management is not aware of any pending or threatened litigation.
Related-Party Transactions
We entered into a number of business relationships with affiliated or related parties, including the following:
| • | the Advisory Agreement; |
| • | the Administration Agreement; and |
| • | Expense Support and Conditional Reimbursement Agreement; |
In addition to the aforementioned agreements, we, our Adviser and certain of our Adviser’s affiliates have been granted exemptive relief by the SEC to
co-invest
with other funds and accounts sponsored or managed by our Adviser or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. For additional information, see “Note 3. Fees. Expenses, Agreements and Related Party Transactions” to the consolidated financial statements included elsewhere in this prospectus. Performance
The (“YTD”) total return based on NAV for each of our share classes are as follows:
year-to-date
Inception Date |
YTD Return (1)
|
|||||||
Class I (no upfront placement fee) |
February 3, 2022 | 3.80 | % | |||||
Class I (with upfront placement fee) |
February 3, 2022 | 1.73 | % | |||||
Class D (no upfront placement fee) |
February 3, 2022 | 3.74 | % | |||||
Class D (with upfront placement fee) |
February 3, 2022 | 1.67 | % | |||||
Class F (no upfront placement fee) |
February 3, 2022 | 3.68 | % | |||||
Class F (with upfront placement fee) |
February 3, 2022 | 1.60 | % | |||||
Class S (no upfront placement fee) |
October 1, 2023 | 3.59 | % | |||||
Class S (with upfront placement fee) |
October 1, 2023 | (0.04 | )% | |||||
| (1) | Performance is through March 31, 2024 and assumes that distributions are reinvested pursuant to our distribution reinvestment plan and, with respect to figures listed next to “with upfront placement fee,” the maximum upfront placement fee (e.g. 2.0% for Class I, Class D and Class F, and 3.5% for Class S) was charged and the starting NAV per share was increased for the applicable period, solely for purposes of this calculation, by the amount of the maximum upfront placement fee. |
Recent Developments
Subscriptions
The Fund received $243.5 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F shares, and Class S shares for subscriptions effective April 1, 2024.
104
The Fund received $255.6 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F shares, and Class S shares for subscriptions effective May 1, 2024.
Share Repurchases
On May 1, 2024, the Fund offered to purchase up to 5% of its Common Shares at a price equal to the net asset value per Share as of June 30, 2024. The offer expired on May 3
0
, 2024. Distributions Declarations
On April 25, 2024, the Fund declared net distributions of $0.1600 per Class I share, $0.1548 per Class D share, $0.1496 per Class F share, and $0.1423 per Class S share, all of which were paid on or about May 31, 2024 to shareholders of record as of April 30, 2024. Additionally, the Fund declared variable supplemental distributions of $0.0550 for all share classes outstanding, all of which were paid on or about May 31, 2024 to shareholders of record as of April 30, 2024.
On May 31, 2024, the Fund declared net distributions of $0.1600 per Class I share, $0.1546 per Class D share, $0.1492 per Class F share, and $0.1417 per Class S share, all of which are payable on or about June 28, 2024 to shareholders of record as of May 31, 2024. Additionally, the Fund declared variable supplemental distributions of $0.0550 for all share classes outstanding, all of which are payable on or about June 28, 2024 to shareholders of record as of May 31, 2024.
Managing Dealer
On April 11, 2024, the Fund entered into a managing dealer agreement (the “Managing Dealer Agreement”) with HPS Securities, LLC, as the Fund’s managing dealer (“HPS Securities”). Pursuant to the Managing Dealer Agreement, HPS Securities, among other things, manages the Fund’s relationships with third-party brokers engaged by HPS Securities to participate in the distribution of the Fund’s common shares (“participating brokers”) and financial advisors. HPS Securities also coordinates the Fund’s marketing and distribution efforts with participating brokers and their registered representatives with respect to communications related to the terms of the offering, the Fund’s investment strategies, material aspects of the Fund’s operations and subscription procedures. As set forth in and pursuant to the Managing Dealer Agreement, the Fund will pay HPS Securities only shareholder servicing and/or distribution fees with respect to Class S shares, Class D and Class F shares. The Fund will not pay any other fees to the Managing Dealer. The Managing Dealer Agreement may be terminated by the Fund or HPS Securities (i) on 60 days’ written notice or (ii) immediately upon notice to the other party in the event that such other party shall have failed to comply with any material provision thereof. The Managing Dealer Agreement also may be terminated at any time without the payment of any penalty, (x) by vote of a majority of the Fund’s trustees who are not “interested persons”, as defined in the Investment Company Act of 1940, as amended, of the Fund and who have no direct or indirect financial interest in the operation of the Fund’s distribution plan or the Managing Dealer Agreement or (y) by a majority vote of the outstanding voting securities of the Fund, on not more than 60 days’ written notice to HPS Securities or the Fund’s investment adviser.
In addition, and in connection with the transition to HPS Securities as the Fund’s managing dealer as discussed above, the Fund provided notice for the termination of the managing dealer agreement dated as of August 3, 2021 by and between the Fund and Emerson Equity LLC, which termination shall be effective as of April 11, 2024.
Debt Securitization
On April 18, 2024, the Fund, through HLEND CLO
2024-2,
LLC (the “Issuer”), a limited liability company formed under the laws of the State of Delaware and a wholly-owned indirect subsidiary of the Fund, priced its $526.0 million term debt securitization (the “2024 Debt Securitization”). On May 23, 2024 (the “Closing Date”), 105
the Fund completed the 2024 Debt Securitization, also known as a collateralized loan obligation, in connection with which a subsidiary of the Fund issued the Notes (as defined below). The 2024 Debt Securitization is subject to the Fund’s overall asset coverage requirement.
The notes offered in the 2024 Debt Securitization were issued
by HLEND CLO 2024-2, LLC
(the “2024 Issuer”), an indirect, wholly-owned and consolidated subsidiary of the Fund, and consist of (i) Class A-1
Senior Secured Floating Rate Notes, Class A-2
Senior Secured Floating Rate Notes, Class A-F
Senior Secured Fixed Rate Notes, Class B-1 Senior
Secured Floating Rate Notes, Class B-2 Senior
Secured Floating Rate Notes, Class B-F
Senior Secured Fixed Rate Notes, Class C-1
Secured Deferrable Floating Rate Notes, Class C-2
Secured Deferrable Floating Rate Notes, and Class C-F
Secured Deferrable Fixed Rate Notes (collectively, the “Secured Notes”), and (ii) the subordinated notes issued by the 2024 Issuer (the “Subordinated Notes” and, together with the Secured Notes, the “Notes”), the terms of which are summarized in the table below: Class |
Par Size ($) | Ratings (S&P) | Coupon | |||||
Class A-1 Notes |
255,000,000 | AAA(sf) | SOFR + 0.250% | |||||
Class A-2 Notes |
40,850,000 | AAA(sf) | SOFR + 1.875% | |||||
Class A-F Notes |
9,150,000 | AAA(sf) | 6.275% | |||||
Class B-1 Notes |
35,000,000 | AA(sf) | SOFR + 0.500% | |||||
Class B-2 Notes |
13,500,000 | AA(sf) | SOFR + 2.400% | |||||
Class B-F Notes |
1,500,000 | AA(sf) | 6.714% | |||||
Class C-1 Notes |
31,500,000 | A(sf) | SOFR + 0.750% | |||||
Class C-2 Notes |
12,150,000 | A(sf) | SOFR + 3.200% | |||||
Class C-F Notes |
1,350,000 | A(sf) | 7.490% | |||||
Subordinated Notes |
126,000,000 | N/A | N/A | |||||
On the Closing Date and in connection with the 2024 Debt Securitization, the 2024 Issuer entered into a note purchase agreement (the “Purchase Agreement”) with SG Americas Securities, LLC, as the initial purchaser (the “Initial Purchaser”), pursuant to which the Initial Purchaser purchased the Secured Notes issued pursuant to an indenture as part of the 2024 Debt Securitization. HLEND
CLO 2024-2 Investments,
LLC (the “Depositor”), a wholly-owned subsidiary of the Fund, retained all of the Subordinated Notes issued in the 2024 Debt Securitization. The 2024 Debt Securitization is backed by a diversified portfolio of middle-market commercial loans and participation interests therein, which is managed by the Fund as collateral manager pursuant to a collateral management agreement entered into with the 2024 Issuer on the Closing Date (the “Collateral Management Agreement”). The Fund has agreed to irrevocably waive all collateral management fees payable to it so long as it is the collateral manager under the Collateral Management Agreement. The Notes are scheduled to mature on April 20, 2034; however, the Notes may be redeemed by the 2024 Issuer, at the written direction of (i) a majority of the Subordinated Notes with the consent of the Fund or (ii) the Fund, in each case, on any business day on or after April 20, 2026.
As part of the 2024 Debt Securitization, the Fund, the Depositor and the 2024 Issuer entered into an amended and restated sale and contribution agreement on the Closing Date (the “Sale Agreement”), pursuant to which the Fund sold, transferred, assigned, contributed or otherwise conveyed to the Depositor and the Depositor subsequently sold, transferred, assigned, contributed or otherwise conveyed to the 2024 Issuer the loans and participations therein securing the 2024 Debt Securitization for the purchase price and other consideration set forth in the Sale Agreement. Following this transfer, the 2024 Issuer, and not the Depositor or the Fund, holds all of the ownership interest in such loans and participations therein. The Fund made customary representations, warranties and covenants in the Sale Agreement.
The Secured Notes are the secured obligations of the 2024 Issuer, the Subordinated Notes are the unsecured obligations of the 2024 Issuer, and the indenture governing the Notes include customary covenants and events of
106
default. The Notes have not been, and will not be, registered under the Securities Act or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.
Financing Transactions
On June 11, 2024, the Fund priced an offering of $400,000,000 in aggregate principal amount of its 6.250% notes due 2029 (the “September 2029 Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The September 2029 Notes will mature on September 30, 2029 and may be redeemed in whole or in part at the Fund’s option at any time prior to August 30, 2029 at par value plus a “make-whole” premium and at par value on or thereafter. The offering is expected to close on June 18, 2024, subject to customary closing conditions.
The Fund expects to use the net proceeds of the offering to make investments in accordance with its investment strategy and policies, to reduce borrowings and repay indebtedness incurred under various financing agreements the Fund has entered into and for general corporate purposes of the Fund and its subsidiaries.
Critical Accounting Estimates
The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ.
Investments and Fair Value Measurements
The Fund is required to report its investments for which current market values are not readily available at fair value. The Fund values its investments in accordance with ASC 820, Fair Value Measurement, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.
Investments that are listed or traded on an exchange and are freely transferable are valued at either the closing price (in the case of securities and futures) or the mean of the closing bid and offer (in the case of options) on the principal exchange on which the investment is listed or traded. Investments for which other market quotations are readily available will typically be valued at those market quotations. To validate market quotations, the Fund utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Where it is possible to obtain reliable, independent market quotations from a third party vendor, the Fund uses these quotations to determine the value of its investments. The Fund utilizes
mid-market
pricing (i.e., mid-point of average bid and ask prices) to value these investments. The Adviser obtains these market quotations from independent pricing services, if available; otherwise from one or more broker quotes. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment. Where prices or inputs are not available or, in the judgment of the Adviser, not reliable, valuation approaches based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available, as will be the case for a substantial portion of the Fund’s investments, are valued at fair value as determined in good faith by the Adviser as the Fund’s valuation designee under Rule
2a-5
under the 1940 Act, pursuant to the Fund’s valuation policy, and 107
under the oversight of the Board, based on, among other things, the input of one or more independent valuation firms retained by the Fund to review the Fund’s investments. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
With respect to the quarterly valuation of investments, the Fund undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available as of the last calendar day of each quarter, which includes, among other procedures, the following:
• |
The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in consultation with the Adviser’s investment professionals responsible for each portfolio investment; |
• |
In addition, independent valuation firms retained by the Fund prepare quarter-end valuations of each such investment that was (i) originated or purchased prior to the first calendar day of the quarter and (ii) is not a de minimis investment, as determined by the Adviser. The independent valuation firms provide a final range of values on such investments to the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations; |
• |
The Adviser’s valuation committee with respect to the Fund (the “Valuation Committee”) reviews the valuation recommendations prepared by the Adviser’s valuation team and, as appropriate, the independent valuation firms’ valuation ranges; |
• |
The Adviser’s Valuation Committee then determines fair value marks for each of the Fund’s portfolio investments; and |
• |
The Board and Audit Committee periodically review the valuation process and provide oversight in accordance with the requirements of Rule 2a-5 under the 1940 Act. |
As part of the valuation process, the Fund takes into account relevant factors in determining the fair value of our investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant, of: (i) the estimated enterprise value of a portfolio company, generally based on an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, and (v) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Fund has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Fund’s portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Fund and the Adviser may reasonably rely on that assistance. However, the Adviser is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Fund’s valuation policy, the Board’s oversight and a consistently applied valuation process.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date.
The Fund’s accounting policy on the fair value of our investments is critical because the determination of fair value involves subjective judgments and estimates. Accordingly, the notes to the Fund’s consolidated financial statements express the uncertainty with respect to the possible effect of these valuations, and any change in these valuations, on the consolidated financial statements.
See “Note 5. Fair Value Measurements” to the consolidated financial statements included elsewhere in this prospectus for more information on the fair value of the Fund’s investments.
108
INVESTMENT OBJECTIVE AND STRATEGIES
We were formed on December 23, 2020, as a Delaware statutory trust. We seek to invest primarily in newly originated senior secured debt and other securities, including syndicated loans, of private U.S. companies within the upper middle market.
We have elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code. As a BDC and a RIC, we will be required to comply with certain regulatory requirements.
Our investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. Our investment strategy focuses primarily on newly originated, privately negotiated senior secured term loans in high quality, established upper middle market companies, and in select situations, companies in special situations. The loans within the portfolio are typically floating rate instruments that often pay current income on a quarterly basis. We expect returns to be generated from ongoing interest income as well as from original issue discount, closing payments, commitment fees, prepayments and related fees. We use the term “upper middle market companies” to generally mean companies with EBITDA of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually, at the time of investment. We have and may continue to invest in smaller or larger companies if the opportunity presents attractive investment characteristics and risk-adjusted returns. While our investment strategy primarily focuses on companies in the United States, we also intend to leverage HPS’s global presence to invest in companies in Europe, Australia and other locations outside the U.S., subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.” In addition to corporate level obligations, our investments in these companies may also opportunistically include private asset-based financings such as equipment financings, financings against mission-critical corporate assets and mortgage loans. We may also selectively make investments that represent equity in portfolios of loans, receivables or other debt instruments. We may also participate in programmatic investments in partnership with one or more unaffiliated banks or other financial institutions, where our partner assumes senior exposure to each investment, and we participate in the junior exposure.
Our investment strategy also includes a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. Our liquid credit instruments have included and may continue to include senior secured loans, senior secured bonds, high yield bonds and structured credit instruments. We intend to use these investments to maintain liquidity for our share repurchase program and manage cash before investing subscription proceeds into originated loans, while also seeking attractive investment returns. We may also invest in publicly traded securities of larger corporate issuers on an opportunistic basis when market conditions create compelling potential return opportunities, subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.”
We believe our investment strategy has the ability to benefit from strong downside protections. With our primary focus on senior secured loans, our investments are generally expected to display conservative ratios, benefit from a direct security interest in a borrower’s assets and require that borrowers provide financial maintenance covenants or other structural credit features tailored to mitigate identifiable credit risks.
loan-to-value
We will capitalize on HPS’s scale, differentiated breadth of deal origination sourcing, expertise in fundamental credit analysis and structuring, rigorous approach to investment selection and active portfolio monitoring to implement our investment strategy and seek to deliver attractive risk returns to our shareholders.
Under normal circumstances, we invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in credit and credit-related instruments issued by corporate issuers (including loans, notes, bonds and other corporate debt securities).
Our investments in newly originated secured debt have taken and may continue to take the form of first lien senior secured and unitranche loans, notes, bonds and other corporate debt securities, bridge loans, assignments, participations, total return swaps and other derivatives. We seek to invest primarily in first lien senior secured debt and unitranche loans but may also invest in second lien and subordinated debt. We invest primarily in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. A portion of the Fund’s investments may also be composed of “covenant-lite loans,” although such loans are not expected to comprise a significant portion of the Fund’s portfolio. We also have the ability to acquire investments through secondary transactions, including through loan portfolios, receivables, contractual obligations to purchase subsequently originated loans and other debt instruments.
Although not expected to be a primary component of our investment strategy, we may also make certain Opportunistic Investments, in each case taking into account availability of leverage for such investments and our target risk/return profile. We may, to a limited extent, invest in junior debt (whether secured or unsecured), including mezzanine loans, as part of our investment strategy and upon approval of each such investment by our portfolio management team. We may also invest in preferred equity, or our debt investments may be accompanied by equity-related securities (such as options or warrants) and/or select common equity investments. While we expect our assets to be primarily directly originated, we may also invest in structured products or broadly syndicated transactions where HPS and/or its affiliates seek an anchor-like or otherwise influential role in certain traded instruments as part of our liquid portfolio.
The loans within the portfolio are typically floating rate instruments that often pay current income on a quarterly basis, and we look to generate return from a combination of ongoing interest income, original issue discount, closing payments, commitment fees, prepayments and related fees. Our investments generally have stated terms of three to seven years, and the expected average life of our investments is generally two to three years. However, there is no limit to the maturity or duration of any investment that we may hold in our portfolio. We expect most of our debt investments to be unrated. When rated by a nationally recognized statistical ratings organization, our investments would generally carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investor Service, Inc. or lower than
“BBB-”
by Standard & Poor’s Rating Services). Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be illiquid and difficult to value. Subject to the limitations of the 1940 Act, we may invest in loans or other securities, the proceeds of which may refinance or otherwise repay debt or securities of companies whose debt is owned by other funds and accounts sponsored or managed by the Adviser or HPS. We expect to invest in
co-investment
transactions with other funds and accounts sponsored or managed by the Adviser or HPS. See “Regulation—Affiliated Transactions” and “Conflicts of Interest—Co-Investment
Relief. We have, and may in the future, enter into interest rate, foreign exchange, and/or other derivative arrangements to hedge against interest rate, currency, and/or other credit related risks through the use of futures, swaps, options and forward contracts. These hedging activities are subject to the applicable legal and regulatory compliance requirements; however, there can be no assurance any hedging strategy employed will be successful. We have and may also seek to borrow capital in local currency as a means of hedging
non-U.S.
dollar denominated investments. Our investments are subject to a number of risks. See “Investment Objective and Strategies” and “Risk Factors.”
The Adviser and the Administrator
The Fund’s investment activities are managed by the Adviser, an investment adviser registered with the SEC under the Advisers Act and a wholly-owned subsidiary of HPS that has access to the same resources and
investment personnel for the management of the Fund that HPS utilizes for the management of other funds and accounts. Our Adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis.
The Administrator provides or oversees the performance of administrative and compliance services. We reimburse the Administrator for its costs, expenses and our allocable portion of compensation (including salaries, bonuses and benefits) of the Administrator’s personnel and the Administrator’s overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement.
HPS is a leading global credit-focused alternative investment firm with $112 billion of total assets under management as of March 31, 2024. HPS invests primarily in
non-investment
grade credit and manages various strategies across the capital structure that include privately negotiated senior debt; privately negotiated junior capital solutions in debt, preferred equity and common equity formats; liquid credit, including syndicated leveraged loans, CLOs and high yield bonds; asset-based finance; and real estate. Established in 2007, HPS has approximately 200 investment professionals and over 660 total employees, working from fourteen offices globally as of March 31, 2024. HPS was established as a unit of HCM, a subsidiary of JPMAM. In March 2016, the principals of HPS acquired HPS from JPMAM, which retained HCM’s hedge fund strategies. In June 2018, affiliates of Dyal Capital Partners, a division of Blue Owl Capital Inc., made a passive minority investment in HPS. In February 2022, an affiliate of The Guardian Life Insurance Company of America made a passive minority investment in HPS. Market Opportunity
Private credit as an asset class has grown considerably since the global financial crisis of 2008, and it is estimated that the total market size of private credit has grown to reach $1.6 trillion in 2023.
7
We expect this growth to continue and, along with the factors outlined below, to provide a robust backdrop to what HPS believes will be a significant number of attractive investment opportunities aligned to our investment strategy. | • | Senior Secured Loans Offer Attractive Investment Characteristics |
| • | Regulatory Actions Continue to Drive Demand towards Private Financing. non-investment grade credit commitments on their balance sheets, particularly with respect to middle and upper middle market-sized issuers. Instead, many commercial banks have adopted an “underwrite-and-distribute” 8 . Access to the |
|
7 |
Source: Preqin, Preqin Special Report: The Future of Alternatives in 2028. |
|
8 |
Source: S&P LCD Quarterly Leveraged Lending Review 4Q 2022, Primary Investor Market: Banks vs. Non-bank. |
syndicated leveraged loan market has also become challenging for both first time issuers and smaller scale issuers, who previously had access to the capital markets. Issuers of tranche sizes representing less than $500 million account for approximately 5% of the new issue market as of March 31, 2024 as compared to over 49% in 2000 9 . HPS believes that these regulatory actions have caused a shift in the role that commercial banks play in the direct lending market for middle to upper middle market borrowers, creating a void in the financing marketplace. This void has been filled by direct lending platforms which seek to provide borrowers an alternative “originate and retain” solution. In response, corporate borrower behavior has increasingly shifted to a more conscious assessment of the benefits that direct lending platforms of strategic financing partners can offer. |
| • | Volatility in Credit Markets has made Availability of Capital Less Predictable. |
| • | Increasingly Larger Borrowers Are Finding Value in Private Solutions |
Potential Competitive Strengths
HPS is a leading global, credit-focused alternative investment firm that seeks to provide creative capital solutions and generate attractive risk-adjusted returns for its clients. The scale and breadth of HPS’s platform offers the flexibility to invest in companies large and small across the capital structure through both standard and highly customized structures. At its core, HPS shares a common thread of intellectual rigor and investment discipline that enables it to create value for its clients, who have entrusted HPS with approximately $112 billion of assets under management as of March 31, 2024.
HPS is a leading provider of credit solutions to middle and upper middle market companies. Since its inception in 2007, HPS has committed approximately $131 billion
10
in privately originated transactions across more than 760 investments. We benefit from the following key competitive strengths of HPS in pursuing our investment strategy: | • | Scaled Capital with an Ability to Speak for the Full Debt Quantum |
|
9 |
Source: S&P LCD Middle Market Deal Size Category Factsheet 1Q 2024. |
|
10 |
As of December 31, 2023. Based on the total face value committed to private credit investments that are part of the Strategic Investment Partners strategy, the Specialty Direct Lending strategy, the Core Senior Lending strategy, and any additional private credit investments made by HLEND, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are part of the Special Situations or Asset Value strategies. |
| platform, including managed accounts and similar investment vehicles, allows it to commit to loans of up to approximately $1 billion. HPS believes that there is a finite set of competitors who can provide and solely hold investments of this size and service these larger scale borrowers. HPS believes that many borrowers in this segment value the confidentiality, efficiency and execution certainty available in the private credit market. HPS also believes that being the sole or majority investor in a debt tranche can also provide the funds it or its affiliates advise with enhanced downside protection. Additionally, due to favorable competitive dynamics with fewer capital providers with the ability to deliver scaled capital solutions, HPS believes that the HPS Direct Lending platform has, to date, been successful in capturing attractive risk-adjusted returns for providing solutions to larger, more diversified borrowers. Having the scale to provide a complete capital solution to larger borrowers has also been an important factor in HPS’s ability to make investments in an increasingly competitive market environment. |
| • | Diversified Sourcing Network 11 HPS believes that its ability to source from non-sponsor channels significantly reduces the level of competitive intensity and allows it to focus on structuring improved economics, stricter financial covenants and stronger loan documentation. In addition, the direct dialogue with management teams can result in a better understanding of the underlying borrowers and better positioning to actively manage investments throughout their life. HPS is also actively engaged with financial sponsors, and its exposure to sponsor transactions tends to increase in times of public market dislocation (when certainty of capital and speed of execution with a single counterparty is often sought after and highly valued). HPS believes that the ability to flex in and out of both sponsor and non-sponsor markets allows the Fund to remain nimble and optimize its opportunity set across different market dynamics. While HPS seeks to source investments from non-sponsor channels for the Fund, as of February 29, 2024, the Fund has sourced only a minority of its overall private credit investments from non-sponsor channels. The Fund may not, in the future, obtain its desired allocation to investments from the non-sponsor channel, which could adversely impact returns. |
| • | Breadth of HPS ’ s Credit Investment Platform non-investment grade credit opportunities across the capital structure. As a multi-strategy credit platform, seeking opportunities across both private and liquid credit, HPS employs an open-architecture framework under which investment teams can apply shared knowledge and insights when evaluating new investment opportunities. HPS’s team of approximately 200 investment professionals managed approximately $112 billion as of March 31, 2024. HPS believes that its multi-strategy approach provides a differentiated vantage point to evaluate relative value and better positions the firm to provide borrowers with a comprehensive and diverse set of potential financing solutions, which may enable the Fund to see more investment opportunities. In addition, HPS believes that its global footprint enables the Fund to view and potentially benefit from relative value opportunities across geographies. |
| • | Willingness to Navigate Complexity to Evaluate a Mispriced Opportunity. |
|
11 |
As of December 31, 2023. Based on all investments made since inception by funds and accounts across HPS’s Direct Lending Platform, including Specialty Direct Lending, Core Senior Lending and HLEND strategies. |
| that addressing complexity through creative pricing and structure can generate potential investment opportunities that can offer attractive, uncorrelated returns taking into account the additional work that is required. Leveraging HPS’s multi-strategy approach to credit may provide the Fund with distinctive vantage points in determining the relative value of, as well as insight into appropriately pricing, the investment opportunity in light of the risk. HPS believes that the capability to navigate complexity to identify a potentially mispriced investment opportunity is important in environments where volatility and uncertainty around economic growth is common. |
| • | Focus on the Upper Middle Market upper-end of the middle market. As HPS believes that the market is in its later stages of the existing credit cycle, the Adviser intends to position the portfolio by focusing on larger, more resilient companies that generally generate $75 million to $1 billion of EBITDA annually or $250 million to $5 billion in revenue annually. In comparison, the S&P LCD definition of middle market is defined as companies with $50 million of EBITDA or less. HPS believes the upper end of the middle market has a favorable supply/demand dynamic, with substantial demand resulting from regulatory driven structural shifts in the financial landscape and limited supply as most other direct lending providers focus on small to middle market borrowers. HPS also believes that this segment of the market can offer greater downside protection, as larger businesses typically possess the benefits of scale and a greater critical mass through diversification of customers and supplier base. As a result of these dynamics, HPS believes that it can generally negotiate commensurate or better terms with respect to borrowers in that segment and that those borrowers can provide the Fund with increased downside protection, resulting in attractive risk-adjusted returns compared to the smaller-end and core-middle market. |
| • | Emphasis on Capital Preservation. |
The Board
Overall responsibility for the Fund’s oversight rests with the Board. We have entered into the Advisory Agreement with the Adviser, pursuant to which the Adviser manages the Fund on a basis. The Board is responsible for overseeing the Adviser and other service providers in our operations in accordance with the provisions of the 1940 Act, our Bylaws and applicable provisions of state and other laws. The Adviser will keep the Board well informed as to the Adviser’s activities on our behalf and our investment operations and provide the Board with additional information as the Board may, from time to time, request. The Board is currently composed of six members, four of whom are Trustees who are not “interested persons” of the Fund or the Adviser as defined in the 1940 Act.
day-to-day
Investment Selection and Process for Private Investment Portfolio
We believe that much of the value HPS creates for our private investment portfolio comes on the front end through the diversity of its sourcing capabilities. To source transactions, HPS leverages the breadth of its global credit platform and its shared knowledge and insights gleaned across both private and public credit to cast a wide net to drive transaction flow. HPS seeks to generate investment opportunities across its various sourcing channels, including financial intermediaries such as investment banks and debt advisory firms, direct relationships with companies and management teams, private equity sponsors and formal partnerships and
strategic arrangements with select financial institutions. We believe that this multi-pronged approach to sourcing provides a significant pipeline of investment opportunities for us that could contribute to our portfolio with attractive investment economics and risk/reward profile.
The Adviser and HPS evaluate and manage directly originated investments by adhering to the core principles of rigorous fundamental analysis, thorough due diligence, active portfolio monitoring and risk management.
Rigorous Investment Screening and Selection Process
HPS expects us to benefit from its global sourcing platforms and seeks to build a strong pipeline of investment opportunities. From this pipeline, certain investments proceed to an initial screening discussion that focuses on establishing the framework for the viability of the investment opportunity and the reasons to make the investment (e.g., leading market share, sustainable franchise and brand value, and
value-add
products or services). When evaluating a loan, the Investment Team expects to focus on a combination of business stability, asset values and contractual loan protections. We focus on lending to borrowers that the Investment Team believes demonstrate or are expected to develop attractive characteristics which may include: (i) leading market share, (ii) sustainable competitive advantages and strong barriers to entry, (iii) substantial free cash flow conversion and EBITDA margins, (iv) liquidity to withstand market cycles, and/or (v) high-quality, proven management teams. When evaluating asset value, the Investment Team intends to focus on evaluating: (a) the liquidity and stability of the secondary market for the collateral, (b) the ability to effectively enforce security provisions and/or (c) the level of over-collateralization offered by the borrower’s underlying assets. This process seeks to prioritize the Investment Team’s time spent and resources allocated by focusing on screening for opportunities where the borrower may place greater emphasis on certain non-economic
characteristics, such as certainty of scaled capital, creative financing solutions, an ability to understand complexity of capital structure or business risk and/or confidentiality of operating and financial performance. HPS believes that when facing these characteristics, we have a competitive edge over certain syndicated financing solutions or other competitive direct lending platforms (both of which typically have a lower cost of capital). This rigorous selection process helps the Investment Team focus on situations where the Adviser believes we have a competitive edge to capitalize on an investment opportunity. Fundamental Analysis, Due Diligence, and Capital Preservation
The Investment Team’s approach to investment selection is anchored around seeking to conduct rigorous upfront, “private equity-like” due diligence. The Investment Team’s due diligence and risk management processes seek to utilize and benefit from the substantial resources within HPS, as well as the Investment Team’s extensive relationships with management teams, industry experts, consultants, and outside advisors. The Fund may at times retain outside consultants, expert networks, research firms and accounting and audit services to help enhance due diligence in certain areas of focus. The Investment Team’s intended approach to working closely with involved counterparties, such as financial intermediaries, or directly with a borrower’s management team, is expected to provide certain due diligence advantages by facilitating access to information needed to complete each step of the Investment Team’s screening, due diligence and monitoring process. In addition, the Investment Team seeks to employ a comprehensive investment process, which may include
in-depth
due diligence and full credit analysis on transaction drivers, investment thesis, review of business, industry and borrower risks and mitigants, undertaking a competitive analysis, management calls/meetings, reviewing and performing financial analysis of historical results, preparing detailed models with financial forecasts, examining legal structure/terms/collateral, performing relative value analysis, employing external consultants and/or other considerations that the Investment Team deems appropriate. This investment process typically includes: | i. | Review of historical filings, financial information and other publicly-available information; |
| ii. | Assessment of monthly, quarterly and annual financial projections; |
| iii. | Business and industry diligence including meetings with senior management team, often in conjunction with retained third party experts; |
| iv. | Site/plant visits (where relevant), in certain cases in conjunction with retained industry-specific independent engineers; |
| v. | Accounting and quality of earnings review, often through retained external accountants; |
| vi. | “Channel checks” on the company, industry and management team, utilizing the Investment Team’s relationships as well as the institutional relationships of HPS; |
| vii. | Background checks on senior management and members of the board of directors using external providers; and/or |
| viii. | Detailed legal and structural analysis of the borrower and negotiation of the investment documentation. |
HPS generally seeks to employ a “cradle to grave” approach with respect to its investments such that the Investment Team is responsible for sourcing the investment, investment due diligence, and monitoring the investment until the investment is exited. HPS believes that this is a distinctive approach that can lead to (i) greater connectivity between HPS and a borrower’s management teams, (ii) enhanced access to the borrower details and (iii) increased accountability to help reduce the inherent risk of knowledge loss in circumstances where the sourcing, diligence and monitoring roles are fragmented.
Post-Closing—Active Monitoring and Value-Added Collaboration with Portfolio Companies
The Investment Team intends to actively monitor the activities and the financial condition of each portfolio company through active dialogue with members of the management team. Currently, portfolio holdings are reviewed on a monthly basis and, on a quarterly basis, the Investment Team holds
in-depth
portfolio review discussions led by the portfolio manager. Typically, during these discussions, each investment is assessed and ranked based on a risk scale that seeks to classify an investment by both operating and company/industry performance relative to its initial base-case plan. Based on these risk rankings, any investments that are undergoing strategic or financial challenges are typically reviewed and assessed on a weekly basis by the portfolio manager. The frequency of these discussions is intended to help inform the Investment Team of any movement in the underlying operating and credit performance of the challenged investments on a nearly real-time basis. Furthermore, HPS believes that these challenged investments benefit from the dedicated focus by HPS’s Value Enhancement Team (“VET”). The VET’s goal is to enhance values in positions with a high degree of risk and/or sufficient control, particularly in investments that have received reorganized equity post-restructuring. The VET seeks to work in close coordination with the investment’s deal team through any workout processes, with a focus on preserving principal and enhancing post-reorganization equity value. The VET seeks to achieve this through a variety of activities, which may include the selection of new management teams, board members, setting of management incentives, engaging industry consultants, and/or identifying and implementing the
go-forward
strategy of the borrower. Where needed, the VET expects to work fluidly with the investment’s deal team and/or restructuring team and expects to act as an additional resource on challenged investments. Overall, this hands-on
approach is designed to allow the Investment Team to proactively identify, address and mitigate downside risk to underperforming investments early in the life of the investment. Disciplined Approach
The Investment Team expects to combine a disciplined investment approach with a substantial platform for transaction sourcing. Through this platform, the Investment Team expects to identify and invest in a select number of attractive investment opportunities. By adhering to the platform’s core principles of rigorous fundamental analysis, significant due diligence and active risk management, the Investment Team seeks to build an investment portfolio of consisting primarily of senior secured loan investments that the Investment Team believes will generate an attractive risk-adjusted return profile.
Warehousing Transactions
On August 17, 2021, we entered into multiple sale and purchase agreements (the “Purchase Agreements”) with Macquarie US Trading LLC and Macquarie Bank Limited (together, the “Financing Provider”), whereby we agreed, subject to certain conditions, to purchase certain assets from unaffiliated parties. The transactions under the Purchase Agreements related primarily to newly originated, privately negotiated senior secured term loans to middle market companies consistent with our investment objective and strategies (the “Warehousing Transactions”). The Warehousing Transactions were designed to assist us with deploying capital upon receipt of subscription proceeds. Under the Purchase Agreements, we had forward obligations to settle the purchase of certain investments (the “Warehouse Investments”) from the Financing Provider, each of which was obligated to settle the sale of such investments subject to the following conditions: (a) that we received subscriptions of at least $300 million; and (b) that our Board approved the purchase of the specific Warehouse Investments (collectively, the “Warehouse Conditions”).
Pursuant to the Purchase Agreements, we were entitled to request that the Financing Provider acquire the Warehouse Investments that we designated from time to time, which a Financing Provider was entitled to approve or reject in its sole and absolute discretion. Prior to any sale to us, the Warehouse Investments were owned and held solely for the account of the relevant Financing Provider. Until such time the Warehouse Conditions were satisfied, which occurred on February 3, 2022, we had no obligation to purchase the Warehouse Investments nor be entitled to any benefits or subject to any obligations under the Purchase Agreements. On such date, we recognized $656.3 million of investments at principal ($106.9 million of which was unfunded) from the Financing Provider. Since February 3, 2022, we have not entered into any Purchase Agreement with the Financing Provider.
Investment Committee
Our investment activities are under the direction of the Investment Committee and the Board. The Investment Committee is currently comprised of Michael Patterson, Scott Kapnick, Scot French, Purnima Puri, Faith Rosenfeld, Colbert Cannon, Michael Fenstermacher, Jeffrey Fitts, Vikas Keswani, and Grishma Parekh. Our activities are overseen by our Investment Team, each member of which is an officer or employee of HPS or its affiliate. The Investment Team includes individuals with substantial experience in both secured loan and public credit investing and risk management. HPS may change the composition of the Investment Committee and the Investment Team at any time, and HPS may add additional senior Investment Team members to the Investment Committee over time. The culmination of the private investment process is typically a comprehensive Investment Committee recommendation package that details the merits, risks and research conducted to reach the investment conclusion. This package is then presented, reviewed and deliberated by the Investment Team and the Investment Committee members during the Investment Committee Meeting. The Investment Committee Meeting is the forum in which Investment Committee members can raise key questions, counter opinions, and deliberate on the investment opportunity.
day-to-day
Allocation of Investment Opportunities
General
Our Adviser and/or HPS provide investment management services to registered investment companies, investment funds, client accounts and proprietary accounts that HPS and/or the Adviser may establish.
The Adviser shares any investment and sale opportunities with its other clients, HPS’s clients and us in accordance with the Advisers Act and firm-wide allocation policies. Subject to the Advisers Act and as further set forth in this prospectus, certain other clients of the Adviser or certain clients of HPS may receive certain priority or other allocation rights with respect to certain investments, subject to various conditions set forth in such other clients’ respective governing agreements.
In addition, as a BDC regulated under the 1940 Act, we are subject to certain limitations relating to
co-investments
and joint transactions with affiliates, which, in certain circumstances, limit the Fund’s ability to make investments or enter into other transactions alongside other clients. Co-Investment
Relief We and the Adviser have received an exemptive order from the SEC that permits us, among other things, to , based on investment strategy). The
co-invest
with certain other persons, including certain affiliates of the Adviser and certain funds and accounts managed and controlled by the Adviser and its affiliates, subject to certain terms and conditions. Pursuant to such order, our Board has established Board Criteria clearly defining co-investment
opportunities in which we will have the opportunity to participate with other funds or accounts sponsored or managed by the Adviser or HPS that target similar assets. If an investment falls within the Board Criteria, the Adviser must offer an opportunity for us to participate. We may determine to participate or not to participate, depending on whether the Adviser determines that the investment is appropriate for us (e.g.
co-investment
would generally be allocated to us, the Adviser’s other clients and the HPS funds or accounts that target similar assets pro rata based on capital available for investment in the asset class being allocated. If the Adviser determines that such investment is not appropriate for us, the investment will not be allocated to us, but the Adviser will be required to report such investment and the rationale for its determination for us to not participate in the investment to the Board at the next quarterly board meeting. Competition
The business of investing in debt investments is highly competitive and involves a high degree of uncertainty. Market competition for investment opportunities includes traditional lending institutions, including commercial and investment banks, as well as a growing number of
non-traditional
participants, such as private credit funds, hedge funds, private equity funds, mezzanine funds, and other private investors, as well as BDCs, and debt-focused competitors, such as issuers of CLOs, and other structured loan funds. In addition, given our target investment size and investment type, the Adviser expects a large number of competitors for investment opportunities. Some of these competitors may have access to greater amounts of capital and to capital that may be committed for longer periods of time or may have different return thresholds than us, and thus these competitors may have advantages not shared by us. In addition, competitors may have incurred, or may in the future incur, leverage to finance their debt investments at levels or on terms more favorable than those available to us. Furthermore, competitors may offer loan terms that are more favorable to borrowers, such as less onerous borrower financial and other covenants, borrower rights to cure defaults, and other terms more favorable to borrowers than current or historical norms. Strong competition for investments could result in fewer investment opportunities for us, as certain of these competitors have established or are establishing investment vehicles that target the same or similar investments that we intend to purchase. Over the past several years, many investment funds have been formed with investment objectives similar to ours, and many such existing funds have grown in size and have added larger successor funds to their platform. These and other investors may make competing offers for investment opportunities identified by the Adviser which may affect our ability to participate in attractive investment opportunities and/or cause us to incur additional risks when competing for investment opportunities. Moreover, identifying attractive investment opportunities is difficult and involves a high degree of uncertainty. The Adviser may identify an investment that presents an attractive investment opportunity but may not be able to complete such investment in a manner that meets our objectives. We may incur significant expenses in connection with the identification of investment opportunities and investigating other potential investments that are ultimately not consummated, including expenses related to due diligence, transportation and legal, accounting and other professional services as well as the fees of other third-party service providers.
Non-Exchange
Traded, Perpetual-Life BDC We are
non-exchange
traded, meaning our shares are not listed for trading on a stock exchange or other securities market, and a perpetual-life BDC, meaning we are an investment vehicle of indefinite duration, whose Common Shares are intended to be sold monthly on a continuous basis at a price generally equal to our monthly NAV per share. In our perpetual-life structure, we may, at our discretion, offer investors an opportunity to repurchase their shares on a quarterly basis, but we are not obligated to offer to repurchase any in any particular quarter. We believe that our perpetual nature enables us to execute a patient and opportunistic strategy and be able to invest across different market environments. This may reduce our risk of being a forced seller of assets in market downturns compared to non-perpetual funds. While we may consider a liquidity event at any time in the future, we currently do not intend to undertake a liquidity event, and we are not obligated by the Declaration of Trust or otherwise to effect a liquidity event at any time.
FINRA Rule 2310(b)(3)(D) requires that we disclose the liquidity of prior public programs sponsored by the Adviser, in which disclosed in the offering materials was a date or time period at which the program might be liquidated, and whether the prior program(s) in fact liquidated on or around that date or during the time period. As of the date of this prospectus, the Adviser has not sponsored any prior public programs responsive to FINRA Rule 2310(b)(3)(D).
Employees
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 of the Adviser or its affiliates pursuant to the terms of the Advisory Agreement and the Administrator or its affiliates pursuant to the Administration Agreement. Each of our executive officers described under “Management of the Fund” is employed by the Adviser or its affiliates. Our day-to-day investment operations are managed by the Adviser. The services necessary for the sourcing and administration of our investment portfolio are provided by investment professionals employed by the Adviser or its affiliates. The Investment Team will focus on origination, non-originated investments and transaction development and the ongoing monitoring of our investments. In addition, we reimburse the Administrator for its costs, expenses and allocable portion of overhead, including compensation (including salaries, bonuses and benefits) paid by the Administrator (or its affiliates) to our chief compliance officer and chief financial officer and their respective staffs as well as other administrative personnel (based on the percentage of time such individuals devote, on an estimated basis, to our business and affairs).
Regulation as a BDC
The following discussion is a general summary of the material prohibitions and descriptions governing BDCs generally. It does not purport to be a complete description of all of the laws and regulations affecting BDCs.
Qualifying Assets
(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an Eligible Portfolio Company (as defined below), or from any person who is, or has been during the preceding 13 months, an affiliated person of an Eligible Portfolio Company, or from any other person, subject to such rules as may be prescribed by the SEC. An “Eligible Portfolio Company” is defined in the 1940 Act as any issuer which:
(a) is organized under the laws of, and has its principal place of business in, the United States;
(b) is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and
(c) satisfies any of the following:
(i) does not have any class of securities that is traded on a national securities exchange;
(ii) has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;
(iii) is controlled by a BDC or a group of companies, including a BDC and the BDC has an affiliated person who is a director of the Eligible Portfolio Company; or
(iv) is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.
(2) Securities of any Eligible Portfolio Company controlled by us.
(3) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
(4) Securities of an Eligible Portfolio Company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the Eligible Portfolio Company.
(5) Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.
(6) Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
In addition, a BDC must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above.
Significant Managerial Assistance
Temporary Investments
Warrants
Leverage and Senior Securities; Coverage Ratio
defined in the 1940 Act, would at least equal 150% immediately after each such issuance. On August 30, 2021, our sole shareholder approved the adoption of this 150% threshold pursuant to Section 61(a)(2) of the 1940 Act and such election became effective the following day. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets we hold, we may raise $200 from borrowing and issuing senior securities. In addition, while any senior securities remain outstanding, we will be required to make provisions to prohibit any distribution to our shareholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We are also permitted to borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes, which borrowings would not be considered senior securities.
We have entered into credit facilities, unsecured notes, debt securitization issuances and other financing arrangements to facilitate our investment objectives. Such credit facilities typically bear interest at floating rates spreads over SOFR or other applicable reference rates. Shareholders will bear the costs associated with any borrowings under our financing arrangements. In connection with a credit facility or other borrowings, lenders may require us to pledge assets, commitments and/or drawdowns (and the ability to enforce the payment thereof) and may ask to comply with positive or negative covenants that could have an effect on our operations. In addition, from time to time, our losses on leveraged investments may result in the liquidation of other investments held by us and may result in additional drawdowns to repay such amounts.
We may enter into a TRS agreement. A TRS is a contract in which one party agrees to make periodic payments to another party based on the change in the market value of the assets underlying the TRS, which may include a specified security, basket of securities or securities indices during a specified period, in return for periodic payments based on a fixed or variable interest rate. A TRS effectively adds leverage to a portfolio by providing investment exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. Because of the unique structure of a TRS, a TRS often offers lower financing costs than are offered through more traditional borrowing arrangements. We would typically have to post collateral to cover this potential obligation.
We have created, and may in the future also create, leverage by securitizing our assets (including in CLOs) and retaining the equity portion of, and/or the subordinated notes issued by, the securitized vehicle. See “Risk Factors—The Fund is Subject to Risks Associated with Forming CLOs.” We may also from time to time make secured loans of our marginable securities to brokers, dealers and other financial institutions.
Code of Ethics
17j-1
under the 1940 Act and Rule 204A-1
under the Advisers Act, respectively, that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to the code are permitted to 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. You may read and copy this code of ethics at the SEC’s Public Reference Room in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090.
You may also obtain copies of the codes of ethics, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549. Affiliated Transactions
co-invest
with certain other persons, including certain affiliates of the Adviser and certain funds and accounts managed and controlled by the Adviser and its affiliates, subject to certain terms and conditions. Other
We are also required to provide and maintain a bond issued by a reputable fidelity insurance company to protect against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any Trustee or officer against any liability to our shareholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.
We are also required to designate a chief compliance officer and to adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws and to review these policies and procedures annually for their adequacy and the effectiveness of their implementation.
We are not permitted to change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a majority of our outstanding voting securities. A majority of the outstanding voting securities of a company is defined under the 1940 Act as the lesser of: (i) 67% or more of such company’s shares present at a meeting if more than 50% of the outstanding shares of such company are present or represented by proxy, or (ii) more than 50% of the outstanding shares of such company.
122
SENIOR SECURITIES
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)
|
|||||||||||||
| HLEND A Funding Facility |
||||||||||||||||
| March 31, 2024 (unaudited) |
$ |
|
N/A | |||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| December 31, 2022 |
|
N/A | ||||||||||||||
| HLEND B Funding Facility |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| December 31, 2022 |
|
N/A | ||||||||||||||
| HLEND C Funding Facility |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| HLEND D Funding Facility |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| HLEND E Funding Facility |
||||||||||||||||
| March 31, 2024 (unaudited) |
|
|
N/A | |||||||||||||
| Revolving Credit Facility |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| December 31, 2022 |
|
N/A | ||||||||||||||
| November 2025 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| December 31, 2022 |
|
N/A | ||||||||||||||
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)
|
|||||||||||||
| November 2027 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| December 31, 2022 |
|
N/A | ||||||||||||||
| March 2026 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| March 2028 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| September 2027 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| September 2028 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| January 2029 Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| 2023 CLO Secured Notes |
||||||||||||||||
| March 31, 2024 (unaudited) |
N/A | |||||||||||||||
| December 31, 2023 |
|
N/A | ||||||||||||||
| Short-Term Borrowings |
||||||||||||||||
| March 31, 2024 (unaudited) |
|
N/A | ||||||||||||||
| December 31, 2023 |
|
|
|
N/A | ||||||||||||
| December 31, 2022 |
|
N/A | ||||||||||||||
| (1) | Total amount of each class of senior securities outstanding at the end of the period presented. |
| (2) | Asset coverage per unit is the ratio of the carrying value of our total assets, less all liabilities excluding indebtedness represented by senior securities in this table, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis. |
| (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. The “—” in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities. |
| (4) | Not applicable because the senior securities are not registered for public trading. |
As of March 31, 2024, the aggregate principal amount of indebtedness outstanding was $
3,859.6
million. As of December 31, 2023, the aggregate principal amount of indebtedness outstanding was $4,210.4 million. 125
PORTFOLIO COMPANIES
The following table sets forth certain information as of March 31, 2024 for each portfolio company in which the Fund had an investment. Percentages shown for class of securities held by the Fund represent percentage of the class owned and do not necessarily represent voting ownership or economic ownership.
The Adviser, as the Fund’s valuation designee, approved the valuation of the Fund’s investment portfolio, as of March 31, 2024, at fair value as determined in good faith using a consistently applied valuation process in accordance with the Fund’s documented valuation policy that has been reviewed and approved by the Board. The Adviser also approved in good faith the valuation of such securities as of the end of each quarter. For more information relating to the Fund’s investments, see the Fund’s financial statements included elsewhere in this prospectus.
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest
Rate
(2)
|
Maturity
Date
|
% of Class
Held at
3/31/2024
|
Par
Amount/
Units
|
Amortized
Cost
(3)
|
Fair
Value
|
Percentage
of Net
Assets
|
||||||||||||||||||||||||
| Arcfield Acquisition Corp
(4)(6)(9) 14295 Park Meadow Drive, Chantilly, VA 20151
|
Aerospace and Defense | First Lien Senior Secured Revolving Loan | 8/4/2028 | 5,687 | $ (84 | ) | $ | (173 | ) | 0.00 | % | |||||||||||||||||||||||
| Arcfield Acquisition Corp
(4)(9) 14295 Park Meadow Drive, Chantilly, VA 20151
|
Aerospace and Defense | First Lien Senior Secured Debt | SF + 6.25% | 11.54 | % | 8/3/2029 | 48,760 | 47,964 | 47,098 | 0.75 | % | |||||||||||||||||||||||
| ASDAM Operations Pty Ltd
(4)(5)(8) 153 Keys Rd, Moorabbin, Victoria 3189, Australia
|
Aerospace and Defense | First Lien Senior Secured Delayed Draw Loan | B + 5.75% | 10.10 | % | 8/22/2028 | AUD 3,614 | 2,418 | 2,296 | 0.04 | % | |||||||||||||||||||||||
| ASDAM Operations Pty Ltd
(4)(5)(6)(8) 153 Keys Rd, Moorabbin, Victoria 3189, Australia
|
Aerospace and Defense | First Lien Senior Secured Delayed Draw Loan | 8/22/2028 | AUD 5,421 | (88 | ) | (91 | ) | 0.00 | % | ||||||||||||||||||||||||
| ASDAM Operations Pty Ltd
(4)(5)(8) 153 Keys Rd, Moorabbin, Victoria 3189, Australia
|
Aerospace and Defense | First Lien Senior Secured Debt | B + 5.75% | 10.10 | % | 8/22/2028 | AUD 41,558 | 27,906 | 26,400 | 0.42 | % | |||||||||||||||||||||||
| Cadence - Southwick, Inc.
(4)(6)(10) 2655 Seely Avenue, San Jose, CA, 95134
|
Aerospace and Defense | First Lien Senior Secured Revolving Loan | SF + 6.75% | 12.15 | % | 5/3/2028 | 11,291 | 4,992 | 5,207 | 0.08 | % | |||||||||||||||||||||||
| Cadence - Southwick, Inc .(4)(10) 2655 Seely Avenue, San Jose, CA, 95134 |
Aerospace and Defense | First Lien Senior Secured Debt | SF + 6.75% | 12.12 | % | 5/3/2029 | 41,425 | 40,360 | 41,302 | 0.66 | % | |||||||||||||||||||||||
| Cadence - Southwick, Inc. 2655 Seely Avenue, San Jose, CA, 95134(4)(10)
|
Aerospace and Defense | First Lien Senior Secured Debt | SF + 6.00% | 11.43 | % | 5/3/2029 | 3,112 | 3,053 | 3,081 | 0.05 | % | |||||||||||||||||||||||
126
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| Fastener Distribution Holdings, LLC (4)(10) 5200 Sheila Street, Commerce, CA 90040 |
Aerospace and Defense |
First Lien Senior Secured Debt |
SF + 6.50% |
11.98 |
% |
10/1/2025 |
41,401 |
41,007 |
41,006 |
0.66 |
% | |||||||||||||||||||||||
| Frontgrade Technologies Holdings Inc. (4)(6)(9) 4350 Centennial Blvd, Colorado Springs, CO, 80907 |
Aerospace and Defense |
First Lien Senior Secured Revolving Loan |
1/10/2028 |
6,864 |
(143 |
) |
(38 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Frontgrade Technologies Holdings Inc. (4)(9) 4350 Centennial Blvd, Colorado Springs, CO, 80907 |
Aerospace and Defense |
First Lien Senior Secured Debt |
SF + 6.75% |
12.06 |
% |
1/9/2030 |
37,335 |
36,399 |
37,290 |
0.60 |
% | |||||||||||||||||||||||
| Frontgrade Technologies Holdings Inc. (4)(9) 4350 Centennial Blvd, Colorado Springs, CO, 80907 |
Aerospace and Defense |
First Lien Senior Secured Debt |
SF + 6.75% |
12.06 |
% |
1/9/2030 |
7,860 |
7,719 |
7,850 |
0.13 |
% | |||||||||||||||||||||||
| WP CPP Holdings, LLC (4)(6)(10) |
Aerospace and Defense |
First Lien Senior Secured Revolving Loan |
11/30/2029 |
26,285 |
(621 |
) |
(575 |
) |
-0.01 |
% | ||||||||||||||||||||||||
| WP CPP Holdings, LLC (4)(10) |
Aerospace and Defense |
First Lien Senior Secured Debt |
SF + 7.50% (incl 4.13% PIK) |
12.84 |
% |
11/30/2029 |
189,377 |
184,953 |
185,232 |
2.97 |
% | |||||||||||||||||||||||
| Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
Alternative Energy |
First Lien Senior Secured Debt |
SF + 6.50% |
11.91 |
% |
11/9/2026 |
15,393 |
15,126 |
15,056 |
0.24 |
% | |||||||||||||||||||||||
| Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) 1 Refinery Rd, Box 40, Come By Chance, Newfoundland and Labrador A0B 1N0, Canada
|
Alternative Energy |
First Lien Senior Secured Debt |
SF + 6.50% |
11.91 |
% |
11/9/2026 |
1,198 |
1,175 |
1,172 |
0.02 |
% | |||||||||||||||||||||||
| Braya Renewable Fuels (Newfoundland) LP (4)(5)(6)(15) |
Alternative Energy |
First Lien Senior Secured Delayed Draw Loan |
11/9/2026 |
1,139 |
(20 |
) |
(25 |
) |
0.00 |
% | ||||||||||||||||||||||||
127
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| CRSS HPS LLC (4)(5)(10) |
Asset Based Lending and Fund Finance |
First Lien Senior Secured Debt |
SF + 6.75% |
12.23 |
% |
12/21/2026 |
21,451 |
21,061 |
21,178 |
0.34 |
% | |||||||||||||||||||||||
| Clarios Global LP (7) Florist Tower, 5757 N. Green Bay Ave., Glendale, WI 53209-4408
|
Automobiles and Parts |
First Lien Senior Secured Debt |
SF + 3.00% |
8.33 |
% |
5/6/2030 |
14,963 |
14,889 |
15,019 |
0.24 |
% | |||||||||||||||||||||||
| Foundation Automotive US Corp (4)(10) 211 Highland Cross Drive, Ste 260, Houston, TX 77073 |
Automobiles and Parts |
First Lien Senior Secured Delayed Draw Loan |
SF + 7.75% PIK |
13.33 |
% |
12/24/2027 |
4,300 |
4,252 |
3,697 |
0.06 |
% | |||||||||||||||||||||||
| Foundation Automotive Corp (4)(5)(10) 2424 4 St SW Suite 520, Calgary, Alberta, Canada |
Automobiles and Parts |
First Lien Senior Secured Debt |
SF + 8.25% (incl. 4.25% PIK) |
13.82 |
% |
12/24/2027 |
14,146 |
14,003 |
12,164 |
0.19 |
% | |||||||||||||||||||||||
| Foundation Automotive US Corp (4)(10) 211 Highland Cross Drive, Ste 260, Houston, TX 77073 |
Automobiles and Parts |
First Lien Senior Secured Debt |
SF + 8.25% (incl. 4.25% PIK) |
13.82 |
% |
12/24/2027 |
24,083 |
23,844 |
20,709 |
0.33 |
% | |||||||||||||||||||||||
| Oil Changer Holding Corporation (4)(10) 4511 Willow Rd, Suite 1 Pleasanton, CA 94588
|
Automobiles and Parts |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.75% |
12.24 |
% |
2/8/2027 |
40,493 |
40,245 |
40,390 |
0.65 |
% | |||||||||||||||||||||||
| Oil Changer Holding Corporation (4)(10) |
Automobiles and Parts |
First Lien Senior Secured Debt |
SF + 6.75% |
12.24 |
% |
2/8/2027 |
8,501 |
8,451 |
8,480 |
0.14 |
% | |||||||||||||||||||||||
| Illuminate Buyer, LLC (7) 5825 N. Sam Houston Pkwy. W., #600, Houston, TX 77086 |
Chemicals |
First Lien Senior Secured Debt |
SF + 3.50% |
8.94 |
% |
12/31/2029 |
15,111 |
14,906 |
15,147 |
0.24 |
% | |||||||||||||||||||||||
| Esdec Solar Group B.V. (4)(5)(6)(8)
|
Construction and Materials |
First Lien Senior Secured Delayed Draw Loan |
8/30/2028 |
€ |
17,183 |
(351 |
) |
8 |
0.00 |
% | ||||||||||||||||||||||||
| Esdec Solar Group B.V. (4)(5)(8) |
Construction and Materials |
First Lien Senior Secured Debt |
E + 6.00% |
9.91 |
% |
8/30/2028 |
€ |
51,291 |
55,132 |
55,378 |
0.89 |
% | ||||||||||||||||||||||
| Nexus Intermediate III, LLC (4)(9) |
Construction and Materials |
First Lien Senior Secured Debt |
SF + 5.50% |
11.18 |
% |
12/6/2027 |
1,061 |
1,049 |
1,061 |
0.02 |
% | |||||||||||||||||||||||
| Aesthetics Australia Group Pty Ltd (4)(5)(8) |
Consumer Services |
First Lien Senior Secured Debt |
B + 6.25% |
10.67 |
% |
3/21/2028 |
AUD |
57,095 |
36,001 |
35,939 |
0.58 |
% | ||||||||||||||||||||||
128
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| AI Learning (Singapore) PTE. LTD. (4)(5)(12) 101 Thomson Road, Singapore, Singapore 307591 |
Consumer Services |
First Lien Senior Secured Debt |
SORA + 8.25% (incl 4.00% PIK) |
12.19 |
% |
5/25/2027 |
SGD |
44,063 |
31,773 |
31,975 |
0.51 |
% | ||||||||||||||||||||||
| American Academy Holdings, LLC (4)(10) 2233 S Presidents Drive Suite F, Salt Lake City, UT 84120 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 11.00% (incl 5.25% PIK) |
16.44 |
% |
6/30/2027 |
54,692 |
54,692 |
54,524 |
0.87 |
% | |||||||||||||||||||||||
| Auctane Inc (4)(9)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 5.75% |
11.16 |
% |
10/5/2028 |
24,500 |
24,500 |
24,500 |
0.39 |
% | |||||||||||||||||||||||
| Club Car Wash Operating, LLC (4)(6)(10)
|
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% |
11.45 |
% |
6/16/2027 |
39,367 |
24,780 |
25,390 |
0.41 |
% | |||||||||||||||||||||||
| Club Car Wash Operating, LLC (4)(10)
|
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% |
11.45 |
% |
6/16/2027 |
12,504 |
12,328 |
12,504 |
0.20 |
% | |||||||||||||||||||||||
| Club Car Wash Operating, LLC (4)(10) 1591 East Prathersville Road, Columbia, MO 65201 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 6.00% |
11.45 |
% |
6/16/2027 |
25,588 |
25,347 |
25,588 |
0.41 |
% | |||||||||||||||||||||||
| Express Wash Concepts, LLC (4)(10)
|
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% |
11.43 |
% |
4/30/2027 |
47,108 |
46,813 |
46,875 |
0.75 |
% | |||||||||||||||||||||||
| Express Wash Concepts, LLC (4)(10)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 6.00% |
11.43 |
% |
4/30/2027 |
26,460 |
26,290 |
26,329 |
0.42 |
% | |||||||||||||||||||||||
| Houghton Mifflin Harcourt Company (8) 125 High St., Boston, MA 02110 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 5.25% |
10.68 |
% |
4/9/2029 |
25,187 |
24,616 |
25,029 |
0.40 |
% | |||||||||||||||||||||||
| IXM Holdings, Inc. (4)(11)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 6.50% |
11.82 |
% |
12/14/2029 |
18,566 |
18,300 |
18,483 |
0.30 |
% | |||||||||||||||||||||||
| IXM Holdings, Inc. (4)(6)(11) 250 Ridge Rd, Dayton, NJ 08810 |
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
12/14/2029 |
1,638 |
(24 |
) |
(7 |
) |
0.00 |
% | ||||||||||||||||||||||||
| IXM Holdings, Inc. (4)(6)(11) 250 Ridge Rd, Dayton, NJ 08810 |
Consumer Services |
First Lien Senior Secured Revolving Loan |
12/14/2029 |
2,184 |
(31 |
) |
(10 |
) |
0.00 |
% | ||||||||||||||||||||||||
| KUEHG Corp. (8)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 5.00% |
10.30 |
% |
6/12/2030 |
3,837 |
3,827 |
3,853 |
0.06 |
% | |||||||||||||||||||||||
| Learning Care Group, Inc. (8) 21333 Haggerty Rd., Suite 300 Novi, MI 48375 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 4.75% |
10.07 |
% |
8/11/2028 |
1,990 |
1,964 |
1,996 |
0.03 |
% | |||||||||||||||||||||||
| Mckissock Investment Holdings, LLC (9) 218 LIBERTY ST, WARREN, PA 16365 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 5.00% |
10.38 |
% |
3/12/2029 |
46,683 |
45,592 |
46,897 |
0.75 |
% | |||||||||||||||||||||||
129
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| Mckissock Investment Holdings, LLC (9) 218 LIBERTY ST, WARREN, PA 16365 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 5.00% |
10.46 |
% |
3/12/2029 |
12,485 |
12,393 |
12,543 |
0.20 |
% | |||||||||||||||||||||||
| Polyconcept North America Holdings, Inc. (9) 400 Hunt Valley Road New Kensington, PA 15068 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 5.50% |
10.80 |
% |
5/18/2029 |
22,951 |
22,598 |
22,918 |
0.37 |
% | |||||||||||||||||||||||
| Spotless Brands, LLC (4)(10) 2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 |
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.50% |
11.97 |
% |
7/25/2028 |
21,538 |
21,224 |
21,432 |
0.34 |
% | |||||||||||||||||||||||
| Spotless Brands, LLC (4)(10)
|
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.50% |
11.96 |
% |
7/25/2028 |
15,983 |
15,751 |
15,904 |
0.25 |
% | |||||||||||||||||||||||
| Spotless Brands, LLC (4)(10) 2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 6.50% |
11.97 |
% |
7/25/2028 |
105,332 |
103,768 |
104,814 |
1.68 |
% | |||||||||||||||||||||||
| Spotless Brands, LLC (4)(6)(10) 2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 |
Consumer Services |
First Lien Senior Secured Revolving Loan |
7/25/2028 |
5,175 |
(73 |
) |
(25 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Thrasio LLC (4)(7)(17) 85 West Street, Suite 4, Walpole, MA 02081 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 7.00% |
12/18/2026 |
2,751 |
2,741 |
943 |
0.02 |
% | |||||||||||||||||||||||||
| Thrasio LLC (4)(10) 85 West Street, Suite 4, Walpole, MA 02081 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 8.00% |
13.44 |
% |
7/1/2024 |
162 |
159 |
159 |
0.00 |
% | |||||||||||||||||||||||
| Thrasio LLC (4)(10)(17)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 10.00% PIK |
7/1/2024 |
162 |
161 |
159 |
0.00 |
% | |||||||||||||||||||||||||
| TruGreen Limited Partnership (9)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 4.00% |
9.43 |
% |
11/2/2027 |
8,553 |
8,472 |
8,341 |
0.13 |
% | |||||||||||||||||||||||
| WMB Holdings Inc (8)
|
Consumer Services |
First Lien Senior Secured Debt |
SF + 2.75% |
8.08 |
% |
11/2/2029 |
1,750 |
1,707 |
1,756 |
0.03 |
% | |||||||||||||||||||||||
| Zips Car Wash, LLC (4)(10) 8400 Belleview Dr, 210, Plano, TX 75024 |
Consumer Services |
First Lien Senior Secured Debt |
SF + 7.25% (incl 1.50% PIK) |
12.68 |
% |
12/31/2024 |
26,045 |
26,045 |
25,459 |
0.41 |
% | |||||||||||||||||||||||
| Zips Car Wash, LLC (4)(10) 8400 Belleview Dr, 210, Plano, TX 75024 |
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 7.25% (incl 1.50% PIK) |
12.68 |
% |
12/31/2024 |
15,343 |
15,338 |
14,997 |
0.24 |
% | |||||||||||||||||||||||
| Zips Car Wash, LLC (4)(10)
|
Consumer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 7.25% (incl 1.50% PIK) |
12.68 |
% |
12/31/2024 |
985 |
985 |
963 |
0.02 |
% | |||||||||||||||||||||||
| Hamilton Projects Acquiror, LLC (9) 13860 Ballantyne Corporate Place Suite 300, Charlotte NC 28273 |
Electricity |
First Lien Senior Secured Debt |
SF + 4.50% |
9.94 |
% |
6/17/2027 |
52,312 |
48,980 |
52,553 |
0.84 |
% | |||||||||||||||||||||||
130
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| IP Operating Portfolio I, LLC (4)(7)
12333 Sowden Rd Ste B, PMB #68743, Houston, Texas 77080-2059 |
Electricity |
First Lien Senior Secured Delayed Draw Loan |
7.88 |
% |
12/31/2029 |
27,428 |
26,937 |
27,428 |
0.44 |
% | ||||||||||||||||||||||||
| Sunzia UpperCo LLC (4)(16)
|
Electricity |
First Lien Senior Secured Debt |
SF + 5.00% |
10.32 |
% |
6/27/2025 |
25,000 |
24,745 |
24,744 |
0.40 |
% | |||||||||||||||||||||||
| Brightstar Escrow Corp. (7)
51 W 52nd St, 18th Flr New York, NY 10019 |
Electronic and Electrical Equipment |
First Lien Senior Secured Debt |
9.75 |
% |
10/15/2025 |
1,000 |
991 |
1,016 |
0.02 |
% | ||||||||||||||||||||||||
| PCP CW Aggregator Holdings II, L.P. (4)(5)(10)
101 Crossways Park West, Woodbury, NY 11797 |
Finance and Credit Services |
First Lien Senior Secured Debt |
SF + 9.25% PIK |
14.72 |
% |
2/9/2027 |
20,123 |
19,911 |
19,884 |
0.32 |
% | |||||||||||||||||||||||
| Verscend Holding Corp. (7)
|
Finance and Credit Services |
First Lien Senior Secured Debt |
SF + 4.00% |
9.44 |
% |
8/27/2025 |
3,929 |
3,920 |
3,934 |
0.06 |
% | |||||||||||||||||||||||
| Yes Energy LLC (4)(9)
80302 |
Finance and Credit Services |
First Lien Senior Secured Delayed Draw Loan |
BS + 5.00% |
10.34 |
% |
4/21/2028 |
10,000 |
9,845 |
10,082 |
0.16 |
% | |||||||||||||||||||||||
| Yes Energy LLC (4)(9)
|
Finance and Credit Services |
First Lien Senior Secured Debt |
BS + 5.00% |
10.34 |
% |
4/21/2028 |
26,000 |
25,488 |
26,213 |
0.42 |
% | |||||||||||||||||||||||
| Specialty Ingredients, LLC (4)(6)(9)
546 West St., Watertown, WI 53094 |
Food Producers |
First Lien Senior Secured Revolving Loan |
SF + 6.00% |
11.43 |
% |
2/12/2029 |
11,279 |
6,599 |
6,758 |
0.11 |
% | |||||||||||||||||||||||
| Specialty Ingredients, LLC (4)(9
)
|
Food Producers |
First Lien Senior Secured Debt |
SF + 6.00% |
11.43 |
% |
2/12/2029 |
89,574 |
88,201 |
89,500 |
1.43 |
% | |||||||||||||||||||||||
| Sugar PPC Buyer LLC (4)(10)
|
Food Producers |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% |
11.32 |
% |
10/2/2030 |
16,541 |
16,184 |
16,472 |
0.26 |
% | |||||||||||||||||||||||
| Sugar PPC Buyer LLC (4)(10)
|
Food Producers |
First Lien Senior Secured Debt |
SF + 6.00% |
11.32 |
% |
10/2/2030 |
59,546 |
58,301 |
59,299 |
0.95 |
% | |||||||||||||||||||||||
| Floating Infrastructure Holdings Finance LLC (4)(5)(10)
100 First Stamford Place, Suite 440, Stamford, CT 06902 |
Gas, Water and Multi-utilities
|
First Lien Senior Secured Debt |
SF + 5.75% |
11.16 |
% |
8/13/2027 |
41,924 |
41,358 |
41,804 |
0.67 |
% | |||||||||||||||||||||||
131
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| Eagle LNG Partners Jacksonville II LLC (4)(14)
2445 Technology Forest Blvd, Suite 500, The Woodlands, TX 77381 |
Gas, Water and Multi- utilities |
First Lien Senior Secured Debt |
SF + 10.38% |
15.68 |
% |
6/8/2024 |
620 |
617 |
617 |
0.01 |
% | |||||||||||||||||||||||
| BP Purchaser, LLC (4)(9)
2650 Galvin Drive, Elgin, IL 60124 |
General Industrials |
First Lien Senior Secured Debt |
SF + 5.50% |
11.08 |
% |
12/11/2028 |
27,443 |
27,059 |
26,898 |
0.43 |
% | |||||||||||||||||||||||
| Bright Light Buyer, Inc. (4)(10)
3360 Davie Road, Suite 509 Davie, FL 33314 |
General Industrials |
First Lien Senior Secured Debt |
SF + 6.00% |
11.32 |
% |
11/8/2029 |
75,000 |
73,249 |
74,091 |
1.19 |
% | |||||||||||||||||||||||
| Capripack Debtco PLC (4)(5)(10)
Rivergate, Handelskai 92, 1200 Vienna, Austria |
General Industrials |
First Lien Senior Secured Debt |
E + 7.25% (incl 2.50% PIK) |
11.16 |
% |
1/3/2030 |
€ |
13,146 |
13,876 |
13,710 |
0.22 |
% | ||||||||||||||||||||||
| Capripack Debtco PLC (4)(5)(10)
Rivergate, Handelskai 92, 1200 Vienna, Austria |
General Industrials |
First Lien Senior Secured Debt |
E + 7.25% (incl 2.50% PIK) |
11.16 |
% |
1/3/2030 |
€ |
70,763 |
74,692 |
73,801 |
1.18 |
% | ||||||||||||||||||||||
| Cube Industrials Buyer, Inc. (4)(6)(10)
30 Corporate Drive, Suite 200, Burlington, MA 01803-4232 |
General Industrials |
First Lien Senior Secured Revolving Loan |
10/18/2029 |
5,664 |
(79 |
) |
— |
0.00 |
% | |||||||||||||||||||||||||
| Cube Industrials Buyer, Inc (4)(10) 30 Corporate Drive, Suite 200, Burlington, MA 01803-4232 |
General Industrials |
First Lien Senior Secured Debt |
SF + 6.00% |
11.30 |
% |
10/18/2030 |
49,086 |
48,397 |
49,232 |
0.79 |
% | |||||||||||||||||||||||
| Formerra, LLC (4)(10)
1250 Windham Pkwy, Romeoville, IL 60446 |
General Industrials |
First Lien Senior Secured Delayed Draw Loan |
SF + 7.25% |
12.69 |
% |
11/1/2028 |
4,241 |
4,131 |
4,238 |
0.07 |
% | |||||||||||||||||||||||
| Formerra, LLC (4)(6)(10)
1250 Windham Pkwy, Romeoville, IL 60446 |
General Industrials |
First Lien Senior Secured Revolving Loan |
SF + 7.25% |
12.68 |
% |
11/1/2028 |
12,031 |
2,108 |
2,398 |
0.04 |
% | |||||||||||||||||||||||
| Formerra, LLC (4)(10)
1250 Windham Pkwy, Romeoville, IL 60446 |
General Industrials |
First Lien Senior Secured Debt |
SF + 7.25% |
12.71 |
% |
11/1/2028 |
105,419 |
102,743 |
105,347 |
1.69 |
% | |||||||||||||||||||||||
| Marcone Yellowstone Buyer Inc. (4)(13)
One City Place, Ste 400, St Louis, MO 63141 |
General Industrials |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.25% |
11.70 |
% |
6/23/2028 |
11,922 |
11,836 |
11,922 |
0.19 |
% | |||||||||||||||||||||||
| Marcone Yellowstone Buyer Inc. (4)(13)
One City Place, Ste 400, St Louis, MO 63141 |
General Industrials |
First Lien Senior Secured Debt |
SF + 6.25% |
11.70 |
% |
6/23/2028 |
49,737 |
49,189 |
49,737 |
0.80 |
% | |||||||||||||||||||||||
132
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| Marcone Yellowstone Buyer Inc (4)(13) |
General Industrials |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.25% |
11.70 |
% |
6/23/2028 |
4,384 |
4,353 |
4,384 |
0.07 |
% | |||||||||||||||||||||||
| Marcone Yellowstone Buyer Inc. (4)(13) One City Place, Ste 400, St Louis, MO 63141 |
General Industrials |
First Lien Senior Secured Debt |
SF + 6.25% |
11.70 |
% |
6/23/2028 |
13,194 |
13,099 |
13,194 |
0.21 |
% | |||||||||||||||||||||||
| TMC Buyer Inc (8) |
General Industrials |
First Lien Senior Secured Debt |
SF + 6.00% |
11.31 |
% |
6/30/2028 |
69,973 |
63,051 |
69,185 |
1.11 |
% | |||||||||||||||||||||||
| 123Dentist Inc (4)(5)(6)(9) |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
8/10/2029 |
CAD 5,587 |
(79 |
) |
— |
0.00 |
% | |||||||||||||||||||||||||
| 123Dentist Inc (4)(5)(9) |
Health Care Providers |
First Lien Senior Secured Debt |
C + 5.50% |
10.79 |
% |
8/10/2029 |
CAD 51,609 |
39,579 |
38,106 |
0.61 |
% | |||||||||||||||||||||||
| Accelerated Health Systems LLC (8) 2122 York Road, Ste. 300 Oak Brook, IL 60523 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 4.25% |
9.70 |
% |
2/15/2029 |
7,931 |
7,915 |
5,972 |
0.10 |
% | |||||||||||||||||||||||
| ATI Holdings Acquisition, Inc. (4)(5)(10) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 7.25% |
12.73 |
% |
2/24/2028 |
41,092 |
40,550 |
39,920 |
0.64 |
% | |||||||||||||||||||||||
| Baart Programs, Inc. (4)(10) |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.00% |
10.57 |
% |
6/11/2027 |
10,097 |
10,034 |
10,001 |
0.16 |
% | |||||||||||||||||||||||
| Charlotte Buyer Inc (8) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 5.25% |
10.57 |
% |
2/11/2028 |
23,875 |
22,751 |
23,982 |
0.38 |
% | |||||||||||||||||||||||
| ERC Topco Holdings, LLC (4)(6)(9) 7351 E. Lowry Blvd, Ste 200, Denver, CO 80230 |
Health Care Providers |
First Lien Senior Secured Revolving Loan |
SF + 6.25% (incl 3.25% PIK) |
11.83 |
% |
11/10/2027 |
1,000 |
742 |
532 |
0.01 |
% | |||||||||||||||||||||||
| ERC Topco Holdings, LLC (4)(9) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.25% (incl 3.25% PIK) |
11.81 |
% |
11/10/2028 |
25,291 |
24,949 |
18,820 |
0.30 |
% | |||||||||||||||||||||||
| ERC Topco Holdings, LLC (4)(9) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.25% PIK |
11.81 |
% |
11/10/2028 |
414 |
414 |
308 |
0.00 |
% | |||||||||||||||||||||||
| ERC Topco Holdings, LLC (4)(9) 7351 E. Lowry Blvd, Ste 200, Denver, CO 80230 |
Health Care Providers |
First Lien Senior Secured Revolving Loan |
SF + 6.25% PIK |
11.81 |
% |
11/10/2028 |
6 |
6 |
4 |
0.00 |
% | |||||||||||||||||||||||
| MB2 Dental Solutions, LLC (4)(6)(9) 2403 Lacy Lane, Carrollton, TX 75006 |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
2/13/2031 |
54,046 |
(530 |
) |
(753 |
) |
-0.01 |
% | ||||||||||||||||||||||||
133
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| MB2 Dental Solutions, LLC (4)(6)(9) |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
2/13/2031 |
32,427 |
(318 |
) |
(452 |
) |
-0.01 |
% | ||||||||||||||||||||||||
| MB2 Dental Solutions, LLC (4)(6)(9) 2403 Lacy Lane, Carrollton, TX 75006 |
Health Care Providers |
First Lien Senior Secured Revolving Loan |
2/13/2031 |
13,909 |
(273 |
) |
(194 |
) |
0.00 |
% | ||||||||||||||||||||||||
| MB2 Dental Solutions, LLC (4)(9) 2403 Lacy Lane, Carrollton, TX 75006 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.00% |
11.32 |
% |
2/13/2031 |
156,084 |
153,615 |
153,911 |
2.46 |
% | |||||||||||||||||||||||
| Medline Borrower LP (8) Three Lakes Drive Northfield, IL 60093 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 2.75% |
8.08 |
% |
10/23/2028 |
15,173 |
15,052 |
15,228 |
0.24 |
% | |||||||||||||||||||||||
| MPH Acquisition Holdings LLC (8) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 4.25% |
9.85 |
% |
9/1/2028 |
4,574 |
4,485 |
4,431 |
0.07 |
% | |||||||||||||||||||||||
| Pareto Health Intermediate Holdings, Inc. (4)(10) FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.25% |
11.55 |
% |
6/3/2030 |
30,091 |
29,295 |
30,009 |
0.48 |
% | |||||||||||||||||||||||
| Pareto Health Intermediate Holdings, Inc. (4)(10) FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.25% |
11.55 |
% |
6/3/2030 |
10,030 |
9,765 |
10,003 |
0.16 |
% | |||||||||||||||||||||||
| Pareto Health Intermediate Holdings, Inc. (4)(6)(10) |
Health Care Providers |
First Lien Senior Secured Revolving Loan |
6/1/2029 |
4,032 |
(104 |
) |
(20 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Pediatric Associates Holding Company, LLC (8) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 3.25% |
8.69 |
% |
12/29/2028 |
7,698 |
7,672 |
6,793 |
0.11 |
% | |||||||||||||||||||||||
| Phoenix Newco Inc (8) |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 3.25% |
8.69 |
% |
11/15/2028 |
17,522 |
17,429 |
17,582 |
0.28 |
% | |||||||||||||||||||||||
| Pinnacle Fertility, Inc. (4)(9) 6720 N Scottsdale Rd, Ste 160, Scottsdale, Arizona 85253 |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.00% |
10.43 |
% |
3/14/2028 |
9,234 |
9,120 |
9,234 |
0.15 |
% | |||||||||||||||||||||||
| Pinnacle Fertility, Inc. (4)(9) 6720 N Scottsdale Rd, Ste 160, Scottsdale, Arizona 85253 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 5.00% |
10.43 |
% |
3/14/2028 |
26,950 |
26,582 |
26,950 |
0.43 |
% | |||||||||||||||||||||||
134
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| PPV Intermediate Holdings, LLC (4)(9)
141 Longwater Dr, Suite 108, Norwell, MA 02061 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 5.75% |
11.09 |
% |
8/31/2029 |
108,193 |
106,639 |
108,597 |
1.74 |
% | |||||||||||||||||||||||
| PPV Intermediate Holdings, LLC (4)(6)(9)
141 Longwater Dr, Suite 108, Norwell, MA 02061 |
Health Care Providers |
First Lien Senior Secured Revolving Loan |
8/31/2029 |
8,145 |
(126 |
) |
— |
0.00 |
% | |||||||||||||||||||||||||
| PTSH Intermediate Holdings, LLC (4)(9)
1100 Circle 75 Pkwy, Ste 1400, Atlanta, GA 30339 |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.50% |
10.96 |
% |
12/17/2027 |
3,931 |
3,876 |
3,931 |
0.06 |
% | |||||||||||||||||||||||
| PTSH Intermediate Holdings, LLC (4)(9)
1100 Circle 75 Pkwy, Ste 1400, Atlanta, GA 30339 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 5.50% |
10.96 |
% |
12/17/2027 |
20,626 |
20,358 |
20,626 |
0.33 |
% | |||||||||||||||||||||||
| Tenet Healthcare Corp (5)(7)
14201 Dallas Parkway, Dallas, TX 75254 |
Health Care Providers |
First Lien Senior Secured Debt |
5.13 |
% |
11/1/2027 |
2,695 |
2,722 |
2,638 |
0.04 |
% | ||||||||||||||||||||||||
| Tivity Health Inc (4)(9)
4031 Aspen Grove Drive, Suite 250, Franklin, TN 37067 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.00% |
11.31 |
% |
6/28/2029 |
110,871 |
108,773 |
109,489 |
1.75 |
% | |||||||||||||||||||||||
| United Musculoskeletal Partners Acquisition Holdings, LLC (4)(6)(9)
400 Perimeter Center Terrace Suite 875 Atlanta, GA 30346 |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.75% |
11.06 |
% |
7/17/2028 |
50,098 |
31,959 |
31,656 |
0.51 |
% | |||||||||||||||||||||||
| United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9)
400 Perimeter Center Terrace Suite 875 Atlanta, GA 30346 |
Health Care Providers |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.75% |
11.07 |
% |
7/17/2028 |
26,481 |
26,106 |
25,916 |
0.41 |
% | |||||||||||||||||||||||
| United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9)
400 Perimeter Center Terrace Suite 875 Atlanta, GA 30346 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 5.75% |
11.07 |
% |
7/17/2028 |
43,180 |
42,539 |
42,259 |
0.68 |
% | |||||||||||||||||||||||
| WCAS XIV Primary Care Investors, L.P . (4)(10)
500 W. Main St., Louisville, KY 40202 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.25% |
11.58 |
% |
12/31/2032 |
56,433 |
55,307 |
55,307 |
0.89 |
% | |||||||||||||||||||||||
| WCAS XIII Primary Care Investors, L.P. (4)(10)
500 W. Main St., Louisville, KY 40202 |
Health Care Providers |
First Lien Senior Secured Debt |
SF + 6.25% |
11.56 |
% |
12/31/2029 |
135,630 |
133,386 |
133,253 |
2.13 |
% | |||||||||||||||||||||||
| LHS Borrower LLC (8)
1595 Georgetown Rd, Hudson, OH 44236 |
Household Goods and Home Construction |
First Lien Senior Secured Debt |
SF + 4.75% |
10.18 |
% |
2/16/2029 |
6,930 |
6,881 |
6,635 |
0.11 |
% | |||||||||||||||||||||||
| Sunset Debt Merger Sub, Inc. (9)
7549 Graber Rd., Middleton, WI 53562 |
Household Goods and Home Construction |
First Lien Senior Secured Debt |
SF + 4.00% |
9.44 |
% |
10/6/2028 |
706 |
612 |
651 |
0.01 |
% | |||||||||||||||||||||||
135
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| LSF12 Donnelly Bidco, LLC (4)(10)
16430 N Scottsdale Road, Suite 450, Scottsdale, AZ, 85254 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 6.50% |
11.83 |
% |
10/2/2029 |
19,828 |
19,373 |
19,664 |
0.31 |
% | |||||||||||||||||||||||
| Radwell Parent, LLC (4)(6)(9)
1 Millennium Drive, Willingboro, NJ 08046 |
Industrial Engineering |
First Lien Senior Secured Revolving Loan |
SF + 6.75% |
12.05 |
% |
4/3/2028 |
13,271 |
2,406 |
2,654 |
0.04 |
% | |||||||||||||||||||||||
| Radwell Parent, LLC (4)(9)
1 Millennium Drive, Willingboro, NJ 08046 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 6.75% |
12.05 |
% |
4/2/2029 |
153,435 |
149,771 |
156,504 |
2.51 |
% | |||||||||||||||||||||||
| Roper Industrial Products Investment Co (8)
6496 University Parkway, Sarasota, FL 34240 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 4.00% |
9.30 |
% |
11/22/2029 |
17,998 |
17,467 |
18,126 |
0.29 |
% | |||||||||||||||||||||||
| Standard Industries Inc (8)
1 Campus Drive Parsippany, NJ 07054 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 2.25% |
7.69 |
% |
9/22/2028 |
1,259 |
1,259 |
1,261 |
0.02 |
% | |||||||||||||||||||||||
| Time Manufacturing Holdings, LLC (4)(9)
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 |
Industrial Engineering |
First Lien Senior Secured Debt |
E + 6.50% |
10.45 |
% |
12/1/2027 |
€ |
4,758 |
4,949 |
4,920 |
0.08 |
% | ||||||||||||||||||||||
| Time Manufacturing Holdings, LLC (4)(6)(9)
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 |
Industrial Engineering |
First Lien Senior Secured Revolving Loan |
SF + 6.50% |
11.99 |
% |
12/1/2027 |
1,000 |
792 |
765 |
0.01 |
% | |||||||||||||||||||||||
| Time Manufacturing Holdings, LLC (4)(9)
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 6.50% |
11.99 |
% |
12/1/2027 |
12,081 |
11,913 |
11,591 |
0.19 |
% | |||||||||||||||||||||||
| Time Manufacturing Holdings, LLC (4)(9)
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 |
Industrial Engineering |
First Lien Senior Secured Debt |
E + 6.50% |
10.45 |
% |
12/1/2027 |
€ |
8,380 |
9,342 |
8,665 |
0.14 |
% | ||||||||||||||||||||||
| TK Elevator US Newco Inc (5)(8)
788 Circle 75 Parkway SE, Suite 500, Atlanta, GA 30339 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 3.50% |
8.79 |
% |
4/11/2030 |
12,541 |
12,386 |
12,598 |
0.20 |
% | |||||||||||||||||||||||
| Wec US Holdings Ltd (7)
1000 Westinghouse Drive, Cranberry Township, PA 16066 |
Industrial Engineering |
First Lien Senior Secured Debt |
SF + 2.75% |
8.08 |
% |
1/27/2031 |
10,000 |
9,923 |
10,000 |
0.16 |
% | |||||||||||||||||||||||
| BLY US Holdings Inc. (4)(5)(10)
2455 South 3600 West, West Valley City, UT 84119 |
Industrial Metals and Mining |
First Lien Senior Secured Debt |
SF + 7.50% |
13.07 |
% |
9/8/2026 |
3,060 |
3,011 |
3,070 |
0.05 |
% | |||||||||||||||||||||||
| BLY US Holdings Inc. (4)(5)(10)
2455 South 3600 West, West Valley City, UT 84119 |
Industrial Metals and Mining |
First Lien Senior Secured Debt |
SF + 7.50% |
13.07 |
% |
9/8/2026 |
9,130 |
8,904 |
9,294 |
0.15 |
% | |||||||||||||||||||||||
136
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| BLY US Holdings Inc. (4)(5)(10)
2455 South 3600 West, West Valley City, UT 84119 |
Industrial Metals and Mining |
First Lien Senior Secured Debt |
SF + 7.50% |
13.08 |
% |
9/8/2026 |
12,036 |
11,698 |
11,966 |
0.19 |
% | |||||||||||||||||||||||
| Acuris Finance US, Inc (8)
1345 Sixth Avenue, 50th Floor, New York, NY 10105 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 4.00% |
9.45 |
% |
2/16/2028 |
13,500 |
13,414 |
13,502 |
0.22 |
% | |||||||||||||||||||||||
| AI Circle Bidco Limited (4)(5)(6)(10)
Level 24, 32 London Bridge Street, London, England SE1 9SG, GB |
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
2/8/2031 |
€ |
6,374 |
(272 |
) |
(272 |
) |
0.00 |
% | |||||||||||||||||||||||
| AI Circle Bidco Limited (4)(5)(10)
Level 24, 32 London Bridge Street, London, England SE1 9SG, GB |
Industrial Support Services |
First Lien Senior Secured Debt |
E + 6.75% |
10.66 |
% |
2/8/2031 |
€ |
44,620 |
46,190 |
46,249 |
0.74 |
% | ||||||||||||||||||||||
| Allied Universal Holdco LLC (8)
1551 N Tustin Ave, Santa Ana, CA 92705 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 3.75% |
9.18 |
% |
5/12/2028 |
2,993 |
2,986 |
2,993 |
0.05 |
% | |||||||||||||||||||||||
| Argos Health Holdings, Inc. (4)(9)
5440 Harvest Hill Rd, Dallas, TX 75230 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.75% |
11.07 |
% |
12/6/2027 |
652 |
643 |
624 |
0.01 |
% | |||||||||||||||||||||||
| Atlas Intermediate III, L.L.C. (4)(10)
4 Tri Harbor Court Port Washington, NY 11050 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 8.25% (incl 4.00% PIK) |
13.56 |
% |
10/31/2029 |
113,237 |
110,631 |
110,798 |
1.77 |
% | |||||||||||||||||||||||
| Atlas Intermediate III, L.L.C. (4)(6)(10)
4 Tri Harbor Court Port Washington, NY 11050 |
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
10/31/2029 |
13,445 |
(313 |
) |
(290 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Becklar, LLC (4)(10)
4699 Harrison Blvd, Ogden, UT 84403 |
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.85% |
12.28 |
% |
12/21/2026 |
981 |
970 |
968 |
0.02 |
% | |||||||||||||||||||||||
| Becklar, LLC (4)(10)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.85% |
12.28 |
% |
12/21/2026 |
5,696 |
5,622 |
5,618 |
0.09 |
% | |||||||||||||||||||||||
| Captive Resources Midco LLC (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
7/3/2028 |
7,558 |
(107 |
) |
— |
0.00 |
% | |||||||||||||||||||||||||
| Captive Resources Midco LLC (4)(9)
1100 N. Arlington Heights Road, Itasca, IL 60143 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.75% (incl 3.13% PIK) |
11.08 |
% |
7/2/2029 |
94,323 |
92,957 |
94,323 |
1.51 |
% | |||||||||||||||||||||||
| CD&R Madison UK Bidco LTD (4)(5)(6)(7)
|
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
SN + 8.25% |
13.44 |
% |
2/28/2030 |
£ |
9,965 |
2,259 |
2,503 |
0.04 |
% | ||||||||||||||||||||||
137
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| CD&R Madison UK Bidco LTD (4)(5)(7)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SN + 8.25% (incl 2.00% PIK) |
13.49 |
% |
2/28/2030 |
£ |
45,620 |
53,311 |
56,923 |
0.91 |
% | ||||||||||||||||||||||
| CD&R Madison UK Bidco LTD (4)(5)(7)
|
Industrial Support Services |
First Lien Senior Secured Debt |
E + 7.75% (incl 2.00% PIK) |
11.70 |
% |
2/28/2030 |
€ |
22,491 |
23,056 |
23,943 |
0.38 |
% | ||||||||||||||||||||||
| Coretrust Purchasing Group LLC (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
10/1/2029 |
10,736 |
(274 |
) |
215 |
0.00 |
% | |||||||||||||||||||||||||
| Coretrust Purchasing Group LLC (4)(6)(9)
601 11th Avenue, Suite 700, Nashville, TN 37203, US |
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
10/1/2029 |
11,656 |
(275 |
) |
— |
0.00 |
% | |||||||||||||||||||||||||
| Coretrust Purchasing Group LLC (4)(9)
601 11th Avenue, Suite 700, Nashville, TN 37203, US |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.50% |
11.83 |
% |
10/1/2029 |
72,799 |
71,043 |
74,255 |
1.19 |
% | |||||||||||||||||||||||
| Eagle 2021 Lower Merger Sub, LLC (4)(9)
5440 Harvest Hill Rd, Dallas, TX 75230 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.75% |
11.07 |
% |
12/6/2027 |
815 |
804 |
780 |
0.01 |
% | |||||||||||||||||||||||
| Employbridge, LLC (9)
1845 Satellite Blvd, Suite 300, Duluth, GA 30097 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 4.75% |
10.34 |
% |
7/19/2028 |
9,782 |
9,743 |
8,204 |
0.13 |
% | |||||||||||||||||||||||
| Empower Payments Investor, LLC (4)(6)(9)
1131 4th Avenue S, Ste 330, Nashville, TN 37210 |
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
3/12/2031 |
14,426 |
(287 |
) |
(286 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Empower Payments Investor, LLC (4)(6)(9)
1131 4th Avenue S, Ste 330, Nashville, TN 37210 |
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
3/12/2030 |
9,704 |
(192 |
) |
(192 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Empower Payments Investor, LLC (4)(9)
1131 4th Avenue S, Ste 330, Nashville, TN 37210 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.25% |
10.48 |
% |
3/12/2031 |
101,946 |
99,923 |
99,923 |
1.60 |
% | |||||||||||||||||||||||
| Galaxy US Opco Inc. (5)(8)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 4.75% |
10.06 |
% |
4/29/2029 |
25,971 |
25,480 |
23,569 |
0.38 |
% | |||||||||||||||||||||||
| Guidehouse Inc. (4)(9)
1676 International Drive Suite 800, McLean, VA 22102 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.75% (incl 2.00% PIK) |
11.08 |
% |
12/16/2030 |
187,369 |
184,914 |
187,238 |
3.00 |
% | |||||||||||||||||||||||
| IG Investments Holdings, LLC (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
9/22/2027 |
1,726 |
(17 |
) |
— |
0.00 |
% | |||||||||||||||||||||||||
138
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| IG Investments Holdings, LLC (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.00% |
11.41 |
% |
9/22/2028 |
22,221 |
21,976 |
22,221 |
0.36 |
% | |||||||||||||||||||||||
| IG Investments Holdings, LLC (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.00% |
11.41 |
% |
9/22/2028 |
1,833 |
1,820 |
1,833 |
0.03 |
% | |||||||||||||||||||||||
| NBG Acquisition Corp. (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
SF + 5.25% |
10.71 |
% |
11/6/2028 |
2,876 |
2,002 |
1,984 |
0.03 |
% | |||||||||||||||||||||||
| NBG Acquisition Corp. (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.25% |
10.71 |
% |
11/6/2028 |
21,281 |
21,174 |
21,005 |
0.34 |
% | |||||||||||||||||||||||
| PG Investment Co 59 Sarl (5)(7)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 3.50% |
8.81 |
% |
3/26/2031 |
6,977 |
6,959 |
6,999 |
0.11 |
% | |||||||||||||||||||||||
| Planet US Buyer LLC (7)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 3.50% |
8.81 |
% |
2/7/2031 |
7,500 |
7,481 |
7,533 |
0.12 |
% | |||||||||||||||||||||||
| Royal Buyer, LLC (4)(6)(9) 751 Canyon Dr., Ste. 100, Coppell, TX 75019 |
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% |
11.34 |
% |
8/31/2028 |
8,985 |
5,087 |
5,140 |
0.08 |
% | |||||||||||||||||||||||
| Royal Buyer, LLC (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
8/31/2028 |
7,000 |
(103 |
) |
(68 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Royal Buyer, LLC (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.00% |
11.34 |
% |
8/31/2028 |
44,438 |
43,766 |
44,005 |
0.70 |
% | |||||||||||||||||||||||
| Royal Buyer, LLC (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
8/31/2028 |
23,538 |
(232 |
) |
(229 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Royal Buyer, LLC (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.00% |
11.33 |
% |
8/31/2028 |
70,849 |
70,160 |
70,160 |
1.12 |
% | |||||||||||||||||||||||
| Sedgwick Claims Management Services, Inc. (7)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 3.75% |
9.08 |
% |
2/24/2028 |
19,157 |
19,010 |
19,213 |
0.31 |
% | |||||||||||||||||||||||
| SimpliSafe Holding Corporation (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.25% |
11.58 |
% |
5/2/2028 |
15,076 |
3,772 |
3,998 |
0.06 |
% | |||||||||||||||||||||||
| SimpliSafe Holding Corporation (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.25% |
11.58 |
% |
5/2/2028 |
118,736 |
117,079 |
118,736 |
1.90 |
% | |||||||||||||||||||||||
139
| Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
| Spirit RR Holdings, Inc. (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Revolving Loan |
SF + 5.25% |
10.68 |
% |
9/13/2028 |
3,579 |
361 |
401 |
0.01 |
% | |||||||||||||||||||||||
| Spirit RR Holdings, Inc. (4)(9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.25% |
10.65 |
% |
9/13/2028 |
42,994 |
42,293 |
42,799 |
0.69 |
% | |||||||||||||||||||||||
| Spirit RR Holdings, Inc. (4)(6)(9)
|
Industrial Support Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.25% |
10.68 |
% |
9/13/2028 |
5,978 |
2,900 |
2,958 |
0.05 |
% | |||||||||||||||||||||||
| TruckPro, LLC (4)(12)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 7.75% |
13.44 |
% |
8/16/2028 |
70,356 |
68,509 |
69,675 |
1.12 |
% | |||||||||||||||||||||||
| Vaco Holdings LLC (9)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 5.00% |
10.43 |
% |
1/21/2029 |
12,463 |
12,422 |
12,349 |
0.20 |
% | |||||||||||||||||||||||
| W3 TopCo LLC (4)(10)
|
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 6.50% |
11.83 |
% |
3/22/2029 |
89,928 |
86,351 |
86,349 |
1.38 |
% | |||||||||||||||||||||||
| E.S.G. Movilidad, S.L.U. (4)(5)(6)(7)
|
Industrial Transportation |
First Lien Senior Secured Delayed Draw Loan |
5/31/2029 |
€ |
11,245 |
(293 |
) |
— |
0.00 |
% | ||||||||||||||||||||||||
| E.S.G. Movilidad, S.L.U. (4)(5)(7)
|
Industrial Transportation |
First Lien Senior Secured Debt |
E + 6.50% |
10.53 |
% |
5/31/2029 |
€ |
8,096 |
8,493 |
8,737 |
0.14 |
% | ||||||||||||||||||||||
| E.S.G. Movilidad, S.L.U. (4)(5)(7)
|
Industrial Transportation |
First Lien Senior Secured Debt |
E + 6.50% |
10.53 |
% |
5/31/2029 |
€ |
22,264 |
23,357 |
24,027 |
0.38 |
% | ||||||||||||||||||||||
| Truck-Lite Co, LLC (4)(6)(9)
|
Industrial Transportation |
First Lien Senior Secured Delayed Draw Loan |
2/13/2031 |
9,338 |
(183 |
) |
(183 |
) |
0.00 |
% | ||||||||||||||||||||||||
| Truck-Lite Co, LLC (4)(6)(9)
|
Industrial Transportation |
First Lien Senior Secured Revolving Loan |
SF + 5.75% |
11.06 |
% |
2/13/2030 |
11,973 |
165 |
165 |
0.00 |
% | |||||||||||||||||||||||
| Truck-Lite Co, LLC (4)(9)
|
Industrial Transportation |
First Lien Senior Secured Debt |
SF + 6.38% (incl 2.50% PIK) |
11.68 |
% |
2/13/2031 |
86,373 |
84,678 |
84,678 |
1.36 |
% | |||||||||||||||||||||||
140
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Apex Group Treasury LLC (5)(8)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 5.00% | 10.32 | % | 7/27/2028 | 6,965 | 6,869 | 7,000 | 0.11 | % | |||||||||||||||||||||||
Ascensus Holdings, Inc. (8)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 3.50% | 8.94 | % | 8/2/2028 | 7,623 | 7,565 | 7,605 | 0.12 | % | |||||||||||||||||||||||
Eisner Advisory Group LLC (8)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 4.00% | 9.33 | % | 2/28/2031 | 6,063 | 6,003 | 6,095 | 0.10 | % | |||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Delayed Draw Loan |
9/3/2030 | 5,484 | (106 | ) | (48 | ) | 0.00 | % | ||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Revolving Loan |
SF + 6.00% | 11.28 | % | 9/4/2029 | 7,590 | 1,264 | 1,325 | 0.02 | % | |||||||||||||||||||||||
More Cowbell II, LLC (4)(9)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 6.00% | 11.09 | % | 9/3/2030 | 50,342 | 49,418 | 49,903 | 0.80 | % | |||||||||||||||||||||||
Osaic Holdings Inc (7)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 4.50% | 9.83 | % | 8/16/2028 | 12,993 | 12,938 | 13,059 | 0.21 | % | |||||||||||||||||||||||
RFS OPCO LLC (4)(7)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 5.00% | 10.31 | % | 4/4/2031 | 70,000 | 69,300 | 69,300 | 1.11 | % | |||||||||||||||||||||||
Transnetwork LLC (8)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SF + 5.50% | 10.82 | % | 12/29/2030 | 48,791 | 47,847 | 49,096 | 0.79 | % | |||||||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14)
|
Investment Banking and Brokerage Services |
First Lien Senior Secured Debt |
SN + 8.00% | 13.22 | % | 9/22/2028 | £ | 23,080 | 27,241 | 28,858 | 0.46 | % | ||||||||||||||||||||||
Jam City, Inc. (4)(10)
|
Leisure Goods | First Lien Senior Secured Debt |
SF + 7.00% | 12.57 | % | 9/7/2027 | 1,988 | 1,977 | 1,997 | 0.03 | % | |||||||||||||||||||||||
141
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
OneDigital Borrower LLC (8)
|
Life Insurance | First Lien Senior Secured Debt | SF + 4.25% | 9.68 | % | 11/16/2027 | 5,865 | 5,857 | 5,872 | 0.09 | % | |||||||||||||||||||||||
2080 Media, Inc. (4)(9)
|
Media | First Lien Senior Secured Delayed Draw Loan | SF + 6.00% | 11.31 | % | 3/14/2029 | 12,618 | 12,450 | 12,618 | 0.20 | % | |||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9)
|
Media | First Lien Senior Secured Revolving Loan | 3/14/2028 | 13,795 | (182 | ) | — | 0.00 | % | |||||||||||||||||||||||||
2080 Media, Inc. (4)(9)
|
Media | First Lien Senior Secured Debt | SF + 6.00% | 11.31 | % | 3/14/2029 | 54,353 | 53,549 | 54,353 | 0.87 | % | |||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10)
|
Media | First Lien Senior Secured Revolving Loan | SF + 7.25% | 12.72 | % | 10/29/2027 | 2,766 | 2,440 | 2,336 | 0.04 | % | |||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10)
|
Media | First Lien Senior Secured Debt | SF + 7.25% | 12.72 | % | 10/29/2027 | 40,869 | 40,126 | 38,596 | 0.62 | % | |||||||||||||||||||||||
Associations Inc. (4)(10)
|
Media | First Lien Senior Secured Delayed Draw Loan | SF + 6.50% (incl 2.50% PIK) | 12.08 | % | 7/2/2027 | 496 | 493 | 496 | 0.01 | % | |||||||||||||||||||||||
Associations Inc. (4)(10)
|
Media | First Lien Senior Secured Delayed Draw Loan | SF + 6.50% (incl 2.50% PIK) | 12.09 | % | 7/2/2027 | 1,033 | 1,026 | 1,033 | 0.02 | % | |||||||||||||||||||||||
Associations Inc. (4)(10)
|
Media | First Lien Senior Secured Delayed Draw Loan | SF + 6.50% (incl 2.50% PIK) | 12.07 | % | 7/2/2027 | 1,033 | 1,026 | 1,033 | 0.02 | % | |||||||||||||||||||||||
142
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Associations Inc. (4)(10)
|
Media | First Lien Senior Secured Delayed Draw Loan |
SF + 6.50% (incl 2.50% PIK) | 12.08 | % | 7/2/2027 | 624 | 620 | 624 | 0.01 | % | |||||||||||||||||||||||
Associations Inc. (4)(6)(10)
|
Media | First Lien Senior Secured Revolving Loan |
SF + 6.50% | 12.09 | % | 7/2/2027 | 403 | 204 | 207 | 0.00 | % | |||||||||||||||||||||||
Associations Inc. (4)(10)
|
Media | First Lien Senior Secured Debt |
SF + 6.50% (incl 2.50% PIK) | 12.09 | % | 7/2/2027 | 29,681 | 29,506 | 29,681 | 0.48 | % | |||||||||||||||||||||||
Aventine Intermediate LLC (4)(9)
|
Media | First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% (incl 4.00% PIK) | 11.41 | % | 6/18/2027 | 1,085 | 1,073 | 1,015 | 0.02 | % | |||||||||||||||||||||||
Aventine Intermediate LLC (4)(9)
|
Media | First Lien Senior Secured Debt |
SF + 6.00% (incl 4.00% PIK) | 11.41 | % | 6/18/2027 | 19,058 | 18,839 | 17,837 | 0.29 | % | |||||||||||||||||||||||
Circana Group, LP. (4)(6)(9)
|
Media | First Lien Senior Secured Revolving Loan |
SF + 5.75% | 11.08 | % | 12/1/2027 | 9,023 | 4,922 | 5,053 | 0.08 | % | |||||||||||||||||||||||
Circana Group, LP. (4)(9)
|
Media | First Lien Senior Secured Debt |
SF + 6.25% (incl 2.75% PIK) | 11.58 | % | 12/1/2028 | 143,563 | 141,454 | 143,903 | 2.30 | % | |||||||||||||||||||||||
Circana Group, LP. (4)(9)
|
Media | First Lien Senior Secured Debt |
SF + 5.75% | 11.16 | % | 12/1/2028 | 9,174 | 9,106 | 9,157 | 0.15 | % | |||||||||||||||||||||||
143
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
IEHL US Holdings, Inc. (4)(12)
|
Media | First Lien Senior Secured Debt |
SF + 7.25% | 12.56 | % | 10/29/2029 | 6,604 | 6,432 | 6,590 | 0.11 | % | |||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12)
|
Media | First Lien Senior Secured Debt |
SN + 7.65% | 12.91 | % | 10/29/2029 | £ | 15,493 | 18,811 | 19,506 | 0.31 | % | ||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10)
72 Welbeck Street LONDON, W1G 0AY United Kingdom |
Media | First Lien Senior Secured Debt |
E + 7.25% | 11.16 | % | 10/29/2029 | € | 2,540 | 2,727 | 2,738 | 0.04 | % | ||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10)
|
Media | First Lien Senior Secured Delayed Draw Loan |
E + 7.25% | 11.16 | % | 10/29/2029 | € | 3,048 | 3,181 | 3,285 | 0.05 | % | ||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12)
|
Media | First Lien Senior Secured Delayed Draw Loan |
4/27/2029 | 5,080 | (138 | ) | (17 | ) | 0.00 | % | ||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12)
|
Media | First Lien Senior Secured Delayed Draw Loan |
SF + 7.25% | 12.56 | % | 10/29/2029 | 30,478 | 29,695 | 30,413 | 0.49 | % | |||||||||||||||||||||||
Mav Acquisition Corporation (8)
|
Media | First Lien Senior Secured Debt |
SF + 4.75% | 10.19 | % | 7/28/2028 | 15,684 | 15,486 | 15,731 | 0.25 | % | |||||||||||||||||||||||
144
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
OneTeam Partners, LLC (4)(9)
|
Media | First Lien Senior Secured Debt |
SF + 5.50% | 10.93 | % | 9/14/2029 | 74,063 | 72,880 | 74,063 | 1.19 | % | |||||||||||||||||||||||
Renaissance Financiere (4)(5)(7)
|
Media | First Lien Senior Secured Delayed Draw Loan |
E + 7.00% | 10.93 | % | 7/26/2028 | € | 34,871 | 35,544 | 37,455 | 0.60 | % | ||||||||||||||||||||||
Renaissance Holding Corp. (8)
|
Media | First Lien Senior Secured Debt |
SF + 4.25% | 9.58 | % | 4/5/2030 | 7,960 | 7,803 | 7,985 | 0.13 | % | |||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10)
|
Media | First Lien Senior Secured Delayed Draw Loan |
SF + 7.50% | 12.92 | % | 8/7/2028 | 3,657 | 3,578 | 3,622 | 0.06 | % | |||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10)
|
Media | First Lien Senior Secured Revolving Loan |
8/7/2028 | 4,711 | (112 | ) | (45 | ) | 0.00 | % | ||||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10)
|
Media | First Lien Senior Secured Debt |
SF + 7.25% | 12.67 | % | 8/7/2028 | 4,263 | 4,180 | 4,180 | 0.07 | % | |||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10)
|
Media | First Lien Senior Secured Debt |
SF + 7.50% | 12.92 | % | 8/7/2028 | 63,512 | 62,001 | 62,905 | 1.01 | % | |||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC(4)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 7.50% | 12.96 | % | 2/23/2028 | 21,259 | 20,893 | 19,343 | 0.31 | % | |||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.75% (incl 3.38% PIK) | 12.06 | % | 9/30/2030 | 15,471 | 1,207 | 1,438 | 0.02 | % | |||||||||||||||||||||||
145
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Revolving Loan |
10/1/2029 | 21,254 | (584 | ) | (315 | ) | -0.01 | % | ||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
E + 6.75% (incl 3.38% PIK) | 10.66 | % | 9/30/2030 | € | 62,119 | 63,867 | 66,145 | 1.06 | % | ||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 6.75% (incl 3.38% PIK) | 12.06 | % | 9/30/2030 | 82,072 | 79,809 | 80,929 | 1.30 | % | |||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
5/11/2028 | 34,900 | (825 | ) | (419 | ) | -0.01 | % | ||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.50% | 10.83 | % | 5/11/2028 | 22,800 | 22,478 | 22,596 | 0.36 | % | |||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Revolving Loan |
SF + 5.50% | 10.83 | % | 5/11/2028 | 10,875 | 3,654 | 3,709 | 0.06 | % | |||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 5.50% | 10.83 | % | 5/11/2028 | 75,106 | 74,028 | 74,436 | 1.19 | % | |||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 5.75% | 11.08 | % | 5/11/2028 | 9,652 | 9,437 | 9,536 | 0.15 | % | |||||||||||||||||||||||
146
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Femur Buyer, Inc. (4)(6)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Revolving Loan |
9/18/2029 | 13,350 | (331 | ) | (332 | ) | -0.01 | % | ||||||||||||||||||||||||
Femur Buyer, Inc. (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 8.25% (incl 4.50% PIK) | 13.58 | % | 3/18/2030 | 137,576 | 134,158 | 134,157 | 2.15 | % | |||||||||||||||||||||||
Limpio Bidco GMBH (4)(5)(7)
Robert-Koch-Str. 2, 22851 Norderstedt |
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
E + 6.20% | 10.11 | % | 10/31/2030 | € | 66,556 | 68,602 | 71,220 | 1.14 | % | ||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 6.75% | 12.08 | % | 3/13/2029 | 111,785 | 108,441 | 111,278 | 1.78 | % | |||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 5.75% | 11.08 | % | 3/13/2029 | 62,432 | 61,264 | 61,910 | 0.99 | % | |||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.25% | 11.56 | % | 5/12/2029 | 3,153 | 581 | 486 | 0.01 | % | |||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Revolving Loan |
SF + 5.75% | 11.06 | % | 5/12/2028 | 9,458 | 5,545 | 5,278 | 0.08 | % | |||||||||||||||||||||||
Plasma Buyer LLC (4)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 5.75% | 11.06 | % | 5/12/2029 | 83,848 | 82,573 | 79,962 | 1.28 | % | |||||||||||||||||||||||
Resonetics, LLC (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 6.00% | 11.33 | % | 4/28/2028 | 63,354 | 61,662 | 62,405 | 1.00 | % | |||||||||||||||||||||||
SDC US Smilepay SPV (4)(7)(17)
|
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
P + 9.75% | 10/27/2025 | 24,175 | 20,147 | 17,602 | 0.28 | % | |||||||||||||||||||||||||
TecoStar Holdings Inc (4)(10)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 8.50% (incl 4.50% PIK) | 13.83 | % | 7/6/2029 | 121,254 | 118,657 | 121,185 | 1.94 | % | |||||||||||||||||||||||
Zeus Company LLC (4)(6)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Delayed Draw Loan |
2/28/2031 | 23,088 | (344 | ) | (342 | ) | -0.01 | % | ||||||||||||||||||||||||
Zeus Company LLC (4)(6)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Revolving Loan |
2/28/2030 | 21,506 | (318 | ) | (318 | ) | -0.01 | % | ||||||||||||||||||||||||
Zeus Company LLC (4)(9)
|
Medical Equipment and Services |
First Lien Senior Secured Debt |
SF + 5.50% | 10.81 | % | 2/28/2031 | 124,100 | 122,263 | 122,262 | 1.96 | % | |||||||||||||||||||||||
147
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9)
|
Non-life Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% | 11.31 | % | 11/1/2029 | 7,988 | 3,421 | 3,519 | 0.06 | % | |||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9)
|
Non-life Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.50% | 10.99 | % | 11/1/2029 | 39,550 | 39,302 | 39,550 | 0.63 | % | |||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9)
|
Non-life Insurance |
First Lien Senior Secured Revolving Loan |
11/1/2029 | 467 | — | — | 0.00 | % | ||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9)
|
Non-life Insurance |
First Lien Senior Secured Debt |
SF + 5.50% | 10.96 | % | 11/1/2029 | 14,236 | 14,236 | 14,236 | 0.23 | % | |||||||||||||||||||||||
Acrisure LLC (7)
|
Non-life Insurance |
First Lien Senior Secured Debt |
SF + 4.50% | 9.83 | % | 11/6/2030 | 3,990 | 3,952 | 4,015 | 0.06 | % | |||||||||||||||||||||||
Alera Group, Inc. (4)(9)
|
Non-life Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.25% | 10.58 | % | 10/2/2028 | 21,501 | 21,348 | 21,501 | 0.34 | % | |||||||||||||||||||||||
Alera Group, Inc. (4)(9)
|
Non-life Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.25% | 10.58 | % | 10/2/2028 | 12,366 | 12,358 | 12,366 | 0.20 | % | |||||||||||||||||||||||
Alera Group, Inc. (4)(9)
|
Non-life Insurance |
First Lien Senior Secured Debt |
SF + 5.25% | 10.58 | % | 10/2/2028 | 43,614 | 43,586 | 43,614 | 0.70 | % | |||||||||||||||||||||||
Alera Group, Inc. (4)(6)(9)
|
Non-life Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.75% | 11.08 | % | 10/2/2028 | 5,196 | 210 | 262 | 0.00 | % | |||||||||||||||||||||||
Alliant Holdings Intermediate, LLC (8)
|
Non-life Insurance |
First Lien Senior Secured Debt |
SF + 3.50% | 8.83 | % | 11/6/2030 | 18,792 | 18,673 | 18,888 | 0.30 | % | |||||||||||||||||||||||
AmWINS Group, Inc. (9)
|
Non-life Insurance |
First Lien Senior Secured Debt |
SF + 2.25% | 7.69 | % | 2/19/2028 | 4,585 | 4,566 | 4,591 | 0.07 | % | |||||||||||||||||||||||
148
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
AmWINS Group, Inc. (9)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 2.75% | 8.19 | % | 2/19/2028 | 2,970 | 2,964 | 2,979 | 0.05 | % | |||||||||||||||||||||||
Amynta Agency Borrower Inc (7)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 4.25% | 9.55 | % | 2/28/2028 | 20,065 | 19,582 | 20,164 | 0.32 | % | |||||||||||||||||||||||
BroadStreet Partners, Inc. (7)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 3.75% | 9.08 | % | 1/27/2029 | 9,169 | 9,096 | 9,207 | 0.15 | % | |||||||||||||||||||||||
Galway Borrower LLC (4)(6)(9)
1 California Street, Suite 400, San Francisco, CA 94111 |
Non-life
Insurance |
First Lien Senior Secured Revolving Loan |
SF + 5.25% | 10.66 | % | 9/29/2028 | 2,216 | 331 | 358 | 0.01 | % | |||||||||||||||||||||||
Galway Borrower LLC (4)(9)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 5.25% | 10.65 | % | 9/29/2028 | 60,809 | 60,395 | 60,809 | 0.97 | % | |||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.50% | 10.93 | % | 11/27/2028 | 22,406 | 22,201 | 22,406 | 0.36 | % | |||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.50% | 10.93 | % | 11/27/2028 | 48 | 47 | 48 | 0.00 | % | |||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 5.50% | 10.93 | % | 11/27/2028 | 9,752 | 9,690 | 9,752 | 0.16 | % | |||||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(6)(10)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
11/24/2028 | 14,338 | (143 | ) | (143 | ) | 0.00 | % | ||||||||||||||||||||||||
HUB International Limited (7)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
7.25 | % | 6/15/2030 | 10,517 | 10,517 | 10,819 | 0.17 | % | ||||||||||||||||||||||||
HUB International Limited (9)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 3.25% | 8.57 | % | 6/20/2030 | 13,853 | 13,711 | 13,874 | 0.22 | % | |||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% | 11.34 | % | 8/27/2026 | 5,825 | 354 | 396 | 0.01 | % | |||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.02% | 11.36 | % | 8/27/2026 | 20,644 | 20,427 | 20,610 | 0.33 | % | |||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.02% | 11.46 | % | 8/27/2026 | 56,827 | 56,428 | 56,734 | 0.91 | % | |||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(10)
|
Non-life
Insurance |
First Lien Senior Secured Revolving Loan |
8/27/2026 | 472 | (4 | ) | (1 | ) | 0.00 | % | ||||||||||||||||||||||||
149
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
8.50 | % | 3/15/2030 | 14,487 | 14,468 | 15,113 | 0.24 | % | ||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(9)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.75% | 11.20 | % | 10/16/2028 | 18,174 | 17,904 | 18,174 | 0.29 | % | |||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(6)(9)
|
Non-life
Insurance |
First Lien Senior Secured Revolving Loan |
10/16/2028 | 822 | (11 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(9)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 5.50% | 10.95 | % | 10/16/2028 | 7,168 | 7,071 | 7,168 | 0.11 | % | |||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9)
|
Non-life
Insurance |
First Lien Senior Secured Revolving Loan |
5/1/2029 | 6,685 | (170 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
5/1/2030 | 10,961 | (304 | ) | 219 | 0.00 | % | |||||||||||||||||||||||||
Summit Acquisition Inc. (4)(9)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 6.75% | 12.06 | % | 5/1/2030 | 48,658 | 47,392 | 49,631 | 0.79 | % | |||||||||||||||||||||||
Truist Insurance Holdings LLC (7)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 3.25% | 8.55 | % | 5/6/2031 | 13,333 | 13,300 | 13,328 | 0.21 | % | |||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9)
|
Non-life
Insurance |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.00% | 10.46 | % | 3/25/2027 | 25,953 | 25,722 | 25,711 | 0.41 | % | |||||||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9)
|
Non-life
Insurance |
First Lien Senior Secured Revolving Loan |
3/25/2027 | 6,576 | (59 | ) | (61 | ) | 0.00 | % | ||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 5.00% | 10.46 | % | 3/25/2027 | 20,580 | 20,386 | 20,389 | 0.33 | % | |||||||||||||||||||||||
USI Inc/NY (7)
|
Non-life
Insurance |
First Lien Senior Secured Debt |
SF + 3.25% | 8.55 | % | 9/27/2030 | 5,970 | 5,956 | 5,983 | 0.10 | % | |||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10)
|
Oil, Gas and Coal |
First Lien Senior Secured Delayed Draw Loan |
12/7/2029 | 6,923 | (152 | ) | (79 | ) | 0.00 | % | ||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10)
|
Oil, Gas and Coal |
First Lien Senior Secured Revolving Loan |
P + 5.00% | 13.50 | % | 12/7/2029 | 6,923 | 1,237 | 1,305 | 0.02 | % | |||||||||||||||||||||||
150
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10)
|
Oil, Gas and Coal | First Lien Senior Secured Debt |
SF + 6.00% | 11.33 | % | 12/7/2029 | 46,038 | 45,057 | 45,510 | 0.73 | % | |||||||||||||||||||||||
Parfums Holding Co Inc (12)
|
Personal Care, Drug and Grocery Stores |
First Lien Senior Secured Debt |
SF + 6.00% | 11.57 | % | 6/30/2026 | 16,413 | 15,263 | 16,393 | 0.26 | % | |||||||||||||||||||||||
Puma Buyer LLC (4)(8) |
Personal Care, Drug and Grocery Stores |
First Lien Senior Secured Debt |
SF + 5.50% | 10.90 | % | 7/16/2029 | 61,225 | 57,830 | 61,225 | 0.98 | % | |||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9)
|
Personal Care, Drug and Grocery Stores |
First Lien Senior Secured Debt |
SF + 5.65% | 10.96 | % | 3/23/2028 | 15,826 | 15,550 | 15,806 | 0.25 | % | |||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9)
Quarter One, Level 2, 1 Epping Road, North Ryde, NSW 2113, Australia |
Personal Care, Drug and Grocery Stores |
First Lien Senior Secured Debt |
B + 5.75% | 10.14 | % | 3/23/2028 | AUD | 35,035 | 25,693 | 22,824 | 0.37 | % | ||||||||||||||||||||||
Daphne S.P.A. (4)(5)(6)(7)
VIA DELL’ECONOMIA, 91, VICENZA, Vicenza 36100, Italy |
Personal Goods | First Lien Senior Secured Delayed Draw Loan |
5/23/2028 | € | 3,978 | (106 | ) | (390 | ) | -0.01 | % | |||||||||||||||||||||||
Daphne S.P.A. (4)(5)(7)
VIA DELL’ECONOMIA, 91, VICENZA, Vicenza 36100, Italy |
Personal Goods | First Lien Senior Secured Debt |
E + 6.25% | 10.16 | % | 5/23/2028 | € | 45,354 | 47,713 | 44,496 | 0.71 | % | ||||||||||||||||||||||
Spanx, LLC (4)(6)(9)
|
Personal Goods | First Lien Senior Secured Revolving Loan |
11/18/2027 | 5,000 | (63 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Spanx, LLC (4)(9) |
Personal Goods | First Lien Senior Secured Debt |
SF + 5.25% | 10.68 | % | 11/20/2028 | 29,325 | 28,918 | 29,325 | 0.47 | % | |||||||||||||||||||||||
Advarra Holdings, Inc. (4)(6)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Delayed Draw Loan |
8/24/2029 | 6,340 | (93 | ) | — | 0.00 | % | |||||||||||||||||||||||||
151
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Debt |
SF + 5.25% | 10.58 | % | 8/24/2029 | 69,283 | 68,324 | 69,283 | 1.11 | % | |||||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.50% | 11.10 | % | 11/1/2028 | 1,341 | 1,329 | 1,341 | 0.02 | % | |||||||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Revolving Loan |
10/30/2026 | 2,115 | (23 | ) | — | 0.00 | % | |||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Debt |
SF + 5.50% | 11.10 | % | 11/1/2028 | 24,893 | 24,622 | 24,893 | 0.40 | % | |||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Delayed Draw Loan |
10/27/2028 | € | 8,400 | (175 | ) | 25 | 0.00 | % | ||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Debt |
E + 6.50% | 10.44 | % | 10/27/2028 | € | 82,300 | 80,448 | 89,059 | 1.43 | % | ||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Delayed Draw Loan |
B + 6.50% | 10.97 | % | 10/30/2028 | AUD | 11,982 | 1,907 | 1,972 | 0.03 | % | ||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(9) |
Pharmaceuticals and Biotechnology |
First Lien Senior Secured Debt |
B + 6.50% | 10.89 | % | 10/30/2028 | AUD | 118,623 | 74,333 | 77,153 | 1.23 | % | ||||||||||||||||||||||
OEG Borrower LLC (4)(8)
|
Real Estate Investment and Services |
First Lien Senior Secured Debt |
SF + 5.00% | 10.43 | % | 6/18/2029 | 39,400 | 38,181 | 39,400 | 0.63 | % | |||||||||||||||||||||||
AI Grace Aus Bidco Pty Ltd (4)(5)(9)
|
Retailers | First Lien Senior Secured Debt |
E + 6.50% | 10.50 | % | 12/5/2029 | € | 21,626 | 22,683 | 22,909 | 0.37 | % | ||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10)
7055 S Lindell Road, Las Vegas, NV 89118 |
Retailers | First Lien Senior Secured Revolving Loan |
10/31/2029 | 1,150 | (11 | ) | — | 0.00 | % | |||||||||||||||||||||||||
152
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
Retailers | First Lien Senior Secured Delayed Draw Loan |
SF + 6.00% | 11.30 | % | 10/31/2029 | 1,494 | 351 | 369 | 0.01 | % | |||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(10) |
Retailers | First Lien Senior Secured Debt |
SF + 6.00% | 11.31 | % | 10/31/2029 | 13,538 | 13,409 | 13,565 | 0.22 | % | |||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
Retailers | First Lien Senior Secured Debt |
SF + 8.00% | 13.46 | % | 7/28/2027 | 51,165 | 49,890 | 49,999 | 0.80 | % | |||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
Retailers | First Lien Senior Secured Debt |
SF + 8.00% | 13.48 | % | 7/28/2027 | 43,955 | 42,313 | 42,953 | 0.69 | % | |||||||||||||||||||||||
Petsmart LLC (9) |
Retailers | First Lien Senior Secured Debt |
SF + 3.75% | 9.18 | % | 2/11/2028 | 15,394 | 15,314 | 15,378 | 0.25 | % | |||||||||||||||||||||||
White Cap Buyer, LLC (8)
|
Retailers | First Lien Senior Secured Debt |
SF + 3.75% | 9.08 | % | 10/19/2027 | 9,297 | 9,263 | 9,335 | 0.15 | % | |||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
SN + 5.25% | 10.47 | % | 6/28/2029 | £ | 47,995 | 55,880 | 60,565 | 0.97 | % | ||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SN + 5.25% | 10.47 | % | 6/28/2029 | £ | 91,991 | 109,956 | 116,084 | 1.86 | % | ||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.00% | 12.32 | % | 11/7/2029 | 39,900 | 38,969 | 39,405 | 0.63 | % | |||||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
11/7/2029 | 6,000 | (140 | ) | (74 | ) | 0.00 | % | ||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10)
|
Software and Computer Services |
First Lien Senior Secured Debt |
E + 7.00% | 10.92 | % | 11/7/2029 | € | 18,568 | 19,397 | 19,798 | 0.32 | % | ||||||||||||||||||||||
Avalara, Inc. (4)(6)(9) |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
10/19/2028 | 6,324 | (120 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Avalara, Inc. (4)(9) |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.25% | 12.56 | % | 10/19/2028 | 56,918 | 55,815 | 57,016 | 0.91 | % | |||||||||||||||||||||||
153
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Barracuda Networks Inc (8)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.50% | 9.81 | % | 8/15/2029 | 13,827 | 13,508 | 13,773 | 0.22 | % | |||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) 100 International Drive, Suite 200 Portsmouth, NH 03801, USA |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
5/15/2028 | 385 | (3 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) 100 International Drive, Suite 200 Portsmouth, NH 03801, USA |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.25% | 10.58 | % | 5/14/2029 | 4,546 | 4,512 | 4,546 | 0.07 | % | |||||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
4/16/2027 | 2,687 | — | (6 | ) | 0.00 | % | |||||||||||||||||||||||||
Calabrio, Inc. (4)(10) |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.13% | 12.45 | % | 4/16/2027 | 22,313 | 22,313 | 22,265 | 0.36 | % | |||||||||||||||||||||||
Calabrio, Inc. (4)(10) |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.13% | 12.45 | % | 4/16/2027 | 3,273 | 3,212 | 3,266 | 0.05 | % | |||||||||||||||||||||||
Central Parent Inc (7) |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.00% | 9.31 | % | 7/6/2029 | 15,000 | 14,965 | 15,062 | 0.24 | % | |||||||||||||||||||||||
Certinia Inc. (4)(6)(10)
60 South Market St, Suite 750 San Jose, CA 95113 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
8/3/2029 | 5,449 | (145 | ) | (41 | ) | 0.00 | % | ||||||||||||||||||||||||
Certinia Inc. (4)(10)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.25% | 12.56 | % | 8/3/2029 | 40,323 | 39,246 | 40,019 | 0.64 | % | |||||||||||||||||||||||
Cloud Software Group Inc (8)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.50% | 9.91 | % | 3/30/2029 | 13,658 | 12,768 | 13,611 | 0.22 | % | |||||||||||||||||||||||
Cloud Software Group Inc (7) 851 Cypress Creek Road, Fort Lauderdale, FL 33309 |
Software and Computer Services |
First Lien Senior Secured Debt |
6.50 | % | 3/31/2029 | 7,740 | 6,729 | 7,354 | 0.12 | % | ||||||||||||||||||||||||
CommerceHub, Inc. (4)(9)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 6.25% | 11.73 | % | 12/29/2027 | 51,141 | 48,441 | 50,759 | 0.81 | % | |||||||||||||||||||||||
154
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9)
|
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
2/27/2030 | 7,123 | (160 | ) | (24 | ) | 0.00 | % | ||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9)
1855 S. Grant Street, San Mateo, CA 94402 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
2/27/2029 | 6,211 | (127 | ) | (30 | ) | 0.00 | % | ||||||||||||||||||||||||
Coupa Holdings, LLC (4)(9)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.50% | 12.81 | % | 2/27/2030 | 79,777 | 78,197 | 79,510 | 1.27 | % | |||||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) 53 rue de Châteaudun 75009 Paris, France |
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
8/29/2030 | € | 9,441 | (243 | ) | (255 | ) | 0.00 | % | |||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) 53 rue de Châteaudun 75009 Paris, France |
Software and Computer Services |
First Lien Senior Secured Debt |
E + 6.00% | 9.83 | % | 8/29/2030 | € | 6,742 | 7,170 | 7,282 | 0.12 | % | ||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) 53 rue de Châteaudun 75009 Paris, France |
Software and Computer Services |
First Lien Senior Secured Debt |
SN + 6.00% | 11.22 | % | 8/29/2030 | £ | 23,265 | 28,754 | 29,354 | 0.47 | % | ||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(6)(10)
235 East Palmer Street, Franklin, NC 28734 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
3/16/2026 | 966 | (5 | ) | (2 | ) | 0.00 | % | ||||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) 235 East Palmer Street, Franklin, NC 28734
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.00% | 12.30 | % | 3/16/2028 | 39,246 | 38,299 | 39,314 | 0.63 | % | |||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 6.50% | 11.80 | % | 3/16/2028 | 8,830 | 8,768 | 8,810 | 0.14 | % | |||||||||||||||||||||||
Enverus Holdings Inc (4)(9) 2901 Vía Fortuna #100, Austin, TX 78746 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.50% | 10.83 | % | 12/24/2029 | 64,577 | 63,653 | 64,307 | 1.03 | % | |||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) 2901 Vía Fortuna #100, Austin, TX 78746 |
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
12/24/2029 | 3,229 | (47 | ) | (14 | ) | 0.00 | % | ||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9 2901 Vía Fortuna #100, Austin, TX 78746 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
12/24/2029 | 4,913 | (70 | ) | (21 | ) | 0.00 | % | ||||||||||||||||||||||||
FinThrive Software Intermediate Holdings Inc (8) 7950 Legacy Drive, Suite 900, Plano, TX 75024, US |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.00% | 9.57 | % | 12/18/2028 | 12,937 | 12,743 | 10,940 | 0.18 | % | |||||||||||||||||||||||
GoTo Group Inc (7) 333 Summer St, Boston, Massachusetts 02210 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.75% | 10.17 | % | 4/30/2028 | 1,008 | 1,008 | 777 | 0.01 | % | |||||||||||||||||||||||
155
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
GoTo Group Inc (7)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.75% | 10.17 | % | 4/30/2028 | 1,008 | 1,008 | 964 | 0.02 | % | |||||||||||||||||||||||
GovCIO Buyer Company (4)(10) 4000 Legato Rd., Suite 600, Fairfax, VA 22033 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.00% | 10.32 | % | 8/18/2027 | 9,581 | 9,462 | 9,581 | 0.15 | % | |||||||||||||||||||||||
Helios Software Holdings, Inc. (10) |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.75% | 9.25 | % | 3/11/2028 | 11,761 | 11,679 | 11,673 | 0.19 | % | |||||||||||||||||||||||
Huskies Parent, Inc. (4)(6)(9) 170 Huyshope Avenue, Hartford, CT 06106 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
SF + 5.50% | 10.96 | % | 11/3/2027 | 1,000 | 635 | 618 | 0.01 | % | |||||||||||||||||||||||
Huskies Parent, Inc. (4)(9) 170 Huyshope Avenue, Hartford, CT 06106 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.50% | 10.96 | % | 11/3/2028 | 25,090 | 24,753 | 24,249 | 0.39 | % | |||||||||||||||||||||||
LMI Inc/DE (8) 1255 Battery St, Suite 500, San Francisco, CA 94111 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.75% | 9.18 | % | 10/2/2028 | 6,246 | 6,219 | 6,157 | 0.10 | % | |||||||||||||||||||||||
Medallia, Inc. (4)(9) 6220 Stoneridge Mall Rd Floor 2, Pleasanton, CA 94588 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 6.50% (incl 4.00% PIK) | 11.91 | % | 10/30/2028 | 77,518 | 77,518 | 76,571 | 1.23 | % | |||||||||||||||||||||||
McAfee Corp (8) 6220 America Center Drive, San Jose, CA 95002 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.75% | 9.18 | % | 3/1/2029 | 7,860 | 7,835 | 7,869 | 0.13 | % | |||||||||||||||||||||||
Mitchell Topo Holdings Inc (8)
6220 Greenwich Drive San Diego, CA 92122 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.75% | 9.19 | % | 10/15/2028 | 16,562 | 16,350 | 16,587 | 0.27 | % | |||||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) 5335 Gate Pkwy Jacksonville, FL 32256 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.50% | 9.42 | % | 2/10/2028 | 1,789 | 1,780 | 1,750 | 0.03 | % | |||||||||||||||||||||||
New Era Technology, Inc. (4)(10)
1370 Avenue of the Americas, 10th Floor, New York, NY 10019 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 6.25% | 11.71 | % | 10/31/2026 | 19,161 | 19,161 | 18,797 | 0.30 | % | |||||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10)
33 N Garden Ave, Ste 1200, Clearwater, FL 33755 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
2/1/2029 | 4,657 | (94 | ) | (22 | ) | 0.00 | % | ||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) 33 N Garden Ave, Ste 1200, Clearwater, FL 33755
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.50% | 12.81 | % | 2/1/2029 | 33,837 | 33,156 | 33,677 | 0.54 | % | |||||||||||||||||||||||
156
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Peraton Inc. (9)
1875 Explorer Street Reston, VA 20190 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.75% | 9.18 | % | 2/1/2028 | 15,043 | 14,915 | 15,059 | 0.24 | % | |||||||||||||||||||||||
Perforce Software Inc (4)(8)
400 First Avenue North #400, Minneapolis, MN 55401 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.50% | 9.83 | % | 7/1/2026 | 19,650 | 19,370 | 19,439 | 0.31 | % | |||||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9)
1001 17th Street, Suite 100, Denver, CO 80202 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
10/17/2028 | 6,068 | (118 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9)
1001 17th Street, Suite 100, Denver, CO 80202 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.00% | 12.33 | % | 10/17/2029 | 59,003 | 57,789 | 60,184 | 0.96 | % | |||||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9)
21251 Ridgetop Circle, Suite 100, Dulles, VA 20166 |
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
9/19/2028 | 10,833 | (184 | ) | 108 | 0.00 | % | |||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9)
21251 Ridgetop Circle, Suite 100, Dulles, VA 20166 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.75% | 11.08 | % | 9/19/2028 | 42,683 | 42,033 | 43,110 | 0.69 | % | |||||||||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8)
211 South Gulph Road Suite 500 King of Prussia, PA 19406 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.75% | 10.06 | % | 10/28/2030 | 15,061 | 14,778 | 15,160 | 0.24 | % | |||||||||||||||||||||||
Project Ruby Ultimate Parent Corp (9)
11300 Switzer Road Overland Park, KS 66210 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.25% | 8.69 | % | 3/10/2028 | 12,226 | 12,109 | 12,228 | 0.20 | % | |||||||||||||||||||||||
Proofpoint, Inc. (8)
892 Ross Drive Sunnyvale, CA 94089 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.25% | 8.69 | % | 8/31/2028 | 2,384 | 2,384 | 2,388 | 0.04 | % | |||||||||||||||||||||||
Quail Buyer, Inc. (4)(9)
3760 Haven Avenue, Menlo Park, CA 94025 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.25% | 10.72 | % | 10/1/2027 | 7,293 | 7,204 | 7,293 | 0.12 | % | |||||||||||||||||||||||
Riley MergeCo LLC (4)(6)(10)
470 Nevada St, Auburn, CA 95603 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
9/23/2027 | 304 | (5 | ) | (5 | ) | 0.00 | % | ||||||||||||||||||||||||
Riley MergeCo LLC (4)(10)
470 Nevada St, Auburn, CA 95603 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.50% | 10.94 | % | 9/23/2027 | 1,811 | 1,787 | 1,779 | 0.03 | % | |||||||||||||||||||||||
Smarsh Inc. (4)(6)(9)
851 SW 6TH Ave., Suite 800, Portland, OR 97204 |
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.75% | 11.06 | % | 2/16/2029 | 4,286 | 2,080 | 2,143 | 0.03 | % | |||||||||||||||||||||||
Smarsh Inc. (4)(6)(9)
851 SW 6TH Ave., Suite 800, Portland, OR 97204 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
SF + 5.75% | 11.08 | % | 2/16/2029 | 1,071 | 414 | 429 | 0.01 | % | |||||||||||||||||||||||
157
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Smarsh Inc. (4)(9)
851 SW 6TH Ave., Suite 800, Portland, OR 97204 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 5.75% | 11.06 | % | 2/16/2029 | 17,143 | 16,897 | 17,143 | 0.27 | % | |||||||||||||||||||||||
TriMech Acquisition Corp. (4)(6)(14)
4461 Cox Road, Suite 302, Glen Allen, VA 23060 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
P + 3.75% | 12.25 | % | 3/10/2028 | 3,289 | 1,011 | 1,053 | 0.02 | % | |||||||||||||||||||||||
TriMech Acquisition Corp. (4)(10)
4461 Cox Road, Suite 302, Glen Allen, VA 23060 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 4.75% | 10.23 | % | 3/10/2028 | 21,276 | 21,055 | 21,276 | 0.34 | % | |||||||||||||||||||||||
TriMech Acquisition Corp. (4)(10)
4461 Cox Road, Suite 302, Glen Allen, VA 23060 |
Software and Computer Services |
First Lien Senior Secured Debt |
SN + 4.75% | 10.08 | % | 3/10/2028 | £ | 36,162 | 43,801 | 45,385 | 0.73 | % | ||||||||||||||||||||||
UKG Inc (7)
2250 North Commerce Parkway, Weston, FL 33326 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 3.50% | 8.81 | % | 2/10/2031 | 8,147 | 8,137 | 8,199 | 0.13 | % | |||||||||||||||||||||||
User Zoom Technologies, Inc. (4)(9)
|
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 7.00% | 12.49 | % | 4/5/2029 | 18,948 | 18,661 | 18,948 | 0.30 | % | |||||||||||||||||||||||
Zelis Payments Buyer, Inc. (7)
2 Concourse Parkway, Suite 300, Atlanta, GA 30328 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 2.75% | 8.08 | % | 9/28/2029 | 10,994 | 10,940 | 11,006 | 0.18 | % | |||||||||||||||||||||||
Zendesk Inc (4)(6)(9)
989 Market St, San Francisco, CA 94103 |
Software and Computer Services |
First Lien Senior Secured Delayed Draw Loan |
11/22/2028 | 39,321 | (664 | ) | 387 | 0.01 | % | |||||||||||||||||||||||||
Zendesk Inc (4)(6)(9)
989 Market St, San Francisco, CA 94103 |
Software and Computer Services |
First Lien Senior Secured Revolving Loan |
11/22/2028 | 17,940 | (278 | ) | — | 0.00 | % | |||||||||||||||||||||||||
Zendesk Inc (4)(9)
989 Market St, San Francisco, CA 94103 |
Software and Computer Services |
First Lien Senior Secured Debt |
SF + 6.25% | 11.57 | % | 11/22/2028 | 161,380 | 158,896 | 162,968 | 2.61 | % | |||||||||||||||||||||||
Altar Bidco Inc (8)
15 Elizabeth Drive, Chelmsford, MA 0182 |
Technology Hardware and Equipment |
First Lien Senior Secured Debt |
SF + 3.10% | 7.95 | % | 2/1/2029 | 8,847 | 8,793 | 8,850 | 0.14 | % | |||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10)
11010 Prairie Lakes Drive, Suite 155, Eden Prairie, MN 55344 |
Technology Hardware and Equipment |
First Lien Senior Secured Delayed Draw Loan |
1/27/2028 | 22,837 | (519 | ) | (2,175 | ) | -0.03 | % | ||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10)
11010 Prairie Lakes Drive, Suite 155, Eden Prairie, MN 55344 |
Technology Hardware and Equipment |
First Lien Senior Secured Revolving Loan |
SF + 6.75% | 12.21 | % | 1/27/2028 | 5,122 | 3,872 | 3,482 | 0.06 | % | |||||||||||||||||||||||
158
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10)
11010 Prairie Lakes Drive, Suite 155, Eden Prairie, MN 55344 |
Technology Hardware and Equipment |
First Lien Senior Secured Debt |
SF + 6.75% | 12.21 | % | 1/27/2028 | 44,988 | 44,094 | 40,703 | 0.65 | % | |||||||||||||||||||||||
Excelitas Technologies Corp. (4)(9)
200 West Street, 4th Floor East, Waltham, MA 02451 |
Technology Hardware and Equipment |
First Lien Senior Secured Debt |
SF + 5.75% | 11.16 | % | 8/13/2029 | 10,003 | 9,845 | 10,004 | 0.16 | % | |||||||||||||||||||||||
Excelitas Technologies Corp. (4)(7)
200 West Street, 4th Floor East, Waltham, MA 02451 |
Technology Hardware and Equipment |
First Lien Senior Secured Debt |
E + 5.75% | 9.66 | % | 8/13/2029 | € | 5,517 | 5,573 | 5,957 | 0.10 | % | ||||||||||||||||||||||
Excelitas Technologies Corp. (4)(6)(9)
200 West Street, 4th Floor East, Waltham, MA 02451 |
Technology Hardware and Equipment |
First Lien Senior Secured Revolving Loan |
SF + 5.75% | 11.16 | % | 8/14/2028 | 3,261 | 2,366 | 2,408 | 0.04 | % | |||||||||||||||||||||||
TechInsights Inc (4)(5)(10)
1891 Robertson Road, Suite 500, Ottawa, ON K2H 5B7, Canada |
Technology Hardware and Equipment |
First Lien Senior Secured Delayed Draw Loan |
SF + 6.63% | 12.09 | % | 11/9/2027 | 980 | 966 | 979 | 0.02 | % | |||||||||||||||||||||||
TechInsights Inc (4)(5)(10)
1891 Robertson Road, Suite 500, Ottawa, ON K2H 5B7, Canada |
Technology Hardware and Equipment |
First Lien Senior Secured Debt |
SF + 6.63% | 12.09 | % | 11/9/2027 | 2,546 | 2,511 | 2,543 | 0.04 | % | |||||||||||||||||||||||
Delta Topco, Inc. (9)
3111 Coronado Drive, Santa Clara, CA 95054 |
Telecommunications Equipment |
First Lien Senior Secured Debt |
SF + 3.75% | 9.12 | % | 12/1/2027 | 6,864 | 6,734 | 6,880 | 0.11 | % | |||||||||||||||||||||||
Guardian US Holdco LLC (8)
550 West 34th Street, 48th Floor, New York, NY 10001 |
Telecommunications Equipment |
First Lien Senior Secured Debt |
SF + 3.50% | 8.81 | % | 1/31/2030 | 7,940 | 7,805 | 7,971 | 0.13 | % | |||||||||||||||||||||||
Directv Financing, LLC (9)
2260 E Imperial Hwy, El Segundo, CA 90245 |
Telecommunications Service Providers |
First Lien Senior Secured Debt |
SF + 5.00% | 10.44 | % | 8/2/2027 | 7,710 | 7,595 | 7,730 | 0.12 | % | |||||||||||||||||||||||
Meriplex Communications, LTD (4)(6)(9)
10111 Richmond Avenue, Suite 500 Houston, TX 77042 |
Telecommunications Service Providers |
First Lien Senior Secured Delayed Draw Loan |
SF + 5.00% | 10.43 | % | 7/17/2028 | 4,933 | 2,888 | 2,764 | 0.04 | % | |||||||||||||||||||||||
159
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Meriplex Communications, LTD (4)(6)(9)
10111 Richmond Avenue, Suite 500 Houston, TX 77042 |
Telecommunications Service Providers |
First Lien Senior Secured Revolving Loan |
7/17/2028 | 1,143 | (12 | ) | (39 | ) | 0.00 | % | ||||||||||||||||||||||||
Meriplex Communications, LTD (4)(9)
10111 Richmond Avenue, Suite 500 Houston, TX 77042 |
Telecommunications Service Providers |
First Lien Senior Secured Debt |
SF + 5.00% | 10.43 | % | 7/17/2028 | 13,781 | 13,627 | 13,306 | 0.21 | % | |||||||||||||||||||||||
TA TT Buyer, LLC (8)
730 Third Ave, Suite 21st floor, New York, NY 10017 |
Telecommunications Service Providers |
First Lien Senior Secured Debt |
SF + 5.00% | 10.30 | % | 4/2/2029 | 14,774 | 14,663 | 14,854 | 0.24 | % | |||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7)
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom |
Travel and Leisure | First Lien Senior Secured Delayed Draw Loan |
SN + 6.00% | 11.23 | % | 9/8/2028 | £ | 2,437 | 310 | (134 | ) | 0.00 | % | |||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7)
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom |
Travel and Leisure | First Lien Senior Secured Debt |
SN + 6.00% | 11.20 | % | 9/8/2028 | £ | 7,749 | 10,097 | 8,278 | 0.13 | % | ||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7)
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom |
Travel and Leisure | First Lien Senior Secured Debt |
SN + 6.00% | 11.20 | % | 9/8/2028 | £ | 4,509 | 5,908 | 4,818 | 0.08 | % | ||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7)
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom |
Travel and Leisure | First Lien Senior Secured Debt |
SN + 6.00% | 11.24 | % | 9/8/2028 | £ | 4,676 | 6,121 | 4,996 | 0.08 | % | ||||||||||||||||||||||
160
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Fertitta Entertainment LLC (8)
1510 West Loop South, Houston, TX 77027 |
Travel and Leisure | First Lien Senior Secured Debt |
SF + 3.75% | 9.08 | % | 1/27/2029 | 9,929 | 9,643 | 9,964 | 0.16 | % | |||||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15)
Mjølstadnesvegen 6092 Fosnavåg, Norway |
Travel and Leisure | First Lien Senior Secured Debt |
E + 9.50% (incl 3.50% PIK) | 13.43 | % | 7/27/2026 | € | 18,954 | 21,018 | 20,965 | 0.34 | % | ||||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15)
Mjølstadnesvegen 6092 Fosnavåg, Norway |
Travel and Leisure | First Lien Senior Secured Debt |
E + 9.50% (incl 3.50% PIK) | 13.43 | % | 10/26/2024 | € | 3,716 | 4,121 | 4,232 | 0.07 | % | ||||||||||||||||||||||
Travel Leaders Group, LLC (4)(14)
3033 Campus Drive, Suite W320, Plymouth, MN 55441 |
Travel and Leisure | First Lien Senior Secured Debt |
SF + 8.50% (incl 3.00% PIK) | 13.93 | % | 3/27/2028 | 137,822 | 135,097 | 141,592 | 2.27 | % | |||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(17)(18)
626 West Main Street Suite 400 Louisville, KY 40202 |
Industrial Support Services |
First Lien Senior Secured Debt |
SF + 7.50% PIK | 5/1/2028 | 5,625 | 5,476 | 5,625 | 0.09 | % | |||||||||||||||||||||||||
Asurion Corporation (7)
140 11th Ave N Nashville, TN 37203 |
Consumer Services | Second Lien Senior Secured Debt |
SF + 5.25% | 10.69 | % | 1/31/2028 | 4,132 | 4,095 | 3,747 | 0.06 | % | |||||||||||||||||||||||
Charlotte Buyer Inc (4)(8)
500 West Main Street, Louisville, KY 40202 |
Health Care Providers |
Second Lien Senior Secured Debt |
SF + 8.25% | 13.57 | % | 8/11/2028 | 10,000 | 9,464 | 9,943 | 0.16 | % | |||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(8)
100 Cambridge St, 14th floor, Boston, MA 02114, USA |
Industrial Support Services |
Second Lien Senior Secured Debt |
SF + 8.25% | 13.56 | % | 4/29/2030 | 9,000 | 8,820 | 7,889 | 0.13 | % | |||||||||||||||||||||||
Cloud Software Group Inc (7)
851 W Cypress Creek Rd, Fort Lauderdale, FL 33309 |
Software and Computer Services |
Second Lien Senior Secured Debt |
9.00 | % | 9/30/2029 | 4,659 | 3,817 | 4,474 | 0.07 | % | ||||||||||||||||||||||||
UKG Inc (8)
2250 North Commerce Parkway, Weston, FL 33326 |
Software and Computer Services |
Second Lien Senior Secured Debt |
SF + 5.25% | 10.68 | % | 5/3/2027 | 8,420 | 8,345 | 8,510 | 0.14 | % | |||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(17)(18)
626 West Main Street Suite 400 Louisville, KY 40202 |
Industrial Support Services |
Second Lien Senior Secured Debt |
SF + 7.50% PIK | 10/30/2028 | 1,932 | 1,881 | 1,932 | 0.03 | % | |||||||||||||||||||||||||
161
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
TPG VIII Merlin New Holdings I, L.P. (4)(5)(10)
2260 E Imperial Hwy, El Segundo, CA 90245 |
Asset Based Lending and Fund Finance |
Other Secured Debt |
SF + 6.50% | 11.83 | % | 3/15/2027 | 65,000 | 63,720 | 63,719 | 1.02 | % | |||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7)
888 7th Avenue, 37th Floor New York, New York 10106 |
Consumer Services | Unsecured Debt |
|
15.00 PIK |
% |
7/16/2029 | 13,891 | 13,891 | 13,891 | 0.22 | % | |||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7)
141 Longwater Dr, Suite 108, Norwell, MA 02061 |
Health Care Providers |
Unsecured Debt |
|
13.75 |
% PIK |
9/3/2030 | 291 | 287 | 272 | 0.00 | % | |||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7)
141 Longwater Dr, Suite 108, Norwell, MA 02061 |
Health Care Providers |
Unsecured Debt |
|
14.75 |
% PIK |
9/3/2030 | 248 | 242 | 242 | 0.00 | % | |||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7)
141 Longwater Dr, Suite 108, Norwell, MA 02061 |
Health Care Providers |
Unsecured Debt |
|
13.75 |
% PIK |
9/3/2030 | 925 | 910 | 864 | 0.01 | % | |||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7)
6240 Lake Osprey Dr, Sarasota, FL 34240 |
Medical Equipment and Services |
Unsecured Debt |
|
13.13 |
% PIK |
12/28/2032 | 102 | 100 | 99 | 0.00 | % | |||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7)
6240 Lake Osprey Dr, Sarasota, FL 34240 |
Medical Equipment and Services |
Unsecured Debt |
|
13.13 |
% PIK |
12/28/2032 | 184 | 179 | 180 | 0.00 | % | |||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7)
6240 Lake Osprey Dr, Sarasota, FL 34240 |
Medical Equipment and Services |
Unsecured Debt |
|
13.13 |
% PIK |
12/28/2032 | 1,080 | 1,064 | 1,055 | 0.02 | % | |||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer
(7)
1301 Dove Street, Suite 200, Newport Beach, CA 92660 |
Non-life Insurance |
Unsecured Debt |
6.75 | % | 10/15/2027 | 6,255 | 5,785 | 6,168 | 0.10 | % | ||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7)
400 Washington Blvd., Stamford, CT 06902 |
Telecommunications Service Providers |
Unsecured Debt |
5.50 | % | 5/1/2026 | 7,000 | 7,065 | 6,899 | 0.11 | % | ||||||||||||||||||||||||
ALM 2020 Ltd (5)(7)
C/O MaplesFS Limited, PO Box 1093, Queensgate House, George Town, KY1-1102, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 6.26% | 11.58 | % | 10/15/2029 | 3,330 | 3,050 | 3,332 | 0.05 | % | |||||||||||||||||||||||
AMMC CLO 21 LTD (5)(7)
PO Box 1093, Queensgate House, South Church Street, George Town, KY1-1102, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 3.10% | 8.68 | % | 11/2/2030 | 2,150 | 1,935 | 2,162 | 0.03 | % | |||||||||||||||||||||||
162
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
AMMC CLO 21 LTD (5)(7)
PO Box 1093, Queensgate House, South Church Street, George Town, KY1-1102, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 6.76% | 12.08 | % | 11/2/2030 | 4,126 | 3,682 | 3,921 | 0.06 | % | |||||||||||||||||||||||
Carlyle Global Market Strategies (5)(7)
C/O Walkers Fiduciary Limited, 190 Elgin Avenue, George Town, KY1-9008, Cayman Islands |
Structured Finance |
Structured Finance investments |
L + 5.40% | 10.98 | % | 7/27/2031 | 1,200 | 949 | 1,131 | 0.02 | % | |||||||||||||||||||||||
Catskill Park CLO Ltd (5)(7)
190 Elgin Avenue, Grand Cayman, George Town, KY1-9005, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 6.26% | 11.58 | % | 4/20/2029 | 1,350 | 1,235 | 1,347 | 0.02 | % | |||||||||||||||||||||||
CENT CLO 16, L.P. (5)(7)
PO Box 1093, Queensgate House, Grand Cayman, George Town, KY1-1102, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 8.07% | 13.39 | % | 7/24/2034 | 3,000 | 2,828 | 2,841 | 0.05 | % | |||||||||||||||||||||||
Dryden 108 CLO Ltd (5)(7)
2nd Floor Sir Walter Raleigh House, 48-50 Esplanade, St. Helier, JE2 3QB, Jersey |
Structured Finance |
Structured Finance investments |
7/18/2035 | 2,900 | 2,291 | 2,021 | 0.03 | % | ||||||||||||||||||||||||||
Marble Point CLO XI Ltd (5)(7)
c/o Ocorian Trust (Cayman) Limited, Windward 3, Regatta Office Park, PO Box 1350, George Town, KY1-1108, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 3.06% | 8.36 | % | 12/18/2030 | 1,850 | 1,578 | 1,783 | 0.03 | % | |||||||||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7)
c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, US-DE 19801 |
Structured Finance |
Structured Finance investments |
SF + 10.02% | 15.34 | % | 10/24/2034 | 2,500 | 2,345 | 2,500 | 0.04 | % | |||||||||||||||||||||||
OCP CLO 2017-14 Ltd(5)(7)
c/o Ocorian Trust (Cayman) Limited, Windward 3, Regatta Office Park, PO Box 1350, George Town, KY1-1108, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 6.80% | 12.11 | % | 1/15/2033 | 1,469 | 1,294 | 1,476 | 0.02 | % | |||||||||||||||||||||||
Shackleton 2019-XV CLO Ltd(5)(7)
C/O Walkers Fiduciary Limited, 190 Elgin Avenue, Grand Cayman, George Town, KY1-9008, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 6.66% | 12.24 | % | 1/15/2032 | 3,000 | 2,658 | 2,971 | 0.05 | % | |||||||||||||||||||||||
Voya CLO Ltd (5)(7)
PO Box 1093, Queensgate House, South Church Street, George Town, KY1-1102, Cayman Islands |
Structured Finance |
Structured Finance investments |
SF + 3.81% | 9.13 | % | 4/17/2030 | 1,500 | 1,341 | 1,489 | 0.02 | % | |||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. (4)
399 S Spring Ave, 108 St Louis, Missouri 63110 |
Consumer Services |
Preferred Equity |
2,000 | 1,940 | 2,096 | 0.03 | % | |||||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)(6)
1591 East Prathersville Road, Columbia, MO 65201 |
Consumer Services |
Preferred Equity |
15.00 | % PIK | 8,817 | 5,569 | 5,569 | 0.09 | % | |||||||||||||||||||||||||
Rapid Express Preferred, LLC (4)(6)
12055 Farm to Market Rd 2154, College Station, TX 77845 |
Consumer Services |
Preferred Equity |
15.00 | % PIK | 2,784 | 928 | 928 | 0.01 | % | |||||||||||||||||||||||||
163
|
Name and Address of Portfolio Company (1)
|
Industry |
Investment Type |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 3/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)
1591 East Prathersville Road, Columbia, MO 65201 |
Consumer Services |
Preferred Equity |
15.00 | % PIK | 10,861 | 10,861 | 10,861 | 0.17 | % | |||||||||||||||||||||||||
Rapid Express Preferred, LLC (4)
12055 Farm to Market Rd 2154, College Station, TX 77845 |
Consumer Services |
Preferred Equity |
15.00 | % PIK | 4,983 | 4,983 | 4,983 | 0.08 | % | |||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4)
9450 SW Gemini Drive PMB #68743, Beaverton, OR 97008 |
Electricity | Equity and other investments |
3 | 68 | 225 | 0.00 | % | |||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)
2445 Technology Forest Blvd, Suite 500 The Woodlands, TX 77381 |
Gas, Water and Multi- utilities |
Equity and other investments |
— | — | — | 0.00 | % | |||||||||||||||||||||||||||
BCPE VIRGINIA HOLDCO, INC. (4)
1676 International Drive Suite 800 McLean, VA 22102 |
Industrial Support Services |
Preferred Equity |
2,000 | 1,960 | 2,097 | 0.03 | % | |||||||||||||||||||||||||||
OneTeam Partners, LLC (4)
1901 L Street, NW 7th Floor, Washington, DC 20036 |
Media | Preferred Equity |
8.00 | % | 1,000 | 1,000 | 1,158 | 0.02 | % | |||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(18)
626 West Main Street Suite 400 Louisville, KY 40202 |
Industrial Support Services |
Equity and other investments |
274 | 2,333 | 2,333 | 0.04 | % | |||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(18)(19)
1955 Harrison St #200 Hollywood, FL 33020 |
Travel and Leisure |
Equity and other investments |
10,101 | 9,892 | 9,831 | 0.16 | % | |||||||||||||||||||||||||||
ULTRA III, LLC (5)(18)
40 West 57th Street, New York, NY 10019 |
Investments in joint ventures |
Investments in joint ventures |
158,113 | 163,291 | 2.61 | % | ||||||||||||||||||||||||||||
| 9,805,977 | 9,917,572 | 158.75 | % | |||||||||||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Fund (which such term “Fund” shall include the Fund’s consolidated subsidiaries) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Fund’s investments is pledged as collateral under its credit facilities and debt securitization issuances unless otherwise indicated.
|
| (2) | The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average (“SONIA” or “SN”), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate (“SOFR” or “SF”), Canadian Dollar Offered Rate (“CDOR” or “C”), Singapore Overnight Rate Average (“SORA”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Rate (“BBSW” or “B”) which reset daily, monthly, quarterly, or semiannually or annually. For each such investment, the Fund has provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR, SORA, BS or BBSW and the current contractual interest rate in effect at March 31, 2024. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread.
|
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with GAAP. |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Fund’s valuation designee, subject to the oversight of the Board (see Note 2 and Note 5 to the consolidated financial statements included elsewhere in this prospectus), pursuant to the Fund’s valuation policy.
|
| (5) | The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Fund’s may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Fund’s total assets. As of March 31, 2024, non-qualifying assets represented 18.0% of total assets as calculated in accordance with regulatory requirements. |
164
| (6) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Fund’s unfunded commitments: |
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan |
$ | 54,046 | $ | (753 | ) | ||||
Zendesk Inc |
1st Lien Senior Secured Delayed Draw Loan |
39,321 | 387 | |||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
34,900 | (419 | ) | ||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan |
32,427 | (452 | ) | ||||||
WP CPP Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
26,285 | (575 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan |
23,538 | (229 | ) | ||||||
Zeus Company LLC |
1st Lien Senior Secured Delayed Draw Loan |
23,088 | (342 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
22,837 | (2,175 | ) | ||||||
Zeus Company LLC |
1st Lien Senior Secured Revolving Loan |
21,506 | (318 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Revolving Loan |
21,254 | (315 | ) | ||||||
Zendesk Inc |
1st Lien Senior Secured Revolving Loan |
17,940 | — | |||||||
United Musculoskeletal Partners Acquisition Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan |
17,374 | (371 | ) | ||||||
Esdec Solar Group B.V. |
1st Lien Senior Secured Delayed Draw Loan |
18,544 | 8 | |||||||
Empower Payments Investor, LLC |
1st Lien Senior Secured Delayed Draw Loan |
14,426 | (286 | ) | ||||||
Higginbotham Insurance Agency, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
14,338 | (143 | ) | ||||||
Club Car Wash Operating, LLC |
1st Lien Senior Secured Delayed Draw Loan |
13,977 | — | |||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Revolving Loan |
13,909 | (194 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Delayed Draw Loan |
13,817 | (192 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Revolving Loan |
13,795 | — | |||||||
Atlas Intermediate III, L.L.C. |
1st Lien Senior Secured Revolving Loan |
13,445 | (290 | ) | ||||||
Femur Buyer, Inc. |
1st Lien Senior Secured Revolving Loan |
13,350 | (332 | ) | ||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Revolving Loan |
11,656 | — | |||||||
Truck-Lite Co, LLC |
1st Lien Senior Secured Revolving Loan |
11,574 | (227 | ) | ||||||
E.S.G. Movilidad, S.L.U. |
1st Lien Senior Secured Delayed Draw Loan |
12,136 | — | |||||||
SimpliSafe Holding Corporation |
1st Lien Senior Secured Delayed Draw Loan |
11,078 | — | |||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Delayed Draw Loan |
10,961 | 219 | |||||||
Prism Parent Co., Inc. |
1st Lien Senior Secured Delayed Draw Loan |
10,833 | 108 | |||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Delayed Draw Loan |
10,736 | 215 | |||||||
Radwell Parent, LLC |
1st Lien Senior Secured Revolving Loan |
10,617 | — | |||||||
Empower Payments Investor, LLC |
1st Lien Senior Secured Revolving Loan |
9,704 | (192 | ) | ||||||
Formerra, LLC |
1st Lien Senior Secured Revolving Loan |
9,625 | (7 | ) | ||||||
Denali Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan |
10,189 | (255 | ) | ||||||
Truck-Lite Co, LLC |
1st Lien Senior Secured Delayed Draw Loan |
9,338 | (183 | ) | ||||||
Gusto Aus Bidco Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan |
5,821 | (15 | ) | ||||||
Dolcetto HoldCo S.P.A. |
1st Lien Senior Secured Delayed Draw Loan |
9,065 | 25 | |||||||
PPV Intermediate Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
8,145 | — | |||||||
CD&R Madison UK Bidco Ltd |
1st Lien Senior Secured Delayed Draw Loan |
9,939 | (105 | ) | ||||||
Captive Resources Midco LLC |
1st Lien Senior Secured Revolving Loan |
7,558 | — | |||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan |
7,123 | (24 | ) | ||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Revolving Loan |
7,069 | (63 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Revolving Loan |
7,000 | (68 | ) | ||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
6,923 | (79 | ) | ||||||
Frontgrade Technologies Holdings Inc. |
1st Lien Senior Secured Revolving Loan |
6,864 | (38 | ) | ||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Revolving Loan |
6,685 | — | |||||||
Trupanion, Inc. |
1st Lien Senior Secured Revolving Loan |
6,576 | (61 | ) | ||||||
AI Circle Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan |
6,879 | (272 | ) | ||||||
Advarra Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
6,340 | — | |||||||
Avalara, Inc. |
1st Lien Senior Secured Revolving Loan |
6,324 | — | |||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
6,211 | (30 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Revolving Loan |
6,189 | (62 | ) | ||||||
Ping Identity Holding Corp. |
1st Lien Senior Secured Revolving Loan |
6,068 | — | |||||||
165
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Cadence – Southwick, Inc. |
1st Lien Senior Secured Revolving Loan |
6,022 | (33 | ) | ||||||
Artisan Bidco, Inc. |
1st Lien Senior Secured Revolving Loan |
6,000 | (74 | ) | ||||||
Arcfield Acquisition Corp |
1st Lien Senior Secured Revolving Loan |
5,687 | (173 | ) | ||||||
Cube Industrials Buyer, Inc. |
1st Lien Senior Secured Revolving Loan |
5,664 | — | |||||||
123Dentist Inc |
1st Lien Senior Secured Delayed Draw Loan |
4,125 | — | |||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Revolving Loan |
5,538 | (64 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Delayed Draw Loan |
5,484 | (48 | ) | ||||||
Certinia Inc. |
1st Lien Senior Secured Revolving Loan |
5,449 | (41 | ) | ||||||
ASDAM Operations Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan |
3,535 | (91 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Delayed Draw Loan |
5,419 | (9 | ) | ||||||
Spotless Brands, LLC |
1st Lien Senior Secured Revolving Loan |
5,175 | (25 | ) | ||||||
International Entertainment Investments Ltd |
1st Lien Senior Secured Delayed Draw Loan |
5,080 | (17 | ) | ||||||
Spanx, LLC |
1st Lien Senior Secured Revolving Loan |
5,000 | — | |||||||
Alera Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
4,936 | 3 | |||||||
Enverus Holdings Inc |
1st Lien Senior Secured Revolving Loan |
4,913 | (21 | ) | ||||||
Showtime Acquisition, L.L.C. |
1st Lien Senior Secured Revolving Loan |
4,711 | (45 | ) | ||||||
Oranje Holdco, Inc. |
1st Lien Senior Secured Revolving Loan |
4,657 | (22 | ) | ||||||
Specialty Ingredients, LLC |
1st Lien Senior Secured Revolving Loan |
4,511 | (4 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
4,469 | — | |||||||
Pareto Health Intermediate Holdings, Inc. |
1st Lien Senior Secured Revolving Loan |
4,032 | (20 | ) | ||||||
Daphne S.P.A. |
1st Lien Senior Secured Delayed Draw Loan |
4,294 | (390 | ) | ||||||
Circana Group, LP. |
1st Lien Senior Secured Revolving Loan |
3,970 | — | |||||||
Plasma Buyer LLC |
1st Lien Senior Secured Revolving Loan |
3,783 | (159 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan |
3,758 | (37 | ) | ||||||
Club Car Wash Preferred, LLC |
Preferred Equity |
3,248 | — | |||||||
Enverus Holdings Inc |
1st Lien Senior Secured Delayed Draw Loan |
3,229 | (14 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Revolving Loan |
3,161 | (14 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
2,993 | (14 | ) | ||||||
Calabrio, Inc. |
1st Lien Senior Secured Revolving Loan |
2,687 | (6 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan |
2,522 | (116 | ) | ||||||
TriMech Acquisition Corp. |
1st Lien Senior Secured Revolving Loan |
2,237 | — | |||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Revolving Loan |
2,184 | (10 | ) | ||||||
Artemis Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan |
2,738 | (420 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Delayed Draw Loan |
2,143 | — | |||||||
CPI Buyer, LLC |
1st Lien Senior Secured Revolving Loan |
2,115 | — | |||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Delayed Draw Loan |
1,999 | (69 | ) | ||||||
Galway Borrower LLC |
1st Lien Senior Secured Revolving Loan |
1,858 | — | |||||||
Rapid Express Preferred, LLC |
Preferred Equity |
1,856 | — | |||||||
IG Investments Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
1,726 | — | |||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan |
1,638 | (7 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Revolving Loan |
1,152 | (110 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
1,150 | — | |||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Revolving Loan |
1,143 | (39 | ) | ||||||
Braya Renewable Fuels (Newfoundland) LP |
1st Lien Senior Secured Delayed Draw Loan |
1,139 | (25 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan |
1,128 | 2 | |||||||
DS Admiral Bidco, LLC |
1st Lien Senior Secured Revolving Loan |
966 | (2 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Revolving Loan |
855 | (11 | ) | ||||||
Excelitas Technologies Corp. |
1st Lien Senior Secured Revolving Loan |
848 | (1 | ) | ||||||
Patriot Growth Insurance Services LLC |
1st Lien Senior Secured Revolving Loan |
822 | — | |||||||
Smarsh Inc. |
1st Lien Senior Secured Revolving Loan |
643 | — | |||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Revolving Loan |
472 | (1 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Revolving Loan |
467 | — | |||||||
Bottomline Technologies, Inc. |
1st Lien Senior Secured Revolving Loan |
385 | — | |||||||
Huskies Parent, Inc. |
1st Lien Senior Secured Revolving Loan |
353 | (10 | ) | ||||||
Riley MergeCo LLC |
1st Lien Senior Secured Revolving Loan |
304 | (5 | ) | ||||||
166
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Arc Media Holdings Limited |
1st Lien Senior Secured Revolving Loan |
277 | (15 | ) | ||||||
ERC Topco Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
245 | (55 | ) | ||||||
Associations Inc. |
1st Lien Senior Secured Revolving Loan |
196 | — | |||||||
Time Manufacturing Holdings, LLC |
1st Lien Senior Secured Revolving Loan |
195 | (8 | ) | ||||||
Total |
$ | 886,629 | $ | (10,325 | ) | |||||
| (7) | There are no interest rate floors on these investments. |
| (8) | The interest rate floor on these investments as of March 31, 2024 was 0.50%. |
| (9) | The interest rate floor on these investments as of March 31, 2024 was 0.75%. |
| (10) | The interest rate floor on these investments as of March 31, 2024 was 1.00%. |
| (11) | The interest rate floor on these investments as of March 31, 2024 was 1.25%. |
| (12) | The interest rate floor on these investments as of March 31, 2024 was 1.50%. |
| (13) | The interest rate floor on these investments as of March 31, 2024 was 1.75%. |
| (14) | The interest rate floor on these investments as of March 31, 2024 was 2.00%. |
| (15) | The interest rate floor on these investments as of March 31, 2024 was 2.50%. |
| (16) | The interest rate floor on these investments as of March 31, 2024 was 3.00%. |
| (17) | Loan was on non-accrual status as of March 31, 2024. |
| (18) | Under the 1940 Act, the Fund is deemed to “control” a portfolio company if the Fund owns more than 25% of its outstanding voting securities and/or holds the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Fund is deemed an “affiliated person” of a portfolio company if the Fund owns between 5% and 25% (inclusive) of the portfolio company’s outstanding voting securities. For purposes of determining the classification of its investment portfolio, the Fund has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the Adviser and/or its affiliates. As of March 31, 2024 , the Fund’s controlled/affiliated and non-controlled/affiliated investments were as follows: |
Fair Value as of December 31, 2023 |
Gross Additions |
Gross Reductions |
Change in Unrealized Gains (Loss) |
Net Realized Gain (Loss) |
Fair Value as of March 31, 2024 |
Dividend and Interest Income |
||||||||||||||||||||||
Non-Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
Southern Graphics Inc. |
$ | 9,947 | $ | — | $ | (57 | ) | $ | — | $ | — | $ | 9,890 | $ | — | |||||||||||||
SLF V AD1 Holdings, LLC |
9,877 | — | — | (46 | ) | — | 9,831 | — | ||||||||||||||||||||
Total Non-Controlled/Affiliated Investments |
$ | 19,824 | $ | — | $ | (57 | ) | $ | (46 | ) | $ | — | $ | 19,721 | $ | — | ||||||||||||
Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
ULTRA III, LLC |
$ | 124,003 | $ | 35,000 | $ | (2,400 | ) | $ | 6,688 | $ | — | $ | 163,291 | $ | 1,819 | |||||||||||||
Total Controlled/Affiliated Investments |
$ | 124,003 | $ | 35,000 | $ | (2,400 | ) | $ | 6,688 | $ | — | $ | 163,291 | $ | 1,819 | |||||||||||||
| (19) | These investments are not pledged as collateral under the Credit Facilities and/or 2023 CLO Secured Notes. |
167
MANAGEMENT OF THE FUND
Board
Our business and affairs are managed under the direction of our Board. The responsibilities of the Board include, among other things, the oversight of our investment activities, oversight of our investment valuation process, oversight of our financing arrangements and corporate governance activities. Our Board consists of six members, four of whom are not “interested persons” of the Fund or of the Adviser as defined in Section 2(a)(19) of the 1940 Act and are “independent,” as determined by our Board. We refer to these individuals as our Independent Trustees. Our Board elects our executive officers, who serve at the discretion of the Board.
Trustees
Information regarding the Board is as follows:
Name |
Year of Birth |
Position |
Length of Time Served |
Principal Occupation During Past 5 Years |
Other Trusteeships Held by Trustee |
|||||
Interested Trustees |
||||||||||
| Michael Patterson | 1974 | Trustee and Chief Executive Officer | Since 2021 | Governing Partner of HPS and the Portfolio Manager for the Specialty Loan Funds and Core Senior Lending Funds. | Trustee, HPS Corporate Capital Solutions Fund (2023-Present).
|
|||||
| Grishma Parekh | 1980 | Trustee and President | Since 2021 | Managing Director at HPS and Co-Head of North American Core Senior Lending (2020 –present); Partner at the Carlyle Group in Direct Lending. |
Trustee, HPS Corporate Capital Solutions Fund (2023-Present).
|
|||||
Independent Trustees |
||||||||||
| Randall Lauer | 1959 | Trustee | Since 2021 | Head of Institutional Sales and Business Development at Academy Securities, Inc. (2022-Present); Managing Director at Citigroup, Head of Institutional Markets Sales – Midwest Region (2012-2021) and Head of Securitized Product Sales – North America (2018-2019). | Trustee, HPS Corporate Capital Solutions Fund (2023-Present); Trustee, Silent Falcon UAS Technologies (2021-Present); Trustee, Lake Forest College (2016-Present); Trustee, St. John’s Northwestern Academies (2018-Present).
|
|||||
168
Name |
Year of Birth |
Position |
Length of Time Served |
Principal Occupation During Past 5 Years |
Other Trusteeships Held by Trustee |
|||||
| Robin Melvin | 1963 | Trustee | Since 2021 | Director, Bank of New York Mellon Family of Funds (1995-Present); Co-Chair of Mentor Illinois (2014 – 2020). |
Trustee, HPS Corporate Capital Solutions Fund (2023-Present); Director, Bank of New York Mellon Family of Funds (1995-Present);, Director, Northwestern Memorial Hospital Board of Directors (2023-Present) | |||||
| Donna Milia | 1974 | Trustee | Since February 2023 | Senior Advisor of Galaxy Digital (TSX: GLXY) (2019-2022); Chief Financial Officer of Galaxy Digital (2017-2019). | Trustee, HPS Corporate Capital Solutions Fund (2023-Present). | |||||
| Robert Van Dore | 1959 | Trustee | Since 2021 | Partner at Deloitte & Touche LLP (1981-2021). | Trustee, HPS Corporate Capital Solutions Fund (2023-Present). | |||||
The address for each trustee is c/o HPS Corporate Lending Fund, 40 West 57
th
Street, 33rd
Floor, New York, NY 10019. While we do not intend to list our shares on any securities exchange, if any class of our shares is listed on a national securities exchange, our Board will be divided into three classes of trustees serving staggered terms of three years each. Executive Officers Who are Not Trustees
Information regarding our executive officers who are not Trustees is as follows:
Name |
Year of Birth |
Position |
Length of Time Served |
Principal Occupation During Past 5 Years |
||||
| Robert Busch | 1982 | Chief Financial Officer and Principal Accounting Officer | Since 2022 | Managing Director at HPS (2022 – present); Managing Director of Blackstone Credit and Chief Accounting Officer and Treasurer of various Blackstone funds. | ||||
| Gregory MacCordy | 1953 | Chief Compliance Officer | Since 2021 | Director at ACA Group. | ||||
| Yoohyun K. Choi | 1971 | Secretary | Since 2021 | General Counsel and a Managing Director at HPS. | ||||
| Tyler Thorn | 1978 | Assistant Secretary | Since 2021 | Managing Director and Attorney at HPS. | ||||
The address for each executive officer is c/o HPS Advisors, LLC, 40 West 57
th
Street, 33rd
Floor New York, NY 10019. Biographical Information
The following is information concerning the business experience of our Board and executive officers. Our Trustees have been divided into two groups—Interested Trustees and Independent Trustees. Interested Trustees are “interested persons” as defined in the 1940 Act.
169
Interested Trustees
Michael Patterson,
Trustee and Chief Executive Officer.
Grishma Parekh,
Trustee and President
Co-Head
of North American Core Senior Lending. Prior to joining HPS in 2020, Ms. Parekh spent over twelve years as a Partner and Managing Director at The Carlyle Group. During her tenure at The Carlyle Group, Ms. Parekh was a founding member of the Direct Lending platform, served as Head of Origination for Illiquid Credit, and was a member of the investment committee for the Direct Lending business. Prior to joining The Carlyle Group in 2007, Ms. Parekh was an Investment Banking Associate at JPMorgan where she was responsible for originating, structuring and executing high yield bond and leveraged loan transactions. Ms. Parekh holds a BS in Finance and Information Systems from the Stern School of Business at New York University. Ms. Parekh joined the Board of the Fund in August 2021. Ms. Parekh also serves as an Interested Trustee on the Board of HPS Corporate Capital Solutions Fund. Independent Trustees
Randall Lauer,
Trustee
Robin Melvin,
Trustee
non-profit
youth mentoring advocacy organization. Prior to that Ms. Melvin was an investment banker at Goldman, Sachs & Co. Ms. Melvin is a Board Member of the Bank of New York Mellon Family of Funds, where she is Chairman of the Compensation Committee, Chairman of the Nominating Committee and serves on the Audit Committee for three of the four fund clusters. She is also a member of the Governance Committee for the total co. Ms. Melvin also serves as a Director on the Northwestern Memorial Hospital Board of Directors. Ms. Melvin previously served as a Trustee of Westover School and Chair of the 170
Head Search Committee and Chair of the Finance Committee until June 30, 2023. Ms. Melvin holds an AB from Harvard College and an MBA from Harvard Business School. Ms. Melvin joined the Board of the Fund in August 2021. Ms. Melvin also serves as an Independent Trustee on the Board of HPS Corporate Capital Solutions Fund.
Donna Milia
Truste
Robert Van Dore,
Trustee
Executive Officers Who are not Trustees
Robert Busch,
Chief Financial Officer and Principal Accounting Officer.
non-traded
business development company, Blackstone Private Credit Fund, and publicly-traded BDC, Blackstone Secured Lending Fund, as well as the Chief Financial Officer and Treasurer of three BXC publicly listed closed end funds and an interval fund. Prior to BXC, Mr. Busch was a Senior Vice President at Fifth Street Asset Management where he held various roles within finance, accounting and financial reporting for the firm’s publicly traded BDCs and alternative asset manager. In addition, Mr. Busch was an Audit Manager at Deloitte & Touche LLP serving clients in various industries, including alternative asset management and real estate. Mr. Busch is a Certified Public Accountant in the state of New York and received a Bachelor’s Degree in Business Administration with a concentration in Accounting from Boston University’s Questrom School of Business where he graduated cum laude. Gregory MacCordy,
Chief Compliance Officer.
171
financial and counter-intelligence investigations. Mr. MacCordy also worked at TIAA for 18 years, where he built and managed a $13 billion portfolio of global fixed income and direct credit lending, and developed the risk and compliance program policies and procedures for the investment team. Following TIAA, Mr. MacCordy worked at a multi-strategy hedge fund, where he was
co-chair
of the investment committee and managed investment compliance. He also worked at a FINRA registered broker-dealer conducting client and new transaction due diligence and consulting for banks in credit compliance for mortgage and RMBS products. Mr. MacCordy graduated from the University of Missouri with a BS and BA in Accounting, and from New York University Stern School of Business with an MBA in Finance. Yoohyun (Kathy) Choi,
Secretary.
Tyler Thorn,
Assistant Secretary.
Communications with Trustees
Shareholders and other interested parties may contact any member (or all members) of the Board by mail. To communicate with the Board, any individual Trustees or any group or committee of Trustees, correspondence should be addressed to the Board or any such individual Trustees or group or committee of Trustees by either name or title. All such correspondence should be sent to HPS Corporate Lending Fund, c/o HPS Advisors, LLC, 40 West 57
th
Street, 33rd
Floor, New York, NY 10019, Attention: Chief Compliance Officer. Committees of the Board
Our Board currently has two committees: an audit committee and a nominating and governance committee. We do not have a compensation committee because our executive officers do not receive any direct compensation from us.
Audit Committee.
S-K
under the Exchange Act. Each of the members of the audit committee meet the independence requirements of Rule 10A-3
of the Exchange Act and, in addition, is not an “interested person” of the Fund or of the Adviser as defined in Section 2(a)(19) of the 1940 Act. During the year ended December 31, 2023, the Audit Committee met five times. 172
A copy of the charter of the Audit Committee is available in print to any shareholder who requests it, and it is also available on the Fund’s website at
.
www.hlend.com
Nominating and Governance Committee.
co-investments
for the Fund. The nominating and governance committee consists of four persons, including Randall Lauer, Robin Melvin, Donna Milia and Robert Van Dore, all of whom are considered independent for purposes of the 1940 Act. Robin Melvin serves as the chair of the Nominating and Governance Committee. The Nominating and Governance Committee will consider nominees to the Board recommended by a shareholder, if such shareholder complies with the advance notice provisions of our Bylaws. Our Bylaws provide that a shareholder who wishes to nominate a person for election as a Trustee at a meeting of shareholders must deliver written notice to our Corporate Secretary. This notice must contain, as to each nominee, all of the information relating to such person as would be required to be disclosed in a proxy statement meeting the requirements of Regulation 14A under the Exchange Act, and certain other information set forth in the Bylaws. In order to be eligible to be a nominee for election as a Trustee by a shareholder, such potential nominee must deliver to our Corporate Secretary a written questionnaire providing the requested information about the background and qualifications of such person and a written representation and agreement that such person is not and will not become a party to any voting agreements, any agreement or understanding with any person with respect to any compensation or indemnification in connection with service on the Board, and would be in compliance with all of our publicly disclosed corporate governance, conflict of interest, confidentiality and share ownership and trading policies and guidelines. During the year ended December 31, 2023, the Nominating and Governance Committee met five times.
A copy of charter of the Nominating and Governance Committee is available in print to any shareholder who requests it, and it is also available on the Fund’s website at
.
www.hlend.com
Compensation of Trustees
Our Trustees who do not also serve in an executive officer capacity for us, the Adviser or its affiliates are entitled to receive annual cash retainer fees, fees for participating in the board and committee meetings and annual fees for serving as a committee chairperson. These Trustees are Randall Lauer, Robin Melvin, Donna Milia and Robert Van Dore. Amounts payable under the arrangement are determined and paid quarterly in arrears as follows:
|
Annual Committee Chair Cash
Retainer |
||||||||||||||||
Annual Cash Retainer |
Board Meeting Fee |
Committee Meeting Fee |
Audit | Nominating and Governance |
||||||||||||
$125,000 |
$ | 2,500 | $ | 1,000 | $ | 15,000 | $ | 10,000 | ||||||||
The following table sets forth information concerning total compensation earned by or paid to each of our Trustees for the year ended December 31, 2023.
|
Total Compensation earned from the Fund for Fiscal Year 2023 (4)
|
Total Compensation earned from the Fund Complex for Fiscal Year 2023 (5)
|
|||||||
Interested Trustees |
||||||||
Michael Patterson (1)
|
None | None | ||||||
Grishma Parekh (1)
|
None | None | ||||||
Independent Trustees |
||||||||
Randall Lauer (2)
|
$148,000 | $155,925 | ||||||
Robin Melvin (2)
|
$158,000 | $166,610 | ||||||
Robert Van Dore (2)
|
$163,000 | $171,952 | ||||||
Donna Milia (3)
|
$124,361 | $132,286 | ||||||
|
(1) |
These are interested trustees and, as such, do not receive compensation from the Fund for their services as trustees. |
173
|
(2) |
Mr. Lauer, Ms. Melvin and Mr. Van Dore joined the Board in August 2021. |
|
(3) |
Ms. Milia joined the Board in February 2023. |
|
(4) |
The Fund does not have a profit-sharing plan, and trustees do not receive any pension or retirement benefits from the Fund. |
|
(5) |
For purposes of this registration statement, the term “Fund Complex” is defined to include the Fund and HPS Corporate Capital Solutions Fund, a BDC managed by the Adviser. |
We also reimburse each of the Trustees for all reasonable and authorized business expenses in accordance with our policies as in effect from time to time, including reimbursement of reasonable expenses incurred in connection with attending each board meeting and each committee meeting not held concurrently with a board meeting.
out-of-pocket
We do not pay compensation to our Trustees who also serve in an executive officer capacity for us or the Adviser or its affiliates.
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 of the Adviser or its affiliates, pursuant to the terms of the Advisory Agreement and the Administration Agreement. Our investment operations are managed by our Adviser. In addition, we reimburse the Administrator for our allocable portion of expenses incurred by it in performing its obligations under the Administration Agreement, including our allocable portion of the cost of our officers and their respective staffs.
day-to-day
Compensation of Executive Officers
None of our officers receive direct compensation from us. The compensation of our chief financial officer and chief compliance officer is paid by our Administrator, subject to reimbursement by us of an allocable portion of such compensation for services rendered by them to us. To the extent that our Administrator outsources any of its functions, we will pay the fees associated with such functions on a direct basis without profit to our Administrator.
Board Leadership Structure
Our business and affairs are managed under the direction of our Board. Among other things, our Board sets broad policies for us, approves the appointment of our investment adviser, administrator and officers, and has oversight of the valuation process used to establish the Fund’s NAV. The role of our Board, and of any individual Trustees, is one of oversight and not of management of our affairs.
day-to-day
Under our Bylaws, our Board may designate one of our Trustees as chair to preside over meetings of our Board and meetings of shareholders, and to perform such other duties as may be assigned to him or her by our Board. The Board has appointed Michael Patterson to serve in the role of chairperson of the Board. The chairperson’s role is to preside at all meetings of the Board and to act as a liaison with the Adviser, counsel and other Trustees generally between meetings. The chairperson serves as a key point person for dealings between management and the Trustees. The chairperson also may perform such other functions as may be delegated by the Board from time to time. The Board reviews matters related to its leadership structure annually. The Board has determined that its leadership structure is appropriate because it allows the Board to exercise informed and independent judgment over the matters under its purview and it allocates areas of responsibility among committees of Trustees and the full board in a manner that enhances effective oversight.
Our Board believes that its leadership structure is the optimal structure for us at this time. Our Board reviews its leadership structure periodically as part of its annual self-assessment process, further believes that its structure is presently appropriate to enable it to exercise its oversight of us.
174
Board Role in Risk Oversight
Our Board performs its risk oversight function primarily through (i) its standing committees, which report to the entire Board and are comprised solely of Independent Trustees, and (ii) active monitoring by our chief compliance officer and our compliance policies and procedures. Oversight of other risks is delegated to the committees.
Oversight of our investment activities extends to oversight of the risk management processes employed by the Adviser as part of its management of our investment activities. The Board anticipates reviewing risk management processes at both regular and special board meetings throughout the year, consulting with appropriate representatives of the Adviser as necessary and periodically requesting the production of risk management reports or presentations. The goal of the Boards risk oversight function is to ensure that the risks associated with our investment activities are accurately identified, thoroughly investigated and responsibly addressed. Investors should note, however, that the Board’ oversight function cannot eliminate all risks or ensure that particular events do not adversely affect the value of investments.
day-to-day
We believe that the role of our Board in risk oversight is effective and appropriate given the extensive regulation to which we are subject as a BDC. As a BDC,
we
are required to comply with certain regulatory requirements that control the levels of risk in our business and operations. For example, we are limited in our ability to enter into certain transactions with our affiliates. Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act requires our executive officers, members of our Board, and persons who own more than ten percent of our shares to file initial reports of ownership and reports of changes in ownership with the SEC and furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on our review of the copies of such reports furnished to us, we believe that, with respect to the fiscal year ended December 31, 2023, such persons complied with all such filing requirements.
175
PORTFOLIO MANAGEMENT
HPS Advisors, LLC, a wholly-owned subsidiary of HPS, serves as our investment adviser. Prior to June 30, 2023, HPS served as our investment adviser. The Adviser is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of our Board, the Adviser manages the operations of, and provides investment advisory and management services to, us.
day-to-day
Investment Personnel
The management of our investment portfolio is the responsibility of the Adviser and the Investment Committee. The Investment Committee is currently comprised of Michael Patterson, Scott Kapnick, Scot French, Purnima Puri, Faith Rosenfeld, Colbert Cannon, Michael Fenstermacher, Jeffrey Fitts, Vikas Keswani, and Grishma Parekh. Michael Patterson is the lead portfolio manager of the strategy. A portion of the Investment Committee, including Colbert Cannon, Michael Fenstermacher, Jeffrey Fitts, Vikas Keswani, and Grishma Parekh, has the most significant responsibility for assisting Mr. Patterson with the management of our portfolio. Mr. Patterson is the Fund’s portfolio manager for the purposes of the information included below.
day-to-day
As of March 31, 2024, HPS was staffed with approximately 200 investment personnel, including the investment personnel noted above, and over 660 employees. In addition, HPS may retain additional investment personnel in the future based upon its needs.
The table below shows the dollar range of Common Shares owned by the portfolio manager as of December 31, 2023:
Name of Portfolio Manager |
Dollar Range of Equity Securities (1)
|
|||
Michael Patterson |
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 $1,000,000. |
Other Accounts Managed by Portfolio Manager
The portfolio manager primarily responsible for the management of the Fund also manages other registered investment companies, other pooled investment vehicles and other accounts, as indicated below. The following table identifies, as of December 31, 2023: (i) the number of other registered investment companies, other pooled investment vehicles and other accounts managed by the portfolio manager; (ii) the total assets of such companies, vehicles and accounts; and (iii) the number and total assets of such companies, vehicles and accounts that are subject to an advisory fee based on performance.
day-to-day
Type of Account |
Number of Accounts |
Assets of Accounts ($ millions) |
Number of Accounts Subject to a performance Fee |
Assets Subject to a performance Fee ($ millions) |
||||||||||||
Registered Investment companies |
0 | — | — | — | ||||||||||||
Other pooled investment vehicles: |
32 | 24,351 | 30 | 24,325 | ||||||||||||
Other accounts |
63 | 23,292 | 50 | 19,815 | ||||||||||||
The Adviser
Investment Committee
Investment decisions generally require consensus approval of the Investment Committee. The Investment Committee meets regularly to vet new investment opportunities, and evaluate strategic initiatives and actions
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taken by the Adviser on our behalf. The management of investments approved by the Investment Committees is overseen by the portfolio manager.
day-to-day
All of the Investment Committee members have ownership and financial interests in, and may receive compensation and/or profit distributions from, the Adviser or its affiliates. None of the Investment Committee members receive any direct compensation from us. See “Control Persons and Principal Shareholders” for additional information about equity interests held by certain of these individuals.
Members of the Investment Committee Who Are Not Our Trustees or Executive Officers
Scott Kapnick
Co-Head
of Global Investment Banking at Goldman Sachs, positions he held from 2001 to 2006. He also served as Co-Chief
Executive Officer of Goldman Sachs International from 2005 to 2006 and spent 12 out of his 21 years at the firm in Europe (London and Frankfurt). Mr. Kapnick was named Partner in 1994. Mr. Kapnick is a graduate of Williams College and holds a combined JD/MBA from the University of Chicago. Mr. Kapnick also studied at the London School of Economics & Political Science.Scot French
on-balance
sheet proprietary investment fund. Within Citigroup Global Special Situations, Mr. French managed a portfolio of private mezzanine and private equity investments in North America, Europe and Latin America. Prior to joining Citigroup, Mr. French worked in the Investment Banking Division at Goldman Sachs from 1999 to 2004 and in Mergers & Acquisitions at Salomon Brothers Inc. from 1994 to 1999. Mr. French began his career at Price Waterhouse from 1992 to 1994. Mr. French is a graduate of the University of Illinois. Purnima Puri.
Faith Rosenfeld.
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Colbert Cannon
Michael Fenstermacher
Co-Head
of North American Core Senior Lending. Prior to joining HPS in 2008, Mr. Fenstermacher was an Associate at JPMorgan’s Leveraged Finance Group, where he originated, underwrote and distributed high yield bonds and leveraged loans. During his four years with JPMorgan, Mr. Fenstermacher specialized in financial sponsor transactions. Prior to joining JPMorgan, Mr. Fenstermacher spent two years at Bank One as a Credit Analyst in the Automotive and Financial Institutions groups. Mr. Fenstermacher holds a BS from Indiana University with a concentration in Finance. Jeffrey Fitts
Vikas Keswani
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ADVISORY AGREEMENT AND ADMINISTRATION AGREEMENT
The Adviser is located at 40 West 57 operations and provides investment advisory services to us.
th
Street, New York, NY 10019. Prior to June 30, 2023, HPS served as our investment adviser. The Adviser is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of our Board and in accordance with the 1940 Act, the Adviser manages our day-to-day
Advisory Agreement
The Adviser provides management services to us pursuant to the Advisory Agreement. Under the terms of the Advisory Agreement, the Adviser is responsible for the following:
| • | determining the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes in accordance with our investment objective, policies and restrictions; |
| • | identifying investment opportunities and making investment decisions for us, including negotiating the terms of investments in, and dispositions of, portfolio securities and other instruments on our behalf; |
| • | monitoring our investments; |
| • | performing due diligence on prospective portfolio companies; |
| • | exercising voting rights in respect of portfolio securities and other investments for us; |
| • | serving on, and exercising observer rights for, boards of directors and similar committees of our portfolio companies; |
| • | negotiating, obtaining and managing financing facilities and other forms of leverage; and |
| • | providing us with such other investment advisory and related services as we may, from time to time, reasonably require for the investment of capital. |
The Adviser’s services under the Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities, and it intends to do so, so long as its services to us are not impaired.
Compensation of Adviser
We pay the Adviser a fee for its services under the Advisory Agreement consisting of two components: a management fee and an incentive fee. The cost of both the management fee and the incentive fee is ultimately borne by the shareholders.
Management Fee
The management fee is payable monthly in arrears at an annual rate of 1.25% of the value of our net assets as of the beginning of the first calendar day of the applicable month. For purposes of the Advisory Agreement, net assets means our total assets less the carrying value of our liabilities, determined on a consolidated basis in accordance with GAAP.
Incentive Fee
The incentive fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of our income and a portion is based on a percentage of our capital gains, each as described below.
Incentive Fee Based on Income
The portion based on our income is based on
Pre-Incentive
Fee Net Investment Income Returns. “Pre-Incentive
Fee Net Investment Income Returns” means dividends, cash interest or other distributions or other 179
cash income and any third-party fees received from portfolio companies (such as upfront fees, commitment fees, origination fee, amendment fees, ticking fees and
break-up
fees, as well as prepayments premiums, but excluding fees for providing managerial assistance) accrued during the month, minus operating expenses for the month (including the management fee, taxes, any expenses payable under the Advisory Agreement and an administration agreement with our administrator, any expense of securitizations, and interest expense or other financing fees and any dividends paid on preferred shares, but excluding the incentive fee and shareholder servicing and /or distribution fees). Pre-Incentive
Fee Net Investment Income Returns includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero-coupon
securities), accrued income that we have not yet received in cash. Pre-Incentive
Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive
Fee Net Investment Income Returns. Pre-Incentive
Fee Net Investment Income Returns, expressed as a rate of return on the value of our net assets at the end of the immediate preceding quarter, is compared to a “hurdle rate” of return of 1.25% per quarter (5.0% annualized). We pay the Adviser an incentive fee quarterly in arrears with respect to our
Pre-Incentive
Fee Net Investment Income Returns in each calendar quarter as follows: | • | No incentive fee based on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which our Pre-Incentive Fee Net Investment Income Returns do not exceed the hurdle rate of 1.25% per quarter (5.0% annualized); |
| • | 100% of the dollar amount of our Pre-Incentive Fee Net Investment Income Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the hurdle rate but is less than a rate of return of 1.43% (5.72% annualized). We refer to this portion of our Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate but is less than 1.43%) as the “catch-up.” The “catch-up” is meant to provide the Adviser with approximately 12.5% of our Pre-Incentive Fee Net Investment Income Returns as if a hurdle rate did not apply if this net investment income exceeds 1.43% in any calendar quarter; and |
| • | 12.5% of the dollar amount of our Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of return of 1.43% (5.72% annualized). This reflects that once the hurdle rate is reached and the catch-up is achieved, 12.5% of all Pre-Incentive Fee Net Investment Income Returns thereafter are allocated to the Adviser. |
Pre-Incentive
Fee Net Investment Income (expressed as a percentage of the value of net assets per quarter)
Percentage of
Pre-Incentive
Fee Net Investment Income Allocated to Quarterly Incentive Fee
These calculations are
pro-rated
for any period of less than three months and adjusted for any share issuances or repurchases during the relevant quarter. You should be aware that a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments. Accordingly, an increase in interest rates would make it easier for us to meet or exceed the incentive fee hurdle rate and may result in a substantial increase of the amount of incentive fees payable to the Adviser with respect to Pre-Incentive
Fee Net Investment Income Returns. Because of the structure of the incentive fee, it is possible that we may pay an incentive fee in a calendar quarter in which we incur an overall loss taking into account capital account losses. For example, if we receive Pre-Incentive
Fee Net Investment Income Returns in excess of the 180
quarterly hurdle rate, we will pay the applicable incentive fee even if we have incurred a loss in that calendar quarter due to realized and unrealized capital losses.
Incentive Fee Based on Capital Gains
The second component of the incentive fee, the capital gains incentive fee, is payable at the end of each calendar year in arrears. The amount payable equals 12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains as calculated in accordance with GAAP.
Each year, the fee paid for the capital gains incentive fee is net of the aggregate amount of any previously paid capital gains incentive fee by the applicable share class for all prior periods. We will accrue, but will not pay, a capital gains incentive fee with respect to unrealized appreciation because a capital gains incentive fee would be owed to the Adviser if we were to sell the relevant investment and realize a capital gain. In no event will the capital gains incentive fee payable pursuant to the Advisory Agreement be in excess of the amount permitted by the Advisers Act, including Section 205 thereof.
For purposes of computing the Fund’s incentive fee on income and the incentive fee on capital gains, the calculation methodology looks through derivative financial instruments or swaps as if we owned the reference assets directly. The fees that are payable under the Advisory Agreement for any partial period will be appropriately prorated.
Examples of Quarterly Incentive Fee Calculation
Example 1—Incentive Fee on
pre-incentive
fee net investment income for each quarter Scenarios expressed as a percentage of net asset value at the beginning of the quarter |
Scenario 1 |
Scenario 2 |
Scenario 3 |
|||||||||
Pre-incentive fee net investment income for the quarter |
1.00 | % | 1.35 | % | 2.00 | % | ||||||
Catch up incentive fee (maximum of 0.18%) |
0.00 | % | -0.10 | % | -0.18 | % | ||||||
Split incentive fee (12.50% above 1.43%) |
0.00 | % | 0.00 | % | -0.07 | % | ||||||
Net Investment income |
1.00 | % | 1.25 | % | 1.75 | % | ||||||
Scenario 1—Incentive Fee on Income
Pre-incentive
fee net investment income does not exceed the 1.25% quarterly preferred return rate, therefore there is no catch up or split incentive fee on pre-incentive
fee net investment income. Scenario 2—Incentive Fee on Income
Pre-incentive
fee net investment income falls between the 1.25% quarterly preferred return rate and the upper level breakpoint of 1.43%, therefore the incentive fee on pre-incentive
fee net investment income is 100% of the pre-incentive
fee above the 1.25% quarterly preferred return. Scenario 3—Incentive Fee on Income
Pre-incentive
fee net investment income exceeds the 1.25% quarterly preferred return and the 1.43% upper level breakpoint provision. Therefore, the upper level breakpoint provision is fully satisfied by the 0.18% of pre-incentive
fee net investment income above the 1.25% preferred return rate and there is a 12.50% incentive fee on pre-incentive
fee net investment income above the 1.43% upper level breakpoint. This ultimately provides an incentive fee which represents 12.50% of pre-incentive
fee net investment income. 181
Example 2—Incentive Fee on Capital Gains
Assumptions
Year1: |
No net realized capital gains or losses | |
Year2: |
6.00% realized capital gains and 1.00% realized capital losses and unrealized capital depreciation; capital gain incentive fee = 12.50% × (realized capital gains for year computed net of all realized capital losses and unrealized capital depreciation at year end) |
| Year 1 Incentive Fee on Capital Gains | = 12.50% × (0) |
|
= 0 |
||
| = No Incentive Fee on Capital Gains | ||
| Year 2 Incentive Fee on Capital Gains | = 12.50% × (6.00% –1.00)% | |
| = 12.50% × 5.00% | ||
| = 0.63% | ||
Administration Agreement
Under the terms of the Administration Agreement, the Administrator provides or oversees the performance of administrative and compliance services, including, but not limited to, maintaining financial records, overseeing the calculation of NAV, compliance monitoring (including diligence and oversight of our other service providers), preparing reports to shareholders and reports filed with the SEC and other regulators, preparing materials and coordinating meetings of our Board, managing the payment of expenses, the payment and receipt of funds for investments and the performance of administrative and professional services rendered by others and providing office space, equipment and office services. We reimburse the Administrator for the costs and expenses incurred by the Administrator in performing its obligations under the Administration Agreement. Such reimbursement includes our allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other
non-investment
professionals at the Administrator that perform duties for us; and (iii) any internal audit group personnel of HPS or any of its affiliates, subject to the limitations described in Advisory and Administration Agreements. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and we will reimburse the Administrator for any services performed for us by such affiliate or third party. The Administrator has hired a sub-administrator
to assist in the provision of administrative services. The sub-administrator
receives compensation for its sub-administrative
services under a sub-administration
agreement. The amount of the reimbursement payable to the Administrator will be the lesser of (1) the Administrator’s actual costs incurred in providing such services and (2) the amount that we estimate we would be required to pay alternative service providers for comparable services in the same geographic location. The Administrator is required to allocate the cost of such services to us based on factors such as assets, revenues, time allocations and/or other reasonable metrics. We do not reimburse the Administrator for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of the Administrator.
Certain Terms of the Advisory Agreement and Administration Agreement
Each of the Advisory Agreement and the Administration Agreement has been approved by the Board. Unless earlier terminated as described below, each of the Advisory Agreement and the Administration
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Agreement will remain in effect for a period of one year from the date it first became effective and will remain in effect from thereafter if approved annually by a majority of the Board or by the holders of a majority of our outstanding voting securities and, in each case, a majority of the Independent Trustees. We may terminate the Advisory Agreement upon 60 days’ written notice, and the Administration Agreement upon 120 days’ written notice, without payment of any penalty. The decision to terminate either agreement may be made by a majority of the Board or the shareholders holding a majority of our outstanding voting securities, which means the lesser of (1) 67% or more of the voting securities present at a meeting if more than 50% of the outstanding voting securities are present or represented by proxy, or (2) more than 50% of the outstanding voting securities. In addition, without payment of any penalty, the Adviser may terminate the Advisory Agreement upon 120 days’ written notice and the Administrator may terminate the Administration Agreement upon 120 days’ written notice. The Advisory Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related SEC guidance and interpretations.
year-to-year
Each of the Adviser and the Administrator shall not be liable for any error of judgment or mistake of law or for any act or omission or any loss suffered by us in connection with the matters to which the Advisory Agreement and Administration Agreement, respectively, relate, provided that each of the Adviser and the Administrator shall not be protected against any liability to the Fund or its shareholders to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or by reason of the reckless disregard of its duties and obligations (“disabling conduct”). Each of the Advisory Agreement and the Administration Agreement provide that, absent disabling conduct, the Adviser, the Administrator and their officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it (collectively, the “Indemnified Parties”) will be 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 the Adviser’s services under the Advisory Agreement and the Administrator’s services under the Administration Agreement or otherwise as adviser or administrator for us. Each of the Adviser and the Administrator shall not be liable under their respective agreements with us or otherwise for any loss due to the mistake, action, inaction, negligence, dishonesty, fraud or bad faith of any broker or other agent; provided, that such broker or other agent shall have been selected, engaged or retained and monitored by the Adviser and/or the Administrator in good faith, unless such action or inaction was made by reason of disabling conduct, or in the case of a criminal action or proceeding, where the Adviser and/or the Administrator had reasonable cause to believe its conduct was unlawful. In addition, we will not provide for indemnification of an Indemnified Party for any liability or loss suffered by such Indemnified Party, nor will we provide that an Indemnified Party be held harmless for any loss or liability suffered by us, unless: (1) we have determined, in good faith, that the course of conduct that caused the loss or liability was in our best interest; (2) the Indemnified Party was acting on our behalf or performing services for us; (3) such liability or loss was not the result of negligence or misconduct, in the case that the Indemnified Party is the Adviser or the Administrator), an affiliate of HPS or one of our officers; and (4) the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from our shareholders.
Payment of Our Expenses Under the Investment Advisory and Administration Agreements
Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, are provided and paid for by the Adviser. We bear all other costs and expenses of our operations, administration and transactions, including, but not limited to:
1. investment advisory fees, including management fees and incentive fees, paid to the Adviser pursuant to the Advisory Agreement;
2. our allocable portion of compensation (including salaries, bonuses, and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its
183
administrative obligations under the Administration Agreement, including but not limited to: (i) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other
non-investment
professionals at the Administrator that perform duties for us; and (iii) any internal audit group personnel of HPS or any of its affiliates; and 3. all other expenses of the Fund’s operations, administrations and transactions including, without limitation, those relating to:
| (i) | organization and offering expenses associated with this offering (including legal, accounting, printing, mailing, subscription processing and filing fees and expenses and other offering expenses, including costs associated with technology integration between the Fund’s systems and those of participating intermediaries, reasonable bona fide due diligence expenses of participating intermediaries supported by detailed and itemized invoices, costs in connection with preparing sales materials and other marketing expenses, design and website expenses, fees and expenses of the Fund’s escrow agent and transfer agent, fees to attend retail seminars sponsored by participating intermediaries and costs, expenses and reimbursements for travel, meals, accommodations, entertainment and other similar expenses related to meetings or events with prospective investors, intermediaries, registered investment advisors or financial or other advisors, but excluding the shareholder servicing fee); |
| (ii) | all taxes, fees, costs, and expenses, retainers and/or other payments of accountants, legal counsel, advisors (including tax advisors), administrators, auditors (including with respect to any additional auditing required under The Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and any applicable legislation implemented by an EEA Member state in connection with such Directive (the “AIFMD”), investment bankers, administrative agents, paying agents, depositaries, custodians, trustees, sub-custodians, consultants (including individuals consulted through expert network consulting firms), engineers, senior advisors, industry experts, operating partners, deal sourcers (including personnel dedicated to but not employed by the Administrator or its affiliates in the credit-focused business of HPS), and other professionals (including, for the avoidance of doubt, the costs and charges allocable with respect to the provision of internal legal, tax, accounting, technology or other services and professionals related thereto (including secondees and temporary personnel or consultants that may be engaged on short- or long-term arrangements) as deemed appropriate by the Administrator, with the oversight of the Board, where such internal personnel perform services that would be paid by the Fund if outside service providers provided the same services); fees, costs, and expenses herein include (x) costs, expenses and fees for hours spent by its in-house attorneys and tax advisors that provide transactional legal advice and/or services to the Fund or its portfolio companies on matters related to potential or actual investments and transactions and the ongoing operations of the Fund and (y) expenses and fees to provide administrative and accounting services to the Fund or its portfolio companies, and expenses, charges and/or related costs incurred directly by the Fund or affiliates in connection with such services (including overhead related thereto), in each case, (I) that are specifically charged or specifically allocated or attributed by the Administrator, with the oversight of the Board, to the Fund or its portfolio companies and (II) provided that any such amounts shall not be greater than what would be paid to an unaffiliated third party for substantially similar advice and/or services); |
| (iii) | the cost of calculating the Fund’s net asset value, including the cost of any third-party valuation services; |
| (iv) | the cost of effecting any sales and repurchases of the Common Shares and other securities; |
| (v) | fees and expenses payable under any managing dealer and selected intermediary agreements, if any; |
184
| (vi) | interest and fees and expenses arising out of all borrowings, guarantees and other financings or derivative transactions (including interest, fees and related legal expenses) made or entered into by the Fund, including, but not limited to, the arranging thereof and related legal expenses; |
| (vii) | all fees, costs and expenses of any loan servicers and other service providers and of any custodians, lenders, investment banks and other financing sources; |
| (viii) | costs incurred in connection with the formation or maintenance of entities or vehicles to hold the Fund’s assets for tax or other purposes; |
| (ix) | costs of derivatives and hedging; |
| (x) | expenses, including travel, entertainment, lodging and meal expenses, incurred by the Adviser, or members of its investment team, or payable to third parties, in evaluating, developing, negotiating, structuring and performing due diligence on prospective portfolio companies, including such expenses related to potential investments that were not consummated, and, if necessary, enforcing the Fund’s rights; |
| (xi) | expenses (including the allocable portions of compensation and out-of-pocket |
| (xii) | all fees, costs and expenses, if any, incurred by or on behalf of the Fund in developing, negotiating and structuring prospective or potential investments that are not ultimately made, including, without limitation any legal, tax, administrative, accounting, travel, meals, accommodations and entertainment, advisory, consulting and printing expenses, reverse termination fees and any liquidated damages, commitment fees that become payable in connection with any proposed investment that is not ultimately made, forfeited deposits or similar payments; |
| (xiii) | the allocated costs incurred by the Adviser and the Administrator in providing managerial assistance to those portfolio companies that request it; |
| (xiv) | all brokerage costs, hedging costs, prime brokerage fees, custodial expenses, agent bank and other bank service fees; private placement fees, commissions, appraisal fees, commitment fees and underwriting costs; costs and expenses of any lenders, investment banks and other financing sources, and other investment costs, fees and expenses actually incurred in connection with evaluating, making, holding, settling, clearing, monitoring or disposing of actual investments (including, without limitation, travel, meals, accommodations and entertainment expenses and any expenses related to attending trade association and/or industry meetings, conferences or similar meetings, any costs or expenses relating to currency conversion in the case of investments denominated in a currency other than U.S. dollars) and expenses arising out of trade settlements (including any delayed compensation expenses); |
| (xv) | investment costs, including all fees, costs and expenses incurred in sourcing, evaluating, developing, negotiating, structuring, trading (including trading errors), settling, monitoring and holding prospective or actual investments or investment strategies including, without limitation, any financing, legal, filing, auditing, tax, accounting, compliance, loan administration, travel, meals, accommodations and entertainment, advisory, consulting, engineering, data-related and other professional fees, costs and expenses in connection therewith (to the extent the Adviser is not reimbursed by a prospective or actual issuer of the applicable investment or other third parties or capitalized as part of the acquisition price of the transaction) and any fees, costs and expenses related to the organization or maintenance of any vehicle through which the Fund directly or indirectly participates in the acquisition, holding and/or disposition of investments or which otherwise facilitate the Fund’s investment activities, including without limitation any travel and accommodations expenses related to such vehicle and the salary and benefits of any personnel (including personnel of Adviser or its affiliates) reasonably necessary and/or advisable for the |
185
| maintenance and operation of such vehicle, or other overhead expenses (including any fees, costs and expenses associated with the leasing of office space (which may be made with one or more affiliates of HPS as lessor in connection therewith)); |
| (xvi) | transfer agent, dividend agent and custodial fees; |
| (xvii) | fees and expenses associated with marketing efforts; |
| (xviii) | federal and state registration fees, franchise fees, any stock exchange listing fees and fees payable to rating agencies; |
| (xix) | Independent Trustees’ fees and expenses including reasonable travel, entertainment, lodging and meal expenses, and any legal counsel or other advisors retained by, or at the discretion or for the benefit of, the Independent Trustees; |
| (xx) | costs of preparing financial statements and maintaining books and records, costs of Sarbanes-Oxley Act of 2002 compliance and attestation and costs of preparing and filing reports or other documents with the SEC, Financial Industry Regulatory Authority, U.S. Commodity Futures Trading Commission (“CFTC”) and other regulatory bodies and other reporting and compliance costs, including registration and exchange listing and the costs associated with reporting and compliance obligations under the 1940 Act and any other applicable federal and state securities laws, and the compensation of professionals responsible for the foregoing; |
| (xxi) | all fees, costs and expenses associated with the preparation and issuance of the Fund’s periodic reports and related statements ( e.g. |
| (xxii) | the costs of any reports, proxy statements or other notices to shareholders (including printing and mailing costs) and the costs of any shareholder or Trustee meetings; |
| (xxiii) | proxy voting expenses; |
| (xxiv) | costs associated with an exchange listing; |
| (xxv) | costs of registration rights granted to certain investors; |
| (xxvi) | any taxes and/or tax-related interest, fees or other governmental charges (including any penalties incurred where the Adviser lacks sufficient information from third parties to file a timely and complete tax return) levied against the Fund and all expenses incurred in connection with any tax audit, investigation, litigation, settlement or review of the Fund and the amount of any judgments, fines, remediation or settlements paid in connection therewith; |
| (xxvii) | all fees, costs and expenses of any litigation, arbitration or audit involving the Fund any vehicle or its portfolio companies and the amount of any judgments, assessments fines, remediations or settlements paid in connection therewith, Trustees and officers, liability or other insurance (including costs of title insurance) and indemnification (including advancement of any fees, costs or expenses to persons entitled to indemnification) or extraordinary expense or liability relating to the affairs of the Fund; |
| (xxviii) | all fees, costs and expenses associated with the Fund’s information, obtaining and maintaining technology (including the costs of any professional service providers), hardware/software, data-related communication, market data and research (including news and quotation equipment and services and including costs allocated by the Adviser’s or its affiliates’ internal and third-party research group (which are generally based on time spent, assets under management, usage rates, |
186
| proportionate holdings or a combination thereof or other reasonable methods determined by the Administrator) and expenses and fees (including compensation costs) charged or specifically attributed or allocated by Adviser and/or its affiliates for data-related services provided to the Fund and/or its portfolio companies (including in connection with prospective investments), each including expenses, charges, fees and/or related costs of an internal nature; provided, that any such expenses, charges or related costs shall not be greater than what would be paid to an unaffiliated third party for substantially similar services) reporting costs (which includes notices and other communications and internally allocated charges), and dues and expenses incurred in connection with membership in industry or trade organizations; |
| (xxix) | the costs of specialty and custom software for monitoring risk, compliance and the overall portfolio, including any development costs incurred prior to the filing of the Fund’s election to be treated as a business development company; |
| (xxx) | costs associated with individual or group shareholders; |
| (xxxi) | fidelity bond, trustees and officers errors and omissions liability insurance and other insurance premiums; |
| (xxxii) | direct costs and expenses of administration, including printing, mailing, long distance telephone, copying and secretarial and other staff; |
| (xxxiii) | all fees, costs and expenses of winding up and liquidating the Fund’s assets; |
| (xxxiv) | extraordinary expenses (such as litigation or indemnification); |
| (xxxv) | all fees, costs and expenses related to compliance-related matters (such as developing and implementing specific policies and procedures in order to comply with certain regulatory requirements) and regulatory filings; notices or disclosures related to the Fund’s activities (including, without limitation, expenses relating to the preparation and filing of filings required under the Securities Act, TIC Form SLT filings, Internal Revenue Service filings under FATCA and FBAR reporting requirements applicable to the Fund or reports to be filed with the CFTC, reports, disclosures, filings and notifications prepared in connection with the laws and/or regulations of jurisdictions in which the Fund engages in activities, including any notices, reports and/or filings required under the AIFMD, European Securities and Markets Authority and any related regulations, and other regulatory filings, notices or disclosures of the Adviser relating to the Fund and its affiliates relating to the Fund, and their activities) and/or other regulatory filings, notices or disclosures of the Adviser and its affiliates relating to the Fund including those pursuant to applicable disclosure laws and expenses relating to FOIA requests, but excluding, for the avoidance of doubt, any expenses incurred for general compliance and regulatory matters that are not related to the Fund and its activities; |
| (xxxvi) | costs and expenses (including travel) in connection with the diligence and oversight of the Fund’s service providers; |
| (xxxvii) | costs and expenses, including travel, meals, accommodations, entertainment and other similar expenses, incurred by the Adviser or its affiliates for meetings with existing investors and any intermediaries, registered investment advisors, financial and other advisors representing such existing investors; and |
| (xxxviii) | all other expenses incurred by the Administrator in connection with administering the Fund’s business. |
With respect to (i) above, as our investment adviser prior to June 30, 2023, HPS agreed to advance all of our organization and offering expenses on our behalf through February 3, 2022, the date on which we broke escrow for our initial offering of Common Shares. On such date, the Fund became obligated to reimburse HPS for such advanced expenses and HPS subsequently requested reimbursement of these expenses and was paid pursuant to
187
the Prior Expense Support Agreement. After such date, the Fund bears all such expenses, subject to the Expense Support Agreements. Pursuant to the Expense Support Agreements, HPS was, and the Adviser is obligated to advance all of our Other Operating Expenses to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Fund’s NAV. We were and are obligated to reimburse HPS and the Adviser, respectively, for such advanced expenses only if certain conditions are met. See “ —Expense Support and Conditional Reimbursement Agreement.” Any reimbursements will not exceed actual expenses incurred by the Adviser and its affiliates.
From time to time, the Adviser, the Administrator or their affiliates may pay third-party providers of goods or services. We will reimburse the Adviser, the Administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, the Adviser and the Administrator may defer or waive fees and/or rights to be reimbursed for expenses. All of the foregoing expenses are ultimately borne by our shareholders.
Costs and expenses of the Adviser and the Administrator that are eligible for reimbursement by the Fund will be reasonably allocated to the Fund on the basis of time spent, assets under management, usage rates, proportionate holdings, a combination thereof or other reasonable methods determined by the Administrator.
Expense Support and Conditional Reimbursement Agreement
We have entered into an Expense Support and Conditional Reimbursement Agreement with the Adviser. Pursuant to the Expense Support Agreement, the Adviser is obligated to advance all of our Other Operating Expenses to the effect that such expenses do not exceed 1.00% (on an annualized basis) of the Fund’s NAV. Any Required Expense Payment must be paid by the Adviser to us in any combination of cash or other immediately available funds and/or offset against amounts due from us to the Adviser or its affiliates.
The Adviser may elect to pay certain additional expenses on our behalf, provided that no portion of the payment will be used to pay any interest expense or distribution and/or shareholder servicing fees of the Fund. Any Voluntary Expense Payment that the Adviser has committed to pay must be paid by the Adviser to us in any combination of cash or other immediately available funds no later than forty-five days after such commitment was made in writing, and/or offset against amounts due from us to the Adviser or its affiliates.
Following any calendar month in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to our shareholders based on distributions declared with respect to record dates occurring in such calendar month (the amount of such excess being hereinafter referred to as “Excess Operating Funds”), we shall pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to us within three years prior to the last business day of such calendar month have been reimbursed. Any payments required to be made by the Fund shall be referred to herein as a “Reimbursement Payment.” “Available Operating Funds” means the sum of (i) our net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) our net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to us on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).
No Reimbursement Payment for any quarter shall be made if: (1) the Effective Rate of Distributions Per Share declared by us at the time of such Reimbursement Payment is less than the Effective Rate of Distributions Per Share at the time the Expense Payment was made to which such Reimbursement Payment relates, (2) our Operating Expense Ratio at the time of such Reimbursement Payment is greater than the Operating Expense Ratio at the time the Expense Payment was made to which such Reimbursement Payment relate, or (3) our Other Operating Expenses at the time of such Reimbursement Payment exceeds 1.00% of our net asset value. “Effective Rate of Distributions Per Share” means the annualized rate (based on a 365 day year) of regular cash distributions per share exclusive of returns of capital, distribution rate reductions due to distribution and/or shareholder servicing fees, and declared special dividends or special distributions, if any. The “Operating
188
Expense Ratio” is calculated by dividing Operating Expenses, less organizational and offering expenses, base management and incentive fees owed to the Adviser, shareholder servicing and/or distribution fees, and interest expense, by our net assets. “Operating Expenses” means all of the Fund’s operating costs and expenses incurred, as determined in accordance with generally accepted accounting principles for investment companies.
Our obligation to make a Reimbursement Payment shall automatically become our liability on the last business day of the applicable calendar month, except to the extent the Adviser has waived its right to receive such payment for the applicable month.
Board Approval of the Advisory Agreement
Our Board, including our Independent Trustees, approved the Advisory Agreement at a meeting held on May 9, 2023. In reaching a decision to approve the Advisory Agreement, the Board reviewed a significant amount of information and considered, among other things:
| • | the nature, quality and extent of the advisory and other services to be provided to the Fund by the Adviser; |
| • | the proposed investment advisory fee rates to be paid by the Fund to the Adviser; |
| • | the fee structures of comparable externally managed business development companies that engage in similar investing activities; |
| • | our projected operating expenses and expense ratio compared to business development companies with similar investment objectives; |
| • | information about the services to be performed and the personnel who would be performing such services under the Advisory Agreement; and |
| • | the organizational capability and financial condition of the Adviser and its affiliates. |
Based on the information reviewed and the discussion thereof, the Board, including a majority of the
non-interested
Trustees, concluded that the investment advisory fee rates are reasonable in relation to the services to be provided and approved the Advisory Agreement as being in the best interests of our shareholders. Prohibited Activities
Our activities are subject to compliance with the 1940 Act. In addition, our Declaration of Trust prohibits the following activities among us, the Adviser and its affiliates:
| • | We may not purchase or lease assets in which the Adviser or its affiliates has an interest unless (i) we disclose the terms of the transaction to our shareholders, the terms are reasonable to us and the price does not exceed the lesser of cost or fair market value, as determined by an independent expert or (ii) such purchase or lease of assets is consistent with the 1940 Act or an exemptive order under the 1940 Act issued to us by the SEC; |
| • | We may not invest in general partnerships or joint ventures with affiliates and non-affiliates unless certain conditions are met; |
| • | The Adviser and its affiliates may not acquire assets from us unless (i) approved by our shareholders entitled to cast a majority of the votes entitled to be cast on the matter or (ii) such acquisition is consistent with the 1940 Act or an exemptive order under the 1940 Act issued to us by the SEC; |
| • | We may not lease assets to the Adviser or its affiliates unless we disclose the terms of the transaction to our shareholders and such terms are fair and reasonable to us; |
| • | We may not make any loans, credit facilities, credit agreements or otherwise to the Adviser or its affiliates except for the advancement of funds as permitted by our Declaration of Trust or unless otherwise permitted by the 1940 Act or applicable guidance or exemptive relief of the SEC; |
189
| • | We may not acquire assets in exchange for our Common Shares; |
| • | We may not pay a commission or fee, either directly or indirectly to the Adviser or its affiliates, except as otherwise permitted by our Declaration of Trust, in connection with the reinvestment of cash flows from operations and available reserves or of the proceeds of the resale, exchange or refinancing of our assets; |
| • | The Adviser may not charge duplicate fees to us; and |
| • | The Adviser may not provide financing to us with a term in excess of 12 months. |
In addition, in the Advisory Agreement, the Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state securities laws governing its operations and investments.
Compliance with the Omnibus Guidelines Published by NASAA
Rebates, Kickbacks and Reciprocal Arrangements
Our Declaration of Trust prohibits our Adviser from: (i) receiving or accepting any rebate,
give-ups
or similar arrangement that is prohibited under applicable federal or state securities laws, (ii) participating in any reciprocal business arrangement that would circumvent provisions of applicable federal or state securities laws governing conflicts of interest or investment restrictions, (iii) entering into any agreement, arrangement or understanding that would circumvent the restrictions against dealing with affiliates or promoters under applicable federal or state securities laws, or (iv) participating in any arrangements that would circumvent the NASAA Omnibus Guidelines Statement of Policy adopted on March 29, 1992 and as amended on May 7, 2007 and from time to time (the “Omnibus Guidelines”). In addition, our Adviser may not directly or indirectly pay or award any fees or commissions or other compensation to any person or entity engaged to sell our shares or give investment advice to a potential shareholder; provided, however, that our Adviser may pay a registered broker or other properly licensed agent normal sales commissions or other compensation (including cash compensation and non-cash
compensation (as such terms are defined under FINRA Rule 2310)) for selling or distributing our Common Shares, including out of the Adviser’s own assets, including those amounts paid to the Adviser under the Advisory Agreement. Commingling
The Adviser may not permit our funds to be commingled with the funds of any other
entity.
190
CONFLICTS OF INTEREST
The following represent the known material inherent or potential conflicts of interest that we believe should be considered by prospective investors before subscribing for the Common Shares.
Relationship among the Fund, the Adviser and the Investment Team
.
The functions performed by the Adviser are not exclusive. The officers and employees of the Adviser and its affiliates will devote such time as the Adviser deems necessary and sufficient to carry out the operations of the Fund effectively. The Adviser and its affiliates have rendered in the past and will continue to render in the future various services to others (including investment vehicles and accounts which have the ability to participate in similar types of investments as those of the Fund) and perform a variety of other functions that are unrelated to the management of the Fund and the selection and acquisition of the Fund’s investments.
Without limiting the generality of the foregoing, the Affiliated Group will invest for their own accounts and manage accounts for other individuals or entities, including entities in which the Affiliated Group or its trustees or employees may hold an interest, either directly in managed accounts or indirectly through investments in private investment entities. Any of such accounts will pay different fees, invest with leverage or utilize different investment strategies than the Fund. In addition, the Fund may enter into transactions with such accounts, and the Affiliated Group may invest in the same securities and instruments on behalf of such accounts that the Fund invests in. The Affiliated Group or its personnel will have income or other incentives to favor such accounts. The records of any such investments by members of the Affiliated Group will not be open to inspection by shareholders. The Adviser and HPS, however, will not knowingly or deliberately favor any such accounts over the Fund in its dealings on behalf of such accounts.
In addition, members of the Affiliated Group, including employees of HPS or its affiliates, may make personal investments in third-party entities (directly or through investment funds managed by third-party managers). Such entities may enter into transactions with the Fund, presenting a conflict of interest for the Adviser and HPS between acting in the best interests of the Fund and enhancing the returns of such personal investments.
As described in “
,” HPS has historically worked with, and the Fund intends to continue to work with, sourcing, operating and/or joint venture partners. Sourcing, operating and joint venture partners are independent contractors engaged for particular purposes in connection with the Fund and/or certain of its projects, and are not part of the Affiliated Group.
Risks Associated with Sourcing
,
Operating or Joint Venture Partners
Co-Investment
Transactions. co-invest
with certain other persons, including certain affiliated accounts managed and controlled by the Adviser or its affiliates. Subject to the 1940 Act and the conditions of any such co-investment
order issued by the SEC, the Fund may, under certain circumstances, co-invest
with certain affiliated accounts in investments that are suitable for the Fund and one or more of such affiliated accounts. Even though the Fund and any such affiliated account co-invest
in the same securities, conflicts of interest may still arise. If the Adviser is 191
presented with
co-investment
opportunities that generally fall within the Fund’s investment objective and other Board-established criteria and those of one or more affiliated accounts advised by the Adviser or its affiliates, whether focused on a debt strategy or otherwise, the Adviser will allocate such opportunities among the Fund and such affiliated accounts in a manner consistent with the exemptive order and the firm-wide allocation policies and procedures, as discussed in this Registration Statement. With respect to
co-investment
transactions conducted under the exemptive order, initial internal allocations among the Fund and other investment funds affiliated with the Adviser will generally be made, taking into account the allocation considerations set forth in the firm-wide allocation policies and procedures as described above. If the Fund invests in a transaction under a co-investment
exemptive order and, immediately before the submission of the order for the Fund and all other funds, accounts, or other similar arrangements advised by HPS and its affiliates, the opportunity is oversubscribed, it will generally be allocated on a pro-rata
basis based on available capital. The Board regularly reviews the allocation policies and procedures of the Adviser. To the extent consistent with applicable law and/or exemptive relief issued to the Fund, in addition to such
co-investments,
the Fund and HPS or an affiliated account may, as part of unrelated transactions, invest in either the same or different tiers of a portfolio company’s capital structure or in an affiliate of such portfolio company. To the extent the Fund holds investments in the same portfolio company or in an affiliate thereof that are different (including with respect to their relative seniority) than those held by HPS or an affiliated account, the Adviser may be presented with decisions when the interests of the two co-investors
are in conflict. If the portfolio company in which the Fund has an equity or debt investment and in which an affiliated account has an equity or debt investment elsewhere in the portfolio company’s capital structure, becomes distressed or defaults on its obligations under the private credit investment, the Adviser may have conflicting loyalties between its duties to the affiliated account, the Fund, certain of its other affiliates and the portfolio company. In that regard, actions may be taken for such affiliated account that are adverse to the Fund, or actions may or may not be taken by the Fund due to such affiliated account’s investment, which action or failure to act may be adverse to the Fund. In addition, it is possible that in a bankruptcy proceeding, the Fund’s interest may be adversely affected by virtue of such affiliated account’s involvement and actions relating to its investment. Decisions about what action should be taken in a troubled situation, including whether to enforce claims, whether to advocate or initiate restructuring or liquidation inside or outside of bankruptcy and the terms of any work-out
or restructuring, raise conflicts of interest. In those circumstances where the Fund and such affiliated accounts hold investments in different classes of a company’s debt or equity, the Adviser and HPS may also, to the fullest extent permitted by applicable law, take steps to reduce the potential for adversity between the Fund and such affiliated accounts, including causing the Fund to take certain actions that, in the absence of such conflict, it would not take, such as (A) remaining passive in a restructuring or similar situations (including electing not to vote or voting pro rata with other security-holders), (B) divesting investments or (C) otherwise taking action designed to reduce adversity. Declining an Investment.
—Competition Among the Accounts Managed by the Adviser and Its Affiliates
.
Conflicts of Interest Generally.
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by law and shall be deemed to have satisfied applicable fiduciary duties related thereto to the fullest extent permitted by law). These actions include, by way of example and without limitation, (i) disposing of the investment or refraining from making the investment giving rise to the conflict of interest; (ii) appointing an independent fiduciary to act with respect to the matter giving rise to the conflict of interest; (iii) in connection with a matter giving rise to a conflict of interest with respect to an investment, consulting with the Board regarding the conflict of interest and/or obtaining a waiver or consent from the Board of the conflict of interest or acting in a manner, or pursuant to standards or procedures, approved by or disclosed to the Board with respect to such conflict of interest; (iv) disclosing the conflict to the shareholders; (v) implementing certain policies and procedures designed to ameliorate such conflict of interest or (vi) remaining passive and/or electing not to be the lead investor of a tranche of securities (even though the Fund may hold the largest stake in the applicable tranche of securities). There can be no assurance that the Adviser will identify or resolve all conflicts of interest in a manner that is favorable to the Fund. By acquiring Common Shares in the Fund, each shareholder will be deemed to have acknowledged and consented to the existence or resolution of any such actual, apparent or potential conflicts of interest and to have waived any claim with respect to any liability arising from the existence of any such conflict of interest. For the avoidance of doubt, in some cases after evaluating such conflict or potential conflict, the Adviser may determine that no action is required or that taking action may be adverse to the interests of the Fund or the Affiliated Group.
Competition
Among
the Accounts Managed by the
Adviser and Its Affiliates
.
Under certain circumstances, the Fund may invest in connection with a transaction in which Affiliated Group Accounts have already invested or are expected to invest. Under other circumstances, Affiliated Group Accounts may invest in a portfolio company in which the Fund has already invested or is expected to invest as well as investing in the Fund itself. Where an investment is allocated among the Fund as well as one or more Affiliated Group Accounts, such investment opportunity is expected to be allocated based on one or more factors which may include each entity’s capital available for investment, available leverage, structure of the investment (including whether a delayed-draw investment, revolver or line of credit is part of, and/or cannot be separated from such investment), applicable concentration limits and investment guidelines and restrictions, investment objectives, investment strategies, whether the investment represents a
follow-on
investment for one or more of the entities, the nature and size of existing portfolio holdings, expected investment pipeline, size of the investment opportunity, portfolio cash positions, risk/return objectives (and availability or expected availability of leverage for certain investments to meet such investment objectives), liquidity constraints (including the applicable wind-down and ramp-up
periods, remaining investment period and termination or redemption terms), round-lot
position size, availability of credit facilities or counterparty relationships needed to effect the transaction, legal, tax, regulatory or other considerations and/or management of potential or actual conflicts of 193
interest by the Adviser. To the extent permitted by applicable law and the terms of the
co-investment
exemptive relief, the Fund may also partner with other entities in which the Affiliated Group holds an investment or with which the Affiliated Group has a significant business relationship. To the extent permitted by applicable law and the terms of the
co-investment
exemptive relief, where the Fund invests in the same issuer as an Affiliated Group Account, the terms of the Fund’s investment, including the type of instrument purchased, may be different from the terms of the Affiliated Group Account’s investment or the type of instrument the Affiliated Group Account purchases. The Affiliated Group Accounts may be given certain governance or other rights or may be subject to terms and conditions that are more favorable than those applicable to the Fund. Conflicts could arise after the Affiliated Group Account, on the one hand, and the Fund, on the other hand, make investments in the same issuer with respect to the issuer’s strategy, growth and financing alternatives and with respect to the manner and timing of the Fund’s exit from the investment compared to the Affiliated Group Account’s exit. The Affiliated Group Accounts may make decisions that are more beneficial to themselves than to the Fund. Further, investments may benefit one or more of the Affiliated Group Accounts disproportionately to their benefit to the Fund. Conversely, the interests of one or more of the Affiliated Group Accounts in one or more investments may, in the future, be adverse to that of the Fund, and the Adviser may be incentivized not to undertake certain actions on behalf of the Fund in connection with such investments, including the exercise of certain rights the Fund may have, in view of the investment by the Affiliated Group in such investments. In addition, to the extent permitted by applicable law and the terms of the , regarding whether an Affiliate Group Account agrees to waive certain covenants or make certain amendments). Conversely, if the Fund holds voting securities of an issuer, the Adviser’s vote on behalf of the Fund on a matter may end up benefiting Affiliated Group Accounts and harming the Fund, especially with the benefit of hindsight (, if the Fund agrees to certain covenants, waivers or amendments, but the issuer and the Fund’s investment in such issuer end up getting further impaired).
co-investment
exemptive relief, the Affiliated Group and one or more Affiliated Group Accounts (including the Fund), expect to invest, from time to time, in different instruments or classes of securities of the same issuer, including where the Fund and/or any Affiliated Group Account control the majority of such instrument or class of securities. For example, the Fund expects to invest in the senior debt of an issuer where the strategic investment partners family of funds holds, or subsequently invests in, subordinated debt of such issuer. As a result, one or more Affiliated Group Accounts may have different investment objectives or pursue or enforce rights with respect to a particular issuer in which the Fund has invested, and those activities may have an adverse effect on the Fund. For example, if the Fund holds debt of an issuer and an Affiliated Group Account holds equity instruments of the same issuer, then if the issuer experiences financial or operational challenges, the Fund, which holds the debt, may seek a liquidation of the issuer, whereas the Affiliated Group Account, which holds the equity instruments, may prefer a reorganization of the issuer. In these circumstances, actions taken on behalf of the Fund may be adverse to the strategic investment partners family of funds investors, and vice versa, creating a conflict of interest for the Adviser and its affiliates. In addition, if an Affiliated Group Account holds voting securities (for example, equity) of an issuer in which the Fund holds non-voting
securities (for example, secured debt) of such issuer, HPS or the Adviser, acting on behalf of such Affiliated Group Account may vote on certain matters in a manner that has an adverse effect on the positions held by the Fund (e.g.
e.g.
Courses of action that the Adviser and HPS may pursue to reduce the potential for adversity between the Fund and an Affiliated Group Account include causing one or both clients to take certain actions that, in the absence of such conflict, it would not take, such as (i) remaining passive in a restructuring or similar situations (including electing not to vote or voting pro rata with other security holders), (ii) investing in the same or similar classes of securities as the other client in order to align their interests, (iii) divesting investments in whole or in part or (iv) appointing an unaffiliated third-party agent to act on behalf of either the Fund or such Affiliated Group Account. Any such step could have the effect of benefiting an Affiliated Group Account or HPS or its affiliates and might not be in the best interests of or may be adverse to the Fund.
194
In enforcing its rights with respect to an investment, the Fund, along with other Affiliated Group Accounts, may pursue or enforce rights with respect to a particular issuer, or the Adviser and/or HPS may pursue or enforce rights with respect to a particular issuer jointly on behalf of the Fund and other Affiliated Group Accounts, even where the interests of such Affiliated Group Accounts may diverge in one or more respects from those of the Fund.
The Fund may be negatively impacted by the activities by or on behalf of such other Affiliated Group Accounts, and transactions for the Fund may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case had a particular course of action with respect to the issuer of the securities not been pursued with respect to such other Affiliated Group Accounts. In certain instances, personnel of HPS or its affiliates may obtain information about the issuer thereby limiting the Adviser’s ability to buy or sell securities of the issuer on behalf of the Fund. These conflicts are magnified with respect to issuers that undergo restructuring or become insolvent. It is possible that in connection with a restructuring, insolvency, bankruptcy or similar proceeding the Fund may be limited (by applicable law, courts or otherwise) in the positions or actions it may be permitted to take due to other interests held or actions or positions taken by Affiliated Group Accounts.
Positions taken by Affiliated Group Accounts may also dilute or otherwise negatively affect the values, prices or investment strategies associated with investments held by the Fund. For example, this may occur when investment decisions regarding the Fund are based on research or other information that is also used to support portfolio decisions for other Affiliated Group Accounts. When an Affiliated Group Account implements a portfolio decision or strategy ahead of, or contemporaneously with, similar portfolio decisions or strategies for the Fund (whether or not the portfolio decisions emanate from the same research analysis or other information), market impact, liquidity constraints, or other factors could result in the Fund receiving less favorable investment results, and the costs of implementing such portfolio decisions or strategies could be increased or the Fund could otherwise be disadvantaged. In addition, Affiliated Group Accounts may have short positions in the same security or instrument or a different security or instrument in the same issuer as a security or instrument purchased by the Fund, which may present additional conflicts, particularly if the issuer experiences financial difficulties.
To the extent permitted by applicable law and the terms of the
co-investment
exemptive relief, the Fund may participate in a follow-on
investment of an Affiliated Group Account, where the Fund has not previously invested in the applicable portfolio company, and vice versa. Any such follow-on
investment would present conflicts of interest, including in the Adviser or its affiliate’s negotiation of the terms of such follow-on
investment, and raises the risk that the Fund’s capital may be used to support an Affiliated Group Account’s existing investment. In addition, an investment that HPS or the Adviser determined was appropriate for an Other HPS Investor (including funds and accounts on HPS’s direct lending platform) when originally consummated may be refinanced, extended or otherwise modified in such a way that the investment is no longer consistent with the investment objectives of the Other HPS Investor, but is consistent with the investment objective of the Fund. In this situation, to the extent permitted by applicable law and the terms of the
co-investment
exemptive relief, the Fund may make an investment in the issuer and the proceeds of the Fund’s investment will be used by the issuer to repay the existing investment in such issuer of an Other HPS Investor and vice versa. For example, the Fund expects to participate in recapitalizations or refinancings of portfolio companies in which the HPS Specialty Loan Funds have invested. In this situation, the new loan in which the Fund invests may have a lower interest rate, for example, due to changes in market conditions, improvements in the business of the issuer or other factors. In these circumstances, the Other HPS Investor may exit the investment at the time the loan is refinanced, extended or otherwise modified, and the Fund may participate in the investment going forward and vice versa. In these circumstances, the consent of the shareholders will not be required. As a result, conflicts of interest are generally expected to arise between the Other HPS Investor exiting the investment and the Fund entering into the investment, including determinations of whether the Affiliated Group Account is being 195
redeemed from an investment with a negative outlook (and whether the Fund is supporting such exit with their investment), and whether the Fund is paying a higher or lower price than market value or transacting on terms that are more or less favorable than in other comparable transactions. Conversely, the Fund’s investment may be refinanced by an Affiliated Group Account that may have the effect of shortening the duration of an attractive investment.
As a result, conflicts of interest are generally expected to arise between the Fund exiting the investment and such Other HPSInvestor entering into the investment, including determinations of whether the Fund is being taken out of an investment with a positive outlook or whether the Fund’s exit may have the effect of shortening the duration of an attractive investment. Similarly, the Fund may agree to an amendment, extension, refinancing or similar transaction involving an existing investment, and such transaction may create an investment opportunity for other Affiliated Group Accounts.
The Fund may be allocated a small part of an investment opportunity within the investment objective of the Fund when other Affiliated Group Accounts are allocated a larger portion. The Fund may be prohibited (due to, for example, regulatory limitations) from pursuing certain investment opportunities and may find that its ability to participate in any particular opportunity may be substantially limited.
For the foregoing reasons, among others, the Affiliated Group and its portfolio managers, including the Investment Team, are generally expected to have a conflict of interest between acting in the best interests of the Fund and such other Affiliated Group Accounts. The Adviser and HPS have developed policies and procedures that provide that they will allocate investment opportunities and make purchase and sale decisions among the Fund, HPS’s clients and the Adviser’s other clients in a manner that they consider, in their discretion and consistent with their fiduciary obligation to their clients, to be reasonable. In many cases, these policies may result in the allocation of limited opportunities across accounts, but in many other cases, the allocations may reflect numerous other factors based upon the Adviser’s and HPS’s good faith assessment of the best use of such limited opportunities relative to the objectives, limitations and requirements of each of their clients and applying a variety of factors, including those described herein. The Adviser and HPS seek to treat all clients reasonably in light of all factors relevant to managing an investment fund or account, and in some cases, it is possible that the application of the factors described herein may result in allocations in which certain investment funds or accounts may receive an allocation when other investment funds (including the Fund) or accounts do not. Similarly, the Adviser and HPS may cause the liquidation of certain positions for the Fund and other clients in its discretion in accordance with the foregoing principles. Such allocations or liquidations may benefit another client instead of the Fund or may be detrimental to the Fund.
pro rata
Moreover, the results of the investment activities of the Fund may differ significantly from the results achieved by the Affiliated Group for the other Affiliated Group Accounts. The Adviser will manage the Fund and HPS and the Adviser will manage the other Affiliated Group Accounts in accordance with their respective investment objectives and guidelines; however, the Affiliated Group may give advice and take action, with respect to any current or future Affiliated Group Accounts that may compete or conflict with the advice the Adviser may give to the Fund, including with respect to the timing or nature of actions relating to certain investments.
Future investment activities by the Adviser on behalf of other clients and HPS on behalf of its clients may give rise to additional conflicts of interest and demands on the Adviser’s and HPS’s time and resources.
Diverse Membership; Relationships with
Shareholders.
196
investments, and the timing of disposition of investments, which may be more beneficial for the Fund or shareholders than for one or more of the other shareholders. Such structuring of the Fund’s investments and other factors may result in different returns being realized by different shareholders. Furthermore, under the U.S. tax audit rules applicable to the Fund, decisions or elections made in connection with certain laws and regulations by the Adviser (or such other person designated by the Adviser) in connection with tax audits (including whether or not to make an election under those rules) may be more beneficial for one type of shareholder than for another type of shareholder. As a consequence, conflicts of interest may arise in connection with decisions made by the Adviser, including in respect of the nature or structuring of investments and the use of leverage that may be more beneficial for one shareholder than for another shareholder, especially in respect of individual tax situations. In addition, one or more of the Fund, the Adviser, and/or their affiliates may face certain tax risks based on positions taken by the Fund, its subsidiaries and/or a withholding agent, and the Adviser reserves the right on behalf of itself and its affiliates to take positions adverse to the Fund and the shareholders, including with respect to withholding of amounts to cover actual or potential tax liabilities.
Valuation of Assets
.
The Affiliated Group is engaged in advisory and management services for multiple collective investment vehicles and managed accounts, including other investment funds managed by the Affiliated Group. In connection with these activities, the Affiliated Group is required to value assets, including in connection with managing or advising their proprietary and client accounts. In this regard, certain units within the Affiliated Group may share information regarding valuation techniques and models or other information relevant to the valuation of a specific asset or category of assets, although they are under no obligation to engage in such information sharing. The Adviser will value the Fund’s investments according to its established valuation policies, and may value an identical asset differently than other units within the Affiliated Group (, when an asset does not have a readily ascertainable market price).
e.g.
Conflicts with Portfolio Companies.
Selection of Service Providers.
co-investors
or commercial counterparties or entities in which an Affiliated Group Account has an investment. Additionally, certain employees of HPS or its affiliates may have family members or relatives employed by such advisors and Service Providers. These relationships may 197
influence the Adviser in deciding whether to select or recommend such Service Providers to perform services for the Fund or portfolio companies (the cost of which generally will be borne directly or indirectly by the Fund or such entities, as applicable).
Allocation of Revolver, Delayed-Draw Investment or Line of Credit Obligations
i.e.
—
Risks Associated with Revolver, Delayed-Draw and Line of Credit Investments
Joint Ventures.
The structure of this type of investment program will vary and will be determined on a basis in order to accommodate the nature of the arrangements, applicable bank and other regulatory restrictions, particular considerations applicable to the funds and accounts participating in the investment program, tax considerations, and other factors. For example, the investment program may be structured so that the Fund purchases debt of a holding company (the “HPS JV Participant”) and the HPS JV Participant then participates in the joint venture or the investments sourced through the joint venture. In such a situation, the equity of the HPS JV Participant is expected to be held by Other HPS Investors. As a result, conflicts of interest may arise between the Fund (as debt holders of the HPS JV Participant) and the Other HPS Investors participating in the investment program (as equity holders of the HPS JV Participant). These conflicts of interest would be magnified in the event of any default, bankruptcy or similar event of financial distress with respect to the HPS JV Participant. Further, the returns realized by the Fund are likely to differ from the returns realized by the Other HPS Investors participating in the investment program. In such a structure, the Fund as a debt holder will have more enhanced downside protection than the Other HPS Investors but will not benefit from all of the upside from the underlying investments, whereas the Other HPS Investors, while being subject to a greater risk of loss, will also benefit from greater upside than the Fund.
case-by-case
198
The Fund’s joint venture partner may be a regulated banking entity, and the joint venture vehicle may be subject to bank regulation as a result of the bank’s ownership interest therein. As a result, there is a risk that the joint venture could be subject to bank regulatory audit and review, as well as potential fines or other enforcement actions that the Fund, acting on its own, would not otherwise be subject to. While the bank joint venture partner would be expected to assume some of these liabilities directly, the HPS JV Partner would nevertheless have some exposure, potentially in respect of larger liabilities. Such liabilities could be significant. Furthermore, the activities of the joint venture may be restricted because of regulatory requirements applicable to the bank or its internal policies designed to comply with, limit the applicability of, or that otherwise relate to such requirements.
The Adviser believes that any such joint venture will be structured in a manner that would not cause a violation of applicable banking laws and regulations. However, it is possible that future changes or clarifications in statutes, regulations or interpretations concerning the permissible activities of bank holding companies, as well as further judicial or administrative decisions and interpretations of present or future statutes or regulations could restrict (or possibly prevent) the banking partner from continuing to participate in the joint venture in the manner originally contemplated. In such event, the Adviser and the applicable banking partner may agree to alter or restrict the investment program or may elect to terminate the investment program altogether. Any such restructuring or termination may adversely affect the returns realized by the Fund in connection with its participation in the investment program.
Asset-Based Financing Among the Funds and Affiliated Group Accounts
.
Risks Factors
—
Risks Relating to the Fund
’
s Investments
—
The Fund is Subject to Risks Relating to Asset-Based Financing
Competition Among the Accounts Managed by the Adviser and Its Affiliates
The foregoing list of conflicts does not purport to be a complete enumeration or explanation of the actual and potential conflicts involved in an investment in the Fund. Prospective investors should read this Registration Statement and consult with their own advisors before deciding whether to invest in the Fund. In addition, as the Fund’s investment program develops and changes over time, an investment in the Fund may be subject to additional and different actual and potential conflicts. Although the various conflicts discussed herein are generally described separately, prospective investors should consider the potential effects of the interplay of multiple conflicts.
199
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
The following table sets forth, as of May 31, 2024, information with respect to the beneficial ownership of our Common Shares at the time of the satisfaction of the minimum offering requirement by:
| • | each person known to us to be expected to beneficially own more than 5% of the outstanding Common Shares; |
| • | each of our Trustees and each executive officer; and |
| • | all of our Trustees and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. There are no Common Shares subject to options that are currently exercisable or exercisable within 60 days of the offering.
Type of Ownership |
Number |
Percentage |
||||||||||
Interested Trustees |
||||||||||||
Michael Patterson |
Beneficial | 199,203 | * | |||||||||
Grishma Parekh |
Record | 19,920 | * | |||||||||
Independent Trustees (1)
|
||||||||||||
Randall Lauer |
— | — | — | |||||||||
Robin Melvin |
— | — | — | |||||||||
Robert Van Dore |
— | — | — | |||||||||
Donna Milia |
— | — | — | |||||||||
Executive Officers Who Are Not Trustees (1)
|
||||||||||||
Robert Busch |
— | — | — | |||||||||
Gregory MacCordy |
— | — | — | |||||||||
Yoohyun (K.) Choi |
— | — | — | |||||||||
Tyler Thorn |
— | — | — | |||||||||
Other |
||||||||||||
HPS Investment Partners, LLC (2)
|
Record | 125 | * | |||||||||
All officers and Trustees as a group (10 persons) |
||||||||||||
| * | Less than 1%. |
| (1) | The address for all of the Fund’s officers and Trustees is HPS Corporate Lending Fund, c/o HPS Advisors, LLC, 40 West 57 th Street, 33rd Floor New York, NY 10019. |
| (2) | The address for HPS Investment Partners, LLC is 40 West 57 th Street, 33rd Floor New York, NY 10019. |
The following table sets forth the dollar range of our equity securities beneficially owned by each Trustee as of March 31, 2024.
Name and Address |
Dollar Range of Equity Securities in Fund (1)(2)(3)
|
Dollar Range of Equity Securities in the Fund Complex (1)(3)(4)
|
||||||
Interested Trustees |
||||||||
Michael Patterson |
Over $100,000 | Over $100,000 | ||||||
Grishma Parekh |
Over $100,000 | Over $100,000 | ||||||
Independent Trustees |
||||||||
Randall Lauer |
— | — | ||||||
Robin Melvin |
— | — | ||||||
Donna Milia |
— | — | ||||||
Robert Van Dore |
— | — | ||||||
| (1) | Beneficial ownership has been determined in accordance with Rule 16a-1(a)(2) of the Exchange Act. |
200
| (2) | The dollar range of equities securities beneficially owned by our Trustees is based on the public offering price of $25.42 per share. |
| (3) | The dollar range of equity securities beneficially owned are: none, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000 or over $100,000. |
| (4) | For purposes of this prospectus, the term “Fund Complex” is defined to include the Fund and HPS Corporate Capital Solutions Fund, a BDC managed by the Adviser. |
201
DISTRIBUTIONS
We have declared distributions each month beginning in February 2022 through the date of this prospectus and expect to continue to pay regular monthly distributions. Any distributions we make will be at the discretion of our Board, considering factors such as our earnings, cash flow, capital needs and general financial condition and the requirements of Delaware law. As a result, our distribution rates and payment frequency may vary from time to time.
Our Board’s discretion as to the payment of distributions will be directed, in substantial part, by its determination to cause us to comply with the RIC requirements. To maintain our treatment as a RIC, we generally are required to make aggregate annual distributions to our shareholders of at least 90% of our investment company taxable income. See “Description of our Common Shares” and “Certain U.S. Federal Income Tax Considerations.”
The per share amount of distributions on Class I, Class D, Class F and Class S shares generally differ because of different class-specific shareholder servicing and/or distribution fees that are deducted from the gross distributions for each share class. Specifically, distributions on Class S shares will be lower than Class I shares, Class D shares and Class F shares, distributions on Class F shares will be lower than Class I shares and Class D shares, and distributions on Class D shares will be lower than Class I shares because we are required to pay higher ongoing shareholder servicing and/or distribution fees with respect to the Class S shares (compared to Class I shares, Class D shares and Class F shares), we are required to pay higher ongoing shareholder servicing and/or distribution fees with respect to the Class F shares (compared to Class I shares and Class D shares), and we are required to pay higher ongoing shareholder servicing fees with respect to Class D shares (compared to Class I shares).
There is no assurance we will pay distributions in any particular amount, if at all. We may fund any distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings or return of capital, and we have no limits on the amounts we may pay from such sources. The use of borrowings to pay distributions is subject to the limitations in Section 5.4(f) of the Declaration of Trust and Section VI.K. of the Omnibus Guidelines. The extent to which we pay distributions from sources other than cash flow from operations will depend on various factors, including the level of participation in our distribution reinvestment plan, how quickly we invest the proceeds from this and any future offering and the performance of our investments. Funding distributions from the sales of assets, borrowings, return of capital or proceeds of this offering will result in us having less funds available to acquire investments. As a result, the return you realize on your investment may be reduced. Doing so may also negatively impact our ability to generate cash flows. Likewise, funding distributions from the sale of additional securities will dilute your interest in us on a percentage basis and may impact the value of your investment especially if we sell these securities at prices less than the price you paid for your shares.
From time to time, we may also pay special distributions in the form of cash or Common Shares at the discretion of our Board.
We have not established limits on the amount of funds we may use from any available sources to make distributions. There can be no assurance that we will achieve the performance necessary to sustain our distributions or that we will be able to pay distributions at a specific rate or at all. The Adviser and its affiliates have no obligation to waive advisory fees or otherwise reimburse expenses in future periods. See “Advisory Agreement and Administration Agreement.”
Consistent with the Code, shareholders will be notified of the source of our distributions. Our distributions may exceed our earnings and profits. As a result, a portion of the distributions we make may represent a return of capital for tax purposes. The tax basis of shares must be reduced by the amount of any return of capital distributions, which will result in an increase in the amount of any taxable gain (or a reduction in any loss) on the sale of shares.
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From time to time, we expect portions of our distributions may be funded indirectly through the reimbursement of certain expenses by the Adviser and its affiliates, including through the waiver of certain investment advisory fees by the Adviser, that are subject to conditional reimbursement by us within three years. Any such distributions funded through expense reimbursements or waivers of advisory fees are not based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or the Adviser or its affiliates continues to advance such expenses or waive such fees. Our future reimbursement of amounts advanced or waived by the Adviser and its affiliates will reduce the distributions that you would otherwise receive in the future. In addition, the advancement of expenses or waiver of fees by the Adviser and its affiliates may prevent a decline in NAV in the short term, and our reimbursement of these amounts may reduce our NAV in the future. Other than as set forth in this prospectus, the Adviser and its affiliates have no obligation to advance expenses or waive advisory fees.
We have elected to be treated, and intend to qualify annually, as a RIC under the Code. To obtain and maintain RIC tax treatment, we must distribute at least 90% of our investment company taxable income (net ordinary taxable income and net short-term capital gains in excess of net long-term capital losses), if any, to our shareholders. A RIC may satisfy the 90% distribution requirement by actually distributing dividends (other than capital gain dividends) during the taxable year. In addition, a RIC may, in certain cases, satisfy the 90% distribution requirement by distributing dividends relating to a taxable year after the close of such taxable year under the “spillback dividend” provisions of Subchapter M. If a RIC makes a spillback dividend, the amounts will be included in a shareholder’s gross income for the year in which the spillback dividend is paid.
We currently intend to distribute net capital gains (, net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment and elect to treat such gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions. See “Certain U.S. Federal Income Tax Considerations.”
i.e.
Since we have issued senior securities, we may be prohibited from making distributions if doing so causes us to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.
We have adopted a distribution reinvestment plan pursuant to which you may elect to have the full amount of your cash distributions reinvested in additional Common Shares. See “Distribution Reinvestment Plan.”
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3
DESCRIPTION OF OUR COMMON SHARES
The following description is based on relevant portions of Delaware law and on our Declaration of Trust and Bylaws. This summary is not necessarily complete, and we refer you to Delaware law, our Declaration of Trust and our Bylaws for a more detailed description of the provisions summarized below.
General
The terms of the Declaration of Trust authorize an unlimited number of Common Shares of any class, par value $0.01 per share, of which shares were outstanding as of M
267,712,745
ay
1, 2024, and an unlimited number of shares of preferred shares, par value $0.01 per share. The Declaration of Trust provides that the Board may classify or reclassify any unissued Common Shares into one or more classes or series of Common Shares or preferred shares by setting or changing the preferences, conversion or other rights, voting powers, restrictions, or limitations as to dividends, qualifications, or terms or conditions of redemption of the shares. There is currently no market for our Common Shares, and we can offer no assurances that a market for our shares will develop in the future. We do not intend for the shares offered under this prospectus to be listed on any national securities exchange. There are no outstanding options or warrants to purchase our shares. No shares have been authorized for issuance under any equity compensation plans. Under the terms of our Declaration of Trust, shareholders shall be entitled to the same limited liability extended to shareholders of private Delaware for profit corporations formed under the Delaware General Corporation Law, 8 Del. C. § 100, et. seq. Our Declaration of Trust provides that no shareholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to us by reason of being a shareholder, nor shall any shareholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any person in connection with the Fund’s assets or the affairs of the Fund by reason of being a shareholder. None of our shares are subject to further calls or to assessments, sinking fund provisions, obligations of the Fund or potential liabilities associated with ownership of the security (not including investment risks). In addition, except as may be provided by the Board in setting the terms of any class or series of Common Shares or as provided in connection with a
roll-up
transaction pursuant to the Declaration of Trust, no shareholder shall be entitled to exercise appraisal rights in connection with any transaction. Outstanding Securities
Title of Class |
Amount Authorized |
Amount Held by Fund for its Account |
Amount Outstanding as of May 1, 2024 |
|||||||||
| Unlimited |
|
|||||||||||
| Unlimited |
|
|||||||||||
| Unlimited |
|
|||||||||||
| Unlimited |
|
|||||||||||
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acquire Common Shares to furnish such information as may be necessary to determine whether such person is a benefit plan investor or a controlling person, restrict or prohibit transfers of such shares or redeem any outstanding shares for such price and on such other terms and conditions as may be determined by or at the direction of the Board. In the event of our liquidation, dissolution or winding up, each share of our Common Shares would be entitled to share pro rata in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred shares, if any preferred shares are outstanding at such time. Subject to the rights of holders of any other class or series of shares, each share of our Common Shares is entitled to one vote on all matters submitted to a vote of shareholders, including the election of Trustees. Except as may be provided by the Board in setting the terms of classified or reclassified shares, and subject to the express terms of any class or series of preferred shares, the holders of our Common Shares possess exclusive voting power. There will be no cumulative voting in the election of Trustees. Subject to the special rights of the holders of any class or series of preferred shares to elect Trustees, each Trustee will be elected by a plurality of the votes cast with respect to such Trustee’s election except in the case of a “contested election” (as defined in our Bylaws), in which case Trustees will be elected by a majority of the votes cast in the contested election of Trustees; provided that, if the Fund is unable to achieve the quorum specified in the Bylaws, the incumbent Trustee, if any, shall retain their position. Pursuant to our Declaration of Trust, our Board may amend the Bylaws to alter the vote required to elect Trustees.
No upfront selling commissions are paid for sales of any Class I shares; however, if you purchase Class I shares from certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 2.0% cap on NAV for Class I shares. Class I shares are subject to a minimum initial investment of $1,000,000, which is waived or reduced by the Managing Dealer to $10,000 or less for certain investors as described below under “Plan of Distribution.” All subsequent purchases of Class I shares, except for those made under our distribution reinvestment plan, are subject to a minimum investment size of $500 per transaction. The Managing Dealer can waive the initial or subsequent minimum investment at its discretion.
No shareholder servicing and/or distribution fees are paid for sales of any Class I shares.
Class I shares are generally available for purchase in the offering only (1) through
fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class I shares, (2) by endowments, foundations, pension funds and other institutional investors, (3) through participating brokers that have alternative fee arrangements with their clients to provide access to Class I shares, (4) through transaction/brokerage platforms at participating brokers, (5) by our executive officers and Trustees and their immediate family members, as well as officers and employees of the Adviser or other affiliates and their immediate family members, and, if approved by our Board, joint venture partners, consultants and other service providers, or (6) by other categories of investors that we name in an amendment or supplement to this prospectus. In certain cases, where a holder of Class D, Class F or Class S shares exits a relationship with a participating broker for the offering and does not enter into a new relationship with a participating broker for the offering, such holder’s shares may be exchanged into an equivalent NAV amount of Class I shares. We may also offer Class I shares to certain feeder vehicles primarily created to hold our Class I shares, which in turn offer interests in themselves to investors; we expect to conduct such offerings pursuant to exceptions to registration under the Securities Act and not as a part of the offering. Such feeder vehicles may have additional costs and expenses, which would be disclosed in connection with the offering of their interests. We may also offer Class I shares to other investment vehicles. Without limiting the foregoing, the Managing Dealer waives or reduces to $10,000 or less Class I investment minimums for purchases: (1) through
fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class I shares, (2) through participating brokers that have alternative fee arrangements with their clients to provide access to Class I shares, (3) through 2
0
5
transaction/brokerage platforms at participating brokers, (4) by our executive officers and Trustees and their immediate family members, as well as officers and employees of the Adviser or other affiliates and their immediate family members, and, if approved by our Board, joint venture partners, consultants and other service providers, and (5) by other categories of investors that we name in an amendment or supplement to this prospectus. The foregoing categories of investors who are granted waivers or reductions by the Managing Dealer from the Class I investment minimums include investors described in the foregoing sentence who make purchases for eligible retirement plans and IRAs. Waivers and reductions are subject to the terms and conditions of agreements that the Managing Dealer enters into with participating intermediaries, as applicable.
No upfront selling commissions are paid for sales of any Class D shares; however, if you purchase Class D shares from certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 2.0% cap on NAV for Class D shares. Class D shares are subject to a minimum initial investment of $2,500. All subsequent purchases of Class D shares, except for those made under our distribution reinvestment plan, are subject to a minimum investment size of $500 per transaction. The Managing Dealer can waive the initial or subsequent minimum investment at its discretion.
We pay the Managing Dealer selling commissions over time as a shareholder servicing fee with respect to our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of all our outstanding Class D shares, including any Class D shares issued pursuant to our distribution reinvestment plan. The shareholder servicing fees are paid monthly in arrears. The Managing Dealer reallows (pays) all or a portion of the shareholder servicing fees to participating brokers and servicing brokers for ongoing shareholder services performed by such brokers, and will waive shareholder servicing fees to the extent a broker is not eligible to receive it for failure to provide such services.
Class D shares are generally available for purchase in the offering only (1) through
fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class D shares, (2) through participating brokers that have alternative fee arrangements with their clients to provide access to Class D shares, (3) through transaction/ brokerage platforms at participating brokers, (4) through certain registered investment advisers, (5) through bank trust departments or any other organization or person authorized to act in a fiduciary capacity for its clients or customers or (6) by other categories of investors that we name in an amendment or supplement to this prospectus. No upfront selling commissions are paid for sales of any Class F shares; however, if you purchase Class F shares from the Founding Distributor, it may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as it may determine, provided that it limits such charges to a 2.0% cap on NAV for Class F shares. Class F shares are subject to a minimum initial investment of $2,500. All subsequent purchases of Class F shares, except for those made under our distribution reinvestment plan, are subject to a minimum investment size of $500 per transaction. The Managing Dealer can waive the initial or subsequent minimum investment at its discretion.
We pay the Managing Dealer selling commissions over time as a shareholder servicing and/or distribution fee with respect to our outstanding Class F shares equal to 0.50% per annum of the aggregate NAV of our outstanding Class F shares, including any Class F shares issued pursuant to our distribution reinvestment plan.
Class F shares are generally available for purchase in the offering only by the Founding Distributor. In this context, Class F Shares can be purchased (1) through
fee-based
programs, also known as wrap accounts, sponsored by the Founding Distributor, (2) in instances where the Founding Distributor has alternative fee 2
0
6
arrangements with its clients to provide access to Class F shares, (3) through transaction/brokerage platforms at the Founding Distributor, or (4) by other categories of investors that we name in an amendment or supplement to this prospectus.
No upfront selling commissions are paid for sales of any Class S shares; however, if you purchase Class S shares from certain financial intermediaries, they may directly charge you transaction or other fees, including upfront placement fees or brokerage commissions, in such amount as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares. Class S shares are subject to a minimum initial investment of $2,500. All subsequent purchases of Class S shares, except for those made under our distribution reinvestment plan, are subject to a minimum investment size of $500 per transaction. The Managing Dealer can waive the initial or subsequent minimum investment at its discretion.
We pay the Managing Dealer selling commissions over time as a shareholder servicing and/or distribution fee with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares, including any Class S shares issued pursuant to our distribution reinvestment plan. The shareholder servicing and/or distribution fees are paid monthly in arrears. The Managing Dealer reallows (pays) all or a portion of the shareholder servicing and/or distribution fees to participating brokers and servicing brokers for ongoing shareholder services performed by such brokers, and will waive shareholder servicing and/or distribution fees to the extent a broker is not eligible to receive it for failure to provide such services.
Other Terms of Common Shares
We will cease paying the shareholder servicing and/or distribution fee on the Class S shares, Class D shares and Class F shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of our assets or (iii) the date following the completion of the primary portion of this offering on which, in the aggregate, underwriting compensation from all sources in connection with this offering, including the shareholder servicing and/or distribution fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering. In addition, as required by exemptive relief that allows us to offer multiple classes of shares, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer and the applicable selling agent), we will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class S shares, Class D shares and Class F shares in such shareholder’s account. We may modify this requirement if permitted by applicable exemptive relief. At the end of such month, the applicable Class S shares, Class D shares or Class F shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class S, Class D or Class F shares. In addition, immediately before any liquidation, dissolution or winding up, each Class S share, Class D share and Class F share will automatically convert into a number of Class I shares (including any fractional shares) with an equivalent NAV as such share.
This offering does not include an offering of preferred shares. However, under the terms of the Declaration of Trust, our Board may authorize us to issue preferred shares in one or more classes or series without shareholder approval, to the extent permitted by the 1940 Act. The Board has the power to fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of each class or series of preferred shares. We do not currently anticipate issuing preferred shares in the near future. In the event we issue preferred shares, we will
2
0
7
make any required disclosure to shareholders. We will not offer preferred shares to the Adviser or our affiliates except on the same terms as offered to all other shareholders.
Preferred shares could be issued with terms that would adversely affect the shareholders, provided that we may not issue any preferred shares that would limit or subordinate the voting rights of holders of our Common Shares. Preferred shares could also be used as an anti-takeover device through the issuance of shares of a class or series of preferred shares with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control. Every issuance of preferred shares will be required to comply with the requirements of the 1940 Act. The 1940 Act requires, among other things, that: (1) immediately after issuance and before any dividend or other distribution is made with respect to common shares and before any purchase of common shares is made, such preferred shares together with all other 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 (2) the holders of shares of preferred shares, if any are issued, must be entitled as a class voting separately to elect two Trustees at all times and to elect a majority of the Trustees if distributions on such preferred shares are in arrears by two full years or more. Certain matters under the 1940 Act require the affirmative vote of the holders of at least a majority of the outstanding shares of preferred shares (as determined in accordance with the 1940 Act) voting together as a separate class. For example, the vote of such holders of preferred shares would be required to approve a proposal involving a plan of reorganization adversely affecting such securities.
The issuance of any preferred shares must be approved by a majority of our Independent Trustees not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel.
Limitation on Liability of Trustees and Officers; Indemnification and Advance of Expenses
Delaware law permits a Delaware statutory trust to include in its declaration of trust a provision to indemnify and hold harmless any trustee or beneficial owner or other person from and against any and all claims and demands whatsoever. Our Declaration of Trust provides that our Trustees will not be liable to us or our shareholders for monetary damages for breach of fiduciary duty as a trustee to the fullest extent permitted by Delaware law. Our Declaration of Trust provides for the indemnification of any person to the full extent permitted, and in the manner provided, by Delaware law. In accordance with the 1940 Act, we will not indemnify certain persons for any liability to which such persons 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 office.
Pursuant to our Declaration of Trust and subject to certain exceptions described therein, we will indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former Trustee, officer, employee, sponsor, controlling person or agent of the Fund and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (ii) any individual who, while a Trustee, officer, agent or employee of the Fund and at the request of the Fund, serves or has served as a director, trustee, officer, employee or agent of any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity (each such person, an “Indemnitee”), in each case to the fullest extent permitted by Delaware law. Notwithstanding the foregoing, we will not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by an Indemnitee unless (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the Indemnitee, (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee, or (iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and
2
0
8
of the published position of any state securities regulatory authority in which securities were offered or sold as to indemnification for violations of securities laws.
We will not indemnify an Indemnitee against any liability or loss suffered by such Indemnitee unless (i) the Indemnitee determines in good faith that the course of conduct that caused the loss or liability was in the best interests of the Fund, (ii) the Indemnitee was acting on behalf of or performing services for the Fund, (iii) such liability or loss was not the result of (A) negligence or misconduct, in the case that the party seeking indemnification is a Trustee (other than an Independent Trustee), officer, employee, sponsor, controlling person or agent of the Fund, or (B) gross negligence or willful misconduct, in the case that the party seeking indemnification is an Independent Trustee, and (iv) such indemnification or agreement to hold harmless is recoverable only out of the net assets of the Fund and not from the shareholders.
In addition, the Declaration of Trust permits the Fund to advance reasonable expenses to an Indemnitee, and we will do so in advance of final disposition of a proceeding if (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Fund, (ii) the Indemnitee provides the Fund with written affirmation of the Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by the Fund as authorized by the Declaration of Trust, (iii) the legal proceeding was initiated by a third party who is not a shareholder or, if by a shareholder of the Fund acting in his or her capacity as such, a court of competent jurisdiction approves such advancement, and (iv) the Indemnitee provides the Fund with a written agreement to repay the amount paid or reimbursed by the Fund, together with the applicable legal rate of interest thereon, if it is ultimately determined by final,
non-appealable
decision of a court of competent jurisdiction, that the Indemnitee is not entitled to indemnification. Delaware Law and Certain Declaration of Trust Provisions
Organization and Duration
We were formed in Delaware on December 23, 2020, and will remain in existence until dissolved in accordance with our Declaration of Trust or pursuant to Delaware law.
Purpose
Under the Declaration of Trust, we are permitted to engage in any business activity that lawfully may be conducted by a statutory trust organized under Delaware law and, in connection therewith, to exercise all of the rights and powers conferred upon us pursuant to the agreements relating to such business activity.
Our Declaration of Trust contains provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise. Our Board may, without shareholder action, authorize the issuance of shares in one or more classes or series, including preferred shares; our Board may, without shareholder action, amend our Declaration of Trust to increase the number of our Common Shares, of any class or series, that we will have authority to issue; and our Declaration of Trust provides that, while we do not intend to list our shares on any securities exchange, if any class of our shares is listed on a national securities exchange, our Board will be divided into three classes of Trustees serving staggered terms of three years each. 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. 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.
Sales and Leases to the Fund
Our Declaration of Trust provides that, unless otherwise permitted by the 1940 Act or applicable guidance or exemptive relief of the SEC, except as otherwise permitted under the 1940 Act, we may not purchase or lease assets in which the Adviser or any of its affiliates have an interest unless all of the following conditions are met: (a) the transaction is fully disclosed to the shareholders in a prospectus or in a periodic report; and (b) the assets
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are sold or leased upon terms that are reasonable to us and at a price not to exceed the lesser of cost or fair market value as determined by an independent expert. However, the Adviser may purchase assets in its own name (and assume loans in connection) and temporarily hold title, for the purposes of facilitating the acquisition of the assets, the borrowing of money, obtaining financing for us, or the completion of construction of the assets, so long as all of the following conditions are met: (i) the assets are purchased by us at a price no greater than the cost of the assets to the Adviser; (ii) all income generated by, and the expenses associated with, the assets so acquired will be treated as belonging to us; and (iii) there are no other benefits arising out of such transaction to the Adviser apart from compensation otherwise permitted by the Omnibus Guidelines, as adopted by the NASAA.
Sales and Leases to our Adviser, Trustees or Affiliates
Our Declaration of Trust provides that, unless otherwise permitted by the 1940 Act or applicable guidance or exemptive relief of the SEC, we may not sell assets to the Adviser or any of its affiliates unless such sale is approved by the holders of a majority of our outstanding Common Shares. Our Declaration of Trust also provides that we may not lease assets to the Adviser, any Trustee or any affiliate thereof unless all of the following conditions are met: (a) the transaction is fully disclosed to the shareholders in a prospectus or in a periodic report; and (b) the terms of the transaction are fair and reasonable to us.
Loans
Our Declaration of Trust provides that, unless otherwise permitted by the 1940 Act or applicable guidance or exemptive relief of the SEC, except for the advancement of indemnification funds, no loans, credit facilities, credit agreements or otherwise may be made by us to the Adviser or any of its affiliates.
Commissions on Financing, Refinancing or Reinvestment
Our Declaration of Trust provides that, unless otherwise permitted by the 1940 Act or applicable guidance or exemptive relief of the SEC, we generally may not pay, directly or indirectly, a commission or fee to the Adviser or any of its affiliates in connection with the reinvestment of cash available for distribution, available reserves, or the proceeds of the resale, exchange or refinancing of assets.
Lending Practices
Our Declaration of Trust provides that, with respect to financing made available to us by the Adviser, the Adviser may not receive interest in excess of the lesser of the Adviser’s cost of funds or the amounts that would be charged by unrelated lending institutions on comparable loans for the same purpose. The Adviser may not impose a prepayment charge or penalty in connection with such financing and the Adviser may not receive points or other financing charges. In addition, the Adviser will be prohibited from providing financing to us with a term in excess of 12 months.
Number of Trustees; Vacancies; Removal
Our Declaration of Trust provides that the number of Trustees will be set by our Board in accordance with our Bylaws. Our Bylaws provide that a majority of our entire Board may at any time increase or decrease the number of Trustees. Our Declaration of Trust provides that the number of Trustees generally may not be less than one. Except as otherwise required by applicable requirements of the 1940 Act and as may be provided by our Board in setting the terms of any class or series of preferred shares, pursuant to an election under our Declaration of Trust, any and all vacancies on our Board may be filled only by the affirmative vote of a majority of the remaining Trustees in office, even if the remaining Trustees do not constitute a quorum, and any Trustee elected to fill a vacancy will serve for the remainder of the full term of the Trustee for whom the vacancy occurred and until a successor is elected and qualified, subject to any applicable requirements of the 1940 Act. Independent Trustees will nominate replacements for any vacancies among the Independent Trustees’ positions.
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Our Declaration of Trust provides that a Trustee may be removed without cause upon the vote of a majority of then-outstanding shares.
We have a total of six members of our Board, four of whom are Independent Trustees. Our Declaration of Trust provides that a majority of our Board must be Independent Trustees except for a period of up to 60 days after the death, removal or resignation of an Independent Trustee pending the election of his or her successor.
The Board is divided into three classes, designated Class I, Class II and Class III, and the term of office of the Trustees (each, a “Term”) of one class shall terminate upon the expiration of such Term as set forth below, and in all cases as to each Trustee such Term shall extend until his or her successor shall be elected by the shareholders or until his or earlier resignation, removal from office, death or incapacity. The initial Term of office of Trustees of Class I shall expire at the Fund’s 2026 meeting of shareholders; the initial Term of office of Trustees of Class II shall expire at the Fund’s 2027 meeting of Shareholders, and the initial Term of office of Trustees of Class III shall expire at the Fund’s 2028 meeting of Shareholders. Following such initial Terms, each class of Trustees shall stand for election upon the fifth anniversary of the respective meeting of shareholders at which such class of Trustees was elected. Each Trustee may be reelected to an unlimited number of succeeding Terms in accordance with the Declaration of Trust.
Action by Shareholders
Our Bylaws provide that shareholder action can be taken only at a special meeting of shareholders or by unanimous consent in lieu of a meeting. The shareholders will only have voting rights as required by the 1940 Act or as otherwise provided for in the Declaration of Trust and Bylaws. Under our Declaration of Trust and Bylaws, the Fund is required to hold a meeting of shareholders at least annually. Special meetings may be called by the Trustees and certain of our officers, and will be limited to the purposes for any such special meeting set forth in the notice thereof. In addition, our Bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the shareholders requesting the meeting, a special meeting of shareholders will be called by the secretary of the Fund upon the written request of shareholders entitled to cast 10% or more of the votes entitled to be cast at the meeting. Any special meeting called by such shareholders is required to be held not less than 15 nor more than 60 days after the secretary gives notice for such special meeting. These provisions will have the effect of significantly reducing the ability of shareholders being able to have proposals considered at a meeting of shareholders.
With respect to special meetings of shareholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to the Board at a special meeting may be made only (1) pursuant to our notice of the meeting, (2) by the Board or (3) provided that the Board has determined that Trustees will be elected at the meeting, by a shareholder who is entitled to vote at the meeting and who has complied with the advance notice provisions of the Bylaws.
Our Declaration of Trust provides that the following actions may be taken by the shareholders, without concurrence by our Board or the Adviser, upon a vote by the holders of more than 50% of the outstanding shares entitled to vote to:
| • | modify the Declaration of Trust; |
| • | remove the Adviser or appoint a new investment adviser; |
| • | sell all or substantially all of our assets other than in the ordinary course of business; or |
| • | elect Trustees at an annual meeting. |
The purpose of requiring shareholders to give us advance notice of nominations and other business is to afford our Board a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our Board, to inform shareholders and make recommendations about such qualifications or business, as well as to provide a
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more orderly procedure for conducting meetings of shareholders. Although our Declaration of Trust does not give our Board any power to disapprove shareholder nominations for the election of Trustees or proposals recommending certain action, they may have the effect of precluding a contest for the election of Trustees or the consideration of shareholder 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 trustees 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 shareholders.
Our Adviser or our Board, as applicable, may not, without the approval of a vote by the holders of more than 50% of the outstanding shares entitled to vote on such matters:
| • | modify the Declaration of Trust except for amendments which do not adversely affect the rights of our shareholders; |
| • | appoint a new investment adviser (other than a sub-adviser pursuant to the terms of the Advisory Agreement and applicable law); or |
| • | sell all or substantially all of our assets other than in the ordinary course of business or as otherwise permitted by law. |
The Adviser, except as permitted under the Advisory Agreement, may not voluntarily withdraw as the Adviser unless such withdrawal would not affect the tax status of the Fund and would not materially adversely affect the shareholders.
Amendment of the Declaration of Trust and Bylaws
Our Declaration of Trust provides that shareholders are entitled to vote upon a proposed amendment to the Declaration of Trust if the amendment would alter or change the powers, preferences or special rights of the shares held by such shareholders so as to affect them adversely. Approval of any such amendment requires at least a majority of the votes cast by such shareholders at a meeting of shareholders duly called and at which a quorum is present. In addition, amendments to our Declaration of Trust to make our Common Shares a “redeemable security” or to convert the Fund, whether by merger or otherwise, from a
closed-end
company to an open-end
company each must be approved by the affirmative vote of shareholders entitled to cast at least a majority of the votes entitled to be cast on the matter. Our Declaration of Trust provides that our Board has the exclusive power to adopt, alter or repeal any provision of our Bylaws and to make new Bylaws. Except as described above and for certain provisions of our Declaration of Trust relating to shareholder voting and the removal of Trustees, our Declaration of Trust provides that our Board may amend our Declaration of Trust without any vote of our shareholders.
Determinations by Our Board of Trustees
Our Declaration of Trust contains a provision that codifies the authority of our Board to manage our business and affairs. This provision enumerates certain matters and states that the determination as to any such enumerated matters made by or pursuant to the direction of our Board (consistent with our Declaration of Trust) is final and conclusive and binding upon us and our shareholders. This provision does not alter the duties our Board owes to us or our shareholders pursuant to our Declaration of Trust and under Delaware law. Further, it would not restrict the ability of a shareholder to challenge an action by our Board which was taken in a manner that is inconsistent with our Declaration of Trust or the Board’s duties under Delaware law or which did not comply with the requirements of the provision.
Actions by the Board Related to Merger, Conversion, Reorganization or Dissolution
The Board may, without the approval of holders of our outstanding shares, approve a merger, conversion, consolidation or other reorganization of the Fund, provided that the resulting entity is a business development
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company under the 1940 Act. The Fund will not permit the Adviser or the Board to cause any other form of merger or other reorganization of the Fund without the affirmative vote by the holders of more than fifty percent (50%) of the outstanding shares of the Fund entitled to vote on the matter. The Fund may be dissolved at any time, without the approval of holders of our outstanding shares, upon affirmative vote by a majority of the Trustees.
Derivative Actions
No person, other than a Trustee, who is not a shareholder shall be entitled to bring any derivative action, suit or other proceeding on behalf of the Fund.
In addition to the requirements set forth in Section 3816 of the Delaware Statutory Trust Act, a shareholder may bring a derivative action on behalf of the Fund only if the following conditions are met: (i) a demand on the Board shall only be deemed not likely to succeed and therefore excused if a majority of the Board, or a majority of any committee established to consider the merits of such action, is composed of Board who are not “Independent Trustees” (as that term is defined in the Delaware Statutory Trust Act); and (ii) unless a demand is not required under clause (i) above, the Board must be afforded a reasonable amount of time to consider such shareholder request and to investigate the basis of such claim; and the Board shall be entitled to retain counsel or other advisors in considering the merits of the request. For purposes of this paragraph, the Board may designate a committee of one or more Trustees to consider a shareholder demand.
Exclusive Delaware Jurisdiction
Each Trustee, each officer, each shareholder and each person beneficially owning an interest in a share of the Fund (whether through a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing or otherwise), to the fullest extent permitted by law, including Section 3804(e) of the Delaware Statutory Trust Act, (i) irrevocably agrees that any claims, suits, actions or proceedings arising out of or relating in any way to the Fund or its business and affairs, the Delaware Statutory Trust Act, the Declaration of Trust or the Bylaws or asserting a claim governed by the internal affairs (or similar) doctrine or arising out of or relating in any way to the Fund, the Delaware Statutory Trust Act or the Declaration of Trust (including, without limitation, any claims, suits, actions or proceedings to interpret, apply or enforce (A) the provisions of the Declaration of Trust or the Bylaws, or (B) the duties (including fiduciary duties), obligations or liabilities of the Fund to the shareholders or the Board, or of officers or the Board to the Fund, to the shareholders or each other, or (C) the rights or powers of, or restrictions on, the Fund, the officers, the Board or the shareholders, or (D) any provision of the Delaware Statutory Trust Act or other laws of the State of Delaware pertaining to trusts made applicable to the Fund pursuant to Section 3809 of the Delaware Statutory Trust Act, or (E) any other instrument, document, agreement or certificate contemplated by any provision of the Delaware Statutory Trust Act, the Declaration of Trust or the Bylaws relating in any way to the Fund (regardless, in every case, of whether such claims, suits, actions or proceedings (x) sound in contract, tort, fraud or otherwise, (y) are based on common law, statutory, equitable, legal or other grounds, or (z) are derivative or direct claims)), shall be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, any other court in the State of Delaware with subject matter jurisdiction, (ii) irrevocably submits to the exclusive jurisdiction of such courts in connection with any such claim, suit, action or proceeding, (iii) irrevocably agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject to the jurisdiction of such courts or any other court to which proceedings in such courts may be appealed, (B) such claim, suit, action or proceeding is brought in an inconvenient forum or (C) the venue of such claim, suit, action or proceeding is improper, (iv) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such service shall constitute good and sufficient service of process and notice thereof; provided, nothing in clause (iv) hereof shall affect or limit any right to serve process in any other manner permitted by law and (v) irrevocably waives any and all right to trial by jury in any such claim, suit, action or proceeding. In the event that any claim, suit, action or proceeding is commenced outside of the Court of Chancery of the State of Delaware in contravention of the foregoing, all reasonable and documented out of pocket fees, costs and expenses, including reasonable attorneys’ fees and court costs, incurred by the
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prevailing party in such claim, suit, action or proceeding shall be reimbursed by the
non-prevailing
party. Nothing disclosed in the foregoing will apply to any claims, suits, actions or proceedings asserting a claim brought under federal or state securities laws or under the Kansas Uniform Securities Act. Restrictions on
Roll-Up
Transactions In connection with a proposed
“roll-up
transaction,” which, in general terms, is any transaction involving the acquisition, merger, conversion or consolidation, directly or indirectly, of us and the issuance of securities of an entity that would be created or would survive after the successful completion of the roll-up
transaction, we will obtain an appraisal of all of our properties from an independent expert. In order to qualify as an independent expert for this purpose, the person or entity must have no material current or prior business or personal relationship with us and must be engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by us, who is qualified to perform such work. Our assets will be appraised on a consistent basis, and the appraisal will be based on the evaluation of all relevant information and will indicate the value of our assets as of a date immediately prior to the announcement of the proposed roll-up
transaction. The appraisal will assume an orderly liquidation of our assets over a 12-month
period. The terms of the engagement of such independent expert will clearly state that the engagement is for our benefit and the benefit of our shareholders. We will include a summary of the appraisal, indicating all material assumptions underlying the appraisal, in a report to the shareholders in connection with the proposed roll-up
transaction. If the appraisal will be included in a prospectus used to offer the securities of the roll-up
entity, the appraisal will be filed with the SEC and the states as an exhibit to the registration statement for the offering. In connection with a proposed
roll-up
transaction, the person sponsoring the roll-up
transaction must offer to the shareholders who vote against the proposal a choice of: | • | accepting the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction offered in the proposed roll-up transaction; or |
| • | one of the following: |
| • | remaining as shareholders and preserving their interests in us on the same terms and conditions as existed previously; or |
| • | receiving cash in an amount equal to their pro rata share of the appraised value of our net assets. |
We are prohibited from participating in any proposed
roll-up
transaction: | • | which would result in shareholders having voting rights in the entity that would be created or would survive after the successful completion of the roll-up transaction that are less than shareholder rights and other voting rights provided in the Declaration of Trust, including rights with respect to the election and removal of Trustees, annual and special meetings, amendments to the Declaration of Trust and our dissolution; |
| • | which includes provisions that would operate as a material impediment to, or frustration of, the accumulation of Common Shares by any purchaser of the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction, except to the minimum extent necessary to preserve the tax status of such entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the entity that would be created or would survive after the successful completion of the roll-up transaction on the basis of the number of shares held by that investor; |
| • | in which shareholders’ rights to access to records of the entity that would be created or would survive after the successful completion of the roll-up transaction will be less than those provided in the Declaration of Trust; or |
| • | in which we would bear any of the costs of the roll-up transaction if the shareholders reject the roll-up transaction. |
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Access to Records
Any shareholder will be permitted access to all of our records to which they are entitled under applicable law at all reasonable times and may inspect and copy any of them for a reasonable copying charge. Inspection of our records by the office or agency administering the securities laws of a jurisdiction will be provided upon reasonable notice and during normal business hours. An alphabetical list of the names, addresses and business telephone numbers of our shareholders, along with the number of Common Shares held by each of them, will be maintained as part of our books and records and will be available for inspection by any shareholder or the shareholder’s designated agent at our office. The shareholder list will be updated at least quarterly to reflect changes in the information contained therein. A copy of the list will be mailed to any shareholder who requests the list within ten days of the request. A shareholder may request a copy of the shareholder list for any proper and legitimate purpose, including, without limitation, in connection with matters relating to voting rights and the exercise of shareholder rights under federal proxy laws. A shareholder requesting a list will be required to pay reasonable costs of postage and duplication. Such copy of the shareholder list shall be printed in alphabetical order, on white paper, and in readily readable type size (no smaller than 10 point font).
A shareholder may also request access to any other corporate records. If a proper request for the shareholder list or any other corporate records is not honored, then the requesting shareholder will be entitled to recover certain costs incurred in compelling the production of the list or other requested corporate records as well as actual damages suffered by reason of the refusal or failure to produce the list. However, a shareholder will not have the right to, and we may require a requesting shareholder to represent that it will not, secure the shareholder list or other information for the purpose of selling or using the list for a commercial purpose not related to the requesting shareholder’s interest in our affairs. We may also require that such shareholder sign a confidentiality agreement in connection with the request.
Reports to Shareholders
Within 60 days after each fiscal quarter, we will distribute our quarterly report on Form
and on the SEC’s website at .
10-Q
to all shareholders of record. In addition, we will distribute our annual report on Form 10-K
to all shareholders within 120 days after the end of each calendar year, which must contain, among other things, a breakdown of the expenses reimbursed by us to the Adviser. These reports will also be available on our website at www.hlend.com
www.sec.gov
Subject to availability, you may authorize us to provide prospectuses, prospectus supplements, annual reports and other information, or documents, electronically by so indicating on your subscription agreement, or by sending us instructions in writing in a form acceptable to us to receive such documents electronically. Unless you elect in writing to receive documents electronically, all documents will be provided in paper form by mail. You must have internet access to use electronic delivery. While we impose no additional charge for this service, there may be potential costs associated with electronic delivery, such as online charges. If our
e-mail
notification is returned to us as “undeliverable,” we will contact you to obtain your updated e-mail
address. If we are unable to obtain a valid e-mail
address for you, we will resume sending a paper copy by regular U.S. mail to your address of record. You may revoke your consent for electronic delivery at any time and we will resume sending you a paper copy of all required documents. However, in order for us to be properly notified, your revocation must be given to us a reasonable time before electronic delivery has commenced. We will provide you with paper copies at any time upon request. Such request will not constitute revocation of your consent to receive required documents electronically. If you invest in our shares through a financial advisor or a financial intermediary, such as a broker-dealer, and such advisor or intermediary delivers all or a portion of the reports above, any election with respect to delivery you have made with such financial advisor or intermediary will govern how you receive such reports. Conflict with the 1940 Act
Our Declaration of Trust provides that, if and to the extent that any provision of Delaware law, or any provision of our Declaration of Trust conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will co
ntrol.
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DETERMINATION OF NET ASSET VALUE
We expect to determine our NAV for each class of shares each month as of the last day of each calendar month. The NAV per share for each class of shares is determined by dividing the value of total assets attributable to the class minus the carrying value of liabilities attributable to the class by the total number of Common Shares outstanding of the class at the date as of which the determination is made.
We conduct the valuation of our investments, upon which our NAV is based, at all times consistent with GAAP and the 1940 Act. We value our investments in accordance with ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices or values derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.
Investments that are listed or traded on an exchange and are freely transferrable are valued at either the closing price (in the case of securities and futures) or the mean of the closing bid and offer (in the case of options) on the principal exchange on which the investment is listed or traded. Investments for which other market quotations are readily available will typically be valued at those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Where it is possible to obtain reliable, independent market quotations from a third party vendor, we use these quotations to determine the value of our investments. We utilize ,
mid-market
pricing (i.e.
mid-point
of average bid and ask prices) to value these investments. The Adviser obtains these market quotations from independent pricing services, if available; otherwise from one or more broker quotes. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment. Where prices or inputs are not available, or, in the judgment of the Adviser, not reliable, valuation approaches based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available, as will be the case for a substantial portion of our investments, are valued at fair value as determined in good faith by the Adviser as our valuation designee under Rule
2a-5
under the 1940 Act, pursuant to our valuation policy, and under the oversight of the Board, based on, among other things, the input of one or more independent valuation firms retained by us to review our investments. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity. With respect to the quarterly valuation of investments, we undertake a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available as of the last calendar day of each quarter, which includes, among other procedures, the following:
| • | The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in consultation with the Adviser’s investment professionals responsible for each portfolio investment; |
| • | In addition, independent valuation firms retained by us prepare quarter-end valuations of each such investment that was (i) originated or purchased prior to the first calendar day of the quarter and (ii) is not a de minimis investment, as determined by the Adviser. The independent valuation firms provide a final range of values on such investments to the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations; |
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| • | The Adviser’s valuation committee with respect to the Fund (the “Valuation Committee”) reviews the valuation recommendations prepared by the Adviser’s valuation team and, as appropriate, the independent valuation firms’ valuation ranges; |
| • | The Adviser’s Valuation Committee then determines fair value marks for each of our portfolio investments; and |
| • | The Board and Audit Committee periodically review the valuation process and provide oversight in accordance with the requirements of Rule 2a-5 under the 1940 Act. |
When we determine our NAV as of the last day of a month that is not also the last day of a calendar quarter, the Adviser’s valuation team will prepare preliminary fair value estimates for each investment consistent with the methodologies set forth in the valuation policy. If an individual asset for which reliable market quotations are not readily available is known by the Adviser’s valuation team to have experienced a significant observable event since the most recent quarter end, an independent valuation firm may from be asked by the Adviser’s valuation team to provide an independent fair value range for such asset. The independent valuation firm will provide a final range of values for each such investment to the Adviser’s Valuation Committee, along with analyses to support its valuation methodology and calculations.
time-to-time
As part of the valuation process, we take into account relevant factors in determining the fair value of our investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant, of: (i) the estimated enterprise value of a portfolio company, generally based on an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, and (v) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
We have and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and we and the Adviser may reasonably rely on that assistance. However, the Adviser is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to our valuation policy, the Board’s oversight and a consistently applied valuation process.
Our most recently determined NAV per share for each class of shares will be available on our website: . We report our NAV per share as of the last day of each month on our website within 20 business days of the last day of each month.
www.hlend.com
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PLAN OF DISTRIBUTION
General
We are offering a maximum of $15,000,000,000 in Common Shares on a “best efforts” basis through HPS Securities, LLC, the Managing Dealer, a registered broker-dealer, and have sold approximately $6,603,000,000 in Common Shares as of May 1, 2024. Because this is a “best efforts” offering, the Managing Dealer must only use its best efforts to sell the shares, which means that no underwriter, broker or other person will be obligated to purchase any shares. The Managing Dealer is an affiliate of the Adviser and is headquartered at 40 West 57th Street, 33rd Floor, New York, NY 10019.
The shares are being offered on a “best efforts” basis, which means generally that the Managing Dealer is required to use only its best efforts to sell the shares and it has no firm commitment or obligation to purchase any of the shares. The Fund intends that the Common Shares offered pursuant to this prospectus will not be listed on any national securities exchange, and neither the Managing Dealer nor the participating brokers intend to act as market-makers with respect to our Common Shares. Because no public market is expected for the shares, shareholders will likely have limited ability to sell their shares until there is a liquidity event for the Fund.
We are offering to the public four classes of Common Shares: Class S shares, Class D shares, Class I shares and Class F shares. We are offering to sell any combination of share classes with a dollar value up to the maximum offering amount. All investors must meet the suitability standards discussed in the section of this prospectus entitled “Suitability Standards.” The share classes have different ongoing shareholder servicing and/or distribution fees.
Class S shares are available through brokerage and transactional-based accounts. Class D shares are generally available for purchase in this offering only (1) through
fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class D shares, (2) through participating brokers that have alternative fee arrangements with their clients to provide access to Class D shares, (3) through transaction/brokerage platforms at participating brokers, (4) through certain registered investment advisers, (5) through bank trust departments or any other organization or person authorized to act in a fiduciary capacity for its clients or customers or (6) other categories of investors that we name in an amendment or supplement to this prospectus. Class F shares are generally available for purchase in this offering only through the Founding Distributor. In this context, Class F Shares can be purchased (1) through fee-based
programs, also known as wrap accounts, sponsored by the Founding Distributor, (2) in instances where the Founding Distributor has alternative fee arrangements with its clients to provide access to Class F shares, (3) through transaction/brokerage platforms at the Founding Distributor, or (4) by other categories of investors that we name in an amendment or supplement to this prospectus. Class I shares are generally available for purchase in this offering only (1) through fee-based
programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class I shares, (2) by endowments, foundations, pension funds and other institutional investors, (3) through participating brokers that have alternative fee arrangements with their clients to provide access to Class I shares, (4) through transaction/brokerage platforms at participating brokers, (5) by our executive officers and Trustees and their immediate family members, as well as officers and employees of the Adviser or other affiliates and their immediate family members, and, if approved by our Board, joint venture partners, consultants and other service providers, or (6) by other categories of investors that we name in an amendment or supplement to this prospectus. In certain cases, where a holder of Class S, Class D or Class F shares exits a relationship with a participating broker for this offering and does not enter into a new relationship with a participating broker for this offering, such holder’s shares may be exchanged into an equivalent NAV amount of Class I shares. We may also offer Class I shares to certain feeder vehicles primarily created to hold our Class I shares, which in turn offer interests in themselves to investors; we expect to conduct such offerings pursuant to exceptions to registration under the Securities Act and not as a part of this offering. Such feeder vehicles may have additional costs and expenses, which would be disclosed in connection with the offering of their interests. We may also offer Class I shares to other investment vehicles. Without limiting the foregoing, the Managing Dealer waives or reduces to $10,000 or less Class I investment minimums for purchases:
(1) through fee-based programs,
also known as wrap accounts, sponsored 218
by participating brokers or other intermediaries that provide access to Class I shares, (2) through participating brokers that have alternative fee arrangements with their clients to provide access to Class I shares, (3) through transaction/brokerage platforms at participating brokers, (4) by our executive officers and Trustees and their immediate family members, as well as officers and employees of the Adviser or other affiliates and their immediate family members, and, if approved by our Board, joint venture partners, consultants and other service providers, and (5) by other categories of investors that we name in an amendment or supplement to this prospectus. The foregoing categories of investors who are granted waivers or reductions by the Managing Dealer from the Class I investment minimums include investors described in the foregoing sentence who make purchases for eligible retirement plans and IRAs. Waivers and reductions are subject to the terms and conditions of agreements that the Managing Dealer enters into with participating intermediaries, as applicable.
If you are eligible to purchase all four classes of shares, you should be aware that Class I shares have no shareholder servicing or distribution fees, which will reduce the NAV or distributions of the other share classes. However, Class I shares do not receive shareholder services. Before making your investment decision, please consult with your investment adviser regarding your account type and the classes of Common Shares you may be eligible to purchase. Neither the Managing Dealer nor its affiliates will directly or indirectly compensate any person engaged as an investment advisor or bank trust department by a potential investor as an inducement for such investment advisor or bank trust department to advise favorably for an investment in us.
The number of shares we have registered pursuant to the registration statement of which this prospectus forms a part is the number that we reasonably expect to be offered and sold within two years from the initial effective date of the registration statement. Under applicable SEC rules, we may extend this offering one additional year if all of the shares we have registered are not yet sold within two years. With the filing of a registration statement for a subsequent offering, we may also be able to extend this offering beyond three years until the
follow-on
registration statement is declared effective. Pursuant to this prospectus, we are offering to the public all of the shares that we have registered. Although we have registered a fixed dollar amount of our shares, we intend effectively to conduct a continuous offering of an unlimited number of Common Shares over an unlimited time period by filing a new registration statement prior to the end of the three-year period described in Rule 415. In such a circumstance, the issuer may also choose to enlarge the continuous offering by including on such new registration statement a further amount of securities, in addition to any unsold securities covered by the earlier registration statement. This offering must be registered in every state in which we offer or sell shares. Generally, such registrations are for a period of one year. Thus, we may have to stop selling shares in any state in which our registration is not renewed or otherwise extended annually. We reserve the right to terminate this offering at any time and to extend our offering term to the extent permissible under applicable law. In addition to the Managing Dealer, the Founding Distributor also participated in the initial public offering (SEC File on behalf of certain of its “associated persons,” as defined by FINRA. However, such associated persons purchased shares at the same public offering prices per share as those of other shareholders that are not “associated persons” of the Founding Distributor that purchased shares in the same share class and on the same subscription date. Therefore, the acquisition of such shares is not deemed “underwriting compensation” as defined in Supplemental Material 0.01 of FINRA Rule 5110.
No. 333-259453;
FINRA Filing ID 2021-08-04-5861739)
Purchase Price
Shares will be sold at the then-current NAV per share, as described in “Determination of Net Asset Value.” Each class of shares may have a different NAV per share because shareholder servicing and/or distribution fees differ with respect to each class.
Underwriting Compensation
We entered into a Managing Dealer Agreement with the Managing Dealer, pursuant to which the Managing Dealer agreed to, among other things, manage our relationships with third-party brokers engaged by the
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Managing Dealer to participate in the distribution of Common Shares, which we refer to as “participating brokers,” and financial advisors. The Managing Dealer also coordinates our marketing and distribution efforts with participating brokers and their registered representatives with respect to communications related to the terms of the offering, our investment strategies, material aspects of our operations and subscription procedures.
As set forth in and pursuant to the Managing Dealer Agreement, we will pay the Managing Dealer only shareholder servicing and/or distribution fees with respect to Class S shares, Class D and Class F shares. We will not pay any other fees to the Managing Dealer or referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of our shares. The terms and arrangements of all underwriting compensation paid in connection with the Fund’s offering will comply with FINRA Rule 5110(g)(4).
Upfront Sales Loads
Class
S, Class
D, Class
I and Class
F Shares.
Shareholder Servicing and/or Distribution Fees—Class S, Class D and Class F
The following table shows the shareholder servicing and/or distribution fees we pay the Managing Dealer with respect to the Class S, Class D, Class I and Class F on an annualized basis as a percentage of our NAV for such class.
| Shareholder Servicing and/or Distribution Fee as a % of NAV |
||||
Class S shares |
0.85 | % | ||
Class D shares |
0.25 | % | ||
Class I shares |
— | |||
Class F shares |
0.50 | % | ||
The shareholder servicing and/or distribution fees are paid monthly in arrears, calculated using the NAV of the applicable class as of the beginning of the first calendar day of the month and subject to FINRA and other limitations on underwriting compensation described in “ —Limitations on Underwriting Compensation” below.
The Managing Dealer will reallow (pay) all or a portion of the shareholder servicing and/or distribution fees to participating brokers and servicing brokers for ongoing shareholder services performed by such brokers, and will waive shareholder servicing and/or distribution fees to the extent a broker is not eligible to receive it for failure to provide such services. Because the shareholder servicing and/or distribution fees with respect to Class S shares, Class D shares and Class F shares are calculated based on the aggregate NAV for all of the outstanding shares of each such class, it reduces the NAV with respect to all shares of each such class, including shares issued under our distribution reinvestment plan.
Eligibility to receive the shareholder servicing and/or distribution fee is conditioned on a broker providing the following ongoing services with respect to the Class S, Class D or Class F shares: assistance with recordkeeping, answering investor inquiries regarding us, including regarding distribution payments and reinvestments, helping investors understand their investments upon their request, and assistance with share repurchase requests. If the applicable broker is not eligible to receive the shareholder servicing and/or
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distribution fee due to failure to provide these services, the Managing Dealer will waive the shareholder servicing fee and/or distribution that broker would have otherwise been eligible to receive. The shareholder servicing and/or distribution fees are ongoing fees that are not paid at the time of purchase.
Other Compensation
We or the Adviser may also pay directly, or reimburse the Managing Dealer if the Managing Dealer pays on our behalf, any organization and offering expenses (other than any upfront selling commissions and shareholder servicing and/or distribution fees).
Limitations on Underwriting Compensation
We will cease paying the shareholder servicing and/or distribution fee on the Class S shares, Class D shares and Class F shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of our assets or (iii) the date following the completion of the primary portion of this offering on which, in the aggregate, underwriting compensation from all sources in connection with this offering, including the shareholder servicing and/or distribution fee and other underwriting compensation, is equal to 10% of the gross proceeds from our primary offering.
In addition, as required by exemptive relief that allows us to offer multiple classes of shares, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer and the applicable selling agent), we will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class S shares, Class D shares and Class F shares in such shareholder’s account. We may modify this requirement if permitted by applicable exemptive relief. At the end of such month, the applicable Class S shares, Class D shares or Class F shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class S, Class D or Class F shares.
This offering is being made in compliance with FINRA Rule 2310. Under the rules of FINRA, all items of underwriting compensation, including any upfront selling commissions, Managing Dealer fees, reimbursement fees for bona fide due diligence expenses, training and education expenses,
non-transaction
based compensation paid to registered persons associated with the Managing Dealer in connection with the wholesaling of our offering and all other forms of underwriting compensation, will not exceed 10% of the gross offering proceeds (excluding shares purchased through our distribution reinvestment plan). Term of the Managing Dealer Agreement
Either party may terminate the Managing Dealer Agreement upon 60 days’ written notice to the other party or immediately upon notice to the other party in the event such other party failed to comply with a material provision of the Managing Dealer Agreement. Our obligations under the Managing Dealer Agreement to pay the shareholder servicing and/or distribution fees with respect to the Class S, Class D shares and Class F shares distributed in this offering as described therein shall survive termination of the agreement until such shares are no longer outstanding (including such shares that have been converted into Class I shares, as described above).
Indemnification
To the extent permitted by law and our Declaration of Trust, we will indemnify the participating brokers and the Managing Dealer against some civil liabilities, including certain liabilities under the Securities Act, and
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liabilities arising from an untrue statement of material fact contained in, or omission to state a material fact in, this prospectus or the registration statement of which this prospectus is a part, blue sky applications or approved sales literature.
Supplemental Sales Material
In addition to this prospectus, we will use sales material in connection with the offering of shares, although only when accompanied by or preceded by the delivery of this prospectus. Some or all of the sales material may not be available in certain jurisdictions. This sales material may include information relating to this offering, the past performance of the Adviser and its affiliates, case studies and articles and publications concerning credit markets and direct lending. In addition, the sales material may contain quotes from various publications without obtaining the consent of the author or the publication for use of the quoted material in the sales material.
We are offering shares only by means of this prospectus. Although the information contained in the sales material will not conflict with any of the information contained in this prospectus, the sales material does not purport to be complete and should not be considered as a part of this prospectus or the registration statement of which this prospectus is a part, or as incorporated by reference in this prospectus or the registration statement, or as forming the basis of the offering of the Common Shares.
Share Distribution Channels and Special Discounts
We expect our Managing Dealer to use multiple distribution channels to sell our shares. These channels may charge different brokerage fees for purchases of our shares. Our Managing Dealer is expected to engage participating brokers in connection with the sale of the shares of this offering in accordance with participating broker agreements.
Offering Restrictions
Notice to
Non-U.S.
Investors To the extent you are a citizen of, or domiciled in, a country or jurisdiction outside of the United States, please consult with your advisors before purchasing or disposing of Common Shares.
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HOW TO SUBSCRIBE
You may buy or request that we repurchase Common Shares through your financial advisor, a participating broker or other financial intermediary that has a selling agreement with the Managing Dealer. Because an investment in our Common Shares involves many considerations, your financial advisor or other financial intermediary may help you with this decision. Due to the illiquid nature of investments in originated loans, our Common Shares are only suitable as a long-term investment. Because there is no public market for our shares, shareholders may have difficulty selling their shares if we choose to repurchase only some, or even none, of the shares in a particular quarter, or if our Board modifies, suspends or terminates the share repurchase program.
Investors who meet the suitability standards described herein may purchase Common Shares. See “Suitability Standards” in this prospectus. Investors seeking to purchase Common Shares must proceed as follows:
| • | Read this entire prospectus and any appendices and supplements accompanying this prospectus. |
| • | Complete the execution copy of the subscription agreement. A specimen copy of the subscription agreement, including instructions for completing it, is included in this prospectus as Appendix A. Subscription agreements may be executed manually or by electronic signature except where the use of such electronic signature has not been approved by the Managing Dealer. Should you execute the subscription agreement electronically, your electronic signature, whether digital or encrypted, included in the subscription agreement is intended to authenticate the subscription agreement and to have the same force and effect as a manual signature. |
| • | Deliver a check, submit a wire transfer, instruct your broker to make payment from your brokerage account or otherwise deliver funds for the full purchase price of the Common Shares being subscribed for along with the completed subscription agreement to the participating broker. Checks should be made payable, or wire transfers directed, to “HPS Corporate Lending Fund.” For Class S, Class D and Class F shares, after you have satisfied the applicable minimum purchase requirement of $2,500, additional purchases must be in increments of $500. For Class I shares, after you have satisfied the applicable minimum purchase requirement of $10,000 or $1,000,000, additional purchases must be in increments of $500, unless such minimums are waived by the Managing Dealer. The minimum subsequent investment does not apply to purchases made under our distribution reinvestment plan. |
| • | By executing the subscription agreement and paying the total purchase price for the Common Shares subscribed for, each investor attests that he or she meets the suitability standards as stated in the subscription agreement and agrees to be bound by all of its terms. Certain participating brokers may require additional documentation. |
A sale of the shares to a subscriber may not be completed until at least five business days after the subscriber receives our final prospectus. Subscriptions to purchase our Common Shares may be made on an ongoing basis, but investors may only purchase our Common Shares pursuant to accepted subscription orders as of the first day of each month (based on the NAV per share as determined as of the previous day, being the last day of the preceding month), and to be accepted, a subscription request must be made with a completed and executed subscription agreement in good order, including satisfying any additional requirements imposed by the subscriber’s broker, and payment of the full purchase price of our Common Shares being subscribed at least five business days prior to the first day of the month (unless waived by the Managing Dealer).
For example, if you wish to subscribe for Common Shares on November 1, your subscription request must be received in good order at least five business days before November 1. Notice of each share transaction will be furnished to shareholders (or their financial representatives) as soon as practicable but not later than seven business days after the Fund’s NAV as of October 31 is determined and credited to the shareholder’s account, together with information relevant for personal and tax records. While a shareholder will not know our NAV applicable on the effective date of the share purchase, our NAV applicable to a purchase of shares will be available generally within 20 business days after the effective date of the share purchase; at that time, the number
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of shares based on that NAV and each shareholder’s purchase will be determined and shares will be credited to the shareholder’s account as of the effective date of the share purchase. In this example, if accepted, your subscription would be effective on the first calendar day of November.
If for any reason we reject the subscription, or if the subscription request is canceled before it is accepted or withdrawn as described below, we will return the subscription agreement and the related funds, without interest or deduction, within ten business days after such rejection, cancellation or withdrawal.
Common Shares purchased by a fiduciary or custodial account will be registered in the name of the fiduciary account and not in the name of the beneficiary. If you place an order to buy shares and your payment is not received and collected, your purchase may be canceled and you could be liable for any losses or fees we have incurred.
You have the option of placing a transfer on death (TOD), designation on your shares purchased in this offering. A TOD designation transfers the ownership of the shares to your designated beneficiary upon your death. This designation may only be made by individuals, not entities, who are the sole or joint owners with right to survivorship of the shares. If you would like to place a TOD designation on your shares, you must check the TOD box on the subscription agreement and you must complete and return a TOD form, which you may obtain from your financial advisor, in order to effect the designation.
Purchase Price
Shares will be sold at the then-current NAV per share, as described in “Determination of Net Asset Value.” Each class of shares may have a different NAV per share because shareholder servicing and/or distribution fees differ with respect to each class.
If you participate in our distribution reinvestment plan, the cash distributions attributable to the class of shares that you purchase in our primary offering will be automatically invested in additional shares of the same class. The purchase price for shares purchased under our distribution reinvestment plan will be equal to the most recent available NAV per share for such shares at the time the distribution is payable.
We will generally adhere to the following procedures relating to purchases of Common Shares in this continuous offering:
| • | On each business day, our transfer agent will collect purchase orders. Notwithstanding the submission of an initial purchase order, we can reject purchase orders for any reason, even if a prospective investor meets the minimum suitability requirements outlined in our prospectus. Investors may only purchase our Common Shares pursuant to accepted subscription orders as of the first day of each month (based on the NAV per share as determined as of the previous day, being the last day of the preceding month), and to be accepted, a subscription request must be made with a completed and executed subscription agreement in good order and payment of the full purchase price of our Common Shares being subscribed at least five business days prior to the first day of the month. If a purchase order is received less than five business days prior to the first day of the month, unless waived by the Managing Dealer, the purchase order will be executed in the next month’s closing at the transaction price applicable to that month. As a result of this process, the price per share at which your order is executed may be different than the price per share for the month in which you submitted your purchase order. |
| • | Generally, within 20 business days after the first calendar day of each month, we will determine our NAV per share for each share class as of the last calendar day of the immediately preceding month, which will be the purchase price for shares purchased with that effective date. |
| • | Completed subscription requests will not be accepted by us before two business days before the first calendar day of each month. |
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| • | Subscribers are not committed to purchase shares at the time their subscription orders are submitted and any subscription may be canceled at any time before the time it has been accepted as described in the previous sentence. You may withdraw your purchase request by notifying the transfer agent, through your financial intermediary or directly on our toll-free, automated telephone line, 1-888-484-1944. |
| • | You will receive a confirmation statement of each new transaction in your account from us or your financial advisor, participating broker or financial intermediary as soon as practicable but generally not later than seven business days after the shareholder transactions are settled when the applicable NAV per share is determined. |
Our NAV may vary significantly from one month to the next. Through our website at , you will have information about the most recently available NAV per share.
www.hlend.com
In contrast to securities traded on an exchange or where the price often fluctuates as a result of, among other things, the supply and demand of securities in the trading market, our NAV is calculated once monthly using our valuation methodology, and the price at which we sell new shares and repurchase outstanding shares will not change depending on the level of demand by investors or the volume of requests for repurchases.
over-the-counter,
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SHARE REPURCHASE PROGRAM
We do not intend to list our shares on a securities exchange and we do not expect there to be a public market for our shares. As a result, if you purchase our Common Shares, your ability to sell your shares will be limited.
We have commenced a share repurchase program in which we intend to repurchase, in each quarter, up to 5% of our Common Shares outstanding (by number of shares) as of the close of the previous calendar quarter. Our Board may amend, suspend or terminate the share repurchase program if it deems such action to be in our best interest and the best interest of our shareholders. As a result, share repurchases may not be available each quarter. Upon a suspension of our share repurchase program, our Board will consider at least quarterly whether the continued suspension of our share repurchase program remains in our best interest and the best interest of our shareholders. However, our Board is not required to authorize the recommencement of our share repurchase program within any specified period of time. Our Board may also determine to terminate our share repurchase program if required by applicable law or in connection with a transaction in which our shareholders receive liquidity for their Common Shares, such as a sale or merger of the Fund or listing of our Common Shares on a national securities exchange.
Under our share repurchase program, to the extent we offer to repurchase shares in any particular quarter, we expect to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The
one-year
holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at our discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by the Fund for the benefit of remaining shareholders. We intend to conduct the repurchase offers in accordance with the requirements of Rule 13e-4
promulgated under the Exchange Act and the 1940 Act. You may tender all of the Common Shares that you own. There is no repurchase priority for a shareholder under the circumstances of death or disability of such shareholder.
In the event the amount of shares tendered exceeds the repurchase offer amount, shares will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted in the next quarterly tender offer, or upon the recommencement of the share repurchase program, as applicable. We will have no obligation to repurchase shares, including if the repurchase would violate the restrictions on distributions under federal law or Delaware law. The limitations and restrictions described above may prevent us from accommodating all repurchase requests made in any quarter. Our share repurchase program has many limitations, including the limitations described above, and should not in any way be viewed as the equivalent of a secondary market.
We will offer to repurchase shares on such terms as may be determined by our Board in its complete and absolute discretion unless, in the judgment of our Independent Trustees, such repurchases would not be in the best interests of our shareholders or would violate applicable law. There is no assurance that our board will exercise its discretion to offer to repurchase shares or that there will be sufficient funds available to accommodate all of our shareholders’ requests for repurchase. As a result, we may repurchase less than the full amount of shares that you request to have repurchased. If we do not repurchase the full amount of your shares that you have requested to be repurchased, or we determine not to make repurchases of our shares, you will likely not be able to dispose of your shares, even if we under-perform. Any periodic repurchase offers will be subject in part to our available cash and compliance with the RIC qualification and diversification rules and the 1940 Act. Shareholders will not pay a fee to us in connection with our repurchase of shares under the share repurchase program.
The Fund will repurchase shares from shareholders pursuant to written tenders on terms and conditions that the Board determines to be fair to the Fund and to all shareholders. When the Board determines that the Fund will
226
repurchase shares, notice will be provided to shareholders describing the terms of the offer, containing information shareholders should consider in deciding whether to participate in the repurchase opportunity and containing information on how to participate. Shareholders deciding whether to tender their shares during the period that a repurchase offer is open may obtain the Fund’s most recent NAV per share on our website at:
. However, our repurchase offers will generally use the NAV on or around the last business day of a calendar quarter, which will not be available until after the expiration of the applicable tender offer, so you will not know the exact price of shares in the tender offer when you make your decision whether to tender your shares.
www.hlend.com
Repurchases of shares from shareholders by the Fund will be paid in cash promptly after the determination of the relevant NAV per share is finalized. Repurchases will be effective after receipt and acceptance by the Fund of eligible written tenders of shares from shareholders by the applicable repurchase offer deadline. The Fund does not impose any charges in connection with repurchases of shares. All shares purchased by us pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares.
Repurchase of HPS’s shares by the Fund will be on terms no more favorable than, and with the same limitations as, those applicable to shareholders under the share repurchase program described herein. Most of our assets consist of instruments that cannot generally be readily liquidated without impacting our ability to realize full value upon their disposition. Therefore, we may not always have sufficient liquid resources to make repurchase offers. In order to provide liquidity for share repurchases, we intend to generally maintain under normal circumstances an allocation to broadly syndicated loans and other liquid investments. We may fund repurchase requests from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and we have no limits on the amounts we may pay from such sources. Should making repurchase offers, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us as a whole, or should we otherwise determine that investing our liquid assets in originated loans or other illiquid investments rather than repurchasing our shares is in the best interests of the Fund as a whole, then we may choose to offer to repurchase fewer shares than described above, or none at all.
If during any consecutive four-quarter period (each, an “LTM Repurchase Period”), we do not have at least one quarter in which we fully accept all properly submitted tenders in a repurchase offer, the Adviser intends to recommend that our Board approve a plan pursuant to which we will not make any new investments (excluding investment in any transactions for which there are binding written agreements (including investments funded in phases),
follow-on
investments made in existing portfolio companies, revolver or letter of credit drawdowns and obligations under any existing Fund guarantee and except as necessary for the Fund to (i) preserve its status as a RIC under the Code and as a BDC, (ii) repay indebtedness to allow for distributions or (iii) comply with applicable law) and will use all “capital available for investing” to accept properly submitted tenders until such time that all properly submitted tenders in a repurchase offer in respect of one quarter during an LTM Repurchase Period have been fully accepted; provided that the Adviser is not required to make such recommendations to the Board if the Fund has, accepted repurchase offers for at least (i) 5% of the aggregate shares outstanding (either by number of shares or aggregate NAV) during each of the four quarters in such LTM Repurchase Period or (ii) 20% of the aggregate shares outstanding (either by number of shares or aggregate NAV) on a cumulative basis during such LTM Repurchase Period, provided that the cumulative percentage will be calculated by summing the percentage of each such quarter’s repurchases as measured against the aggregate number of shares or NAV for the applicable quarter in which the repurchases occurred. For these purposes, “capital available for investing” will be determined based on the amount of cash on hand, less (i) Fund expenses, including, without limitation, management fees, (ii) amounts that may become due under any borrowing or other financings or similar obligations, (iii) amounts needed to meet current or anticipated debt covenants, (iv) amounts consistent with historical working capital requirements, and (v) obligations imposed by (x) law, including the requirement under the Omnibus Guidelines that we not impair our capital or operations, (y) courts, or (z) arbitration or indemnity obligations. The purpose of this
227
recommendation would be to allow the Fund to satisfy as many properly submitted tender requests as possible and we expect that during this time, we and our Board would also consider additional ways to improve shareholder liquidity.
If, during any LTM Repurchase Period, we do not have at least one quarter in which we fully accept all properly submitted tenders in a repurchase offer, the investment adviser will defer its incentive fee until all properly submitted tenders in any one repurchase offer have been accepted, after which such deferred incentive fee will become payable and no further incentive fee amounts will be required to be deferred; provided that the investment adviser is not required to defer its incentive fee if the Fund has, accepted repurchase offers for at least (i) 5% of the aggregate shares outstanding (either by number of shares or aggregate NAV) during each of the four quarters in such LTM Repurchase Period or (ii) 20% of the aggregate shares outstanding (either by number of shares or aggregate NAV) on a cumulative basis during such LTM Repurchase Period, provided that the cumulative percentage will be calculated by summing the percentage of each such quarter’s repurchases as measured against the aggregate number of shares or NAV for the applicable quarter in which the repurchases occurred.
In the event that any shareholder fails to maintain the minimum balance of $1,500 of our shares, we may, at the time of such failure or any time subsequent to such failure, repurchase all of the shares held by that shareholder at the repurchase price in effect on the date we determine that the shareholder has failed to meet the minimum balance, less any Early Repurchase Deduction. Minimum account repurchases will apply even in the event that the failure to meet the minimum balance is caused solely by a decline in our NAV. Minimum account repurchases may be subject to the Early Repurchase Deduction.
Payment for repurchased shares may require us to liquidate portfolio holdings earlier than our Adviser would otherwise have caused these holdings to be liquidated, potentially resulting in losses, and may increase our investment-related expenses as a result of higher portfolio turnover rates. Our Adviser intends to take measures, subject to policies as may be established by our Board, to attempt to avoid or minimize potential losses and expenses resulting from the repurchase of shares.
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DISTRIBUTION REINVESTMENT PLAN
We have adopted a distribution reinvestment plan, pursuant to which we will reinvest all cash distributions declared by the Board on behalf of our shareholders who do not elect to receive their distributions in cash as provided below. As a result, if the Board authorizes, and we declare, a cash distribution or other distribution, then our shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional shares as described below, rather than receiving the cash distribution or other distribution. Distributions on fractional shares will be credited to each participating shareholder’s account to three decimal places.
No action is required on the part of a registered shareholder to have his, her or its cash distribution or other distribution reinvested in our shares, except shareholders located in certain states or who are clients of selected participating brokers, as described below. Shareholders who are eligible for default enrollment can elect to “opt out” of the Fund’s distribution reinvestment plan in their subscription agreements. Shareholders located in Alabama, Arkansas, California, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon, Tennessee, Vermont and Washington, as well as those who are clients of certain participating brokers that do not permit automatic enrollment in our distribution reinvestment plan, will automatically receive their distributions in cash unless they elect to participate in our distribution reinvestment plan and have their cash distributions reinvested in additional Common Shares.
If any shareholder initially elects not to participate or is defaulted to
non-participation
by virtue of residing in one the states mentioned above or being a client of a participating broker dealer that does not permit automatic enrollment in distribution reinvestment plans, they may later become a participant by subsequently completing and executing an enrollment form or any distribution authorization form as may be available from the Fund or U.S. Bank Global Fund Services (the “Plan Administrator”). Participation in the distribution reinvestment plan will begin with the next distribution payable after acceptance of a participant’s subscription, enrollment or authorization. Common Shares will be purchased under the distribution reinvestment plan as of the first calendar day of the month following the record date of the distribution. If a shareholder seeks to terminate its participation in the distribution reinvestment plan, notice of termination must be received by the Plan Administrator five business days in advance of the first calendar day of the next month in order for a shareholder’s termination to be effective for such month. Any transfer of shares by a participant to a
non-participant
will terminate participation in the distribution reinvestment plan with respect to the transferred shares. If a participant elects to tender its Common Shares in full, any Common Shares issued to the participant under the Plan subsequent to the expiration of the tender offer will be considered part of the participant’s prior tender, and participant’s participation in the Plan will be terminated as of the valuation date of the applicable tender offer. Any distributions to be paid to such shareholder on or after such date will be paid in cash on the scheduled distribution payment date. If you elect to opt out of the distribution reinvestment plan, you will receive any distributions we declare in cash. There will be no upfront selling commissions or Managing Dealer fees charged to you if you participate in the distribution reinvestment plan. We pay the Plan Administrator fees under the distribution reinvestment plan. If your shares are held by a broker or other financial intermediary, you may change your election by notifying your broker or other financial intermediary of your election.
Any purchases of our shares pursuant to our distribution reinvestment plan are dependent on the continued registration of our securities or the availability of an exemption from registration in the recipient’s home state.
The purchase price for shares purchased under our distribution reinvestment plan will be equal to the most recent available NAV per share for such shares at the time the distribution is payable. Common Shares issued pursuant to our distribution reinvestment plan will have the same voting rights as the Common Shares offered pursuant to this prospectus. Shareholders will not pay transaction related charges when purchasing Common
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Shares under our distribution reinvestment plan, but all outstanding Class S, Class D and Class F shares, including those purchased under our distribution reinvestment plan, will be subject to ongoing servicing fees.
See our Distribution Reinvestment Plan, which is filed as an exhibit to our registration statement for this offering, for more information.
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REGULATION
The following discussion is a general summary of the material prohibitions and descriptions governing BDCs generally. It does not purport to be a complete description of all of the laws and regulations affecting BDCs.
Qualifying Assets
Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940 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 any of the following:
(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an Eligible Portfolio Company (as defined below), or from any person who is, or has been during the preceding 13 months, an affiliated person of an Eligible Portfolio Company, or from any other person, subject to such rules as may be prescribed by the SEC. An “Eligible Portfolio Company” is defined in the 1940 Act as any issuer which:
(a) is organized under the laws of, and has its principal place of business in, the United States;
(b) is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and
(c) satisfies any of the following:
| (i) | does not have any class of securities that is traded on a national securities exchange; |
| (ii) | has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million; |
| (iii) | is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the Eligible Portfolio Company; or |
| (iv) | is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million. |
(2) Securities of any Eligible Portfolio Company controlled by us.
(3) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
(4) Securities of an Eligible Portfolio Company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the Eligible Portfolio Company.
(5) Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.
(6) Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
In addition, a BDC must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above.
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Significant Managerial Assistance
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 above. However, in order to count portfolio securities as Qualifying Assets for the purpose of the 70% test, the BDC must either control the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance; except that, where the BDC purchases such securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available significant managerial assistance means, among other things, any arrangement whereby the BDC, through its trustees, officers or employees, offers to provide and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company through monitoring of portfolio company operations, selective participation in board and management meetings, consulting with and advising a portfolio company’s officers or other organizational or financial guidance.
Temporary Investments
Pending investment in other types of Qualifying Assets, as described above, our investments can consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which are referred to herein, collectively, as temporary investments, so that 70% of our assets would be Qualifying Assets.
Warrants
Under the 1940 Act, a BDC is subject to restrictions on the issuance, terms and amount of warrants, options or rights to purchase shares that it may have outstanding at any time. In particular, the amount of shares that would result from the conversion or exercise of all outstanding warrants, options or rights to purchase shares cannot exceed 25% of the BDC’s total outstanding shares.
Leverage and Senior Securities; Coverage Ratio
We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of shares senior to our Common Shares if our asset coverage, as defined in the 1940 Act, would at least equal 150% immediately after each such issuance. On August 30, 2021, our sole shareholder approved the adoption of this 150% threshold pursuant to Section 61(a)(2) of the 1940 Act and such election became effective the following day. As defined in the 1940 Act, asset coverage of 150% means that for every $100 of net assets we hold, we may raise $200 from borrowing and issuing senior securities. In addition, while any senior securities remain outstanding, we will be required to make provisions to prohibit any distribution to our shareholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We are also permitted to borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes, which borrowings would not be considered senior securities.
We have entered into credit facilities, unsecured notes, and other financing arrangements to facilitate our investment objectives. Such credit facilities typically bear interest at floating rates spreads over SOFR or other applicable reference rates. Shareholders bear the costs associated with any borrowings under our financing arrangements. In connection with a credit facility or other borrowings, lenders may require us to pledge assets, commitments and/or drawdowns (and the ability to enforce the payment thereof) and may ask to comply with positive or negative covenants that could have an effect on our operations. In addition, from time to time, our losses on leveraged investments may result in the liquidation of other investments held by us and may result in additional drawdowns to repay such amounts.
We may enter into a total return swap agreement. A TRS is a contract in which one party agrees to make periodic payments to another party based on the change in the market value of the assets underlying the TRS, which may include a specified security, basket of securities or securities indices during a specified period, in
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return for periodic payments based on a fixed or variable interest rate. A TRS effectively adds leverage to a portfolio by providing investment exposure to a security or market without owning or taking physical custody of such security or investing directly in such market. Because of the unique structure of a TRS, a TRS often offers lower financing costs than are offered through more traditional borrowing arrangements. We would typically have to post collateral to cover this potential obligation.
We have created, and may in the future also create, leverage by securitizing our assets (including in CLOs) and retaining the equity portion of, and/or the subordinated notes issued by, the securitized vehicle. We may also from time to time make secured loans of our marginable securities to brokers, dealers and other financial institutions.
Code of Ethics
We and the Adviser have adopted a code of ethics pursuant to Rule
17j-1
under the 1940 Act and Rule 204A-1
under the Advisers Act, respectively, that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to the code are permitted to 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. You may read and copy this code of ethics at the SEC’s Public Reference Room in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090.
You may also obtain copies of the codes of ethics, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549. Affiliated Transactions
We may be prohibited under the 1940 Act from conducting certain transactions with our affiliates without the prior approval of our Trustees who are not interested persons and, in some cases, the prior approval of the SEC. We and the Adviser have received an exemptive order from the SEC that permits us, among other things, to
co-invest
with certain other persons, including certain affiliates of the Adviser and certain funds and accounts managed and controlled by the Adviser and its affiliates, subject to certain terms and conditions. Proxy Voting Policies and Procedures
We have delegated our proxy voting responsibility to the Adviser. The Proxy Voting Policies and Procedures of the Adviser are set forth below. The guidelines will be reviewed periodically by the Adviser, and, accordingly, are subject to change.
As an investment adviser registered under the Advisers Act, the Adviser has a duty to monitor corporate events and to vote proxies, as well as a duty to cast votes in the best interest of clients and not subrogate client interests to its own interests. Rule
206(4)-6
under the Advisers Act places specific requirements on registered investment advisers with proxy voting authority. Proxy Policies
The Adviser’s policies and procedures are reasonably designed to ensure that the Adviser votes proxies in our best interest and addresses how it will resolve any conflict of interest that may arise when voting proxies and, in so doing, to maximize the value of the investments made by us, taking into consideration our investment horizons and other relevant factors. It will review on a basis each proposal submitted for a shareholder vote to determine its impact on the portfolio securities held by its clients. Although the Adviser will generally vote against proposals that may have a negative impact on its clients’ portfolio securities, it may vote for such a proposal if there exists compelling long-term reasons to do so.
case-by-case
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Decisions on how to vote a proxy generally are made by the Adviser. The Investment Committee and the members of the Investment Team covering the applicable security often have the most intimate knowledge of both a company’s operations and the potential impact of a proxy vote’s outcome. Decisions are based on a number of factors which may vary depending on a proxy’s subject matter, but are guided by the general policies described in the proxy policy. In addition, the Adviser may determine not to vote a proxy after consideration of the vote’s expected benefit to clients and the cost of voting the proxy. To ensure that its vote is not the product of a conflict of interest, the Adviser requires the members of the Investment Committee to disclose any personal conflicts of interest they may have with respect to overseeing our investment in a particular company.
Proxy Voting Records
You may obtain information, without charge, regarding how we voted proxies with respect to our portfolio securities by making a written request for proxy voting information to: Chief Compliance Officer, HPS Advisors, LLC 40 West 57
th
Street, 33rd
Floor New York, NY 10019. Net Worth of Sponsors
The NASAA, in its Omnibus Guidelines, requires that our affiliates and Adviser, or our Sponsor as defined under the Omnibus Guidelines, have an aggregate financial net worth, exclusive of home, automobiles and home furnishings, of the greater of either $100,000, or 5.0% of the first $20 million of both the gross amount of securities currently being offered in this offering and the gross amount of any originally issued direct participation program securities sold by our affiliates and sponsors within the past 12 months, plus 1.0% of all amounts in excess of the first $20 million. Based on these requirements, our Adviser and its affiliates, while not liable directly or indirectly for any indebtedness we may incur, have an aggregate financial net worth in excess of those amounts required by the Omnibus Guidelines.
Other
We will be periodically examined by the SEC for compliance with the 1940 Act, and be subject to the periodic reporting and related requirements of the 1934 Act.
We are also required to provide and maintain a bond issued by a reputable fidelity insurance company to protect against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any trustee or officer against any liability to our shareholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.
We are also required to designate a chief compliance officer and to adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws and to review these policies and procedures annually for their adequacy and the effectiveness of their implementation.
We are not permitted to change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a majority of our outstanding voting securities. A majority of the outstanding voting securities of a company is defined under the 1940 Act as the lesser of: (i) 67% or more of such company’s shares present at a meeting if more than 50% of the outstanding shares of such company are present or represented by proxy, or (ii) more than 50% of the outstanding shares of such company.
Our internet address is
We make available free of charge on our website our annual report on Form
www.hlend.com
.
10-K,
quarterly reports on Form 10-Q,
current reports on Form 8-K,
proxy statement and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 234
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summary of certain U.S. federal income tax considerations applicable to us and the purchase, ownership and disposition of our shares. This discussion does not purport to be complete or to deal with all aspects of U.S. federal income taxation that may be relevant to shareholders in light of their particular circumstances. Unless otherwise noted, this discussion applies only to U.S. shareholders that hold our shares as capital assets. A U.S. shareholder is an individual who is a citizen or resident of the United States, a U.S. corporation, a trust if it (a) is subject to the primary supervision of a court in the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) has made a valid election to be treated as a U.S. person, or any estate the income of which is subject to U.S. federal income tax regardless of its source. If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds our Common Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. This discussion is based upon present provisions of the Code, the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, or differing interpretations (possibly with retroactive effect). This discussion does not represent a detailed description of the U.S. federal income tax consequences relevant to special classes of taxpayers including, without limitation, financial institutions, insurance companies, investors in pass-through entities, U.S. shareholders whose “functional currency” is not the U.S. dollar,
tax-exempt
organizations, dealers in securities or currencies, traders in securities or commodities that elect mark to market treatment, or persons that will hold our shares as a position in a “straddle,” “hedge” or as part of a “constructive sale” for U.S. federal income tax purposes. In addition, this discussion does not address the application of the Medicare tax on net investment income or the U.S. federal alternative minimum tax, or any tax consequences attributable to persons being required to accelerate the recognition of any item of gross income with respect to our shares as a result of such income being recognized on an applicable financial statement. Prospective investors, including a partner in a partnership that will hold Common Shares, should consult their tax advisors with regard to the U.S. federal tax consequences of the purchase, ownership, or disposition of our shares, as well as the tax consequences arising under the laws of any state, foreign country or other taxing jurisdiction. Taxation as a Regulated Investment Company
The Fund has elected to be treated, and intends to qualify each taxable year, as a RIC under Subchapter M of the Code.
To qualify for the favorable tax treatment accorded to RICs under Subchapter M of the Code, the Fund must, among other things: (1) have an election in effect to be treated as a BDC under the 1940 Act at all times during each taxable year; (2) have filed with its return for the taxable year an election to be a RIC or have made such election for a previous taxable year; (3) derive in each taxable year at least 90% of its gross income from (a) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock or securities or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies; and (b) net income derived from an interest in certain publicly-traded partnerships that are treated as partnerships for U.S. federal income tax purposes and that derive less than 90% of their gross income from the items described in (a) above (each, a “Qualified Publicly-Traded Partnership”); and (4) diversify its holdings so that, at the end of each quarter of each taxable year of the Fund (a) at least 50% of the value of the Fund’s total assets is represented by cash and cash items (including receivables), U.S. government securities and securities of other RICs, and other securities for purposes of this calculation limited, in respect of any one issuer to an amount not greater in value than 5% of the value of the Fund’s total assets, and to not more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Fund’s total assets is invested in the securities (other than U.S. government securities or securities of other RICs) of (I) any one issuer, (II) any two or more issuers which the Fund controls and which are determined to be engaged in the same or similar trades or businesses or related trades or businesses or (III) any one or more Qualified Publicly-Traded Partnerships (described in 3(b) above).
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As a RIC, the Fund generally will not be subject to U.S. federal income tax on its investment company taxable income (as that term is defined in the Code, but determined without regard to the deduction for dividends paid) and net capital gain (the excess of net long-term capital gain over net short-term capital loss), if any, that it distributes in each taxable year to its shareholders, provided that it distributes at least 90% of the sum of its investment company taxable income (determined without regard to the deduction for dividends paid) and its net
tax-exempt
income (if any) for such taxable year. Generally, the Fund intends to distribute to its shareholders, at least annually, substantially all of its investment company taxable income and net capital gains, if any. Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% U.S. federal excise tax. To prevent imposition of the excise tax, the Fund must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for the
one-year
period ending October 31 of the calendar year and (iii) any ordinary income and capital gains for previous years that were not distributed during those years. For these purposes, the Fund will be deemed to have distributed any income or gains on which it paid U.S. federal income tax. A distribution will be treated as paid on December 31 of any calendar year if it is declared by the Fund in October, November or December with a record date in such a month and paid by the Fund during January of the following calendar year. Such distributions will be taxable to shareholders in the calendar year in which the distributions are declared, rather than the calendar year in which the distributions are received.
The Fund is authorized to borrow funds and to sell assets in order to satisfy the distribution requirement. However, under the 1940 Act, the Fund is not permitted to make distributions to shareholders while the Fund’s debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. Moreover, the Fund’s ability to dispose of assets to meet the distribution requirement may be limited by (1) the illiquid nature of the Fund’s portfolio and/or (2) other requirements relating to the Fund’s qualification as a RIC, including the diversification requirements. If the Fund disposes of assets in order to meet the distribution requirement or to avoid imposition of the 4% federal excise tax, the Fund may make such dispositions at times that, from an investment standpoint, are not advantageous.
Some of the income and fees that the Fund may recognize, such as fees for providing managerial assistance, certain fees earned with respect to the Fund’s investments, income recognized in a
work-out
or restructuring of a portfolio investment, or income recognized from an equity investment in an operating partnership, may not satisfy the 90% income requirement. In order to manage the risk that such income and fees might disqualify the Fund as a RIC for a failure to satisfy the 90% income requirement, the Fund may be required to recognize such income and fees indirectly through one or more entities treated as corporations for U.S. federal income tax purposes. Such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the Fund’s return on such income and fees. A portfolio company in which the Fund invests may face financial difficulties that require the Fund to
work-out,
modify or otherwise restructure its investment in the portfolio company. Any such transaction could, depending upon the specific terms of the transaction, result in unusable capital losses and future non-cash
income. Any such transaction could also result in the Fund receiving assets that give rise to income that is not qualifying income for purposes of the 90% income requirement, and we may need to hold such assets in a taxable subsidiary and pay federal and state income tax on income related to such assets. A RIC is limited in its ability to deduct expenses in excess of its investment company taxable income. If the Fund’s deductible expenses in a given taxable year exceed the Fund’s investment company taxable income, the Fund may incur a net operating loss for that taxable year. However, a RIC is not permitted to carry forward net operating losses to subsequent taxable years and such net operating losses do not pass through to its shareholders. In addition, deductible expenses can be used only to offset investment company taxable income, not net capital gain. A RIC may not use any net capital losses (that is, the excess of realized capital losses over realized capital gains) to offset its investment company taxable income, but may carry forward such net capital losses, and use
236
them to offset future capital gains, indefinitely. Due to these limits on deductibility of expenses and net capital losses, the Fund may for tax purposes have aggregate taxable income for several taxable years that the Fund is required to distribute and that is taxable to shareholders even if such taxable income is greater than the net income the Fund actually earns during those taxable years. Any underwriting fees paid by the Fund are not deductible.
For federal income tax purposes, the Fund is generally permitted to carry forward a net capital loss in any taxable year to offset its own capital gains, if any. These amounts are available to be carried forward to offset future capital gains to the extent permitted by the Code and applicable tax regulations. Any such loss carryforwards will retain their character as short-term or long-term. In the event that the Fund were to experience an ownership change as defined under the Code, the capital loss carryforwards and other favorable tax attributes of the Fund, if any, may be subject to limitation.
While the Fund generally intends to qualify as a RIC for each taxable year, it is possible that we may not satisfy the diversification requirements described above, and thus may not qualify as a RIC. If the Fund failed to qualify as a RIC or failed to satisfy the 90% distribution requirement in any taxable year, the Fund would be subject to U.S. federal income tax at regular corporate rates on its taxable income, even if such income were distributed to its shareholders, and all distributions out of earnings and profits (including distributions of net capital gain) would be taxed to shareholders as ordinary dividend income. Such distributions generally would be eligible (i) to be treated as “qualified dividend income” in the case of individual and other
non-corporate
shareholders and (ii) for the dividends received deduction in the case of corporate shareholders. In addition, the Fund could be required to recognize unrealized gains, pay taxes and make distributions (which could be subject to interest charges) before requalifying for taxation as a RIC. The remainder of this discussion assumes that the Fund qualifies as a RIC for each taxable year.
Distributions
Distributions to shareholders by the Fund of ordinary income (including “market discount” realized by the Fund on the sale of debt securities), and of net short-term capital gains, if any, realized by the Fund will generally be taxable to U.S. shareholders as ordinary income to the extent such distributions are paid out of the Fund’s current or accumulated earnings and profits. Distributions, if any, of net capital gains properly reported as “capital gain dividends” will be taxable as long-term capital gains, regardless of the length of time the shareholder has owned our shares. A distribution of an amount in excess of the Fund’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be treated by a shareholder as a return of capital which will be applied against and reduce the shareholder’s basis in his or her shares. To the extent that the amount of any such distribution exceeds the shareholder’s basis in his or her shares, the excess will be treated by the shareholder as gain from a sale or exchange of the shares. Distributions paid by the Fund generally will not be eligible for the dividends received deduction allowed to corporations or for the reduced rates applicable to certain qualified dividend income received by
non-corporate
shareholders. Distributions will be treated in the manner described above regardless of whether such distributions are paid in cash or invested in additional shares pursuant to the distribution reinvestment plan. Shareholders receiving distributions in the form of additional shares will generally be treated as receiving a distribution in the amount of the fair market value of the distributed shares. The additional shares received by a shareholder pursuant to the distribution reinvestment plan will have a new holding period commencing on the day following the day on which the shares were credited to the shareholder’s account.
The Fund may elect to retain its net capital gain or a portion thereof for investment and be taxed at corporate rates on the amount retained. In such case, it may designate the retained amount as undistributed capital gains in a notice to its shareholders, who will be treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will (i) be required to report its pro rata share of such gain on its tax return
237
as long-term capital gain, (ii) receive a refundable tax credit for its pro rata share of tax paid by the Fund on the gain and (iii) increase the tax basis for its shares by an amount equal to the deemed distribution less the tax credit.
Certain distributions reported by the Fund as Section 163(j) interest dividends may be treated as interest income by the shareholders for purposes of the tax rules applicable to interest expense limitations under Section 163(j) of the Code. Such treatment by the shareholders is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that the Fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the Fund’s business interest income over the sum of the Fund’s (i) business interest expense and (ii) other deductions properly allocable to its business interest income.
The Internal Revenue Service currently requires that a RIC that has two or more classes of stock allocate to each such class proportionate amounts of each type of its income (such as ordinary income and capital gains) based upon the percentage of total dividends paid to each class for the tax year. Accordingly, if the Fund issues preferred shares, the Fund intends to allocate capital gain dividends, if any, between its Common Shares and preferred shares in proportion to the total dividends paid to each class with respect to such tax year. Shareholders will be notified annually as to the U.S. federal tax status of distributions pursuant to the distribution reinvestment plan.
Sale or Exchange of Common Shares
Upon the sale or other disposition of our shares (except pursuant to a repurchase by the Fund, as described below), a shareholder will generally realize a capital gain or loss in an amount equal to the difference between the amount realized and the shareholder’s adjusted tax basis in the shares sold. Such gain or loss will be long-term or short-term, depending upon the shareholder’s holding period for the shares. Generally, a shareholder’s gain or loss will be a long-term gain or loss if the shares have been held for more than one year. For
non-corporate
taxpayers, long-term capital gains are currently eligible for reduced rates of taxation. No loss will be allowed on the sale or other disposition of shares if the owner acquires (including pursuant to the distribution reinvestment plan) or enters into a contract or option to acquire securities that are substantially identical to such shares within 30 days before or after the disposition. In such a case, the basis of the securities acquired will be adjusted to reflect the disallowed loss. Losses realized by a shareholder on the sale or exchange of shares held for six months or less are treated as long-term capital losses to the extent of any distribution of long-term capital gain received (or amounts designated as undistributed capital gains) with respect to such shares.
From time to time, the Fund may offer to repurchase its outstanding shares. Shareholders who tender all shares of the Fund held, or considered to be held, by them will be treated as having sold their shares and generally will realize a capital gain or loss. If a shareholder tenders fewer than all of its shares or fewer than all shares tendered are repurchased, such shareholder may be treated as having received a taxable dividend upon the tender of its shares. In such a case, there is a risk that
non-tendering
shareholders, and shareholders who tender some but not all of their shares or fewer than all of whose shares are repurchased, in each case whose percentage interests in the Fund increase as a result of such tender, will be treated as having received a taxable distribution from the Fund. The extent of such risk will vary depending upon the particular circumstances of the tender offer, and in particular whether such offer is a single and isolated event or is part of a plan for periodically redeeming shares of the Fund. Legislation requires reporting of adjusted cost basis information for covered securities, which generally include shares of a RIC, to the Internal Revenue Service and to taxpayers. Shareholders should contact their financial intermediaries with respect to reporting of cost basis and available elections for their accounts.
238
Under U.S. Treasury regulations, if a shareholder recognizes a loss with respect to shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the Internal Revenue Service a disclosure statement on Internal Revenue Service Form 8886. Direct owners of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders 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. Shareholders should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances.
Nature of the Fund’s Investments
Certain of the Fund’s hedging and derivatives transactions are subject to special and complex U.S. federal income tax provisions that may, among other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (ii) convert lower-taxed long-term capital gain into higher-taxed short-term capital gain or ordinary income, (iii) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (iv) cause the Fund to recognize income or gain without a corresponding receipt of cash, (v) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (vi) adversely alter the intended characterization of certain complex financial transactions and (vii) produce income that will not be treated as qualifying income for purposes of the 90% gross income test described above.
These rules could therefore affect the character, amount and timing of distributions to shareholders and the Fund’s status as a RIC. The Fund may make certain tax elections, if relevant, in order to mitigate the effect of these provisions.
Below Investment Grade Instruments
The Fund expects to primarily invest in debt securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Investments in these types of instruments may present special tax issues for the Fund. U.S. federal income tax rules are not entirely clear about issues such as when the Fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless instruments, how payments received on obligations in default should be allocated between principal and income and whether exchanges of debt obligations in a bankruptcy or workout context are taxable. These and other issues will be addressed by the Fund, to the extent necessary, to distribute sufficient income to preserve our tax status as a RIC and minimize the extent to which we are subject to U.S. federal income tax.
Original Issue Discount
For federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as
zero-coupon
securities, debt instruments with PIK interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Because any original issue discount will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our shareholders in order to satisfy the annual distribution requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the annual distribution requirement necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may not qualify for or maintain RIC tax treatment and thus may become subject to corporate-level income tax. 239
Market Discount
In general, the Fund will be treated as having acquired a security with market discount if its stated redemption price at maturity (or, in the case of a security issued with original issue discount, its revised issue price) exceeds the Fund’s initial tax basis in the security by more than a statutory de minimis amount. The Fund will be required to treat any principal payments on, or any gain derived from the disposition of, any securities acquired with market discount as ordinary income to the extent of the accrued market discount, unless the Fund makes an election to accrue market discount on a current basis. If this election is not made, all or a portion of any deduction for interest expense incurred to purchase or carry a market discount security may be deferred until the Fund sells or otherwise disposes of such security.
Currency Fluctuations
Under Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates between the time the Fund accrues income or receivables or expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects such income or receivables or pays such liabilities are generally treated as ordinary income or loss. Similarly, gains or losses on foreign currency, foreign currency forward contracts, certain foreign currency options or futures contracts and the disposition of debt securities denominated in foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, are also treated as ordinary income or loss.
Foreign Taxes
The Fund’s investment in
non-U.S. securities
may be subject to non-U.S. withholding
and other taxes. In that case, the Fund’s yield on those securities would be decreased. Shareholders will generally not be entitled to claim a credit or deduction with respect to foreign taxes paid by the Fund. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. Passive Foreign Investment Companies
The Fund may invest in stocks of foreign companies that are classified under the Code as passive foreign investment companies (“PFICs”). In general, a foreign company is classified as a PFIC if at least 50% of its assets constitute investment-type assets or 75% or more of its gross income is investment-type income. In general, under the PFIC rules, an “excess distribution” received with respect to PFIC stock is treated as having been realized ratably over the period during which the Fund held the PFIC stock. The Fund will be subject to tax on the portion, if any, of the excess distribution that is allocated to its holding period in prior taxable years (and an interest factor will be added to the tax, as if the tax had actually been payable in such prior taxable years) even though the Fund distributes the corresponding income to shareholders. Excess distributions include any gain from the sale of PFIC stock as well as certain distributions from a PFIC. All excess distributions are taxable as ordinary income.
The Fund may be eligible to elect alternative tax treatment with respect to PFIC stock. Under such an election, the Fund generally would be required to include in its gross income its share of the earnings of a PFIC on a current basis, regardless of whether any distributions are received from the PFIC. If this election is made, the special rules, discussed above, relating to the taxation of excess distributions, would not apply. Treasury Regulations generally treat income inclusion from a PFIC with respect to which the Fund has made such an election as qualifying income for purposes of the 90% income requirement if (i) there is a current distribution out of the earnings and profits of the PFIC that are attributable to such income inclusion or (ii) such income inclusion is derived with respect to the Fund’s business of investing in stock, securities, or currencies. Alternatively, the Fund may be able to elect to mark to market its PFIC stock, resulting in any unrealized gains at year end being treated as though they were realized and reported as ordinary income. Any losses and any loss from an actual disposition of the PFIC’s shares would be deductible as ordinary losses to the extent of any net gains included in income in prior years with respect to stock in the same PFIC.
mark-to-market
mark-to-market
240
Because the application of the PFIC rules may affect, among other things, the character of gains, the amount of gain or loss and the timing of the recognition of income with respect to PFIC stock, as well as subject the Fund to tax on certain income from PFIC stock, the amount that must be distributed to shareholders, and which will be taxed to shareholders as ordinary income or long-term capital gain, may be increased or decreased substantially as compared to a fund that did not invest in PFIC stock.
Warrants
Gain or loss realized by the Fund from warrants acquired by the Fund 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 the Fund held a particular warrant.
Preferred Shares or Borrowings
If the Fund utilizes leverage through the issuance of preferred shares or borrowings, it may be restricted by certain covenants with respect to the declaration of, and payment of, distributions on shares in certain circumstances. Limits on the Fund’s payments of distributions on shares may prevent the Fund from meeting the distribution requirements described above, and may, therefore, jeopardize the Fund’s qualification for taxation as a RIC and possibly subject the Fund to the 4% excise tax. The Fund endeavors to avoid restrictions on its ability to make distribution payments.
Backup Withholding
The Fund may be required to withhold from all distributions and redemption proceeds payable to U.S. shareholders who fail to provide the Fund with their correct taxpayer identification numbers or to make required certifications, or who have been notified by the Internal Revenue Service that they are subject to backup withholding. Certain shareholders specified in the Code generally are exempt from such backup withholding. This backup withholding is not an additional tax. Any amounts withheld may be refunded or credited against the shareholder’s U.S. federal income tax liability, provided the required information is timely furnished to the Internal Revenue Service.
U.S. Taxation of
Tax-Exempt
U.S. Shareholders A U.S. shareholder that is a
tax-exempt
organization for U.S. federal income tax purposes and therefore generally exempt from U.S. federal income taxation may nevertheless be subject to taxation to the extent that it is considered to derive unrelated business taxable income (“UBTI”). The direct conduct by a tax-exempt
U.S. shareholder of the activities that the Fund proposes to conduct could give rise to UBTI. However, a RIC is a corporation for U.S. federal income tax purposes and its business activities generally will not be attributed to its shareholders for purposes of determining their treatment under current law. Therefore, a tax-exempt
U.S. shareholder should not be subject to U.S. federal income taxation solely as a result of such shareholder’s direct or indirect ownership of the Fund’s equity and receipt of distributions with respect to such equity (regardless of whether we incur indebtedness). Moreover, under current law, if the Fund incurs indebtedness, such indebtedness will not be attributed to a tax-exempt
U.S. shareholder. Therefore, a tax-exempt
U.S. shareholder should not be treated as earning income from “debt-financed property” and distributions the Fund pays should not be treated as “unrelated debt-financed income” solely as a result of indebtedness that the Fund incurs. Certain tax-exempt
private universities are subject to an additional 1.4% excise tax on their “net investment income,” including income from interest, dividends, and capital gains. Proposals periodically are made to change the treatment of “blocker” investment vehicles interposed between tax-exempt
investors and non-qualifying
investments. In the event that any such proposals were to be adopted and applied to RICs, the treatment of dividends payable to tax-exempt
investors could be adversely affected. In addition, special rules would apply if the Fund were to invest in certain real estate mortgage investment conduits or taxable mortgage pools, which the Fund does not currently plan to do, that could result in a tax-exempt
U.S. shareholder recognizing income that would be treated as UBTI. 241
Foreign Shareholders
U.S. taxation of a shareholder who is a nonresident alien individual, a foreign trust or estate or a foreign corporation, as defined for U.S. federal income tax purposes (a “foreign shareholder”), depends on whether the income from the Fund is “effectively connected” with a U.S. trade or business carried on by the shareholder.
As a RIC is a corporation for U.S. federal income tax purposes, its business activities generally will not be attributed to its shareholders for purposes of determining their treatment under current law. Therefore, a foreign shareholder should not be considered to earn income “effectively connected” with a U.S. trade or business solely as a result of activities conducted by the Fund.
If the income from the Fund is not “effectively connected” with a U.S. trade or business carried on by the foreign shareholder, distributions of investment company taxable income will be subject to a U.S. tax of 30% (or lower treaty rate), which tax is generally withheld from such distributions. The portion of distributions considered to be a return of capital for U.S. federal income tax purposes generally will not be subject to tax. However, dividends paid by the Fund that are “interest-related dividends” or “short-term capital gain dividends” will generally be exempt from such withholding, in each case to the extent the Fund properly reports such dividends to shareholders. For these purposes, interest-related dividends and short-term capital gain dividends generally represent distributions of certain interest or short-term capital gains that would not have been subject to U.S. federal withholding tax at the source if received directly by a foreign shareholder, and that satisfy certain other requirements. Interest-related dividends do not include distributions paid in respect of a RIC’s
non-U.S.
source interest income or its dividend income (or any other type of income other than generally non-contingent
U.S.-source interest income received from unrelated obligors). In the case of shares of the Fund held through an intermediary, the intermediary may withhold U.S. federal income tax even if the Fund reports the payment as interest-related dividends or short-term capital gain dividends. There can be no assurance as to whether any of the Fund’s distributions will be eligible for an exemption from withholding of U.S. federal income tax or, as to whether any of the Fund’s distributions that are eligible, will be reported as such by us. A foreign shareholder whose income from the Fund is not “effectively connected” with a U.S. trade or business would generally be exempt from U.S. federal income tax on capital gain dividends, any amounts retained by the Fund that are designated as undistributed capital gains and any gains realized upon the sale or exchange of shares. However, a foreign shareholder who is a nonresident alien individual and is physically present in the United States for more than 182 days during the taxable year and meets certain other requirements will nevertheless be subject to a U.S. tax of 30% on such capital gain dividends, undistributed capital gains and sale or exchange gains.
If the income from the Fund is “effectively connected” with a U.S. trade or business carried on by a foreign shareholder, then distributions of investment company taxable income, any capital gain dividends, any amounts retained by the Fund that are designated as undistributed capital gains and any gains realized upon the sale or exchange of shares will be subject to U.S. federal income tax at the graduated rates applicable to U.S. citizens, residents or domestic corporations, as applicable. Foreign corporate shareholders may also be subject to the 30% branch profits tax imposed by the Code.
The Fund may be required to withhold from distributions that are otherwise exempt from U.S. federal withholding tax (or taxable at a reduced treaty rate) unless the foreign shareholder certifies his or her foreign status under penalties of perjury or otherwise establishes an exemption.
The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may differ from those described herein. Foreign shareholders are advised to consult their own tax advisors with respect to the particular tax consequences to them of an investment in the Fund.
242
Additional Withholding Requirements
Under Sections 1471 through 1474 of the Code (such Sections commonly referred to as “FATCA”), a 30% United States federal withholding tax may apply to any dividends that the Fund pays to (i) a “foreign financial institution” (as specifically defined in the Code), whether such foreign financial institution is the beneficial owner or an intermediary, unless such foreign financial institution agrees to verify, report and disclose its United States “account” holders (as specifically defined in the Code) and meets certain other specified requirements or (ii) a
non-financial
foreign entity, whether such nonfinancial foreign entity is the beneficial owner or an intermediary, unless such entity provides a certification that the beneficial owner of the payment does not have any substantial United States owners or provides the name, address and taxpayer identification number of each such substantial United States owner and certain other specified requirements are met. 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. In addition, foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. You should consult your own tax advisor regarding FATCA and whether it may be relevant to your ownership and disposition of our shares. Foreign and Other Taxation
The Fund’s investment in
non-U.S.
securities may be subject to non-U.S.
withholding taxes. In that case, the Fund’s yield on those securities would be decreased. Shareholders will generally not be entitled to claim a credit or deduction with respect to foreign taxes paid by the Fund. In addition, shareholders may be subject to state, local and foreign taxes on their distributions from the Fund. Shareholders are advised to consult their own tax advisors with respect to the particular tax consequences to them of an investment in the Fund.
243
RESTRICTIONS ON SHARE OWNERSHIP
Each prospective investor that is, or is acting on behalf of, any (i) “employee benefit plan” (within the meaning of Section 3(3) of ERISA) subject to Title I of ERISA, (ii) “plan” described in Section 4975(e)(1) of the Code, subject to Section 4975 of the Code (including for , IRA and a “Keogh” plan), (iii) plan, account or other arrangement that is subject to provisions under any Similar Laws, or (iv) entity whose underlying assets are considered to include the assets of any of the foregoing described in clauses (i), (ii) and (iii), pursuant to ERISA or otherwise (each of the foregoing described in clauses (i), (ii), (iii) and (iv) referred to herein as a “Plan”), must independently determine that our Common Shares are an appropriate investment, taking into account its obligations under ERISA, the Code and applicable Similar Laws.
e.g.
In contemplating an investment in the Fund, each fiduciary of the Plan who is responsible for making such an investment should carefully consider, taking into account the facts and circumstances of the Plan, whether such investment is consistent with the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws. Furthermore, absent an exemption, the fiduciaries of a Plan should not invest in the Fund with the assets of any Plan if the Adviser or any of its affiliates is a fiduciary with respect to such assets of the Plan.
In contemplating an investment in the Fund, fiduciaries of Plans that is a Benefit Plan Investor (defined below) subject to Title I of ERISA or Section 4975 of the Code should also carefully consider the definition of the term “plan assets” in ERISA and the Plan Asset Regulations. Under ERISA and the Plan Asset Regulations, when a Benefit Plan Investor invests in an equity interest of an entity that is neither a “Publicly-Offered Security” nor a security issued by an investment company registered under the 1940 Act, the Benefit Plan Investor’s assets include both the equity interest and an undivided interest in each of the entity’s underlying assets, unless it is established that the entity is an “operating company” or that equity participation in the entity by “benefit plan investors” (“Benefit Plan Investors”) is not “significant” (each within the meaning of the Plan Asset Regulations). The term “Benefit Plan Investor” is defined in the Plan Asset Regulations to include (a) any employee benefit plan (as defined in section 3(3) of ERISA) subject to the provisions of Title I of ERISA, (b) any plan described in section 4975(e)(1) of the Code subject to Section 4975 of the Code, and (c) any entity whose underlying assets include plan assets by reason of such an employee benefit plan’s or plan’s investment in the entity.
Under the Plan Asset Regulations, equity participation in an entity by Benefit Plan Investors is “significant” on any date if, immediately after the most recent acquisition of any equity interest in the entity, 25% or more of the total value of any class of equity interests is held by Benefit Plan Investors. For purposes of this determination, the value of equity interests held by a person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of the entity or that provides investment advice for a fee (direct or indirect) with respect to such assets (or any affiliate of such a person) is disregarded. The Plan Assets Regulations define the term “publicly-offered security” as a security that is “widely-held,” “freely transferrable” and either part of a class of securities registered under the Exchange Act or sold pursuant to an effective registration statement under the Securities Act if the securities are registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer during which the public offering occurred. A security is considered “widely held” only if it is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another. A security will not fail to be “widely held” because the number of independent investors falls below 100 subsequent to the initial public offering as a result of events beyond the issuer’s control. The Plan Assets Regulations provide that whether a security is “freely transferable” is a factual question to be determined on the basis of all relevant facts and circumstances. It is noted that the Plan Assets Regulations only establish a presumption in favor of the finding of free transferability where the applicable investment minimum is $10,000 or less and the restrictions are consistent with the particular types of restrictions listed in the Plan Assets Regulations. With respect to the question of free transferability, it is noted that, while the minimum initial investment in Class I shares is $1,000,000, the minimum is waived or reduced to $10,000 or less for a substantial portion of the eligible purchasers of Class I shares.
244
If the assets of the Fund were deemed to be “plan assets” under the Plan Asset Regulations, this would result, among other things, in (i) the application of the prudence and other fiduciary responsibility standards of ERISA to investments made by the Fund, and (ii) the possibility that certain transactions in which the Fund might seek to engage could constitute “prohibited transactions” under ERISA and the Code. If a prohibited transaction occurs for which no exemption is available, the Adviser and/or any other fiduciary that has engaged in the prohibited transaction could be required to (i) restore to the Covered Plan any profit realized on the transaction and (ii) reimburse the Benefit Plan Investor for any losses suffered by the Benefit Plan Investor as a result of the investment. In addition, each disqualified person (within the meaning of Section 4975 of the Code) involved could be subject to an excise tax equal to 15% of the amount involved in the prohibited transaction for each year the transaction continues and, unless the transaction is corrected within statutorily required periods, to an additional tax of 100%. Fiduciaries of Benefit Plan Investors who decide to invest in the Fund could, under certain circumstances, be liable for prohibited transactions or other violations as a result of their investment in the Fund or as
co-fiduciaries
for actions taken by or on behalf of the Fund or the Adviser. With respect to an IRA that invests in the Fund, the occurrence of a prohibited transaction involving the individual who established the IRA, or his or her beneficiaries, would cause the IRA to lose its tax-exempt
status. Accordingly, the Fund intends to conduct its affairs so that its assets should not be deemed to constitute “plan assets” under the Plan Asset Regulations. In this regard, generally, we intended to take one of the following approaches: (1) in the event that each class of Common Shares is considered a “Publicly-Offered Security,” we will not limit “benefit plan investors” from investing in the Common Shares, and (2) in the event one or more classes of Common Shares does not constitute a Publicly-Offered Security, (a) we will limit investment in each class of Common Shares by “benefit plan investors” to less than 25% of the total value of each class of our Common Shares, within the meaning of the Plan Asset Regulations (including any class that constitutes a Publicly-Offered Security), or (b) we will prohibit “benefit plan investors” from owning any class that does not constitute a Publicly-Offered Security. For purposes of the 25% test in the immediately preceding sentence, we will disregard equity interests held by persons (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of the Fund or any person who provides investment advice for a fee (direct or indirect) with respect to such assets, or any person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such person, (with “control” for this purpose means with respect to a person other than an individual, means the power to exercise a controlling influence over the management or policies of such person) (“Controlling Persons”) as contemplated by the Plan Asset Regulations. In this respect, in order to avoid the possibility that our assets could be treated as “plan assets,” within the meaning of the Plan Asset Regulations, until such time as each class of our Common Shares constitutes “Publicly-Offered Securities,” (i) we will require any person proposing to acquire any of the Class S, Class D, Class I, and Class F Common Shares to furnish such information as may be necessary to determine whether such person is a Benefit Plan Investor or a Controlling Person, and (ii) we will have the power to (a) exclude any shareholder or potential shareholder from purchasing any of the Class S, Class D, Class I, and Class F Common Shares, (b) prohibit any redemption of Class S, Class D, Class I, or Class F Common Shares, and (c) redeem some or all Class S, Class D, Class I, and Class F Common Shares held by any holder if, and to the extent that, our Board determines that there is a substantial likelihood that such holder’s purchase, ownership or redemption of Class S, Class D, Class I, and Class F Common Shares would result in our assets to be characterized as plan assets under the Plan Asset Regulations, and each of the Class S, Class D, Class I, and Class F Common Shares of the Fund shall be subject to such terms and conditions. After such time as all of Class S, Class D, Class I, Class F and Common Shares (and any other equity interests in the Fund (if any)) constitute “Publicly-Offered Securities,” the Fund may no longer be required to limit or prohibit “benefit plan investors” from investing in the Fund.
CUSTODIAN, TRANSFER AND DISTRIBUTION PAYING AGENT AND REGISTRAR
Our securities are held under a custody agreement by U.S. Bank National Association. The address of the custodian is 8 Greenway Plaza, Suite 1100. Houston, TX 77046. U.S. Bank Global Fund Services will act as our
245
transfer agent, distribution paying agent and registrar. The principal business address of our transfer agent is 615 East Michigan Street, Milwaukee, WI 53202. U.S. Bank National Association and its affiliates are acting solely in the capacity of custodian, transfer agent and escrow agent in connection with the offering of securities described herein, and have not endorsed, recommended or guaranteed the purchase, value or repayment of such securities.
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 our business. Subject to policies established by our Board, if any, our Adviser is primarily responsible for the execution of any publicly-traded securities portfolio transactions and the allocation of brokerage commissions. Our 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 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 Adviser may select a broker based partly upon brokerage or research services provided to it and us and any other clients. In return for such services, we may pay a higher commission than other brokers would charge if our Adviser determines in good faith that such commission is reasonable in relation to the services provided.
EXPERTS
The financial statements as of December 31, 2023 and December 31, 2022 and for each of the three years in the period ended December 31, 2023 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
Dechert LLP, New York, NY, acts as counsel to the Fund.
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 Common Shares offered by this prospectus. The registration statement contains additional information about us and the Common Shares being offered by this prospectus. We are required to file with or submit to the SEC annual, quarterly and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act. The SEC maintains an internet site that contains reports, proxy and information statements and other information filed electronically by us with the SEC, which are available on the SEC’s website at Copies of these reports, proxy and information statements and other information may be obtained, after paying a duplicating fee, by electronic request at the following
http://www.sec.gov.
e-mail
address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549. 246
HPS INVESTMENT PARTNERS, LLC
PRIVACY NOTICE
April 2024
Dear Investor,
Enclosed please find the HPS Investment Partners, LLC (“HPS”) Privacy Notice that details how HPS collects, shares and protects your personal information. The purpose of this notice is to inform you as to how you may limit the sharing of your personal information with our affiliates for marketing purposes.
HPS will continue to distribute a Privacy Notice to all existing investors in the event of a substantive change to our privacy policies. If you have any questions, please contact our Compliance Department at (833)
457-0279.
247
Rev. April 2024
FACTS |
WHAT DOES HPS DO WITH YOUR PERSONAL INFORMATION? |
|
Why? |
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
|
What? |
The types of personal information we collect and share depend on the product or service you have with us. This information can include: • Social Security number and income • Account balances and transaction history • Wire transfer instructions and assets |
|
How? |
All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons HPS chooses to share; and whether you can limit this sharing. |
|
Reasons we can share your personal information |
Does HPS share? |
Can you limit this sharing? |
||
|
For our everyday business purposes - such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus |
Yes | No | ||
|
For our marketing purposes - to offer our products and services to you |
Yes | No | ||
For joint marketing with other financial companies |
Yes | No | ||
|
For our affiliates’ everyday business purposes - information about your transactions and experiences |
Yes | No | ||
|
For our affiliates’ everyday business purposes - information about your credit worthiness |
Yes | Yes | ||
For our affiliates to market to you |
Yes | Yes | ||
For nonaffiliates to market to you |
Yes | Yes | ||
To limit our sharing |
Call the Compliance Department at (833)
457-0279.
Please note: If you are a
new no longer However, you can contact us at any time to limit our sharing. |
|
Questions? |
Call (833) 457-0279
|
248
Who we are |
||
Who is providing this notice? |
The HPS family of advisers, which includes the following entities: HPS Advisors, LLC, HPS Securities, LLC, HPS Investment Partners (UK) LLP; HPS Investment Partners (HK) Limited; HPS Investment Partners (AUS) Pty Ltd.; HPS ALSC Management, LLC; HPS Investment Partners (SG) Pte. Ltd.; HPS RE Management, LLC; HPS Investment Partners CLO (US), LLC; HPS Investment Partners CLO (UK) LLP; Segovia Loan Advisors (UK) LLP; HPS Investment Partners Lux Sarl;; HPS Mezzanine Partners II, LLC; HPS Mezzanine Management III, LLC; HPS Mezzanine Management 2019, LLC; HPS Strategic Investment Management V, LLC; HPS Opportunities SL Management, LLC; HPS EF GP, LLC; HPS EL SLF 2016 GP; CGC, LLC; and CGC III Partners, LLC. |
|
What we do |
||
How does HPS protect my personal information? |
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. | |
How does HPS collect my personal information? |
We collect your personal information, for example, when you: • enter into an investment advisory contract • give us your income information or give us your contact information • make a wire transfer or provide account information We also collect your personal information from others, such as affiliates, credit bureaus or other companies. |
|
Why can’t I limit all sharing? |
Federal law gives you the right to limit only • sharing for affiliates’ everyday business purposes—information about your creditworthiness • affiliates from using your information to market to you • sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law. |
|
What happens when I limit sharing for an account I hold jointly with someone else? |
Your choices will apply to everyone on your account. | |
Definitions |
||
Affiliates |
Companies related by common ownership or control. They can be financial and nonfinancial companies. •
Our affiliates include financial companies such as those HPS entities with common ownership. |
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Nonaffiliates |
Companies not related by common ownership or control. They can be financial and nonfinancial companies. •
Nonaffiliates we share with can include placement agents and banks. |
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249
Joint marketing |
A formal agreement between nonaffiliated financial companies that together market financial products or services to you. •
Our joint marketing partners include other financial sponsors. |
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Other important information |
||
|
State laws: NV: We are providing this notice pursuant to Nevada law. If you prefer not to receive marketing calls from us, you may be placed on our Internal Do Not Call List by calling the Compliance Department at (833)
457-0279 or by writing to us at privacy@hpspartners.com.
California Residents: In accordance with the California Financial Information Privacy Act, we will not share information we collect about California residents with nonaffiliates except as permitted by law, such as with the consent of the customer or to service the customer’s accounts. We also will limit the sharing of information about you with our affiliates to the extent required by applicable California law. Vermont Residents: In accordance with Vermont law, we will not share information we collect about Vermont residents with nonaffiliates except as permitted by law, such as with the consent of the customer or to service the customer’s accounts. We will not share creditworthiness information about Vermont residents among HPS’s affiliates except with the authorization or consent of the Vermont resident. |
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250
April 2024
HPS INVESTMENT PARTNERS
DATA PRIVACY NOTICE
In this Data Privacy Notice, the term “Fund” means the fund referenced in the documentation accompanying this notice. References to “”, “”, and “” refer to the Fund or an HPS Group (defined below) member. The Fund or an HPS Group (defined below) member acts as a data controller in respect of your personal data. If you have any questions about this Data Privacy Notice and whether any of the following applies to you, please contact us at
we
us
our
GDPR-Compliance@hpspartners.com
.
This Data Privacy Notice applies to you to the extent that EU and UK Data Protection Legislation (defined below) applies to the Fund’s and the HPS Group’s (defined below) processing of your personal data if (i) you are an applicant for shares in the Fund or in relation to an account, (ii) your personal data has been provided in connection with an application for shares in the Fund or in connection with an account by another person (such as where you are a director, partner, trustee, employee, agent or direct or indirect owner of an applicant) or (iii) the Fund or the HPS Group otherwise uses your personal data. It also applies to you if you are an investor in a Cayman Islands fund, as you will have rights under the Data Protection Act (As Revised) of the Cayman Islands, and related regulations and guidance (“”). If this Data Privacy Notice applies to you, you have certain rights with respect to your personal data, as outlined below.
DPA
For this Data Privacy Notice, “” means all applicable legislation and regulations relating to the protection of personal data in force from time to time in the European Union (“”), the European Economic Area (“”), or the United Kingdom (“”) including (without limitation): Directive 2002/58/EC (the Privacy and Electronic Communications Directive), Regulation (EU) 2016/679 (the General Data Protection Regulation) and any national implementing or successor legislation (including but not limited to the Luxembourg law of August 1, 2018 on the organization of the National Commission for Data Protection and the general regime on data protection), the General Data Protection Regulation as it forms part of the laws of England and Wales, Scotland and Northern Ireland by virtue of section 3 of the European Union (Withdrawal) Act 2018, or any other legislation which implements any other current or future legal act of the EU or the UK concerning the protection and processing of personal data, and including any amendment or ” means the EU and UK Data Protection Legislation and the DPA, as applicable. The terms “”, “”, “”, “” and “” in this Data Privacy Notice shall be interpreted in accordance with the applicable EU and UK Data Protection Legislation.
EU and UK Data Protection Legislation
EU
EEA
UK
re-enactment
of the foregoing. “Data Protection Laws
data controller
data processor
data subject
personal data
processing
We are sensitive to the privacy concerns of the individual investors, and individuals associated with institutional investors, in the Fund or an account. We have a policy of protecting the confidentiality and security of information we collect about you. We are providing you this Data Privacy Notice to help you better understand why and how we collect certain personal data, the care with which we treat that personal data, and how we use that personal data.
Categories and sources of personal data collected
In connection with forming, operating and advising the Fund and accounts for our investors, HPS Investment Partners, LLC, HPS Investment Partners (UK) LLP, HPS Investment Partners Lux Sàrl, HPS Investment Partners (HK), Limited, HPS Investment Partners (SG) Pte. Ltd. and HPS Investment Partners (AUS) Pty Ltd. (together with their affiliates, the “”), the Fund and each of their general partners and managing members, each of their affiliates and, in each case, their administrators, legal and other advisors and agents (the
HPS Group
251
“”) collect, record, store, adapt, and otherwise process and use personal data either relating to you from the following sources:
Authorised Entities
| a) | information we receive from you in conversations over the telephone, face-to-face, e-mail, or on subscription agreements, investor questionnaires, applications or other forms (including, without limitation, any anti-money laundering (“AML |
| b) | information about your transactions with us or others; |
| c) | information captured on our website, including any information captured via “cookies”; |
| d) | information obtained through the monitoring of telephone calls and other communications that we carry out; |
| e) | information relating to you from other sources, including from: |
| (i) | publicly available and accessible directories and sources; |
| (ii) | tax authorities, including those that are based outside the UK, the EEA or the Cayman Islands, if you are subject to tax in another jurisdiction; |
| (iii) | governmental and competent regulatory authorities to whom we have regulatory obligations; |
| (iv) | fraud prevention and detection agencies and organisations, vendors providing AML and sanctions checking databases; and |
| (v) | other third parties, including advisors, affiliates, financial advisors, employers, credit agencies, intermediaries, and direct and indirect service providers to the HPS Group and the Fund. |
We will process the following categories of personal data:
| a) | names, dates of birth and birth places; |
| b) | contact details and professional addresses (including physical address, email address and telephone number); |
| c) | account data and other information contained in any document provided to the Authorised Entities (whether directly or indirectly); |
| d) | transaction history, wire transfer instructions, investment experience and investment activity as well as income information; |
| e) | information regarding your status under various laws and regulations, including your social security number, tax status, income and assets; |
| f) | accounts and transactions with other institutions; |
| g) | information regarding your interest in the Fund or account, including ownership percentage, capital investment, income and losses; |
| h) | information regarding your citizenship and location of residence; |
| i) | source of funds and source of wealth used to make an investment in any of our funds and nature of your business activities; and |
| j) | anti-money laundering identification (including passport and drivers’ license) and verification documentation. |
We may combine personal data that you provide to us with other information that we collect about you, in some circumstances. This will include information collected in an online or offline context.
252
Necessity of personal data for an investment in the Fund
The provision of certain personal data is necessary for shares in the Fund to be issued to any applicant and for compliance by the Fund and the other Authorised Entities with certain legal and regulatory obligations. Your failure to provide the personal data requested to fulfil the purposes described in this
Data Privacy Notice may result in us being unable to provide the services requested by you under our agreements with you or otherwise.
Purpose of processing and accompanying legal bases
Your personal data will be used for the following purposes, and pursuant to the corresponding legal bases:
Purpose |
Legal basis |
|
| For the performance of, or in connection with, the terms of our agreements with you and the operation of the Fund or accounts in which you invest | Contractual necessity Legitimate interest | |
| To manage and administer your holding in such fund or account in accordance with the relevant governing documents of the Fund or account and any agreements between you and such Fund or us | Contractual necessity Legitimate interest | |
| To communicate with you as necessary in connection with our business relationship with you or the organisation that you represent and generally in connection with your or the organisation that you represent’s interest in any Fund or account and to facilitate your subscription in other funds | Legitimate interest | |
| To administer the Fund and accounts (including in connection with evaluating your or the organisation that you represent’s eligibility to invest in such Fund and accounts, and in connection with the borrowings of such Fund and accounts) | Legitimate interest | |
| To monitor, understand and improve our business and investor relationships generally and to market our funds to our current and former investors (in each case, to the extent permitted by the Data Protection Laws), including carrying out statistical analysis and market research | Legitimate interest | |
| In connection with making and disposing of investments including with respect to anti-money laundering and know-your-customer review |
Legitimate interest Necessity for compliance with a legal obligation |
|
| To comply with legal and regulatory obligations or legal processes applicable to certain investors, the Fund and/or the Authorised Entities from time to time including applicable anti-money laundering and counter terrorist financing legislation, regulation or procedure, or as we otherwise deem advisable in connection with applicable law or regulations |
Legitimate interest Necessity for compliance with a legal obligation |
|
| To comply with any tax regulations and requests from tax authorities |
Legitimate interest Necessity for compliance with a legal obligation |
|
| To manage corporate transactions on an ongoing basis, such as investments, mergers or acquisitions | Legitimate interest | |
| To safeguard our operations and mitigate risk to our security, systems and infrastructure |
Legitimate interest Necessity for compliance with a legal obligation |
|
253
Where we rely on the legal basis that the use of your personal information is necessary for our legitimate interest, these legitimate interests are:
| • | forming, operating and advising the Fund and accounts; and |
| • | managing legal and regulatory compliance and other risks; and |
| • | to protect our business and the security of our systems. |
Disclosure of personal data to third parties
In addition to disclosing personal data to the Authorised Entities, we will disclose your personal data where permitted by the Data Protection Laws, to our service providers, employees, agents, contractors, consultants, professional advisers, administrators, attorneys, accountants, lenders, data processors, joint-venture partners, regulatory and self-regulatory bodies, auditors, technology providers, transaction counter-parties, issuers/portfolio companies of investments (in connection with any anti-money laundering and know-your-customer review), other fund service providers (e.g. anti-money laundering advisers), financing providers,
co-investors
and other persons employed and/or retained by us in order to fulfil the purposes described in this Data Privacy Notice. In addition, we may share personal data with regulatory bodies having competent jurisdiction over us, as well as with the tax authorities, auditors and tax advisers (where necessary or required by law). We may also share your personal information with applicable third parties in the event of a reorganization, merger, sale, acquisition, assignment or other disposition of all or a portion of our business, assets or shares. In any case where we share personal data with a third party (other than an HPS Group member) that acts as a data controller, the use by that third party of the personal data will be subject to the third party’s own privacy policies.
Disclosure of personal data outside the EEA, UK or the Cayman Islands
In the event that we collect personal information from you and transfer it outside of the EEA, UK or Cayman Islands (where many of our funds are domiciled and operate), any such transfer will be in compliance with applicable Data Protection Laws and subject to appropriate safeguards. For example, if personal data is transferred outside the EEA or UK, the country to which the personal data is transferred may be approved by the European Commission, the Information Commissioner’s Office, or another data regulator (each a “”) or the recipient may have entered into standard contractual clauses approved by the Relevant Supervisory Authority that oblige them to protect the personal data.
Relevant Supervisory Authority
For more information on the means of transfer of investors’ data, please contact the EU and UK privacy team at
GDPR-Compliance@hpspartners.com
.
Special categories of personal data
“Special categories of personal data” are subject to specific protection or restriction by law in certain territories, including the EU and UK. For these purposes, “special categories of personal data” relate to: racial or ethnic origin; political opinions (such as those of a PEP); religious or philosophical beliefs; trade union membership; genetic data; biometric data; data concerning health; or data concerning sexual preferences, sex life or sexual orientation. There are also special rules surrounding data relating to criminal convictions or offences. We will only process special categories of personal data or data relating to your criminal records if permitted by law and only if one of the following conditions is met:
| • | the data in question has been made public by you; |
| • | the processing is necessary for the purpose of, or in connection with, any actual or prospective legal proceedings, for the purpose of obtaining legal advice or otherwise for the purposes of establishing, exercising or defending legal rights subject to applicable local legislation or where courts are acting in their judicial capacity; |
254
| • | the processing is necessary for reasons of substantial public interest on the basis of local law which is proportionate to the aim pursued and which contains appropriate safeguarding measures; or |
| • | as otherwise permitted by law; and |
In each case we will meet any additional local legal requirements and enforce any applicable duties of confidentiality effectively.
Retention of personal data
We will retain your personal data for as long as is necessary for the purposes for which it was collected a We may also retain data afterwards including, but not limited to, in connection with legal, tax and regulatory obligations, and our record retention policies.
Updates to personal data
We will use reasonable efforts to keep personal data up to date. However, each person will need to notify us without delay in the event of any change in his / her personal circumstances, so that we can keep the personal data up to date.
Data subject rights
Pursuant to EU and UK Data Protection Legislation, individuals have a number of rights which may be exercised in respect of their personal data in certain circumstances, :
i.e.
| a) | the right to obtain information regarding the processing of your personal data and access personal data held by us; |
| b) | the right to request that we rectify any inaccuracies in personal data held by us; |
| c) | the right to request that erase personal data held by us. Please note that there may be circumstances where you ask us to erase your personal data but we are legally entitled to retain it; |
| d) | the right to receive some personal data in a structured, commonly used and machine-readable format and/or request that we transmit those data to a third party where this is technically feasible. Please note that this right only applies to personal data which you have provided to us; and |
| e) | the right to object to, and the right to request the restriction of our processing of your personal data. Again, there may be circumstances where you object to, or ask us to restrict, our processing of your personal data but we are legally entitled to continue processing your personal data or to refuse that request. |
These rights will be exercisable subject to limitations as provided for in EU and UK Data Protection Legislation. You may make a request to us to exercise these rights by contacting the EU and UK privacy team at
GDPR-Compliance@hpspartners.com
.
Note that investors have the right to lodge a complaint with the appropriate regulator. In the UK, the data protection regulator is the Information Commissioner’s Office, whose you can search for further information. A full list of EU data protection regulators is available
website
here
.
Investors in Cayman Islands investment funds have broadly analogous rights under the DPA.
Contacting us
For queries, requests or comments in respect of this notice or the way in which we use investors’ personal data, please contact the EU and UK privacy team at
GDPR-Compliance@hpspartners.com
.
255
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page |
||||
| F-2 | ||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| F-8 | ||||
| F-55 | ||||
| F-102 | ||||
| F-104 | ||||
| F-106 | ||||
| F-108 | ||||
| F-109 | ||||
| F-111 | ||||
| F-143 | ||||
F-1
HPS Corporate Lending Fund
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
March 31, 2024 |
December 31, 2023 |
|||||||
| (Unaudited) | ||||||||
ASSETS |
||||||||
Investments at fair value |
||||||||
Non-controlled/non-affiliated investments (amortized cost of $9,628,282 and $9,058,649 at March 31, 2024 and December 31, 2023, respectively) |
$ | 9,734,560 | $ | 9,145,583 | ||||
Non-controlled/affiliated investments (amortized cost of $19,582 and $19,639 at March 31, 2024 and December 31, 2023, respectively) |
19,721 | 19,824 | ||||||
Controlled/affiliated investments (amortized cost of $158,113 and $125,513 at March 31, 2024 and December 31, 2023, respectively) |
163,291 | 124,003 | ||||||
Total investments at fair value (amortized cost of $9,805,977 and $9,203,801 at March 31, 2024 and December 31, 2023, respectively) |
9,917,572 | 9,289,410 | ||||||
Cash and cash equivalents |
300,662 | 188,775 | ||||||
Interest receivable from non-controlled/non-affiliated investments |
105,191 | 91,134 | ||||||
Dividend receivable from non-controlled/non-affiliated investments |
7 | 83 | ||||||
Deferred financing costs |
37,403 | 30,825 | ||||||
Deferred offering costs |
438 | 891 | ||||||
Derivative assets, at fair value (Note 6) |
5,233 | 8,353 | ||||||
Receivable for investments |
33,205 | 105,138 | ||||||
Other assets |
13,874 | 811 | ||||||
Total assets |
$ | 10,413,585 | $ | 9,715,420 | ||||
LIABILITIES |
||||||||
Debt (net of unamortized debt issuance costs of $23,251 and $11,833 at March 31, 2024 and December 31, 2023, respectively) |
$ | 3,826,106 | $ | 4,206,900 | ||||
Payable for investments purchased |
98,943 | 71,339 | ||||||
Interest payable |
60,498 | 58,786 | ||||||
Derivative liabilities, at fair value (Note 6) |
12,124 | 9,104 | ||||||
Due to affiliates |
13,780 | 12,833 | ||||||
Distribution payable (Note 9) |
51,674 | 74,907 | ||||||
Payable for share repurchases (Note 9) |
59,526 | 63,474 | ||||||
Management fees payable (Note 3) |
6,649 | 5,591 | ||||||
Income based incentive fees payable (Note 3) |
25,565 | 20,347 | ||||||
Capital gains incentive fees payable (Note 3) |
9,472 | 3,518 | ||||||
Distribution and/or shareholder servicing fees payable |
1,801 | 1,524 | ||||||
Accrued expenses and other liabilities |
237 | 1,733 | ||||||
Total liabilities |
4,166,375 | 4,530,056 | ||||||
Commitments and contingencies (Note 8) |
||||||||
NET ASSETS |
||||||||
Common Shares, $0.01 par value (246,372,791 and 206,889,570 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively) |
2,464 | 2,069 | ||||||
Additional paid in capital |
6,105,332 | 5,113,205 | ||||||
Distributable earnings (loss) |
139,414 | 70,090 | ||||||
Total net assets |
6,247,210 | 5,185,364 | ||||||
Total liabilities and net assets |
$ | 10,413,585 | $ | 9,715,420 | ||||
F-2
HPS Corporate Lending Fund
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
March 31, 2024 |
December 31, 2023 |
|||||||
| (Unaudited) | ||||||||
NET ASSET VALUE PER SHARE |
||||||||
Class I Shares: |
||||||||
Net assets |
$ | 1,674,789 | $ | 1,314,775 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
66,048,340 | 52,457,511 | ||||||
Net asset value per share |
$ | 25.36 | $ | 25.06 | ||||
Class D Shares: |
||||||||
Net assets |
$ | 815,793 | $ | 706,613 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
32,172,817 | 28,192,719 | ||||||
Net asset value per share |
$ | 25.36 | $ | 25.06 | ||||
Class F Shares: |
||||||||
Net assets |
$ | 3,633,652 | $ | 3,142,475 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
143,301,946 | 125,381,461 | ||||||
Net asset value per share |
$ | 25.36 | $ | 25.06 | ||||
Class S Shares: |
||||||||
Net assets |
$ | 122,976 | $ | 21,501 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
4,849,688 | 857,879 | ||||||
Net asset value per share |
$ | 25.36 | $ | 25.06 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
HPS Corporate Lending Fund
Consolidated Statements of Operations
(in thousands)
(Unaudited)
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Investment income: |
||||||||
From non-controlled/non-affiliated investments: |
||||||||
Interest income |
$ | 291,764 | $ | 173,642 | ||||
Payment-in-kind interest income |
18,030 | 4,730 | ||||||
Dividend income |
795 | — | ||||||
Other income |
1,094 | 404 | ||||||
From controlled/affiliated investments: |
||||||||
Dividend income |
1,819 | — | ||||||
Total investment income |
313,502 | 178,776 | ||||||
Expenses: |
||||||||
Interest expense |
86,093 | 49,963 | ||||||
Management fees |
18,339 | 11,188 | ||||||
Income based incentive fee |
25,565 | 14,248 | ||||||
Capital gains incentive fee |
5,954 | — | ||||||
Distribution and/or shareholder servicing fees |
||||||||
Class D |
497 | 275 | ||||||
Class F |
4,309 | 2,835 | ||||||
Class S |
184 | — | ||||||
Professional fees |
756 | 919 | ||||||
Board of Trustees’ fees |
149 | 141 | ||||||
Administrative service expenses (Note 3) |
822 | 573 | ||||||
Other general & administrative |
2,384 | 1,651 | ||||||
Amortization of continuous offering costs |
453 | 365 | ||||||
Total expenses |
145,505 | 82,158 | ||||||
Net investment income before excise tax |
167,997 | 96,618 | ||||||
Excise tax expense |
(15 | ) | (5 | ) | ||||
Net investment income after excise tax |
168,012 | 96,623 | ||||||
Net realized and change in unrealized gain (loss): |
||||||||
Realized gain (loss): |
||||||||
Non-controlled/non-affiliated investments |
(9,949 | ) | (10,731 | ) | ||||
Foreign currency forward contracts |
167 | (529 | ) | |||||
Foreign currency transactions |
3,509 | (169 | ) | |||||
Net realized gain (loss) |
(6,273 | ) | (11,429 | ) | ||||
Net change in unrealized appreciation (depreciation): |
||||||||
Non-controlled/non-affiliated investments |
19,345 | 77,873 | ||||||
Non-controlled/affiliated investments |
(46 | ) | — | |||||
Controlled/affiliated investments |
6,688 | — | ||||||
Foreign currency forward contracts |
12,494 | (2,505 | ) | |||||
Translation of assets and liabilities in foreign currencies |
15,430 | (1,533 | ) | |||||
Net change in unrealized appreciation (depreciation) |
53,911 | 73,835 | ||||||
Net realized and change in unrealized gain (loss) |
47,638 | 62,406 | ||||||
Net increase (decrease) in net assets resulting from operations |
$ | 215,650 | $ | 159,029 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
HPS Corporate Lending Fund
Consolidated Statements of Changes in Net Assets
(in thousands)
(Unaudited)
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Increase (decrease) in net assets from operations: |
||||||||
Net investment income after excise tax |
$ | 168,012 | $ | 96,623 | ||||
Net realized gain (loss) |
(6,273 | ) | (11,429 | ) | ||||
Net change in unrealized appreciation (depreciation) |
53,911 | 73,835 | ||||||
Net increase (decrease) in net assets resulting from operations |
215,650 | 159,029 | ||||||
Distributions to common shareholders: |
||||||||
Class I |
(39,684 | ) | (20,939 | ) | ||||
Class D |
(20,018 | ) | (10,276 | ) | ||||
Class F |
(84,571 | ) | (51,585 | ) | ||||
Class S |
(2,054 | ) | — | |||||
Net decrease in net assets resulting from distributions |
(146,327 | ) | (82,800 | ) | ||||
Share transactions: |
||||||||
Class I: |
||||||||
Proceeds from shares sold |
360,098 | 21,893 | ||||||
Share transfers between classes |
1,333 | 16,465 | ||||||
Distributions reinvested |
13,526 | 8,526 | ||||||
Repurchased shares, net of early repurchase deduction |
(33,211 | ) | (9,192 | ) | ||||
Net increase (decrease) from share transactions |
341,746 | 37,692 | ||||||
Class D: |
||||||||
Proceeds from shares sold |
96,497 | 30,400 | ||||||
Share transfers between classes |
2,927 | — | ||||||
Distributions reinvested |
10,964 | 4,406 | ||||||
Repurchased shares, net of early repurchase deduction |
(10,558 | ) | 8 | |||||
Net increase (decrease) from share transactions |
99,830 | 34,814 | ||||||
Class F: |
||||||||
Proceeds from shares sold |
428,057 | 100,409 | ||||||
Share transfers between classes |
(5,691 | ) | (16,465 | ) | ||||
Distributions reinvested |
43,940 | 24,524 | ||||||
Repurchased shares, net of early repurchase deduction |
(15,757 | ) | (16,585 | ) | ||||
Net increase (decrease) from share transactions |
450,549 | 91,883 | ||||||
Class S: |
||||||||
Proceeds from shares sold |
98,389 | — | ||||||
Share transfers between classes |
1,431 | — | ||||||
Distributions reinvested |
578 | — | ||||||
Repurchased shares, net of early repurchase deduction |
— | — | ||||||
Net increase (decrease) from share transactions |
100,398 | — | ||||||
Total increase (decrease) in net assets |
1,061,846 | 240,618 | ||||||
Net assets, beginning of period |
5,185,364 | 3,455,272 | ||||||
Net assets, end of period |
$ | 6,247,210 | $ | 3,695,890 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
HPS Corporate Lending Fund
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Cash flows from operating activities: |
||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 215,650 | $ | 159,029 | ||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: |
||||||||
Net change in unrealized (appreciation) depreciation on investments |
(25,987 | ) | (77,873 | ) | ||||
Net realized (gain) loss on investments |
9,949 | 10,731 | ||||||
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts |
(12,494 | ) | 2,505 | |||||
Net change in unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies |
(16,775 | ) | 1,633 | |||||
Net accretion of discount and amortization of premium, net |
(27,075 | ) | (8,903 | ) | ||||
Amortization of deferred financing costs |
2,064 | 1,276 | ||||||
Amortization of debt issuance costs |
1,188 | 295 | ||||||
Amortization of offering costs |
453 | 365 | ||||||
Payment-in-kind interest capitalized |
(15,722 | ) | (4,669 | ) | ||||
Payment-in-kind dividends capitalized |
(761 | ) | — | |||||
Purchases of investments |
(1,416,804 | ) | (965,575 | ) | ||||
Proceeds from sale of investments and principal repayments |
848,237 | 109,331 | ||||||
Changes in operating assets and liabilities: |
||||||||
Interest receivable from non-controlled/non-affiliated investments |
(14,057 | ) | (10,782 | ) | ||||
Dividend receivable from non-controlled/non-affiliated investments |
76 | — | ||||||
Receivable for investments |
71,933 | (7,922 | ) | |||||
Other assets |
(13,063 | ) | 139 | |||||
Payable for investments purchased |
27,604 | 46,560 | ||||||
Interest payable |
1,712 | 18,153 | ||||||
Due to affiliates |
947 | 4,595 | ||||||
Management fees payable |
1,058 | 11,188 | ||||||
Income based incentive fees payable |
5,218 | 14,248 | ||||||
Capital gains incentive fees payable |
5,954 | — | ||||||
Distribution and/or shareholder servicing fees payable |
277 | 74 | ||||||
Accrued expenses and other liabilities |
(1,496 | ) | 11,173 | |||||
Net cash provided by (used in) operating activities |
(351,914 | ) | (684,429 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings on debt |
1,267,000 | 1,470,143 | ||||||
Repayments of debt |
(1,600,966 | ) | (815,960 | ) | ||||
Deferred financing costs paid |
(8,642 | ) | (7,233 | ) | ||||
Debt issuance costs paid |
(12,606 | ) | (3,646 | ) | ||||
Deferred offering costs paid |
— | (1,286 | ) | |||||
Proceeds from issuance of Common Shares |
983,041 | 152,702 | ||||||
Common Shares repurchased, net of early repurchase deduction |
(63,474 | ) | (9,814 | ) | ||||
Distributions paid in cash |
(100,552 | ) | (54,574 | ) | ||||
F-6
HPS Corporate Lending Fund
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Net cash provided by (used in) financing activities |
463,801 | 730,332 | ||||||
Net increase (decrease) in cash and cash equivalents |
111,887 | 45,903 | ||||||
Cash and cash equivalents, beginning of period |
188,775 | 74,241 | ||||||
Cash and cash equivalents, end of period |
$ | 300,662 | $ | 120,144 | ||||
Supplemental information and non-cash activities: |
||||||||
Interest paid during the period |
$ | 81,129 | $ | 31,810 | ||||
Taxes paid during the period |
$ | 1,522 | $ | 819 | ||||
Distribution payable |
$ | 51,674 | $ | 29,860 | ||||
Share repurchases accrued but not paid |
$ | 59,526 | $ | 25,769 | ||||
Reinvestment of distributions during the period |
$ | 69,008 | $ | 37,456 | ||||
Non-cash purchases of investments |
$ | 2,016 | $ | 19,124 | ||||
Non-cash sales of investments |
$ | (2,016 | ) | $ | (19,124 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||
First Lien Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Aerospace and Defense |
||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(6)(9) |
8/4/2028 | $ | 5,687 | $ | (84 | ) | $ | (173 | ) | |||||||||||||||||||
Arcfield Acquisition Corp (4)(9) |
SF + | 6.25% | 11.54 | % | 8/3/2029 | 48,760 | 47,964 | 47,098 | ||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
B + | 5.75% | 10.10 | % | 8/22/2028 | A$ | 3,614 | 2,418 | 2,296 | |||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(6)(8) |
8/22/2028 | A$ | 5,421 | (88 | ) | (91 | ) | |||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
B + | 5.75% | 10.10 | % | 8/22/2028 | A$ | 41,558 | 27,906 | 26,400 | |||||||||||||||||||
Cadence - Southwick, Inc. (4)(6)(10) |
SF + | 6.75% | 12.15 | % | 5/3/2028 | 11,291 | 4,992 | 5,207 | ||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
SF + | 6.75% | 12.12 | % | 5/3/2029 | 41,425 | 40,360 | 41,302 | ||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
SF + | 6.00% | 11.43 | % | 5/3/2029 | 3,112 | 3,053 | 3,081 | ||||||||||||||||||||
Fastener Distribution Holdings, LLC (4)(10) |
SF + | 6.50% | 11.98 | % | 10/1/2025 | 41,401 | 41,007 | 41,006 | ||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(6)(9) |
1/10/2028 | 6,864 | (143 | ) | (38 | ) | ||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
SF + | 6.75% | 12.06 | % | 1/9/2030 | 37,335 | 36,399 | 37,290 | ||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
SF + | 6.75% | 12.06 | % | 1/9/2030 | 7,860 | 7,719 | 7,850 | ||||||||||||||||||||
WP CPP Holdings, LLC (4)(6)(10) |
11/30/2029 | 26,285 | (621 | ) | (575 | ) | ||||||||||||||||||||||
WP CPP Holdings, LLC (4)(10) |
SF + |
7.50% (incl
4.13% PIK)
|
12.84 | % | 11/30/2029 | 189,377 | 184,953 | 185,232 | ||||||||||||||||||||
| 395,835 | 395,885 | 6.34 | % | |||||||||||||||||||||||||
Alternative Energy |
||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
SF + | 6.50% | 11.91 | % | 11/9/2026 | 15,393 | 15,126 | 15,056 | ||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
SF + | 6.50% | 11.91 | % | 11/9/2026 | 1,198 | 1,175 | 1,172 | ||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(6)(15) |
11/9/2026 | 1,139 | (20 | ) | (25 | ) | ||||||||||||||||||||||
| 16,281 | 16,203 | 0.26 | % | |||||||||||||||||||||||||
Asset Based Lending and Fund Finance |
||||||||||||||||||||||||||||
CRSS HPS LLC (4)(5)(10) |
SF + | 6.75% | 12.23 | % | 12/21/2026 | 21,451 | 21,061 | 21,178 | ||||||||||||||||||||
| 21,061 | 21,178 | 0.34 | % | |||||||||||||||||||||||||
Automobiles and Parts |
||||||||||||||||||||||||||||
Clarios Global LP (7) |
SF + | 3.00% | 8.33 | % | 5/6/2030 | 14,963 | 14,889 | 15,019 | ||||||||||||||||||||
Foundation Automotive Us Corp (4)(10) |
SF + | 7.75% PIK | 13.33 | % | 12/24/2027 | 4,300 | 4,252 | 3,697 | ||||||||||||||||||||
Foundation Automotive Corp (4)(5)(10) |
SF + |
8.25% (incl.
4.25% PIK)
|
13.82 | % | 12/24/2027 | 14,146 | 14,003 | 12,164 | ||||||||||||||||||||
Foundation Automotive Us Corp (4)(10) |
SF + | 8.25% (incl. 4.25% PIK) | 13.82 | % | 12/24/2027 | 24,083 | 23,844 | 20,709 | ||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
SF + | 6.75% | 12.24 | % | 2/8/2027 | 40,493 | 40,245 | 40,390 | ||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
SF + | 6.75% | 12.24 | % | 2/8/2027 | 8,501 | 8,451 | 8,480 | ||||||||||||||||||||
| 105,684 | 100,459 | 1.61 | % | |||||||||||||||||||||||||
F-8
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Chemicals |
||||||||||||||||||||||||||||
Illuminate Buyer, LLC (7) |
SF + | 3.50% | 8.94 | % | 12/31/2029 | 15,111 | 14,906 | 15,147 | ||||||||||||||||||||
| 14,906 | 15,147 | 0.24 | % | |||||||||||||||||||||||||
Construction and Materials |
||||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(6)(8) |
8/30/2028 | € | 17,183 | (351 | ) | 8 | ||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(8) |
E + | 6.00% | 9.91 | % | 8/30/2028 | € | 51,291 | 55,132 | 55,378 | |||||||||||||||||||
Nexus Intermediate III, LLC (4)(9) |
SF + | 5.50% | 11.18 | % | 12/6/2027 | 1,061 | 1,049 | 1,061 | ||||||||||||||||||||
| 55,830 | 56,447 | 0.90 | % | |||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
Aesthetics Australia Group Pty Ltd (4)(5)(8) |
B + | 6.25% | 10.67 | % | 3/21/2028 | A$ | 57,095 | 36,001 | 35,939 | |||||||||||||||||||
AI Learning (Singapore) PTE. LTD. (4)(5)(12) |
SORA + | 8.25% (incl 4.00% PIK) | 12.19 | % | 5/25/2027 | 44,063 | $ | 31,773 | 31,975 | |||||||||||||||||||
American Academy Holdings, LLC (4)(10) |
SF + | 11.00% (incl 5.25% PIK) | 16.44 | % | 6/30/2027 | 54,692 | 54,692 | 54,524 | ||||||||||||||||||||
Auctane Inc (4)(9) |
SF + | 5.75% | 11.16 | % | 10/5/2028 | 24,500 | 24,500 | 24,500 | ||||||||||||||||||||
Club Car Wash Operating, LLC (4)(6)(10) |
SF + | 6.00% | 11.45 | % | 6/16/2027 | 39,367 | 24,780 | 25,390 | ||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
SF + | 6.00% | 11.45 | % | 6/16/2027 | 12,504 | 12,328 | 12,504 | ||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
SF + | 6.00% | 11.45 | % | 6/16/2027 | 25,588 | 25,347 | 25,588 | ||||||||||||||||||||
Express Wash Concepts (4)(10) |
SF + | 6.00% | 11.43 | % | 4/30/2027 | 47,108 | 46,813 | 46,875 | ||||||||||||||||||||
Express Wash Concepts (4)(10) |
SF + | 6.00% | 11.43 | % | 4/30/2027 | 26,460 | 26,290 | 26,329 | ||||||||||||||||||||
Houghton Mifflin Harcourt Company (8) |
SF + | 5.25% | 10.68 | % | 4/9/2029 | 25,187 | 24,616 | 25,029 | ||||||||||||||||||||
IXM Holdings, Inc. (4)(11) |
SF + | 6.50% | 11.82 | % | 12/14/2029 | 18,566 | 18,300 | 18,483 | ||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) |
12/14/2029 | 1,638 | (24 | ) | (7 | ) | ||||||||||||||||||||||
IXM Holdings, Inc.(4)(6)(11) |
12/14/2029 | 2,184 | (31 | ) | (10 | ) | ||||||||||||||||||||||
KUEHG Corp. (8) |
SF + | 5.00% | 10.30 | % | 6/12/2030 | 3,837 | 3,827 | 3,853 | ||||||||||||||||||||
Learning Care Group, Inc. (8) |
SF + | 4.75% | 10.07 | % | 8/11/2028 | 1,990 | 1,964 | 1,996 | ||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
SF + | 5.00% | 10.38 | % | 3/12/2029 | 46,683 | 45,592 | 46,897 | ||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
SF + | 5.00% | 10.46 | % | 3/12/2029 | 12,485 | 12,393 | 12,543 | ||||||||||||||||||||
Polyconcept North America Holdings, Inc. (9) |
SF + | 5.50% | 10.80 | % | 5/18/2029 | 22,951 | 22,598 | 22,918 | ||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + | 6.50% | 11.97 | % | 7/25/2028 | 21,538 | 21,224 | 21,432 | ||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + | 6.50% | 11.96 | % | 7/25/2028 | 15,983 | 15,751 | 15,904 | ||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + | 6.50% | 11.97 | % | 7/25/2028 | 105,332 | 103,768 | 104,814 | ||||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) |
7/25/2028 | 5,175 | (73 | ) | (25 | ) | ||||||||||||||||||||||
Thrasio LLC (4)(7)(17) |
SF + | 7.00% | 12/18/2026 | 2,751 | 2,741 | 943 | ||||||||||||||||||||||
Thrasio LLC (4)(10) |
SF + | 8.00% | 13.44 | % | 7/1/2024 | 162 | 159 | 159 | ||||||||||||||||||||
Thrasio LLC (4)(10)(17) |
SF + | 10.00% PIK | 7/1/2024 | 162 | 161 | 159 | ||||||||||||||||||||||
Trugreen Limited Partnership (9) |
SF + | 4.00% | 9.43 | % | 11/2/2027 | 8,553 | 8,472 | 8,341 | ||||||||||||||||||||
WMB Holdings Inc (8) |
SF + | 2.75% | 8.08 | % | 11/2/2029 | 1,750 | 1,707 | 1,756 | ||||||||||||||||||||
F-9
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + | 7.25% (incl 1.50% PIK) | 12.68 | % | 12/31/2024 | 26,045 | 26,045 | 25,459 | ||||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + | 7.25% (incl 1.50% PIK) | 12.68 | % | 12/31/2024 | 15,343 | 15,338 | 14,997 | ||||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + | 7.25% (incl 1.50% PIK) | 12.68 | % | 12/31/2024 | 985 | 985 | 963 | ||||||||||||||||||||
| 608,037 | 610,228 | 9.77 | % | |||||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||||
Hamilton Projects Acquiror, LLC (9) |
SF + | 4.50% | 9.94 | % | 6/17/2027 | 52,312 | 48,980 | 52,553 | ||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7) |
7.88 | % | 12/31/2029 | 27,428 | 26,937 | 27,428 | ||||||||||||||||||||||
Sunzia UpperCo LLC (4)(16) |
SF + | 5.00% | 10.32 | % | 6/27/2025 | 25,000 | 24,745 | 24,744 | ||||||||||||||||||||
| 100,662 | 104,725 | 1.68 | % | |||||||||||||||||||||||||
Electronic and Electrical Equipment |
||||||||||||||||||||||||||||
Brightstar Escrow Corp. (7) |
9.75 | % | 10/15/2025 | 1,000 | 991 | 1,016 | ||||||||||||||||||||||
| 991 | 1,016 | 0.02 | % | |||||||||||||||||||||||||
Finance and Credit Services |
||||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(5)(10) |
SF + | 9.25% PIK | 14.72 | % | 2/9/2027 | 20,123 | 19,911 | 19,884 | ||||||||||||||||||||
Verscend Holding Corp. (7) |
SF + | 4.00% | 9.44 | % | 8/27/2025 | 3,929 | 3,920 | 3,934 | ||||||||||||||||||||
Yes Energy LLC (4)(9) |
BS + | 5.00% | 10.34 | % | 4/21/2028 | 10,000 | 9,845 | 10,082 | ||||||||||||||||||||
Yes Energy LLC (4)(9) |
BS + | 5.00% | 10.34 | % | 4/21/2028 | 26,000 | 25,488 | 26,213 | ||||||||||||||||||||
| 59,164 | 60,113 | 0.96 | % | |||||||||||||||||||||||||
Food Producers |
||||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(6)(9) |
SF + | 6.00% | 11.43 | % | 2/12/2029 | 11,279 | 6,599 | 6,758 | ||||||||||||||||||||
Specialty Ingredients, LLC (4)(9) |
SF + | 6.00% | 11.43 | % | 2/12/2029 | 89,574 | 88,201 | 89,500 | ||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) |
SF + | 6.00% | 11.32 | % | 10/2/2030 | 16,541 | 16,184 | 16,472 | ||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) |
SF + | 6.00% | 11.32 | % | 10/2/2030 | 59,546 | 58,301 | 59,299 | ||||||||||||||||||||
| 169,285 | 172,029 | 2.75 | % | |||||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(5)(10) |
SF + | 5.75% | 11.16 | % | 8/13/2027 | 41,924 | 41,358 | 41,804 | ||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(14) |
SF + | 10.38% | 15.68 | % | 6/8/2024 | 620 | 617 | 617 | ||||||||||||||||||||
| 41,975 | 42,421 | 0.68 | % | |||||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||||
BP Purchaser, LLC (4)(9) |
SF + | 5.50% | 11.08 | % | 12/11/2028 | 27,443 | 27,059 | 26,898 | ||||||||||||||||||||
Bright Light Buyer, Inc. (4)(10) |
SF + | 6.00% | 11.32 | % | 11/8/2029 | 75,000 | 73,249 | 74,091 | ||||||||||||||||||||
Capripack Debtco PLC (4)(5)(10) |
E + | 7.25% (incl 2.50% PIK) | 11.16 | % | 1/3/2030 | € | 13,146 | 13,876 | 13,710 | |||||||||||||||||||
Capripack Debtco PLC (4)(5)(10) |
E + | 7.25% (incl 2.50% PIK) | 11.16 | % | 1/3/2030 | € | 70,763 | 74,692 | 73,801 | |||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(6)(10) |
10/18/2029 | 5,664 | (79 | ) | — | |||||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(10) |
SF + | 6.00% | 11.30 | % | 10/18/2030 | 49,086 | 48,397 | 49,232 | ||||||||||||||||||||
F-10
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Formerra, LLC (4)(10) |
SF + | 7.25% | 12.69 | % | 11/1/2028 | 4,241 | 4,131 | 4,238 | ||||||||||||||||||||
Formerra, LLC (4)(6)(10) |
SF + | 7.25% | 12.68 | % | 11/1/2028 | 12,031 | 2,108 | 2,398 | ||||||||||||||||||||
Formerra, LLC (4)(10) |
SF + | 7.25% | 12.71 | % | 11/1/2028 | 105,419 | 102,743 | 105,347 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.70 | % | 6/23/2028 | 11,922 | 11,836 | 11,922 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.70 | % | 6/23/2028 | 49,737 | 49,189 | 49,737 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.70 | % | 6/23/2028 | 4,384 | 4,353 | 4,384 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.70 | % | 6/23/2028 | 13,194 | 13,099 | 13,194 | ||||||||||||||||||||
TMC Buyer Inc (8) |
SF + | 6.00% | 11.31 | % | 6/30/2028 | 69,973 | 63,051 | 69,185 | ||||||||||||||||||||
| 487,704 | 498,137 | 7.97 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
123Dentist Inc (4)(5)(6)(9) |
8/10/2029 | C$ | 5,587 | (79 | ) | — | ||||||||||||||||||||||
123Dentist Inc (4)(5)(9) |
C + | 5.50% | 10.79 | % | 8/10/2029 | C$ | 51,609 | 39,579 | 38,106 | |||||||||||||||||||
Accelerated Health Systems, LLC (8) |
SF + | 4.25% | 9.70 | % | 2/15/2029 | 7,931 | 7,915 | 5,972 | ||||||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(5)(10) |
SF + | 7.25% | 12.73 | % | 2/24/2028 | 41,092 | 40,550 | 39,920 | ||||||||||||||||||||
Baart Programs, Inc. (4)(10) |
SF + | 5.00% | 10.57 | % | 6/11/2027 | 10,097 | 10,034 | 10,001 | ||||||||||||||||||||
Charlotte Buyer Inc (8) |
SF + | 5.25% | 10.57 | % | 2/11/2028 | 23,875 | 22,751 | 23,982 | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(6)(9) |
SF + | 6.25% (incl 3.25% PIK) | 11.83 | % | 11/10/2027 | 1,000 | 742 | 532 | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + | 6.25% (incl 3.25% PIK) | 11.81 | % | 11/10/2028 | 25,291 | 24,949 | 18,820 | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + | 6.25% PIK | 11.81 | % | 11/10/2028 | 414 | 414 | 308 | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + | 6.25% PIK | 11.81 | % | 11/10/2028 | 6 | 6 | 4 | ||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) |
2/13/2031 | 54,046 | (530 | ) | (753 | ) | ||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) |
2/13/2031 | 32,427 | (318 | ) | (452 | ) | ||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) |
2/13/2031 | 13,909 | (273 | ) | (194 | ) | ||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(9) |
SF + | 6.00% | 11.32 | % | 2/13/2031 | 156,084 | 153,615 | 153,911 | ||||||||||||||||||||
Medline Borrower, LP (8) |
SF + | 2.75% | 8.08 | % | 10/23/2028 | 15,173 | 15,052 | 15,228 | ||||||||||||||||||||
MPH Acquisition Holdings LLC (8) |
SF + | 4.25% | 9.85 | % | 9/1/2028 | 4,574 | 4,485 | 4,431 | ||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
SF + | 6.25% | 11.55 | % | 6/3/2030 | 30,091 | 29,295 | 30,009 | ||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
SF + | 6.25% | 11.55 | % | 6/3/2030 | 10,030 | 9,765 | 10,003 | ||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) |
6/1/2029 | 4,032 | (104 | ) | (20 | ) | ||||||||||||||||||||||
Pediatric Associates Holding Company, LLC (8) |
SF + | 3.25% | 8.69 | % | 12/29/2028 | 7,698 | 7,672 | 6,793 | ||||||||||||||||||||
Phoenix Newco Inc (8) |
SF + | 3.25% | 8.69 | % | 11/15/2028 | 17,522 | 17,429 | 17,582 | ||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) |
SF + | 5.00% | 10.43 | % | 3/14/2028 | 9,234 | 9,120 | 9,234 | ||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) |
SF + | 5.00% | 10.43 | % | 3/14/2028 | 26,950 | 26,582 | 26,950 | ||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(9) |
SF + | 5.75% | 11.09 | % | 8/31/2029 | 108,193 | 106,639 | 108,597 | ||||||||||||||||||||
F-11
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(6)(9) |
8/31/2029 | 8,145 | (126 | ) | — | |||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
SF + | 5.50% | 10.96 | % | 12/17/2027 | 3,931 | 3,876 | 3,931 | ||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
SF + | 5.50% | 10.96 | % | 12/17/2027 | 20,626 | 20,358 | 20,626 | ||||||||||||||||||||
Tenet Healthcare Corp (5)(7) |
5.13 | % | 11/1/2027 | 2,695 | 2,722 | 2,638 | ||||||||||||||||||||||
Tivity Health Inc (4)(9) |
SF + | 6.00% | 11.31 | % | 6/28/2029 | 110,871 | 108,773 | 109,489 | ||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(6)(9) |
SF + | 5.75% | 11.06 | % | 7/17/2028 | 50,098 | 31,959 | 31,656 | ||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) |
SF + | 5.75% | 11.07 | % | 7/17/2028 | 26,481 | 26,106 | 25,916 | ||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) |
SF + | 5.75% | 11.07 | % | 7/17/2028 | 43,180 | 42,539 | 42,259 | ||||||||||||||||||||
WCAS XIV Primary Care Investors, L.P. (4)(10) |
SF + | 6.25% | 11.58 | % | 12/31/2032 | 56,433 | 55,307 | 55,307 | ||||||||||||||||||||
WCAS XIII Primary Care Investors, L.P. (4)(10) |
SF + | 6.25% | 11.56 | % | 12/31/2029 | 135,630 | 133,386 | 133,253 | ||||||||||||||||||||
| 950,190 | 944,039 | 15.11 | % | |||||||||||||||||||||||||
Household Goods and Home Construction |
||||||||||||||||||||||||||||
LHS Borrower, LLC (8) |
SF + | 4.75% | 10.18 | % | 2/16/2029 | 6,930 | 6,881 | 6,635 | ||||||||||||||||||||
Sunset Debt Merger Sub, Inc. (9) |
SF + | 4.00% | 9.44 | % | 10/6/2028 | 706 | 612 | 651 | ||||||||||||||||||||
| 7,493 | 7,286 | 0.12 | % | |||||||||||||||||||||||||
Industrial Engineering |
||||||||||||||||||||||||||||
LSF12 Donnelly Bidco, LLC (4)(10) |
SF + | 6.50% | 11.83 | % | 10/2/2029 | 19,828 | 19,373 | 19,664 | ||||||||||||||||||||
Radwell Parent, LLC (4)(6)(9) |
SF + | 6.75% | 12.05 | % | 4/3/2028 | 13,271 | 2,406 | 2,654 | ||||||||||||||||||||
Radwell Parent, LLC (4)(9) |
SF + | 6.75% | 12.05 | % | 4/2/2029 | 153,435 | 149,771 | 156,504 | ||||||||||||||||||||
Roper Industrial Products Investment Co (8) |
SF + | 4.00% | 9.30 | % | 11/22/2029 | 17,998 | 17,467 | 18,126 | ||||||||||||||||||||
Standard Industries, Inc. (8) |
SF + | 2.25% | 7.69 | % | 9/22/2028 | 1,259 | 1,259 | 1,261 | ||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
E + | 6.50% | 10.45 | % | 12/1/2027 | € | 4,758 | 4,949 | 4,920 | |||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(6)(9) |
SF + | 6.50% | 11.99 | % | 12/1/2027 | 1,000 | 792 | 765 | ||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
SF + | 6.50% | 11.99 | % | 12/1/2027 | 12,081 | 11,913 | 11,591 | ||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
E + | 6.50% | 10.45 | % | 12/1/2027 | € | 8,380 | 9,342 | 8,665 | |||||||||||||||||||
TK Elevator U.S. Newco, Inc. (5)(8) |
SF + | 3.50% | 8.79 | % | 4/11/2030 | 12,541 | 12,386 | 12,598 | ||||||||||||||||||||
Wec US Holdings Ltd (7) |
SF + | 2.75% | 8.08 | % | 1/27/2031 | 10,000 | 9,923 | 10,000 | ||||||||||||||||||||
| 239,581 | 246,748 | 3.95 | % | |||||||||||||||||||||||||
Industrial Metals and Mining |
||||||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + | 7.50% | 13.07 | % | 9/8/2026 | 3,060 | 3,011 | 3,070 | ||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + | 7.50% | 13.07 | % | 9/8/2026 | 9,130 | 8,904 | 9,294 | ||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + | 7.50% | 13.08 | % | 9/8/2026 | 12,036 | 11,698 | 11,966 | ||||||||||||||||||||
| 23,613 | 24,330 | 0.39 | % | |||||||||||||||||||||||||
F-12
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Acuris Finance US, Inc (8) |
SF + | 4.00% | 9.45 | % | 2/16/2028 | 13,500 | 13,414 | 13,502 | ||||||||||||||||||||
AI Circle Bidco Limited (4)(5)(6)(10) |
2/8/2031 | € | 6,374 | (272 | ) | (272 | ) | |||||||||||||||||||||
AI Circle Bidco Limited (4)(5)(10) |
E + | 6.75% | 10.66 | % | 2/8/2031 | € | 44,620 | 46,190 | 46,249 | |||||||||||||||||||
Allied Universal Holdco LLC (8) |
SF + | 3.75% | 9.18 | % | 5/12/2028 | 2,993 | 2,986 | 2,993 | ||||||||||||||||||||
Argos Health Holdings, Inc. (4)(9) |
SF + | 5.75% | 11.07 | % | 12/6/2027 | 652 | 643 | 624 | ||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(10) |
SF + | 8.25% (incl 4.00% PIK) | 13.56 | % | 10/31/2029 | 113,237 | 110,631 | 110,798 | ||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(6)(10) |
10/31/2029 | 13,445 | (313 | ) | (290 | ) | ||||||||||||||||||||||
Becklar, LLC (4)(10) |
SF + | 6.85% | 12.28 | % | 12/21/2026 | 981 | 970 | 968 | ||||||||||||||||||||
Becklar, LLC (4)(10) |
SF + | 6.85% | 12.28 | % | 12/21/2026 | 5,696 | 5,622 | 5,618 | ||||||||||||||||||||
Captive Resources Midco LLC (4)(6)(9) |
7/3/2028 | 7,558 | (107 | ) | — | |||||||||||||||||||||||
Captive Resources Midco LLC (4)(9) |
SF + | 5.75% (incl 3.13% PIK) | 11.08 | % | 7/2/2029 | 94,323 | 92,957 | 94,323 | ||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(6)(7) |
SN + | 8.25% | 13.44 | % | 2/28/2030 | £ | 9,965 | 2,259 | 2,503 | |||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) |
SN + | 8.25% (incl 2.00% PIK) | 13.49 | % | 2/28/2030 | £ | 45,620 | 53,311 | 56,923 | |||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) |
E + | 7.75% (incl 2.00% PIK) | 11.70 | % | 2/28/2030 | € | 22,491 | 23,056 | 23,943 | |||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
10/1/2029 | 10,736 | (274 | ) | 215 | |||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
10/1/2029 | 11,656 | (275 | ) | — | |||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(9) |
SF + | 6.50% | 11.83 | % | 10/1/2029 | 72,799 | 71,043 | 74,255 | ||||||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(9) |
SF + | 5.75% | 11.07 | % | 12/6/2027 | 815 | 804 | 780 | ||||||||||||||||||||
Employbridge, LLC (9) |
SF + | 4.75% | 10.34 | % | 7/19/2028 | 9,782 | 9,743 | 8,204 | ||||||||||||||||||||
Empower Payments Investor, LLC (4)(6)(9) |
3/12/2031 | 14,426 | (287 | ) | (286 | ) | ||||||||||||||||||||||
Empower Payments Investor, LLC (4)(6)(9) |
3/12/2030 | 9,704 | (192 | ) | (192 | ) | ||||||||||||||||||||||
Empower Payments Investor, LLC (4)(9) |
SF + | 5.25% | 10.48 | % | 3/12/2031 | 101,946 | 99,923 | 99,923 | ||||||||||||||||||||
Galaxy US Opco Inc. (5)(8) |
SF + | 4.75% | 10.06 | % | 4/29/2029 | 25,971 | 25,480 | 23,569 | ||||||||||||||||||||
Guidehouse Inc. (4)(9) |
SF + | 5.75% (incl 2.00% PIK) | 11.08 | % | 12/16/2030 | 187,369 | 184,914 | 187,238 | ||||||||||||||||||||
IG Investments Holdings, LLC (4)(6)(9) |
9/22/2027 | 1,726 | (17 | ) | — | |||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
SF + | 6.00% | 11.41 | % | 9/22/2028 | 22,221 | 21,976 | 22,221 | ||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
SF + | 6.00% | 11.41 | % | 9/22/2028 | 1,833 | 1,820 | 1,833 | ||||||||||||||||||||
NBG Acquisition Corp. (4)(6)(9) |
SF + | 5.25% | 10.71 | % | 11/6/2028 | 2,876 | 2,002 | 1,984 | ||||||||||||||||||||
NBG Acquisition Corp. (4)(9) |
SF + | 5.25% | 10.71 | % | 11/6/2028 | 21,281 | 21,174 | 21,005 | ||||||||||||||||||||
PG Investment Co 59 Sarl (5)(7) |
SF + | 3.50% | 8.81 | % | 3/26/2031 | 6,977 | 6,959 | 6,999 | ||||||||||||||||||||
Planet US Buyer LLC (7) |
SF + | 3.50% | 8.81 | % | 2/7/2031 | 7,500 | 7,481 | 7,533 | ||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
SF + | 6.00% | 11.34 | % | 8/31/2028 | 8,985 | 5,087 | 5,140 | ||||||||||||||||||||
F-13
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
8/31/2028 | 7,000 | (103 | ) | (68 | ) | ||||||||||||||||||||||
Royal Buyer, LLC (4)(9) |
SF + | 6.00% | 11.34 | % | 8/31/2028 | 44,438 | 43,766 | 44,005 | ||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
8/31/2028 | 23,538 | (232 | ) | (229 | ) | ||||||||||||||||||||||
Royal Buyer, LLC (4)(9) |
SF + | 6.00% | 11.33 | % | 8/31/2028 | 70,849 | 70,160 | 70,160 | ||||||||||||||||||||
Sedgwick Claims Management Services, Inc. (7) |
SF + | 3.75% | 9.08 | % | 2/24/2028 | 19,157 | 19,010 | 19,213 | ||||||||||||||||||||
Simplisafe Holding Corporation (4)(6)(9) |
SF + | 6.25% | 11.58 | % | 5/2/2028 | 15,076 | 3,772 | 3,998 | ||||||||||||||||||||
Simplisafe Holding Corporation (4)(9) |
SF + | 6.25% | 11.58 | % | 5/2/2028 | 118,736 | 117,079 | 118,736 | ||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
SF + | 5.25% | 10.68 | % | 9/13/2028 | 3,579 | 361 | 401 | ||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(9) |
SF + | 5.25% | 10.65 | % | 9/13/2028 | 42,994 | 42,293 | 42,799 | ||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
SF + | 5.25% | 10.68 | % | 9/13/2028 | 5,978 | 2,900 | 2,958 | ||||||||||||||||||||
TruckPro, LLC (4)(12) |
SF + | 7.75% | 13.44 | % | 8/16/2028 | 70,356 | 68,509 | 69,675 | ||||||||||||||||||||
Vaco Holdings, LLC (9) |
SF + | 5.00% | 10.43 | % | 1/21/2029 | 12,463 | 12,422 | 12,349 | ||||||||||||||||||||
W3 TopCo LLC (4)(10) |
SF + | 6.50% | 11.83 | % | 3/22/2029 | 89,928 | 86,351 | 86,349 | ||||||||||||||||||||
| 1,274,996 | 1,288,649 | 20.63 | % | |||||||||||||||||||||||||
Industrial Transportation |
||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(6)(7) |
5/31/2029 | € | 11,245 | (293 | ) | — | ||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
E + | 6.50% | 10.53 | % | 5/31/2029 | € | 8,096 | 8,493 | 8,737 | |||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
E + | 6.50% | 10.53 | % | 5/31/2029 | € | 22,264 | 23,357 | 24,027 | |||||||||||||||||||
Truck-Lite Co, LLC (4)(6)(9) |
2/13/2031 | 9,338 | (183 | ) | (183 | ) | ||||||||||||||||||||||
Truck-Lite Co, LLC (4)(6)(9) |
SF + | 5.75% | 11.06 | % | 2/13/2030 | 11,973 | 165 | 165 | ||||||||||||||||||||
Truck-Lite Co, LLC (4)(9) |
SF + | 6.38% (incl 2.50% PIK) | 11.68 | % | 2/13/2031 | 86,373 | 84,678 | 84,678 | ||||||||||||||||||||
| 116,217 | 117,424 | 1.88 | % | |||||||||||||||||||||||||
Investment Banking and Brokerage Services |
||||||||||||||||||||||||||||
Apex Group Treasury LLC (5)(8) |
SF + | 5.00% | 10.32 | % | 7/27/2028 | 6,965 | 6,869 | 7,000 | ||||||||||||||||||||
Ascensus Holdings, Inc. (8) |
SF + | 3.50% | 8.94 | % | 8/2/2028 | 7,623 | 7,565 | 7,605 | ||||||||||||||||||||
Eisner Advisory Group LLC (8) |
SF + | 4.00% | 9.33 | % | 2/28/2031 | 6,063 | 6,003 | 6,095 | ||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
9/3/2030 | 5,484 | (106 | ) | (48 | ) | ||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
SF + | 6.00% | 11.28 | % | 9/4/2029 | 7,590 | 1,264 | 1,325 | ||||||||||||||||||||
More Cowbell II, LLC (4)(9) |
SF + | 6.00% | 11.09 | % | 9/3/2030 | 50,342 | 49,418 | 49,903 | ||||||||||||||||||||
Osaic Holdings Inc (7) |
SF + | 4.50% | 9.83 | % | 8/16/2028 | 12,993 | 12,938 | 13,059 | ||||||||||||||||||||
RFS OPCO LLC (4)(7) |
SF + | 5.00% | 10.31 | % | 4/4/2031 | 70,000 | 69,300 | 69,300 | ||||||||||||||||||||
Transnetwork LLC (8) |
SF + | 5.50% | 10.82 | % | 12/29/2030 | 48,791 | 47,847 | 49,096 | ||||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14) |
SN + | 8.00% | 13.22 | % | 9/22/2028 | £ | 23,080 | 27,241 | 28,858 | |||||||||||||||||||
| 228,339 | 232,193 | 3.72 | % | |||||||||||||||||||||||||
Leisure Goods |
||||||||||||||||||||||||||||
Jam City, Inc. (4)(10) |
SF + | 7.00% | 12.57 | % | 9/7/2027 | 1,988 | 1,977 | 1,997 | ||||||||||||||||||||
| 1,977 | 1,997 | 0.03 | % | |||||||||||||||||||||||||
Life Insurance |
||||||||||||||||||||||||||||
Onedigital Borrower LLC (8) |
SF + | 4.25% | 9.68 | % | 11/16/2027 | 5,865 | 5,857 | 5,872 | ||||||||||||||||||||
| 5,857 | 5,872 | 0.09 | % | |||||||||||||||||||||||||
F-14
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Media |
||||||||||||||||||||||||||||
2080 Media, Inc. (4)(9) |
SF + | 6.00% | 11.31 | % | 3/14/2029 | 12,618 | 12,450 | 12,618 | ||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
3/14/2028 | 13,795 | (182 | ) | — | |||||||||||||||||||||||
2080 Media, Inc. (4)(9) |
SF + | 6.00% | 11.31 | % | 3/14/2029 | 54,353 | 53,549 | 54,353 | ||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10) |
SF + | 7.25% | 12.72 | % | 10/29/2027 | 2,766 | 2,440 | 2,336 | ||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10) |
SF + | 7.25% | 12.72 | % | 10/29/2027 | 40,869 | 40,126 | 38,596 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.08 | % | 7/2/2027 | 496 | 493 | 496 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.09 | % | 7/2/2027 | 1,033 | 1,026 | 1,033 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.07 | % | 7/2/2027 | 1,033 | 1,026 | 1,033 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.08 | % | 7/2/2027 | 624 | 620 | 624 | ||||||||||||||||||||
Associations Inc. (4)(6)(10) |
SF + | 6.50% | 12.09 | % | 7/2/2027 | 403 | 204 | 207 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.09 | % | 7/2/2027 | 29,681 | 29,506 | 29,681 | ||||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
SF + | 6.00% (incl 4.00% PIK) | 11.41 | % | 6/18/2027 | 1,085 | 1,073 | 1,015 | ||||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
SF + | 6.00% (incl 4.00% PIK) | 11.41 | % | 6/18/2027 | 19,058 | 18,839 | 17,837 | ||||||||||||||||||||
Circana Group, LP. (4)(6)(9) |
SF + | 5.75% | 11.08 | % | 12/1/2027 | 9,023 | 4,922 | 5,053 | ||||||||||||||||||||
Circana Group, LP. (4)(9) |
SF + | 6.25% (incl 2.75% PIK) | 11.58 | % | 12/1/2028 | 143,563 | 141,454 | 143,903 | ||||||||||||||||||||
Circana Group, LP. (4)(9) |
SF + | 5.75% | 11.16 | % | 12/1/2028 | 9,174 | 9,106 | 9,157 | ||||||||||||||||||||
IEHL US Holdings, Inc. (4)(12) |
SF + | 7.25% | 12.56 | % | 10/29/2029 | 6,604 | 6,432 | 6,590 | ||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
SN + | 7.65% | 12.91 | % | 10/29/2029 | £ | 15,493 | 18,811 | 19,506 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
E + | 7.25% | 11.16 | % | 10/29/2029 | € | 2,540 | 2,727 | 2,738 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
E + | 7.25% | 11.16 | % | 10/29/2029 | € | 3,048 | 3,181 | 3,285 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12) |
4/27/2029 | 5,080 | (138 | ) | (17 | ) | ||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
SF + | 7.25% | 12.56 | % | 10/29/2029 | 30,478 | 29,695 | 30,413 | ||||||||||||||||||||
Mav Acquisition Corporation (8) |
SF + | 4.75% | 10.19 | % | 7/28/2028 | 15,684 | 15,486 | 15,731 | ||||||||||||||||||||
Oneteam Partners, LLC (4)(9) |
SF + | 5.50% | 10.93 | % | 9/14/2029 | 74,063 | 72,880 | 74,063 | ||||||||||||||||||||
Renaissance Financiere (4)(5)(7) |
E + | 7.00% | 10.93 | % | 7/26/2028 | € | 34,871 | 35,544 | 37,455 | |||||||||||||||||||
Renaissance Holding Corp. (8) |
SF + | 4.25% | 9.58 | % | 4/5/2030 | 7,960 | 7,803 | 7,985 | ||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) |
SF + | 7.50% | 12.92 | % | 8/7/2028 | 3,657 | 3,578 | 3,622 | ||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) |
8/7/2028 | 4,711 | (112 | ) | (45 | ) | ||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) |
SF + | 7.25% | 12.67 | % | 8/7/2028 | 4,263 | 4,180 | 4,180 | ||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) |
SF + | 7.50% | 12.92 | % | 8/7/2028 | 63,512 | 62,001 | 62,905 | ||||||||||||||||||||
| 578,720 | 586,353 | 9.39 | % | |||||||||||||||||||||||||
F-15
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(9) |
SF + | 7.50% | 12.96 | % | 2/23/2028 | 21,259 | 20,893 | 19,343 | ||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
SF + | 6.75% (incl 3.38% PIK) | 12.06 | % | 9/30/2030 | 15,471 | 1,207 | 1,438 | ||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
10/1/2029 | 21,254 | (584 | ) | (315 | ) | ||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
E + | 6.75% (incl 3.38% PIK) | 10.66 | % | 9/30/2030 | € | 62,119 | 63,867 | 66,145 | |||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
SF + | 6.75% (incl 3.38% PIK) | 12.06 | % | 9/30/2030 | 82,072 | 79,809 | 80,929 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
5/11/2028 | 34,900 | (825 | ) | (419 | ) | ||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + | 5.50% | 10.83 | % | 5/11/2028 | 22,800 | 22,478 | 22,596 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
SF + | 5.50% | 10.83 | % | 5/11/2028 | 10,875 | 3,654 | 3,709 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + | 5.50% | 10.83 | % | 5/11/2028 | 75,106 | 74,028 | 74,436 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + | 5.75% | 11.08 | % | 5/11/2028 | 9,652 | 9,437 | 9,536 | ||||||||||||||||||||
Femur Buyer, Inc. (4)(6)(10) |
9/18/2029 | 13,350 | (331 | ) | (332 | ) | ||||||||||||||||||||||
Femur Buyer, Inc. (4)(10) |
SF + | 8.25% (incl 4.50% PIK) | 13.58 | % | 3/18/2030 | 137,576 | 134,158 | 134,157 | ||||||||||||||||||||
Limpio Bidco GMBH (4)(5)(7) |
E + | 6.20% | 10.11 | % | 10/31/2030 | € | 66,556 | 68,602 | 71,220 | |||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
SF + | 6.75% | 12.08 | % | 3/13/2029 | 111,785 | 108,441 | 111,278 | ||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
SF + | 5.75% | 11.08 | % | 3/13/2029 | 62,432 | 61,264 | 61,910 | ||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
SF + | 6.25% | 11.56 | % | 5/12/2029 | 3,153 | 581 | 486 | ||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
SF + | 5.75% | 11.06 | % | 5/12/2028 | 9,458 | 5,545 | 5,278 | ||||||||||||||||||||
Plasma Buyer LLC (4)(9) |
SF + | 5.75% | 11.06 | % | 5/12/2029 | 83,848 | 82,573 | 79,962 | ||||||||||||||||||||
Resonetics, LLC (4)(10) |
SF + | 6.00% | 11.33 | % | 4/28/2028 | 63,354 | 61,662 | 62,405 | ||||||||||||||||||||
SDC US Smilepay SPV (4)(7)(17) |
P + | 9.75% | 10/27/2025 | 24,175 | 20,147 | 17,602 | ||||||||||||||||||||||
TecoStar Holdings Inc (4)(10) |
SF + | 8.50% (incl 4.50% PIK) | 13.83 | % | 7/6/2029 | 121,254 | 118,657 | 121,185 | ||||||||||||||||||||
Zeus Company LLC (4)(6)(9) |
2/28/2031 | 23,088 | (344 | ) | (342 | ) | ||||||||||||||||||||||
Zeus Company LLC (4)(6)(9) |
2/28/2030 | 21,506 | (318 | ) | (318 | ) | ||||||||||||||||||||||
Zeus Company LLC (4)(9) |
SF + | 5.50% | 10.81 | % | 2/28/2031 | 124,100 | 122,263 | 122,262 | ||||||||||||||||||||
| 1,056,864 | 1,064,151 | 17.03 | % | |||||||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
SF + | 6.00% | 11.31 | % | 11/1/2029 | 7,988 | 3,421 | 3,519 | ||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
SF + | 5.50% | 10.99 | % | 11/1/2029 | 39,550 | 39,302 | 39,550 | ||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
11/1/2029 | 467 | — | — | ||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
SF + | 5.50% | 10.96 | % | 11/1/2029 | 14,236 | 14,236 | 14,236 | ||||||||||||||||||||
F-16
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Acrisure LLC (7) |
SF + | 4.50% | 9.83 | % | 11/6/2030 | 3,990 | 3,952 | 4,015 | ||||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + | 5.25% | 10.58 | % | 10/2/2028 | 21,501 | 21,348 | 21,501 | ||||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + | 5.25% | 10.58 | % | 10/2/2028 | 12,366 | 12,358 | 12,366 | ||||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + | 5.25% | 10.58 | % | 10/2/2028 | 43,614 | 43,586 | 43,614 | ||||||||||||||||||||
Alera Group (4)(6)(9) |
SF + | 5.75% | 11.08 | % | 10/2/2028 | 5,196 | 210 | 262 | ||||||||||||||||||||
Alliant Holdings Intermediate, LLC (8) |
SF + | 3.50% | 8.83 | % | 11/6/2030 | 18,792 | 18,673 | 18,888 | ||||||||||||||||||||
AmWINS Group, Inc. (9) |
SF + | 2.25% | 7.69 | % | 2/19/2028 | 4,585 | 4,566 | 4,591 | ||||||||||||||||||||
AmWINS Group, Inc. (9) |
SF + | 2.75% | 8.19 | % | 2/19/2028 | 2,970 | 2,964 | 2,979 | ||||||||||||||||||||
Amynta Agency Borrower Inc. (7) |
SF + | 4.25% | 9.55 | % | 2/28/2028 | 20,065 | 19,582 | 20,164 | ||||||||||||||||||||
BroadStreet Partners, Inc. (7) |
SF + | 3.75% | 9.08 | % | 1/27/2029 | 9,169 | 9,096 | 9,207 | ||||||||||||||||||||
Galway Borrower LLC (4)(6)(9) |
SF + | 5.25% | 10.66 | % | 9/29/2028 | 2,216 | 331 | 358 | ||||||||||||||||||||
Galway Borrower LLC (4)(9) |
SF + | 5.25% | 10.65 | % | 9/29/2028 | 60,809 | 60,395 | 60,809 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + | 5.50% | 10.93 | % | 11/27/2028 | 22,406 | 22,201 | 22,406 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + | 5.50% | 10.93 | % | 11/27/2028 | 48 | 47 | 48 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + | 5.50% | 10.93 | % | 11/27/2028 | 9,752 | 9,690 | 9,752 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc.(4)(6)(10) |
11/24/2028 | 14,338 | (143 | ) | (143 | ) | ||||||||||||||||||||||
HUB International Limited (7) |
7.25 | % | 6/15/2030 | 10,517 | 10,517 | 10,819 | ||||||||||||||||||||||
HUB International Limited (9) |
SF + | 3.25% | 8.57 | % | 6/20/2030 | 13,853 | 13,711 | 13,874 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) |
SF + | 6.00% | 11.34 | % | 8/27/2026 | 5,825 | 354 | 396 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) |
SF + | 6.02% | 11.36 | % | 8/27/2026 | 20,644 | 20,427 | 20,610 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) |
SF + | 6.02% | 11.46 | % | 8/27/2026 | 56,827 | 56,428 | 56,734 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(10) |
8/27/2026 | 472 | (4 | ) | (1 | ) | ||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) |
8.50 | % | 3/15/2030 | 14,487 | 14,468 | 15,113 | ||||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) |
SF + | 5.75% | 11.20 | % | 10/16/2028 | 18,174 | 17,904 | 18,174 | ||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(6)(9) |
10/16/2028 | 822 | (11 | ) | — | |||||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) |
SF + | 5.50% | 10.95 | % | 10/16/2028 | 7,168 | 7,071 | 7,168 | ||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) |
5/1/2029 | 6,685 | (170 | ) | — | |||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) |
5/1/2030 | 10,961 | (304 | ) | 219 | |||||||||||||||||||||||
Summit Acquisition Inc. (4)(9) |
SF + | 6.75% | 12.06 | % | 5/1/2030 | 48,658 | 47,392 | 49,631 | ||||||||||||||||||||
Truist Insurance Holdings LLC (7) |
SF + | 3.25% | 8.55 | % | 5/6/2031 | 13,333 | 13,300 | 13,328 | ||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
SF + | 5.00% | 10.46 | % | 3/25/2027 | 25,953 | 25,722 | 25,711 | ||||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9) |
3/25/2027 | 6,576 | (59 | ) | (61 | ) | ||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
SF + | 5.00% | 10.46 | % | 3/25/2027 | 20,580 | 20,386 | 20,389 | ||||||||||||||||||||
USI Inc/NY (7) |
SF + | 3.25% | 8.55 | % | 9/27/2030 | 5,970 | 5,956 | 5,983 | ||||||||||||||||||||
| 538,903 | 546,209 | 8.74 | % | |||||||||||||||||||||||||
F-17
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Oil, Gas and Coal |
||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
12/7/2029 | 6,923 | (152 | ) | (79 | ) | ||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
P + | 5.00% | 13.50 | % | 12/7/2029 | 6,923 | 1,237 | 1,305 | ||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10) |
SF + | 6.00% | 11.33 | % | 12/7/2029 | 46,038 | 45,057 | 45,510 | ||||||||||||||||||||
| 46,142 | 46,736 | 0.75 | % | |||||||||||||||||||||||||
Personal Care, Drug and Grocery Stores |
||||||||||||||||||||||||||||
Parfums Holding Co Inc (12) |
SF + | 6.00% | 11.57 | % | 6/30/2026 | 16,413 | 15,263 | 16,393 | ||||||||||||||||||||
Puma Buyer LLC (4)(8) |
SF + | 5.50% | 10.90 | % | 7/16/2029 | 61,225 | 57,830 | 61,225 | ||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
SF + | 5.65% | 10.96 | % | 3/23/2028 | 15,826 | 15,550 | 15,806 | ||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
B + | 5.75% | 10.14 | % | 3/23/2028 | A$ | 35,035 | 25,693 | 22,824 | |||||||||||||||||||
| 114,336 | 116,248 | 1.86 | % | |||||||||||||||||||||||||
Personal Goods |
||||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(6)(7) |
5/23/2028 | € | 3,978 | (106 | ) | (390 | ) | |||||||||||||||||||||
Daphne S.P.A. (4)(5)(7) |
E + | 6.25% | 10.16 | % | 5/23/2028 | € | 45,354 | 47,713 | 44,496 | |||||||||||||||||||
Spanx, LLC (4)(6)(9) |
11/18/2027 | 5,000 | (63 | ) | — | |||||||||||||||||||||||
Spanx, LLC (4)(9) |
SF + | 5.25% | 10.68 | % | 11/20/2028 | 29,325 | 28,918 | 29,325 | ||||||||||||||||||||
| 76,462 | 73,431 | 1.18 | % | |||||||||||||||||||||||||
Pharmaceuticals and Biotechnology |
||||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(6)(9) |
8/24/2029 | 6,340 | (93 | ) | — | |||||||||||||||||||||||
Advarra Holdings, Inc. (4)(9) |
SF + | 5.25% | 10.58 | % | 8/24/2029 | 69,283 | 68,324 | 69,283 | ||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
SF + | 5.50% | 11.10 | % | 11/1/2028 | 1,341 | 1,329 | 1,341 | ||||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) |
10/30/2026 | 2,115 | (23 | ) | — | |||||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
SF + | 5.50% | 11.10 | % | 11/1/2028 | 24,893 | 24,622 | 24,893 | ||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) |
10/27/2028 | € | 8,400 | (175 | ) | 25 | ||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) |
E + | 6.50% | 10.44 | % | 10/27/2028 | € | 82,300 | 80,448 | 89,059 | |||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(9) |
B + | 6.50% | 10.97 | % | 10/30/2028 | A$ | 11,982 | 1,907 | 1,972 | |||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(9) |
B + | 6.50% | 10.89 | % | 10/30/2028 | A$ | 118,623 | 74,333 | 77,153 | |||||||||||||||||||
| 250,672 | 263,726 | 4.22 | % | |||||||||||||||||||||||||
Real Estate Investment and Services |
||||||||||||||||||||||||||||
OEG Borrower LLC (4)(8) |
SF + | 5.00% | 10.43 | % | 6/18/2029 | 39,400 | 38,181 | 39,400 | ||||||||||||||||||||
| 38,181 | 39,400 | 0.63 | % | |||||||||||||||||||||||||
Retailers |
||||||||||||||||||||||||||||
AI Grace Aus Bidco Pty Ltd (4)(5)(9) |
E + | 6.50% | 10.50 | % | 12/5/2029 | € | 21,626 | 22,683 | 22,909 | |||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
10/31/2029 | 1,150 | (11 | ) | — | |||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
SF + | 6.00% | 11.30 | % | 10/31/2029 | 1,494 | 351 | 369 | ||||||||||||||||||||
BradyIFS Holdings, LLC (4)(10) |
SF + | 6.00% | 11.31 | % | 10/31/2029 | 13,538 | 13,409 | 13,565 | ||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
SF + | 8.00% | 13.46 | % | 7/28/2027 | 51,165 | 49,890 | 49,999 | ||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
SF + | 8.00% | 13.48 | % | 7/28/2027 | 43,955 | 42,313 | 42,953 | ||||||||||||||||||||
Petsmart LLC (9) |
SF + | 3.75% | 9.18 | % | 2/11/2028 | 15,394 | 15,314 | 15,378 | ||||||||||||||||||||
White Cap Buyer, LLC (8) |
SF + | 3.75% | 9.08 | % | 10/19/2027 | 9,297 | 9,263 | 9,335 | ||||||||||||||||||||
| 153,212 | 154,508 | 2.47 | % | |||||||||||||||||||||||||
F-18
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
SN + | 5.25% | 10.47 | % | 6/28/2029 | £ | 47,995 | 55,880 | 60,565 | |||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
SN + | 5.25% | 10.47 | % | 6/28/2029 | £ | 91,991 | 109,956 | 116,084 | |||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
SF + | 7.00% | 12.32 | % | 11/7/2029 | 39,900 | 38,969 | 39,405 | ||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) |
11/7/2029 | 6,000 | (140 | ) | (74 | ) | ||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
E + | 7.00% | 10.92 | % | 11/7/2029 | € | 18,568 | 19,397 | 19,798 | |||||||||||||||||||
Avalara, Inc. (4)(6)(9) |
10/19/2028 | 6,324 | (120 | ) | — | |||||||||||||||||||||||
Avalara, Inc. (4)(9) |
SF + | 7.25% | 12.56 | % | 10/19/2028 | 56,918 | 55,815 | 57,016 | ||||||||||||||||||||
Barracuda Networks Inc (8) |
SF + | 4.50% | 9.81 | % | 8/15/2029 | 13,827 | 13,508 | 13,773 | ||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) |
5/15/2028 | 385 | (3 | ) | — | |||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) |
SF + | 5.25% | 10.58 | % | 5/14/2029 | 4,546 | 4,512 | 4,546 | ||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) |
4/16/2027 | 2,687 | — | (6 | ) | |||||||||||||||||||||||
Calabrio, Inc. (4)(10) |
SF + | 7.13% | 12.45 | % | 4/16/2027 | 22,313 | 22,313 | 22,265 | ||||||||||||||||||||
Calabrio, Inc. (4)(10) |
SF + | 7.13% | 12.45 | % | 4/16/2027 | 3,273 | 3,212 | 3,266 | ||||||||||||||||||||
Central Parent Inc (7) |
SF + | 4.00% | 9.31 | % | 7/6/2029 | 15,000 | 14,965 | 15,062 | ||||||||||||||||||||
Certinia Inc. (4)(6)(10) |
8/3/2029 | 5,449 | (145 | ) | (41 | ) | ||||||||||||||||||||||
Certinia Inc. (4)(10) |
SF + | 7.25% | 12.56 | % | 8/3/2029 | 40,323 | 39,246 | 40,019 | ||||||||||||||||||||
Cloud Software Group Inc. (8) |
SF + | 4.50% | 9.91 | % | 3/30/2029 | 13,658 | 12,768 | 13,611 | ||||||||||||||||||||
Cloud Software Group Inc. (7) |
6.50 | % | 3/31/2029 | 7,740 | 6,729 | 7,354 | ||||||||||||||||||||||
CommerceHub, Inc. (4)(9) |
SF + | 6.25% | 11.73 | % | 12/29/2027 | 51,141 | 48,441 | 50,759 | ||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
2/27/2030 | 7,123 | (160 | ) | (24 | ) | ||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
2/27/2029 | 6,211 | (127 | ) | (30 | ) | ||||||||||||||||||||||
Coupa Holdings, LLC (4)(9) |
SF + | 7.50% | 12.81 | % | 2/27/2030 | 79,777 | 78,197 | 79,510 | ||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) |
8/29/2030 | € | 9,441 | (243 | ) | (255 | ) | |||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
E + | 6.00% | 9.83 | % | 8/29/2030 | € | 6,742 | 7,170 | 7,282 | |||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.22 | % | 8/29/2030 | £ | 23,265 | 28,754 | 29,354 | |||||||||||||||||||
DS Admiral Bidco, LLC (4)(6)(10) |
3/16/2026 | 966 | (5 | ) | (2 | ) | ||||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) |
SF + | 7.00% | 12.30 | % | 3/16/2028 | 39,246 | 38,299 | 39,314 | ||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) |
SF + | 6.50% | 11.80 | % | 3/16/2028 | 8,830 | 8,768 | 8,810 | ||||||||||||||||||||
Enverus Holdings Inc (4)(9) |
SF + | 5.50% | 10.83 | % | 12/24/2029 | 64,577 | 63,653 | 64,307 | ||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
12/24/2029 | 3,229 | (47 | ) | (14 | ) | ||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
12/24/2029 | 4,913 | (70 | ) | (21 | ) | ||||||||||||||||||||||
Finthrive Software Intermediate Holdings Inc (8) |
SF + | 4.00% | 9.57 | % | 12/18/2028 | 12,937 | 12,743 | 10,940 | ||||||||||||||||||||
GoTo Group Inc (7) |
SF + | 4.75% | 10.17 | % | 4/30/2028 | 1,008 | 1,008 | 777 | ||||||||||||||||||||
GoTo Group Inc (7) |
SF + | 4.75% | 10.17 | % | 4/30/2028 | 1,008 | 1,008 | 964 | ||||||||||||||||||||
GovCIO Buyer Company (4)(10) |
SF + | 5.00% | 10.32 | % | 8/18/2027 | 9,581 | 9,462 | 9,581 | ||||||||||||||||||||
Helios Software Holdings, Inc. (10) |
SF + | 3.75% | 9.25 | % | 3/11/2028 | 11,761 | 11,679 | 11,673 | ||||||||||||||||||||
Huskies Parent, Inc. (4)(6)(9) |
SF + | 5.50% | 10.96 | % | 11/3/2027 | 1,000 | 635 | 618 | ||||||||||||||||||||
Huskies Parent, Inc. (4)(9) |
SF + | 5.50% | 10.96 | % | 11/3/2028 | 25,090 | 24,753 | 24,249 | ||||||||||||||||||||
LMI Inc/DE (8) |
SF + | 3.75% | 9.18 | % | 10/2/2028 | 6,246 | 6,219 | 6,157 | ||||||||||||||||||||
Medallia, Inc. (4)(9) |
SF + |
6.50% (incl
4.00% PIK)
|
11.91 | % | 10/30/2028 | 77,518 | 77,518 | 76,571 | ||||||||||||||||||||
Mcafee Corp. (8) |
SF + | 3.75% | 9.18 | % | 3/1/2029 | 7,860 | 7,835 | 7,869 | ||||||||||||||||||||
Mitchell Topo Holdings Inc (8) |
SF + | 3.75% | 9.19 | % | 10/15/2028 | 16,562 | 16,350 | 16,587 | ||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) |
SF + | 3.50% | 9.42 | % | 2/10/2028 | 1,789 | 1,780 | 1,750 | ||||||||||||||||||||
New Era Technology, Inc. (4)(10) |
SF + | 6.25% | 11.71 | % | 10/31/2026 | 19,161 | 19,161 | 18,797 | ||||||||||||||||||||
F-19
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10) |
2/1/2029 | 4,657 | (94 | ) | (22 | ) | ||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) |
SF + | 7.50% | 12.81 | % | 2/1/2029 | 33,837 | 33,156 | 33,677 | ||||||||||||||||||||
Peraton Inc. (9) |
SF + | 3.75% | 9.18 | % | 2/1/2028 | 15,043 | 14,915 | 15,059 | ||||||||||||||||||||
Perforce Software, Inc. (4)(8) |
SF + | 4.50% | 9.83 | % | 7/1/2026 | 19,650 | 19,370 | 19,439 | ||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9) |
10/17/2028 | 6,068 | (118 | ) | — | |||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9) |
SF + | 7.00% | 12.33 | % | 10/17/2029 | 59,003 | 57,789 | 60,184 | ||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9) |
9/19/2028 | 10,833 | (184 | ) | 108 | |||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9) |
SF + | 5.75% | 11.08 | % | 9/19/2028 | 42,683 | 42,033 | 43,110 | ||||||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) |
SF + | 4.75% | 10.06 | % | 10/28/2030 | 15,061 | 14,778 | 15,160 | ||||||||||||||||||||
Project Ruby Ultimate Parent Corp (9) |
SF + | 3.25% | 8.69 | % | 3/10/2028 | 12,226 | 12,109 | 12,228 | ||||||||||||||||||||
Proofpoint, Inc. (8) |
SF + | 3.25% | 8.69 | % | 8/31/2028 | 2,384 | 2,384 | 2,388 | ||||||||||||||||||||
Quail Buyer, Inc. (4)(9) |
SF + | 5.25% | 10.72 | % | 10/1/2027 | 7,293 | 7,204 | 7,293 | ||||||||||||||||||||
Riley Mergeco LLC (4)(6)(10) |
9/23/2027 | 304 | (5 | ) | (5 | ) | ||||||||||||||||||||||
Riley Mergeco LLC (4)(10) |
SF + | 5.50% | 10.94 | % | 9/23/2027 | 1,811 | 1,787 | 1,779 | ||||||||||||||||||||
Smarsh Inc. (4)(6)(9) |
SF + | 5.75% | 11.06 | % | 2/16/2029 | 4,286 | 2,080 | 2,143 | ||||||||||||||||||||
Smarsh Inc. (4)(6)(9) |
SF + | 5.75% | 11.08 | % | 2/16/2029 | 1,071 | 414 | 429 | ||||||||||||||||||||
Smarsh Inc. (4)(9) |
SF + | 5.75% | 11.06 | % | 2/16/2029 | 17,143 | 16,897 | 17,143 | ||||||||||||||||||||
Trimech Acquisition Corp. (4)(6)(14) |
P + | 3.75% | 12.25 | % | 3/10/2028 | 3,289 | 1,011 | 1,053 | ||||||||||||||||||||
Trimech Acquisition Corp. (4)(10) |
SF + | 4.75% | 10.23 | % | 3/10/2028 | 21,276 | 21,055 | 21,276 | ||||||||||||||||||||
Trimech Acquisition Corp. (4)(10) |
SN + | 4.75% | 10.08 | % | 3/10/2028 | £ | 36,162 | 43,801 | 45,385 | |||||||||||||||||||
UKG Inc (7) |
SF + | 3.50% | 8.81 | % | 2/10/2031 | 8,147 | 8,137 | 8,199 | ||||||||||||||||||||
User Zoom Technologies, Inc. (4)(9) |
SF + | 7.00% | 12.49 | % | 4/5/2029 | 18,948 | 18,661 | 18,948 | ||||||||||||||||||||
Zelis Payments Buyer, Inc. (7) |
SF + | 2.75% | 8.08 | % | 9/28/2029 | 10,994 | 10,940 | 11,006 | ||||||||||||||||||||
Zendesk Inc (4)(6)(9) |
11/22/2028 | 39,321 | (664 | ) | 387 | |||||||||||||||||||||||
Zendesk Inc (4)(6)(9) |
11/22/2028 | 17,940 | (278 | ) | — | |||||||||||||||||||||||
Zendesk Inc (4)(9) |
SF + | 6.25% | 11.57 | % | 11/22/2028 | 161,380 | 158,896 | 162,968 | ||||||||||||||||||||
| 1,345,717 | 1,377,501 | 22.05 | % | |||||||||||||||||||||||||
Technology Hardware and Equipment |
||||||||||||||||||||||||||||
Altar Bidco, Inc. (8) |
SF + | 3.10% | 7.95 | % | 2/1/2029 | 8,847 | 8,793 | 8,850 | ||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
1/27/2028 | 22,837 | (519 | ) | (2,175 | ) | ||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
SF + | 6.75% | 12.21 | % | 1/27/2028 | 5,122 | 3,872 | 3,482 | ||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10) |
SF + | 6.75% | 12.21 | % | 1/27/2028 | 44,988 | 44,094 | 40,703 | ||||||||||||||||||||
Excelitas Technologies Corp. (4)(9) |
SF + | 5.75% | 11.16 | % | 8/13/2029 | 10,003 | 9,845 | 10,004 | ||||||||||||||||||||
Excelitas Technologies Corp. (4)(7) |
E + | 5.75% | 9.66 | % | 8/13/2029 | € | 5,517 | 5,573 | 5,957 | |||||||||||||||||||
Excelitas Technologies Corp. (4)(6)(9) |
SF + | 5.75% | 11.16 | % | 8/14/2028 | 3,261 | 2,366 | 2,408 | ||||||||||||||||||||
TechInsights Inc (4)(5)(10) |
SF + | 6.63% | 12.09 | % | 11/9/2027 | 980 | 966 | 979 | ||||||||||||||||||||
TechInsights Inc (4)(5)(10) |
SF + | 6.63% | 12.09 | % | 11/9/2027 | 2,546 | 2,511 | 2,543 | ||||||||||||||||||||
| 77,501 | 72,751 | 1.16 | % | |||||||||||||||||||||||||
Telecommunications Equipment |
||||||||||||||||||||||||||||
Delta Topco, Inc. (9) |
SF + | 3.75% | 9.12 | % | 12/1/2027 | 6,864 | 6,734 | 6,880 | ||||||||||||||||||||
Guardian US Holdco LLC (8) |
SF + | 3.50% | 8.81 | % | 1/31/2030 | 7,940 | 7,805 | 7,971 | ||||||||||||||||||||
| 14,539 | 14,851 | 0.24 | % | |||||||||||||||||||||||||
F-20
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||||
Directv Financing, LLC (9) |
SF + | 5.00% | 10.44 | % | 8/2/2027 | 7,710 | 7,595 | 7,730 | ||||||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) |
SF + | 5.00% | 10.43 | % | 7/17/2028 | 4,933 | 2,888 | 2,764 | ||||||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) |
7/17/2028 | 1,143 | (12 | ) | (39 | ) | ||||||||||||||||||||||
Meriplex Communications, Ltd (4)(9) |
SF + | 5.00% | 10.43 | % | 7/17/2028 | 13,781 | 13,627 | 13,306 | ||||||||||||||||||||
TA TT Buyer, LLC (8) |
SF + | 5.00% | 10.30 | % | 4/2/2029 | 14,774 | 14,663 | 14,854 | ||||||||||||||||||||
| 38,761 | 38,615 | 0.62 | % | |||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7) |
SN + | 6.00% | 11.23 | % | 9/8/2028 | £ | 2,437 | 310 | (134 | ) | ||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.20 | % | 9/8/2028 | £ | 7,749 | 10,097 | 8,278 | |||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.20 | % | 9/8/2028 | £ | 4,509 | 5,908 | 4,818 | |||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.24 | % | 9/8/2028 | £ | 4,676 | 6,121 | 4,996 | |||||||||||||||||||
Fertitta Entertainment LLC (8) |
SF + | 3.75% | 9.08 | % | 1/27/2029 | 9,929 | 9,643 | 9,964 | ||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
E + |
9.50% (incl
3.50% PIK)
|
13.43 | % | 7/27/2026 | € | 18,954 | 21,018 | 20,965 | |||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
E + |
9.50% (incl
3.50% PIK)
|
13.43 | % | 10/26/2024 | € | 3,716 | 4,121 | 4,232 | |||||||||||||||||||
Travel Leaders Group, LLC (4)(14) |
SF + |
8.50% (incl
3.00% PIK)
|
13.93 | % | 3/27/2028 | 137,822 | 135,097 | 141,592 | ||||||||||||||||||||
| 192,315 | 194,711 | 3.12 | % | |||||||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Non-Affiliated |
9,448,003 | 9,551,717 | 152.90 | % | ||||||||||||||||||||||||
First Lien Debt - Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(17)(18) |
SF + | 7.50% PIK | 5/1/2028 | $ | 5,625 | $ | 5,476 | $ | 5,625 | |||||||||||||||||||
| 5,476 | 5,625 | 0.09 | % | |||||||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Affiliated |
5,476 | 5,625 | 0.09 | % | ||||||||||||||||||||||||
Total First Lien Debt |
$ | 9,453,479 | $ | 9,557,342 | 152.99 | % | ||||||||||||||||||||||
Second Lien Debt |
||||||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
Asurion Corporation (7) |
SF + | 5.25% | 10.69 | % | 1/31/2028 | $ | 4,132 | $ | 4,095 | $ | 3,747 | |||||||||||||||||
| 4,095 | 3,747 | 0.06 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
Charlotte Buyer Inc (4)(8) |
SF + | 8.25% | 13.57 | % | 8/11/2028 | 10,000 | 9,464 | 9,943 | ||||||||||||||||||||
| 9,464 | 9,943 | 0.16 | % | |||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(8) |
SF + | 8.25% | 13.56 | % | 4/29/2030 | 9,000 | 8,820 | 7,889 | ||||||||||||||||||||
| 8,820 | 7,889 | 0.13 | % | |||||||||||||||||||||||||
F-21
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Cloud Software Group Inc (7) |
9.00 | % | 9/30/2029 | 4,659 | 3,817 | 4,474 | ||||||||||||||||||||||
UKG Inc (8) |
SF + | 5.25% | 10.68 | % | 5/3/2027 | 8,420 | 8,345 | 8,510 | ||||||||||||||||||||
| 12,162 | 12,984 | 0.21 | % | |||||||||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Non-Affiliated |
34,541 | 34,563 | 0.55 | % | ||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(17)(18) |
SF + | 7.50% PIK | 10/30/2028 | $ | 1,932 | $ | 1,881 | $ | 1,932 | |||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Affiliated |
1,881 | 1,932 | 0.03 | % | ||||||||||||||||||||||||
Total Second Lien Debt |
$ | 36,422 | $ | 36,495 | 0.58 | % | ||||||||||||||||||||||
Other Secured Debt |
||||||||||||||||||||||||||||
Other Secured Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Asset Based Lending and Fund Finance |
||||||||||||||||||||||||||||
TPG VIII Merlin New Holdings I, L.P. (4)(5)(10) |
SF + | 6.50% | 11.83% | 3/15/2027 | $ | 65,000 | $ | 63,720 | $ | 63,719 | ||||||||||||||||||
Total Other Secured Debt - Non-Controlled/Non-Affiliated |
$ | 63,720 | $ | 63,719 | 1.02 | % | ||||||||||||||||||||||
Unsecured Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7) |
|
15.00% PIK
|
|
7/16/2029 | $ | 13,891 | $ | 13,891 | $ | 13,891 | ||||||||||||||||||
| 13,891 | 13,891 | 0.22 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
|
13.75% PIK
|
|
9/3/2030 | 291 | 287 | 272 | |||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
|
14.75% PIK |
|
9/3/2030 | 248 | 242 | 242 | |||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
|
13.75% PIK |
|
9/3/2030 | 925 | 910 | 864 | |||||||||||||||||||||
| 1,439 | 1,378 | 0.02 | % | |||||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
|
13.13% PIK |
|
12/28/2032 | 102 | 100 | 99 | |||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
|
13.13% PIK |
|
12/28/2032 | 184 | 179 | 180 | |||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
|
13.13% PIK |
|
12/28/2032 | 1,080 | 1,064 | 1,055 | |||||||||||||||||||||
| 1,343 | 1,334 | 0.02 | % | |||||||||||||||||||||||||
F-22
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (7) |
6.75% | 10/15/2027 | 6,255 | 5,785 | 6,168 | |||||||||||||||||||||||
| 5,785 | 6,168 | 0.10 | % | |||||||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7) |
5.50% | 5/1/2026 | 7,000 | 7,065 | 6,899 | |||||||||||||||||||||||
| 7,065 | 6,899 | 0.11 | % | |||||||||||||||||||||||||
Total Unsecured Debt - Non-Controlled/Non-Affiliated |
$ | 29,523 | $ | 29,670 | 0.47 | % | ||||||||||||||||||||||
Structured Finance - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Structured Finance Investments |
||||||||||||||||||||||||||||
ALM 2020 Ltd (5)(7) |
SF + | 6.26% | 11.58% | 10/15/2029 | $ | 3,330 | $ | 3,050 | $ | 3,332 | ||||||||||||||||||
AMMC CLO 21 Ltd (5)(7) |
SF + | 3.10% | 8.68% | 11/2/2030 | 2,150 | 1,935 | 2,162 | |||||||||||||||||||||
AMMC CLO 21 Ltd (5)(7) |
SF + | 6.76% | 12.08% | 11/2/2030 | 4,126 | 3,682 | 3,921 | |||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) |
L + | 5.40% | 10.98% | 7/27/2031 | 1,200 | 949 | 1,131 | |||||||||||||||||||||
Catskill Park CLO Ltd (5)(7) |
SF + | 6.26% | 11.58% | 4/20/2029 | 1,350 | 1,235 | 1,347 | |||||||||||||||||||||
CENT CLO 16, L.P. (5)(7) |
SF + | 8.07% | 13.39% | 7/24/2034 | 3,000 | 2,828 | 2,841 | |||||||||||||||||||||
Dryden 108 CLO Ltd (5)(7) |
7/18/2035 | 2,900 | 2,291 | 2,021 | ||||||||||||||||||||||||
Marble Point CLO XI Ltd (5)(7) |
SF + | 3.06% | 8.36% | 12/18/2030 | 1,850 | 1,578 | 1,783 | |||||||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7) |
SF + | 10.02% | 15.34% | 10/24/2034 | 2,500 | 2,345 | 2,500 | |||||||||||||||||||||
OCP CLO 2017-14 Ltd (5)(7) |
SF + | 6.80% | 12.11% | 1/15/2033 | 1,469 | 1,294 | 1,476 | |||||||||||||||||||||
Shackleton 2019-XV CLO Ltd (5)(7) |
SF + | 6.66% | 12.24% | 1/15/2032 | 3,000 | 2,658 | 2,971 | |||||||||||||||||||||
Voya CLO Ltd (5)(7) |
SF + | 3.81% | 9.13% | 4/17/2030 | 1,500 | 1,341 | 1,489 | |||||||||||||||||||||
| 25,186 | 26,974 | 0.43 | % | |||||||||||||||||||||||||
Total Structured Finance - Non-Controlled/Non-Affiliated |
$ | 25,186 | $ | 26,974 | 0.43 | % | ||||||||||||||||||||||
Equity Investments |
||||||||||||||||||||||||||||
Equity Investments - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. - Preferred Shares (4) |
2,000 | $ | 1,940 | $ | 2,096 | |||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)(6) |
|
15.00% PIK |
|
8,817 | 5,569 | 5,569 | ||||||||||||||||||||||
Rapid Express Preferred, LLC (4)(6) |
|
15.00% PIK |
|
2,784 | 928 | 928 | ||||||||||||||||||||||
Club Car Wash Preferred, LLC (4) |
|
15.00% PIK |
|
10,861 | 10,861 | 10,861 | ||||||||||||||||||||||
Rapid Express Preferred, LLC (4) |
|
15.00% PIK |
|
4,983 | 4,983 | 4,983 | ||||||||||||||||||||||
| 24,281 | 24,437 | 0.39 | % | |||||||||||||||||||||||||
F-23
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4) |
3 | 68 | 225 | |||||||||||||||||||||||||
| 68 | 225 | — | % | |||||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4) |
— | — | — | |||||||||||||||||||||||||
| — | — | — | % | |||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
BCPE Virginia HoldCo, Inc. (4) |
2,000 | 1,960 | 2,097 | |||||||||||||||||||||||||
| 1,960 | 2,097 | 0.03 | % | |||||||||||||||||||||||||
Media |
||||||||||||||||||||||||||||
Oneteam Partners, LLC - Preferred Shares (4) |
8.00% | 1,000 | 1,000 | 1,158 | ||||||||||||||||||||||||
| 1,000 | 1,158 | 0.02 | % | |||||||||||||||||||||||||
Total Equity Investments - Non-Controlled/Non-Affiliated |
27,309 | 27,917 | 0.45 | % | ||||||||||||||||||||||||
Equity Investments - Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(18) |
274 | $ | 2,333 | $ | 2,333 | |||||||||||||||||||||||
| 2,333 | 2,333 | 0.04 | % | |||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(18)(19) |
10,101 | 9,892 | 9,831 | |||||||||||||||||||||||||
| 9,892 | 9,831 | 0.16 | % | |||||||||||||||||||||||||
Total Equity Investments - Non-Controlled/Affiliated |
12,225 | 12,164 | 0.19 | % | ||||||||||||||||||||||||
Total Equity Investments |
$ | 39,534 | $ | 40,081 | 0.64 | % | ||||||||||||||||||||||
Investments in Joint Ventures |
||||||||||||||||||||||||||||
Investments in Joint Ventures - Controlled/Affiliated |
||||||||||||||||||||||||||||
ULTRA III, LLC (5)(18) |
$ | 158,113 | $ | 163,291 | ||||||||||||||||||||||||
Total Investments in Joint Ventures - Controlled/Affiliated |
$ | 158,113 | $ | 163,291 | 2.61 | % | ||||||||||||||||||||||
Total Investments - Non-Controlled/Non-Affiliated |
$ | 9,628,282 | $ | 9,734,560 | 155.82 | % | ||||||||||||||||||||||
Total Investments - Non-Controlled/Affiliated |
$ | 19,582 | $ | 19,721 | 0.32 | % | ||||||||||||||||||||||
Total Investments - Controlled/Affiliated |
$ | 158,113 | $ | 163,291 | 2.61 | % | ||||||||||||||||||||||
Total Investment Portfolio |
$ | 9,805,977 | $ | 9,917,572 | 158.75 | % | ||||||||||||||||||||||
F-24
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares (5) |
145,891 | $ | 145,891 | $ | 145,891 | |||||||||||||||||||||||
Cash |
154,771 | 154,771 | ||||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 300,662 | $ | 300,662 | 4.81 | % | ||||||||||||||||||||||
Total Investment Portfolio, Cash and Cash Equivalents |
$ | 10,106,639 | $ | 10,218,234 | 163.56 | % | ||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral under its credit facilities and debt securitization issuances unless otherwise indicated. |
| (2) | The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average (“SONIA” or “SN”), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate (“SOFR” or “SF”), Canadian Dollar Offered Rate (“CDOR” or “C”), Singapore Overnight Rate Average (“SORA”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Rate (“BBSW” or “B”) which reset daily, monthly, quarterly, semiannually or annually. For each such investment, the Company has provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR, SORA, BS or BBSW and the current contractual interest rate in effect at March 31, 2024. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread. |
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of March 31, 2024, non-qualifying assets represented 18.0% of total assets as calculated in accordance with regulatory requirements. |
| (6) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments: |
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan | $ | 54,046 | $ | (753 | ) | ||||
Zendesk Inc |
1st Lien Senior Secured Delayed Draw Loan | 39,321 | 387 | |||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 34,900 | (419 | ) | ||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan | 32,427 | (452 | ) | ||||||
WP CPP Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 26,285 | (575 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan | 23,538 | (229 | ) | ||||||
Zeus Company LLC |
1st Lien Senior Secured Delayed Draw Loan | 23,088 | (342 | ) | ||||||
F-25
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 22,837 | (2,175 | ) | ||||||
Zeus Company LLC |
1st Lien Senior Secured Revolving Loan | 21,506 | (318 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Revolving Loan | 21,254 | (315 | ) | ||||||
Zendesk Inc |
1st Lien Senior Secured Revolving Loan | 17,940 | — | |||||||
United Musculoskeletal Partners Acquisition Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 17,374 | (371 | ) | ||||||
Esdec Solar Group B.V. |
1st Lien Senior Secured Delayed Draw Loan | 18,544 | 8 | |||||||
Empower Payments Investor, LLC |
1st Lien Senior Secured Delayed Draw Loan | 14,426 | (286 | ) | ||||||
Higginbotham Insurance Agency, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 14,338 | (143 | ) | ||||||
Club Car Wash Operating, LLC |
1st Lien Senior Secured Delayed Draw Loan | 13,977 | — | |||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Revolving Loan | 13,909 | (194 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Delayed Draw Loan | 13,817 | (192 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Revolving Loan | 13,795 | — | |||||||
Atlas Intermediate III, L.L.C. |
1st Lien Senior Secured Revolving Loan | 13,445 | (290 | ) | ||||||
Femur Buyer, Inc. |
1st Lien Senior Secured Revolving Loan | 13,350 | (332 | ) | ||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Revolving Loan | 11,656 | — | |||||||
Truck-Lite Co, LLC |
1st Lien Senior Secured Revolving Loan | 11,574 | (227 | ) | ||||||
E.S.G. Movilidad, S.L.U. |
1st Lien Senior Secured Delayed Draw Loan | 12,136 | — | |||||||
SimpliSafe Holding Corporation |
1st Lien Senior Secured Delayed Draw Loan | 11,078 | — | |||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,961 | 219 | |||||||
Prism Parent Co., Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,833 | 108 | |||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Delayed Draw Loan | 10,736 | 215 | |||||||
Radwell Parent, LLC |
1st Lien Senior Secured Revolving Loan | 10,617 | — | |||||||
Empower Payments Investor, LLC |
1st Lien Senior Secured Revolving Loan | 9,704 | (192 | ) | ||||||
Formerra, LLC |
1st Lien Senior Secured Revolving Loan | 9,625 | (7 | ) | ||||||
Denali Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 10,189 | (255 | ) | ||||||
Truck-Lite Co, LLC |
1st Lien Senior Secured Delayed Draw Loan | 9,338 | (183 | ) | ||||||
Gusto Aus Bidco Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 5,821 | (15 | ) | ||||||
Dolcetto HoldCo S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 9,065 | 25 | |||||||
PPV Intermediate Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 8,145 | — | |||||||
CD&R Madison UK Bidco Ltd |
1st Lien Senior Secured Delayed Draw Loan | 9,939 | (105 | ) | ||||||
Captive Resources Midco LLC |
1st Lien Senior Secured Revolving Loan | 7,558 | — | |||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 7,123 | (24 | ) | ||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Revolving Loan | 7,069 | (63 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 7,000 | (68 | ) | ||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,923 | (79 | ) | ||||||
Frontgrade Technologies Holdings Inc. |
1st Lien Senior Secured Revolving Loan | 6,864 | (38 | ) | ||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Revolving Loan | 6,685 | — | |||||||
Trupanion, Inc. |
1st Lien Senior Secured Revolving Loan | 6,576 | (61 | ) | ||||||
AI Circle Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 6,879 | (272 | ) | ||||||
Advarra Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,340 | — | |||||||
Avalara, Inc. |
1st Lien Senior Secured Revolving Loan | 6,324 | — | |||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 6,211 | (30 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Revolving Loan | 6,189 | (62 | ) | ||||||
Ping Identity Holding Corp. |
1st Lien Senior Secured Revolving Loan | 6,068 | — | |||||||
Cadence - Southwick, Inc. |
1st Lien Senior Secured Revolving Loan | 6,022 | (33 | ) | ||||||
Artisan Bidco, Inc. |
1st Lien Senior Secured Revolving Loan | 6,000 | (74 | ) | ||||||
Arcfield Acquisition Corp |
1st Lien Senior Secured Revolving Loan | 5,687 | (173 | ) | ||||||
Cube Industrials Buyer, Inc. |
1st Lien Senior Secured Revolving Loan | 5,664 | — | |||||||
F-26
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
123Dentist Inc |
1st Lien Senior Secured Delayed Draw Loan | 4,125 | — | |||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 5,538 | (64 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Delayed Draw Loan | 5,484 | (48 | ) | ||||||
Certinia Inc. |
1st Lien Senior Secured Revolving Loan | 5,449 | (41 | ) | ||||||
ASDAM Operations Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 3,535 | (91 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Delayed Draw Loan | 5,419 | (9 | ) | ||||||
Spotless Brands, LLC |
1st Lien Senior Secured Revolving Loan | 5,175 | (25 | ) | ||||||
International Entertainment Investments Ltd |
1st Lien Senior Secured Delayed Draw Loan | 5,080 | (17 | ) | ||||||
Spanx, LLC |
1st Lien Senior Secured Revolving Loan | 5,000 | — | |||||||
Alera Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 4,936 | 3 | |||||||
Enverus Holdings Inc |
1st Lien Senior Secured Revolving Loan | 4,913 | (21 | ) | ||||||
Showtime Acquisition, L.L.C. |
1st Lien Senior Secured Revolving Loan | 4,711 | (45 | ) | ||||||
Oranje Holdco, Inc. |
1st Lien Senior Secured Revolving Loan | 4,657 | (22 | ) | ||||||
Specialty Ingredients, LLC |
1st Lien Senior Secured Revolving Loan | 4,511 | (4 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 4,469 | — | |||||||
Pareto Health Intermediate Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 4,032 | (20 | ) | ||||||
Daphne S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 4,294 | (390 | ) | ||||||
Circana Group, LP. |
1st Lien Senior Secured Revolving Loan | 3,970 | — | |||||||
Plasma Buyer LLC |
1st Lien Senior Secured Revolving Loan | 3,783 | (159 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan | 3,758 | (37 | ) | ||||||
Club Car Wash Preferred, LLC |
Preferred Equity | 3,248 | — | |||||||
Enverus Holdings Inc |
1st Lien Senior Secured Delayed Draw Loan | 3,229 | (14 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 3,161 | (14 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 2,993 | (14 | ) | ||||||
Calabrio, Inc. |
1st Lien Senior Secured Revolving Loan | 2,687 | (6 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan | 2,522 | (116 | ) | ||||||
TriMech Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 2,237 | — | |||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 2,184 | (10 | ) | ||||||
Artemis Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 2,738 | (420 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Delayed Draw Loan | 2,143 | — | |||||||
CPI Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 2,115 | — | |||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Delayed Draw Loan | 1,999 | (69 | ) | ||||||
Galway Borrower LLC |
1st Lien Senior Secured Revolving Loan | 1,858 | — | |||||||
Rapid Express Preferred, LLC |
Preferred Equity | 1,856 | — | |||||||
IG Investments Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,726 | — | |||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 1,638 | (7 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Revolving Loan | 1,152 | (110 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,150 | — | |||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Revolving Loan | 1,143 | (39 | ) | ||||||
Braya Renewable Fuels (Newfoundland) LP |
1st Lien Senior Secured Delayed Draw Loan | 1,139 | (25 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 1,128 | 2 | |||||||
DS Admiral Bidco, LLC |
1st Lien Senior Secured Revolving Loan | 966 | (2 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 855 | (11 | ) | ||||||
Excelitas Technologies Corp. |
1st Lien Senior Secured Revolving Loan | 848 | (1 | ) | ||||||
Patriot Growth Insurance Services LLC |
1st Lien Senior Secured Revolving Loan | 822 | — | |||||||
Smarsh Inc. |
1st Lien Senior Secured Revolving Loan | 643 | — | |||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Revolving Loan | 472 | (1 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Revolving Loan | 467 | — | |||||||
F-27
HPS Corporate Lending Fund
Consolidated Schedule of Investments
March 31, 2024
(in thousands)
(Unaudited)
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Bottomline Technologies, Inc. |
1st Lien Senior Secured Revolving Loan | 385 | — | |||||||
Huskies Parent, Inc. |
1st Lien Senior Secured Revolving Loan | 353 | (10 | ) | ||||||
Riley MergeCo LLC |
1st Lien Senior Secured Revolving Loan | 304 | (5 | ) | ||||||
Arc Media Holdings Limited |
1st Lien Senior Secured Revolving Loan | 277 | (15 | ) | ||||||
ERC Topco Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 245 | (55 | ) | ||||||
Associations Inc. |
1st Lien Senior Secured Revolving Loan | 196 | — | |||||||
Time Manufacturing Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 195 | (8 | ) | ||||||
Total |
$ | 886,629 | $ | (10,325 | ) | |||||
| (7) | There are no interest rate floors on these investments. |
| (8) | The interest rate floor on these investments as of March 31, 2024 was 0.50%. |
| (9) | The interest rate floor on these investments as of March 31, 2024 was 0.75%. |
| (10) | The interest rate floor on these investments as of March 31, 2024 was 1.00%. |
| (11) | The interest rate floor on these investments as of March 31, 2024 was 1.25%. |
| (12) | The interest rate floor on these investments as of March 31, 2024 was 1.50%. |
| (13) | The interest rate floor on these investments as of March 31, 2024 was 1.75%. |
| (14) | The interest rate floor on these investments as of March 31, 2024 was 2.00%. |
| (15) | The interest rate floor on these investments as of March 31, 2024 was 2.50%. |
| (16) | The interest rate floor on these investments as of March 31, 2024 was 3.00%. |
| (17) | Loan was on non-accrual status as of March 31, 2024. |
| (18) | Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company is deemed to “control” a portfolio company if the Company owns more than 25% of its outstanding voting securities and/or holds the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company is deemed an “affiliated person” of a portfolio company if the Company owns between 5% and 25% (inclusive) of the portfolio company’s outstanding voting securities. For purposes of determining the classification of its investment portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the Adviser and/or its affiliates. As of March 31, 2024, the Company’s controlled/affiliated and non-controlled/affiliated investments were as follows: |
|
Fair Value as of December 31, 2023 |
Gross Additions |
Gross Reductions |
Change in Unrealized Gains (Loss) |
Net Realized Gain (Loss) |
Fair Value as of March 31, 2024 |
Dividend and Interest Income |
||||||||||||||||||||||
Non-Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
Southern Graphics Inc. |
$ | 9,947 | $ | — | $ | (57 | ) | $ | — | $ | — | $ | 9,890 | $ | — | |||||||||||||
SLF V AD1 Holdings, LLC |
9,877 | — | — | (46 | ) | — | 9,831 | — | ||||||||||||||||||||
Total Non-Controlled/Affiliated Investments |
$ | 19,824 | $ | — | $ | (57 | ) | $ | (46 | ) | $ | — | $ | 19,721 | $ | — | ||||||||||||
Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
ULTRA III, LLC |
$ | 124,003 | $ | 35,000 | $ | (2,400 | ) | $ | 6,688 | $ | — | $ | 163,291 | $ | 1,819 | |||||||||||||
Total Controlled/Affiliated Investments |
$ | 124,003 | $ | 35,000 | $ | (2,400 | ) | $ | 6,688 | $ | — | $ | 163,291 | $ | 1,819 | |||||||||||||
| (19) | These investments are not pledged as collateral under the Credit Facilities and/or 2023 CLO Secured Notes. |
F-28
ADDITIONAL INFORMATION
Foreign currency forward contracts:
Currency Purchased |
Currency Sold |
Counterparty |
Settlement Date |
Unrealized Appreciation (Depreciation) |
||||||||
U.S. Dollars 3,343 |
Euro 3,083 | Goldman Sachs Bank USA | 9/23/2024 | $ | (9 | ) | ||||||
U.S. Dollars 248 |
Euro 224 | Goldman Sachs Bank USA | 6/23/2025 | 1 | ||||||||
U.S. Dollars 2,545 |
Euro 2,215 | Goldman Sachs Bank USA | 3/23/2026 | 75 | ||||||||
U.S. Dollars 177,612 |
Euro 163,379 | Goldman Sachs Bank USA | 12/23/2024 | (828 | ) | |||||||
U.S. Dollars 10,841 |
Euro 9,948 | Goldman Sachs Bank USA | 6/21/2024 | 70 | ||||||||
U.S. Dollars 6,868 |
British Pound 6,303 | Goldman Sachs Bank USA | 10/15/2024 | (1,095 | ) | |||||||
U.S. Dollars 7,472 |
British Pound 6,079 | Goldman Sachs Bank USA | 9/23/2024 | (207 | ) | |||||||
U.S. Dollars 764 |
British Pound 620 | Goldman Sachs Bank USA | 6/23/2025 | (20 | ) | |||||||
U.S. Dollars 2,601 |
British Pound 2,109 | Goldman Sachs Bank USA | 3/21/2025 | (67 | ) | |||||||
U.S. Dollars 88 |
British Pound 69 | Goldman Sachs Bank USA | 6/21/2024 | 1 | ||||||||
U.S. Dollars 32,604 |
Singaporean Dollars 43,183 | Goldman Sachs Bank USA | 12/23/2024 | 221 | ||||||||
U.S. Dollars 3,077 |
Singaporean Dollars 4,117 | Goldman Sachs Bank USA | 6/21/2024 | 15 | ||||||||
U.S. Dollars 101,171 |
Euro 89,721 | SMBC Capital Markets, Inc. | 9/23/2025 | 1,916 | ||||||||
U.S. Dollars 161,354 |
Euro 148,103 | SMBC Capital Markets, Inc. | 6/21/2024 | 1,032 | ||||||||
U.S. Dollars 50,229 |
Euro 45,512 | SMBC Capital Markets, Inc. | 3/21/2025 | 309 | ||||||||
U.S. Dollars 48,042 |
Australian Dollars 72,501 | SMBC Capital Markets, Inc. | 6/21/2024 | 659 | ||||||||
U.S. Dollars 4,524 |
Canadian Dollars 6,097 | SMBC Capital Markets, Inc. | 6/21/2024 | 18 | ||||||||
U.S. Dollars 132,929 |
British Pound 104,236 | SMBC Capital Markets, Inc. | 6/21/2024 | 1,338 | ||||||||
Canadian Dollars 128 |
U.S. Dollars 94 | SMBC Capital Markets, Inc. | 6/21/2024 | — | ||||||||
Euro 829 |
U.S. Dollars 901 | SMBC Capital Markets, Inc. | 6/21/2024 | (31 | ) | |||||||
British Pound 987 |
U.S. Dollars 1,248 | SMBC Capital Markets, Inc. | 6/21/2024 | (2 | ) | |||||||
Australian Dollars 3,479 |
U.S. Dollars 2,279 | SMBC Capital Markets, Inc. | 6/21/2024 | (6 | ) | |||||||
Total |
$ | 3,390 | ||||||||||
Interest rate swaps:
Counterparty |
Hedged Instrument |
Company Receives |
Company Pays |
Maturity Date |
Notional Amount |
Fair Market Value |
||||||||||||||||
Goldman Sachs Bank USA |
November 2025 Notes | 8.37 | % | SOFR + 4.08% | 11/14/2025 | $ | 85,000 | $ | (1,045 | ) | ||||||||||||
Goldman Sachs Bank USA |
November 2027 Notes | 8.43 | % | SOFR + 4.42% | 11/14/2027 | 77,500 | (945 | ) | ||||||||||||||
Goldman Sachs Bank USA |
March 2026 Notes | 8.12 | % | SOFR + 3.76% | 3/15/2026 | 276,000 | (1,660 | ) | ||||||||||||||
Goldman Sachs Bank USA |
March 2028 Notes | 8.18 | % | SOFR + 4.24% | 3/15/2028 | 124,000 | (1,282 | ) | ||||||||||||||
Goldman Sachs Bank USA |
September 2027 Notes | 8.67 | % | SOFR + 4.31% | 9/14/2027 | 75,000 | 148 | |||||||||||||||
Goldman Sachs Bank USA |
September 2028 Notes | 8.80 | % | SOFR + 4.54% | 9/14/2028 | 250,000 | 867 | |||||||||||||||
SMBC Capital Markets, Inc. |
January 2029 Notes | 6.75 | % | SOFR + 2.88% | 1/30/2029 | 550,000 | (6,364 | ) | ||||||||||||||
Total Interest Rate Swaps |
$ | (10,281 | ) | |||||||||||||||||||
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||
First Lien Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-29
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Aerospace and Defense |
||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(6)(9) |
8/4/2028 | $ | 5,687 | $ | (89 | ) | $ | (228 | ) | |||||||||||||||||||
Arcfield Acquisition Corp (4)(9) |
SF + | 6.25% | 11.64 | % | 8/3/2029 | 48,883 | 48,042 | 46,696 | ||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
B + | 5.75% | 10.11 | % | 8/22/2028 | A$ | 3,614 | 2,415 | 2,374 | |||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(6)(8) |
8/22/2028 | A$ | 5,421 | (93 | ) | (132 | ) | |||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
B + | 5.75% | 10.11 | % | 8/22/2028 | A$ | 41,558 | 27,867 | 27,304 | |||||||||||||||||||
Cadence - Southwick, Inc. (4)(6)(10) |
SF + | 6.75% | 12.22 | % | 5/3/2028 | 11,291 | 2,717 | 2,852 | ||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
SF + | 6.75% | 12.24 | % | 5/3/2029 | 41,529 | 40,408 | 40,998 | ||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
SF + | 6.00% | 11.47 | % | 5/3/2029 | 3,120 | 3,058 | 3,058 | ||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(6)(9) |
1/10/2028 | 6,864 | (152 | ) | (94 | ) | ||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
SF + | 6.75% | 12.10 | % | 1/9/2030 | 37,429 | 36,451 | 36,988 | ||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
SF + | 6.75% | 12.10 | % | 1/9/2030 | 7,880 | 7,732 | 7,787 | ||||||||||||||||||||
Sequa Corp (4)(6)(10) |
11/23/2027 | 13,676 | (542 | ) | (135 | ) | ||||||||||||||||||||||
Sequa Corp (4)(10) |
SF + | 7.00% | 12.37 | % | 11/24/2028 | 127,027 | 121,623 | 125,770 | ||||||||||||||||||||
WP CPP Holdings, LLC (4)(6)(10) |
11/30/2029 | 26,285 | (648 | ) | (648 | ) | ||||||||||||||||||||||
WP CPP Holdings, LLC (4)(10) |
SF + | 7.50% (incl 4.13% PIK) | 12.88 | % | 11/30/2029 | 187,888 | 183,258 | 183,255 | ||||||||||||||||||||
| 472,047 | 475,845 | 9.18 | % | |||||||||||||||||||||||||
Alternative Energy |
||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
SF + | 6.50% | 11.95 | % | 11/9/2026 | 17,091 | 16,765 | 16,765 | ||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(6)(15) |
11/9/2026 | 1,139 | (22 | ) | (22 | ) | ||||||||||||||||||||||
| 16,743 | 16,743 | 0.32 | % | |||||||||||||||||||||||||
Asset Based Lending and Fund Finance |
||||||||||||||||||||||||||||
CRSS HPS LLC (4)(5)(10) |
SF + | 6.75% | 12.21 | % | 12/21/2026 | 21,772 | 21,341 | 21,341 | ||||||||||||||||||||
| 21,341 | 21,341 | 0.41 | % | |||||||||||||||||||||||||
Automobiles and Parts |
||||||||||||||||||||||||||||
Clarios Global LP (7) |
SF + | 3.75% | 9.11 | % | 5/6/2030 | 14,963 | 14,886 | 15,015 | ||||||||||||||||||||
Foundation Automotive Us Corp (4)(10) |
SF + | 7.75% | 13.41 | % | 12/24/2027 | 4,300 | 4,249 | 3,865 | ||||||||||||||||||||
F-30
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Foundation Automotive Corp (4)(5)(10) |
SF + | 7.75% | 13.36 | % | 12/24/2027 | 13,689 | 13,536 | 12,306 | ||||||||||||||||||||
Foundation Automotive Us Corp (4)(10) |
SF + | 7.75% | 13.36 | % | 12/24/2027 | 33,889 | 33,514 | 30,466 | ||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
SF + | 6.75% | 12.27 | % | 2/8/2027 | 40,597 | 40,326 | 40,234 | ||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
SF + | 6.75% | 12.27 | % | 2/8/2027 | 8,523 | 8,468 | 8,447 | ||||||||||||||||||||
Tenneco Inc (8) |
SF + | 4.75% | 10.22 | % | 11/17/2028 | 2,992 | 2,424 | 2,624 | ||||||||||||||||||||
| 117,403 | 112,957 | 2.18 | % | |||||||||||||||||||||||||
Chemicals |
||||||||||||||||||||||||||||
Illuminate Buyer, LLC (7) |
SF + | 3.50% | 8.97 | % | 6/30/2027 | 15,111 | 14,972 | 15,157 | ||||||||||||||||||||
| 14,972 | 15,157 | 0.29 | % | |||||||||||||||||||||||||
Construction and Materials |
||||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(6)(8) |
8/30/2028 | € | 17,183 | (361 | ) | (164 | ) | |||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(8) |
E + | 6.00% | 9.97 | % | 8/30/2028 | € | 51,420 | 55,215 | 56,271 | |||||||||||||||||||
Nexus Intermediate III, LLC (4)(6)(9) |
12/6/2027 | 300 | (3 | ) | — | |||||||||||||||||||||||
Nexus Intermediate III, LLC (4)(9) |
SF + | 5.50% | 11.36 | % | 12/6/2027 | 1,064 | 1,051 | 1,064 | ||||||||||||||||||||
| 55,902 | 57,171 | 1.10 | % | |||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
AI Learning (Singapore) PTE. LTD. (4)(5)(12) |
SORA + | 8.25% (incl 4.00% PIK) | 11.70 | % | 5/25/2027 | 44,063 | $ | 31,713 | 32,862 | |||||||||||||||||||
American Academy Holdings, LLC (4)(10) |
SF + | 11.00% (incl 5.25% PIK) | 16.47 | % | 1/2/2025 | 54,019 | 54,019 | 53,914 | ||||||||||||||||||||
Auctane Inc (4)(9) |
SF + | 5.75% | 11.23 | % | 10/5/2028 | 24,563 | 24,563 | 24,478 | ||||||||||||||||||||
Club Car Wash Operating, LLC (4)(6)(10) |
SF + | 6.50% | 12.00 | % | 6/16/2027 | 40,289 | 25,670 | 26,066 | ||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
SF + | 6.50% | 12.00 | % | 6/16/2027 | 12,958 | 12,762 | 12,879 | ||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
SF + | 6.50% | 12.00 | % | 6/16/2027 | 26,517 | 26,248 | 26,355 | ||||||||||||||||||||
Ensemble RCM LLC (7) |
SF + | 3.75% | 9.23 | % | 8/3/2026 | 1,979 | 1,974 | 1,985 | ||||||||||||||||||||
Express Wash Concepts (4)(10) |
SF + | 6.00% | 11.46 | % | 4/30/2027 | 47,227 | 46,908 | 46,662 | ||||||||||||||||||||
Express Wash Concepts (4)(10) |
SF + | 6.00% | 11.46 | % | 4/30/2027 | 26,528 | 26,344 | 26,210 | ||||||||||||||||||||
Houghton Mifflin Harcourt Company (8) |
SF + | 5.25% | 10.71 | % | 4/9/2029 | 25,250 | 24,650 | 24,831 | ||||||||||||||||||||
IXM Holdings, Inc. (4)(11) |
SF + | 6.50% | 11.86 | % | 12/14/2029 | 18,566 | 18,289 | 18,289 | ||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) |
12/14/2029 | 1,638 | (25 | ) | (24 | ) | ||||||||||||||||||||||
IXM Holdings, Inc.(4)(6)(11) |
SF + | 6.50% | 11.86 | % | 12/14/2029 | 2,184 | 568 | 568 | ||||||||||||||||||||
Learning Care Group, Inc. (8) |
SF + | 4.75% | 10.14 | % | 8/11/2028 | 1,995 | 1,967 | 2,010 | ||||||||||||||||||||
F-31
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
SF + | 5.00% | 10.38 | % | 3/12/2029 | 46,800 | 45,651 | 46,859 | ||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
SF + | 5.00% | 10.54 | % | 3/12/2029 | 12,517 | 12,420 | 12,533 | ||||||||||||||||||||
PECF USS Intermediate Holding III Corporation (8) |
SF + | 4.25% | 9.89 | % | 12/15/2028 | 14,712 | 14,645 | 11,558 | ||||||||||||||||||||
Polyconcept North America Holdings, Inc. (9) |
SF + | 5.50% | 10.85 | % | 5/18/2029 | 23,009 | 22,638 | 22,846 | ||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + | 6.50% | 12.02 | % | 7/25/2028 | 21,593 | 21,260 | 21,670 | ||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + | 6.50% | 12.03 | % | 7/25/2028 | 16,023 | 15,777 | 16,080 | ||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + | 6.50% | 12.03 | % | 7/25/2028 | 105,600 | 103,951 | 105,979 | ||||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) |
SF + | 6.50% | 11.96 | % | 7/25/2028 | 5,175 | 1,040 | 1,118 | ||||||||||||||||||||
Thrasio LLC (4)(7)(16) |
SF + | 7.00% | 12/18/2026 | 2,912 | 2,903 | 1,715 | ||||||||||||||||||||||
Trugreen Limited Partnership (9) |
SF + | 4.00% | 9.46 | % | 11/2/2027 | 8,575 | 8,488 | 8,298 | ||||||||||||||||||||
WMB Holdings Inc (8) |
SF + | 3.25% | 8.71 | % | 11/2/2029 | 1,889 | 1,841 | 1,896 | ||||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + | 7.25% | 12.71 | % | 3/1/2024 | 26,027 | 26,025 | 25,942 | ||||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + | 7.25% | 12.71 | % | 3/1/2024 | 15,336 | 15,308 | 15,286 | ||||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + | 7.25% | 12.71 | % | 3/1/2024 | 984 | 984 | 981 | ||||||||||||||||||||
| 588,581 | 589,846 | 11.38 | % | |||||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||||
Hamilton Projects Acquiror, LLC (9) |
SF + | 4.50% | 9.97 | % | 6/17/2027 | 55,588 | 51,772 | 55,914 | ||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7) |
7.88 | % | 12/31/2029 | 27,428 | 26,919 | 27,154 | ||||||||||||||||||||||
| 78,691 | 83,068 | 1.60 | % | |||||||||||||||||||||||||
Electronic and Electrical Equipment |
||||||||||||||||||||||||||||
Brightstar Escrow Corp. (7) |
9.75 | % | 10/15/2025 | 1,000 | 989 | 1,015 | ||||||||||||||||||||||
| 989 | 1,015 | 0.02 | % | |||||||||||||||||||||||||
Finance and Credit Services |
||||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(5)(10) |
L + | 9.25% PIK | 14.69 | % | 2/9/2027 | 19,395 | 19,164 | 19,032 | ||||||||||||||||||||
Verscend Holding Corp. (7) |
SF + | 4.00% | 9.47 | % | 8/27/2025 | 3,939 | 3,928 | 3,957 | ||||||||||||||||||||
Yes Energy LLC (4)(9) |
BS + | 5.00% | 10.46 | % | 4/21/2028 | 10,000 | 9,836 | 10,004 | ||||||||||||||||||||
Yes Energy LLC (4)(9) |
BS + | 5.00% | 10.46 | % | 4/21/2028 | 26,000 | 25,458 | 26,010 | ||||||||||||||||||||
| 58,386 | 59,003 | 1.14 | % | |||||||||||||||||||||||||
Food Producers |
||||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(6)(9) |
SF + | 6.00% | 11.46 | % | 2/12/2029 | 11,279 | 5,744 | 5,805 | ||||||||||||||||||||
Specialty Ingredients, LLC (4)(9) |
SF + | 6.00% | 11.46 | % | 2/12/2029 | 89,801 | 88,354 | 88,876 | ||||||||||||||||||||
F-32
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Sugar PPC Buyer LLC (4)(6)(10) |
10/2/2030 | 16,541 | (366 | ) | (359 | ) | ||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) |
SF + | 6.00% | 11.34 | % | 10/2/2030 | 59,546 | 58,254 | 58,254 | ||||||||||||||||||||
| 151,986 | 152,576 | 2.94 | % | |||||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(5)(10) |
SF + | 5.75% | 11.20 | % | 8/13/2027 | 43,439 | 42,809 | 42,991 | ||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(14) |
SF + | 9.88% | 15.22 | % | 6/8/2024 | 620 | 613 | 613 | ||||||||||||||||||||
| 43,422 | 43,604 | 0.84 | % | |||||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||||
BP Purchaser, LLC (4)(9) |
SF + | 5.50% | 11.14 | % | 12/11/2028 | 27,513 | 27,108 | 26,815 | ||||||||||||||||||||
Bright Light Buyer, Inc. (4)(10) |
SF + | 6.00% | 11.37 | % | 11/8/2029 | 75,000 | 73,171 | 73,170 | ||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(6)(10) |
10/18/2029 | 5,664 | (82 | ) | (82 | ) | ||||||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(10) |
SF + | 6.00% | 11.40 | % | 10/18/2030 | 49,086 | 48,371 | 48,371 | ||||||||||||||||||||
Formerra, LLC (4)(10) |
SF + | 7.25% | 12.81 | % | 11/1/2028 | 4,252 | 4,136 | 4,210 | ||||||||||||||||||||
Formerra, LLC (4)(6)(10) |
11/1/2028 | 12,031 | (315 | ) | (117 | ) | ||||||||||||||||||||||
Formerra, LLC (4)(10) |
SF + | 7.25% | 12.78 | % | 11/1/2028 | 105,686 | 102,857 | 104,660 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.75 | % | 6/23/2028 | 11,952 | 11,861 | 11,871 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.75 | % | 6/23/2028 | 49,864 | 49,282 | 49,526 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.75 | % | 6/23/2028 | 4,395 | 4,362 | 4,365 | ||||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + | 6.25% | 11.75 | % | 6/23/2028 | 13,228 | 13,127 | 13,138 | ||||||||||||||||||||
TMC Buyer Inc (8) |
SF + | 6.00% | 11.47 | % | 6/30/2028 | 70,148 | 62,802 | 69,403 | ||||||||||||||||||||
| 396,680 | 405,330 | 7.82 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
123Dentist Inc (4)(5)(6)(9) |
8/10/2029 | C$ | 7,211 | (101 | ) | (55 | ) | |||||||||||||||||||||
123Dentist Inc (4)(5)(9) |
C + | 5.50% | 10.94 | % | 8/10/2029 | C$ | 50,116 | 38,465 | 37,435 | |||||||||||||||||||
Accelerated Health Systems, LLC (8) |
SF + | 4.25% | 9.75 | % | 2/15/2029 | 7,951 | 7,935 | 6,722 | ||||||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(5)(10) |
SF + | 7.25% | 12.73 | % | 2/24/2028 | 41,092 | 40,516 | 38,936 | ||||||||||||||||||||
Baart Programs, Inc. (4)(10) |
SF + | 5.00% | 10.61 | % | 6/11/2027 | 10,123 | 10,055 | 9,809 | ||||||||||||||||||||
Charlotte Buyer Inc (8) |
SF + | 5.25% | 10.61 | % | 2/11/2028 | 28,560 | 27,129 | 28,714 | ||||||||||||||||||||
F-33
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
ERC Topco Holdings, LLC (4)(6)(9) |
SF + | 6.25% (incl 3.25% PIK) | 11.91 | % | 11/10/2027 | 1,000 | 420 | 304 | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + | 6.25% (incl 3.25% PIK) | 11.86 | % | 11/10/2028 | 25,291 | 24,931 | 21,444 | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + | 6.25% PIK | 11.86 | % | 11/10/2028 | 203 | 203 | 172 | ||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + | 6.00% | 11.46 | % | 1/29/2027 | 9,108 | 8,979 | 9,052 | ||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + | 6.00% | 11.46 | % | 1/29/2027 | 86,591 | 85,394 | 86,054 | ||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + | 6.00% | 11.46 | % | 1/29/2027 | 34,429 | 33,987 | 34,216 | ||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(10) |
SF + | 6.50% | 11.96 | % | 1/29/2027 | 12,490 | 8,177 | 8,448 | ||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + | 6.00% | 11.46 | % | 1/29/2027 | 68,490 | 67,136 | 67,812 | ||||||||||||||||||||
Medline Borrower, LP (8) |
SF + | 3.00% | 8.47 | % | 10/23/2028 | 19,648 | 19,482 | 19,769 | ||||||||||||||||||||
MPH Acquisition Holdings LLC (8) |
SF + | 4.25% | 9.90 | % | 9/1/2028 | 4,586 | 4,491 | 4,434 | ||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
SF + | 6.50% | 11.97 | % | 6/3/2030 | 30,166 | 29,336 | 29,744 | ||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
SF + | 6.50% | 11.97 | % | 6/3/2030 | 10,055 | 9,779 | 9,915 | ||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) |
6/1/2029 | 4,032 | (109 | ) | (61 | ) | ||||||||||||||||||||||
Pediatric Associates Holding Company, LLC (8) |
SF + | 3.25% | 8.72 | % | 12/29/2028 | 7,717 | 7,690 | 7,486 | ||||||||||||||||||||
Phoenix Newco Inc (8) |
SF + | 3.25% | 8.72 | % | 11/15/2028 | 17,567 | 17,469 | 17,692 | ||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(6)(9) |
SF + | 5.00% | 10.43 | % | 3/14/2028 | 12,383 | 9,078 | 9,184 | ||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) |
SF + | 5.00% | 10.43 | % | 3/14/2028 | 27,019 | 26,626 | 26,857 | ||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(9) |
SF + | 5.75% | 11.14 | % | 8/31/2029 | 108,193 | 106,567 | 107,507 | ||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(6)(9) |
8/31/2029 | 8,145 | (132 | ) | (52 | ) | ||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
SF + | 5.50% | 11.00 | % | 12/17/2027 | 3,941 | 3,882 | 3,941 | ||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
SF + | 5.50% | 11.00 | % | 12/17/2027 | 20,679 | 20,392 | 20,679 | ||||||||||||||||||||
Tenet Healthcare Corp (5)(7) |
5.13 | % | 11/1/2027 | 2,695 | 2,724 | 2,636 | ||||||||||||||||||||||
Tivity Health Inc (4)(9) |
SF + | 6.00% | 11.35 | % | 6/28/2029 | 111,153 | 108,949 | 108,628 | ||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(6)(9) |
SF + | 5.75% | 11.13 | % | 7/17/2028 | 50,181 | 32,006 | 31,265 | ||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) |
SF + | 5.75% | 11.16 | % | 7/17/2028 | 26,548 | 26,150 | 25,732 | ||||||||||||||||||||
F-34
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) |
SF + | 5.75% | 11.15 | % | 7/17/2028 | 43,290 | 42,610 | 41,959 | ||||||||||||||||||||
WCAS XIII Primary Care Investors, L.P. (4)(10) |
SF + | 6.25% | 11.61 | % | 12/31/2029 | 135,630 | 133,289 | 134,827 | ||||||||||||||||||||
| 953,505 | 951,205 | 18.34 | % | |||||||||||||||||||||||||
Household Goods and Home Construction |
||||||||||||||||||||||||||||
LHS Borrower, LLC (8) |
SF + | 4.75% | 10.21 | % | 2/16/2029 | 6,948 | 6,896 | 6,301 | ||||||||||||||||||||
Sunset Debt Merger Sub, Inc. (9) |
SF + | 4.00% | 9.47 | % | 10/6/2028 | 707 | 609 | 636 | ||||||||||||||||||||
| 7,505 | 6,937 | 0.13 | % | |||||||||||||||||||||||||
Industrial Engineering |
||||||||||||||||||||||||||||
Emerson Climate Technologies Inc (7) |
SF + | 3.00% | 8.36 | % | 5/31/2030 | 13,957 | 13,851 | 14,023 | ||||||||||||||||||||
LSF12 Donnelly Bidco, LLC (4)(10) |
SF + | 6.50% | 11.86 | % | 10/2/2029 | 19,878 | 19,401 | 19,401 | ||||||||||||||||||||
Radwell Parent, LLC (4)(6)(9) |
SF + | 6.75% | 12.10 | % | 4/3/2028 | 13,271 | 2,390 | 2,654 | ||||||||||||||||||||
Radwell Parent, LLC (4)(9) |
SF + | 6.75% | 12.10 | % | 4/2/2029 | 153,824 | 149,966 | 156,200 | ||||||||||||||||||||
Roper Industrial Products Investment Co (8) |
SF + | 4.00% | 9.35 | % | 11/22/2029 | 18,044 | 17,488 | 18,106 | ||||||||||||||||||||
Standard Industries, Inc. (8) |
SF + | 2.25% | 7.72 | % | 9/22/2028 | 1,264 | 1,264 | 1,268 | ||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
E + | 6.50% | 10.46 | % | 12/1/2027 | € | 4,758 | 4,943 | 4,975 | |||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(6)(9) |
SF + | 6.50% | 12.04 | % | 12/1/2027 | 1,000 | 713 | 678 | ||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
SF + | 6.50% | 12.04 | % | 12/1/2027 | 12,081 | 11,902 | 11,481 | ||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
E + | 6.50% | 10.46 | % | 12/1/2027 | € | 8,380 | 9,333 | 8,762 | |||||||||||||||||||
TK Elevator U.S. Newco, Inc. (5)(8) |
SF + | 3.50% | 9.38 | % | 7/30/2027 | 12,573 | 12,439 | 12,617 | ||||||||||||||||||||
Wec US Holdings Ltd (8) |
SF + | 3.75% | 9.11 | % | 8/1/2025 | 3,955 | 3,925 | 3,973 | ||||||||||||||||||||
| 247,615 | 254,138 | 4.90 | % | |||||||||||||||||||||||||
Industrial Metals and Mining |
||||||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + | 7.50% | 13.12 | % | 9/8/2026 | 3,060 | 3,006 | 2,986 | ||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + | 7.50% | 13.12 | % | 9/8/2026 | 9,130 | 8,881 | 8,909 | ||||||||||||||||||||
| 11,887 | 11,895 | 0.23 | % | |||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Acuris Finance US, Inc (8) |
SF + | 4.00% | 9.50 | % | 2/16/2028 | 13,500 | 13,408 | 13,515 | ||||||||||||||||||||
Allied Universal Holdco LLC (8) |
SF + | 3.75% | 9.21 | % | 5/12/2028 | 3,001 | 2,993 | 2,993 | ||||||||||||||||||||
Argos Health Holdings, Inc. (4)(9) |
SF + | 5.75% | 11.15 | % | 12/6/2027 | 653 | 644 | 629 | ||||||||||||||||||||
F-35
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(10) |
SF + | 8.25% (incl 4.00% PIK) | 13.63 | % | 10/31/2029 | 112,091 | 109,368 | 109,368 | ||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(6)(10) |
10/31/2029 | 13,445 | (327 | ) | (327 | ) | ||||||||||||||||||||||
Becklar, LLC (4)(10) |
SF + | 6.85% | 12.30 | % | 12/21/2026 | 986 | 974 | 978 | ||||||||||||||||||||
Becklar, LLC (4)(10) |
SF + | 6.85% | 12.30 | % | 12/21/2026 | 5,725 | 5,644 | 5,676 | ||||||||||||||||||||
Captive Resources Midco LLC (4)(6)(9) |
7/3/2028 | 7,558 | (113 | ) | — | |||||||||||||||||||||||
Captive Resources Midco LLC (4)(9) |
SF + | 5.75% (incl 3.13% PIK) | 11.10 | % | 7/2/2029 | 93,197 | 91,762 | 94,129 | ||||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(6)(7) |
SN + | 8.25% | 13.47 | % | 2/28/2030 | £ | 9,965 | 2,252 | 2,394 | |||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) |
SN + | 8.25% (incl 2.00% PIK) | 13.48 | % | 2/28/2030 | £ | 45,394 | 53,009 | 56,599 | |||||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) |
E + | 7.75% (incl 2.00% PIK) | 11.71 | % | 2/28/2030 | € | 22,377 | 22,902 | 24,093 | |||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
10/1/2029 | 10,736 | (279 | ) | 58 | |||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
10/1/2029 | 11,656 | (287 | ) | — | |||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(9) |
SF + | 6.75% | 12.11 | % | 10/1/2029 | 72,983 | 71,143 | 73,375 | ||||||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(9) |
SF + | 5.75% | 11.15 | % | 12/6/2027 | 817 | 806 | 786 | ||||||||||||||||||||
Employbridge, LLC (9) |
SF + | 4.75% | 10.41 | % | 7/19/2028 | 9,807 | 9,765 | 8,099 | ||||||||||||||||||||
Galaxy US Opco Inc. (5)(8) |
SF + | 4.75% | 10.13 | % | 4/29/2029 | 26,037 | 25,520 | 21,611 | ||||||||||||||||||||
Guidehouse Inc. (4)(9) |
SF + | 5.75% (incl 2.00% PIK) | 11.11 | % | 12/16/2030 | 186,435 | 183,869 | 184,120 | ||||||||||||||||||||
IG Investments Holdings, LLC (4)(6)(9) |
9/22/2027 | 1,726 | (18 | ) | (12 | ) | ||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
SF + | 6.00% | 11.48 | % | 9/22/2028 | 22,278 | 22,019 | 22,129 | ||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
SF + | 6.00% | 11.48 | % | 9/22/2028 | 1,837 | 1,824 | 1,825 | ||||||||||||||||||||
NBG Acquisition Corp. (4)(6)(9) |
SF + | 5.25% | 10.78 | % | 11/6/2028 | 2,876 | 1,837 | 1,792 | ||||||||||||||||||||
NBG Acquisition Corp. (4)(9) |
SF + | 5.25% | 10.78 | % | 11/6/2028 | 21,336 | 21,222 | 20,856 | ||||||||||||||||||||
Planet US Buyer LLC (4)(6)(9) |
2/1/2028 | 8,024 | (197 | ) | (148 | ) | ||||||||||||||||||||||
Planet US Buyer LLC (4)(9) |
SF + | 6.75% | 12.13 | % | 2/1/2030 | 83,233 | 81,061 | 81,744 | ||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
SF + | 5.50% | 10.89 | % | 8/31/2028 | 8,993 | 5,090 | 5,326 | ||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
SF + | 5.50% | 10.89 | % | 8/31/2028 | 7,000 | 1,525 | 1,633 | ||||||||||||||||||||
Royal Buyer, LLC (4)(9) |
SF + | 5.50% | 10.89 | % | 8/31/2028 | 44,550 | 43,839 | 44,996 | ||||||||||||||||||||
Sedgwick Claims Management Services, Inc. (7) |
SF + | 3.75% | 9.11 | % | 2/24/2028 | 19,205 | 19,048 | 19,288 | ||||||||||||||||||||
Simplisafe Holding Corporation (4)(6)(9) |
SF + | 6.25% | 11.61 | % | 5/2/2028 | 15,086 | 3,775 | 3,912 | ||||||||||||||||||||
Simplisafe Holding Corporation (4)(9) |
SF + | 6.25% | 11.61 | % | 5/2/2028 | 119,039 | 117,275 | 118,277 | ||||||||||||||||||||
F-36
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
SF + | 5.25% | 10.71 | % | 9/13/2028 | 3,579 | 299 | 308 | ||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(9) |
SF + | 5.25% | 10.70 | % | 9/13/2028 | 43,103 | 42,361 | 42,508 | ||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
9/13/2028 | 5,986 | (89 | ) | (83 | ) | ||||||||||||||||||||||
TruckPro, LLC (4)(12) |
SF + | 7.25% | 12.94 | % | 8/16/2028 | 70,533 | 68,576 | 69,207 | ||||||||||||||||||||
Vaco Holdings, LLC (9) |
SF + | 5.00% | 10.43 | % | 1/21/2029 | 12,495 | 12,452 | 12,362 | ||||||||||||||||||||
| 1,034,952 | 1,044,016 | 20.13 | % | |||||||||||||||||||||||||
Industrial Transportation |
||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(6)(7) |
5/31/2029 | € | 11,245 | (299 | ) | (86 | ) | |||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
E + | 6.50% | 10.53 | % | 5/31/2029 | € | 8,096 | 8,484 | 8,875 | |||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
E + | 6.50% | 10.53 | % | 5/31/2029 | € | 22,264 | 23,330 | 24,407 | |||||||||||||||||||
| 31,515 | 33,196 | 0.64 | % | |||||||||||||||||||||||||
Investment Banking and Brokerage Services |
||||||||||||||||||||||||||||
Apex Group Treasury LLC (4)(5)(8) |
SF + | 5.00% | 10.40 | % | 7/27/2028 | 6,982 | 6,881 | 6,974 | ||||||||||||||||||||
Ascensus Holdings, Inc. (8) |
SF + | 3.50% | 8.97 | % | 8/2/2028 | 7,643 | 7,581 | 7,638 | ||||||||||||||||||||
Eisner Advisory Group LLC (9) |
SF + | 5.25% | 10.72 | % | 7/28/2028 | 4,451 | 4,433 | 4,466 | ||||||||||||||||||||
Eisner Advisory Group LLC (9) |
SF + | 5.25% | 10.72 | % | 7/28/2028 | 2,526 | 2,526 | 2,535 | ||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
9/3/2030 | 5,484 | (108 | ) | (111 | ) | ||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
SF + | 6.00% | 11.39 | % | 9/4/2029 | 7,590 | 1,258 | 1,245 | ||||||||||||||||||||
More Cowbell II, LLC (4)(9) |
SF + | 6.00% | 11.48 | % | 9/3/2030 | 50,342 | 49,382 | 49,319 | ||||||||||||||||||||
Osaic Holdings Inc (7) |
SF + | 4.50% | 9.86 | % | 8/17/2028 | 10,841 | 10,794 | 10,889 | ||||||||||||||||||||
Transnetwork LLC (8) |
SF + | 5.50% | 10.85 | % | 12/29/2030 | 48,913 | 47,935 | 48,791 | ||||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14) |
SN + | 8.00% | 13.21 | % | 9/22/2028 | £ | 23,256 | 27,392 | 28,599 | |||||||||||||||||||
| 158,074 | 160,345 | 3.09 | % | |||||||||||||||||||||||||
Leisure Goods |
||||||||||||||||||||||||||||
Jam City, Inc. (4)(10) |
SF + | 7.00% | 12.61 | % | 9/7/2027 | 1,996 | 1,983 | 1,991 | ||||||||||||||||||||
| 1,983 | 1,991 | 0.04 | % | |||||||||||||||||||||||||
Life Insurance |
||||||||||||||||||||||||||||
Onedigital Borrower LLC (8) |
SF + | 4.25% | 9.71 | % | 11/16/2027 | 5,880 | 5,872 | 5,884 | ||||||||||||||||||||
| 5,872 | 5,884 | 0.11 | % | |||||||||||||||||||||||||
Media |
||||||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
SF + | 6.00% | 11.47 | % | 3/14/2029 | 29,401 | 12,189 | 12,489 | ||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
3/14/2028 | 13,795 | (193 | ) | (83 | ) | ||||||||||||||||||||||
2080 Media, Inc. (4)(9) |
SF + | 6.00% | 11.47 | % | 3/14/2029 | 54,491 | 53,644 | 54,192 | ||||||||||||||||||||
F-37
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Ancestry.com Inc. (8) |
SF + | 3.25% | 8.71 | % | 12/6/2027 | 6,262 | 6,190 | 6,143 | ||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10) |
SF + | 7.25% | 12.77 | % | 10/29/2027 | 2,766 | 2,437 | 2,347 | ||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10) |
SF + | 7.25% | 12.79 | % | 10/29/2027 | 40,972 | 40,176 | 38,860 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.18 | % | 7/2/2027 | 494 | 491 | 499 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.14 | % | 7/2/2027 | 1,029 | 1,022 | 1,039 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.12 | % | 7/2/2027 | 1,029 | 1,022 | 1,039 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.13 | % | 7/2/2027 | 621 | 617 | 627 | ||||||||||||||||||||
Associations Inc. (4)(6)(10) |
SF + | 6.50% | 12.14 | % | 7/2/2027 | 403 | 140 | 143 | ||||||||||||||||||||
Associations Inc. (4)(10) |
SF + | 6.50% (incl 2.50% PIK) | 12.18 | % | 7/2/2027 | 29,562 | 29,372 | 29,858 | ||||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
SF + | 6.00% | 11.47 | % | 6/18/2027 | 1,073 | 1,061 | 993 | ||||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
SF + | 6.00% | 11.47 | % | 6/18/2027 | 18,855 | 18,619 | 17,452 | ||||||||||||||||||||
Circana Group, LP. (4)(6)(9) |
P + | 4.75% | 13.25 | % | 12/1/2027 | 9,023 | 1,484 | 1,561 | ||||||||||||||||||||
Circana Group, LP. (4)(9) |
SF + | 6.25% (incl 2.75% PIK) | 11.61 | % | 12/1/2028 | 142,859 | 140,633 | 141,912 | ||||||||||||||||||||
Circana Group, LP. (4)(9) |
SF + | 5.75% | 11.21 | % | 12/1/2028 | 9,198 | 9,126 | 9,096 | ||||||||||||||||||||
IEHL US Holdings, Inc. (4)(12) |
SF + | 7.25% | 12.63 | % | 10/29/2029 | 6,604 | 6,425 | 6,522 | ||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
SN + | 7.65% | 12.90 | % | 10/29/2029 | £ | 15,493 | 18,789 | 19,501 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
E + | 7.25% | 11.20 | % | 10/29/2029 | € | 2,540 | 2,724 | 2,770 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
E + | 7.25% | 11.20 | % | 10/29/2029 | € | 3,048 | 3,177 | 3,325 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12) |
4/27/2029 | 5,080 | (141 | ) | (66 | ) | ||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
SF + | 7.25% | 12.63 | % | 10/29/2029 | 30,478 | 29,657 | 30,100 | ||||||||||||||||||||
Kobalt London Limited (4)(5)(9) |
SF + | 8.00% | 13.55 | % | 2/25/2027 | 13,125 | 12,949 | 12,873 | ||||||||||||||||||||
Kobalt London Limited (4)(5)(9) |
SF + | 8.00% | 13.53 | % | 2/25/2027 | 13,125 | 12,952 | 12,874 | ||||||||||||||||||||
Mav Acquisition Corporation (8) |
SF + | 4.75% | 10.22 | % | 7/28/2028 | 15,724 | 15,518 | 15,729 | ||||||||||||||||||||
Oneteam Partners, LLC (4)(9) |
SF + | 5.50% | 10.98 | % | 9/14/2029 | 74,250 | 73,010 | 74,250 | ||||||||||||||||||||
Renaissance Financiere (4)(5)(7) |
E + | 7.00% | 10.94 | % | 7/26/2028 | € | 34,871 | 35,514 | 37,969 | |||||||||||||||||||
Renaissance Holding Corp. (8) |
SF + | 4.75% | 10.11 | % | 4/5/2030 | 7,980 | 7,816 | 8,019 | ||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) |
8/7/2028 | 3,657 | (85 | ) | (68 | ) | ||||||||||||||||||||||
F-38
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) |
8/7/2028 | 4,711 | (118 | ) | (87 | ) | ||||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) |
SF + | 7.50% | 12.98 | % | 8/7/2028 | 63,672 | 62,071 | 62,493 | ||||||||||||||||||||
| 598,288 | 604,371 | 11.66 | % | |||||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(9) |
SF + | 7.50% | 13.01 | % | 2/23/2028 | 21,259 | 20,869 | 19,119 | ||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
SF + | 6.00% | 11.36 | % | 9/30/2030 | 15,467 | 607 | 670 | ||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
10/1/2029 | 21,254 | (610 | ) | (543 | ) | ||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
E + | 6.75% (incl 3.38% PIK) | 10.70 | % | 9/30/2030 | € | 61,588 | 63,223 | 66,272 | |||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
SF + | 6.75% (incl 3.38% PIK) | 12.13 | % | 9/30/2030 | 81,370 | 79,021 | 79,306 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
5/11/2028 | 34,900 | (848 | ) | (734 | ) | ||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + | 5.75% | 11.11 | % | 5/11/2028 | 22,857 | 22,514 | 22,452 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
SF + | 5.75% | 11.11 | % | 5/11/2028 | 10,875 | 3,645 | 3,614 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + | 5.75% | 11.11 | % | 5/11/2028 | 75,297 | 74,150 | 73,963 | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + | 6.00% | 11.36 | % | 5/11/2028 | 9,676 | 9,447 | 9,472 | ||||||||||||||||||||
Limpio Bidco GMBH (4)(5)(7) |
E + | 6.20% | 10.15 | % | 10/31/2030 | € | 66,556 | 68,533 | 71,499 | |||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
SF + | 6.75% | 12.11 | % | 3/13/2029 | 112,067 | 108,545 | 110,472 | ||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
SF + | 5.75% | 11.11 | % | 3/13/2029 | 62,432 | 61,205 | 61,203 | ||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
5/12/2029 | 22,070 | (358 | ) | (846 | ) | ||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
SF + | 5.75% | 11.10 | % | 5/12/2028 | 9,458 | 3,015 | 2,828 | ||||||||||||||||||||
Plasma Buyer LLC (4)(9) |
SF + | 5.75% | 11.10 | % | 5/12/2029 | 84,061 | 82,720 | 80,839 | ||||||||||||||||||||
Resonetics, LLC (4)(10) |
SF + | 6.00% | 11.39 | % | 4/28/2028 | 63,513 | 61,712 | 61,710 | ||||||||||||||||||||
SDC US Smilepay SPV (4)(7)(16) |
P + | 9.75% | 10/27/2025 | 28,737 | 26,203 | 21,039 | ||||||||||||||||||||||
TecoStar Holdings Inc (4)(10) |
SF + | 8.50% (incl 4.50% PIK) | 13.91 | % | 7/6/2029 | 119,875 | 117,155 | 118,687 | ||||||||||||||||||||
| 800,748 | 801,022 | 15.45 | % | |||||||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
SF + | 6.00% | 11.43 | % | 11/1/2029 | 8,000 | 1,340 | 1,446 | ||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
SF + | 5.50% | 11.04 | % | 11/1/2029 | 39,650 | 39,390 | 39,250 | ||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
11/1/2029 | 467 | — | (5 | ) | |||||||||||||||||||||||
F-39
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
SF + | 5.50% | 11.03 | % | 11/1/2029 | 14,273 | 14,273 | 14,129 | ||||||||||||||||||||
Acrisure LLC (7) |
SF + | 4.50% | 9.89 | % | 11/6/2030 | 4,000 | 3,961 | 4,015 | ||||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + | 6.00% | 11.46 | % | 10/2/2028 | 21,555 | 21,397 | 21,411 | ||||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + | 6.00% | 11.46 | % | 10/2/2028 | 12,398 | 12,390 | 12,315 | ||||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + | 6.00% | 11.46 | % | 10/2/2028 | 43,725 | 43,696 | 43,433 | ||||||||||||||||||||
Alera Group (4)(6)(9) |
10/2/2028 | 5,196 | (51 | ) | (51 | ) | ||||||||||||||||||||||
Alliant Holdings Intermediate, LLC (8) |
SF + | 3.50% | 8.86 | % | 11/6/2030 | 18,839 | 18,715 | 18,946 | ||||||||||||||||||||
AmWINS Group, Inc. (9) |
SF + | 2.25% | 7.72 | % | 2/19/2028 | 4,597 | 4,577 | 4,610 | ||||||||||||||||||||
AmWINS Group, Inc. (9) |
SF + | 2.75% | 8.22 | % | 2/19/2028 | 2,977 | 2,971 | 2,990 | ||||||||||||||||||||
Amynta Agency Borrower Inc. (7) |
SF + | 4.25% | 9.61 | % | 2/28/2028 | 20,116 | 19,600 | 20,166 | ||||||||||||||||||||
BroadStreet Partners, Inc. (7) |
SF + | 3.75% | 9.11 | % | 1/27/2029 | 9,192 | 9,115 | 9,231 | ||||||||||||||||||||
Galway Borrower LLC (4)(6)(9) |
9/30/2027 | 2,216 | (29 | ) | (15 | ) | ||||||||||||||||||||||
Galway Borrower LLC (4)(9) |
SF + | 5.25% | 10.70 | % | 9/29/2028 | 60,965 | 60,526 | 60,560 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc.(4)(6)(10) |
SF + | 5.50% | 10.96 | % | 11/27/2028 | 22,463 | 14,732 | 14,698 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + | 5.50% | 10.96 | % | 11/27/2028 | 48 | 47 | 47 | ||||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + | 5.50% | 10.96 | % | 11/27/2028 | 9,777 | 9,710 | 9,669 | ||||||||||||||||||||
HUB International Limited (7) |
7.25 | % | 6/15/2030 | 10,517 | 10,517 | 11,115 | ||||||||||||||||||||||
HUB International Limited (9) |
SF + | 4.25% | 9.66 | % | 6/20/2030 | 13,853 | 13,723 | 13,930 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) |
SF + | 6.00% | 11.39 | % | 8/27/2026 | 5,826 | 352 | 364 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) |
SF + | 6.02% | 11.41 | % | 8/27/2026 | 20,696 | 20,456 | 20,543 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) |
SF + | 6.02% | 11.51 | % | 8/27/2026 | 56,970 | 56,500 | 56,550 | ||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(10) |
8/27/2026 | 472 | (4 | ) | (3 | ) | ||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) |
8.50 | % | 3/15/2030 | 14,487 | 14,467 | 15,232 | ||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) |
SF + | 4.25% | 9.62 | % | 3/15/2030 | 5,128 | 5,091 | 5,156 | ||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) |
SF + | 5.75% | 11.25 | % | 10/16/2028 | 18,214 | 17,928 | 18,150 | ||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(6)(9) |
10/16/2028 | 822 | (12 | ) | (3 | ) | ||||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) |
SF + | 5.50% | 11.00 | % | 10/16/2028 | 7,187 | 7,083 | 7,162 | ||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) |
5/1/2029 | 6,685 | (178 | ) | (85 | ) | ||||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) |
5/1/2030 | 10,961 | (310 | ) | (126 | ) | ||||||||||||||||||||||
F-40
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Summit Acquisition Inc. (4)(9) |
SF + | 6.75% | 12.10 | % | 5/1/2030 | 48,780 | 47,459 | 48,221 | ||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
SF + | 5.00% | 10.50 | % | 3/25/2027 | 26,018 | 25,768 | 25,588 | ||||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9) |
3/25/2027 | 6,576 | (64 | ) | (109 | ) | ||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
SF + | 5.00% | 10.50 | % | 3/25/2027 | 20,633 | 20,421 | 20,292 | ||||||||||||||||||||
USI Inc/NY (7) |
SF + | 3.25% | 8.60 | % | 9/27/2030 | 5,985 | 5,970 | 6,002 | ||||||||||||||||||||
| 521,527 | 524,824 | 10.12 | % | |||||||||||||||||||||||||
Oil, Gas and Coal |
||||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
12/7/2029 | 6,923 | (155 | ) | (154 | ) | ||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
12/7/2029 | 6,923 | (154 | ) | (154 | ) | ||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10) |
SF + | 6.00% | 11.36 | % | 12/7/2029 | 46,154 | 45,127 | 45,126 | ||||||||||||||||||||
| 44,818 | 44,818 | 0.86 | % | |||||||||||||||||||||||||
Personal Care, Drug and Grocery Stores |
||||||||||||||||||||||||||||
Parfums Holding Co Inc (12) |
SF + | 6.00% | 11.61 | % | 6/30/2026 | 19,625 | 18,097 | 19,296 | ||||||||||||||||||||
Puma Buyer LLC (4)(8) |
SF + | 5.50% | 10.95 | % | 7/16/2029 | 61,380 | 57,816 | 61,380 | ||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
SF + | 5.65% | 11.00 | % | 3/23/2028 | 15,866 | 15,572 | 15,714 | ||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
B + | 5.75% | 10.16 | % | 3/23/2028 | A$ | 35,124 | 25,729 | 23,708 | |||||||||||||||||||
| 117,214 | 120,098 | 2.32 | % | |||||||||||||||||||||||||
Personal Goods |
||||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(6)(7) |
5/23/2028 | € | 3,978 | (106 | ) | (242 | ) | |||||||||||||||||||||
Daphne S.P.A. (4)(5)(7) |
E + | 6.25% | 10.21 | % | 5/23/2028 | € | 45,354 | 47,660 | 47,313 | |||||||||||||||||||
Spanx, LLC (4)(6)(9) |
11/18/2027 | 5,000 | (67 | ) | — | |||||||||||||||||||||||
Spanx, LLC (4)(9) |
SF + | 5.25% | 10.71 | % | 11/20/2028 | 29,400 | 28,970 | 29,400 | ||||||||||||||||||||
| 76,457 | 76,471 | 1.47 | % | |||||||||||||||||||||||||
Pharmaceuticals and Biotechnology |
||||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(6)(9) |
8/24/2029 | 6,340 | (94 | ) | 63 | |||||||||||||||||||||||
Advarra Holdings, Inc. (4)(9) |
SF + | 5.25% | 10.61 | % | 8/24/2029 | 69,459 | 68,452 | 70,153 | ||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
SF + | 5.50% | 11.15 | % | 11/1/2028 | 1,344 | 1,332 | 1,339 | ||||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) |
10/30/2026 | 2,115 | (26 | ) | (5 | ) | ||||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
SF + | 5.50% | 11.15 | % | 11/1/2028 | 24,957 | 24,670 | 24,869 | ||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) |
10/27/2028 | € | 8,400 | (178 | ) | (60 | ) | |||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) |
E + | 6.50% | 10.43 | % | 10/27/2028 | € | 82,300 | 80,361 | 90,259 | |||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(9) |
B + | 6.50% | 10.97 | % | 10/30/2028 | A$ | 11,982 | 1,897 | 1,994 | |||||||||||||||||||
F-41
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(9) |
B + | 6.50% | 10.92 | % | 10/30/2028 | A$ | 118,623 | 74,237 | 79,960 | |||||||||||||||||||
| 250,651 | 268,572 | 5.18 | % | |||||||||||||||||||||||||
Real Estate Investment and Services |
||||||||||||||||||||||||||||
OEG Borrower LLC (4)(8) |
SF + | 5.00% | 10.48 | % | 6/18/2029 | 39,500 | 38,219 | 39,500 | ||||||||||||||||||||
| 38,219 | 39,500 | 0.76 | % | |||||||||||||||||||||||||
Retailers |
||||||||||||||||||||||||||||
AI Grace Aus Bidco Pty Ltd (4)(5)(9) |
E + | 6.50% | 10.50 | % | 12/5/2029 | € | 21,626 | 22,654 | 23,165 | |||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
10/31/2029 | 1,150 | (11 | ) | (11 | ) | ||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
SF + | 6.00% | 11.32 | % | 10/31/2029 | 1,495 | 352 | 352 | ||||||||||||||||||||
BradyIFS Holdings, LLC (4)(10) |
SF + | 6.00% | 11.38 | % | 10/31/2029 | 13,572 | 13,436 | 13,439 | ||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
SF + | 8.00% | 13.54 | % | 7/28/2027 | 52,871 | 51,455 | 51,916 | ||||||||||||||||||||
Petsmart LLC (9) |
SF + | 3.75% | 9.21 | % | 2/11/2028 | 15,433 | 15,349 | 15,287 | ||||||||||||||||||||
White Cap Buyer, LLC (8) |
SF + | 3.75% | 9.11 | % | 10/19/2027 | 9,321 | 9,284 | 9,352 | ||||||||||||||||||||
| 112,519 | 113,500 | 2.19 | % | |||||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
SN + | 5.25% | 10.46 | % | 6/28/2029 | £ | 47,995 | 55,828 | 61,787 | |||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
SN + | 5.25% | 10.46 | % | 6/28/2029 | £ | 91,991 | 109,854 | 118,424 | |||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
SF + | 7.00% | 12.38 | % | 11/7/2029 | 40,000 | 39,025 | 39,025 | ||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) |
11/7/2029 | 6,000 | (146 | ) | (146 | ) | ||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
E + | 7.00% | 10.96 | % | 11/7/2029 | € | 18,614 | 19,424 | 20,047 | |||||||||||||||||||
Avalara, Inc. (4)(6)(9) |
10/19/2028 | 6,324 | (126 | ) | (45 | ) | ||||||||||||||||||||||
Avalara, Inc. (4)(9) |
SF + | 7.25% | 12.60 | % | 10/19/2028 | 56,918 | 55,754 | 56,513 | ||||||||||||||||||||
Barracuda Networks Inc (8) |
SF + | 4.50% | 9.88 | % | 8/15/2029 | 13,862 | 13,528 | 13,571 | ||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) |
5/15/2028 | 385 | (3 | ) | — | |||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) |
SF + | 5.25% | 10.61 | % | 5/14/2029 | 4,558 | 4,521 | 4,603 | ||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) |
SF + | 7.13% | 12.48 | % | 4/16/2027 | 2,687 | 1,536 | 1,529 | ||||||||||||||||||||
Calabrio, Inc. (4)(10) |
SF + | 7.13% | 12.48 | % | 4/16/2027 | 22,313 | 22,313 | 22,257 | ||||||||||||||||||||
Central Parent Inc (7) |
SF + | 4.00% | 9.35 | % | 7/6/2029 | 15,000 | 14,964 | 15,102 | ||||||||||||||||||||
Certinia Inc. (4)(6)(10) |
8/3/2029 | 5,449 | (152 | ) | (96 | ) | ||||||||||||||||||||||
Certinia Inc. (4)(10) |
SF + | 7.25% | 12.68 | % | 8/3/2029 | 40,323 | 39,196 | 39,610 | ||||||||||||||||||||
Cloud Software Group Inc. (8) |
SF + | 4.50% | 9.95 | % | 3/30/2029 | 13,693 | 12,756 | 13,409 | ||||||||||||||||||||
Cloud Software Group Inc. (7) |
6.50 | % | 3/31/2029 | 7,740 | 6,679 | 7,381 | ||||||||||||||||||||||
F-42
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
CommerceHub, Inc. (4)(9) |
SF + | 6.25% | 11.79 | % | 12/29/2027 | 64,255 | 60,635 | 60,694 | ||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
2/27/2030 | 7,123 | (163 | ) | (99 | ) | ||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
2/27/2029 | 6,211 | (133 | ) | (89 | ) | ||||||||||||||||||||||
Coupa Holdings, LLC (4)(9) |
SF + | 7.50% | 12.86 | % | 2/27/2030 | 79,777 | 78,130 | 78,671 | ||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) |
8/29/2030 | £ | 8,078 | (249 | ) | (120 | ) | |||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
E + | 6.00% | 9.84 | % | 8/29/2030 | € | 6,742 | 7,164 | 7,359 | |||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.21 | % | 8/29/2030 | £ | 23,265 | 28,728 | 29,309 | |||||||||||||||||||
DS Admiral Bidco, LLC (4)(6)(10) |
SF + | 6.50% | 11.85 | % | 3/16/2026 | 966 | 187 | 186 | ||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) |
SF + | 7.00% | 12.35 | % | 3/16/2028 | 39,345 | 38,336 | 39,093 | ||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) |
SF + | 6.50% | 11.85 | % | 3/16/2028 | 8,853 | 8,787 | 8,761 | ||||||||||||||||||||
Enverus Holdings Inc (4)(9) |
SF + | 5.50% | 10.86 | % | 12/24/2029 | 64,577 | 63,613 | 63,613 | ||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
12/24/2029 | 3,229 | (48 | ) | (48 | ) | ||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
12/24/2029 | 4,913 | (73 | ) | (73 | ) | ||||||||||||||||||||||
Finthrive Software Intermediate Holdings Inc (8) |
SF + | 4.00% | 9.47 | % | 12/18/2028 | 12,970 | 12,765 | 10,370 | ||||||||||||||||||||
GoTo Group Inc (7) |
SF + | 4.75% | 10.28 | % | 8/31/2027 | 2,372 | 2,356 | 1,581 | ||||||||||||||||||||
GovCIO Buyer Company (4)(10) |
SF + | 5.00% | 10.36 | % | 8/18/2027 | 9,812 | 9,681 | 9,812 | ||||||||||||||||||||
Helios Software Holdings, Inc. (10) |
SF + | 3.75% | 9.25 | % | 3/11/2028 | 11,761 | 11,674 | 11,757 | ||||||||||||||||||||
Huskies Parent, Inc. (4)(9) |
SF + | 5.50% | 11.00 | % | 11/3/2027 | 1,000 | 987 | 948 | ||||||||||||||||||||
Huskies Parent, Inc. (4)(9) |
SF + | 5.50% | 11.00 | % | 11/3/2028 | 25,154 | 24,797 | 23,620 | ||||||||||||||||||||
LMI Inc/DE (8) |
SF + | 3.75% | 9.21 | % | 10/2/2028 | 6,262 | 6,234 | 6,032 | ||||||||||||||||||||
Medallia, Inc. (4)(9) |
SF + | 6.50% (incl 4.00% PIK) | 11.95 | % | 10/30/2028 | 76,751 | 76,751 | 75,097 | ||||||||||||||||||||
Mcafee Corp. (8) |
SF + | 3.75% | 9.19 | % | 3/1/2029 | 7,880 | 7,854 | 7,869 | ||||||||||||||||||||
Mitchell Topo Holdings Inc (8) |
SF + | 3.75% | 9.40 | % | 10/15/2028 | 16,604 | 16,380 | 16,621 | ||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) |
SF + | 3.50% | 9.42 | % | 2/10/2028 | 1,793 | 1,784 | 1,762 | ||||||||||||||||||||
New Era Technology, Inc. (4)(10) |
SF + | 6.25% | 11.78 | % | 10/31/2026 | 19,210 | 19,210 | 18,705 | ||||||||||||||||||||
NWN Corporation (4)(6)(10) |
11/29/2028 | 7,686 | (208 | ) | (208 | ) | ||||||||||||||||||||||
NWN Corporation (4)(10) |
SF + | 7.75% | 13.14 | % | 11/29/2028 | 52,087 | 50,680 | 50,679 | ||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10) |
2/1/2029 | 4,657 | (99 | ) | (65 | ) | ||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) |
SF + | 7.50% | 12.88 | % | 2/1/2029 | 33,837 | 33,121 | 33,361 | ||||||||||||||||||||
Peraton Inc. (9) |
SF + | 3.75% | 9.21 | % | 2/1/2028 | 15,083 | 14,946 | 15,139 | ||||||||||||||||||||
Perforce Software, Inc. (4)(8) |
SF + | 4.50% | 9.86 | % | 7/1/2026 | 19,700 | 19,389 | 19,361 | ||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9) |
10/17/2028 | 6,068 | (125 | ) | (43 | ) | ||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9) |
SF + | 7.00% | 12.36 | % | 10/17/2029 | 59,003 | 57,735 | 58,658 | ||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9) |
9/19/2028 | 10,833 | (189 | ) | 108 | |||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9) |
SF + | 5.75% | 11.11 | % | 9/19/2028 | 42,792 | 42,104 | 43,220 | ||||||||||||||||||||
F-43
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) |
SF + | 4.75% | 10.11 | % | 10/28/2030 | 15,061 | 14,767 | 15,172 | ||||||||||||||||||||
Project Ruby Ultimate Parent Corp (9) |
SF + | 3.25% | 8.72 | % | 3/10/2028 | 12,258 | 12,133 | 12,271 | ||||||||||||||||||||
Quail Buyer, Inc. (4)(9) |
SF + | 5.25% | 10.72 | % | 10/1/2027 | 7,311 | 7,216 | 7,311 | ||||||||||||||||||||
Riley Mergeco LLC (4)(6)(10) |
9/23/2027 | 304 | (5 | ) | (8 | ) | ||||||||||||||||||||||
Riley Mergeco LLC (4)(10) |
SF + | 5.50% | 10.97 | % | 9/23/2027 | 1,816 | 1,789 | 1,769 | ||||||||||||||||||||
Smarsh Inc. (4)(6)(9) |
SF + | 5.75% | 11.10 | % | 2/16/2029 | 4,286 | 2,078 | 2,118 | ||||||||||||||||||||
Smarsh Inc. (4)(6)(9) |
2/16/2029 | 1,071 | (16 | ) | (6 | ) | ||||||||||||||||||||||
Smarsh Inc. (4)(9) |
SF + | 5.75% | 11.10 | % | 2/16/2029 | 17,143 | 16,885 | 17,045 | ||||||||||||||||||||
Trimech Acquisition Corp. (4)(6)(14) |
P + | 3.75% | 12.25 | % | 3/10/2028 | 3,289 | 1,601 | 1,583 | ||||||||||||||||||||
Trimech Acquisition Corp. (4)(10) |
SF + | 4.75% | 10.25 | % | 3/10/2028 | 21,331 | 21,095 | 20,926 | ||||||||||||||||||||
Trimech Acquisition Corp. (4)(10) |
SN + | 4.75% | 10.11 | % | 3/10/2028 | £ | 36,254 | 43,882 | 45,565 | |||||||||||||||||||
UKG Inc (8) |
SF + | 3.25% | 8.76 | % | 5/4/2026 | 9,071 | 9,030 | 9,107 | ||||||||||||||||||||
User Zoom Technologies, Inc. (4)(9) |
SF + | 7.00% | 12.49 | % | 4/5/2029 | 18,948 | 18,647 | 18,847 | ||||||||||||||||||||
Zelis Payments Buyer, Inc. (7) |
SF + | 3.50% | 8.97 | % | 9/30/2026 | 10,994 | 10,962 | 11,029 | ||||||||||||||||||||
Zendesk Inc (4)(6)(9) |
11/22/2028 | 39,321 | (678 | ) | 31 | |||||||||||||||||||||||
Zendesk Inc (4)(6)(9) |
11/22/2028 | 17,940 | (293 | ) | — | |||||||||||||||||||||||
Zendesk Inc (4)(9) |
SF + | 6.25% | 11.61 | % | 11/22/2028 | 161,380 | 158,763 | 161,505 | ||||||||||||||||||||
| 1,405,548 | 1,428,877 | 27.57 | % | |||||||||||||||||||||||||
Technology Hardware and Equipment |
||||||||||||||||||||||||||||
Altar Bidco, Inc. (8) |
SF + | 3.10% | 8.26 | % | 2/1/2029 | 8,870 | 8,813 | 8,871 | ||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
1/27/2028 | 22,837 | (533 | ) | (2,435 | ) | ||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
SF + | 6.75% | 12.25 | % | 1/27/2028 | 5,122 | 2,943 | 2,501 | ||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10) |
SF + | 6.75% | 12.28 | % | 1/27/2028 | 45,103 | 44,147 | 40,293 | ||||||||||||||||||||
Excelitas Technologies Corp. (4)(9) |
SF + | 5.75% | 11.23 | % | 8/13/2029 | 10,030 | 9,868 | 9,931 | ||||||||||||||||||||
Excelitas Technologies Corp. (4)(7) |
E + | 5.75% | 9.75 | % | 8/13/2029 | € | 5,531 | 5,583 | 6,045 | |||||||||||||||||||
Excelitas Technologies Corp. (4)(6)(9) |
SF + | 5.75% | 11.23 | % | 8/14/2028 | 3,261 | 1,950 | 1,966 | ||||||||||||||||||||
TechInsights Inc (4)(5)(10) |
SF + | 6.63% | 12.13 | % | 11/9/2027 | 983 | 968 | 959 | ||||||||||||||||||||
TechInsights Inc (4)(5)(10) |
SF + | 6.63% | 12.13 | % | 11/9/2027 | 2,552 | 2,515 | 2,492 | ||||||||||||||||||||
| 76,254 | 70,623 | 1.37 | % | |||||||||||||||||||||||||
Telecommunications Equipment |
||||||||||||||||||||||||||||
Delta Topco, Inc. (9) |
SF + | 3.75% | 9.12 | % | 12/1/2027 | 6,882 | 6,743 | 6,887 | ||||||||||||||||||||
Guardian US Holdco LLC (8) |
SF + | 4.00% | 9.35 | % | 1/31/2030 | 7,960 | 7,819 | 7,993 | ||||||||||||||||||||
| 14,562 | 14,880 | 0.29 | % | |||||||||||||||||||||||||
F-44
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||||
Directv Financing, LLC (9) |
SF + | 5.00% | 10.65 | % | 8/2/2027 | 16,365 | 16,101 | 16,395 | ||||||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) |
SF + | 5.00% | 10.46 | % | 7/17/2028 | 4,938 | 2,890 | 2,804 | ||||||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) |
7/17/2028 | 1,143 | (13 | ) | (31 | ) | ||||||||||||||||||||||
Meriplex Communications, Ltd (4)(9) |
SF + | 5.00% | 10.46 | % | 7/17/2028 | 13,806 | 13,642 | 13,430 | ||||||||||||||||||||
Openmarket Inc. (5)(9) |
SF + | 6.25% | 11.86 | % | 9/17/2026 | 4,888 | 4,816 | 4,839 | ||||||||||||||||||||
Radiate Holdco LLC (9) |
SF + | 3.25% | 8.72 | % | 9/25/2026 | 14,729 | 14,684 | 11,864 | ||||||||||||||||||||
TA TT Buyer, LLC (8) |
SF + | 5.00% | 10.35 | % | 4/2/2029 | 14,812 | 14,695 | 14,738 | ||||||||||||||||||||
| 66,815 | 64,039 | 1.23 | % | |||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7) |
SN + | 6.00% | 11.25 | % | 9/8/2028 | £ | 2,437 | 308 | (39 | ) | ||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.26 | % | 9/8/2028 | £ | 7,749 | 10,090 | 8,669 | |||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.26 | % | 9/8/2028 | £ | 4,509 | 5,906 | 5,045 | |||||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + | 6.00% | 11.30 | % | 9/8/2028 | £ | 4,676 | 6,117 | 5,232 | |||||||||||||||||||
Canoe Bidco Pty Limited (4)(5)(8) |
B + | 5.50% | 9.92 | % | 5/20/2026 | A$ | 31,969 | 21,202 | 21,784 | |||||||||||||||||||
Canoe Bidco Pty Limited (4)(5)(8) |
B + | 5.50% | 9.92 | % | 5/20/2026 | A$ | 137,468 | 95,483 | 93,671 | |||||||||||||||||||
Fertitta Entertainment LLC (8) |
SF + | 4.00% | 9.36 | % | 1/27/2029 | 13,182 | 12,741 | 13,205 | ||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
E + | 9.50% (incl 3.50% PIK) | 13.44 | % | 7/27/2026 | € | 18,785 | 20,835 | 20,881 | |||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
E + | 9.50% (incl 3.50% PIK) | 13.44 | % | 10/26/2024 | € | 3,683 | 4,085 | 4,076 | |||||||||||||||||||
IRB Holding Corp. (9) |
SF + | 3.00% | 8.46 | % | 12/15/2027 | 9,899 | 9,667 | 9,927 | ||||||||||||||||||||
Travel Leaders Group, LLC (4)(14) |
SF + | 8.50% (incl 3.00% PIK) | 13.96 | % | 3/27/2028 | 137,128 | 134,227 | 139,704 | ||||||||||||||||||||
| 320,661 | 322,155 | 6.21 | % | |||||||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Non - Affiliated |
8,914,332 | 8,997,013 | 173.51 | % | ||||||||||||||||||||||||
First Lien Debt- Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(16)(17) |
SF + | 7.50% PIK | 5/1/2028 | $ | 5,682 | $ | 5,533 | $ | 5,682 | |||||||||||||||||||
| 5,533 | 5,682 | 0.11 | % | |||||||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Affiliated |
5,533 | 5,682 | 0.11 | % | ||||||||||||||||||||||||
Total First Lien Debt |
$ | 8,919,865 | $ | 9,002,695 | 173.62 | % | ||||||||||||||||||||||
F-45
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Second Lien Debt |
||||||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
Asurion Corporation (7) |
SF + | 5.25% | 10.72 | % | 1/31/2028 | $ | 4,132 | $ | 4,092 | $ | 3,949 | |||||||||||||||||
| 4,092 | 3,949 | 0.08 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
Charlotte Buyer Inc (4)(8) |
SF + | 8.25% | 13.61 | % | 8/11/2028 | 10,000 | 9,433 | 9,744 | ||||||||||||||||||||
| 9,433 | 9,744 | 0.19 | % | |||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(8) |
SF + | 8.25% | 13.63 | % | 4/29/2030 | 9,000 | 8,812 | 7,765 | ||||||||||||||||||||
| 8,812 | 7,765 | 0.15 | % | |||||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Cloud Software Group Inc (7) |
9.00 | % | 9/30/2029 | 19,666 | 15,951 | 18,750 | ||||||||||||||||||||||
UKG Inc (8) |
SF + | 5.25% | 10.76 | % | 5/3/2027 | 24,852 | 24,613 | 24,947 | ||||||||||||||||||||
| 40,564 | 43,697 | 0.84 | % | |||||||||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Non-Affiliated |
62,901 | 65,155 | 1.26 | % | ||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(16)(17) |
SF + | 7.50% PIK | 10/30/2028 | $ | 1,932 | $ | 1,881 | $ | 1,932 | |||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Affiliated |
1,881 | 1,932 | 0.03 | % | ||||||||||||||||||||||||
Total Second Lien Debt |
$ | 64,782 | $ | 67,087 | 1.29 | % | ||||||||||||||||||||||
Unsecured Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7) |
|
15.00% PIK |
|
7/16/2029 | $ | 13,390 | $ | 13,390 | $ | 13,390 | ||||||||||||||||||
| 13,390 | 13,390 | 0.27 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
|
13.75% PIK |
|
9/3/2030 | 282 | 277 | 256 | |||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
|
14.75% PIK |
|
9/3/2030 | 239 | 233 | 227 | |||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
|
13.75% PIK |
|
9/3/2030 | 894 | 878 | 812 | |||||||||||||||||||||
| 1,388 | 1,295 | 0.02 | % | |||||||||||||||||||||||||
F-46
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
|
13.13% PIK |
|
12/28/2032 | 99 | 97 | 93 | |||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
|
13.13% PIK |
|
12/28/2032 | 178 | 173 | 168 | |||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
|
13.13% PIK |
|
12/28/2032 | 1,046 | 1,029 | 990 | |||||||||||||||||||||
| 1,299 | 1,251 | 0.02 | % | |||||||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (7) |
6.75% | 10/15/2027 | 6,255 | 5,752 | 6,207 | |||||||||||||||||||||||
| 5,752 | 6,207 | 0.12 | % | |||||||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7) |
5.50% | 5/1/2026 | 7,000 | 7,072 | 6,958 | |||||||||||||||||||||||
| 7,072 | 6,958 | 0.13 | % | |||||||||||||||||||||||||
Total Unsecured Debt - Non-Controlled/Non-Affiliated |
$ | 28,901 | $ | 29,101 | 0.56 | % | ||||||||||||||||||||||
Structured Finance - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Structured Finance Investments |
||||||||||||||||||||||||||||
ALM 2020 Ltd (5)(7) |
SF + | 6.26% | 11.66% | 10/15/2029 | $ | 3,330 | $ | 3,037 | $ | 3,297 | ||||||||||||||||||
AMMC CLO 21 Ltd (5)(7) |
SF + | 3.10% | 8.74% | 11/2/2030 | 2,150 | 1,927 | 2,112 | |||||||||||||||||||||
AMMC CLO 21 Ltd (5)(7) |
SF + | 6.76% | 12.14% | 11/2/2030 | 4,126 | 3,665 | 3,840 | |||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) |
SF + | 5.40% | 11.08% | 10/20/2027 | 1,750 | 1,531 | 1,676 | |||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) |
L + | 5.40% | 11.05% | 7/27/2031 | 1,200 | 940 | 1,044 | |||||||||||||||||||||
Catskill Park CLO Ltd (5)(7) |
SF + | 6.26% | 11.68% | 4/20/2029 | 1,350 | 1,230 | 1,287 | |||||||||||||||||||||
CENT CLO 16, L.P. (5)(7) |
SF + | 8.07% | 13.47% | 7/24/2034 | 3,000 | 2,823 | 2,773 | |||||||||||||||||||||
Dryden 108 CLO Ltd (5)(7) |
7/18/2035 | 2,900 | 2,291 | 1,891 | ||||||||||||||||||||||||
Marble Point CLO XI Ltd (5)(7) |
SF + | 3.06% | 8.46% | 12/18/2030 | 1,850 | 1,568 | 1,696 | |||||||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7) |
SF + | 10.02% | 15.42% | 10/24/2034 | 2,500 | 2,341 | 2,446 | |||||||||||||||||||||
OCP CLO 2017-14 Ltd (5)(7) |
SF + | 6.80% | 12.19% | 1/15/2033 | 1,469 | 1,289 | 1,458 | |||||||||||||||||||||
Shackleton 2019-XV CLO Ltd (5)(7) |
SF + | 6.66% | 12.32% | 1/15/2032 | 3,000 | 2,648 | 2,905 | |||||||||||||||||||||
Silver Creek CLO Ltd (5)(7) |
SF + | 5.62% | 11.30% | 7/20/2030 | 2,000 | 1,802 | 1,988 | |||||||||||||||||||||
Voya CLO Ltd (5)(7) |
SF + | 3.81% | 9.21% | 4/17/2030 | 1,500 | 1,335 | 1,455 | |||||||||||||||||||||
| 28,427 | 29,868 | 0.58 | % | |||||||||||||||||||||||||
Total Structured Finance - Non-Controlled/Non-Affiliated |
$ | 28,427 | $ | 29,868 | 0.58 | % | ||||||||||||||||||||||
F-47
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Equity Investments |
||||||||||||||||||||||||||||
Equity Investments - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. - Preferred Shares (4) |
2,000 | $ | 1,940 | $ | 1,970 | |||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)(6) |
8,817 | 2,784 | 2,784 | |||||||||||||||||||||||||
Rapid Express Preferred, LLC (4)(6) |
2,784 | 928 | 928 | |||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4) |
|
15.00% PIK |
|
10,313 | 10,313 | 10,313 | ||||||||||||||||||||||
Rapid Express Preferred, LLC (4) |
|
15.00% PIK |
|
4,770 | 4,770 | 4,770 | ||||||||||||||||||||||
| 20,735 | 20,765 | 0.40 | % | |||||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4) |
3 | $ | 68 | $ | 199 | |||||||||||||||||||||||
| 68 | 199 | — | % | |||||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4) |
— | — | — | |||||||||||||||||||||||||
| — | — | — | % | |||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
BCPE Virginia HoldCo, Inc. (4) |
2,000 | 1,960 | 1,973 | |||||||||||||||||||||||||
| 1,960 | 1,973 | 0.04 | % | |||||||||||||||||||||||||
Media |
||||||||||||||||||||||||||||
Oneteam Partners, LLC - Preferred Shares (4) |
8.00% | 1,000 | 1,000 | 1,132 | ||||||||||||||||||||||||
| 1,000 | 1,132 | 0.02 | % | |||||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Picard Holdco, Inc. - Preferred Shares (4) |
304 | 295 | 343 | |||||||||||||||||||||||||
Picard Holdco, Inc. - Preferred Shares (4) |
30 | 30 | 34 | |||||||||||||||||||||||||
| 325 | 377 | 0.01 | % | |||||||||||||||||||||||||
Total Equity Investments - Non-Controlled/Non-Affiliated |
24,088 | 24,446 | 0.46 | % | ||||||||||||||||||||||||
Equity Investments - Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(17) |
274 | $ | 2,333 | $ | 2,333 | |||||||||||||||||||||||
| 2,333 | 2,333 | 0.05 | % | |||||||||||||||||||||||||
F-48
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount /Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(17)(18) |
10,101 | 9,892 | 9,877 | |||||||||||||||||||||||||
| 9,892 | 9,877 | 0.19 | % | |||||||||||||||||||||||||
Total Equity Investments - Non-Controlled/Affiliated |
12,225 | 12,210 | 0.24 | % | ||||||||||||||||||||||||
Total Equity Investments |
$ | 36,313 | $ | 36,656 | 0.71 | % | ||||||||||||||||||||||
Investments in Joint Ventures |
||||||||||||||||||||||||||||
Investments in Joint Ventures - Controlled/Affiliated |
||||||||||||||||||||||||||||
ULTRA III, LLC (5)(17) |
$ | 125,513 | $ | 124,003 | ||||||||||||||||||||||||
Total Investments in Joint Ventures - Controlled/Affiliated |
$ | 125,513 | $ | 124,003 | 2.39 | % | ||||||||||||||||||||||
Total Investments - Non-Controlled/Non-Affiliated |
$ | 9,058,649 | $ | 9,145,583 | 176.37 | % | ||||||||||||||||||||||
Total Investments - Non-Controlled/Affiliated |
$ | 19,639 | $ | 19,824 | 0.38 | % | ||||||||||||||||||||||
Total Investments - Controlled/Affiliated |
$ | 125,513 | $ | 124,003 | 2.40 | % | ||||||||||||||||||||||
Total Investment Portfolio |
$ | 9,203,801 | $ | 9,289,410 | 179.15 | % | ||||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares |
131,546 | $ | 131,546 | $ | 131,546 | |||||||||||||||||||||||
Cash |
57,229 | 57,229 | ||||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 188,775 | $ | 188,775 | 3.64 | % | ||||||||||||||||||||||
Total Investment Portfolio, Cash and Cash Equivalents |
$ | 9,392,576 | $ | 9,478,185 | 182.79 | % | ||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral under its credit facilities and debt securitization issuances unless otherwise indicated. |
| (2) | The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average (“SONIA” or “SN”), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate (“SOFR” or “SF”), Canadian Dollar Offered Rate (“CDOR” or “C”), Singapore Overnight Rate Average (“SORA”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Rate (“BBSW” or “B”) which reset daily, |
F-49
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
| monthly, quarterly, semiannually or annually. For each such investment, the Company has provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR, SORA, BS or BBSW and the current contractual interest rate in effect at December 31, 2023. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread. |
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, non-qualifying assets represented 17.9% of total assets as calculated in accordance with regulatory requirements. |
| (6) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments: |
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Zendesk Inc |
1st Lien Senior Secured Delayed Draw Loan | $ | 39,321 | $ | 31 | |||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 34,900 | (734 | ) | ||||||
WP CPP Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 26,285 | (648 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 22,837 | (2,435 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan | 22,070 | (846 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Revolving Loan | 21,254 | (543 | ) | ||||||
Esdec Solar Group B.V. |
1st Lien Senior Secured Delayed Draw Loan | 18,968 | (164 | ) | ||||||
Zendesk Inc |
1st Lien Senior Secured Revolving Loan | 17,940 | — | |||||||
United Musculoskeletal Partners Acquisition Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 17,374 | (534 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 16,751 | (92 | ) | ||||||
Sugar PPC Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan | 16,541 | (359 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Delayed Draw Loan | 14,405 | (366 | ) | ||||||
Club Car Wash Operating, LLC |
1st Lien Senior Secured Delayed Draw Loan | 13,977 | (85 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Revolving Loan | 13,795 | (83 | ) | ||||||
Sequa Corp |
1st Lien Senior Secured Revolving Loan | 13,676 | (135 | ) | ||||||
Atlas Intermediate III, L.L.C. |
1st Lien Senior Secured Revolving Loan | 13,445 | (327 | ) | ||||||
E.S.G. Movilidad, S.L.U. |
1st Lien Senior Secured Delayed Draw Loan | 12,414 | (86 | ) | ||||||
Formerra, LLC |
1st Lien Senior Secured Revolving Loan | 12,031 | (117 | ) | ||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Revolving Loan | 11,656 | — | |||||||
SimpliSafe Holding Corporation |
1st Lien Senior Secured Delayed Draw Loan | 11,078 | (71 | ) | ||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,961 | (126 | ) | ||||||
Prism Parent Co., Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,833 | 108 | |||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Delayed Draw Loan | 10,736 | 58 | |||||||
F-50
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Radwell Parent, LLC |
1st Lien Senior Secured Revolving Loan | 10,617 | — | |||||||
Denali Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 10,296 | (120 | ) | ||||||
CD&R Madison UK Bidco LTD |
1st Lien Senior Secured Delayed Draw Loan | 10,039 | (212 | ) | ||||||
Dolcetto HoldCo S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 9,273 | (60 | ) | ||||||
Cadence—Southwick, Inc. |
1st Lien Senior Secured Revolving Loan | 8,280 | (117 | ) | ||||||
PPV Intermediate Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 8,145 | (52 | ) | ||||||
Planet US Buyer LLC |
1st Lien Senior Secured Revolving Loan | 8,024 | (148 | ) | ||||||
NWN Corporation |
1st Lien Senior Secured Revolving Loan | 7,686 | (208 | ) | ||||||
Captive Resources Midco LLC |
1st Lien Senior Secured Revolving Loan | 7,558 | — | |||||||
Higginbotham Insurance Agency, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 7,515 | (83 | ) | ||||||
Circana Group, LP. |
1st Lien Senior Secured Revolving Loan | 7,399 | (52 | ) | ||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 7,123 | (99 | ) | ||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Revolving Loan | 7,069 | (125 | ) | ||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,923 | (154 | ) | ||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 6,923 | (154 | ) | ||||||
Frontgrade Technologies Holdings Inc. |
1st Lien Senior Secured Revolving Loan | 6,864 | (94 | ) | ||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Revolving Loan | 6,685 | (85 | ) | ||||||
Trupanion, Inc. |
1st Lien Senior Secured Revolving Loan | 6,576 | (109 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,554 | — | |||||||
Advarra Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,340 | 63 | |||||||
Avalara, Inc. |
1st Lien Senior Secured Revolving Loan | 6,324 | (45 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Revolving Loan | 6,306 | (216 | ) | ||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 6,211 | (89 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Revolving Loan | 6,189 | (127 | ) | ||||||
Gusto Aus Bidco Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 6,083 | (65 | ) | ||||||
Ping Identity Holding Corp. |
1st Lien Senior Secured Revolving Loan | 6,068 | (43 | ) | ||||||
Club Car Wash Preferred, LLC |
Preferred Equity | 6,033 | — | |||||||
Artisan Bidco, Inc. |
1st Lien Senior Secured Revolving Loan | 6,000 | (146 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 5,986 | (83 | ) | ||||||
Arcfield Acquisition Corp |
1st Lien Senior Secured Revolving Loan | 5,687 | (228 | ) | ||||||
Cube Industrials Buyer, Inc. |
1st Lien Senior Secured Revolving Loan | 5,664 | (82 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Delayed Draw Loan | 5,484 | (111 | ) | ||||||
Certinia Inc. |
1st Lien Senior Secured Revolving Loan | 5,449 | (96 | ) | ||||||
123Dentist Inc |
1st Lien Senior Secured Delayed Draw Loan | 5,441 | (55 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Delayed Draw Loan | 5,419 | (40 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 5,367 | — | |||||||
Specialty Ingredients, LLC |
1st Lien Senior Secured Revolving Loan | 5,357 | (55 | ) | ||||||
Alera Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 5,196 | (51 | ) | ||||||
International Entertainment Investments Ltd |
1st Lien Senior Secured Delayed Draw Loan | 5,080 | (66 | ) | ||||||
Spanx, LLC |
1st Lien Senior Secured Revolving Loan | 5,000 | — | |||||||
Enverus Holdings Inc |
1st Lien Senior Secured Revolving Loan | 4,913 | (73 | ) | ||||||
Showtime Acquisition, L.L.C. |
1st Lien Senior Secured Revolving Loan | 4,711 | (87 | ) | ||||||
Oranje Holdco, Inc. |
1st Lien Senior Secured Revolving Loan | 4,657 | (65 | ) | ||||||
Daphne S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 4,392 | (242 | ) | ||||||
Spotless Brands, LLC |
1st Lien Senior Secured Revolving Loan | 4,057 | — | |||||||
Pareto Health Intermediate Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 4,032 | (61 | ) | ||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan | 4,007 | (11 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan | 3,758 | 38 | |||||||
ASDAM Operations Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 3,694 | (132 | ) | ||||||
Showtime Acquisition, L.L.C. |
1st Lien Senior Secured Delayed Draw Loan | 3,657 | (68 | ) | ||||||
Enverus Holdings Inc |
1st Lien Senior Secured Delayed Draw Loan | 3,229 | (48 | ) | ||||||
F-51
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 3,221 | (44 | ) | ||||||
Pinnacle Fertility, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 3,125 | (19 | ) | ||||||
Artemis Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 2,765 | (338 | ) | ||||||
Galway Borrower LLC |
1st Lien Senior Secured Revolving Loan | 2,216 | (15 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Delayed Draw Loan | 2,143 | (12 | ) | ||||||
CPI Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 2,115 | (5 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Revolving Loan | 2,074 | (221 | ) | ||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Delayed Draw Loan | 1,999 | (54 | ) | ||||||
Rapid Express Preferred, LLC |
Preferred Equity | 1,856 | — | |||||||
IG Investments Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,726 | (12 | ) | ||||||
TriMech Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 1,645 | (31 | ) | ||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 1,638 | (24 | ) | ||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 1,584 | (24 | ) | ||||||
Excelitas Technologies Corp. |
1st Lien Senior Secured Revolving Loan | 1,261 | (13 | ) | ||||||
Calabrio, Inc. |
1st Lien Senior Secured Revolving Loan | 1,152 | (3 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,150 | (11 | ) | ||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Revolving Loan | 1,143 | (31 | ) | ||||||
Braya Renewable Fuels (Newfoundland) LP |
1st Lien Senior Secured Delayed Draw Loan | 1,139 | (22 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 1,128 | (11 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Revolving Loan | 1,071 | (6 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 1,019 | (23 | ) | ||||||
Patriot Growth Insurance Services LLC |
1st Lien Senior Secured Revolving Loan | 822 | (3 | ) | ||||||
DS Admiral Bidco, LLC |
1st Lien Senior Secured Revolving Loan | 773 | (6 | ) | ||||||
ERC Topco Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 567 | (73 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Revolving Loan | 472 | (3 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Revolving Loan | 467 | (5 | ) | ||||||
Bottomline Technologies, Inc. |
1st Lien Senior Secured Revolving Loan | 385 | — | |||||||
Riley MergeCo LLC |
1st Lien Senior Secured Revolving Loan | 304 | (8 | ) | ||||||
Nexus Intermediate III, LLC |
1st Lien Senior Secured Delayed Draw Loan | 300 | — | |||||||
Arc Media Holdings Limited |
1st Lien Senior Secured Revolving Loan | 277 | (14 | ) | ||||||
Time Manufacturing Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 273 | (14 | ) | ||||||
Associations Inc. |
1st Lien Senior Secured Revolving Loan | 261 | — | |||||||
Total |
$ | 760,659 | $ | (12,755 | ) | |||||
| (7) | There are no interest rate floors on these investments. |
| (8) | The interest rate floor on these investments as of December 31, 2023 was 0.50%. |
| (9) | The interest rate floor on these investments as of December 31, 2023 was 0.75%. |
| (10) | The interest rate floor on these investments as of December 31, 2023 was 1.00%. |
| (11) | The interest rate floor on these investments as of December 31, 2023 was 1.25% |
| (12) | The interest rate floor on these investments as of December 31, 2023 was 1.50% |
| (13) | The interest rate floor on these investments as of December 31, 2023 was 1.75%. |
| (14) | The interest rate floor on these investments as of December 31, 2023 was 2.00%. |
| (15) | The interest rate floor on these investments as of December 31, 2023 was 2.50%. |
| (16) | Loan was on non-accrual status as of December 31, 2023. |
| (17) | Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company is deemed to “control” a portfolio company if the Company owns more than 25% of its outstanding voting securities and/or holds the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company is deemed an “affiliated person” of a portfolio company if the Company owns between 5% and 25% (inclusive) of the portfolio company’s outstanding voting securities. For purposes of determining the classification of its investment portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the Adviser |
F-52
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
| and/or its affiliates. As of December 31, 2023, the Company’s controlled/affiliated and non-controlled/affiliated investments were as follows: |
|
Fair Value as of December 31, 2022 |
Gross Additions |
Gross Reductions |
Change in Unrealized Gains (Loss) |
Net Realized Gain (Loss) |
Fair Value as of December 31, 2023 |
Dividend and Interest Income |
||||||||||||||||||||||
Non-Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
Southern Graphics Inc. |
$ | — | $ | 9,747 | $ | — | $ | 200 | $ | — | $ | 9,947 | $ | — | ||||||||||||||
AD1 LBV1, LLC |
— | 6,013 | (5,149 | ) | — | (864 | ) | — | — | |||||||||||||||||||
SLF V AD1 Holdings, LLC |
— | 9,892 | — | (15 | ) | — | 9,877 | — | ||||||||||||||||||||
Total Non-Controlled/Affiliated Investments |
$ | — | $ | 25,652 | $ | (5,149 | ) | $ | 185 | $ | (864 | ) | $ | 19,824 | $ | — | ||||||||||||
Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
ULTRA III, LLC |
$ | — | $ | 129,675 | $ | (4,162 | ) | $ | (1,510 | ) | $ | — | $ | 124,003 | $ | — | ||||||||||||
Total Controlled/Affiliated Investments |
$ | — | $ | 129,675 | $ | (4,162 | ) | $ | (1,510 | ) | $ | — | $ | 124,003 | $ | — | ||||||||||||
| (18) | These investments are not pledged as collateral under the Credit Facilities and 2023 CLO Secured Notes. |
ADDITIONAL INFORMATION
Foreign currency forward contracts
Currency Purchased |
Currency Sold |
Counterparty |
Settlement Date |
Unrealized Appreciation (Depreciation) |
||||||||
U.S. Dollars 10,232 |
Australian Dollars 15,121 | SMBC Capital Markets, Inc. | 3/21/2024 | $ | (96 | ) | ||||||
U.S. Dollars 2,719 |
Canadian Dollars 3,623 | SMBC Capital Markets, Inc. | 3/21/2024 | (18 | ) | |||||||
U.S. Dollars 3,343 |
Euro 3,083 | Goldman Sachs Bank USA | 9/23/2024 | (98 | ) | |||||||
U.S. Dollars 13,028 |
Euro 12,097 | Goldman Sachs Bank USA | 3/21/2024 | (367 | ) | |||||||
U.S. Dollars 177,612 |
Euro 163,379 | Goldman Sachs Bank USA | 12/23/2024 | (5,544 | ) | |||||||
U.S. Dollars 2,320 |
Euro 2,080 | Goldman Sachs Bank USA | 1/29/2024 | 22 | ||||||||
U.S. Dollars 106,649 |
Euro 96,729 | SMBC Capital Markets, Inc. | 3/21/2024 | (465 | ) | |||||||
U.S. Dollars 248 |
Euro 224 | Goldman Sachs Bank USA | 6/23/2025 | (5 | ) | |||||||
U.S. Dollars 101,171 |
Euro 89,721 | SMBC Capital Markets, Inc. | 9/23/2025 | (656 | ) | |||||||
U.S. Dollars 2,545 |
British Pound 2,215 | Goldman Sachs Bank USA | 3/23/2026 | 13 | ||||||||
Euro 80,972 |
U.S. Dollars 89,270 | SMBC Capital Markets, Inc. | 3/21/2024 | 394 | ||||||||
U.S. Dollars 6,868 |
British Pound 6,303 | Goldman Sachs Bank USA | 10/15/2024 | (1,171 | ) | |||||||
U.S. Dollars 7,472 |
British Pound 6,079 | Goldman Sachs Bank USA | 9/23/2024 | (281 | ) | |||||||
U.S. Dollars 764 |
British Pound 620 | Goldman Sachs Bank USA | 6/23/2025 | (27 | ) | |||||||
U.S. Dollars 2,601 |
British Pound 2,109 | Goldman Sachs Bank USA | 3/21/2025 | (91 | ) | |||||||
U.S. Dollars 125 |
British Pound 99 | Goldman Sachs Bank USA | 3/21/2024 | (1 | ) | |||||||
U.S. Dollars 134,754 |
British Pound 105,740 | SMBC Capital Markets, Inc. | 3/21/2024 | (73 | ) | |||||||
U.S. Dollars 3,086 |
Singaporean Dollars 4,117 | Goldman Sachs Bank USA | 3/21/2024 | (44 | ) | |||||||
U.S. Dollars 32,604 |
Singaporean Dollars 43,183 | Goldman Sachs Bank USA | 12/23/2024 | (596 | ) | |||||||
Total |
$ | (9,104 | ) | |||||||||
F-53
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Interest rate swaps
Counterparty |
Hedged Instrument |
Company Receives |
Company Pays |
Maturity Date |
Notional Amount |
Fair Market Value |
||||||||||||||
Goldman Sachs Bank USA |
November 2025 Notes | 8.37 | % | SOFR + 4.08% | 11/14/2025 | $ | 85,000 | $ | (43 | ) | ||||||||||
Goldman Sachs Bank USA |
November 2027 Notes | 8.43 | % | SOFR + 4.42% | 11/14/2027 | 77,500 | 733 | |||||||||||||
Goldman Sachs Bank USA |
March 2026 Notes | 8.12 | % | SOFR + 3.76% | 3/15/2026 | 276,000 | 562 | |||||||||||||
Goldman Sachs Bank USA |
March 2028 Notes | 8.18 | % | SOFR + 4.24% | 3/15/2028 | 124,000 | 538 | |||||||||||||
Goldman Sachs Bank USA |
September 2027 Notes | 8.67 | % | SOFR + 4.31% | 9/14/2027 | 75,000 | 1,275 | |||||||||||||
Goldman Sachs Bank USA |
September 2028 Notes | 8.80 | % | SOFR + 4.54% | 9/14/2028 | 250,000 | 5,288 | |||||||||||||
Total Interest Rate Swaps |
$ | 8,353 | ||||||||||||||||||
F-54
HPS Corporate Lending Fund
Notes to Consolidated Financial Statements
(Unaudited)
(in thousands, except per share data, percentages and as otherwise noted)
Note 1. Organization
HPS Corporate Lending Fund (the “Company” or “HLEND”) is a Delaware statutory trust that was formed on December 23, 2020 and commenced operations on February 3, 2022. The Company seeks to invest primarily in newly originated senior secured debt and other securities of private U.S. companies within the upper middle market. The Company is a non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company is externally managed by HPS Advisors, LLC (the “Adviser”), a wholly-owned subsidiary of HPS Investment Partners, LLC (the “Administrator” or “HPS”). Prior to June 30, 2023, the Company was externally managed by HPS. The Company has elected to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a regulated investment company (“RIC”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company’s investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. The Company seeks to achieve its investment objective by investing primarily in newly originated, privately negotiated senior credit investments in high quality, established upper middle market companies, and in select situations, companies in special situations. Upper middle market companies generally mean companies with earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually at the time of investment.
The Company has and may continue to invest in smaller or larger companies if the opportunity presents attractive investment and risk-adjusted returns. In addition to corporate level obligations, the Company’s investments in such companies may also opportunistically include private asset-based financings such as equipment financings, financings against mission-critical corporate assets and mortgage loans, and/or investments that represent equity in portfolios of loans, receivables or other debt instruments. The Company may also selectively make investments that represent equity in portfolios of loans, receivables or other debt instruments. The Company may also participate in programmatic investments through partnerships or joint ventures with one or more unaffiliated banks or other financial institutions, including structures where a partner assumes senior exposure to each investment, and the Company participates in the junior exposure.
The Company’s investment strategy also includes a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. This allocation may also include senior secured loans, senior secured bonds, high yield bonds and structured credit instruments.
The strategy of the Company primarily focuses on companies in the United States, but also intends to leverage the Adviser’s presence to invest in companies in Europe, Australia and other locations outside the U.S. In addition, the Company may also invest in publicly traded securities of larger corporate issuers on an opportunistic basis when market conditions create compelling potential return opportunities, subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.”
The Company offers on a continuous basis up to $8.0 billion of Common Shares of beneficial interest pursuant to an offering registered with the Securities and Exchange Commission (the “Offering”). The Company offers to sell any combination of four classes of Common Shares: Class I shares, Class D shares, Class F shares, and Class S shares, with a dollar value up to the maximum offering amount. The share classes have different ongoing shareholder servicing and/or distribution fees. The initial purchase price for the Common Shares of
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beneficial interest was $25.00 per share for Class I shares, Class D shares and Class F shares, which commenced operations on February 3, 2022, and the initial purchase price was $25.11 for Class S shares, which commenced operations on October 1, 2023. Thereafter, the purchase price per share for each class of Common Shares equals the net asset value (“NAV”) per share, as of the effective date of the monthly share purchase date. Emerson Equity LLC (the “Managing Dealer”) will use its best efforts to sell shares, but is not obligated to purchase or sell any specific amount of shares in the offering. The Company may also engage in private offerings of its Common Shares.
Note 2. Significant Accounting Policies
Basis of Presentation
The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 6 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair statement of the consolidated financial statements for the interim periods presented have been included. All intercompany balances and transactions have been eliminated. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2024.
As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”).
Basis of Consolidation
As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company.
The Company consolidated the results of its wholly-owned subsidiaries HLEND Holdings A, L.P. (“HLEND A”), HLEND Holdings B, L.P. (“HLEND B”), HLEND Holdings C, L.P. (“HLEND C”), HLEND Holdings D, L.P. (“HLEND D”), HLEND Holdings E, L.P. (“HLEND E”), HLEND CLO 2023-1 INVESTMENTS, LLC, HLEND Proxima, LLC, HLEND FEP, LLC, HLEND OTM, LLC and HLEND Lux Sarl. All intercompany transactions have been eliminated in consolidation.
The Company does not consolidate its investment in the ULTRA III, LLC (“ULTRA III”) joint venture. For further description of the Company’s joint venture, see “Note 11. Joint Venture.”
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual amounts could differ from those estimates and such differences could be material.
Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit.
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Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.
Investments that are listed or traded on an exchange and are freely transferable are valued at either the closing price (in the case of securities and futures) or the mean of the closing bid and offer (in the case of options) on the principal exchange on which the investment is listed or traded. Investments for which other market quotations are readily available will typically be valued at those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Where it is possible to obtain reliable, independent market quotations from a third party vendor, the Company uses these quotations to determine the value of its investments. The Company utilizes mid-market pricing (i.e., mid-point of average bid and ask prices) to value these investments. The Adviser obtains these market quotations from independent pricing services, if available; otherwise from one or more broker quotes. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment.
Where prices or inputs are not available or, in the judgment of the Adviser, not reliable, valuation approaches based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available, as will be the case for a substantial portion of the Company’s investments, are valued at fair value as determined in good faith by the Adviser as the Company’s valuation designee under Rule 2a-5 under the 1940 Act, pursuant to the Company’s valuation policy, and under the oversight of the Board of Trustees (the “Board”), based on, among other things, the input of one or more independent valuation firms retained by the Company to review the Company’s investments. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
With respect to the quarterly valuation of investments, the Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available as of the last calendar day of each quarter, which includes, among other procedures, the following:
| • | The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in consultation with the Adviser’s investment professionals responsible for each portfolio investment; |
| • | In addition, independent valuation firms retained by the Company prepare quarter-end valuations of each such investment that was (i) originated or purchased prior to the first calendar day of the quarter |
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and (ii) is not a de minimis investment, as determined by the Adviser. The independent valuation firms provide a final range of values on such investments to the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations; |
| • | The Adviser’s valuation committee with respect to the Company (the “Valuation Committee”) reviews the valuation recommendations prepared by the Adviser’s valuation team and, as appropriate, the independent valuation firms’ valuation ranges; |
| • | The Adviser’s Valuation Committee then determines fair value marks for each of the Company’s portfolio investments; and |
| • | The Board and Audit Committee periodically review the valuation process and provide oversight in accordance with the requirements of Rule 2a-5 under the 1940 Act. |
As part of the valuation process, the Company takes into account relevant factors in determining the fair value of the Company’s investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant: (i) the estimated enterprise value of a portfolio company, generally based on an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, and (v) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Company has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Company’s portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Adviser and the Company may reasonably rely on that assistance. However, the Adviser is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation policy, the Board’s oversight and a consistently applied valuation process.
Derivative Instruments
The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a pre-determined price at a future date. Foreign currency forward contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts of foreign currency forward contract assets and liabilities are presented separately on the Consolidated Schedules of Investments. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. As it relates to foreign currency forward contracts, the Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value with changes in the net unrealized appreciation (depreciation) on foreign currency forward contracts recorded on the Consolidated Statements of Operations.
Additionally, the Company uses interest rate swaps to mitigate interest rate risk associated with the Company’s fixed rate liabilities. The fair value of the interest rate swaps are included as derivative assets at fair value or derivative liabilities at fair value, as applicable, on the Company’s Consolidated Statements of Assets and Liabilities. The Company designated the interest rate swaps as the hedging instruments in a qualifying fair value hedge accounting relationship, and therefore the change in fair value of the hedging instrument and hedged
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item are recorded as components of interest expense in the Consolidated Statements of Operations. The change in fair value of the interest rate swap is offset by a change in the carrying value of the fixed rate debt.
The fair value of the Company’s derivatives are recorded on the Consolidated Statements of Assets and Liabilities by security type and counterparty on a net basis, if subject to an enforceable master netting agreement, not taking into account collateral posted which is recorded separately. As of March 31, 2024 and December 31, 2023, there was $12.7 million and $0.0 million, respectively, of collateral pledged which is included in other assets on the Consolidated Statements of Assets and Liabilities.
Loan Participations
The Company follows the guidance in ASC 860 Transfers and Servicing when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on the Consolidated Statements of Assets and Liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. There were no participations that were accounted for as secured borrowings during the period.
Foreign Currency Transactions
Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates.
The Company does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included within the net realized and unrealized gains or losses on investments. Fluctuations arising from the translation of non-investment assets and liabilities are included with the net change in unrealized gains (losses) on foreign currency translations on the Consolidated Statements of Operations.
Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.
Revenue Recognition
Interest Income
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period. For the three months ended March 31, 2024 and 2023, the Company recorded non-recurring interest income of $22.4 million and $1.6 million, respectively (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts).
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Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2024 and December 31, 2023, the Company had certain investments in three portfolio companies on non-accrual status.
PIK Income
The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through interest income. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to shareholders in the form of dividends, even though the Company has not yet collected cash.
Dividend Income
Dividend income on preferred equity securities and on the Company’s membership interests in its joint ventures are recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies. To the extent a preferred equity security contains PIK provisions, PIK dividends, computed at the contractual rate specified in each applicable agreement, are accrued and recorded as dividend income and added to the principal balance of the preferred equity security. PIK dividends added to the principal balance are generally collected upon redemption of the equity. For the three months ended March 31, 2024 and 2023, the Company recorded $2.6 million and $0.0 million, respectively, of dividend income, of which, $0.8 million and $0.0 million, respectively, relate to PIK dividends.
Other Income
The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment, syndication and other miscellaneous fees as well as fees for managerial assistance rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered.
Organization Costs
Organization expenses include, among other things, the cost of incorporating the Company and the cost of legal services and other fees pertaining to the Company’s organization.
Offering Expenses
The Company’s offering expenses include, among other things, legal fees, registration fees and other costs pertaining to the preparation of the Company’s registration statement (and any amendments or supplements
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thereto) relating to the offering and associated marketing materials. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over a twelve-month period from incurrence.
Deferred Financing Costs and Debt Issuance Costs
Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These expenses are deferred and amortized into interest expense over the life of the related debt instrument using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the Company’s Statements of Assets and Liabilities. Debt issuance costs related to any issuance of installment debt or notes are presented net against the outstanding debt balance of the related security.
Income Taxes
The Company has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. Rather, any tax liability related to income earned and distributed by the Company would represent obligations of the Company’s shareholders and would not be reflected in the consolidated financial statements of the Company.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. The Company intends to make the requisite distributions to its shareholders, which will generally relieve the Company from corporate-level income taxes.
To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses.
In addition, based on the excise tax distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner in each taxable year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (iii) any income realized, but not distributed, in prior years. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. To the extent that it determines that estimated current year annual taxable income will be in excess of estimated current year distributions from such taxable income, the Company will accrue excise taxes, if any, on estimated undistributed taxable income.
For the three months ended March 31, 2024 and 2023, the Company accrued $(0.0) million and $(0.0) million of U.S. federal excise tax, respectively.
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains and losses are allocated to each class of shares based upon the aggregate net asset value of that class in relation to the aggregate net asset value of the Company. Expenses that are specific to a class of shares are allocated to such class directly.
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Distributions
To the extent that the Company has taxable income available, the Company intends to make monthly distributions to its shareholders. Distributions to shareholders are recorded on the record date. All distributions will be paid at the discretion of the Board and will depend on the Company’s earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time. Although the gross distribution per share is generally equivalent for each share class, the net distribution for each share class is reduced for any class specific expenses, including distribution and/or shareholder servicing fees, if any.
The Company has adopted a distribution reinvestment plan pursuant to which shareholders will have their cash distributions automatically reinvested in additional shares of the Company’s same class of Common Shares to which the distribution relates unless they elect to receive their distributions in cash.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all accounting standard updates (“ASUs”) issued by the Financial Accounting Standards Board. The Company has assessed currently issued ASUs and has determined that ASUs not listed are not applicable or are expected to have minimal impact on its consolidated financial statements.
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”),” which clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years, with early adoption permitted. The Company has concluded that this guidance did not have a material impact on its consolidated financial statements.
Note 3. Fees, Expenses, Agreements and Related Party Transactions
Investment Advisory Agreement
On January 20, 2022, the Company entered into an investment advisory agreement with HPS, pursuant to which HPS managed the Company on a day-to-day basis until June 30, 2023. On June 30, 2023, the Company entered into the Investment Advisory Agreement (the “Investment Advisory Agreement”) with the Adviser and HPS in connection with a corporate reorganization of the investment advisory operations with respect to the Company. The Adviser is responsible for determining the portfolio composition, making investment decisions, monitoring investments, performing due diligence on prospective portfolio companies and providing the Company with such other investment advisory and related services as may reasonably be required for the investment of capital.
The Investment Advisory Agreement is effective for an initial one-year term ending on June 30, 2024 and will remain in effect from year-to-year thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the Independent Trustees. The Company may terminate the Investment Advisory Agreement, without payment of any penalty, upon 60 days’ written notice. The Investment Advisory Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related Securities and Exchange Commission (the “SEC”) guidance and interpretations.
Under the Investment Advisory Agreement, the Company pays the Adviser a fee for its services. The fee consists of two components: a management fee and an incentive fee. The cost of both the management fee and the incentive fee are ultimately borne by the shareholders.
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Base Management Fee
The management fee is payable monthly in arrears at an annual rate of 1.25% of the value of the Company’s net assets as of the beginning of the first calendar day of the applicable month. For purposes of the Investment Advisory Agreement, net assets means the Company’s total assets less the carrying value of liabilities, determined in accordance with U.S. GAAP. For the first calendar month in which the Company had operations, net assets were measured as the beginning net assets as of the date on which the Company broke escrow for the Offering.
The Adviser agreed to waive the base management fee from the date on which the Company broke escrow for the Offering through December 31, 2022.
For the three months ended March 31, 2024 and 2023, base management fees were $18.3 million and $11.2 million, respectively. As of March 31, 2024 and December 31, 2023, $6.6 million and $5.6 million, respectively, were payable to the Adviser related to management fees.
Incentive Fees
The incentive fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Company’s income and a portion is based on a percentage of the Company’s capital gains, each as described below.
(i) Income based incentive fee
The income based incentive fee is based on the Company’s Pre-Incentive Fee Net Investment Income Returns, as defined below. “Pre-Incentive Fee Net Investment Income Returns” means interest income, dividends, cash interest or other distributions or other cash income and any third-party fees received from portfolio companies (such as upfront fees, commitment fees, origination fee, amendment fees, ticking fees and break-up fees, as well as prepayments premiums, but excluding fees for providing managerial assistance) accrued during the quarter, minus operating expenses for the quarter (including the management fee, taxes, any expenses payable under the Investment Advisory Agreement and an administration agreement with the administrator, any expense of securitizations, and interest expense or other financing fees and any dividends paid on preferred stock, but excluding incentive fees and shareholder servicing and/or distribution fees). Pre-Incentive Fee Net Investment Income Returns includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero-coupon securities), accrued income that we have not yet received in cash. Pre-Incentive Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive Fee Net Investment Income Returns.
Pre-Incentive Fee Net Investment Income Returns, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding quarter, is compared to a “Hurdle Rate” defined as a return of 1.25% per quarter (5.0% annualized).
The Company pays the Adviser an incentive fee quarterly in arrears with respect to the Pre-Incentive Fee Net Investment Income Returns in each calendar quarter as follows:
| i. | No incentive fee will be paid on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which the Pre-Incentive Fee Net Investment Income Returns do not exceed the Hurdle Rate; |
| ii. | 100% of the dollar amount of the Pre-Incentive Fee Net Investment Income Returns with respect to that portion of such Pre- Incentive Fee Net Investment Income Returns, if any, that exceeds the |
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| Hurdle Rate but is less than a rate of return of 1.43% (5.72% annualized). This portion of the Pre-Incentive Fee Net Investment Income Returns (which exceeds the Hurdle Rate but is less than 1.43%) is referred to as the “Catch-Up.” The Catch-Up is meant to provide the Adviser with 12.5% of the Company’s Pre-Incentive Fee Net Investment Income Returns as if a Hurdle Rate did not apply if this net investment income exceeds 1.43% in any calendar quarter; and |
| iii. | 12.5% of the dollar amount of the Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of return of 1.43% (5.72% annualized). |
These calculations are prorated for any period of less than three months, including the first quarter the Company commenced operations, and are adjusted for any share issuances or repurchases during the relevant quarter.
The Adviser agreed to waive the income based incentive fee from the date on which the Company broke escrow for the Offering through December 31, 2022. For the three months ended March 31, 2024 and 2023, income based incentive fees were $25.6 million and $14.2 million, respectively. As of March 31, 2024 and December 31, 2023, $25.6 million and $20.3 million, respectively, were payable to the Adviser relating to income based incentive fees.
(ii) Capital gains incentive fee
The second component of the incentive fee, the capital gains incentive fee, is payable at the end of each calendar year in arrears. The amount payable equals 12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains as calculated in accordance with U.S. GAAP. U.S. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 12.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods.
For the three months ended March 31, 2024 and 2023, capital gains incentive fees were $6.0 million and $0.0 million, respectively. As of March 31, 2024 and December 31, 2023, the Company accrued $9.5 million and $3.5 million, respectively, of capital gains incentive fees, none of which were payable under the Investment Advisory Agreement.
Administration Agreement
On January 20, 2022, the Company entered into an agreement (the “Administration Agreement”), subsequently amended on June 30, 2023, with the Administrator under which the Administrator provides, or oversees the performance of, administrative and compliance services, including, but not limited to, maintaining financial records, overseeing the calculation of the Company’s NAV, compliance monitoring (including diligence and oversight of other service providers), preparing reports to shareholders and reports filed with the SEC and other regulators, preparing materials and coordinating meetings of the Company’s Board, managing the payment of expenses, the payment and receipt of funds for investments and the performance of administrative and professional services rendered by others and providing office space, equipment and office services. The
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Company reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations under the Administration Agreement. Such reimbursement includes the Company’s allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) the Company’s chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals at the Administrator that perform duties for the Company; and (iii) any internal audit group personnel of the Administrator or any of its affiliates, subject to the limitations described in Investment Advisory and Administration Agreements. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and the Company will reimburse the Administrator for any services performed for the Company by such affiliate or third party.
The amount of the reimbursement payable to the Administrator for administrative services will be the lesser of (1) Administrators’ actual costs incurred in providing such services and (2) the amount that the Company estimates it would be required to pay alternative service providers for comparable services in the same geographic location. The Administrator is required to allocate the cost of such services to the Company based on factors such as assets, revenues, time allocations and/or other reasonable metrics. The Company does not reimburse the Administrator for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of HPS.
Unless earlier terminated as described below, the Administration Agreement is effective for a one-year term ending on June 30, 2024 and will remain in effect from year-to-year thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the Independent Trustees. The Company may terminate the Administration Agreement, without payment of any penalty, upon 120 days’ written notice. The Administration Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related SEC guidance and interpretations.
For the three months ended March 31, 2024 and 2023, the Company incurred $0.8 million and $0.6 million, respectively, in expenses under the Administration Agreement, which are recorded in “administrative service expenses” in the Company’s Consolidated Statements of Operations. As of March 31, 2024 and December 31, 2023, there was $3.3 million and $2.5 million, respectively, of administrative service expenses payable by the Company which are included in “due to affiliates” in the Consolidated Statements of Assets and Liabilities.
Sub-Administration and Fund Accounting Servicing Agreements
HPS previously engaged U.S. Bancorp Fund Services, LLC (“U.S. Bancorp”) to assist in the provision of sub-administrative and fund accounting services. U.S. Bancorp received compensation for these services under sub-administration and fund accounting servicing agreements. On August 30, 2023, the Company provided notice for the termination of the sub-administration agreement dated as of November 30, 2021 by and among the Company, HPS and U.S. Bancorp.
On August 28, 2023, the Company entered into a Sub-Administration Agreement (the “Sub-Administration Agreement”) with HPS and Harmonic Fund Services (“Harmonic”) as the Company’s sub-administrator. Pursuant to the Sub-Administration Agreement, Harmonic provides certain administrative services necessary for the operations of the Company. The Company will bear all fees to be paid to Harmonic under the Sub-Administration Agreement and Harmonic will be entitled to receive reimbursement from the Company for all out-of-pocket expenses properly incurred by Harmonic in respect of the services provided pursuant to the Sub-Administration Agreement.
F-65
Managing Dealer Agreement
On August 3, 2021, the Company entered into a Managing Dealer Agreement (the “Managing Dealer Agreement”) with the Managing Dealer. Under the terms of the Managing Dealer Agreement, the Managing Dealer will serve as the Managing Dealer for the Offering. The Managing Dealer will be entitled to receive distribution and/or shareholder servicing fees monthly in arrears at an annual rate of 0.25%, 0.50% and 0.85% of the value of the Company’s net assets attributable to Class D shares, Class F shares and Class S shares, respectively, as of the beginning of the first calendar day of the month. No distribution and/or shareholding servicing fees will be paid with respect to Class I. The distribution and/or shareholder servicing fees will be payable to the Managing Dealer, but the Managing Dealer anticipates that all or a portion of the shareholder servicing and/or distribution fees will be retained by, or reallowed (paid) to, participating broker-dealers. As set forth in and pursuant to the Managing Dealer Agreement, the Company pays the Managing Dealer certain fees, including a $35,000 engagement fee that was previously paid, a $250,000 fixed managing dealer fee payable quarterly (which commenced in the first quarter of 2022) in arrears in five equal quarterly installments that was paid, and a two basis point (0.02%) variable managing dealer fee that is payable on any new capital raised in the offering following the expiration of the initial 15-month period of the Offering. In addition, in connection with services provided by the Managing Dealer with respect to the sale of shares registered pursuant to the registration statement filed on Form N-2 on June 30, 2023 related to a follow-on offering of shares of the Company, HPS agreed to pay and paid a one-time fee of $60,000 to the Managing Dealer. For the avoidance of doubt, such fee was borne and paid in its entirety solely by HPS, and such fee (or any portion thereof) was not borne or paid directly or indirectly by the Company or the shareholders.
The Company or the Adviser may also pay directly, or reimburse the Managing Dealer if the Managing Dealer pays on the Company’s behalf, any organization and offering expenses (other than any upfront selling commissions and shareholder servicing and/or distribution fees).
The Company will cease paying the distribution and/or shareholder servicing fees on the Class D shares, Class F shares and Class S shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) a merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of the Company’s assets or (iii) the date following the completion of the primary portion of the Offering on which, in the aggregate, underwriting compensation from all sources in connection with the Offering, including the distribution and/or shareholder servicing fees and other underwriting compensation, is equal to 10% of the gross proceeds from the Offering.
In addition, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer or the applicable selling agent), the Company will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class D shares, Class F shares and Class S shares in such shareholder’s account. At the end of such month, the applicable Class D shares, Class F shares or Class S shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class D, Class F or Class S shares.
The Managing Dealer is a broker-dealer registered with the SEC and is a member of the Financial Industry Regulatory Authority, or FINRA.
The Managing Dealer Agreement may be terminated at any time, without the payment of any penalty, by vote of a majority of the Company’s trustees who are not “interested persons”, as defined in the 1940 Act, of the Company and who have no direct or indirect financial interest in the operation of the Company’s distribution plan or the Managing Dealer Agreement or by vote of a majority of the outstanding voting securities of the Company, on not more than 60 days’ written notice to the Managing Dealer or the Adviser. The Managing Dealer Agreement will automatically terminate in the event of its assignment, as defined in the 1940 Act.
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Either party may terminate the Managing Dealer Agreement upon 60 days’ written notice to the other party or immediately upon notice to the other party in the event such other party failed to comply with a material provision of the Managing Dealer Agreement. The Company’s obligations under the Managing Dealer Agreement to pay the shareholder servicing and/or distribution fees with respect to the Class S, Class D shares and Class F shares distributed shall survive termination of the agreement until such shares are no longer outstanding (including such shares that have been converted into Class I shares, as described above).
Distribution and Servicing Plan
On August 9, 2021, the Board approved a distribution and servicing plan (the “Distribution and Servicing Plan”). The following table shows the shareholder servicing and/or distribution fees the Company pays the Managing Dealer with respect to the Class I, Class D, Class F, and Class S on an annualized basis as a percentage of the Company’s NAV for such class.
|
Shareholder Servicing and/or Distribution Fee as a % of NAV |
||||
Class I shares |
— | % | ||
Class D shares |
0.25 | % | ||
Class F shares |
0.50 | % | ||
Class S shares |
0.85 | % | ||
The shareholder servicing and/or distribution fees are paid monthly in arrears, calculated using the net asset value of the applicable class as of the beginning of the first calendar day of the month and subject to FINRA and other limitations on underwriting compensation. The Managing Dealer agreed to waive shareholder servicing and/or distribution fees for Class D shares and Class F shares for the first nine months following the date on which the Company broke escrow for the Offering.
The Managing Dealer will reallow (pay) all or a portion of the shareholder servicing and/or distribution fees to participating brokers and servicing brokers for ongoing shareholder services performed by such brokers, and will waive shareholder servicing and/or distribution fees to the extent a broker is not eligible to receive it for failure to provide such services. Because the shareholder servicing and/or distribution fees with respect to Class D, Class F or Class S shares are calculated based on the aggregate net asset value for all of the outstanding shares of each such class, it reduces the net asset value with respect to all shares of each such class, including shares issued under the Company’s distribution reinvestment plan.
Eligibility to receive the shareholder servicing and/or distribution fee is conditioned on a broker providing the following ongoing services with respect to the Class D, Class F or Class S shares: assistance with recordkeeping, answering investor inquiries regarding the Company, including regarding distribution payments and reinvestments, helping investors understand their investments upon their request, and assistance with share repurchase requests. If the applicable broker is not eligible to receive the shareholder servicing and/or distribution fee due to failure to provide these services, the Managing Dealer will waive the shareholder servicing fee and/or distribution that broker would have otherwise been eligible to receive. The shareholder servicing and/or distribution fees are ongoing fees that are not paid at the time of purchase.
For the three months ended March 31, 2024, the Company accrued distribution and/or shareholder servicing fees of $0.5 million, $4.3 million and $0.2 million, which were attributable to Class D, Class F and Class S shares, respectively. For the three months ended March 31, 2023, the Company accrued distribution and/or shareholder servicing fees of $0.3 million and $2.8 million, which were attributable to Class D and Class F shares, respectively. As of March 31, 2024 and December 31, 2023, there was $1.8 million and $1.5 million, respectively, of distribution and/or shareholder servicing fees payable to the Managing Dealer.
F-67
Expense Support and Conditional Reimbursement Agreement
On January 20, 2022, the Company entered into an expense support and conditional reimbursement agreement with the Adviser. On June 30, 2023, the Company and the Adviser entered into an Amended and Restated Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”) in connection with the corporate reorganization of the investment advisory operations with respect to the Company. Pursuant to the Expense Support Agreement, on a monthly basis, the Adviser is obligated to advance all of the Company’s Other Operating Expenses (as defined hereafter) (each, a “Required Expense Payment”) to the extent that such expenses exceed 1.00% (on an annualized basis) of the Company’s NAV. The Adviser may elect to pay an additional portion of the Company’s expenses from time to time, which the Company will be obligated to reimburse to the Adviser at a later date if certain conditions are met.
“Other Operating Expenses” means the Company’s total organization and offering expenses, professional fees, trustee fees, administration fees, and other general and administrative expenses (including the Company’s allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement).
Any Required Expense Payment must be paid by the Adviser to the Company in any combination of cash or other immediately available funds and/or offset against amounts due from the Company to the Adviser or its affiliates.
The Adviser may elect to pay certain additional expenses on behalf of the Company (each, a “Voluntary Expense Payment” and together with a Required Expense Payment, the “Expense Payments”), provided that no portion of the payment will be used to pay any interest expense or distribution and/or shareholder servicing fees of the Company. Any Voluntary Expense Payment that the Adviser has committed to pay must be paid by the Adviser to the Company in any combination of cash or other immediately available funds no later than 45 days after such commitment was made in writing, and/or offset against amounts due from the Company to the Adviser or its affiliates.
Following any calendar month in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to the Company’s shareholders based on distributions declared with respect to record dates occurring in such calendar month (the amount of such excess being hereinafter referred to as “Excess Operating Funds”), the Company shall pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such calendar month have been reimbursed. Any payments required to be made by the Company shall be referred to herein as a “Reimbursement Payment.”
“Available Operating Funds” means the sum of (i) the Company’s net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).
The Company’s obligation to make a Reimbursement Payment shall automatically become a liability of the Company on the last business day of the applicable calendar month, except to the extent the Adviser has waived its right to receive such payment for the applicable month.
For the three months ended March 31, 2024 and 2023, the Adviser made no Expense Payments on behalf of the Company and there were no Reimbursement Payments made to the Adviser.
Controlled/Affiliated Portfolio Companies
Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or has the power to exercise control
F-68
over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act, “non-affiliated investments” are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the Consolidated Schedules of Investments.
The Company has made an investment in a joint venture, ULTRA III, which is considered a controlled/affiliated company. For a further description of ULTRA III, see “.”
Note 11. Joint Venture
Note 4. Investments
The composition of the Company’s investment portfolio at cost and fair value was as follows:
March 31, 2024 |
December 31, 2023 |
|||||||||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
|||||||||||||||||||
First lien debt |
$ | 9,453,479 | $ | 9,557,342 | 96.37 | % | $ | 8,919,865 | $ | 9,002,695 | 96.93 | % | ||||||||||||
Second lien debt |
36,422 | 36,495 | 0.37 | 64,782 | 67,087 | 0.72 | ||||||||||||||||||
Other secured debt |
63,720 | 63,719 | 0.64 | — | — | — | ||||||||||||||||||
Unsecured debt |
29,523 | 29,670 | 0.30 | 28,901 | 29,101 | 0.31 | ||||||||||||||||||
Structured finance investments |
25,186 | 26,974 | 0.27 | 28,427 | 29,868 | 0.32 | ||||||||||||||||||
Investments in joint ventures |
158,113 | 163,291 | 1.65 | 125,513 | 124,003 | 1.33 | ||||||||||||||||||
Equity investments |
39,534 | 40,081 | 0.40 | 36,313 | 36,656 | 0.39 | ||||||||||||||||||
Total |
$ | 9,805,977 | $ | 9,917,572 | 100.00 | % | $ | 9,203,801 | $ | 9,289,410 | 100.00 | % | ||||||||||||
The industry composition of investments at fair value was as follows:
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
Fair Value |
% of Total Investments at Fair Value |
Fair Value |
% of Total Investments at Fair Value |
|||||||||||||
Software and Computer Services |
$ | 1,390,485 | 14.03 | % | $ | 1,472,951 | 15.86 | % | ||||||||
Industrial Support Services |
1,308,525 | 13.20 | 1,063,701 | 11.45 | ||||||||||||
Medical Equipment and Services |
1,065,485 | 10.74 | 802,273 | 8.64 | ||||||||||||
Health Care Providers |
955,360 | 9.63 | 962,244 | 10.36 | ||||||||||||
Consumer Services |
652,303 | 6.58 | 627,950 | 6.76 | ||||||||||||
Media |
587,511 | 5.92 | 605,503 | 6.52 | ||||||||||||
Non-life Insurance |
552,377 | 5.57 | 531,031 | 5.72 | ||||||||||||
General Industrials |
498,137 | 5.02 | 405,330 | 4.36 | ||||||||||||
Aerospace and Defense |
395,885 | 3.99 | 475,845 | 5.12 | ||||||||||||
Pharmaceuticals and Biotechnology |
263,726 | 2.66 | 268,572 | 2.89 | ||||||||||||
Industrial Engineering |
246,748 | 2.49 | 254,138 | 2.74 | ||||||||||||
Investment Banking and Brokerage Services |
232,193 | 2.34 | 160,345 | 1.73 | ||||||||||||
Travel and Leisure |
204,542 | 2.06 | 332,032 | 3.57 | ||||||||||||
Food Producers |
172,029 | 1.73 | 152,576 | 1.64 | ||||||||||||
Investments in joint ventures |
163,291 | 1.65 | 124,003 | 1.33 | ||||||||||||
Retailers |
154,508 | 1.56 | 113,500 | 1.22 | ||||||||||||
Industrial Transportation |
117,424 | 1.18 | 33,196 | 0.36 | ||||||||||||
Personal Care, Drug and Grocery Stores |
116,248 | 1.17 | 120,098 | 1.29 | ||||||||||||
F-69
Electricity |
104,950 | 1.06 | 83,267 | 0.90 | ||||||||||||
Automobiles and Parts |
100,459 | 1.01 | 112,957 | 1.22 | ||||||||||||
Asset Based Lending and Fund Finance |
84,897 | 0.86 | 21,341 | 0.23 | ||||||||||||
Personal Goods |
73,431 | 0.74 | 76,471 | 0.82 | ||||||||||||
Technology Hardware and Equipment |
72,751 | 0.73 | 70,623 | 0.76 | ||||||||||||
Finance and Credit Services |
60,113 | 0.61 | 59,003 | 0.64 | ||||||||||||
Construction and Materials |
56,447 | 0.57 | 57,171 | 0.62 | ||||||||||||
Oil, Gas and Coal |
46,736 | 0.47 | 44,818 | 0.48 | ||||||||||||
Telecommunications Service Providers |
45,514 | 0.46 | 70,997 | 0.76 | ||||||||||||
Gas, Water and Multi-utilities |
42,421 | 0.43 | 43,604 | 0.47 | ||||||||||||
Real Estate Investment and Services |
39,400 | 0.40 | 39,500 | 0.43 | ||||||||||||
Structured Finance |
26,974 | 0.27 | 29,868 | 0.32 | ||||||||||||
Industrial Metals and Mining |
24,330 | 0.25 | 11,895 | 0.13 | ||||||||||||
Alternative Energy |
16,203 | 0.16 | 16,743 | 0.18 | ||||||||||||
Chemicals |
15,147 | 0.15 | 15,157 | 0.16 | ||||||||||||
Telecommunications Equipment |
14,851 | 0.15 | 14,880 | 0.16 | ||||||||||||
Household Goods and Home Construction |
7,286 | 0.07 | 6,937 | 0.07 | ||||||||||||
Life Insurance |
5,872 | 0.06 | 5,884 | 0.06 | ||||||||||||
Leisure Goods |
1,997 | 0.02 | 1,991 | 0.02 | ||||||||||||
Electronic and Electrical Equipment |
1,016 | 0.01 | 1,015 | 0.01 | ||||||||||||
Total |
$ | 9,917,572 | 100.00 | % | $ | 9,289,410 | 100.00 | % | ||||||||
The geographic composition of investments at cost and fair value was as follows:
March 31, 2024 |
||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Fair Value as % of Net Assets |
|||||||||||||
Australia |
$ | 183,720 | $ | 182,299 | 1.84 | % | 2.92 | % | ||||||||
Austria |
88,568 | 87,511 | 0.88 | 1.40 | ||||||||||||
Canada |
73,726 | 72,944 | 0.74 | 1.17 | ||||||||||||
France |
81,462 | 83,432 | 0.84 | 1.34 | ||||||||||||
Germany |
68,602 | 71,220 | 0.72 | 1.14 | ||||||||||||
Italy |
127,880 | 133,190 | 1.34 | 2.13 | ||||||||||||
Luxembourg |
6,959 | 6,999 | 0.07 | 0.11 | ||||||||||||
Norway |
25,139 | 25,197 | 0.25 | 0.40 | ||||||||||||
Singapore |
31,773 | 31,975 | 0.32 | 0.51 | ||||||||||||
Spain |
31,557 | 32,764 | 0.33 | 0.52 | ||||||||||||
Taiwan |
47,447 | 42,010 | 0.42 | 0.67 | ||||||||||||
United Kingdom |
426,662 | 440,072 | 4.44 | 7.04 | ||||||||||||
United States |
8,612,482 | 8,707,959 | 87.81 | 139.40 | ||||||||||||
Total |
$ | 9,805,977 | $ | 9,917,572 | 100.00 | % | 158.75 | % | ||||||||
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December 31, 2023 |
||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Fair Value as % of Net Assets |
|||||||||||||
Australia |
$ | 264,309 | $ | 266,377 | 2.87 | % | 5.14 | % | ||||||||
Canada |
78,148 | 77,962 | 0.84 | 1.50 | ||||||||||||
France |
35,514 | 37,969 | 0.41 | 0.73 | ||||||||||||
Germany |
68,533 | 71,499 | 0.77 | 1.38 | ||||||||||||
Italy |
127,737 | 137,270 | 1.48 | 2.65 | ||||||||||||
Norway |
24,920 | 24,957 | 0.27 | 0.48 | ||||||||||||
Singapore |
31,713 | 32,862 | 0.35 | 0.63 | ||||||||||||
Spain |
31,515 | 33,196 | 0.36 | 0.64 | ||||||||||||
Taiwan |
46,557 | 40,359 | 0.43 | 0.78 | ||||||||||||
United Kingdom |
426,120 | 444,188 | 4.78 | 8.57 | ||||||||||||
United States |
8,068,735 | 8,122,771 | 87.44 | 156.65 | ||||||||||||
Total |
$ | 9,203,801 | $ | 9,289,410 | 100.00 | % | 179.15 | % | ||||||||
As of March 31, 2024 and December 31, 2023, the Company had certain investments in three portfolio companies on non-accrual status, which represented 0.27% and 0.33% of total debt investments, at fair value, respectively.
As of March 31, 2024 and December 31, 2023, on a fair value basis, 99.0% and 98.6%, respectively, of performing debt investments bore interest at a floating rate and 1.0% and 1.4%, respectively, of performing debt investments bore interest at a fixed rate.
Note 5. Fair Value Measurements
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date.
The fair value hierarchy under ASC 820 prioritizes the inputs to valuation methodology used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows:
| • | Level 1: Inputs to the valuation methodology that reflect unadjusted quoted prices available in active markets for identical assets or liabilities as of the reporting date. |
| • | Level 2: Inputs to the valuation methodology other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. |
| • | Level 3: Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of the inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value.
F-71
Investments whose values are based on the listed closing price quoted on the securities’ principal exchange are classified within Level 1 and include active listed equities. The Adviser does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include investment-grade corporate bonds, structured products, and certain bank loans, less liquid listed equities, and high yield bonds. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments classified within Level 3 have unobservable inputs, as they trade infrequently, or not at all. When observable prices are not available for these investments, the Adviser uses one or more valuation techniques (e.g., the market approach and the income approach) of which sufficient and reliable data is available. Within Level 3, the use of the market approach generally consists of using comparable market data, while the use of the income approach generally consists of the net present value of estimated future cash flows, which may be adjusted as appropriate for liquidity, credit, market and/or other risk factors.
Investments in senior loans primarily include first and second lien term loans, delayed draws and revolving credit. The Adviser analyzes enterprise value based on the weighted average of discounted cash flows, public comparables and merger and acquisition comparables. This analysis is done to ensure, among other things, that the investments have adequate collateral and asset coverage. Once the investment is determined to have adequate asset coverage, the Adviser monitors yields for senior loan investments made from the time of purchase to the month end average yields for similar investments and risk profiles. The Company uses market data, including newly funded transactions, and secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield. The change in yield is utilized by the Adviser to discount the anticipated cash flows of the debt investment in order to arrive at a fair value. Further, the Adviser adjusts for material changes in the underlying fundamentals of the issuer, including changes in leverage, as necessary. If the investment does not have adequate coverage, a tranched valuation approach is considered.
Derivative Instruments:
Further inputs considered by the Adviser in estimating the value of investments may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt capital markets (by the investment or other comparable investments), whether the loan contains call protection and changes in financial ratios or cash flows. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Adviser in the absence of market information. The fair value measurement of Level 3 investments does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Adviser due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company’s consolidated results of operations.
F-72
Rule 2a-5 under the 1940 Act was recently adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The rule permits boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. In accordance with this rule, the Company’s Board of Trustees has designated our Adviser as the valuation designee primarily responsible for the valuation of the Company’s investments, subject to the oversight of the Board of Trustees.
The following table presents the fair value hierarchy of investments and cash equivalents:
March 31, 2024 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
First lien debt |
$ | — | $ | 999,762 | $ | 8,557,580 | $ | 9,557,342 | ||||||||
Second lien debt |
— | 16,731 | 19,764 | 36,495 | ||||||||||||
Other secured debt |
— | — | 63,719 | 63,719 | ||||||||||||
Unsecured debt |
— | 13,067 | 16,603 | 29,670 | ||||||||||||
Structured finance investments |
— | 26,974 | — | 26,974 | ||||||||||||
Equity investments |
— | — | 40,081 | 40,081 | ||||||||||||
Total investments |
— | 1,056,534 | 8,697,747 | 9,754,281 | ||||||||||||
Investments measured at NAV (1)
|
— | — | — | 163,291 | ||||||||||||
Total |
$ | — | $ | 1,056,534 | $ | 8,697,747 | $ | 9,917,572 | ||||||||
Cash equivalents |
$ | 145,891 | $ | — | $ | — | $ | 145,891 | ||||||||
December 31, 2023 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
First lien debt |
$ | — | $ | 1,046,460 | $ | 7,956,235 | $ | 9,002,695 | ||||||||
Second lien debt |
— | 47,646 | 19,441 | 67,087 | ||||||||||||
Unsecured debt |
— | 13,165 | 15,936 | 29,101 | ||||||||||||
Structured finance investments |
— | 29,868 | — | 29,868 | ||||||||||||
Equity investments |
— | — | 36,656 | 36,656 | ||||||||||||
Total investments |
— | 1,137,139 | 8,028,268 | 9,165,407 | ||||||||||||
Investments measured at NAV (1)
|
— | — | — | 124,003 | ||||||||||||
Total |
$ | — | $ | 1,137,139 | $ | 8,028,268 | $ | 9,289,410 | ||||||||
Cash equivalents |
$ | 131,546 | $ | — | $ | — | $ | 131,546 | ||||||||
| (1) | Includes investment in ULTRA III (refer to Note 11). Certain investments that are measured at fair value using the NAV practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. |
F-73
The following table presents change in the fair value of investments for which Level 3 inputs were used to determine fair value:
Three Months Ended March 31, 2024 |
||||||||||||||||||||||||
|
First Lien Debt |
Second Lien Debt |
Other Secured Debt |
Unsecured Debt |
Equity Investments |
Total Investments |
|||||||||||||||||||
Fair value, beginning of period |
$ | 7,956,235 | $ | 19,441 | $ | — | $ | 15,936 | $ | 36,656 | $ | 8,028,268 | ||||||||||||
Purchases of investments (1)
|
1,257,653 | — | 63,700 | 594 | 3,547 | 1,325,494 | ||||||||||||||||||
Proceeds from principal repayments and sales of investments |
(680,727 | ) | — | — | — | (385 | ) | (681,112 | ) | |||||||||||||||
Accretion of discount/amortization of premium |
24,017 | 39 | 20 | 2 | — | 24,078 | ||||||||||||||||||
Net realized gain (loss) |
(6,866 | ) | — | — | — | 60 | (6,806 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) |
14,242 | 284 | (1 | ) | 71 | 203 | 14,799 | |||||||||||||||||
Transfers into Level 3 (2)
|
— | — | — | — | — | — | ||||||||||||||||||
Transfers out of Level 3 (2)
|
(6,974 | ) | — | — | — | — | (6,974 | ) | ||||||||||||||||
Fair value, end of period |
$ | 8,557,580 | $ | 19,764 | $ | 63,719 | $ | 16,603 | $ | 40,081 | $ | 8,697,747 | ||||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of March 31, 2024 |
$ | 20,387 | $ | 284 | $ | (1 | ) | $ | 71 | $ | 256 | $ | 20,997 | |||||||||||
| (1) | Purchases include PIK interest and dividends, if applicable. |
| (2) | Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three months ended March 31, 2024, transfers into or out of Level 3 were primarily due to decreased or increased price transparency, respectively. |
Three Months Ended March 31, 2023 |
||||||||||||||||||||
|
First Lien Debt |
Second Lien Debt |
Unsecured Debt |
Equity Investments |
Total Investments |
||||||||||||||||
Fair value, beginning of period |
$ | 4,882,393 | $ | 8,794 | $ | 1,606 | $ | 2,306 | $ | 4,895,099 | ||||||||||
Purchases of investments (1)
|
861,403 | — | 377 | 579 | 862,359 | |||||||||||||||
Proceeds from principal repayments and sales of investments |
(30,581 | ) | — | — | (52 | ) | (30,633 | ) | ||||||||||||
Accretion of discount/amortization of premium |
7,981 | 33 | 9 | — | 8,023 | |||||||||||||||
Net realized gain (loss) |
(893 | ) | — | — | (353 | ) | (1,246 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) |
58,744 | (242 | ) | (77 | ) | (11 | ) | 58,414 | ||||||||||||
Transfers into Level 3 (2)
|
— | 9,463 | — | — | 9,463 | |||||||||||||||
Transfers out of Level 3 (2)
|
(4,714 | ) | — | — | — | (4,714 | ) | |||||||||||||
Fair value, end of period |
$ | 5,774,333 | $ | 18,048 | $ | 1,915 | $ | 2,469 | $ | 5,796,765 | ||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of March 31, 2023 |
$ | 57,176 | $ | (242 | ) | $ | (79 | ) | $ | (11 | ) | $ | 56,844 | |||||||
| (1) | Purchases include PIK interest, if applicable. |
| (2) | Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three months ended March 31, 2023, transfers into or out of Level 3 were primarily due to decreased or increased price transparency, respectively. |
F-74
The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value.
March 31, 2024 |
||||||||||||||||||||
Range |
||||||||||||||||||||
Fair Value (1)
|
Valuation Technique |
Unobservable Input |
Low |
High |
Weighted Average (2)
|
|||||||||||||||
Investments in first lien debt |
$ | 6,745,841 | Yield analysis | Discount rate | 7.88 | % | 20.75 | % | 11.84 | % | ||||||||||
| 18,546 | Recovery analysis | Recovery rate | 34.30 | % | 72.81 | % | 70.85 | % | ||||||||||||
Investments in second lien debt |
19,764 | Yield analysis | Discount rate | 12.93 | % | 16.87 | % | 14.92 | % | |||||||||||
Investments in unsecured debt |
16,603 | Yield analysis | Discount rate | 13.57 | % | 15.38 | % | 14.91 | % | |||||||||||
Investments in preferred equity |
27,692 | Yield analysis | Discount rate | 13.58 | % | 15.00 | % | 14.77 | % | |||||||||||
Investments in common equity |
12,389 | Discounted cash flow | Discount rate | 9.00 | % | 15.00 | % | 11.81 | % | |||||||||||
| Exit multiple | 8.00x | 10.00x | 10.00x | |||||||||||||||||
| Terminal Growth Rate | 3.00 | % | 3.00 | % | 3.00 | % | ||||||||||||||
December 31, 2023 |
||||||||||||||||||||
Range |
||||||||||||||||||||
Fair Value (1)
|
Valuation Technique |
Unobservable Input |
Low |
High |
Weighted Average (2)
|
|||||||||||||||
Investments in first lien debt |
$ | 6,422,647 | Yield analysis | Discount rate | 8.09 | % | 35.64 | % | 12.03 | % | ||||||||||
| 21,039 | Recovery analysis | Recovery rate | 73.21 | % | 73.21 | % | 73.21 | % | ||||||||||||
Investments in second lien debt |
19,441 | Yield analysis | Discount rate | 12.96 | % | 17.24 | % | 15.39 | % | |||||||||||
Investments in unsecured debt |
1,295 | Yield analysis | Discount rate | 16.00 | % | 16.00 | % | 16.00 | % | |||||||||||
Investments in preferred equity |
1,510 | Yield analysis | Discount rate | 14.50 | % | 16.31 | % | 14.94 | % | |||||||||||
Investments in common equity |
2,532 | Discounted cash flow | Discount rate | 9.00 | % | 15.00 | % | 9.47 | % | |||||||||||
| Exit multiple | 10.00x | 10.00x | 10.00x | |||||||||||||||||
| Terminal Growth Rate | 3.00 | % | 3.00 | % | 3.00 | % | ||||||||||||||
| (1) | As of March 31, 2024, included within the fair value of Level 3 assets of $8,697,747 is an amount of $1,856,912 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices). As of December 31, 2023, included within the fair value of Level 3 assets of $8,028,268 is an amount of $1,559,804 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices). |
| (2) | Weighted averages are calculated based on fair value of investments. |
The significant unobservable input used in the yield analysis is the discount rate based on comparable market yields. The significant unobservable inputs used in the income approach are the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment. Significant increases in discount rates would result in a significantly lower fair value measurement. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market comparable transactions or market multiples would result in an increase or decrease in the fair value.
F-75
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.
Financial Instruments Not Carried at Fair Value
The following table presents fair value measurements of the Company’s debt obligations as of March 31, 2024 and December 31, 2023, had they been accounted for at fair value:
Debt
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
|
Carrying Value |
Fair Value |
Carrying Value |
Fair Value |
|||||||||||||
HLEND A Funding Facility |
$ | 603,407 | $ | 603,407 | $ | 615,838 | $ | 615,838 | ||||||||
HLEND B Funding Facility |
316,767 | 316,767 | 513,747 | 513,747 | ||||||||||||
HLEND C Funding Facility |
487,500 | 487,500 | 487,500 | 487,500 | ||||||||||||
HLEND D Funding Facility |
125,000 | 125,000 | 195,000 | 195,000 | ||||||||||||
HLEND E Funding Facility |
— | — | — | — | ||||||||||||
Revolving Credit Facility |
403,964 | 403,964 | 1,025,294 | 1,025,294 | ||||||||||||
November 2025 Notes (1)
|
167,908 | 173,401 | 168,749 | 170,580 | ||||||||||||
November 2027 Notes (1)
|
152,776 | 161,773 | 154,366 | 155,934 | ||||||||||||
March 2026 Notes (1)
|
272,703 | 281,339 | 274,716 | 275,727 | ||||||||||||
March 2028 Notes (1)
|
121,825 | 128,750 | 123,588 | 123,672 | ||||||||||||
September 2027 Notes (1)
|
74,467 | 78,690 | 75,545 | 76,389 | ||||||||||||
September 2028 Notes (1)
|
248,524 | 266,578 | 252,814 | 255,315 | ||||||||||||
January 2029 Notes (1)
|
531,455 | 548,785 | — | — | ||||||||||||
2023 CLO Secured Notes (2)
|
319,810 | 319,810 | 319,743 | 319,743 | ||||||||||||
Total |
$ | 3,826,106 | $ | 3,895,764 | $ | 4,206,900 | $ | 4,214,739 | ||||||||
| (1) | The carrying value of the Company’s November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes, September 2028 Notes and January 2029 Notes are presented net of unamortized debt issuance costs of $(1.0) million, $(1.3) million, $(1.6) million, $(0.9) million, $(0.7) million,$(2.3) million and $(12.2) million, respectively, as of March 31, 2024 and includes the increase in the notes carrying value of $(1.0) million, $(0.9) million, $(1.7) million, $(1.3) million, $0.1 million, $0.9 million and $(6.4) million, respectively, as a result of the qualifying fair value hedge relationship as described above. The carrying value of the Company’s November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(1.2) million, $(1.4) million, $(1.8) million, $(0.9) million, $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the increase (decrease) in the notes carrying value of $(0.0) million, $0.7 million, $0.6 million, $0.5 million, $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (2) | The carrying value of the Company’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.2) million and $(3.3) million as of March 31, 2024 and December 31, 2023, respectively. |
F-76
The following table presents the fair value hierarchy of the Company’s debt obligations as of March 31, 2024 and December 31, 2023:
March 31, 2024 |
December 31, 2023 |
|||||||
Level 1 |
$ | — | $ | — | ||||
Level 2 |
— | — | ||||||
Level 3 |
3,895,764 | 4,214,739 | ||||||
Total |
$ | 3,895,764 | $ | 4,214,739 | ||||
As of March 31, 2024 and December 31, 2023, the carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value due to their short maturities. Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company’s marketplace credit ratings, if applicable, or market quotes, if available.
Note 6. Derivative Instruments
The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. The Company enters into swap contracts in the normal course of business to manage its interest rate risk exposure. For derivative contracts, the Company enters into netting arrangements with its counterparties. In accordance with authoritative guidance, the Company offsets fair value amounts recognized for derivative instruments with the same security type and counterparty under a master netting arrangement.
During the three months ended March 31, 2024 and 2023, the average notional exposure for foreign currency forward contracts were $670.7 million and $249.8 million, respectively, and the average notional exposure for interest rate swaps were $1,300.0 million and $262.5 million, respectively.
The following tables summarize the aggregate notional amount and fair value of the Company’s derivative financial instruments as of March 31, 2024 and December 31, 2023.
March 31, 2024 |
||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total Fair Value |
Notional |
||||||||||||||||
Derivative Assets |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | 5,655 | $ | — | $ | 5,655 | $ | 547,747 | ||||||||||
Interest rates swaps |
— | 1,016 | — | 1,016 | 325,000 | |||||||||||||||
Total derivative assets, at fair value |
$ | — | $ | 6,671 | $ | — | $ | 6,671 | $ | 872,747 | ||||||||||
Derivative Liabilities |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | (2,265 | ) | $ | — | $ | (2,265 | ) | $ | 203,089 | ||||||||
Interest rate swaps |
— | (11,297 | ) | — | (11,297 | ) | 1,112,500 | |||||||||||||
Total derivative liabilities, at fair value |
$ | — | $ | (13,562 | ) | $ | — | $ | (13,562 | ) | $ | 1,315,589 | ||||||||
December 31, 2023 |
||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total Fair Value |
Notional |
||||||||||||||||
Derivative Assets |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | 429 | $ | — | $ | 429 | $ | 94,135 | ||||||||||
Interest rate swaps |
— | 8,396 | — | 8,396 | 802,500 | |||||||||||||||
Total derivative assets, at fair value |
$ | — | $ | 8,825 | $ | — | $ | 8,825 | $ | 896,635 | ||||||||||
Derivative Liabilities |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | (9,533 | ) | $ | — | $ | (9,533 | ) | $ | 603,276 | ||||||||
Interest rate swaps |
— | (43 | ) | — | (43 | ) | 85,000 | |||||||||||||
Total derivative liabilities, at fair value |
$ | — | $ | (9,576 | ) | $ | — | $ | (9,576 | ) | $ | 688,276 | ||||||||
F-77
The effect of transactions in derivative instruments that are not designated in a qualifying hedge accounting relationship on the Consolidated Statements of Operations during the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Net change in unrealized gain (loss) on foreign currency forward contracts |
$ | 12,494 | $ | (2,505 | ) | |||
Realized gain (loss) on foreign currency forward contracts |
$ | 167 | $ | (529 | ) | |||
The following table presents both gross and net information about derivative instruments eligible for offset in the Consolidated Statements of Assets and Liabilities as of March 31, 2024 and December 31, 2023.
March 31, 2024 |
||||||||||||||||||||||
Counterparty |
Account in the Consolidated Statements of Asset and Liabilities |
Gross Amount of Assets |
Gross Amount of (Liabilities) |
Net amounts presented in the Consolidated Statements of Assets and Liabilities |
Collateral Received/ Pledged (1)
|
Net Amounts (2)
|
||||||||||||||||
Goldman Sachs Bank USA |
Derivative liabilities, at fair value | $ | 383 | $ | (2,226 | ) | $ | (1,843 | ) | $ | — | $ | (1,843 | ) | ||||||||
SMBC Capital Markets, Inc. |
Derivative assets, at fair value | $ | 5,272 | $ | (39 | ) | $ | 5,233 | $ | — | $ | 5,233 | ||||||||||
Goldman Sachs Bank USA |
Derivative liabilities, at fair value | $ | 1,016 | $ | (4,932 | ) | $ | (3,916 | ) | $ | 3,180 | $ | (736 | ) | ||||||||
SMBC Capital Markets, Inc. |
Derivative liabilities, at fair value | $ | — | $ | (6,365 | ) | $ | (6,365 | ) | $ | 6,365 | $ | — | |||||||||
December 31, 2023 |
||||||||||||||||||||||
Counterparty |
Account in the Consolidated Statements of Asset and Liabilities |
Gross Amount of Assets |
Gross Amount of (Liabilities) |
Net amounts presented in the Consolidated Statements of Assets and Liabilities |
Collateral Received/ Pledged (1)
|
Net Amounts (2)
|
||||||||||||||||
Goldman Sachs Bank USA |
Derivative liabilities, at fair value | $ | 35 | $ | (8,225 | ) | $ | (8,190 | ) | $ | — | $ | (8,190 | ) | ||||||||
SMBC Capital Markets, Inc. |
Derivative liabilities, at fair value | $ | 394 | $ | (1,308 | ) | $ | (914 | ) | $ | — | $ | (914 | ) | ||||||||
Goldman Sachs Bank USA |
Derivative assets, at fair value | $ | 8,396 | $ | (43 | ) | $ | 8,353 | $ | — | $ | 8,353 | ||||||||||
| (1) | Amount excludes excess cash collateral paid. |
| (2) | Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts, if applicable. |
Hedging
The Company designated certain interest rate swaps as the hedging instrument in a qualifying fair value hedge accounting relationship.
For derivative instruments designated in qualifying hedge relationships, the change in fair value of the hedging instrument and hedged item are recorded in interest expense and recognized as components of Interest expense in the Consolidated Statements of Operations.
F-78
The table below presents the carrying value of unsecured borrowings as of March 31, 2024 and December 31, 2023, that are designated in a qualifying hedging relationship and the related cumulative hedging adjustment increase (decrease) from current and prior hedging relationships included in such carrying values:
March 31, 2024 |
December 31, 2023 |
|||||||||||||||
Description |
Carrying Value |
Cumulative Hedging Adjustments |
Carrying Value |
Cumulative Hedging Adjustments |
||||||||||||
Unsecured Notes |
$ | 1,409,316 | $ | 21,675 | $ | 888,221 | $ | (1,369 | ) | |||||||
Note 7. Borrowings
In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of March 31, 2024 and December 31, 2023, the Company’s asset coverage was 261.9% and 223.2%, respectively.
As of March 31, 2024 and December 31, 2023, the Company was in compliance with all covenants and other requirements of the Credit Facilities, the Unsecured Notes and the 2023 CLO Notes, as applicable.
SPV Financing Facilities
From time to time, wholly-owned subsidiaries of the Company may enter into secured financing facilities (“SPV Financing Facilities”), as described below. The obligations of each special purpose vehicle (“SPV”) to the lenders are secured by a first priority security interest in all of the SPV’s portfolio investments and cash. The obligations of each SPV under the applicable SPV Financing Facility are non-recourse to the Company, and the Company’s exposure to the credit facility is limited to the value of its investment in the SPV, other than as described below with respect to the HLEND C Funding Facility.
In connection with the SPV Financing Facilities, the applicable SPV has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. Each SPV Financing Facility contains customary events of default for similar financing transactions, including if a change of control of the applicable SPV occurs. Upon the occurrence and during the continuation of an event of default, the lender under the SPV Financing Facility may declare the outstanding advances and all other obligations under the SPV Financing Facility immediately due and payable. The occurrence of an event of default (as described above) triggers a requirement that the SPV obtains the consent of the lenders under the SPV Financing Facility prior to entering into any sale or disposition with respect to portfolio investments.
As of March 31, 2024 and December 31, 2023, the Company had five and four SPV Financing Facilities, respectively, as discussed below.
HLEND A Funding Facility
On February 3 2022, HLEND A, entered into a SPV Financing Facility with Morgan Stanley Bank, N.A. (“HLEND A Funding Facility”). Morgan Stanley Senior Funding, Inc. serves as administrative agent and U.S. Bank Trust Company, National Association services as collateral agent. On December 23, 2022, HLEND A entered into an amendment to, among other things, increase the aggregate commitments under the HLEND A Funding Facility from $600 million to $800 million.
Loans under the HLEND A Funding Facility bear interest at a per annum rate equal to the benchmark in effect for the currency of the applicable advances, then in effect plus the applicable spread of 2.40% per annum.
F-79
As of March 31, 2024, the maximum principal amount under the HLEND A Funding Facility was $800 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND A Funding Facility may be used to fund portfolio investments by HLEND A and to make advances under revolving loans or delayed draw term loans where HLEND A is a lender. The period during which HLEND A may make borrowings under the HLEND A Funding Facility expires two business days prior to February 3, 2025 and the HLEND A Funding Facility will mature and all amounts outstanding under credit facility must be repaid by February 3, 2027.
HLEND B Funding Facility
On July 19 2022, HLEND B, entered into a SPV Financing Facility with Bank of America, N.A. (“HLEND B Funding Facility”). Bank of America N.A. serves as administrative agent, U.S. Bank Trust Company, National Association, as collateral administrator, and U.S. Bank National Association, as collateral custodian. On January 25, 2024, HLEND B entered into an amendment to, among other things, increase the maximum principal amount under the HLEND B Funding Facility from $1,000 million to $1,250 million.
Loans under the HLEND B Funding Facility bear interest at a per annum rate equal to the benchmark in effect for the currency of the applicable advances, plus an applicable margin adjusted at one-month or three-month intervals based on the proportion of the broadly syndicated loans, large corporate loans and middle market loans in the portfolio, with the applicable margin attributable to broadly syndicated loans equal to 2.00% per annum, the applicable margin attributable to large corporate loans equal to 2.40% per annum and the applicable margin applicable to middle market loans equal to 2.65% per annum, subject to a blended floor of 2.35%.
As of March 31, 2024, the maximum principal amount under the HLEND B Funding Facility was $1,250 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND B Funding Facility may be used to fund portfolio investments by HLEND B, to make advances under revolving loans or delayed draw term loans where HLEND B is a lender. The period during which HLEND B may make borrowings under the HLEND B Funding Facility expires on January 25, 2027 and the HLEND B Funding Facility will mature and all amounts outstanding under the credit facility must be repaid by January 25, 2029.
HLEND C Funding Facility
On January 12, 2023, HLEND C, as borrower, and the Company, as equity holder, entered into a SPV Financing Facility with U.S. Bank Trust Company, National Association, as administrative agent and U.S. collateral agent (the “HLEND C Funding Facility”), Blackstone Asset Based Finance Advisors LP, as Blackstone Asset Based Finance Representative, and U.S. Bank National Association, as custodian. On June 22, 2023, HLEND C entered into an amendment to, among other things, increase the maximum principal amount under the HLEND C Funding Facility from $400 million to $750 million. The Company has agreed to provide a limited guaranty of a portion of amounts owed under the HLEND C Funding Facility in the event of certain bad acts, including fraud and certain other willful and intentional breaches of the facility documents.
Loans under the HLEND C Funding Facility bear interest at a per annum rate equal to Term SOFR plus the applicable margin of 2.95% per annum. On or after the anticipated repayment date of January 11, 2030, the applicable margin on any remaining outstanding advances will be increased by 2.00% per annum.
As of March 31, 2024, the maximum principal amount under the HLEND C Funding Facility was $750 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND C Funding Facility may be used to fund portfolio investments by HLEND C. All amounts outstanding under the credit facility must be repaid by April 12, 2030.
HLEND D Funding Facility
On March 31 2023, HLEND D, as borrower, and the Company, as equity holder, entered into a SPV Financing Facility with BNP Paribas (“HLEND D Funding Facility”). BNP Paribas serves as administrative
F-80
agent, and U.S. Bank Trust Company, National Association, as collateral agent. On August 1, 2023, HLEND D entered into an amendment to, among other things, increase the maximum principal amount under the HLEND D Funding Facility from $250 million to $500 million.
Loans under the HLEND D Funding Facility bear interest at a per annum rate equal to (i)(a) with respect to Dollar Advances, Term SOFR, (b) with respect to GBP Advances, Adjusted Cumulative Compounded SONIA, (c) with respect to Euro Advances, EURIBOR, (d) with respect to CAD Advances, CDOR, and (e) with respect to AUD Advances, BBSW, plus (ii) the Applicable Margin of 2.90% per annum, plus (iii) in the case of any Advance denominated in an Available Currency (other than Dollars), the Foreign Currency Advance Margin of 0.15% per annum.
As of March 31, 2024, the maximum principal amount under the HLEND D Funding Facility was $500 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND D Funding Facility may be used to fund portfolio investments by HLEND D. The period during which HLEND D may make borrowings under the HLEND D Funding Facility expires on March 31, 2026 and amounts outstanding under the credit facility must be repaid by March 31, 2028.
HLEND E Funding Facility
On March 28, 2024, HLEND E, as borrower, and the Company, as equity holder and as collateral manager, entered into a SPV Financing Facility with the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent (the “HLEND E Funding Facility”), U.S. Bank Trust Company, National Association, as collateral agent, and U.S. Bank National Association, as document custodian.
Loans under the HLEND E Funding Facility bear interest at a per annum rate equal to (i)(a) with respect to Advances denominated in Dollars, Daily Simple SOFR, (b) with respect to Advances denominated in GBP, Daily Simple SONIA, (c) with respect to Advances denominated in Euros, EURIBOR, (d) with respect to Advances denominated in Canadian Dollars, Daily Simple CORRA, and (e) with respect to Advances denominated in Australian Dollars, the Bank Bill Rate, plus (ii) the Applicable Spread of 2.25% per annum.
As of March 31, 2024, the maximum principal amount under the HLEND E Funding Facility was $300 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND E Funding Facility may be used to fund portfolio investments by HLEND E. The period during which HLEND E may make borrowings under the HLEND E Funding Facility expires on March 27, 2027, and amounts outstanding under the credit facility must be repaid by March 28, 2029.
Revolving Credit Facility
On June 23, 2022, the Company, as Borrower, entered into a senior secured revolving credit facility (the “Revolving Credit Facility,” together with HLEND A Funding Facility, HLEND B Funding Facility, HLEND C Funding Facility, HLEND D Funding Facility, and HLEND E Funding Facility the “Credit Facilities”) (which was most recently amended on October 30, 2023, and as further amended from time to time) pursuant to a Senior Secured Revolving Credit Agreement (the “Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders party thereto (the “Lenders”).
The Company may borrow amounts in U.S. dollars or certain other permitted currencies under the Revolving Credit Facility. Advances under the Revolving Credit Facility drawn in U.S. dollars will initially bear interest at a per annum rate equal to 0.75% or 0.875% plus an “alternate base rate” in the case of any ABR Loan and 1.75% or 1.875% plus the Adjusted Term SOFR Rate in the case of any other Loan, in each case, depending on the Company’s rate option election and borrowing base. Advances under the Revolving Credit Facility drawn in currencies other than U.S. dollars will initially bear interest at a per annum rate equal to 1.75% or 1.875%, in each case depending on the Company’s borrowing base, plus any applicable credit spread adjustment, plus certain local rates consistent with market standards. The Company also pays a fee of 0.375% on average daily undrawn amounts under the Revolving Credit Facility.
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The maximum principal amount of the Revolving Credit Facility is $1,300 million (increased from $1,275 million to $1,300 million on January 17, 2024), subject to availability under the borrowing base, which is based on the Company’s portfolio investments and other outstanding indebtedness, with an accordion provision to permit increases to the total facility amount up to $1,912.5 million subject to the satisfaction of certain conditions.
The Revolving Credit Facility is guaranteed by certain subsidiaries of the Company, and will be guaranteed by certain domestic subsidiaries of the Company that are formed or acquired by the Company in the future (collectively, the “Guarantors”). Proceeds of the Revolving Credit Facility may be used for general corporate purposes, including, without limitation, repaying outstanding indebtedness, making distributions, contributions and investments, and acquisition and funding, and such other uses as permitted under the Agreement.
The Revolving Credit Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $200 million limit for swingline loans.
The availability period under the Revolving Credit Facility will terminate on October 30, 2027 (the “Commitment Termination Date”) (other than with respect to the commitment of a lender in the amount of $100 million, which terminates on June 23, 2026), and the Revolving Credit Facility will mature on October 30, 2028 (the “Maturity Date”) (other than with respect to the commitment of a lender in the amount of $100 million, which matures on June 23, 2027). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make mandatory prepayments under the Revolving Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Private Unsecured Notes
The Company issued unsecured notes, as further described below: November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes and September 2028 Notes (each as defined below), which are collectively referred to herein as the “Private Unsecured Notes”.
Interest on the Private Unsecured Notes will be due semiannually. The interest rate is subject to increase (up to a maximum increase of 2.00% above the stated rate) in the event that, subject to certain exceptions, the Private Unsecured Notes cease to have an investment grade rating and the Company’s minimum secured debt ratio exceeds certain thresholds. In addition, the Company is obligated to offer to repay the Private Unsecured Notes at par if certain change in control events occur. The Private Unsecured Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company.
November 2025 Notes
On November 14, 2022, the Company entered into a Master Note Purchase Agreement (the “2022 Note Purchase Agreement”) governing the issuance of $170 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “November 2025 Notes”) to institutional investors in a private placement. The November 2025 Notes have a fixed interest rate of 8.37% per annum and are due on November 14, 2025.
In connection with the November 2025 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.37% per annum and pays a floating interest rate of SOFR + 4.08% per annum on $85 million of the November 2025 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
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November 2027 Notes
On November 14, 2022, the Company entered into the 2022 Note Purchase Agreement governing the issuance of $155 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “November 2027 Notes”) to institutional investors in a private placement. The November 2027 Notes have a fixed interest rate of 8.43% per annum and are due on November 14, 2027.
In connection with the November 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.43% per annum and pays a floating interest rate of SOFR + 4.42% per annum on $77.5 million of the November 2027 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
March 2026 Notes
On March 15, 2023, the Company entered into a Master Note Purchase Agreement (the “2023 Note Purchase Agreement”) governing the issuance of $276 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “March 2026 Notes”) to institutional investors in a private placement. The March 2026 Notes have a fixed interest rate of 8.12% per annum and are due on March 15, 2026.
In connection with the March 2026 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.12% per annum and pays a floating interest rate of SOFR + 3.761% per annum on $276 million of the March 2026 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
March 2028 Notes
On March 15, 2023, the Company entered into the 2023 Note Purchase Agreement governing the issuance of $124 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “March 2028 Notes”) to institutional investors in a private placement. The March 2028 Notes have a fixed interest rate of 8.17% per annum and are due on March 15, 2028.
In connection with the March 2028 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.18% per annum and pays a floating interest rate of SOFR + 4.241% per annum on $124 million of the March 2028 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
September 2027 Notes
On September 14, 2023, the Company entered into a First Supplement to the 2023 Note Purchase Agreement, governing the issuance of $75 million in aggregate principal amount of its Series 2023-B Senior Notes, Tranche A (the “September 2027 Notes”) to institutional investors in a private placement. The September 2027 Notes have a fixed interest rate of 8.67% per annum and are due on September 14, 2027.
In connection with the September 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.67% per annum and pays a floating interest rate of 3-month Term SOFR plus 4.3055% per annum on $75 million of the September 2027 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
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September 2028 Notes
On September 14, 2023, the Company entered into the First Supplement to the 2023 Note Purchase Agreement, governing the issuance of $250 million in aggregate principal amount of its Series 2023-B Senior Notes, Tranche B (the “September 2028 Notes”) to institutional investors in a private placement. The September 2028 Notes have a fixed interest rate of 8.80% per annum and are due on September 14, 2028.
In connection with the September 2028 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.80% per annum and pays a floating interest rate of 3-month Term SOFR plus 4.5365% per annum on $250 million of the September 2028 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
144A Unsecured Notes
January 2029 Notes
On January 30, 2024, the Company issued $550.0 million aggregate principal amount of 6.75% notes due in 2029 (the “January 2029 Notes,” collectively with the Private Unsecured Notes, the “Unsecured Notes”) pursuant to an indenture (the “Base Indenture”) and a supplemental indenture, each dated as of January 30, 2024 (and together with the Base Indenture, the “January 2029 Notes Indenture”), between the Company and U.S. Bank Trust Company, National Association (the “Trustee”).
The January 2029 Notes will mature on January 30, 2029 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the January 2029 Notes Indenture. The January 2029 Notes bear interest at a rate of 6.75% per year payable semi-annually on January 30 and July 30 of each year, commencing on July 30, 2024. The January 2029 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the January 2029 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.
In connection with the January 2029 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 6.75% per annum and pays a floating interest rate of 3-month Term SOFR plus 2.876% per annum on $550.0 million of the January 2029 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
The January 2029 Notes Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of the 1940 Act, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the January 2029 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the January 2029 Notes Indenture.
In addition, on the occurrence of a “change of control repurchase event,” as defined in the January 2029 Notes Indenture, the Company will generally be required to make an offer to purchase the outstanding January 2029 Notes at a price equal to 100% of the principal amount of such January 2029 Notes plus accrued and unpaid interest to the repurchase date.
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Debt Securitizations
The Company has determined that the securitization vehicle noted below operates as an extension of the Company and therefore, will be consolidated by the Company.
2023 Debt Securitization
On October 5, 2023 (the “Closing Date”), the Company completed a $429.1 million term debt securitization (the “2023 Debt Securitization”), consisting of three tranches of secured notes (the “2023 CLO Secured Notes”) and subordinated notes (the “2023 CLO Subordinated Notes”). The 2023 CLO Secured Notes together with the 2023 CLO Subordinated Notes are collectively referred to as the “2023 CLO Notes.” Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The 2023 CLO Notes offered in the 2023 Debt Securitization were issued by HLEND CLO 2023-1, LLC (the “2023 Issuer”), an indirect, wholly-owned and consolidated subsidiary of the Company, and are backed by a diversified portfolio of middle-market commercial loans and participation interests therein. The 2023 CLO Notes are scheduled to mature on October 22, 2035; however, the 2023 CLO Notes may be redeemed by the 2023 Issuer, at the written direction of (i) a majority of the 2023 CLO Subordinated Notes with the consent of the Company or (ii) the Company, in each case, on any business day on or after October 22, 2025.
The following table presents information on the 2023 Debt Securitization:
Description |
Type |
Principal Outstanding |
Interest Rate |
Credit Rating |
||||||
Class A Notes |
Senior Secured Floating Rate | $ | 246,500 | SF + 2.60% | AAA | |||||
Class B Notes |
Senior Secured Floating Rate | 42,500 | SF + 3.35% | AA | ||||||
Class C Notes |
Secured Deferrable Floating Rate | 34,000 | SF + 4.15% | A | ||||||
Total Secured Notes |
$ | 323,000 | ||||||||
Subordinated Notes (1)
|
106,100 | None | Not rated | |||||||
Total Notes |
$ | 429,100 | ||||||||
| (1) | The Company retained all of the 2023 CLO Subordinated Notes issued in the 2023 Debt Securitization which are eliminated in consolidation. |
On the Closing Date and in connection with the 2023 Debt Securitization, the 2023 Issuer and the Company entered into a note purchase agreement with BofA Securities, Inc., as the initial purchaser (the “Initial Purchaser”), pursuant to which the Initial Purchaser purchased the 2023 CLO Secured Notes issued pursuant to an indenture as part of the 2023 Debt Securitization. HLEND CLO 2023-1 Investments, LLC, a wholly-owned subsidiary of the Company, retained all of the 2023 CLO Subordinated Notes issued in the 2023 Debt Securitization.
The 2023 CLO Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.
The Company serves as collateral manager for the 2023 Issuer under a collateral management agreement and has agreed to irrevocably waive all collateral management fees payable to it so long as it is the collateral manager under the collateral management agreement.
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Short-Term Borrowings
In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements, whereby the Company sells to a third party an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, generally not to exceed 180-days from the date it was sold (each a “Short Term Financing Transaction”).
In accordance with ASC 860, Transfers and Servicing, the Short Term Financing Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by these agreements remains on the Company’s Consolidated Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to a third party which is reported as debt on the Company’s Statements of Assets and Liabilities. The repurchase obligation is secured by the respective investment that is the subject of the repurchase agreement. Interest expense associated with the repurchase obligation is reported on the Company’s Consolidated Statements of Operations within interest expense. As of March 31, 2024 and December 31, 2023, there were no short-term borrowings outstanding.
The Company’s outstanding debt obligations were as follows:
March 31, 2024 |
||||||||||||||||||||
|
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 603,407 | $ | 603,407 | $ | 196,593 | $ | 22,937 | ||||||||||
HLEND B Funding Facility (3)
|
1,250,000 | 316,767 | 316,767 | 933,233 | 422,167 | |||||||||||||||
HLEND C Funding Facility |
750,000 | 487,500 | 487,500 | 262,500 | 46,103 | |||||||||||||||
HLEND D Funding Facility |
500,000 | 125,000 | 125,000 | 375,000 | 237,750 | |||||||||||||||
HLEND E Funding Facility |
300,000 | — | — | 300,000 | — | |||||||||||||||
Revolving Credit Facility (3)
|
1,300,000 | 403,964 | 403,964 | 896,036 | 896,036 | |||||||||||||||
November 2025 Notes (4)
|
170,000 | 170,000 | 167,908 | — | — | |||||||||||||||
November 2027 Notes (4)
|
155,000 | 155,000 | 152,776 | — | — | |||||||||||||||
March 2026 Notes (5)
|
276,000 | 276,000 | 272,703 | — | — | |||||||||||||||
March 2028 Notes (5)
|
124,000 | 124,000 | 121,825 | — | — | |||||||||||||||
September 2027 Notes (6)
|
75,000 | 75,000 | 74,467 | — | — | |||||||||||||||
September 2028 Notes (6)
|
250,000 | 250,000 | 248,524 | — | — | |||||||||||||||
January 2029 Notes (7)
|
550,000 | 550,000 | 531,455 | — | — | |||||||||||||||
2023 CLO Secured Notes (8)
|
323,000 | 323,000 | 319,810 | — | — | |||||||||||||||
Total |
$ | 6,823,000 | $ | 3,859,638 | $ | 3,826,106 | $ | 2,963,362 | $ | 1,624,993 | ||||||||||
| (1) | The unused portion is the amount upon which commitment fees, if any, are based. |
| (2) | The amount available reflects any limitations related to each respective credit facility’s borrowing base. |
| (3) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. |
Under the HLEND A Funding Facility, as of March 31, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
| • | Euros (EUR) of 7.5 million |
| • | Australian Dollars (AUD) of 94.4 million |
| • | British Pounds (GBP) of 42.9 million |
Under the HLEND B Funding Facility, as of March 31, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
| • | Euros (EUR) of 3.4 million |
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| • | Australian Dollars (AUD) of 25.5 million |
| • | British Pounds (GBP) of 90.3 million |
Under the Revolving Credit Facility, as of March 31, 2024, the Company had outstanding borrowings denominated in the following non-USD currencies:
| • | Euros (EUR) of 180.6 million |
| • | Australian Dollars (AUD) of 73.2 million |
| • | Canadian Dollars (CAD) of 47.1 million |
| • | British Pounds (GBP) of 64.2 million |
| (4) | The carrying value of the Company’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.0) million and $(1.3) million, respectively, as of March 31, 2024 and includes the change in the notes carrying value of $(1.0) million and $(0.9) million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (5) | The carrying value of the Company’s March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.6) million and $(0.9) million, respectively, as of March 31, 2024 and includes the change in the notes carrying value of $(1.7) million and $(1.3) million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (6) | The carrying value of the Company’s September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.3) million, respectively, as of March 31, 2024 and includes the change in the notes carrying value of $0.1 million and $0.9 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (7) | The carrying value of the Company’s January 2029 Notes are presented net of unamortized debt issuance costs of $(12.2) million as of March 31, 2024 and includes the change in the notes carrying value of $(6.4) million as a result of the qualifying fair value hedge relationship as described above. |
| (8) | The carrying value of the Company’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.2) million as of March 31, 2024. |
December 31, 2023 |
||||||||||||||||||||
|
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 615,838 | $ | 615,838 | $ | 184,162 | $ | 38,218 | ||||||||||
HLEND B Funding Facility (4)
|
1,000,000 | 513,747 | 513,747 | 486,253 | 356,891 | |||||||||||||||
HLEND C Funding Facility |
750,000 | 487,500 | 487,500 | 262,500 | 12,576 | |||||||||||||||
HLEND D Funding Facility |
500,000 | 195,000 | 195,000 | 305,000 | 205,018 | |||||||||||||||
Revolving Credit Facility (5)
|
1,275,000 | 1,025,294 | 1,025,294 | 249,706 | 249,706 | |||||||||||||||
November 2025 Notes (6)
|
170,000 | 170,000 | 168,749 | — | — | |||||||||||||||
November 2027 Notes (6)
|
155,000 | 155,000 | 154,366 | — | — | |||||||||||||||
March 2026 Notes (7)
|
276,000 | 276,000 | 274,716 | — | — | |||||||||||||||
March 2028 Notes (7)
|
124,000 | 124,000 | 123,588 | — | — | |||||||||||||||
September 2027 Notes (8)
|
75,000 | 75,000 | 75,545 | — | — | |||||||||||||||
September 2028 Notes (8)
|
250,000 | 250,000 | 252,814 | — | — | |||||||||||||||
2023 CLO Secured Notes (9)
|
323,000 | 323,000 | 319,743 | — | — | |||||||||||||||
Total |
$ | 5,698,000 | $ | 4,210,379 | $ | 4,206,900 | $ | 1,487,621 | $ | 862,409 | ||||||||||
| (1) | The unused portion is the amount upon which commitment fees, if any, are based. |
| (2) | The amount available reflects any limitations related to each respective credit facility’s borrowing base. |
| (3) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency |
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| exchange rate as of the applicable reporting date. As of December 31, 2023, the Company had outstanding borrowings denominated in Euros (EUR) of 7.5 million, in Australian Dollars (AUD) of 156.0 million, and in British Pounds (GBP) of 42.9 million. |
| (4) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Company had outstanding borrowings denominated in Euros (EUR) of 3.4 million, in Australian Dollars (AUD) of 108.0 million, and in British Pounds (GBP) of 90.3 million. |
| (5) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Company had outstanding borrowings denominated in Euros (EUR) of 312.1 million, in Australian Dollars (AUD) of 95.2 million, in Canadian Dollars (CAD) of 47.1 million and in British Pounds (GBP) of 64.2 million. |
| (6) | The carrying value of the Company’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.2) million and $(1.4) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $(0.0) million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (7) | The carrying value of the Company’s March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.8) million and $(0.9) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $0.6 million and $0.5 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (8) | The carrying value of the Company’s September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (9) | The carrying value of the Company’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023. |
As of March 31, 2024 and December 31, 2023, $58.3 million and $57.3 million, respectively, of interest expense and $2.2 million and $1.5 million, respectively, of unused commitment fees were included in interest payable. For the three months ended March 31, 2024 and 2023, the weighted average interest rate on all borrowings outstanding was 8.95% and 7.63% (including unused fees and amortization of deferred financing and debt issuance costs), respectively, and the average principal debt outstanding was $3,870.4 million and $2,672.4 million, respectively.
The components of interest expense were as follows:
Three Months Ended March 31, |
||||||||
2024 |
2023 |
|||||||
Borrowing interest expense |
$ | 75,393 | $ | 46,521 | ||||
Facility unused fees |
3,040 | 2,155 | ||||||
Amortization of financing and debt issuance costs |
3,252 | 1,571 | ||||||
Gain (loss) from interest rate swaps accounted for as hedges and the related hedged items: |
||||||||
Interest rate swaps |
(18,635 | ) | 7,489 | |||||
Hedged items |
23,043 | (7,773 | ) | |||||
Total interest expense |
$ | 86,093 | $ | 49,963 | ||||
Cash paid for interest expense |
$ | 81,129 | $ | 31,810 | ||||
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Note 8. Commitments and Contingencies
In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.
The Company’s investment portfolio may contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of March 31, 2024 and December 31, 2023, the Company had unfunded delayed draw term loans, revolvers and preferred equity in the aggregate principal amount of $886.6 million and $760.7 million, respectively.
From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of March 31, 2024, management is not aware of any pending or threatened material litigation.
Note 9. Net Assets
In connection with its formation, the Company has the authority to issue an unlimited number of Class I, Class D, Class F and Class S common shares of beneficial interest at $0.01 per share par value. On July 23, 2021, HPS purchased 100 shares of the Company’s Class I common shares of beneficial interest at $25.00 per share.
As of February 3, 2022, the Company had satisfied the minimum offering requirement, and the Company’s Board had authorized the release of proceeds from escrow. As of such date, the Company issued and sold 20,437,880 shares (consisting of 7,074,280 Class I shares, 1,268,000 Class D Shares, and 12,095,600 Class F shares at an offering price of $25.00 per share), and the Escrow Agent released net proceeds of $510.9 million, of which $10.0 million was from an affiliate of HPS, to the Company as payment for such shares. Under the terms of the Company’s Declaration of Trust, all Common Shares have equal rights as to voting and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. On October 1, 2023 Class S shares commenced operations at an offering price of $25.11.
The share classes have different ongoing distribution and/or shareholder servicing fees. Until the release of proceeds from escrow, the per share purchase price for Common Shares in the Offering was $25.00 per share. Thereafter, the purchase price per share for each class of Common Shares will equal the NAV per share, as of the effective date of the monthly share purchase date.
The following table summarizes transactions in common shares of beneficial interest during the three months ended March 31, 2024:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
14,309,134 | $ | 360,098 | |||||
Share transfers between classes |
53,163 | 1,333 | ||||||
Distributions reinvested |
538,118 | 13,526 | ||||||
Share repurchases |
(1,309,587 | ) | (33,211 | ) | ||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
13,590,828 | $ | 341,746 | |||||
CLASS D |
||||||||
Subscriptions |
3,843,517 | $ | 96,497 | |||||
Share transfers between classes |
116,731 | 2,927 | ||||||
F-89
Shares |
Amount |
|||||||
Distributions reinvested |
436,170 | 10,964 | ||||||
Share repurchases |
(416,320 | ) | (10,558 | ) | ||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
3,980,098 | $ | 99,830 | |||||
CLASS F |
||||||||
Subscriptions |
17,020,539 | $ | 428,057 | |||||
Share transfers between classes |
(226,825 | ) | (5,691 | ) | ||||
Distributions reinvested |
1,748,096 | 43,940 | ||||||
Share repurchases |
(621,324 | ) | (15,757 | ) | ||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
17,920,486 | $ | 450,549 | |||||
CLASS S |
||||||||
Subscriptions |
3,911,922 | $ | 98,389 | |||||
Share transfers between classes |
56,931 | 1,431 | ||||||
Distributions reinvested |
22,956 | 578 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
3,991,809 | $ | 100,398 | |||||
Total net increase (decrease) |
39,483,221 | $ | 992,523 | |||||
The following table summarizes transactions in common shares of beneficial interest during the three months ended March 31, 2023:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
903,666 | $ | 21,893 | |||||
Share transfers between classes |
675,921 | 16,465 | ||||||
Distributions reinvested |
352,176 | 8,526 | ||||||
Share repurchases |
(377,320 | ) | (9,207 | ) | ||||
Early repurchase deduction |
— | 15 | ||||||
Net increase (decrease) |
1,554,443 | $ | 37,692 | |||||
CLASS D |
||||||||
Subscriptions |
1,249,379 | $ | 30,400 | |||||
Share transfers between classes |
— | — | ||||||
Distributions reinvested |
182,009 | 4,406 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | 8 | ||||||
Net increase (decrease) |
1,431,388 | $ | 34,814 | |||||
CLASS F |
||||||||
Subscriptions |
4,126,357 | $ | 100,409 | |||||
Share transfers between classes |
(675,921 | ) | (16,465 | ) | ||||
Distributions reinvested |
1,012,997 | 24,524 | ||||||
Share repurchases |
(681,306 | ) | (16,624 | ) | ||||
Early repurchase deduction |
— | 39 | ||||||
Net increase (decrease) |
3,782,127 | $ | 91,883 | |||||
Total net increase (decrease) |
6,767,958 | $ | 164,389 | |||||
F-90
Net Asset Value per Share and Offering Price
The Company determines NAV for each class of shares as of the last day of each calendar month. Share issuances related to monthly subscriptions are effective the first calendar day of each month. Shares are issued at an offering price equivalent to the most recent NAV per share available for each share class, which will be the prior calendar day NAV per share (i.e. the prior month-end NAV). The following table summarizes each
month-end
NAV per share for Class I, Class D, Class F, and Class S common shares of beneficial interest during the three months ended March 31, 2024 and 2023: NAV Per Share |
||||||||||||||||
For the Months Ended |
Class I |
Class D |
Class F |
Class S |
||||||||||||
January 31, 2024 |
$ | 25.14 | $ | 25.14 | $ | 25.14 | $ | 25.14 | ||||||||
February 29, 2024 |
$ | 25.25 | $ | 25.25 | $ | 25.25 | $ | 25.25 | ||||||||
March 31, 2024 |
$ | 25.36 | $ | 25.36 | $ | 25.36 | $ | 25.36 | ||||||||
NAV Per Share |
||||||||||||||||
For the Months Ended |
Class I |
Class D |
Class F |
Class S (1)
|
||||||||||||
January 31, 2023 |
$ | 24.36 | $ | 24.36 | $ | 24.36 | $ | — | ||||||||
February 28, 2023 |
$ | 24.56 | $ | 24.56 | $ | 24.56 | $ | — | ||||||||
March 31, 2023 |
$ | 24.40 | $ | 24.40 | $ | 24.40 | $ | — | ||||||||
| (1) | Class S commenced operations on October 1, 2023. |
Distributions
The Board authorizes and declares monthly distribution amounts per share of Class I, Class D, Class F, and Class S common shares of beneficial interest payable monthly in arrears. The record date for each distribution was the last calendar date of the month in which such distribution was declared. The following table presents distributions that were declared during the three months ended March 31, 2024:
Class I |
||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||
January 30, 2024 |
February 29, 2024 | $ | 0.1600 | $ | 0.0550 | $ | — | $ | 0.2150 | $ | 11,811 | |||||||||||
February 29, 2024 |
March 29, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 13,391 | ||||||||||||||||
March 26, 2024 |
April 30, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 14,482 | ||||||||||||||||
Total |
$ | 0.4800 | $ | 0.1650 | $ | — | $ | 0.6450 | $ | 39,684 | ||||||||||||
Class D |
||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||
January 30, 2024 |
February 29, 2024 | $ | 0.1547 | $ | 0.0550 | $ | — | $ | 0.2097 | $ | 6,514 | |||||||||||
February 29, 2024 |
March 29, 2024 | 0.1550 | 0.0550 | — | 0.2100 | 6,670 | ||||||||||||||||
March 26, 2024 |
April 30, 2024 | 0.1547 | 0.0550 | — | 0.2097 | 6,834 | ||||||||||||||||
Total |
$ | 0.4644 | $ | 0.1650 | $ | — | $ | 0.6294 | $ | 20,018 | ||||||||||||
F-91
Class F |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 30, 2024 |
February 29, 2024 | $ | 0.1494 | $ | 0.0550 | $ | — | $ | 0.2044 | $ | 26,889 | |||||||||||||
February 29, 2024 |
March 29, 2024 | 0.1500 | 0.0550 | — | 0.2050 | 28,278 | ||||||||||||||||||
March 26, 2024 |
April 30, 2024 | 0.1493 | 0.0550 | — | 0.2043 | 29,404 | ||||||||||||||||||
Total |
$ | 0.4487 | $ | 0.1650 | $ | — | $ | 0.6137 | $ | 84,571 | ||||||||||||||
Class S |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 30, 2024 |
February 29, 2024 | $ | 0.1420 | $ | 0.0550 | $ | — | $ | 0.1970 | $ | 357 | |||||||||||||
February 29, 2024 |
March 29, 2024 | 0.1431 | 0.0550 | — | 0.1981 | 743 | ||||||||||||||||||
March 26, 2024 |
April 30, 2024 | 0.1418 | 0.0550 | — | 0.1968 | 954 | ||||||||||||||||||
Total |
$ | 0.4269 | $ | 0.1650 | $ | — | $ | 0.5919 | $ | 2,054 | ||||||||||||||
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees. |
The following table presents distributions that were declared during the three months ended March 31, 2023:
Class I |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
February 28, 2023 | $ | 0.1600 | $ | 0.0210 | $ | — | $ | 0.1810 | $ | 6,441 | |||||||||||||
February 28, 2023 |
March 31, 2023 | 0.1600 | 0.0300 | — | 0.1900 | 6,980 | ||||||||||||||||||
March 28, 2023 |
April 28, 2023 | 0.1600 | 0.0430 | — | 0.2030 | 7,518 | ||||||||||||||||||
Total |
$ | 0.4800 | $ | 0.0940 | $ | — | $ | 0.5740 | $ | 20,939 | ||||||||||||||
Class D |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
February 28, 2023 | $ | 0.1549 | $ | 0.0210 | $ | — | $ | 0.1759 | $ | 3,173 | |||||||||||||
February 28, 2023 |
March 31, 2023 | 0.1553 | 0.0300 | — | 0.1853 | 3,351 | ||||||||||||||||||
March 28, 2023 |
April 28, 2023 | 0.1548 | 0.0430 | — | 0.1978 | 3,752 | ||||||||||||||||||
Total |
$ | 0.4650 | $ | 0.0940 | $ | — | $ | 0.5590 | $ | 10,276 | ||||||||||||||
Class F |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
February 28, 2023 | $ | 0.1499 | $ | 0.0210 | $ | — | $ | 0.1709 | $ | 16,003 | |||||||||||||
February 28, 2023 |
March 31, 2023 | 0.1507 | 0.0300 | — | 0.1807 | 16,992 | ||||||||||||||||||
March 28, 2023 |
April 28, 2023 | 0.1496 | 0.0430 | — | 0.1926 | 18,590 | ||||||||||||||||||
Total |
$ | 0.4502 | $ | 0.0940 | $ | — | $ | 0.5442 | $ | 51,585 | ||||||||||||||
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees. |
F-92
Distribution Reinvestment Plan
The Company has adopted a distribution reinvestment plan, pursuant to which the Company will reinvest all cash distributions declared by the Board on behalf of our shareholders who do not elect to receive their distributions in cash as provided below. As a result, if the Board authorizes, and the Company declares, a cash distribution, then shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional shares as described below, rather than receiving the cash distribution. Distributions on fractional shares will be credited to each participating shareholder’s account to three decimal places.
Character of Distributions
The Company may fund its cash distributions to shareholders from any source of funds available to the Company, including but not limited to offering proceeds, net investment income from operations, capital gains proceeds from the sale of assets, borrowings, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies and expense support from the Adviser, which is subject to recoupment.
Through March 31, 2024, a portion of the Company’s distributions resulted from expense support from the Adviser, and future distributions may result from expense support from the Adviser, each of which is subject to repayment by the Company within three years from the date of payment. The purpose of this arrangement avoids distributions being characterized as a return of capital for U.S. federal income tax purposes. Shareholders should understand that any such distribution is not based solely on the Company’s investment performance, and can only be sustained if the Company achieves positive investment performance in future periods and/or the Adviser continues to provide expense support. Shareholders should also understand that the Company’s future repayments of expense support will reduce the distributions that they would otherwise receive. There can be no assurance that the Company will achieve the performance necessary to sustain these distributions, or be able to pay distributions at all.
Sources of distributions, other than net investment income and realized gains on a U.S. GAAP basis, include required adjustments to U.S. GAAP net investment income in the current period to determine taxable income available for distributions. The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its Common Shares during the three months ended March 31, 2024:
Class I |
Class D |
Class F |
Class S |
|||||||||||||||||||||||||||||
Source of Distribution |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
||||||||||||||||||||||||
Net investment income |
$ | 0.6450 | $ | 39,684 | $ | 0.6294 | $ | 20,018 | $ | 0.6137 | $ | 84,571 | $ | 0.5919 | $ | 2,054 | ||||||||||||||||
Net realized gains |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total |
$ | 0.6450 | $ | 39,684 | $ | 0.6294 | $ | 20,018 | $ | 0.6137 | $ | 84,571 | $ | 0.5919 | $ | 2,054 | ||||||||||||||||
The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its Common Shares during the three months ended March 31, 2023:
Class I |
Class D |
Class F |
||||||||||||||||||||||
Source of Distribution |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
||||||||||||||||||
Net investment income |
$ | 0.5740 | $ | 20,939 | $ | 0.5590 | $ | 10,276 | $ | 0.5442 | $ | 51,585 | ||||||||||||
Net realized gains |
— | — | — | — | — | — | ||||||||||||||||||
Total |
$ | 0.5740 | $ | 20,939 | $ | 0.5590 | $ | 10,276 | $ | 0.5442 | $ | 51,585 | ||||||||||||
Share Repurchase Program
The Company has commenced a share repurchase program in which the Company intends to repurchase, in each quarter, up to 5% of the Company’s Common Shares outstanding (by number of shares) as of the close of
F-93
the previous calendar quarter. The Board may amend, suspend or terminate the share repurchase program if it deems such action to be in the best interest of the Company and the best interest of the shareholders. As a result, share repurchases may not be available each quarter. The Company intends to conduct such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Securities Exchange Act of 1934, as amended, and the 1940 Act. All shares purchased pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares.
Under the Company’s share repurchase program, to the extent the Company offers to repurchase shares in any particular quarter, the Company expects to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The one-year holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at the Company’s discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by the Company for the benefit of remaining shareholders across all shares.
The following table summarizes the share repurchases completed during the three months ended March 31, 2024:
Repurchase Deadline Request |
Percentage of Outstanding Shares the Company Offered to Repurchase (1)
|
Repurchase Pricing Date |
Amount Repurchased (all classes) (2)
|
Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Purchased (1)
|
|||||||||||
March 1, 2024 |
5.00% | March 31, 2024 | $ | 59,526 | 2,347,231 | 1.13 | % | |||||||||
The following table summarizes the share repurchases completed during the three months ended March 31, 2023.
Repurchase Deadline Request |
Percentage of Outstanding Shares the Company Offered to Repurchase (1)
|
Repurchase Pricing Date |
Amount Repurchased (all classes) (2)
|
Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Purchased (1)
|
|||||||||||
March 2, 2023 |
5.00% | March 31, 2023 | $ | 25,836 | 1,058,869 | 0.73 | % | |||||||||
| (1) | Percentage is based on total shares as of the close of the previous calendar quarter. All repurchase requests were satisfied in full. |
| (2) | Amounts not inclusive of Early Repurchase Deduction. |
Note 10. Financial Highlights
The following are the financial highlights for the three months ended March 31, 2024:
Three Months Ended March 31, 2024 |
||||||||||||||||
Class I |
Class D |
Class F |
Class S |
|||||||||||||
Per Share Data: |
||||||||||||||||
Net asset value, beginning of period |
$ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 25.06 | ||||||||
Net investment income (1)
|
0.74 | 0.72 | 0.71 | 0.68 | ||||||||||||
Net unrealized and realized gain (loss) (2)
|
0.21 | 0.21 | 0.20 | 0.21 | ||||||||||||
Net increase (decrease) in net assets resulting from operations |
0.95 | 0.93 | 0.91 | 0.89 | ||||||||||||
Distributions from net investment income (3)
|
(0.65 | ) | (0.63 | ) | (0.61 | ) | (0.59 | ) | ||||||||
Distributions from net realized gains (3)
|
— | — | — | — | ||||||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(0.65 | ) | (0.63 | ) | (0.61 | ) | (0.59 | ) | ||||||||
Total increase (decrease) in net assets |
0.30 | 0.30 | 0.30 | 0.30 | ||||||||||||
Net asset value, end of period |
$ | 25.36 | $ | 25.36 | $ | 25.36 | $ | 25.36 | ||||||||
F-94
Three Months Ended March 31, 2024 |
||||||||||||||||
Class I |
Class D |
Class F |
Class S |
|||||||||||||
Shares outstanding, end of period |
66,048,340 | 32,172,817 | 143,301,946 | 4,849,688 | ||||||||||||
Total return based on NAV (4)
|
3.80 | % | 3.74 | % | 3.68 | % | 3.59 | % | ||||||||
Ratios: |
||||||||||||||||
Ratio of net expenses to average net assets (5)
|
9.21 | % | 9.47 | % | 9.72 | % | 9.99 | % | ||||||||
Ratio of net investment income to average net assets (5)
|
12.02 | % | 11.77 | % | 11.53 | % | 11.17 | % | ||||||||
Portfolio turnover rate |
8.90 | % | 8.90 | % | 8.90 | % | 8.90 | % | ||||||||
Supplemental Data: |
||||||||||||||||
Net assets, end of period |
$ | 1,674,789 | $ | 815,793 | $ | 3,633,652 | $ | 122,976 | ||||||||
Asset coverage ratio |
261.9 | % | 261.9 | % | 261.9 | % | 261.9 | % | ||||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9). |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any. |
| (5) | For the three months ended March 31, 2024, amounts are annualized except for excise tax, and capital gains incentive fee. |
The following are the financial highlights for the three months ended March 31, 2023:
Three Months Ended March 31, 2023 |
||||||||||||
Class I |
Class D |
Class F |
||||||||||
Per Share Data: |
||||||||||||
Net asset value, beginning of period |
$ | 23.88 | $ | 23.88 | $ | 23.88 | ||||||
Net investment income (1)
|
0.67 | 0.65 | 0.64 | |||||||||
Net unrealized and realized gain (loss) (2)
|
0.42 | 0.43 | 0.42 | |||||||||
Net increase (decrease) in net assets resulting from operations |
1.09 | 1.08 | 1.06 | |||||||||
Distributions from net investment income (3)
|
(0.57 | ) | (0.56 | ) | (0.54 | ) | ||||||
Distributions from net realized gains (3)
|
— | — | — | |||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(0.57 | ) | (0.56 | ) | (0.54 | ) | ||||||
Early repurchase deduction fees (6)
|
— | — | — | |||||||||
Total increase (decrease) in net assets |
0.52 | 0.52 | 0.52 | |||||||||
Net asset value, end of period |
$ | 24.40 | $ | 24.40 | $ | 24.40 | ||||||
Shares outstanding, end of period |
36,656,322 | 18,969,647 | 95,841,639 | |||||||||
Total return based on NAV (4)
|
4.60 | % | 4.53 | % | 4.47 | % | ||||||
Ratios: |
||||||||||||
Ratio of net expenses to average net assets (5)
|
8.90 | % | 9.18 | % | 9.39 | % | ||||||
Ratio of net investment income to average net assets (5)
|
11.23 | % | 11.01 | % | 10.71 | % | ||||||
Portfolio turnover rate |
1.77 | % | 1.77 | % | 1.77 | % | ||||||
Supplemental Data: |
||||||||||||
Net assets, end of period |
$ | 894,448 | $ | 462,874 | $ | 2,338,568 | ||||||
Asset coverage ratio |
223.2 | % | 223.2 | % | 223.2 | % | ||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
F-95
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9). |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any. |
| (5) | For the three months ended March 31, 2023, amounts are annualized except for non-recurring expenses. |
| (6) | The per share amount rounds to less than $0.01 per share. |
Note 11. Joint Venture
On June 1, 2023, the Company entered into a limited liability company agreement (the “LLC Agreement”) with the Capital One Member (“COM”) to establish a joint venture to make certain unitranche loans to U.S. middle-market companies. The joint venture is called ULTRA III, LLC (“ULTRA III”). The Company and COM will provide capital to ULTRA III in the form of membership interests. The initial maximum investment amounts in ULTRA III for the Company and COM are approximately $200.0 million and $28.6 million, respectively, which correspond to initial membership interests of approximately 87.5% and 12.5%, respectively. The LLC Agreement is effective as of June 1, 2023.
On February 1, 2024, the Company entered into an amendment (“Amendment No. 1”) to the LLC Agreement with COM to increase the maximum investment amounts for the Company and COM in ULTRA III to $400.0 million and $57.1 million, respectively. The increased investment amounts for the Company and COM correspond to membership interests of 87.5% and 12.5%, respectively.
The Company and COM may, from time-to-time, make additional contributions of capital or may receive returns of capital from ULTRA III. As of March 31, 2024 and December 31, 2023, the Company had contributed $164.7 million and $129.7 million, respectively, and COM had contributed $23.5 million and $18.5 million, respectively, of capital. As of March 31, 2024 and December 31, 2023, $235.3 million and $70.3 million, respectively, of capital remained uncalled from the Company and $33.6 million and $10.1 million, respectively, of capital remained uncalled from COM. As of March 31, 2024 and December 31, 2023, the Company and COM’s membership interests are 87.5% and 12.5%, respectively, for both periods.
All portfolio decisions and generally all other decisions in respect of ULTRA III must be approved by a credit committee of ULTRA III consisting of representatives of the Company and COM (generally with approval from a representative of each required). A Capital One entity is providing a senior revolving financing facility to ULTRA III.
The Company has determined that ULTRA III is an investment company under ASC 946, and in accordance with ASC 946, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary. The Company and COM have equal voting rights with respect to the joint venture. The Company will not consolidate the assets and liabilities of the ULTRA III joint venture.
The Company’s investment in ULTRA III is disclosed on the Company’s Consolidated Schedule of Investments as of March 31, 2024 and December 31, 2023.
F-96
The following table presents the schedule of investments of ULTRA III as of March 31, 2024:
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount /Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(5) |
SF + | 6.00% | 11.32 | % | 11/8/2029 | $ | 245,500 | $ | 239,768 | $ | 242,526 | |||||||||||||||||
| 239,768 | 242,526 | 129.96 | % | |||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||
Emerus Holdings, Inc. (4)(5) |
SF + | 6.25% | 11.58 | % | 1/5/2028 | 160,000 | 155,486 | 155,483 | ||||||||||||||||||||
| 155,486 | 155,483 | 83.32 | % | |||||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
EHOB, LLC (4)(5) |
SF + | 5.75% | 11.06 | % | 12/18/2029 | 125,000 | 122,323 | 123,563 | ||||||||||||||||||||
| 122,323 | 123,563 | 66.21 | % | |||||||||||||||||||||||||
Total First Lien Debt |
$ | 517,577 | $ | 521,572 | 279.49 | % | ||||||||||||||||||||||
Total Investment Portfolio |
$ | 517,577 | $ | 521,572 | 279.49 | % | ||||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||||
Cash |
8,378 | 8,378 | 4.49 | % | ||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 8,378 | $ | 8,378 | 4.49 | % | ||||||||||||||||||||||
Total Portfolio Investments, Cash and Cash Equivalents |
$ | 525,955 | $ | 529,950 | 283.98 | % | ||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments. |
| (2) | The investments bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate (“SOFR” or “SF”), which reset, monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at March 31, 2024. Certain investments are subject to a SOFR interest rate floor, or rate cap. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread. |
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | The interest rate floor on these investments as of March 31, 2024 was 1.00%. |
F-97
The following table presents the schedule of investments of ULTRA III as of December 31, 2023:
Company (1)
|
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
Par Amount /Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(5) |
SF + | 6.00% | 11.37 | % | 11/8/2029 | $ | 245,500 | $ | 239,514 | $ | 239,511 | |||||||||||||||||
| 239,514 | 239,511 | 169.01 | % | |||||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
EHOB, LLC (4)(5) |
SF + | 5.75% | 11.13 | % | 12/18/2029 | 125,000 | 122,205 | 122,204 | ||||||||||||||||||||
| 122,205 | 122,204 | 86.23 | % | |||||||||||||||||||||||||
Total First Lien Debt |
$ | 361,719 | $ | 361,715 | 255.24 | % | ||||||||||||||||||||||
Total Investment Portfolio |
$ | 361,719 | $ | 361,715 | 255.24 | % | ||||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||||
Cash |
2,317 | 2,317 | 1.63 | % | ||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 2,317 | $ | 2,317 | 1.63 | % | ||||||||||||||||||||||
Total Portfolio Investments, Cash and Cash Equivalents |
$ | 364,036 | $ | 364,032 | 256.87 | % | ||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments. |
| (2) | The investments bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate (“SOFR” or “SF”), which reset, monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at December 31, 2023. Certain investments are subject to a SOFR interest rate floor, or rate cap. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread. |
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | The interest rate floor on these investments as of December 31, 2023 was 1.00%. |
F-98
The following table presents the selected statement of assets and liabilities information of ULTRA III as of March 31, 2024 and December 31, 2023:
March 31, 2024 |
December 31, 2023 |
|||||||
| (Unaudited) | ||||||||
ASSETS |
||||||||
Investments at fair value (amortized cost of $517,577 and $361,719 at March 31, 2024 and December 31, 2023, respectively) |
$ | 521,572 | $ | 361,715 | ||||
Cash and cash equivalents |
8,378 | 2,317 | ||||||
Interest receivable |
6,869 | 2,401 | ||||||
Total assets |
$ | 536,819 | $ | 366,433 | ||||
LIABILITIES |
||||||||
Debt |
$ | 342,300 | $ | 222,300 | ||||
Interest payable and other liabilities |
7,901 | 2,415 | ||||||
Total liabilities |
350,201 | 224,715 | ||||||
MEMBERS’ EQUITY |
||||||||
Members’ Equity |
186,618 | 141,718 | ||||||
Total Members’ Equity |
186,618 | 141,718 | ||||||
Total liabilities and members’ equity |
$ | 536,819 | $ | 366,433 | ||||
The following table presents the selected statement of operations information of ULTRA III for the three months ended March 31, 2024 (Unaudited):
|
Three Months Ended March 31, 2024 |
||||
Investment income: |
||||
Interest income |
$ | 15,681 | ||
Total investment income |
15,681 | |||
Expenses: |
||||
Interest expense |
7,407 | |||
Other expenses |
495 | |||
Total expenses |
7,902 | |||
Net investment income |
7,779 | |||
Net realized and change in unrealized gain (loss) on investments |
||||
Net realized gain (loss) on investments |
— | |||
Net change in unrealized appreciation (depreciation) on investments |
4,000 | |||
Net realized and change in unrealized gain (loss) on investments |
4,000 | |||
Net increase (decrease) in net assets resulting from operations |
$ | 11,779 | ||
Note 12. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no additional subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the consolidated financial statements as of March 31, 2024, except as discussed below.
Subscriptions
The Company received $243.5 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F and Class S shares for subscriptions effective April 1, 2024.
F-99
The Company received $255.6 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F and Class S shares for subscriptions effective May 1, 2024.
Distributions Declarations
On April 25, 2024, the Company’s Board declared net distributions of $0.1600 per Class I share, $0.1548 per Class D share, $0.1496 per Class F share, and $0.1423 per Class S share, all of which were paid on or about May 31, 2024 to shareholders of record as of April 30, 2024. Additionally, the Company’s Board declared variable supplemental distributions of $0.0550 for all share classes outstanding, all of which were paid on or about May 31, 2024 to shareholders of record as of April 30, 2024.
Managing Dealer
On April 11, 2024, the Company entered into a managing dealer agreement (the “Managing Dealer Agreement”) with HPS Securities, LLC, as the Company’s managing dealer (“HPS Securities”). Pursuant to the Managing Dealer Agreement, HPS Securities, among other things, manages the Company’s relationships with third-party brokers engaged by HPS Securities to participate in the distribution of the Company’s common shares (“participating brokers”) and financial advisors. HPS Securities also coordinates the Company’s marketing and distribution efforts with participating brokers and their registered representatives with respect to communications related to the terms of the offering, the Company’s investment strategies, material aspects of the Company’s operations and subscription procedures. As set forth in and pursuant to the Managing Dealer Agreement, the Company will pay HPS Securities only shareholder servicing and/or distribution fees with respect to Class S shares, Class D and Class F shares. The Company will not pay any other fees to the Managing Dealer. The Managing Dealer Agreement may be terminated by the Company or HPS Securities (i) on 60 days’ written notice or (ii) immediately upon notice to the other party in the event that such other party shall have failed to comply with any material provision thereof. The Managing Dealer Agreement also may be terminated at any time without the payment of any penalty, (x) by vote of a majority of the Company’s trustees who are not “interested persons”, as defined in the Investment Company Act of 1940, as amended, of the Company and who have no direct or indirect financial interest in the operation of the Company’s distribution plan or the Managing Dealer Agreement or (y) by a majority vote of the outstanding voting securities of the Company, on not more than 60 days’ written notice to HPS Securities or the Company’s investment adviser.
In addition, and in connection with the transition to HPS Securities as the Company’s managing dealer as discussed above, the Company provided notice for the termination of the managing dealer agreement dated as of August 3, 2021 by and between the Company and Emerson Equity LLC, which termination shall be effective as of April 11, 2024.
Debt Securitization
On April 18, 2024, the Company, through HLEND CLO 2024-2, LLC (the “Issuer”), a limited liability company formed under the laws of the State of Delaware and a wholly-owned indirect subsidiary of the Company, priced its $526.0 million term debt securitization (the “CLO Transaction”). The CLO Transaction is expected to close on or about May 23, 2024 (the “Closing”). The HLEND 2024-2 Secured Notes (as defined below) to be issued by the Issuer in the CLO Transaction will be secured by a portfolio of collateral obligations consisting primarily of middle market loans and participation interests therein.
The CLO Transaction is expected to be executed through (i) a private placement of Class A-1 Senior Secured Floating Rate Notes, Class A-2 Senior Secured Floating Rate Notes, Class A-F Senior Secured Fixed Rate Notes, Class B-1 Senior Secured Floating Rate Notes, Class B-2 Senior Secured Floating Rate Notes, Class B-F Senior Secured Fixed Rate Notes, Class C-1 Secured Deferrable Floating Rate Notes, Class C-2 Secured Deferrable Floating Rate Notes, and Class C-F Secured Deferrable Fixed Rate Notes (collectively, the “HLEND 2024-2 Secured Notes”), and (ii) a purchase by the Depositor (as defined below) of the subordinated notes issued
F-100
by the Issuer (the “Subordinated Notes” and, together with the HLEND 2024-2 Secured Notes, the “HLEND 2024-2 Notes”), the terms of which are summarized in the table below:
Class |
Par Size ($) |
Expected Ratings (S&P)* |
Coupon |
Price |
||||||||||
Class A-1 Notes |
$ | 255,000 | AAA(sf) | SOFR + 0.250 | % | 93.2247 | ||||||||
Class A-2 Notes |
40,850 | AAA(sf) | SOFR + 1.875 | % | 100.0000 | |||||||||
Class A-F Notes |
9,150 | AAA(sf) | 6.275 | % | 100.0000 | |||||||||
Class B-1 Notes |
35,000 | AA(sf) | SOFR + 0.500 | % | 89.9300 | |||||||||
Class B-2 Notes |
13,500 | AA(sf) | SOFR + 2.400 | % | 100.0000 | |||||||||
Class B-F Notes |
1,500 | AA(sf) | 6.714 | % | 100.0000 | |||||||||
Class C-1 Notes |
31,500 | A(sf) | SOFR + 0.750 | % | 86.5400 | |||||||||
Class C-2 Notes |
12,150 | A(sf) | SOFR + 3.200 | % | 100.0000 | |||||||||
Class C-F Notes |
1,350 | A(sf) | 7.490 | % | 100.0000 | |||||||||
Subordinated Notes |
126,000 | N/A | N/A | N/A | ||||||||||
Total |
$ | 526,000 | ||||||||||||
| * | Initial ratings expected to be issued by S&P Global Ratings at the Closing. |
The Company, through HLEND CLO 2024-2 Investments, LLC (the “Depositor”), a limited liability company formed under the laws of the State of Delaware and a wholly-owned direct subsidiary of the Company, is expected to acquire 100% of the Subordinated Notes at the Closing and will be required to retain the Subordinated Notes in accordance with the U.S. Risk Retention Rules and the EU/UK Securitization Regulations at and after the Closing. The Subordinated Notes will not bear interest. The Company expects that the HLEND 2024-2 Notes will mature on April 20, 2034, unless otherwise redeemed earlier in accordance with the terms of the indenture governing the HLEND 2024-2 Notes, to be executed on the Closing (the “Indenture”). All capitalized terms used but not defined herein have the meaning given to such terms in the Indenture.
The HLEND 2024-2 Secured Notes will be the secured obligations of the Issuer, and the Indenture will include customary covenants and events of default. The HLEND 2024-2 Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the “SEC”) or an applicable exemption from registration.
F-101
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of HPS Corporate Lending Fund
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, of HPS Corporate Lending Fund and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of changes in net assets and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as 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, 2023 and 2022, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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 of these consolidated financial statements in accordance with the 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
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. 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. Our procedures included confirmation of securities owned as of December 31, 2023 and 2022 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
F-102
Valuation of Certain Level 3 Debt Investments Developed Using a Yield Analysis
As described in Note 5 to the consolidated financial statements, the Company had $8,028 million of level 3 investments measured at fair value as of December 31, 2023, with debt investments representing $7,992 million of this total. Investments classified within Level 3 have unobservable inputs, as they trade infrequently, or not at all. When observable prices are not available for these investments, management uses one or more valuation techniques of which sufficient and reliable data is available. For $6,443 million of those level 3 debt investments, the fair values were determined by management using a yield analysis valuation technique. The significant unobservable input used by management in the yield analysis is the discount rate based on comparable market yields.
The principal considerations for our determination that performing procedures relating to the valuation of certain level 3 debt investments developed using a yield analysis is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the level 3 debt investments; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s yield analysis valuation technique and the discount rate based on comparable market yields; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, for certain level 3 debt investments developed using a yield analysis, testing the completeness and accuracy of underlying data used by management, as well as either (i) testing management’s process for developing the fair value estimate; (ii) evaluating the appropriateness of the yield analysis used by management; (iii) evaluating the reasonableness of the significant unobservable input related to the discount rate based on comparable market yields by considering the consistency with external market and industry data, or (iv) the use of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of management’s estimate by developing an independent fair value estimate range using independently determined assumptions, and comparing the independent fair value estimate range to management’s estimate.
/s/ PricewaterhouseCoopers LLP
New York, New York
March 21, 2024
We have served as the Company’s auditor since 2021.
F-103
HPS Corporate Lending Fund
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
December 31, 2023 |
December 31, 2022 |
|||||||
ASSETS |
||||||||
Investments at fair value |
||||||||
Non-controlled/non-affiliated investments (amortized cost of $9,058,649 and $5,860,186 at December 31, 2023 and December 31, 2022, respectively) |
$ | 9,145,583 | $ | 5,716,521 | ||||
Non-controlled/affiliated investments (amortized cost of $19,639 and $0 at December 31, 2023 and December 31, 2022, respectively) |
19,824 | — | ||||||
Controlled/affiliated investments (amortized cost of $125,513 and $0 at December 31, 2023 and December 31, 2022, respectively) |
124,003 | — | ||||||
Total investments at fair value (amortized cost of $9,203,801 and $5,860,186 at December 31, 2023 and December 31, 2022, respectively) |
9,289,410 | 5,716,521 | ||||||
Cash and cash equivalents |
188,775 | 74,241 | ||||||
Interest receivable from non-controlled/non-affiliated investments |
91,134 | 51,778 | ||||||
Dividend receivable from non-controlled/non-affiliated investments |
83 | — | ||||||
Deferred financing costs |
30,825 | 20,187 | ||||||
Deferred offering costs |
891 | 310 | ||||||
Derivative assets, at fair value (Note 6) |
8,353 | 991 | ||||||
Receivable for investments |
105,138 | 8,591 | ||||||
Other assets |
811 | 410 | ||||||
Total assets |
$ | 9,715,420 | $ | 5,873,029 | ||||
LIABILITIES |
||||||||
Debt (net of unamortized debt issuance costs of $11,833 and $3,572 at December 31, 2023 and December 31, 2022, respectively) |
$ | 4,206,900 | $ | 2,342,067 | ||||
Payable for investments purchased |
71,339 | — | ||||||
Interest payable |
58,786 | 17,440 | ||||||
Derivative liabilities, at fair value (Note 6) |
9,104 | 2,136 | ||||||
Due to affiliates |
12,833 | 5,250 | ||||||
Distribution payable (Note 9) |
74,907 | 39,090 | ||||||
Payable for share repurchases (Note 9) |
63,474 | 9,814 | ||||||
Management fees payable (Note 3) |
5,591 | — | ||||||
Income based incentive fees payable (Note 3) |
20,347 | — | ||||||
Capital gains incentive fees payable (Note 3) |
3,518 | — | ||||||
Shareholder servicing fee payable |
1,524 | 1,032 | ||||||
Accrued expenses and other liabilities |
1,733 | 928 | ||||||
Total liabilities |
4,530,056 | 2,417,757 | ||||||
Commitments and contingencies (Note 8) |
||||||||
NET ASSETS |
||||||||
Common Shares, $0.01 par value (206,889,570 and 144,699,650 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively) |
2,069 | 1,447 | ||||||
Additional paid in capital |
5,113,205 | 3,574,281 | ||||||
Distributable earnings (loss) |
70,090 | (120,456 | ) | |||||
Total net assets |
5,185,364 | 3,455,272 | ||||||
Total liabilities and net assets |
$ | 9,715,420 | $ | 5,873,029 | ||||
F-104
HPS Corporate Lending Fund
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share amounts)
December 31, 2023 |
December 31, 2022 |
|||||||
NET ASSET VALUE PER SHARE |
||||||||
Class I Shares: |
||||||||
Net assets |
$ | 1,314,775 | $ | 838,207 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
52,457,511 | 35,101,879 | ||||||
Net asset value per share |
$ | 25.06 | $ | 23.88 | ||||
Class D Shares: |
||||||||
Net assets |
$ | 706,613 | $ | 418,798 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
28,192,719 | 17,538,259 | ||||||
Net asset value per share |
$ | 25.06 | $ | 23.88 | ||||
Class F Shares: |
||||||||
Net assets |
$ | 3,142,475 | $ | 2,198,267 | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
125,381,461 | 92,059,512 | ||||||
Net asset value per share |
$ | 25.06 | $ | 23.88 | ||||
Class S Shares: |
||||||||
Net assets |
$ | 21,501 | $ | — | ||||
Common Shares outstanding ($0.01 par value, unlimited shares authorized) |
857,879 | — | ||||||
Net asset value per share |
$ | 25.06 | $ | — | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-105
HPS Corporate Lending Fund
Consolidated Statements of Operations
(in thousands)
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Investment income: |
||||||||||||
From non-controlled/non-affiliated investments: |
||||||||||||
Interest income |
$ | 854,132 | $ | 267,488 | $ | — | ||||||
Payment-in-kind interest income |
35,821 | 9,584 | — | |||||||||
Dividend income |
489 | — | — | |||||||||
Other income |
2,938 | 1,446 | — | |||||||||
Total investment income |
893,380 | 278,518 | — | |||||||||
Expenses: |
||||||||||||
Interest expense |
257,847 | 53,964 | — | |||||||||
Management fees |
52,852 | 26,485 | — | |||||||||
Income based incentive fee |
70,466 | 23,211 | — | |||||||||
Capital gains incentive fee |
3,518 | — | — | |||||||||
Distribution and/or shareholder servicing fees |
||||||||||||
Class D |
1,403 | 631 | — | |||||||||
Class F |
13,137 | 6,642 | — | |||||||||
Class S |
23 | — | — | |||||||||
Organizational costs |
— | — | 342 | |||||||||
Professional fees |
4,945 | 2,312 | 372 | |||||||||
Board of Trustees’ fees |
600 | 502 | 223 | |||||||||
Administrative service expenses (Note 3) |
2,459 | 1,768 | — | |||||||||
Other general & administrative |
7,685 | 3,718 | 259 | |||||||||
Amortization of continuous offering costs |
1,736 | 2,059 | — | |||||||||
Total expenses |
416,671 | 121,292 | 1,196 | |||||||||
Expense support (Note 3) |
— | (4,270 | ) | — | ||||||||
Recoupment of expense support (Note 3) |
— | 4,270 | — | |||||||||
Reimbursable expenses previously borne by Adviser (Note 3) |
— | 1,196 | (1,196 | ) | ||||||||
Distribution and/or shareholder servicing fees waived (Note 3) |
— | (5,326 | ) | — | ||||||||
Management fees waived (Note 3) |
— | (26,485 | ) | — | ||||||||
Incentive fees waived (Note 3) |
— | (23,211 | ) | — | ||||||||
Net expenses |
416,671 | 67,466 | — | |||||||||
Net investment income before excise tax |
476,709 | 211,052 | — | |||||||||
Excise tax expense |
1,531 | 824 | — | |||||||||
Net investment income after excise tax |
475,178 | 210,228 | — | |||||||||
Net realized and change in unrealized gain (loss): |
||||||||||||
Realized gain (loss): |
||||||||||||
Non-controlled/non-affiliated investments |
(16,769 | ) | (2,467 | ) | — | |||||||
Non-controlled/affiliated investments |
(864 | ) | — | — | ||||||||
Foreign currency forward contracts |
(7,613 | ) | 4,010 | — | ||||||||
Foreign currency transactions |
(9,464 | ) | 4,567 | — | ||||||||
Net realized gain (loss) |
(34,710 | ) | 6,110 | — | ||||||||
F-106
HPS Corporate Lending Fund
Consolidated Statements of Operations
(in thousands)
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Net change in unrealized appreciation (depreciation): |
||||||||||||
Non-controlled/non-affiliated investments |
$ | 230,599 | $ | (143,665 | ) | $ | — | |||||
Non-controlled/affiliated investments |
185 | — | — | |||||||||
Controlled/affiliated investments |
(1,510 | ) | — | — | ||||||||
Foreign currency forward contracts |
(6,968 | ) | (2,136 | ) | — | |||||||
Translation of assets and liabilities in foreign currencies |
(8,173 | ) | (11,590 | ) | — | |||||||
Net change in unrealized appreciation (depreciation) |
214,133 | (157,391 | ) | — | ||||||||
Net realized and change in unrealized gain (loss) |
179,423 | (151,281 | ) | — | ||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 654,601 | $ | 58,947 | $ | — | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-107
HPS Corporate Lending Fund
Consolidated Statements of Changes in Net Assets
(in thousands)
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Increase (decrease) in net assets from operations: |
||||||||||||
Net investment income after excise tax |
$ | 475,178 | $ | 210,228 | $ | — | ||||||
Net realized gain (loss) |
(34,710 | ) | 6,110 | — | ||||||||
Net change in unrealized appreciation (depreciation) |
214,133 | (157,391 | ) | — | ||||||||
Net increase (decrease) in net assets resulting from operations |
654,601 | 58,947 | — | |||||||||
Distributions to common shareholders: |
||||||||||||
Class I |
(118,577 | ) | (46,368 | ) | — | |||||||
Class D |
(62,793 | ) | (21,812 | ) | — | |||||||
Class F |
(285,572 | ) | (114,106 | ) | — | |||||||
Class S |
(380 | ) | — | — | ||||||||
Net decrease in net assets resulting from distributions |
(467,322 | ) | (182,286 | ) | — | |||||||
Share transactions: |
||||||||||||
Class I: |
||||||||||||
Proceeds from shares sold |
393,222 | 849,178 | 3 | |||||||||
Share transfers between classes |
31,876 | 4,956 | — | |||||||||
Distributions reinvested |
37,411 | 15,279 | — | |||||||||
Repurchased shares, net of early repurchase deduction |
(30,985 | ) | 57 | — | ||||||||
Net increase (decrease) from share transactions |
431,524 | 869,470 | 3 | |||||||||
Class D: |
||||||||||||
Proceeds from shares sold |
285,908 | 427,775 | — | |||||||||
Share transfers between classes |
(4,757 | ) | — | — | ||||||||
Distributions reinvested |
24,835 | 6,105 | — | |||||||||
Repurchased shares, net of early repurchase deduction |
(42,409 | ) | 28 | — | ||||||||
Net increase (decrease) from share transactions |
263,577 | 433,908 | — | |||||||||
Class F: |
||||||||||||
Proceeds from shares sold |
891,120 | 2,254,046 | — | |||||||||
Share transfers between classes |
(28,496 | ) | (4,956 | ) | — | |||||||
Distributions reinvested |
112,818 | 37,939 | — | |||||||||
Repurchased shares, net of early repurchase deduction |
(149,279 | ) | (11,799 | ) | — | |||||||
Net increase (decrease) from share transactions |
826,163 | 2,275,230 | — | |||||||||
Class S: |
||||||||||||
Proceeds from shares sold |
20,150 | — | — | |||||||||
Share transfers between classes |
1,377 | — | — | |||||||||
Distributions reinvested |
22 | — | — | |||||||||
Repurchased shares, net of early repurchase deduction |
— | — | — | |||||||||
Net increase (decrease) from share transactions |
21,549 | — | — | |||||||||
Total increase (decrease) in net assets |
1,730,092 | 3,455,269 | 3 | |||||||||
Net assets, beginning of period |
3,455,272 | 3 | — | |||||||||
Net assets, end of period |
$ | 5,185,364 | $ | 3,455,272 | $ | 3 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-108
HPS Corporate Lending Fund
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 654,601 | $ | 58,947 | $ | — | ||||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: |
||||||||||||
Net change in unrealized (appreciation) depreciation on investments |
(229,274 | ) | 143,665 | — | ||||||||
Net realized (gain) loss on investments |
17,633 | 2,467 | — | |||||||||
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts |
6,968 | 2,136 | — | |||||||||
Net change in unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies |
9,541 | 11,456 | — | |||||||||
Net accretion of discount and amortization of premium, net |
(39,470 | ) | (11,163 | ) | — | |||||||
Amortization of deferred financing costs |
6,232 | 2,365 | — | |||||||||
Amortization of debt issuance costs |
2,128 | 131 | — | |||||||||
Amortization of offering costs |
1,736 | 2,059 | — | |||||||||
Payment-in-kind interest capitalized |
(31,306 | ) | (9,168 | ) | — | |||||||
Payment-in-kind dividends capitalized |
(381 | ) | — | — | ||||||||
Non-cash other income capitalized |
(533 | ) | — | — | ||||||||
Purchases of investments |
(3,962,089 | ) | (6,059,286 | ) | — | |||||||
Proceeds from sale of investments and principal repayments |
672,531 | 216,964 | — | |||||||||
Changes in operating assets and liabilities: |
||||||||||||
Interest receivable from non-controlled/non-affiliated investments |
(39,356 | ) | (51,778 | ) | — | |||||||
Dividend receivable from non-controlled/non-affiliated investments |
(83 | ) | — | — | ||||||||
Receivable for investments sold |
(96,547 | ) | (8,591 | ) | — | |||||||
Other assets |
(401 | ) | (410 | ) | — | |||||||
Payable for investments purchased |
71,339 | — | — | |||||||||
Interest payable |
41,346 | 17,440 | — | |||||||||
Due to affiliates |
7,583 | 5,250 | — | |||||||||
Management fees payable |
5,591 | — | — | |||||||||
Income based incentive fees payable |
20,347 | — | — | |||||||||
Capital gains incentive fees payable |
3,518 | — | — | |||||||||
Shareholder servicing fee payable |
492 | 1,032 | — | |||||||||
Accrued expenses and other liabilities |
805 | 928 | — | |||||||||
Net cash provided by (used in) operating activities |
(2,877,049 | ) | (5,675,556 | ) | — | |||||||
Cash flows from financing activities: |
||||||||||||
Borrowings on debt |
6,305,857 | 5,104,772 | — | |||||||||
Repayments of debt |
(4,449,666 | ) | (2,771,581 | ) | — | |||||||
Deferred financing costs paid |
(16,870 | ) | (22,551 | ) | — | |||||||
Debt issuance costs paid |
(10,389 | ) | (3,703 | ) | — | |||||||
Deferred offering costs paid |
(2,317 | ) | (2,369 | ) | — | |||||||
F-109
HPS Corporate Lending Fund
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Proceeds from issuance of Common Shares |
$ | 1,590,400 | $ | 3,530,999 | $ | 3 | ||||||
Common Shares repurchased, net of early repurchase deduction |
(169,013 | ) | (1,900 | ) | — | |||||||
Distributions paid in cash |
(256,419 | ) | (83,873 | ) | — | |||||||
Net cash provided by (used in) financing activities |
2,991,583 | 5,749,794 | 3 | |||||||||
Net increase (decrease) in cash and cash equivalents |
114,534 | 74,238 | 3 | |||||||||
Cash and cash equivalents, beginning of period |
74,241 | 3 | — | |||||||||
Cash and cash equivalents, end of period |
$ | 188,775 | $ | 74,241 | $ | 3 | ||||||
Supplemental information and non-cash activities: |
||||||||||||
Interest paid during the period |
$ | 208,141 | $ | 36,524 | $ | — | ||||||
Taxes paid during the period |
$ | 819 | $ | — | $ | — | ||||||
Distribution payable |
$ | 74,907 | $ | 39,090 | $ | — | ||||||
Share repurchases accrued but not paid |
$ | 63,474 | $ | 9,814 | $ | — | ||||||
Reinvestment of distributions during the period |
$ | 175,086 | $ | 59,323 | $ | — | ||||||
Non-cash purchases of investments |
$ | 39,502 | $ | 49,940 | $ | — | ||||||
Non-cash sales of investments |
$ | (39,502 | ) | $ | (49,940 | ) | $ | — | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-110
HPS Corporate Lending Fund
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||
First Lien Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||||
Aerospace and Defense |
||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(6)(9) |
8/4/2028 | $ | 5,687 | $ | (89 | ) | $ | (228 | ) | |||||||||||||||||
Arcfield Acquisition Corp (4)(9) |
SF + 6.25% | 11.64 | % | 8/3/2029 | 48,883 | 48,042 | 46,696 | |||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
B + 5.75% | 10.11 | % | 8/22/2028 | A$ | 3,614 | 2,415 | 2,374 | ||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(6)(8) |
8/22/2028 | A$ | 5,421 | (93 | ) | (132 | ) | |||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
B + 5.75% | 10.11 | % | 8/22/2028 | A$ | 41,558 | 27,867 | 27,304 | ||||||||||||||||||
Cadence - Southwick, Inc. (4)(6)(10) |
SF + 6.75% | 12.22 | % | 5/3/2028 | 11,291 | 2,717 | 2,852 | |||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
SF + 6.75% | 12.24 | % | 5/3/2029 | 41,529 | 40,408 | 40,998 | |||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
SF + 6.00% | 11.47 | % | 5/3/2029 | 3,120 | 3,058 | 3,058 | |||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(6)(9) |
1/10/2028 | 6,864 | (152 | ) | (94 | ) | ||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
SF + 6.75% | 12.10 | % | 1/9/2030 | 37,429 | 36,451 | 36,988 | |||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
SF + 6.75% | 12.10 | % | 1/9/2030 | 7,880 | 7,732 | 7,787 | |||||||||||||||||||
Sequa Corp (4)(6)(10) |
11/23/2027 | 13,676 | (542 | ) | (135 | ) | ||||||||||||||||||||
Sequa Corp (4)(10) |
SF + 7.00% | 12.37 | % | 11/24/2028 | 127,027 | 121,623 | 125,770 | |||||||||||||||||||
WP CPP Holdings, LLC (4)(6)(10) |
11/30/2029 | 26,285 | (648 | ) | (648 | ) | ||||||||||||||||||||
WP CPP Holdings, LLC (4)(10) |
|
SF + 7.50% (incl 4.13% PIK) |
|
12.88 | % | 11/30/2029 | 187,888 | 183,258 | 183,255 | |||||||||||||||||
| 472,047 | 475,845 | 9.18 | % | |||||||||||||||||||||||
Alternative Energy |
||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
SF + 6.50% | 11.95 | % | 11/9/2026 | 17,091 | 16,765 | 16,765 | |||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(6)(15) |
11/9/2026 | 1,139 | (22 | ) | (22 | ) | ||||||||||||||||||||
| 16,743 | 16,743 | 0.32 | % | |||||||||||||||||||||||
Asset Based Lending and Fund Finance |
||||||||||||||||||||||||||
CRSS HPS LLC (4)(5)(10) |
SF + 6.75% | 12.21 | % | 12/21/2026 | 21,772 | 21,341 | 21,341 | |||||||||||||||||||
| 21,341 | 21,341 | 0.41 | % | |||||||||||||||||||||||
Automobiles and Parts |
||||||||||||||||||||||||||
Clarios Global LP (7) |
SF + 3.75% | 9.11 | % | 5/6/2030 | 14,963 | 14,886 | 15,015 | |||||||||||||||||||
Foundation Automotive Us Corp (4)(10) |
SF + 7.75% | 13.41 | % | 12/24/2027 | 4,300 | 4,249 | 3,865 | |||||||||||||||||||
Foundation Automotive Corp (4)(5)(10) |
SF + 7.75% | 13.36 | % | 12/24/2027 | 13,689 | 13,536 | 12,306 | |||||||||||||||||||
Foundation Automotive Us Corp (4)(10) |
SF + 7.75% | 13.36 | % | 12/24/2027 | 33,889 | 33,514 | 30,466 | |||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
SF + 6.75% | 12.27 | % | 2/8/2027 | 40,597 | 40,326 | 40,234 | |||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
SF + 6.75% | 12.27 | % | 2/8/2027 | 8,523 | 8,468 | 8,447 | |||||||||||||||||||
Tenneco Inc (8) |
SF + 4.75% | 10.22 | % | 11/17/2028 | 2,992 | 2,424 | 2,624 | |||||||||||||||||||
| 117,403 | 112,957 | 2.18 | % | |||||||||||||||||||||||
Chemicals |
||||||||||||||||||||||||||
Illuminate Buyer, LLC (7) |
SF + 3.50% | 8.97 | % | 6/30/2027 | 15,111 | 14,972 | 15,157 | |||||||||||||||||||
| 14,972 | 15,157 | 0.29 | % | |||||||||||||||||||||||
Construction and Materials |
||||||||||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(6)(8) |
8/30/2028 | € | 17,183 | (361 | ) | (164 | ) | |||||||||||||||||||
Esdec Solar Group B.V. (4)(5)(8) |
E + 6.00% | 9.97 | % | 8/30/2028 | € | 51,420 | 55,215 | 56,271 | ||||||||||||||||||
Nexus Intermediate III, LLC (4)(6)(9) |
12/6/2027 | 300 | (3 | ) | — | |||||||||||||||||||||
Nexus Intermediate III, LLC (4)(9) |
SF + 5.50% | 11.36 | % | 12/6/2027 | 1,064 | 1,051 | 1,064 | |||||||||||||||||||
| 55,902 | 57,171 | 1.10 | % | |||||||||||||||||||||||
F-111
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||
AI Learning (Singapore) PTE. LTD. (4)(5)(12) |
|
SORA + 8.25% (incl 4.00% PIK) |
|
11.70 | % | 5/25/2027 | 44,063 | S$ | 31,713 | 32,862 | ||||||||||||||||
American Academy Holdings, LLC (4)(10) |
|
SF + 11.00% (incl 5.25% PIK) |
|
16.47 | % | 1/2/2025 | 54,019 | 54,019 | 53,914 | |||||||||||||||||
Auctane Inc (4)(9) |
SF + 5.75% | 11.23 | % | 10/5/2028 | 24,563 | 24,563 | 24,478 | |||||||||||||||||||
Club Car Wash Operating, LLC (4)(6)(10) |
SF + 6.50% | 12.00 | % | 6/16/2027 | 40,289 | 25,670 | 26,066 | |||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
SF + 6.50% | 12.00 | % | 6/16/2027 | 12,958 | 12,762 | 12,879 | |||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
SF + 6.50% | 12.00 | % | 6/16/2027 | 26,517 | 26,248 | 26,355 | |||||||||||||||||||
Ensemble RCM LLC (7) |
SF + 3.75% | 9.23 | % | 8/3/2026 | 1,979 | 1,974 | 1,985 | |||||||||||||||||||
Express Wash Concepts (4)(10) |
SF + 6.00% | 11.46 | % | 4/30/2027 | 47,227 | 46,908 | 46,662 | |||||||||||||||||||
Express Wash Concepts (4)(10) |
SF + 6.00% | 11.46 | % | 4/30/2027 | 26,528 | 26,344 | 26,210 | |||||||||||||||||||
Houghton Mifflin Harcourt Company (8) |
SF + 5.25% | 10.71 | % | 4/9/2029 | 25,250 | 24,650 | 24,831 | |||||||||||||||||||
IXM Holdings, Inc. (4)(11) |
SF + 6.50% | 11.86 | % | 12/14/2029 | 18,566 | 18,289 | 18,289 | |||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) |
12/14/2029 | 1,638 | (25 | ) | (24 | ) | ||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) |
SF + 6.50% | 11.86 | % | 12/14/2029 | 2,184 | 568 | 568 | |||||||||||||||||||
Learning Care Group, Inc. (8) |
SF + 4.75% | 10.14 | % | 8/11/2028 | 1,995 | 1,967 | 2,010 | |||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
SF + 5.00% | 10.38 | % | 3/12/2029 | 46,800 | 45,651 | 46,859 | |||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
SF + 5.00% | 10.54 | % | 3/12/2029 | 12,517 | 12,420 | 12,533 | |||||||||||||||||||
PECF USS Intermediate Holding III Corporation (8) |
SF + 4.25% | 9.89 | % | 12/15/2028 | 14,712 | 14,645 | 11,558 | |||||||||||||||||||
Polyconcept North America Holdings, Inc. (9) |
SF + 5.50% | 10.85 | % | 5/18/2029 | 23,009 | 22,638 | 22,846 | |||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + 6.50% | 12.02 | % | 7/25/2028 | 21,593 | 21,260 | 21,670 | |||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + 6.50% | 12.03 | % | 7/25/2028 | 16,023 | 15,777 | 16,080 | |||||||||||||||||||
Spotless Brands, LLC (4)(10) |
SF + 6.50% | 12.03 | % | 7/25/2028 | 105,600 | 103,951 | 105,979 | |||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) |
SF + 6.50% | 11.96 | % | 7/25/2028 | 5,175 | 1,040 | 1,118 | |||||||||||||||||||
Thrasio LLC (4)(7)(16) |
SF + 7.00% | 12/18/2026 | 2,912 | 2,903 | 1,715 | |||||||||||||||||||||
Trugreen Limited Partnership (9) |
SF + 4.00% | 9.46 | % | 11/2/2027 | 8,575 | 8,488 | 8,298 | |||||||||||||||||||
WMB Holdings Inc (8) |
SF + 3.25% | 8.71 | % | 11/2/2029 | 1,889 | 1,841 | 1,896 | |||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + 7.25% | 12.71 | % | 3/1/2024 | 26,027 | 26,025 | 25,942 | |||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + 7.25% | 12.71 | % | 3/1/2024 | 15,336 | 15,308 | 15,286 | |||||||||||||||||||
Zips Car Wash, LLC (4)(10) |
SF + 7.25% | 12.71 | % | 3/1/2024 | 984 | 984 | 981 | |||||||||||||||||||
| 588,581 | 589,846 | 11.38 | % | |||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||
Hamilton Projects Acquiror, LLC (9) |
SF + 4.50% | 9.97 | % | 6/17/2027 | 55,588 | 51,772 | 55,914 | |||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7) |
7.88 | % | 12/31/2029 | 27,428 | 26,919 | 27,154 | ||||||||||||||||||||
| 78,691 | 83,068 | 1.60 | % | |||||||||||||||||||||||
Electronic and Electrical Equipment |
||||||||||||||||||||||||||
Brightstar Escrow Corp. (7) |
9.75 | % | 10/15/2025 | 1,000 | 989 | 1,015 | ||||||||||||||||||||
| 989 | 1,015 | 0.02 | % | |||||||||||||||||||||||
Finance and Credit Services |
||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(5)(10) |
L + 9.25% PIK | 14.69 | % | 2/9/2027 | 19,395 | 19,164 | 19,032 | |||||||||||||||||||
Verscend Holding Corp. (7) |
SF + 4.00% | 9.47 | % | 8/27/2025 | 3,939 | 3,928 | 3,957 | |||||||||||||||||||
Yes Energy LLC (4)(9) |
BS + 5.00% | 10.46 | % | 4/21/2028 | 10,000 | 9,836 | 10,004 | |||||||||||||||||||
Yes Energy LLC (4)(9) |
BS + 5.00% | 10.46 | % | 4/21/2028 | 26,000 | 25,458 | 26,010 | |||||||||||||||||||
| 58,386 | 59,003 | 1.14 | % | |||||||||||||||||||||||
Food Producers |
||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(6)(9) |
SF + 6.00% | 11.46 | % | 2/12/2029 | 11,279 | 5,744 | 5,805 | |||||||||||||||||||
Specialty Ingredients, LLC (4)(9) |
SF + 6.00% | 11.46 | % | 2/12/2029 | 89,801 | 88,354 | 88,876 | |||||||||||||||||||
Sugar PPC Buyer LLC (4)(6)(10) |
10/2/2030 | 16,541 | (366 | ) | (359 | ) | ||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) |
SF + 6.00% | 11.34 | % | 10/2/2030 | 59,546 | 58,254 | 58,254 | |||||||||||||||||||
| 151,986 | 152,576 | 2.94 | % | |||||||||||||||||||||||
F-112
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(5)(10) |
SF + 5.75% | 11.20 | % | 8/13/2027 | 43,439 | 42,809 | 42,991 | |||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(14) |
SF + 9.88% | 15.22 | % | 6/8/2024 | 620 | 613 | 613 | |||||||||||||||||
| 43,422 | 43,604 | 0.84 | % | |||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||
BP Purchaser, LLC (4)(9) |
SF + 5.50% | 11.14 | % | 12/11/2028 | 27,513 | 27,108 | 26,815 | |||||||||||||||||
Bright Light Buyer, Inc. (4)(10) |
SF + 6.00% | 11.37 | % | 11/8/2029 | 75,000 | 73,171 | 73,170 | |||||||||||||||||
Cube Industrials Buyer, Inc. (4)(6)(10) |
10/18/2029 | 5,664 | (82 | ) | (82 | ) | ||||||||||||||||||
Cube Industrials Buyer, Inc. (4)(10) |
SF + 6.00% | 11.40 | % | 10/18/2030 | 49,086 | 48,371 | 48,371 | |||||||||||||||||
Formerra, LLC (4)(10) |
SF + 7.25% | 12.81 | % | 11/1/2028 | 4,252 | 4,136 | 4,210 | |||||||||||||||||
Formerra, LLC (4)(6)(10) |
11/1/2028 | 12,031 | (315 | ) | (117 | ) | ||||||||||||||||||
Formerra, LLC (4)(10) |
SF + 7.25% | 12.78 | % | 11/1/2028 | 105,686 | 102,857 | 104,660 | |||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 11.75 | % | 6/23/2028 | 11,952 | 11,861 | 11,871 | |||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 11.75 | % | 6/23/2028 | 49,864 | 49,282 | 49,526 | |||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 11.75 | % | 6/23/2028 | 4,395 | 4,362 | 4,365 | |||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 11.75 | % | 6/23/2028 | 13,228 | 13,127 | 13,138 | |||||||||||||||||
TMC Buyer Inc (8) |
SF + 6.00% | 11.47 | % | 6/30/2028 | 70,148 | 62,802 | 69,403 | |||||||||||||||||
| 396,680 | 405,330 | 7.82 | % | |||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||
123Dentist Inc (4)(5)(6)(9) |
8/10/2029 | C$ | 7,211 | (101 | ) | (55 | ) | |||||||||||||||||
123Dentist Inc (4)(5)(9) |
C + 5.50% | 10.94 | % | 8/10/2029 | C$ | 50,116 | 38,465 | 37,435 | ||||||||||||||||
Accelerated Health Systems, LLC (8) |
SF + 4.25% | 9.75 | % | 2/15/2029 | 7,951 | 7,935 | 6,722 | |||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(5)(10) |
SF + 7.25% | 12.73 | % | 2/24/2028 | 41,092 | 40,516 | 38,936 | |||||||||||||||||
Baart Programs, Inc. (4)(10) |
SF + 5.00% | 10.61 | % | 6/11/2027 | 10,123 | 10,055 | 9,809 | |||||||||||||||||
Charlotte Buyer Inc (8) |
SF + 5.25% | 10.61 | % | 2/11/2028 | 28,560 | 27,129 | 28,714 | |||||||||||||||||
ERC Topco Holdings, LLC (4)(6)(9) |
SF + 6.25% (incl 3.25% PIK) |
11.91 | % | 11/10/2027 | 1,000 | 420 | 304 | |||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + 6.25% (incl 3.25% PIK) |
11.86 | % | 11/10/2028 | 25,291 | 24,931 | 21,444 | |||||||||||||||||
ERC Topco Holdings, LLC (4)(9) |
SF + 6.25% PIK | 11.86 | % | 11/10/2028 | 203 | 203 | 172 | |||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + 6.00% | 11.46 | % | 1/29/2027 | 9,108 | 8,979 | 9,052 | |||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + 6.00% | 11.46 | % | 1/29/2027 | 86,591 | 85,394 | 86,054 | |||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + 6.00% | 11.46 | % | 1/29/2027 | 34,429 | 33,987 | 34,216 | |||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(10) |
SF + 6.50% | 11.96 | % | 1/29/2027 | 12,490 | 8,177 | 8,448 | |||||||||||||||||
MB2 Dental Solutions, LLC (4)(10) |
SF + 6.00% | 11.46 | % | 1/29/2027 | 68,490 | 67,136 | 67,812 | |||||||||||||||||
Medline Borrower, LP (8) |
SF + 3.00% | 8.47 | % | 10/23/2028 | 19,648 | 19,482 | 19,769 | |||||||||||||||||
MPH Acquisition Holdings LLC (8) |
SF + 4.25% | 9.90 | % | 9/1/2028 | 4,586 | 4,491 | 4,434 | |||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
SF + 6.50% | 11.97 | % | 6/3/2030 | 30,166 | 29,336 | 29,744 | |||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
SF + 6.50% | 11.97 | % | 6/3/2030 | 10,055 | 9,779 | 9,915 | |||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) |
6/1/2029 | 4,032 | (109 | ) | (61 | ) | ||||||||||||||||||
Pediatric Associates Holding Company, LLC (8) |
SF + 3.25% | 8.72 | % | 12/29/2028 | 7,717 | 7,690 | 7,486 | |||||||||||||||||
Phoenix Newco Inc (8) |
SF + 3.25% | 8.72 | % | 11/15/2028 | 17,567 | 17,469 | 17,692 | |||||||||||||||||
Pinnacle Fertility, Inc. (4)(6)(9) |
SF + 5.00% | 10.43 | % | 3/14/2028 | 12,383 | 9,078 | 9,184 | |||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) |
SF + 5.00% | 10.43 | % | 3/14/2028 | 27,019 | 26,626 | 26,857 | |||||||||||||||||
PPV Intermediate Holdings, LLC (4)(9) |
SF + 5.75% | 11.14 | % | 8/31/2029 | 108,193 | 106,567 | 107,507 | |||||||||||||||||
PPV Intermediate Holdings, LLC (4)(6)(9) |
8/31/2029 | 8,145 | (132 | ) | (52 | ) | ||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
SF + 5.50% | 11.00 | % | 12/17/2027 | 3,941 | 3,882 | 3,941 | |||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
SF + 5.50% | 11.00 | % | 12/17/2027 | 20,679 | 20,392 | 20,679 | |||||||||||||||||
Tenet Healthcare Corp (5)(7) |
5.13 | % | 11/1/2027 | 2,695 | 2,724 | 2,636 | ||||||||||||||||||
Tivity Health Inc (4)(9) |
SF + 6.00% | 11.35 | % | 6/28/2029 | 111,153 | 108,949 | 108,628 | |||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(6)(9) |
SF + 5.75% | 11.13 | % | 7/17/2028 | 50,181 | 32,006 | 31,265 | |||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) |
SF + 5.75% | 11.16 | % | 7/17/2028 | 26,548 | 26,150 | 25,732 | |||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9) |
SF + 5.75% | 11.15 | % | 7/17/2028 | 43,290 | 42,610 | 41,959 | |||||||||||||||||
WCAS XIII Primary Care Investors, L.P. (4)(10) |
SF + 6.25% | 11.61 | % | 12/31/2029 | 135,630 | 133,289 | 134,827 | |||||||||||||||||
| 953,505 | 951,205 | 18.34 | % | |||||||||||||||||||||
F-113
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Household Goods and Home Construction |
||||||||||||||||||||||||
LHS Borrower, LLC (8) |
SF + 4.75% | 10.21 | % | 2/16/2029 | 6,948 | 6,896 | 6,301 | |||||||||||||||||
Sunset Debt Merger Sub, Inc. (9) |
SF + 4.00% | 9.47 | % | 10/6/2028 | 707 | 609 | 636 | |||||||||||||||||
| 7,505 | 6,937 | 0.13 | % | |||||||||||||||||||||
Industrial Engineering |
||||||||||||||||||||||||
Emerson Climate Technologies Inc (7) |
SF + 3.00% | 8.36 | % | 5/31/2030 | 13,957 | 13,851 | 14,023 | |||||||||||||||||
LSF12 Donnelly Bidco, LLC (4)(10) |
SF + 6.50% | 11.86 | % | 10/2/2029 | 19,878 | 19,401 | 19,401 | |||||||||||||||||
Radwell Parent, LLC (4)(6)(9) |
SF + 6.75% | 12.10 | % | 4/3/2028 | 13,271 | 2,390 | 2,654 | |||||||||||||||||
Radwell Parent, LLC (4)(9) |
SF + 6.75% | 12.10 | % | 4/2/2029 | 153,824 | 149,966 | 156,200 | |||||||||||||||||
Roper Industrial Products Investment Co (8) |
SF + 4.00% | 9.35 | % | 11/22/2029 | 18,044 | 17,488 | 18,106 | |||||||||||||||||
Standard Industries, Inc. (8) |
SF + 2.25% | 7.72 | % | 9/22/2028 | 1,264 | 1,264 | 1,268 | |||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
E + 6.50% | 10.46 | % | 12/1/2027 | € | 4,758 | 4,943 | 4,975 | ||||||||||||||||
Time Manufacturing Holdings, LLC (4)(6)(9) |
SF + 6.50% | 12.04 | % | 12/1/2027 | 1,000 | 713 | 678 | |||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
SF + 6.50% | 12.04 | % | 12/1/2027 | 12,081 | 11,902 | 11,481 | |||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
E + 6.50% | 10.46 | % | 12/1/2027 | € | 8,380 | 9,333 | 8,762 | ||||||||||||||||
TK Elevator U.S. Newco, Inc. (5)(8) |
SF + 3.50% | 9.38 | % | 7/30/2027 | 12,573 | 12,439 | 12,617 | |||||||||||||||||
Wec US Holdings Ltd (8) |
SF + 3.75% | 9.11 | % | 8/1/2025 | 3,955 | 3,925 | 3,973 | |||||||||||||||||
| 247,615 | 254,138 | 4.90 | % | |||||||||||||||||||||
Industrial Metals and Mining |
||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + 7.50% | 13.12 | % | 9/8/2026 | 3,060 | 3,006 | 2,986 | |||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
SF + 7.50% | 13.12 | % | 9/8/2026 | 9,130 | 8,881 | 8,909 | |||||||||||||||||
| 11,887 | 11,895 | 0.23 | % | |||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||
Acuris Finance US, Inc (8) |
SF + 4.00% | 9.50 | % | 2/16/2028 | 13,500 | 13,408 | 13,515 | |||||||||||||||||
Allied Universal Holdco LLC (8) |
SF + 3.75% | 9.21 | % | 5/12/2028 | 3,001 | 2,993 | 2,993 | |||||||||||||||||
Argos Health Holdings, Inc. (4)(9) |
SF + 5.75% | 11.15 | % | 12/6/2027 | 653 | 644 | 629 | |||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(10) |
SF + 8.25% (incl 4.00% PIK)
|
13.63 | % | 10/31/2029 | 112,091 | 109,368 | 109,368 | |||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(6)(10) |
10/31/2029 | 13,445 | (327 | ) | (327 | ) | ||||||||||||||||||
Becklar, LLC (4)(10) |
SF + 6.85% | 12.30 | % | 12/21/2026 | 986 | 974 | 978 | |||||||||||||||||
Becklar, LLC (4)(10) |
SF + 6.85% | 12.30 | % | 12/21/2026 | 5,725 | 5,644 | 5,676 | |||||||||||||||||
Captive Resources Midco LLC (4)(6)(9) |
7/3/2028 | 7,558 | (113 | ) | — | |||||||||||||||||||
Captive Resources Midco LLC (4)(9) |
SF + 5.75% (incl 3.13% PIK)
|
11.10 | % | 7/2/2029 | 93,197 | 91,762 | 94,129 | |||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(6)(7) |
SN + 8.25% | 13.47 | % | 2/28/2030 | £ | 9,965 | 2,252 | 2,394 | ||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) |
SN + 8.25% (incl 2.00% PIK)
|
13.48 | % | 2/28/2030 | £ | 45,394 | 53,009 | 56,599 | ||||||||||||||||
CD&R Madison UK Bidco LTD (4)(5)(7) |
E + 7.75% (incl 2.00% PIK)
|
11.71 | % | 2/28/2030 | € | 22,377 | 22,902 | 24,093 | ||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
10/1/2029 | 10,736 | (279 | ) | 58 | |||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
10/1/2029 | 11,656 | (287 | ) | — | |||||||||||||||||||
Coretrust Purchasing Group LLC (4)(9) |
SF + 6.75% | 12.11 | % | 10/1/2029 | 72,983 | 71,143 | 73,375 | |||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(9) |
SF + 5.75% | 11.15 | % | 12/6/2027 | 817 | 806 | 786 | |||||||||||||||||
Employbridge, LLC (9) |
SF + 4.75% | 10.41 | % | 7/19/2028 | 9,807 | 9,765 | 8,099 | |||||||||||||||||
Galaxy US Opco Inc. (5)(8) |
SF + 4.75% | 10.13 | % | 4/29/2029 | 26,037 | 25,520 | 21,611 | |||||||||||||||||
Guidehouse Inc. (4)(9) |
SF + 5.75% (incl 2.00% PIK) |
11.11 | % | 12/16/2030 | 186,435 | 183,869 | 184,120 | |||||||||||||||||
IG Investments Holdings, LLC (4)(6)(9) |
9/22/2027 | 1,726 | (18 | ) | (12 | ) | ||||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
SF + 6.00% | 11.48 | % | 9/22/2028 | 22,278 | 22,019 | 22,129 | |||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
SF + 6.00% | 11.48 | % | 9/22/2028 | 1,837 | 1,824 | 1,825 | |||||||||||||||||
NBG Acquisition Corp. (4)(6)(9) |
SF + 5.25% | 10.78 | % | 11/6/2028 | 2,876 | 1,837 | 1,792 | |||||||||||||||||
NBG Acquisition Corp. (4)(9) |
SF + 5.25% | 10.78 | % | 11/6/2028 | 21,336 | 21,222 | 20,856 | |||||||||||||||||
Planet US Buyer LLC (4)(6)(9) |
2/1/2028 | 8,024 | (197 | ) | (148 | ) | ||||||||||||||||||
Planet US Buyer LLC (4)(9) |
SF + 6.75% | 12.13 | % | 2/1/2030 | 83,233 | 81,061 | 81,744 | |||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
SF + 5.50% | 10.89 | % | 8/31/2028 | 8,993 | 5,090 | 5,326 | |||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
SF + 5.50% | 10.89 | % | 8/31/2028 | 7,000 | 1,525 | 1,633 | |||||||||||||||||
Royal Buyer, LLC (4)(9) |
SF + 5.50% | 10.89 | % | 8/31/2028 | 44,550 | 43,839 | 44,996 | |||||||||||||||||
Sedgwick Claims Management Services, Inc. (7) |
SF + 3.75% | 9.11 | % | 2/24/2028 | 19,205 | 19,048 | 19,288 | |||||||||||||||||
F-114
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Simplisafe Holding Corporation (4)(6)(9) |
SF + 6.25% | 11.61 | % | 5/2/2028 | 15,086 | 3,775 | 3,912 | |||||||||||||||||||
Simplisafe Holding Corporation (4)(9) |
SF + 6.25% | 11.61 | % | 5/2/2028 | 119,039 | 117,275 | 118,277 | |||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
SF + 5.25% | 10.71 | % | 9/13/2028 | 3,579 | 299 | 308 | |||||||||||||||||||
Spirit RR Holdings, Inc. (4)(9) |
SF + 5.25% | 10.70 | % | 9/13/2028 | 43,103 | 42,361 | 42,508 | |||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
9/13/2028 | 5,986 | (89 | ) | (83 | ) | ||||||||||||||||||||
TruckPro, LLC (4)(12) |
SF + 7.25% | 12.94 | % | 8/16/2028 | 70,533 | 68,576 | 69,207 | |||||||||||||||||||
Vaco Holdings, LLC (9) |
SF + 5.00% | 10.43 | % | 1/21/2029 | 12,495 | 12,452 | 12,362 | |||||||||||||||||||
| 1,034,952 | 1,044,016 | 20.13 | % | |||||||||||||||||||||||
Industrial Transportation |
||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(6)(7) |
5/31/2029 | € | 11,245 | (299 | ) | (86 | ) | |||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
E + 6.50% | 10.53 | % | 5/31/2029 | € | 8,096 | 8,484 | 8,875 | ||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
E + 6.50% | 10.53 | % | 5/31/2029 | € | 22,264 | 23,330 | 24,407 | ||||||||||||||||||
| 31,515 | 33,196 | 0.64 | % | |||||||||||||||||||||||
Investment Banking and Brokerage Services |
||||||||||||||||||||||||||
Apex Group Treasury LLC (4)(5)(8) |
SF + 5.00% | 10.40 | % | 7/27/2028 | 6,982 | 6,881 | 6,974 | |||||||||||||||||||
Ascensus Holdings, Inc. (8) |
SF + 3.50% | 8.97 | % | 8/2/2028 | 7,643 | 7,581 | 7,638 | |||||||||||||||||||
Eisner Advisory Group LLC (9) |
SF + 5.25% | 10.72 | % | 7/28/2028 | 4,451 | 4,433 | 4,466 | |||||||||||||||||||
Eisner Advisory Group LLC (9) |
SF + 5.25% | 10.72 | % | 7/28/2028 | 2,526 | 2,526 | 2,535 | |||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
9/3/2030 | 5,484 | (108 | ) | (111 | ) | ||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
SF + 6.00% | 11.39 | % | 9/4/2029 | 7,590 | 1,258 | 1,245 | |||||||||||||||||||
More Cowbell II, LLC (4)(9) |
SF + 6.00% | 11.48 | % | 9/3/2030 | 50,342 | 49,382 | 49,319 | |||||||||||||||||||
Osaic Holdings Inc (7) |
SF + 4.50% | 9.86 | % | 8/17/2028 | 10,841 | 10,794 | 10,889 | |||||||||||||||||||
Transnetwork LLC (8) |
SF + 5.50% | 10.85 | % | 12/29/2030 | 48,913 | 47,935 | 48,791 | |||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14) |
SN + 8.00% | 13.21 | % | 9/22/2028 | £ | 23,256 | 27,392 | 28,599 | ||||||||||||||||||
| 158,074 | 160,345 | 3.09 | % | |||||||||||||||||||||||
Leisure Goods |
||||||||||||||||||||||||||
Jam City, Inc. (4)(10) |
SF + 7.00% | 12.61 | % | 9/7/2027 | 1,996 | 1,983 | 1,991 | |||||||||||||||||||
| 1,983 | 1,991 | 0.04 | % | |||||||||||||||||||||||
Life Insurance |
||||||||||||||||||||||||||
Onedigital Borrower LLC (8) |
SF + 4.25% | 9.71 | % | 11/16/2027 | 5,880 | 5,872 | 5,884 | |||||||||||||||||||
| 5,872 | 5,884 | 0.11 | % | |||||||||||||||||||||||
Media |
||||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
SF + 6.00% | 11.47 | % | 3/14/2029 | 29,401 | 12,189 | 12,489 | |||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
3/14/2028 | 13,795 | (193 | ) | (83 | ) | ||||||||||||||||||||
2080 Media, Inc. (4)(9) |
SF + 6.00% | 11.47 | % | 3/14/2029 | 54,491 | 53,644 | 54,192 | |||||||||||||||||||
Ancestry.com Inc. (8) |
SF + 3.25% | 8.71 | % | 12/6/2027 | 6,262 | 6,190 | 6,143 | |||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10) |
SF + 7.25% | 12.77 | % | 10/29/2027 | 2,766 | 2,437 | 2,347 | |||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10) |
SF + 7.25% | 12.79 | % | 10/29/2027 | 40,972 | 40,176 | 38,860 | |||||||||||||||||||
Associations Inc. (4)(10) |
|
SF + 6.50% (incl 2.50% PIK) |
|
12.18 | % | 7/2/2027 | 494 | 491 | 499 | |||||||||||||||||
Associations Inc. (4)(10) |
|
SF + 6.50% (incl 2.50% PIK)
|
|
12.14 | % | 7/2/2027 | 1,029 | 1,022 | 1,039 | |||||||||||||||||
Associations Inc. (4)(10) |
|
SF + 6.50% (incl 2.50% PIK)
|
|
12.12 | % | 7/2/2027 | 1,029 | 1,022 | 1,039 | |||||||||||||||||
Associations Inc. (4)(10) |
|
SF + 6.50% (incl 2.50% PIK)
|
|
12.13 | % | 7/2/2027 | 621 | 617 | 627 | |||||||||||||||||
Associations Inc. (4)(6)(10) |
SF + 6.50% | 12.14 | % | 7/2/2027 | 403 | 140 | 143 | |||||||||||||||||||
Associations Inc. (4)(10) |
|
SF + 6.50% (incl 2.50% PIK)
|
|
12.18 | % | 7/2/2027 | 29,562 | 29,372 | 29,858 | |||||||||||||||||
Aventine Intermediate LLC (4)(9) |
SF + 6.00% | 11.47 | % | 6/18/2027 | 1,073 | 1,061 | 993 | |||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
SF + 6.00% | 11.47 | % | 6/18/2027 | 18,855 | 18,619 | 17,452 | |||||||||||||||||||
Circana Group, LP. (4)(6)(9) |
P + 4.75% | 13.25 | % | 12/1/2027 | 9,023 | 1,484 | 1,561 | |||||||||||||||||||
Circana Group, LP. (4)(9) |
|
SF + 6.25% (incl 2.75% PIK)
|
|
11.61 | % | 12/1/2028 | 142,859 | 140,633 | 141,912 | |||||||||||||||||
Circana Group, LP. (4)(9) |
SF + 5.75% | 11.21 | % | 12/1/2028 | 9,198 | 9,126 | 9,096 | |||||||||||||||||||
IEHL US Holdings, Inc. (4)(12) |
SF + 7.25% | 12.63 | % | 10/29/2029 | 6,604 | 6,425 | 6,522 | |||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
SN + 7.65% | 12.90 | % | 10/29/2029 | £ | 15,493 | 18,789 | 19,501 | ||||||||||||||||||
F-115
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
E + 7.25% | 11.20 | % | 10/29/2029 | € | 2,540 | 2,724 | 2,770 | ||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
E + 7.25% | 11.20 | % | 10/29/2029 | € | 3,048 | 3,177 | 3,325 | ||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12) |
4/27/2029 | 5,080 | (141 | ) | (66 | ) | ||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
SF + 7.25% | 12.63 | % | 10/29/2029 | 30,478 | 29,657 | 30,100 | |||||||||||||||||||
Kobalt London Limited (4)(5)(9) |
SF + 8.00% | 13.55 | % | 2/25/2027 | 13,125 | 12,949 | 12,873 | |||||||||||||||||||
Kobalt London Limited (4)(5)(9) |
SF + 8.00% | 13.53 | % | 2/25/2027 | 13,125 | 12,952 | 12,874 | |||||||||||||||||||
Mav Acquisition Corporation (8) |
SF + 4.75% | 10.22 | % | 7/28/2028 | 15,724 | 15,518 | 15,729 | |||||||||||||||||||
Oneteam Partners, LLC (4)(9) |
SF + 5.50% | 10.98 | % | 9/14/2029 | 74,250 | 73,010 | 74,250 | |||||||||||||||||||
Renaissance Financiere (4)(5)(7) |
E + 7.00% | 10.94 | % | 7/26/2028 | € | 34,871 | 35,514 | 37,969 | ||||||||||||||||||
Renaissance Holding Corp. (8) |
SF + 4.75% | 10.11 | % | 4/5/2030 | 7,980 | 7,816 | 8,019 | |||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) |
8/7/2028 | 3,657 | (85 | ) | (68 | ) | ||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(6)(10) |
8/7/2028 | 4,711 | (118 | ) | (87 | ) | ||||||||||||||||||||
Showtime Acquisition, L.L.C. (4)(10) |
SF + 7.50% | 12.98 | % | 8/7/2028 | 63,672 | 62,071 | 62,493 | |||||||||||||||||||
| 598,288 | 604,371 | 11.66 | % | |||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(9) |
SF + 7.50% | 13.01 | % | 2/23/2028 | 21,259 | 20,869 | 19,119 | |||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
SF + 6.00% | 11.36 | % | 9/30/2030 | 15,467 | 607 | 670 | |||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
10/1/2029 | 21,254 | (610 | ) | (543 | ) | ||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
|
E + 6.75% (incl 3.38% PIK)
|
|
10.70 | % | 9/30/2030 | € | 61,588 | 63,223 | 66,272 | ||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
|
SF + 6.75% (incl 3.38% PIK)
|
|
12.13 | % | 9/30/2030 | 81,370 | 79,021 | 79,306 | |||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
5/11/2028 | 34,900 | (848 | ) | (734 | ) | ||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + 5.75% | 11.11 | % | 5/11/2028 | 22,857 | 22,514 | 22,452 | |||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
SF + 5.75% | 11.11 | % | 5/11/2028 | 10,875 | 3,645 | 3,614 | |||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + 5.75% | 11.11 | % | 5/11/2028 | 75,297 | 74,150 | 73,963 | |||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
SF + 6.00% | 11.36 | % | 5/11/2028 | 9,676 | 9,447 | 9,472 | |||||||||||||||||||
Limpio Bidco GMBH (4)(5)(7) |
E + 6.20% | 10.15 | % | 10/31/2030 | € | 66,556 | 68,533 | 71,499 | ||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
SF + 6.75% | 12.11 | % | 3/13/2029 | 112,067 | 108,545 | 110,472 | |||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
SF + 5.75% | 11.11 | % | 3/13/2029 | 62,432 | 61,205 | 61,203 | |||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
5/12/2029 | 22,070 | (358 | ) | (846 | ) | ||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
SF + 5.75% | 11.10 | % | 5/12/2028 | 9,458 | 3,015 | 2,828 | |||||||||||||||||||
Plasma Buyer LLC (4)(9) |
SF + 5.75% | 11.10 | % | 5/12/2029 | 84,061 | 82,720 | 80,839 | |||||||||||||||||||
Resonetics, LLC (4)(10) |
SF + 6.00% | 11.39 | % | 4/28/2028 | 63,513 | 61,712 | 61,710 | |||||||||||||||||||
SDC US Smilepay SPV (4)(7)(16) |
|
P+10.75% (incl 3.75% PIK)
|
|
10/27/2025 | 28,737 | 26,203 | 21,039 | |||||||||||||||||||
TecoStar Holdings Inc (4)(10) |
|
SF + 8.50% (incl 4.50% PIK)
|
|
13.91 | % | 7/6/2029 | 119,875 | 117,155 | 118,687 | |||||||||||||||||
| 800,748 | 801,022 | 15.45 | % | |||||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
SF + 6.00% | 11.43 | % | 11/1/2029 | 8,000 | 1,340 | 1,446 | |||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
SF + 5.50% | 11.04 | % | 11/1/2029 | 39,650 | 39,390 | 39,250 | |||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
11/1/2029 | 467 | — | (5 | ) | |||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
SF + 5.50% | 11.03 | % | 11/1/2029 | 14,273 | 14,273 | 14,129 | |||||||||||||||||||
Acrisure LLC (7) |
SF + 4.50% | 9.89 | % | 11/6/2030 | 4,000 | 3,961 | 4,015 | |||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + 6.00% | 11.46 | % | 10/2/2028 | 21,555 | 21,397 | 21,411 | |||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + 6.00% | 11.46 | % | 10/2/2028 | 12,398 | 12,390 | 12,315 | |||||||||||||||||||
Alera Group, Inc. (4)(9) |
SF + 6.00% | 11.46 | % | 10/2/2028 | 43,725 | 43,696 | 43,433 | |||||||||||||||||||
Alera Group (4)(6)(9) |
10/2/2028 | 5,196 | (51 | ) | (51 | ) | ||||||||||||||||||||
Alliant Holdings Intermediate, LLC (8) |
SF + 3.50% | 8.86 | % | 11/6/2030 | 18,839 | 18,715 | 18,946 | |||||||||||||||||||
AmWINS Group, Inc. (9) |
SF + 2.25% | 7.72 | % | 2/19/2028 | 4,597 | 4,577 | 4,610 | |||||||||||||||||||
AmWINS Group, Inc. (9) |
SF + 2.75% | 8.22 | % | 2/19/2028 | 2,977 | 2,971 | 2,990 | |||||||||||||||||||
Amynta Agency Borrower Inc. (7) |
SF + 4.25% | 9.61 | % | 2/28/2028 | 20,116 | 19,600 | 20,166 | |||||||||||||||||||
BroadStreet Partners, Inc. (7) |
SF + 3.75% | 9.11 | % | 1/27/2029 | 9,192 | 9,115 | 9,231 | |||||||||||||||||||
Galway Borrower LLC (4)(6)(9) |
9/30/2027 | 2,216 | (29 | ) | (15 | ) | ||||||||||||||||||||
Galway Borrower LLC (4)(9) |
SF + 5.25% | 10.70 | % | 9/29/2028 | 60,965 | 60,526 | 60,560 | |||||||||||||||||||
F-116
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Higginbotham Insurance Agency, Inc.(4)(6)(10) |
SF + 5.50% | 10.96 | % | 11/27/2028 | 22,463 | 14,732 | 14,698 | |||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + 5.50% | 10.96 | % | 11/27/2028 | 48 | 47 | 47 | |||||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(10) |
SF + 5.50% | 10.96 | % | 11/27/2028 | 9,777 | 9,710 | 9,669 | |||||||||||||||||||
HUB International Limited (7) |
7.25 | % | 6/15/2030 | 10,517 | 10,517 | 11,115 | ||||||||||||||||||||
HUB International Limited (9) |
SF + 4.25% | 9.66 | % | 6/20/2030 | 13,853 | 13,723 | 13,930 | |||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) |
SF + 6.00% | 11.39 | % | 8/27/2026 | 5,826 | 352 | 364 | |||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) |
SF + 6.02% | 11.41 | % | 8/27/2026 | 20,696 | 20,456 | 20,543 | |||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(9) |
SF + 6.02% | 11.51 | % | 8/27/2026 | 56,970 | 56,500 | 56,550 | |||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(10) |
8/27/2026 | 472 | (4 | ) | (3 | ) | ||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) |
8.50 | % | 3/15/2030 | 14,487 | 14,467 | 15,232 | ||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) |
SF + 4.25% | 9.62 | % | 3/15/2030 | 5,128 | 5,091 | 5,156 | |||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) |
SF + 5.75% | 11.25 | % | 10/16/2028 | 18,214 | 17,928 | 18,150 | |||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(6)(9) |
10/16/2028 | 822 | (12 | ) | (3 | ) | ||||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(9) |
SF + 5.50% | 11.00 | % | 10/16/2028 | 7,187 | 7,083 | 7,162 | |||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) |
5/1/2029 | 6,685 | (178 | ) | (85 | ) | ||||||||||||||||||||
Summit Acquisition Inc. (4)(6)(9) |
5/1/2030 | 10,961 | (310 | ) | (126 | ) | ||||||||||||||||||||
Summit Acquisition Inc. (4)(9) |
SF + 6.75% | 12.10 | % | 5/1/2030 | 48,780 | 47,459 | 48,221 | |||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
SF + 5.00% | 10.50 | % | 3/25/2027 | 26,018 | 25,768 | 25,588 | |||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9) |
3/25/2027 | 6,576 | (64 | ) | (109 | ) | ||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
SF + 5.00% | 10.50 | % | 3/25/2027 | 20,633 | 20,421 | 20,292 | |||||||||||||||||||
USI Inc/NY (7) |
SF + 3.25% | 8.60 | % | 9/27/2030 | 5,985 | 5,970 | 6,002 | |||||||||||||||||||
| 521,527 | 524,824 | 10.12 | % | |||||||||||||||||||||||
Oil, Gas and Coal |
||||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
12/7/2029 | 6,923 | (155 | ) | (154 | ) | ||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
12/7/2029 | 6,923 | (154 | ) | (154 | ) | ||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10) |
SF + 6.00% | 11.36 | % | 12/7/2029 | 46,154 | 45,127 | 45,126 | |||||||||||||||||||
| 44,818 | 44,818 | 0.86 | % | |||||||||||||||||||||||
Personal Care, Drug and Grocery Stores |
||||||||||||||||||||||||||
Parfums Holding Co Inc (12) |
SF + 6.00% | 11.61 | % | 6/30/2026 | 19,625 | 18,097 | 19,296 | |||||||||||||||||||
Puma Buyer LLC (4)(8) |
SF + 5.50% | 10.95 | % | 7/16/2029 | 61,380 | 57,816 | 61,380 | |||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
SF + 5.65% | 11.00 | % | 3/23/2028 | 15,866 | 15,572 | 15,714 | |||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
B + 5.75% | 10.16 | % | 3/23/2028 | A$ | 35,124 | 25,729 | 23,708 | ||||||||||||||||||
| 117,214 | 120,098 | 2.32 | % | |||||||||||||||||||||||
Personal Goods |
||||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(6)(7) |
5/23/2028 | € | 3,978 | (106 | ) | (242 | ) | |||||||||||||||||||
Daphne S.P.A. (4)(5)(7) |
E + 6.25% | 10.21 | % | 5/23/2028 | € | 45,354 | 47,660 | 47,313 | ||||||||||||||||||
Spanx, LLC (4)(6)(9) |
11/18/2027 | 5,000 | (67 | ) | — | |||||||||||||||||||||
Spanx, LLC (4)(9) |
SF + 5.25% | 10.71 | % | 11/20/2028 | 29,400 | 28,970 | 29,400 | |||||||||||||||||||
| 76,457 | 76,471 | 1.47 | % | |||||||||||||||||||||||
Pharmaceuticals and Biotechnology |
||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(6)(9) |
8/24/2029 | 6,340 | (94 | ) | 63 | |||||||||||||||||||||
Advarra Holdings, Inc. (4)(9) |
SF + 5.25% | 10.61 | % | 8/24/2029 | 69,459 | 68,452 | 70,153 | |||||||||||||||||||
CPI Buyer, LLC (4)(9) |
SF + 5.50% | 11.15 | % | 11/1/2028 | 1,344 | 1,332 | 1,339 | |||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) |
10/30/2026 | 2,115 | (26 | ) | (5 | ) | ||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
SF + 5.50% | 11.15 | % | 11/1/2028 | 24,957 | 24,670 | 24,869 | |||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) |
10/27/2028 | € | 8,400 | (178 | ) | (60 | ) | |||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) |
E + 6.50% | 10.43 | % | 10/27/2028 | € | 82,300 | 80,361 | 90,259 | ||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(9) |
B + 6.50% | 10.97 | % | 10/30/2028 | A$ | 11,982 | 1,897 | 1,994 | ||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(9) |
B + 6.50% | 10.92 | % | 10/30/2028 | A$ | 118,623 | 74,237 | 79,960 | ||||||||||||||||||
| 250,651 | 268,572 | 5.18 | % | |||||||||||||||||||||||
Real Estate Investment and Services |
||||||||||||||||||||||||||
OEG Borrower LLC (4)(8) |
SF + 5.00% | 10.48 | % | 6/18/2029 | 39,500 | 38,219 | 39,500 | |||||||||||||||||||
| 38,219 | 39,500 | 0.76 | % | |||||||||||||||||||||||
F-117
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Retailers |
||||||||||||||||||||||||||||
AI Grace Aus Bidco Pty Ltd (4)(5)(9) |
E + 6.50% | 10.50 | % | 12/5/2029 | € | 21,626 | 22,654 | 23,165 | ||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
10/31/2029 | 1,150 | (11 | ) | (11 | ) | ||||||||||||||||||||||
BradyIFS Holdings, LLC (4)(6)(10) |
SF + 6.00% | 11.32 | % | 10/31/2029 | 1,495 | 352 | 352 | |||||||||||||||||||||
BradyIFS Holdings, LLC (4)(10) |
SF + 6.00% | 11.38 | % | 10/31/2029 | 13,572 | 13,436 | 13,439 | |||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
SF + 8.00% | 13.54 | % | 7/28/2027 | 52,871 | 51,455 | 51,916 | |||||||||||||||||||||
Petsmart LLC (9) |
SF + 3.75% | 9.21 | % | 2/11/2028 | 15,433 | 15,349 | 15,287 | |||||||||||||||||||||
White Cap Buyer, LLC (8) |
SF + 3.75% | 9.11 | % | 10/19/2027 | 9,321 | 9,284 | 9,352 | |||||||||||||||||||||
| 112,519 | 113,500 | 2.19 | % | |||||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
SN + 5.25% | 10.46 | % | 6/28/2029 | £ | 47,995 | 55,828 | 61,787 | ||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
SN + 5.25% | 10.46 | % | 6/28/2029 | £ | 91,991 | 109,854 | 118,424 | ||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
SF + 7.00% | 12.38 | % | 11/7/2029 | 40,000 | 39,025 | 39,025 | |||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) |
11/7/2029 | 6,000 | (146 | ) | (146 | ) | ||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
E + 7.00% | 10.96 | % | 11/7/2029 | € | 18,614 | 19,424 | 20,047 | ||||||||||||||||||||
Avalara, Inc. (4)(6)(9) |
10/19/2028 | 6,324 | (126 | ) | (45 | ) | ||||||||||||||||||||||
Avalara, Inc. (4)(9) |
SF + 7.25% | 12.60 | % | 10/19/2028 | 56,918 | 55,754 | 56,513 | |||||||||||||||||||||
Barracuda Networks Inc (8) |
SF + 4.50% | 9.88 | % | 8/15/2029 | 13,862 | 13,528 | 13,571 | |||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) |
5/15/2028 | 385 | (3 | ) | — | |||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) |
SF + 5.25% | 10.61 | % | 5/14/2029 | 4,558 | 4,521 | 4,603 | |||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) |
SF + 7.13% | 12.48 | % | 4/16/2027 | 2,687 | 1,536 | 1,529 | |||||||||||||||||||||
Calabrio, Inc. (4)(10) |
SF + 7.13% | 12.48 | % | 4/16/2027 | 22,313 | 22,313 | 22,257 | |||||||||||||||||||||
Central Parent Inc (7) |
SF + 4.00% | 9.35 | % | 7/6/2029 | 15,000 | 14,964 | 15,102 | |||||||||||||||||||||
Certinia Inc. (4)(6)(10) |
8/3/2029 | 5,449 | (152 | ) | (96 | ) | ||||||||||||||||||||||
Certinia Inc. (4)(10) |
SF + 7.25% | 12.68 | % | 8/3/2029 | 40,323 | 39,196 | 39,610 | |||||||||||||||||||||
Cloud Software Group Inc. (8) |
SF + 4.50% | 9.95 | % | 3/30/2029 | 13,693 | 12,756 | 13,409 | |||||||||||||||||||||
Cloud Software Group Inc. (7) |
6.50 | % | 3/31/2029 | 7,740 | 6,679 | 7,381 | ||||||||||||||||||||||
CommerceHub, Inc. (4)(9) |
SF + 6.25% | 11.79 | % | 12/29/2027 | 64,255 | 60,635 | 60,694 | |||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
2/27/2030 | 7,123 | (163 | ) | (99 | ) | ||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
2/27/2029 | 6,211 | (133 | ) | (89 | ) | ||||||||||||||||||||||
Coupa Holdings, LLC (4)(9) |
SF + 7.50% | 12.86 | % | 2/27/2030 | 79,777 | 78,130 | 78,671 | |||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) |
8/29/2030 | £ | 8,078 | (249 | ) | (120 | ) | |||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
E + 6.00% | 9.84 | % | 8/29/2030 | € | 6,742 | 7,164 | 7,359 | ||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
SN + 6.00% | 11.21 | % | 8/29/2030 | £ | 23,265 | 28,728 | 29,309 | ||||||||||||||||||||
DS Admiral Bidco, LLC (4)(6)(10) |
SF + 6.50% | 11.85 | % | 3/16/2026 | 966 | 187 | 186 | |||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) |
SF + 7.00% | 12.35 | % | 3/16/2028 | 39,345 | 38,336 | 39,093 | |||||||||||||||||||||
DS Admiral Bidco, LLC (4)(10) |
SF + 6.50% | 11.85 | % | 3/16/2028 | 8,853 | 8,787 | 8,761 | |||||||||||||||||||||
Enverus Holdings Inc (4)(9) |
SF + 5.50% | 10.86 | % | 12/24/2029 | 64,577 | 63,613 | 63,613 | |||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
12/24/2029 | 3,229 | (48 | ) | (48 | ) | ||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
12/24/2029 | 4,913 | (73 | ) | (73 | ) | ||||||||||||||||||||||
Finthrive Software Intermediate Holdings Inc (8) |
SF + 4.00% | 9.47 | % | 12/18/2028 | 12,970 | 12,765 | 10,370 | |||||||||||||||||||||
GoTo Group Inc (7) |
SF + 4.75% | 10.28 | % | 8/31/2027 | 2,372 | 2,356 | 1,581 | |||||||||||||||||||||
GovCIO Buyer Company (4)(10) |
SF + 5.00% | 10.36 | % | 8/18/2027 | 9,812 | 9,681 | 9,812 | |||||||||||||||||||||
Helios Software Holdings, Inc. (10) |
SF + 3.75% | 9.25 | % | 3/11/2028 | 11,761 | 11,674 | 11,757 | |||||||||||||||||||||
Huskies Parent, Inc. (4)(9) |
SF + 5.50% | 11.00 | % | 11/3/2027 | 1,000 | 987 | 948 | |||||||||||||||||||||
Huskies Parent, Inc. (4)(9) |
SF + 5.50% | 11.00 | % | 11/3/2028 | 25,154 | 24,797 | 23,620 | |||||||||||||||||||||
LMI Inc/DE (8) |
SF + 3.75% | 9.21 | % | 10/2/2028 | 6,262 | 6,234 | 6,032 | |||||||||||||||||||||
Medallia, Inc. (4)(9) |
|
SF + 6.50% (incl 4.00% PIK) |
|
11.95 | % | 10/30/2028 | 76,751 | 76,751 | 75,097 | |||||||||||||||||||
Mcafee Corp. (8) |
SF + 3.75% | 9.19 | % | 3/1/2029 | 7,880 | 7,854 | 7,869 | |||||||||||||||||||||
Mitchell Topo Holdings Inc (8) |
SF +3.75% | 9.40 | % | 10/15/2028 | 16,604 | 16,380 | 16,621 | |||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) |
SF + 3.50% | 9.42 | % | 2/10/2028 | 1,793 | 1,784 | 1,762 | |||||||||||||||||||||
New Era Technology, Inc. (4)(10) |
SF + 6.25% | 11.78 | % | 10/31/2026 | 19,210 | 19,210 | 18,705 | |||||||||||||||||||||
NWN Corporation (4)(6)(10) |
11/29/2028 | 7,686 | (208 | ) | (208 | ) | ||||||||||||||||||||||
NWN Corporation (4)(10) |
SF + 7.75% | 13.14 | % | 11/29/2028 | 52,087 | 50,680 | 50,679 | |||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10) |
2/1/2029 | 4,657 | (99 | ) | (65 | ) | ||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) |
SF + 7.50% | 12.88 | % | 2/1/2029 | 33,837 | 33,121 | 33,361 | |||||||||||||||||||||
Peraton Inc. (9) |
SF + 3.75% | 9.21 | % | 2/1/2028 | 15,083 | 14,946 | 15,139 | |||||||||||||||||||||
Perforce Software, Inc. (4)(8) |
SF + 4.50% | 9.86 | % | 7/1/2026 | 19,700 | 19,389 | 19,361 | |||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9) |
10/17/2028 | 6,068 | (125 | ) | (43 | ) | ||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9) |
SF + 7.00% | 12.36 | % | 10/17/2029 | 59,003 | 57,735 | 58,658 | |||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9) |
9/19/2028 | 10,833 | (189 | ) | 108 | |||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9) |
SF + 5.75% | 11.11 | % | 9/19/2028 | 42,792 | 42,104 | 43,220 | |||||||||||||||||||||
F-118
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) |
SF + 4.75% | 10.11 | % | 10/28/2030 | 15,061 | 14,767 | 15,172 | |||||||||||||||||
Project Ruby Ultimate Parent Corp (9) |
SF + 3.25% | 8.72 | % | 3/10/2028 | 12,258 | 12,133 | 12,271 | |||||||||||||||||
Quail Buyer, Inc. (4)(9) |
SF + 5.25% | 10.72 | % | 10/1/2027 | 7,311 | 7,216 | 7,311 | |||||||||||||||||
Riley Mergeco LLC (4)(6)(10) |
9/23/2027 | 304 | (5 | ) | (8 | ) | ||||||||||||||||||
Riley Mergeco LLC (4)(10) |
SF + 5.50% | 10.97 | % | 9/23/2027 | 1,816 | 1,789 | 1,769 | |||||||||||||||||
Smarsh Inc. (4)(6)(9) |
SF + 5.75% | 11.10 | % | 2/16/2029 | 4,286 | 2,078 | 2,118 | |||||||||||||||||
Smarsh Inc. (4)(6)(9) |
2/16/2029 | 1,071 | (16 | ) | (6 | ) | ||||||||||||||||||
Smarsh Inc. (4)(9) |
SF + 5.75% | 11.10 | % | 2/16/2029 | 17,143 | 16,885 | 17,045 | |||||||||||||||||
Trimech Acquisition Corp. (4)(6)(14) |
P + 3.75% | 12.25 | % | 3/10/2028 | 3,289 | 1,601 | 1,583 | |||||||||||||||||
Trimech Acquisition Corp. (4)(10) |
SF + 4.75% | 10.25 | % | 3/10/2028 | 21,331 | 21,095 | 20,926 | |||||||||||||||||
Trimech Acquisition Corp. (4)(10) |
SN + 4.75% | 10.11 | % | 3/10/2028 | £ | 36,254 | 43,882 | 45,565 | ||||||||||||||||
UKG Inc (8) |
SF + 3.25% | 8.76 | % | 5/4/2026 | 9,071 | 9,030 | 9,107 | |||||||||||||||||
User Zoom Technologies, Inc. (4)(9) |
SF + 7.00% | 12.49 | % | 4/5/2029 | 18,948 | 18,647 | 18,847 | |||||||||||||||||
Zelis Payments Buyer, Inc. (7) |
SF + 3.50% | 8.97 | % | 9/30/2026 | 10,994 | 10,962 | 11,029 | |||||||||||||||||
Zendesk Inc (4)(6)(9) |
11/22/2028 | 39,321 | (678 | ) | 31 | |||||||||||||||||||
Zendesk Inc (4)(6)(9) |
11/22/2028 | 17,940 | (293 | ) | — | |||||||||||||||||||
Zendesk Inc (4)(9) |
SF + 6.25% | 11.61 | % | 11/22/2028 | 161,380 | 158,763 | 161,505 | |||||||||||||||||
| 1,405,548 | 1,428,877 | 27.57 | % | |||||||||||||||||||||
Technology Hardware and Equipment |
||||||||||||||||||||||||
Altar Bidco, Inc. (8) |
SF + 3.10% | 8.26 | % | 2/1/2029 | 8,870 | 8,813 | 8,871 | |||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
1/27/2028 | 22,837 | (533 | ) | (2,435 | ) | ||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
SF + 6.75% | 12.25 | % | 1/27/2028 | 5,122 | 2,943 | 2,501 | |||||||||||||||||
CC WDW Borrower, Inc. (4)(10) |
SF + 6.75% | 12.28 | % | 1/27/2028 | 45,103 | 44,147 | 40,293 | |||||||||||||||||
Excelitas Technologies Corp. (4)(9) |
SF + 5.75% | 11.23 | % | 8/13/2029 | 10,030 | 9,868 | 9,931 | |||||||||||||||||
Excelitas Technologies Corp. (4)(7) |
E + 5.75% | 9.75 | % | 8/13/2029 | € | 5,531 | 5,583 | 6,045 | ||||||||||||||||
Excelitas Technologies Corp. (4)(6)(9) |
SF + 5.75% | 11.23 | % | 8/14/2028 | 3,261 | 1,950 | 1,966 | |||||||||||||||||
TechInsights Inc (4)(5)(10) |
SF + 6.63% | 12.13 | % | 11/9/2027 | 983 | 968 | 959 | |||||||||||||||||
TechInsights Inc (4)(5)(10) |
SF + 6.63% | 12.13 | % | 11/9/2027 | 2,552 | 2,515 | 2,492 | |||||||||||||||||
| 76,254 | 70,623 | 1.37 | % | |||||||||||||||||||||
Telecommunications Equipment |
||||||||||||||||||||||||
Delta Topco, Inc. (9) |
SF + 3.75% | 9.12 | % | 12/1/2027 | 6,882 | 6,743 | 6,887 | |||||||||||||||||
Guardian US Holdco LLC (8) |
SF + 4.00% | 9.35 | % | 1/31/2030 | 7,960 | 7,819 | 7,993 | |||||||||||||||||
| 14,562 | 14,880 | 0.29 | % | |||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||
Directv Financing, LLC (9) |
SF + 5.00% | 10.65 | % | 8/2/2027 | 16,365 | 16,101 | 16,395 | |||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) |
SF + 5.00% | 10.46 | % | 7/17/2028 | 4,938 | 2,890 | 2,804 | |||||||||||||||||
Meriplex Communications, Ltd (4)(6)(9) |
7/17/2028 | 1,143 | (13 | ) | (31 | ) | ||||||||||||||||||
Meriplex Communications, Ltd (4)(9) |
SF + 5.00% | 10.46 | % | 7/17/2028 | 13,806 | 13,642 | 13,430 | |||||||||||||||||
Openmarket Inc. (5)(9) |
SF + 6.25% | 11.86 | % | 9/17/2026 | 4,888 | 4,816 | 4,839 | |||||||||||||||||
Radiate Holdco LLC (9) |
SF + 3.25% | 8.72 | % | 9/25/2026 | 14,729 | 14,684 | 11,864 | |||||||||||||||||
TA TT Buyer, LLC (8) |
SF + 5.00% | 10.35 | % | 4/2/2029 | 14,812 | 14,695 | 14,738 | |||||||||||||||||
| 66,815 | 64,039 | 1.23 | % | |||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7) |
SN + 6.00% | 11.25 | % | 9/8/2028 | £ | 2,437 | 308 | (39 | ) | |||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + 6.00% | 11.26 | % | 9/8/2028 | £ | 7,749 | 10,090 | 8,669 | ||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + 6.00% | 11.26 | % | 9/8/2028 | £ | 4,509 | 5,906 | 5,045 | ||||||||||||||||
Artemis Bidco Limited (4)(5)(7) |
SN + 6.00% | 11.30 | % | 9/8/2028 | £ | 4,676 | 6,117 | 5,232 | ||||||||||||||||
Canoe Bidco Pty Limited (4)(5)(8) |
B + 5.50% | 9.92 | % | 5/20/2026 | A$ | 31,969 | 21,202 | 21,784 | ||||||||||||||||
Canoe Bidco Pty Limited (4)(5)(8) |
B + 5.50% | 9.92 | % | 5/20/2026 | A$ | 137,468 | 95,483 | 93,671 | ||||||||||||||||
Fertitta Entertainment LLC (8) |
SF + 4.00% | 9.36 | % | 1/27/2029 | 13,182 | 12,741 | 13,205 | |||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
E + 9.50% (incl 3.50% PIK) |
13.44 | % | 7/27/2026 | € | 18,785 | 20,835 | 20,881 | ||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
E + 9.50% (incl 3.50% PIK) |
13.44 | % | 10/26/2024 | € | 3,683 | 4,085 | 4,076 | ||||||||||||||||
IRB Holding Corp. (9) |
SF + 3.00% | 8.46 | % | 12/15/2027 | 9,899 | 9,667 | 9,927 | |||||||||||||||||
Travel Leaders Group, LLC (4)(14) |
SF + 8.50% (incl 3.00% PIK) |
13.96 | % | 3/27/2028 | 137,128 | 134,227 | 139,704 | |||||||||||||||||
| 320,661 | 322,155 | 6.21 | % | |||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Non-Affiliated |
8,914,332 | 8,997,013 | 173.51 | % | ||||||||||||||||||||
F-119
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
First Lien Debt - Non-Controlled/Affiliated |
||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(16)(17) |
SF + 7.50% PIK | 5/1/2028 | $ | 5,682 | $ | 5,533 | $ | 5,682 | ||||||||||||||||
| 5,533 | 5,682 | 0.11 | % | |||||||||||||||||||||
Total First Lien Debt - Non-Controlled/Affiliated |
5,533 | 5,682 | 0.11 | % | ||||||||||||||||||||
Total First Lien Debt |
$ | 8,919,865 | $ | 9,002,695 | 173.62 | % | ||||||||||||||||||
Second Lien Debt |
||||||||||||||||||||||||
Second Lien Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||
Asurion Corporation (7) |
SF + 5.25% | 10.72 | % | 1/31/2028 | $ | 4,132 | $ | 4,092 | $ | 3,949 | ||||||||||||||
| 4,092 | 3,949 | 0.08 | % | |||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||
Charlotte Buyer Inc (4)(8) |
SF + 8.25% | 13.61 | % | 8/11/2028 | 10,000 | 9,433 | 9,744 | |||||||||||||||||
| 9,433 | 9,744 | 0.19 | % | |||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(8) |
SF + 8.25% | 13.63 | % | 4/29/2030 | 9,000 | 8,812 | 7,765 | |||||||||||||||||
| 8,812 | 7,765 | 0.15 | % | |||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||
Cloud Software Group Inc (7) |
9.00 | % | 9/30/2029 | 19,666 | 15,951 | 18,750 | ||||||||||||||||||
UKG Inc (8) |
SF + 5.25% | 10.76 | % | 5/3/2027 | 24,852 | 24,613 | 24,947 | |||||||||||||||||
| 40,564 | 43,697 | 0.84 | % | |||||||||||||||||||||
Total Second Lien Debt - Non-Controlled/Non-Affiliated |
62,901 | 65,155 | 1.26 | % | ||||||||||||||||||||
Second Lien Debt - Non-Controlled/Affiliated |
||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(16)(17) |
SF + 7.50% PIK | 10/30/2028 | $ | 1,932 | $ | 1,881 | $ | 1,932 | ||||||||||||||||
Total Second Lien Debt - Non-Controlled/Affiliated |
1,881 | 1,932 | 0.03 | % | ||||||||||||||||||||
Total Second Lien Debt |
$ | 64,782 | $ | 67,087 | 1.29 | % | ||||||||||||||||||
Unsecured Debt - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7) |
15.00% PIK | 7/16/2029 | $ | 13,390 | $ | 13,390 | $ | 13,390 | ||||||||||||||||
| 13,390 | 13,390 | 0.27 | % | |||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
13.75% PIK | 9/3/2030 | 282 | 277 | 256 | |||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
14.75% PIK | 9/3/2030 | 239 | 233 | 227 | |||||||||||||||||||
Vetcor Group Holdings LLC (4)(7) |
13.75% PIK | 9/3/2030 | 894 | 878 | 812 | |||||||||||||||||||
| 1,388 | 1,295 | 0.02 | % | |||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
13.13% PIK | 12/28/2032 | 99 | 97 | 93 | |||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
13.13% PIK | 12/28/2032 | 178 | 173 | 168 | |||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
13.13% PIK | 12/28/2032 | 1,046 | 1,029 | 990 | |||||||||||||||||||
| 1,299 | 1,251 | 0.02 | % | |||||||||||||||||||||
F-120
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (7) |
6.75 | % | 10/15/2027 | 6,255 | 5,752 | 6,207 | ||||||||||||||||||
| 5,752 | 6,207 | 0.12 | % | |||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7) |
5.50 | % | 5/1/2026 | 7,000 | 7,072 | 6,958 | ||||||||||||||||||
| 7,072 | 6,958 | 0.13 | % | |||||||||||||||||||||
Total Unsecured Debt - Non-Controlled/Non-Affiliated |
$ | 28,901 | $ | 29,101 | 0.56 | % | ||||||||||||||||||
Structured Finance - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||
Structured Finance Investments |
||||||||||||||||||||||||
ALM 2020 Ltd (5)(7) |
SF + 6.26% | 11.66 | % | 10/15/2029 | $ | 3,330 | $ | 3,037 | $ | 3,297 | ||||||||||||||
AMMC CLO 21 Ltd (5)(7) |
SF + 3.10% | 8.74 | % | 11/2/2030 | 2,150 | 1,927 | 2,112 | |||||||||||||||||
AMMC CLO 21 Ltd (5)(7) |
SF + 6.76% | 12.14 | % | 11/2/2030 | 4,126 | 3,665 | 3,840 | |||||||||||||||||
Carlyle Global Market Strategies (5)(7) |
SF + 5.40% | 11.08 | % | 10/20/2027 | 1,750 | 1,531 | 1,676 | |||||||||||||||||
Carlyle Global Market Strategies (5)(7) |
L + 5.40% | 11.05 | % | 7/27/2031 | 1,200 | 940 | 1,044 | |||||||||||||||||
Catskill Park CLO Ltd (5)(7) |
SF + 6.26% | 11.68 | % | 4/20/2029 | 1,350 | 1,230 | 1,287 | |||||||||||||||||
CENT CLO 16, L.P. (5)(7) |
SF + 8.07% | 13.47 | % | 7/24/2034 | 3,000 | 2,823 | 2,773 | |||||||||||||||||
Dryden 108 CLO Ltd (5)(7) |
7/18/2035 | 2,900 | 2,291 | 1,891 | ||||||||||||||||||||
Marble Point CLO XI Ltd (5)(7) |
SF + 3.06% | 8.46 | % | 12/18/2030 | 1,850 | 1,568 | 1,696 | |||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7) |
SF + 10.02% | 15.42 | % | 10/24/2034 | 2,500 | 2,341 | 2,446 | |||||||||||||||||
OCP CLO 2017-14 Ltd (5)(7) |
SF + 6.80% | 12.19 | % | 1/15/2033 | 1,469 | 1,289 | 1,458 | |||||||||||||||||
Shackleton 2019-XV CLO Ltd (5)(7) |
SF + 6.66% | 12.32 | % | 1/15/2032 | 3,000 | 2,648 | 2,905 | |||||||||||||||||
Silver Creek CLO Ltd (5)(7) |
SF + 5.62% | 11.30 | % | 7/20/2030 | 2,000 | 1,802 | 1,988 | |||||||||||||||||
Voya CLO Ltd (5)(7) |
SF + 3.81% | 9.21 | % | 4/17/2030 | 1,500 | 1,335 | 1,455 | |||||||||||||||||
| 28,427 | 29,868 | 0.58 | % | |||||||||||||||||||||
Total Structured Finance - Non-Controlled/Non-Affiliated |
$ | 28,427 | $ | 29,868 | 0.58 | % | ||||||||||||||||||
Equity Investments |
||||||||||||||||||||||||
Equity Investments - Non-Controlled/Non-Affiliated |
||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. - Preferred Shares (4) |
2,000 | $ | 1,940 | $ | 1,970 | |||||||||||||||||||
Club Car Wash Preferred, LLC (4)(6) |
8,817 | 2,784 | 2,784 | |||||||||||||||||||||
Rapid Express Preferred, LLC (4)(6) |
2,784 | 928 | 928 | |||||||||||||||||||||
Club Car Wash Preferred, LLC (4) |
15.00% PIK | 10,313 | 10,313 | 10,313 | ||||||||||||||||||||
Rapid Express Preferred, LLC (4) |
15.00% PIK | 4,770 | 4,770 | 4,770 | ||||||||||||||||||||
| 20,735 | 20,765 | 0.40 | % | |||||||||||||||||||||
Electricity |
||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4) |
3 | 68 | 199 | |||||||||||||||||||||
| 68 | 199 | — | % | |||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4) |
— | — | — | |||||||||||||||||||||
| — | — | — | % | |||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||
BCPE Virginia HoldCo, Inc. (4) |
2,000 | 1,960 | 1,973 | |||||||||||||||||||||
| 1,960 | 1,973 | 0.04 | % | |||||||||||||||||||||
Media |
||||||||||||||||||||||||
Oneteam Partners, LLC - Preferred Shares (4) |
8.00 | % | 1,000 | 1,000 | 1,132 | |||||||||||||||||||
| 1,000 | 1,132 | 0.02 | % | |||||||||||||||||||||
F-121
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||
Picard Holdco, Inc. — Preferred Shares (4) |
304 | 295 | 343 | |||||||||||||||||||||||||
Picard Holdco, Inc. — Preferred Shares (4) |
30 | 30 | 34 | |||||||||||||||||||||||||
| 325 | 377 | 0.01 | % | |||||||||||||||||||||||||
Total Equity Investments — Non-Controlled/Non-Affiliated |
24,088 | 24,446 | 0.46 | % | ||||||||||||||||||||||||
Equity Investments — Non-Controlled/Affiliated |
||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(17) |
274 | $ | 2,333 | $ | 2,333 | |||||||||||||||||||||||
| 2,333 | 2,333 | 0.05 | % | |||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(17)(18) |
10,101 | 9,892 | 9,877 | |||||||||||||||||||||||||
| 9,892 | 9,877 | 0.19 | % | |||||||||||||||||||||||||
Total Equity Investments — Non-Controlled/Affiliated |
12,225 | 12,210 | 0.24 | % | ||||||||||||||||||||||||
Total Equity Investments |
$ | 36,313 | $ | 36,656 | 0.71 | % | ||||||||||||||||||||||
Investments in Joint Ventures |
||||||||||||||||||||||||||||
Investments in Joint Ventures — Controlled/Affiliated |
||||||||||||||||||||||||||||
ULTRA III, LLC (5)(17) |
$ | 125,513 | $ | 124,003 | ||||||||||||||||||||||||
Total Investments in Joint Ventures — Controlled/Affiliated |
$ | 125,513 | $ | 124,003 | 2.39 | % | ||||||||||||||||||||||
Total Investments — Non-Controlled/Non-Affiliated |
$ | 9,058,649 | $ | 9,145,583 | 176.37 | % | ||||||||||||||||||||||
Total Investments — Non-Controlled/Affiliated |
$ | 19,639 | $ | 19,824 | 0.38 | % | ||||||||||||||||||||||
Total Investments — Controlled/Affiliated |
$ | 125,513 | $ | 124,003 | 2.40 | % | ||||||||||||||||||||||
Total Investment Portfolio |
$ | 9,203,801 | $ | 9,289,410 | 179.15 | % | ||||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares |
131,546 | $ | 131,546 | $ | 131,546 | |||||||||||||||||||||||
Cash |
57,229 | 57,229 | ||||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 188,775 | $ | 188,775 | 3.64 | % | ||||||||||||||||||||||
Total Investment Portfolio, Cash and Cash Equivalents |
$ | 9,392,576 | $ | 9,478,185 | 182.79 | % | ||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral under its credit facilities and debt securitization issuances unless otherwise indicated. |
| (2) | The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average (“SONIA” or “SN”), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate (“SOFR” or “SF”), Canadian Dollar Offered Rate (“CDOR” or “C”), Singapore Overnight Rate Average (“SORA”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Rate (“BBSW” or “B”) which reset daily, monthly, quarterly, semiannually or annually. For each such investment, the Company has provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR, SORA, BS or BBSW and the current contractual interest rate in effect at December 31, 2023. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread. |
F-122
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2023, non-qualifying assets represented 17.9% of total assets as calculated in accordance with regulatory requirements. |
F-123
| (6) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments: |
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Zendesk Inc |
1st Lien Senior Secured Delayed Draw Loan | $ | 39,321 | $ | 31 | |||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 34,900 | (734 | ) | ||||||
WP CPP Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 26,285 | (648 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 22,837 | (2,435 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan | 22,070 | (846 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Revolving Loan | 21,254 | (543 | ) | ||||||
Esdec Solar Group B.V. |
1st Lien Senior Secured Delayed Draw Loan | 18,968 | (164 | ) | ||||||
Zendesk Inc |
1st Lien Senior Secured Revolving Loan | 17,940 | — | |||||||
United Musculoskeletal Partners Acquisition Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 17,374 | (534 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 16,751 | (92 | ) | ||||||
Sugar PPC Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan | 16,541 | (359 | ) | ||||||
Bamboo US BidCo LLC |
1st Lien Senior Secured Delayed Draw Loan | 14,405 | (366 | ) | ||||||
Club Car Wash Operating, LLC |
1st Lien Senior Secured Delayed Draw Loan | 13,977 | (85 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Revolving Loan | 13,795 | (83 | ) | ||||||
Sequa Corp |
1st Lien Senior Secured Revolving Loan | 13,676 | (135 | ) | ||||||
Atlas Intermediate III, L.L.C. |
1st Lien Senior Secured Revolving Loan | 13,445 | (327 | ) | ||||||
E.S.G. Movilidad, S.L.U. |
1st Lien Senior Secured Delayed Draw Loan | 12,414 | (86 | ) | ||||||
Formerra, LLC |
1st Lien Senior Secured Revolving Loan | 12,031 | (117 | ) | ||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Revolving Loan | 11,656 | — | |||||||
SimpliSafe Holding Corporation |
1st Lien Senior Secured Delayed Draw Loan | 11,078 | (71 | ) | ||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,961 | (126 | ) | ||||||
Prism Parent Co., Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,833 | 108 | |||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Delayed Draw Loan | 10,736 | 58 | |||||||
Radwell Parent, LLC |
1st Lien Senior Secured Revolving Loan | 10,617 | — | |||||||
Denali Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 10,296 | (120 | ) | ||||||
CD&R Madison UK Bidco LTD |
1st Lien Senior Secured Delayed Draw Loan | 10,039 | (212 | ) | ||||||
Dolcetto HoldCo S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 9,273 | (60 | ) | ||||||
Cadence — Southwick, Inc. |
1st Lien Senior Secured Revolving Loan | 8,280 | (117 | ) | ||||||
PPV Intermediate Holdings, LLC |
1st Lien Senior Secured
Revolving Loan
|
8,145 | (52 | ) | ||||||
Planet US Buyer LLC |
1st Lien Senior Secured Revolving Loan | 8,024 | (148 | ) | ||||||
NWN Corporation |
1st Lien Senior Secured Revolving Loan | 7,686 | (208 | ) | ||||||
Captive Resources Midco LLC |
1st Lien Senior Secured Revolving Loan | 7,558 | — | |||||||
Higginbotham Insurance Agency, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 7,515 | (83 | ) | ||||||
Circana Group, LP. |
1st Lien Senior Secured Revolving Loan | 7,399 | (52 | ) | ||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 7,123 | (99 | ) | ||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Revolving Loan | 7,069 | (125 | ) | ||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,923 | (154 | ) | ||||||
Camin Cargo Control Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 6,923 | (154 | ) | ||||||
Frontgrade Technologies Holdings Inc. |
1st Lien Senior Secured Revolving Loan | 6,864 | (94 | ) | ||||||
Summit Acquisition Inc. |
1st Lien Senior Secured Revolving Loan | 6,685 | (85 | ) | ||||||
Trupanion, Inc. |
1st Lien Senior Secured Revolving Loan | 6,576 | (109 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,554 | — | |||||||
Advarra Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,340 | 63 | |||||||
Avalara, Inc. |
1st Lien Senior Secured Revolving Loan | 6,324 | (45 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Revolving Loan | 6,306 | (216 | ) | ||||||
Coupa Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 6,211 | (89 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Revolving Loan | 6,189 | (127 | ) | ||||||
Gusto Aus Bidco Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 6,083 | (65 | ) | ||||||
Ping Identity Holding Corp. |
1st Lien Senior Secured Revolving Loan | 6,068 | (43 | ) | ||||||
Club Car Wash Preferred, LLC |
Preferred Equity | 6,033 | — | |||||||
Artisan Bidco, Inc. |
1st Lien Senior Secured Revolving Loan | 6,000 | (146 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 5,986 | (83 | ) | ||||||
Arcfield Acquisition Corp |
1st Lien Senior Secured Revolving Loan | 5,687 | (228 | ) | ||||||
F-124
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Cube Industrials Buyer, Inc. |
1st Lien Senior Secured Revolving Loan | 5,664 | (82 | ) | ||||||
More Cowbell II, LLC |
1st Lien Senior Secured Delayed Draw Loan | 5,484 | (111 | ) | ||||||
Certinia Inc. |
1st Lien Senior Secured Revolving Loan | 5,449 | (96 | ) | ||||||
123Dentist Inc |
1st Lien Senior Secured Delayed Draw Loan | 5,441 | (55 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Delayed Draw Loan | 5,419 | (40 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 5,367 | — | |||||||
Specialty Ingredients, LLC |
1st Lien Senior Secured Revolving Loan | 5,357 | (55 | ) | ||||||
Alera Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 5,196 | (51 | ) | ||||||
International Entertainment Investments Ltd |
1st Lien Senior Secured Delayed Draw Loan | 5,080 | (66 | ) | ||||||
Spanx, LLC |
1st Lien Senior Secured Revolving Loan | 5,000 | — | |||||||
Enverus Holdings Inc |
1st Lien Senior Secured Revolving Loan | 4,913 | (73 | ) | ||||||
Showtime Acquisition, L.L.C. |
1st Lien Senior Secured Revolving Loan | 4,711 | (87 | ) | ||||||
Oranje Holdco, Inc. |
1st Lien Senior Secured Revolving Loan | 4,657 | (65 | ) | ||||||
Daphne S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 4,392 | (242 | ) | ||||||
Spotless Brands, LLC |
1st Lien Senior Secured Revolving Loan | 4,057 | — | |||||||
Pareto Health Intermediate Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 4,032 | (61 | ) | ||||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan | 4,007 | (11 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan | 3,758 | 38 | |||||||
ASDAM Operations Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 3,694 | (132 | ) | ||||||
Showtime Acquisition, L.L.C. |
1st Lien Senior Secured Delayed Draw Loan | 3,657 | (68 | ) | ||||||
Enverus Holdings Inc |
1st Lien Senior Secured Delayed Draw Loan | 3,229 | (48 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 3,221 | (44 | ) | ||||||
Pinnacle Fertility, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 3,125 | (19 | ) | ||||||
Artemis Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 2,765 | (338 | ) | ||||||
Galway Borrower LLC |
1st Lien Senior Secured Revolving Loan | 2,216 | (15 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Delayed Draw Loan | 2,143 | (12 | ) | ||||||
CPI Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 2,115 | (5 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Revolving Loan | 2,074 | (221 | ) | ||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Delayed Draw Loan | 1,999 | (54 | ) | ||||||
Rapid Express Preferred, LLC |
Preferred Equity | 1,856 | — | |||||||
IG Investments Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,726 | (12 | ) | ||||||
TriMech Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 1,645 | (31 | ) | ||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 1,638 | (24 | ) | ||||||
IXM Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 1,584 | (24 | ) | ||||||
Excelitas Technologies Corp. |
1st Lien Senior Secured Revolving Loan | 1,261 | (13 | ) | ||||||
Calabrio, Inc. |
1st Lien Senior Secured Revolving Loan | 1,152 | (3 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,150 | (11 | ) | ||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Revolving Loan | 1,143 | (31 | ) | ||||||
Braya Renewable Fuels (Newfoundland) LP |
1st Lien Senior Secured Delayed Draw Loan | 1,139 | (22 | ) | ||||||
BradyIFS Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 1,128 | (11 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Revolving Loan | 1,071 | (6 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 1,019 | (23 | ) | ||||||
Patriot Growth Insurance Services LLC |
1st Lien Senior Secured Revolving Loan | 822 | (3 | ) | ||||||
DS Admiral Bidco, LLC |
1st Lien Senior Secured Revolving Loan | 773 | (6 | ) | ||||||
ERC Topco Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 567 | (73 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Revolving Loan | 472 | (3 | ) | ||||||
Accession Risk Management Group, Inc. |
1st Lien Senior Secured Revolving Loan | 467 | (5 | ) | ||||||
Bottomline Technologies, Inc. |
1st Lien Senior Secured Revolving Loan | 385 | — | |||||||
Riley MergeCo LLC |
1st Lien Senior Secured Revolving Loan | 304 | (8 | ) | ||||||
Nexus Intermediate III, LLC |
1st Lien Senior Secured Delayed Draw Loan | 300 | — | |||||||
Arc Media Holdings Limited |
1st Lien Senior Secured Revolving Loan | 277 | (14 | ) | ||||||
Time Manufacturing Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 273 | (14 | ) | ||||||
Associations Inc. |
1st Lien Senior Secured Revolving Loan | 261 | — | |||||||
Total |
$ | 760,659 | $ | (12,755 | ) | |||||
| (7) | There are no interest rate floors on these investments. |
| (8) | The interest rate floor on these investments as of December 31, 2023 was 0.50%. |
| (9) | The interest rate floor on these investments as of December 31, 2023 was 0.75%. |
| (10) | The interest rate floor on these investments as of December 31, 2023 was 1.00%. |
F-125
| (11) | The interest rate floor on these investments as of December 31, 2023 was 1.25% |
| (12) | The interest rate floor on these investments as of December 31, 2023 was 1.50% |
| (13) | The interest rate floor on these investments as of December 31, 2023 was 1.75%. |
| (14) | The interest rate floor on these investments as of December 31, 2023 was 2.00%. |
| (15) | The interest rate floor on these investments as of December 31, 2023 was 2.50%. |
| (16) | Loan was on non-accrual status as of December 31, 2023. |
| (17) | Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company is deemed to “control” a portfolio company if the Company owns more than 25% of its outstanding voting securities and/or holds the power to exercise control over the management or policies of the portfolio company. Under the 1940 Act, the Company is deemed an “affiliated person” of a portfolio company if the Company owns between 5% and 25% (inclusive) of the portfolio company’s outstanding voting securities. For purposes of determining the classification of its investment portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the Adviser and/or its affiliates. |
As of December 31, 2023, the Company’s controlled/affiliated and non-controlled/affiliated investments were as follows:
Fair Value as of December 31, 2022 |
Gross Additions |
Gross Reductions |
Change in Unrealized Gains (Loss) |
Net Realized Gain (Loss) |
Fair Value as of December 31, 2023 |
Dividend and Interest Income |
||||||||||||||||||||||
Non-Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
Southern Graphics Inc. |
$ | — | $ | 9,747 | $ | — | $ | 200 | $ | — | $ | 9,947 | $ | — | ||||||||||||||
AD1 LBV1, LLC |
— | 6,013 | (5,149 | ) | — | (864 | ) | — | — | |||||||||||||||||||
SLF V AD1 Holdings, LLC |
— | 9,892 | — | (15 | ) | — | 9,877 | — | ||||||||||||||||||||
Total Non-Controlled/Affiliated Investments |
$ | — | $ | 25,652 | $ | (5,149 | ) | $ | 185 | $ | (864 | ) | $ | 19,824 | $ | — | ||||||||||||
Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
ULTRA III, LLC |
$ | — | $ | 129,675 | $ | (4,162 | ) | $ | (1,510 | ) | $ | — | $ | 124,003 | $ | — | ||||||||||||
Total Controlled/Affiliated Investments |
$ | — | $ | 129,675 | $ | (4,162 | ) | $ | (1,510 | ) | $ | — | $ | 124,003 | $ | — | ||||||||||||
| (18) | These investments are not pledged as collateral under the Credit Facilities and 2023 CLO Secured Notes. |
F-126
ADDITIONAL INFORMATION
Foreign currency forward contracts:
Currency Purchased |
Currency Sold |
Counterparty |
Settlement Date |
Unrealized Appreciation (Depreciation) |
||||||||||||
U.S. Dollars 10,232 |
Australian Dollars 15,121 | SMBC Capital Markets, Inc. | 3/21/2024 | $ | (96 | ) | ||||||||||
U.S. Dollars 2,719 |
Canadian Dollars 3,623 | SMBC Capital Markets, Inc. | 3/21/2024 | (18 | ) | |||||||||||
U.S. Dollars 3,343 |
Euro 3,083 | Goldman Sachs Bank USA | 9/23/2024 | (98 | ) | |||||||||||
U.S. Dollars 13,028 |
Euro 12,097 | Goldman Sachs Bank USA | 3/21/2024 | (367 | ) | |||||||||||
U.S. Dollars 177,612 |
Euro 163,379 | Goldman Sachs Bank USA | 12/23/2024 | (5,544 | ) | |||||||||||
U.S. Dollars 2,320 |
Euro 2,080 | Goldman Sachs Bank USA | 1/29/2024 | 22 | ||||||||||||
U.S. Dollars 106,649 |
Euro 96,729 | SMBC Capital Markets, Inc. | 3/21/2024 | (465 | ) | |||||||||||
U.S. Dollars 248 |
Euro 224 | Goldman Sachs Bank USA | 6/23/2025 | (5 | ) | |||||||||||
U.S. Dollars 101,171 |
Euro 89,721 | SMBC Capital Markets, Inc. | 9/23/2025 | (656 | ) | |||||||||||
U.S. Dollars 2,545 |
British Pound 2,215 | Goldman Sachs Bank USA | 3/23/2026 | 13 | ||||||||||||
Euro 80,972 |
U.S. Dollars 89,270 | SMBC Capital Markets, Inc. | 3/21/2024 | 394 | ||||||||||||
U.S. Dollars 6,868 |
British Pound 6,303 | Goldman Sachs Bank USA | 10/15/2024 | (1,171 | ) | |||||||||||
U.S. Dollars 7,472 |
British Pound 6,079 | Goldman Sachs Bank USA | 9/23/2024 | (281 | ) | |||||||||||
U.S. Dollars 764 |
British Pound 620 | Goldman Sachs Bank USA | 6/23/2025 | (27 | ) | |||||||||||
U.S. Dollars 2,601 |
British Pound 2,109 | Goldman Sachs Bank USA | 3/21/2025 | (91 | ) | |||||||||||
U.S. Dollars 125 |
British Pound 99 | Goldman Sachs Bank USA | 3/21/2024 | (1 | ) | |||||||||||
U.S. Dollars 134,754 |
British Pound 105,740 | SMBC Capital Markets, Inc. | 3/21/2024 | (73 | ) | |||||||||||
U.S. Dollars 3,086 |
Singaporean Dollars 4,117 | Goldman Sachs Bank USA | 3/21/2024 | (44 | ) | |||||||||||
U.S. Dollars 32,604 |
Singaporean Dollars 43,183 | Goldman Sachs Bank USA | 12/23/2024 | (596 | ) | |||||||||||
Total |
$ | (9,104 | ) | |||||||||||||
Interest rate swaps:
Counterparty |
Hedged Instrument |
Company Receives |
Company Pays |
Maturity Date |
Notional Amount |
Fair Market Value |
||||||||||||||||
Goldman Sachs Bank USA |
November 2025 Notes | 8.37 | % | SOFR + 4.08 | % | 11/14/2025 | $ | 85,000 | $ | (43 | ) | |||||||||||
Goldman Sachs Bank USA |
November 2027 Notes | 8.43 | % | SOFR + 4.42 | % | 11/14/2027 | 77,500 | 733 | ||||||||||||||
Goldman Sachs Bank USA |
March 2026 Notes | 8.12 | % | SOFR + 3.76 | % | 3/15/2026 | 276,000 | 562 | ||||||||||||||
Goldman Sachs Bank USA |
March 2028 Notes | 8.18 | % | SOFR + 4.24 | % | 3/15/2028 | 124,000 | 538 | ||||||||||||||
Goldman Sachs Bank USA |
September 2027 Notes | 8.67 | % | SOFR + 4.31 | % | 9/14/2027 | 75,000 | 1,275 | ||||||||||||||
Goldman Sachs Bank USA |
September 2028 Notes | 8.80 | % | SOFR + 4.54 | % | 9/14/2028 | 250,000 | 5,288 | ||||||||||||||
Total Interest Rate Swaps |
$ | 8,353 | ||||||||||||||||||||
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Non-Controlled/Non-Affiliated Investments |
||||||||||||||||||||||||
First Lien Debt |
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Aerospace and Defense |
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Arcfield Acquisition Corp (4)(7)(11) |
3/10/2027 | $ | 2,990 | $ | (50 | ) | $ | (129 | ) | |||||||||||||||
Arcfield Acquisition Corp (4)(11) |
L + 5.75% | 10.02% | 3/10/2028 | 20,446 | 20,078 | 19,453 | ||||||||||||||||||
F-127
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Asdam Operations Pty Ltd (4)(6)(9) |
B + 5.75% | 8.86% | 8/22/2028 | A$ | 3,614 | 2,401 | 2,348 | |||||||||||||||||
Asdam Operations Pty Ltd (4)(6)(7)(9) |
8/22/2028 | A$ | 5,421 | (112 | ) | (168 | ) | |||||||||||||||||
Asdam Operations Pty Ltd (4)(6)(9) |
B + 5.75% | 8.82% | 8/22/2028 | A$ | 41,558 | 27,711 | 27,017 | |||||||||||||||||
Sequa Corp (4)(7)(12) |
11/23/2027 | 13,676 | (684 | ) | (670 | ) | ||||||||||||||||||
Sequa Corp (4)(12) |
SF + 7.00% | 11.32% | 11/24/2028 | 128,310 | 121,852 | 122,005 | ||||||||||||||||||
| 171,196 | 169,856 | 4.92 | % | |||||||||||||||||||||
Automobiles and Parts |
||||||||||||||||||||||||
Foundation Automotive Us Corp (4)(7)(12) |
SF + 7.75% | 11.88% | 12/24/2027 | 38,333 | 3,776 | 2,907 | ||||||||||||||||||
Foundation Automotive Corp (4)(6)(12) |
SF + 7.75% | 12.55% | 12/24/2027 | 16,084 | 15,858 | 15,499 | ||||||||||||||||||
Foundation Automotive Us Corp (4)(12) |
SF + 7.75% | 12.55% | 12/24/2027 | 39,817 | 39,263 | 38,371 | ||||||||||||||||||
Oil Changer Holding Corporation (4)(12) |
L + 6.75% | 11.47% | 2/8/2027 | 41,012 | 40,646 | 39,813 | ||||||||||||||||||
Oil Changer Holding Corporation (4)(12) |
L + 6.75% | 11.47% | 2/8/2027 | 8,611 | 8,535 | 8,359 | ||||||||||||||||||
Power Stop LLC (9) |
L + 4.75% | 9.48% | 1/26/2029 | 19,273 | 19,102 | 13,491 | ||||||||||||||||||
| 127,180 | 118,440 | 3.43 | % | |||||||||||||||||||||
Chemicals |
||||||||||||||||||||||||
Illuminate Buyer, LLC (8) |
L + 3.50% | 7.88% | 6/30/2027 | 7,250 | 7,226 | 6,960 | ||||||||||||||||||
| 7,226 | 6,960 | 0.20 | % | |||||||||||||||||||||
Construction and Materials |
||||||||||||||||||||||||
Nexus Intermediate III, LLC (4)(7)(11) |
12/6/2027 | 300 | (4 | ) | (3 | ) | ||||||||||||||||||
Nexus Intermediate III, LLC (4)(11) |
L + 5.50% | 10.22% | 12/6/2027 | 1,176 | 1,159 | 1,165 | ||||||||||||||||||
| 1,155 | 1,162 | 0.03 | % | |||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||
American Academy Holdings, LLC (4)(12) |
L + 11.00% (incl 6.25% PIK) |
15.38% | 1/2/2025 | 51,704 | 51,744 | 51,087 | ||||||||||||||||||
Asurion Corporation (8) |
SF + 4.00% | 8.68% | 8/16/2028 | 9,975 | 9,497 | 8,925 | ||||||||||||||||||
Asurion Corporation (8) |
L + 3.00% | 7.38% | 11/4/2024 | 1,979 | 1,960 | 1,927 | ||||||||||||||||||
Auctane Inc (4)(11) |
L + 5.75% | 10.13% | 10/5/2028 | 24,813 | 24,813 | 24,124 | ||||||||||||||||||
Club Car Wash Operating, LLC (4)(7)(12) |
SF + 6.50% | 11.23% | 6/16/2027 | 61,873 | 40,059 | 38,434 | ||||||||||||||||||
Club Car Wash Operating, LLC (4)(12) |
SF + 6.50% | 11.23% | 6/16/2027 | 27,790 | 27,430 | 26,568 | ||||||||||||||||||
Express Wash Concepts (4)(7)(12) |
SF + 5.75% | 10.17% | 4/30/2027 | 62,968 | 25,128 | 21,671 | ||||||||||||||||||
Express Wash Concepts (4)(12) |
SF + 5.75% | 10.17% | 4/30/2027 | 26,798 | 26,554 | 25,090 | ||||||||||||||||||
Houghton Mifflin Harcourt Company (9) |
SF + 5.25% | 9.67% | 4/6/2029 | 29,925 | 29,090 | 28,550 | ||||||||||||||||||
PECF USS Intermediate Holding III Corporation (9) |
L + 4.25% | 8.63% | 12/15/2028 | 14,862 | 14,781 | 12,448 | ||||||||||||||||||
Polyconcept North America Holdings, Inc. (11) |
SF + 5.50% | 10.08% | 5/12/2029 | 23,242 | 22,806 | 21,818 | ||||||||||||||||||
Spotless Brands, LLC (4)(12) |
SF + 6.50% | 10.82% | 7/25/2028 | 21,782 | 21,372 | 20,935 | ||||||||||||||||||
Spotless Brands, LLC (4)(12) |
SF + 6.50% | 10.92% | 7/25/2028 | 16,144 | 15,849 | 15,517 | ||||||||||||||||||
Spotless Brands, LLC (4)(12) |
SF + 6.50% | 10.71% | 7/25/2028 | 106,669 | 104,635 | 102,525 | ||||||||||||||||||
Spotless Brands, LLC (4)(7)(12) |
7/25/2028 | 5,175 | (95 | ) | (201 | ) | ||||||||||||||||||
Thrasio LLC (7)(12) |
12/18/2026 | 2,972 | (11 | ) | (338 | ) | ||||||||||||||||||
F-128
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Thrasio LLC (12) |
L + 7.00% | 11.17 | % | 12/18/2026 | 2,927 | 2,916 | 2,594 | |||||||||||||||||||
Trugreen Limited Partnership (11) |
L + 4.00% | 8.38 | % | 11/2/2027 | 9,914 | 9,789 | 8,830 | |||||||||||||||||||
WMB Holdings Inc (9) |
SF + 3.25% | 7.67 | % | 8/31/2029 | 2,202 | 2,137 | 2,183 | |||||||||||||||||||
Zips Car Wash, LLC (4)(12) |
L + 7.25% | 11.67 | % | 3/1/2024 | 26,312 | 26,287 | 25,799 | |||||||||||||||||||
Zips Car Wash, LLC (4)(7)(12) |
SF + 7.25% | 11.53 | % | 3/1/2024 | 39,718 | 14,987 | 14,730 | |||||||||||||||||||
Zips Car Wash, LLC (4)(7)(12) |
SF + 7.25% | 11.67 | % | 3/1/2024 | 1,003 | 994 | 973 | |||||||||||||||||||
| 472,722 | 454,189 | 13.14 | % | |||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7)(8) |
7.88 | % | 12/31/2029 | 27,428 | 8,670 | 8,441 | ||||||||||||||||||||
| 8,670 | 8,441 | 0.24 | % | |||||||||||||||||||||||
Electronic and Electrical Equipment |
||||||||||||||||||||||||||
Brightstar Escrow Corp. (8) |
9.75 | % | 10/15/2025 | 1,000 | 983 | 922 | ||||||||||||||||||||
| 983 | 922 | 0.03 | % | |||||||||||||||||||||||
Finance and Credit Services |
||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(6)(12) |
L + 7.25% | 8.35 | % | 2/9/2027 | 18,186 | 17,877 | 17,431 | |||||||||||||||||||
Verscend Holding Corp. (8) |
L + 4.00% | 8.38 | % | 8/27/2025 | 3,980 | 3,961 | 3,962 | |||||||||||||||||||
Yes Energy LLC (4)(7)(11) |
B + 5.00% | 9.37 | % | 4/21/2028 | 10,000 | 2,268 | 2,099 | |||||||||||||||||||
Yes Energy LLC (4)(11) |
B + 5.00% | 9.37 | % | 4/21/2028 | 26,000 | 25,342 | 24,956 | |||||||||||||||||||
| 49,448 | 48,448 | 1.40 | % | |||||||||||||||||||||||
Food Producers |
||||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(7)(11) |
2/12/2029 | 11,279 | (212 | ) | (413 | ) | ||||||||||||||||||||
Specialty Ingredients, LLC (4)(11) |
SF + 6.00% | 10.68 | % | 2/12/2029 | 90,708 | 88,964 | 87,390 | |||||||||||||||||||
| 88,752 | 86,977 | 2.52 | % | |||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(6)(12) |
SF + 5.75% | 10.43 | % | 8/13/2027 | 44,719 | 43,883 | 43,242 | |||||||||||||||||||
| 43,883 | 43,242 | 1.25 | % | |||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||
BP Purchaser, LLC (4)(11) |
L + 5.50% | 10.24 | % | 12/11/2028 | 27,793 | 27,309 | 26,310 | |||||||||||||||||||
Formerra, LLC (4)(7)(12) |
11/1/2028 | 4,270 | (137 | ) | (135 | ) | ||||||||||||||||||||
Formerra, LLC (4)(7)(12) |
11/1/2028 | 12,031 | (380 | ) | (380 | ) | ||||||||||||||||||||
Formerra, LLC (4)(12) |
SF + 7.25% | 11.49 | % | 11/1/2028 | 106,487 | 103,076 | 103,121 | |||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 10.98 | % | 6/23/2028 | 12,107 | 11,989 | 11,536 | |||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 10.98 | % | 6/23/2028 | 50,373 | 49,661 | 47,997 | |||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 10.90 | % | 6/23/2028 | 4,440 | 4,399 | 4,231 | |||||||||||||||||||
Marcone Yellowstone Buyer Inc. (4)(13) |
SF + 6.25% | 10.98 | % | 6/23/2028 | 13,363 | 13,239 | 12,733 | |||||||||||||||||||
TMC Buyer Inc (4)(7)(9) |
6/30/2028 | 4,569 | (567 | ) | (400 | ) | ||||||||||||||||||||
TMC Buyer Inc (4)(9) |
SF + 6.00% | 9.98 | % | 6/30/2028 | 66,251 | 57,981 | 60,450 | |||||||||||||||||||
| 266,570 | 265,463 | 7.68 | % | |||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||
123Dentist Inc (4)(6)(7)(11) |
8/10/2029 | C$ | 9,636 | (143 | ) | (268 | ) | |||||||||||||||||||
123Dentist Inc (4)(6)(11) |
C + 5.75% | 10.36 | % | 8/10/2029 | C$ | 48,182 | 36,973 | 34,207 | ||||||||||||||||||
Accelerated Health Systems, LLC (9) |
SF + 4.25% | 8.98 | % | 2/15/2029 | 8,032 | 8,009 | 6,581 | |||||||||||||||||||
F-129
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Advarra Holdings, Inc. (4)(7)(11) |
8/24/2029 | 6,340 | (106 | ) | (226 | ) | ||||||||||||||||||||
Advarra Holdings, Inc. (4)(11) |
SF + 5.75% | 10.15 | % | 8/24/2029 | 70,160 | 68,984 | 67,659 | |||||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(6)(12) |
SF + 7.75% (incl 2.00% PIK) |
12.07 | % | 2/24/2028 | 40,535 | 39,829 | 34,415 | |||||||||||||||||||
Baart Programs, Inc. (4)(7)(12) |
L + 5.00% | 9.73 | % | 6/11/2027 | 17,419 | 10,082 | 9,515 | |||||||||||||||||||
Charlotte Buyer Inc (9) |
SF + 5.25% | 9.53 | % | 2/3/2028 | 29,135 | 27,198 | 27,691 | |||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(11) |
11/10/2028 | 620 | (10 | ) | (17 | ) | ||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(11) |
P + 4.50% | 12.00 | % | 11/10/2027 | 1,000 | 600 | 592 | |||||||||||||||||||
ERC Topco Holdings, LLC (4)(11) |
L + 5.50% | 10.23 | % | 11/10/2028 | 25,491 | 25,053 | 24,779 | |||||||||||||||||||
MB2 Dental Solutions, LLC (4)(12) |
SF + 6.00% | 10.42 | % | 1/29/2027 | 9,120 | 8,950 | 8,808 | |||||||||||||||||||
MB2 Dental Solutions, LLC (4)(7)(12) |
SF + 6.00% | 10.71 | % | 1/29/2027 | 87,403 | 37,215 | 35,806 | |||||||||||||||||||
MB2 Dental Solutions, LLC (4)(12) |
SF + 6.00% | 10.42 | % | 1/29/2027 | 25,293 | 24,823 | 24,429 | |||||||||||||||||||
Medline Borrower, LP (9) |
L + 3.25% | 7.63 | % | 10/23/2028 | 19,848 | 19,644 | 18,897 | |||||||||||||||||||
MPH Acquisition Holdings LLC (9) |
L + 4.25% | 8.98 | % | 9/1/2028 | 4,633 | 4,518 | 3,979 | |||||||||||||||||||
Pediatric Associates Holding Company, LLC (7)(9) |
L + 3.25% | 7.63 | % | 12/29/2028 | 1,029 | 508 | 463 | |||||||||||||||||||
Pediatric Associates Holding Company, LLC (9) |
L + 3.25% | 7.63 | % | 12/29/2028 | 6,766 | 6,737 | 6,442 | |||||||||||||||||||
Phoenix Newco Inc (9) |
L + 3.25% | 7.63 | % | 11/15/2028 | 17,746 | 17,624 | 17,130 | |||||||||||||||||||
Pinnacle Fertility, Inc. (4)(7)(11) |
SF + 4.50% | 9.23 | % | 3/14/2028 | 12,477 | 9,131 | 8,979 | |||||||||||||||||||
Pinnacle Fertility, Inc. (4)(11) |
SF + 4.50% | 9.23 | % | 3/14/2028 | 27,294 | 26,811 | 26,479 | |||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(7)(11) |
8/31/2029 | 13,671 | (138 | ) | (520 | ) | ||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(11) |
SF + 5.75% | 9.01 | % | 8/31/2029 | 102,385 | 100,472 | 98,488 | |||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(7)(11) |
SF + 5.75% | 10.07 | % | 8/31/2029 | 8,721 | 2,268 | 2,023 | |||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(7)(11) |
12/17/2027 | 3,953 | (72 | ) | (261 | ) | ||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(11) |
L + 5.75% | 10.48 | % | 12/17/2027 | 20,889 | 20,531 | 19,509 | |||||||||||||||||||
Tenet Healthcare Corp (6)(8) |
5.13 | % | 11/1/2027 | 2,695 | 2,731 | 2,512 | ||||||||||||||||||||
Tivity Health Inc (4)(11) |
SF + 6.00% | 10.58 | % | 6/28/2029 | 112,278 | 109,647 | 106,506 | |||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(7)(11) |
SF + 5.75% | 9.32 | % | 7/17/2028 | 77,292 | 25,439 | 23,854 | |||||||||||||||||||
United Musculoskeletal Partners Acquisition Holdings, LLC (4)(11) |
SF + 5.75% | 9.34 | % | 7/17/2028 | 43,728 | 42,895 | 42,014 | |||||||||||||||||||
| 676,203 | 650,465 | 18.83 | % | |||||||||||||||||||||||
Household Goods and Home Construction |
||||||||||||||||||||||||||
LHS Borrower, LLC (9) |
SF + 4.75% | 9.17 | % | 2/16/2029 | 21,835 | 21,635 | 17,918 | |||||||||||||||||||
| 21,635 | 17,918 | 0.52 | % | |||||||||||||||||||||||
Industrial Engineering |
||||||||||||||||||||||||||
Brookfield WEC Holdings Inc. (9) |
SF + 3.75% | 8.07 | % | 8/1/2025 | 1,995 | 1,954 | 1,991 | |||||||||||||||||||
Radwell Parent, LLC (4)(7)(11) |
4/3/2028 | 13,271 | (392 | ) | (392 | ) | ||||||||||||||||||||
Radwell Parent, LLC (4)(11) |
SF + 6.75% | 11.33 | % | 4/2/2029 | 155,378 | 150,756 | 150,777 | |||||||||||||||||||
Standard Industries, Inc. (9) |
L + 2.25% | 6.43 | % | 9/22/2028 | 1,285 | 1,285 | 1,271 | |||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(11) |
E + 6.50% | 8.42 | % | 12/1/2027 | € | 4,782 | 4,941 | 4,784 | ||||||||||||||||||
F-130
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(7)(11) |
L + 6.50% | 11.23 | % | 12/1/2027 | 1,000 | 727 | 685 | |||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(11) |
L + 6.50% | 11.23 | % | 12/1/2027 | 12,142 | 11,920 | 11,405 | |||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(11) |
E + 6.50% | 8.42 | % | 12/1/2027 | € | 8,423 | 9,346 | 8,424 | ||||||||||||||||||
TK Elevator U.S. Newco, Inc. (6)(9) |
L + 3.50% | 6.87 | % | 7/30/2027 | 7,699 | 7,712 | 7,428 | |||||||||||||||||||
| 188,249 | 186,373 | 5.39 | % | |||||||||||||||||||||||
Industrial Metals and Mining |
||||||||||||||||||||||||||
BLY US Holdings Inc. (4)(6)(12) |
L + 7.50% | 12.29 | % | 9/8/2026 | 3,070 | 2,998 | 2,922 | |||||||||||||||||||
| 2,998 | 2,922 | 0.08 | % | |||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||
Acuris Finance US, Inc (9) |
SF + 4.00% | 8.73 | % | 2/16/2028 | 12,500 | 12,413 | 12,313 | |||||||||||||||||||
Allied Universal Holdco LLC (9) |
L + 3.75% | 8.17 | % | 5/12/2028 | 3,032 | 3,021 | 2,886 | |||||||||||||||||||
Argos Health Holdings, Inc. (4)(11) |
L + 5.75% | 9.97 | % | 12/6/2027 | 660 | 649 | 628 | |||||||||||||||||||
Becklar, LLC (4)(12) |
SF + 6.85% | 11.17 | % | 12/21/2026 | 996 | 978 | 952 | |||||||||||||||||||
Becklar, LLC (4)(12) |
SF + 6.85% | 11.27 | % | 12/21/2026 | 5,798 | 5,689 | 5,542 | |||||||||||||||||||
Captive Resources Midco LLC (4)(7)(11) |
7/3/2028 | 7,558 | (138 | ) | (142 | ) | ||||||||||||||||||||
Captive Resources Midco LLC (4)(11) |
SF + 5.75% (incl 2.88% PIK) |
10.07 | % | 7/2/2029 | 88,980 | 87,273 | 87,284 | |||||||||||||||||||
Coretrust Purchasing Group LLC (4)(7)(11) |
10/1/2029 | 10,736 | (311 | ) | (461 | ) | ||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(7)(11) |
10/1/2029 | 11,656 | (337 | ) | (501 | ) | ||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(11) |
SF + 6.75% | 10.84 | % | 10/1/2029 | 73,720 | 71,558 | 70,552 | |||||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(11) |
L + 5.50% | 9.72 | % | 12/6/2027 | 825 | 811 | 785 | |||||||||||||||||||
Employbridge, LLC (11) |
L + 4.75% | 9.49 | % | 7/19/2028 | 9,907 | 9,855 | 8,145 | |||||||||||||||||||
Galaxy US Opco Inc. (6)(9) |
SF + 4.75% | 9.07 | % | 4/29/2029 | 26,300 | 25,686 | 23,867 | |||||||||||||||||||
Guidehouse Inc. (4)(11) |
L + 6.25% | 10.63 | % | 10/16/2028 | 79,573 | 78,083 | 76,717 | |||||||||||||||||||
IG Investments Holdings, LLC (4)(7)(11) |
L + 6.00% | 10.39 | % | 9/22/2027 | 1,726 | 668 | 638 | |||||||||||||||||||
IG Investments Holdings, LLC (4)(11) |
L + 6.00% | 10.38 | % | 9/22/2028 | 22,506 | 22,194 | 21,760 | |||||||||||||||||||
IG Investments Holdings, LLC (4)(11) |
L + 6.00% | 10.38 | % | 9/22/2028 | 1,856 | 1,840 | 1,794 | |||||||||||||||||||
Mckissock Investment Holdings, LLC (11) |
SF + 5.00% | 8.73 | % | 3/4/2029 | 25,440 | 25,212 | 23,810 | |||||||||||||||||||
NBG Acquisition Corp. (4)(7)(11) |
11/6/2028 | 952 | (12 | ) | (67 | ) | ||||||||||||||||||||
NBG Acquisition Corp. (4)(7)(11) |
11/6/2028 | 18,760 | (256 | ) | (1,319 | ) | ||||||||||||||||||||
NBG Acquisition Corp. (4)(7)(11) |
L + 5.25% | 9.66 | % | 11/6/2028 | 2,876 | 1,415 | 1,316 | |||||||||||||||||||
NBG Acquisition Corp. (4)(11) |
L + 5.25% | 9.66 | % | 11/6/2028 | 21,553 | 21,407 | 20,038 | |||||||||||||||||||
Royal Buyer, LLC (4)(7)(11) |
8/31/2028 | 9,000 | (170 | ) | (321 | ) | ||||||||||||||||||||
Royal Buyer, LLC (4)(7)(11) |
SF + 6.00% | 10.40 | % | 8/31/2028 | 7,000 | 1,501 | 1,383 | |||||||||||||||||||
Royal Buyer, LLC (4)(11) |
SF + 6.00% | 10.40 | % | 8/31/2028 | 45,000 | 44,144 | 43,393 | |||||||||||||||||||
Sedgwick Claims Management Services, Inc. (8) |
L + 3.25% | 7.63 | % | 12/31/2025 | 19,350 | 19,151 | 18,855 | |||||||||||||||||||
Simplisafe Holding Corporation (4)(7)(11) |
5/2/2028 | 15,106 | (272 | ) | (455 | ) | ||||||||||||||||||||
Simplisafe Holding Corporation (4)(11) |
SF + 6.25% | 10.47 | % | 5/2/2028 | 120,247 | 118,057 | 116,628 | |||||||||||||||||||
Southern Graphics Inc. (4)(12) |
L + 7.50% | 12.20 | % | 11/17/2026 | 1,000 | 979 | 874 | |||||||||||||||||||
Southern Graphics Inc. (4)(12) |
L + 7.50% | 12.15 | % | 11/17/2026 | 10,227 | 9,995 | 8,940 | |||||||||||||||||||
Vaco Holdings, LLC (11) |
SF + 5.00% | 9.73 | % | 1/22/2029 | 12,623 | 12,567 | 12,218 | |||||||||||||||||||
Vistage Worldwide Inc (11) |
SF + 5.25% | 9.67 | % | 7/13/2029 | 998 | 971 | 958 | |||||||||||||||||||
| 574,621 | 559,010 | 16.18 | % | |||||||||||||||||||||||
F-131
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Industrial Transportation |
||||||||||||||||||||||||
EquipmentShare.com Inc. (4)(9) |
L + 7.75% | 12.40 | % | 11/16/2026 | 4,215 | 4,155 | 4,026 | |||||||||||||||||
EquipmentShare.com Inc. (4)(9) |
L + 7.75% | 12.40 | % | 11/16/2026 | 16,860 | 16,561 | 16,106 | |||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(6)(7)(8) |
5/31/2029 | € | 11,245 | (335 | ) | (688 | ) | |||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(6)(8) |
E + 6.75% | 9.19 | % | 5/31/2029 | € | 8,096 | 8,446 | 8,172 | ||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(6)(8) |
E + 6.75% | 9.19 | % | 5/31/2029 | € | 22,264 | 23,226 | 22,474 | ||||||||||||||||
| 52,053 | 50,090 | 1.45 | % | |||||||||||||||||||||
Investment Banking and Brokerage Services |
||||||||||||||||||||||||
Ascensus Holdings, Inc. (9) |
L + 3.50% | 8.25 | % | 8/2/2028 | 7,940 | 7,862 | 7,606 | |||||||||||||||||
| 7,862 | 7,606 | 0.22 | % | |||||||||||||||||||||
Leisure Goods |
||||||||||||||||||||||||
Jam City, Inc. (4)(12) |
L + 7.00% | 11.73 | % | 9/7/2027 | 2,201 | 2,183 | 2,148 | |||||||||||||||||
Tilting Point Media LLC (4)(7)(12) |
2/26/2027 | 6,372 | (160 | ) | (600 | ) | ||||||||||||||||||
Tilting Point Media LLC (4)(7)(12) |
2/26/2027 | 2,916 | (73 | ) | (274 | ) | ||||||||||||||||||
Tilting Point Media LLC (4)(12) |
L + 8.00% | 12.39 | % | 2/26/2027 | 7,974 | 7,767 | 7,224 | |||||||||||||||||
| 9,717 | 8,498 | 0.25 | % | |||||||||||||||||||||
Life Insurance |
||||||||||||||||||||||||
Onedigital Borrower LLC (9) |
SF + 4.25% | 8.49 | % | 11/16/2027 | 5,940 | 5,928 | 5,628 | |||||||||||||||||
| 5,928 | 5,628 | 0.16 | % | |||||||||||||||||||||
Media |
||||||||||||||||||||||||
2080 Media, Inc. (4)(7)(11) |
SF + 6.50% | 10.48 | % | 3/14/2029 | 29,529 | 12,247 | 12,497 | |||||||||||||||||
2080 Media, Inc. (4)(7)(11) |
3/14/2028 | 13,795 | (239 | ) | (139 | ) | ||||||||||||||||||
2080 Media, Inc. (4)(11) |
SF + 6.50% | 10.48 | % | 3/14/2029 | 55,042 | 54,030 | 54,518 | |||||||||||||||||
Ancestry.com Inc. (9) |
L + 3.25% | 7.63 | % | 12/6/2027 | 12,894 | 12,706 | 11,971 | |||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(7)(12) |
10/29/2027 | 2,766 | (67 | ) | (67 | ) | ||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(12) |
SF + 7.25% | 11.49 | % | 10/29/2027 | 41,387 | 40,377 | 40,387 | |||||||||||||||||
Associations Inc. (4)(12) |
SF + 6.50% (incl 2.50% PIK) |
10.36 | % | 7/2/2027 | 482 | 477 | 475 | |||||||||||||||||
Associations Inc. (4)(12) |
SF + 6.50% (incl 2.50% PIK) |
11.26 | % | 7/2/2027 | 1,003 | 994 | 989 | |||||||||||||||||
Associations Inc. (4)(12) |
SF + 6.50% (incl 2.50% PIK) |
11.29 | % | 7/2/2027 | 1,003 | 994 | 989 | |||||||||||||||||
Associations Inc. (4)(12) |
L + 6.50% (incl 2.50% PIK) |
10.97 | % | 7/2/2027 | 606 | 600 | 597 | |||||||||||||||||
Associations Inc. (4)(7)(12) |
7/2/2027 | 403 | (4 | ) | (6 | ) | ||||||||||||||||||
Associations Inc. (4)(12) |
SF + 6.50% (incl 2.50% PIK) |
10.36 | % | 7/2/2027 | 4,137 | 4,100 | 4,079 | |||||||||||||||||
Aventine Intermediate LLC (4)(7)(11) |
L + 6.00% (incl 4.00% PIK) |
10.38 | % | 6/18/2027 | 1,032 | 936 | 904 | |||||||||||||||||
Aventine Intermediate LLC (4)(11) |
L + 6.00% (incl 4.00% PIK) |
10.38 | % | 6/18/2027 | 18,124 | 17,823 | 17,295 | |||||||||||||||||
Hyve Group PLC (4)(5)(6)(14) |
SN + 7.75% | 11.19 | % | 10/20/2026 | £ | 24,104 | 26,025 | 28,054 | ||||||||||||||||
Kobalt London Limited (4)(6)(11) |
SF + 7.00% | 11.11 | % | 2/25/2027 | 13,125 | 12,900 | 12,775 | |||||||||||||||||
Kobalt London Limited (4)(6)(11) |
SF + 7.00% | 11.66 | % | 2/25/2027 | 13,125 | 12,896 | 12,775 | |||||||||||||||||
Mav Acquisition Corporation (9) |
L + 4.75% | 8.32 | % | 7/28/2028 | 13,870 | 13,742 | 13,094 | |||||||||||||||||
Oneteam Partners, LLC (4)(11) |
SF + 5.75% | 9.41 | % | 9/14/2029 | 75,000 | 73,554 | 72,467 | |||||||||||||||||
Regency Entertainment (USA), Inc. (4)(12) |
L + 6.75% | 11.13 | % | 11/22/2025 | 30,000 | 29,737 | 29,286 | |||||||||||||||||
Renaissance Financiere (4)(6)(7)(8) |
E + 7.00% | 8.56 | % | 7/26/2028 | € | 34,871 | 24,513 | 25,139 | ||||||||||||||||
Spirit RR Holdings, Inc. (4)(11) |
SF + 6.50% | 11.18 | % | 9/13/2028 | 3,912 | 3,800 | 3,751 | |||||||||||||||||
Spirit RR Holdings, Inc. (4)(7)(11) |
9/13/2028 | 1,806 | (51 | ) | (74 | ) | ||||||||||||||||||
F-132
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Spirit RR Holdings, Inc. (4)(11) |
SF + 6.50% | 11.18 | % | 9/13/2028 | 18,057 | 17,523 | 17,314 | |||||||||||||||||
The NPD Group L.P. (4)(7)(11) |
SF + 5.75% | 10.07 | % | 12/1/2027 | 9,023 | 907 | 780 | |||||||||||||||||
The NPD Group L.P. (4)(11) |
SF + 6.25% (incl 2.75% PIK) |
10.43 | % | 12/1/2028 | 140,214 | 137,538 | 135,174 | |||||||||||||||||
The NPD Group L.P. (4)(11) |
L + 5.75% | 10.13 | % | 12/1/2028 | 9,291 | 9,202 | 8,947 | |||||||||||||||||
| 507,260 | 503,971 | 14.59 | % | |||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(7)(13) |
P + 6.50% | 14.00 | % | 2/23/2028 | 2,358 | 2,190 | 2,080 | |||||||||||||||||
ABB/CON-CISE Optical Group LLC (4)(11) |
L + 7.50% | 12.67 | % | 2/23/2028 | 22,472 | 21,966 | 20,945 | |||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(7)(11) |
5/11/2028 | 22,875 | (409 | ) | (1,001 | ) | ||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(7)(11) |
SF + 5.50% | 9.82 | % | 5/11/2028 | 10,875 | 1,976 | 1,699 | |||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(11) |
SF + 5.50% | 9.82 | % | 5/11/2028 | 76,059 | 74,649 | 72,731 | |||||||||||||||||
Plasma Buyer LLC (4)(7)(11) |
5/12/2029 | 22,070 | (401 | ) | (1,040 | ) | ||||||||||||||||||
Plasma Buyer LLC (4)(7)(11) |
5/12/2028 | 9,458 | (169 | ) | (411 | ) | ||||||||||||||||||
Plasma Buyer LLC (4)(11) |
SF + 5.75% | 10.07 | % | 5/12/2029 | 84,912 | 83,305 | 80,912 | |||||||||||||||||
SDC US Smilepay SPV (4)(7)(12) |
L + 10.75% (incl 3.75% PIK) |
15.52 | % | 10/27/2025 | 76,191 | 35,040 | 34,013 | |||||||||||||||||
| 218,147 | 209,928 | 6.08 | % | |||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||
Alera Group, Inc. (4)(11) |
SF + 6.00% | 10.42 | % | 10/2/2028 | 21,774 | 21,591 | 20,992 | |||||||||||||||||
Alera Group, Inc. (4)(11) |
SF + 6.00% | 10.42 | % | 10/2/2028 | 12,525 | 12,514 | 12,075 | |||||||||||||||||
Alera Group, Inc. (4)(11) |
SF + 6.00% | 10.42 | % | 10/2/2028 | 44,173 | 44,136 | 42,586 | |||||||||||||||||
Alliant Holdings I, L.P. (8) |
L + 3.25% | 7.63 | % | 5/9/2025 | 995 | 977 | 983 | |||||||||||||||||
Alliant Holdings Intermediate, LLC (9) |
L + 3.50% | 7.85 | % | 11/5/2027 | 17,847 | 17,662 | 17,468 | |||||||||||||||||
AmWins Group, LLC (11) |
L + 2.25% | 6.63 | % | 2/21/2028 | 4,645 | 4,619 | 4,568 | |||||||||||||||||
Galway Borrower LLC (4)(7)(11) |
9/29/2028 | 457 | (4 | ) | (24 | ) | ||||||||||||||||||
Galway Borrower LLC (4)(7)(11) |
9/30/2027 | 2,216 | (36 | ) | (109 | ) | ||||||||||||||||||
Galway Borrower LLC (4)(11) |
L + 5.25% | 9.98 | % | 9/29/2028 | 61,128 | 60,592 | 57,907 | |||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(7)(11) |
L + 5.25% | 9.63 | % | 11/25/2026 | 48 | 20 | 20 | |||||||||||||||||
Higginbotham Insurance Agency, Inc. (4)(11) |
L + 5.25% | 9.63 | % | 11/25/2026 | 9,877 | 9,788 | 9,744 | |||||||||||||||||
HUB International Limited (11) |
L + 3.25% | 7.53 | % | 4/25/2025 | 15,846 | 15,733 | 15,725 | |||||||||||||||||
Integrity Marketing Acquisition LLC (4)(7)(11) |
SF + 6.02% | 10.72 | % | 8/27/2025 | 20,895 | 16,714 | 16,223 | |||||||||||||||||
Integrity Marketing Acquisition LLC (4)(11) |
L + 6.02% | 10.03 | % | 8/27/2025 | 57,546 | 56,824 | 55,194 | |||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(7)(11) |
L + 5.75% | 10.47 | % | 10/16/2028 | 18,297 | 976 | 814 | |||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(7)(11) |
10/16/2028 | 822 | (14 | ) | (22 | ) | ||||||||||||||||||
Patriot Growth Insurance Services, LLC (4)(11) |
L + 5.50% | 8.56 | % | 10/16/2028 | 7,260 | 7,133 | 7,061 | |||||||||||||||||
RSC Acquisition, Inc. (4)(7)(11) |
SF + 5.50% | 10.23 | % | 10/30/2026 | 29,453 | 884 | 395 | |||||||||||||||||
RSC Acquisition, Inc. (4)(11) |
SF + 5.50% | 10.05 | % | 10/30/2026 | 10,521 | 10,421 | 10,241 | |||||||||||||||||
RSC Acquisition, Inc. (4)(7)(11) |
10/30/2026 | 467 | — | (12 | ) | |||||||||||||||||||
RSC Acquisition, Inc. (4)(11) |
SF + 5.50% | 9.74 | % | 10/30/2026 | 14,422 | 14,422 | 14,038 | |||||||||||||||||
Trupanion, Inc. (4)(6)(7)(11) |
SF + 5.00% | 9.71 | % | 3/25/2027 | 26,237 | 4,903 | 4,192 | |||||||||||||||||
Trupanion, Inc. (4)(6)(7)(11) |
3/25/2027 | 6,576 | (83 | ) | (262 | ) | ||||||||||||||||||
Trupanion, Inc. (4)(6)(11) |
SF + 5.00% | 9.73 | % | 3/25/2027 | 20,843 | 20,567 | 20,012 | |||||||||||||||||
| 320,339 | 309,809 | 8.97 | % | |||||||||||||||||||||
F-133
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Personal Care, Drug and Grocery Stores |
||||||||||||||||||||||||
Diamond (BC) B.V. (6)(9) |
L + 2.75% | 7.16 | % | 9/29/2028 | 9,369 | 9,295 | 9,070 | |||||||||||||||||
Puma Buyer LLC (4)(9) |
SF + 5.50% | 10.18 | % | 7/16/2029 | 62,000 | 57,841 | 60,711 | |||||||||||||||||
Vermont Aus Pty Ltd (4)(6)(11) |
SF + 5.65% | 10.23 | % | 3/23/2028 | 26,053 | 25,465 | 24,675 | |||||||||||||||||
Vermont Aus Pty Ltd (4)(6)(11) |
B + 5.75% | 9.06 | % | 3/23/2028 | A$ | 35,482 | 25,891 | 22,864 | ||||||||||||||||
| 118,492 | 117,320 | 3.40 | % | |||||||||||||||||||||
Personal Goods |
||||||||||||||||||||||||
Daphne S.P.A. (4)(6)(7)(8) |
5/23/2028 | € | 7,957 | (191 | ) | (421 | ) | |||||||||||||||||
Daphne S.P.A. (4)(6)(8) |
E + 6.25% | 7.44 | % | 5/23/2028 | € | 41,376 | 43,200 | 42,109 | ||||||||||||||||
Spanx, LLC (4)(7)(11) |
L + 5.00% | 9.29 | % | 11/18/2027 | 5,000 | 450 | 287 | |||||||||||||||||
Spanx, LLC (4)(11) |
L + 5.25% | 9.64 | % | 11/20/2028 | 29,700 | 29,183 | 28,075 | |||||||||||||||||
| 72,642 | 70,050 | 2.03 | % | |||||||||||||||||||||
Pharmaceuticals and Biotechnology |
||||||||||||||||||||||||
CPI Buyer, LLC (4)(7)(11) |
L + 5.50% | 10.23 | % | 11/1/2028 | 4,341 | 802 | 729 | |||||||||||||||||
CPI Buyer, LLC (4)(7)(11) |
10/30/2026 | 2,115 | (35 | ) | (43 | ) | ||||||||||||||||||
CPI Buyer, LLC (4)(11) |
L + 5.50% | 10.23 | % | 11/1/2028 | 25,211 | 24,860 | 24,509 | |||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7)(8) |
10/27/2028 | € | 8,400 | (201 | ) | (218 | ) | |||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(8) |
E + 6.50% | 8.55 | % | 10/27/2028 | € | 82,300 | 80,018 | 85,973 | ||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(6)(7)(11) |
10/30/2028 | A$ | 11,982 | (224 | ) | (238 | ) | |||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(6)(11) |
B + 6.50% | 10.16 | % | 10/30/2028 | A$ | 118,623 | 73,889 | 78,441 | ||||||||||||||||
Petvet Care Centers LLC (11) |
L + 3.50% | 7.88 | % | 2/14/2025 | 7,723 | 7,670 | 7,282 | |||||||||||||||||
| 186,779 | 196,435 | 5.69 | % | |||||||||||||||||||||
Real Estate Investment and Services |
||||||||||||||||||||||||
850 Third Avenue Mezz I, LLC (4)(7)(9) |
L + 6.50% | 10.89 | % | 10/1/2024 | 2,791 | 2,132 | 1,757 | |||||||||||||||||
850 Third Avenue Owner LLC (4)(9) |
L + 6.50% | 10.89 | % | 10/1/2024 | 4,726 | 4,697 | 4,063 | |||||||||||||||||
OEG Borrower LLC (4)(9) |
SF + 5.00% | 9.60 | % | 5/20/2029 | 39,900 | 38,393 | 39,002 | |||||||||||||||||
| 45,222 | 44,822 | 1.30 | % | |||||||||||||||||||||
Retailers |
||||||||||||||||||||||||
Petsmart LLC (11) |
L + 3.75% | 8.13 | % | 2/11/2028 | 10,550 | 10,481 | 10,356 | |||||||||||||||||
The Michaels Companies, Inc. (11) |
L + 4.25% | 8.98 | % | 4/14/2028 | 2,851 | 2,826 | 2,472 | |||||||||||||||||
The Talbots, Inc. (4)(12) |
L + 8.00% | 12.74 | % | 11/17/2026 | 7,897 | 7,685 | 7,494 | |||||||||||||||||
| 20,992 | 20,322 | 0.59 | % | |||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||
Applied Systems Inc (9) |
L + 3.00% | 7.73 | % | 9/19/2024 | 9,227 | 9,205 | 9,209 | |||||||||||||||||
Armstrong Bidco Limited (4)(6)(7)(8) |
SN + 5.25% | 8.70 | % | 6/28/2029 | £ | 47,995 | 41,968 | 44,715 | ||||||||||||||||
Armstrong Bidco Limited (4)(6)(8) |
SN + 5.25% | 8.70 | % | 6/28/2029 | £ | 91,991 | 109,456 | 110,602 | ||||||||||||||||
Avalara, Inc. (4)(7)(11) |
10/19/2028 | 6,324 | (153 | ) | (153 | ) | ||||||||||||||||||
Avalara, Inc. (4)(11) |
SF + 7.25% | 11.83 | % | 10/19/2028 | 56,918 | 55,526 | 55,542 | |||||||||||||||||
AxiomSL Group, Inc. (4)(7)(12) |
12/3/2027 | 744 | — | — | ||||||||||||||||||||
AxiomSL Group, Inc. (4)(12) |
L + 5.75% | 10.13 | % | 12/3/2027 | 11,358 | 11,358 | 11,358 | |||||||||||||||||
AxiomSL Group, Inc. (4)(7)(12) |
12/3/2025 | 812 | — | — | ||||||||||||||||||||
Barracuda Networks Inc (9) |
SF + 4.50% | 8.59 | % | 5/17/2029 | 21,500 | 20,884 | 20,771 | |||||||||||||||||
Bottomline Technologies, Inc. (4)(7)(11) |
5/15/2028 | 385 | (3 | ) | (13 | ) | ||||||||||||||||||
F-134
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||
Bottomline Technologies, Inc. (4)(11) |
SF + 5.50% | 9.82 | % | 5/14/2029 | 4,604 | 4,560 | 4,425 | |||||||||||||||||
Calabrio, Inc. (4)(7)(12) |
L + 7.00% | 11.75 | % | 4/16/2027 | 2,687 | 1,536 | 1,478 | |||||||||||||||||
Calabrio, Inc. (4)(12) |
L + 7.00% | 11.73 | % | 4/16/2027 | 22,313 | 22,313 | 21,835 | |||||||||||||||||
CCC Intelligent Solutions Inc. (9) |
L + 2.25% | 6.63 | % | 9/21/2028 | 10,070 | 10,020 | 10,010 | |||||||||||||||||
Cloud Software Group Holdings Inc (8) |
6.50 | % | 3/31/2029 | 9,610 | 8,076 | 8,117 | ||||||||||||||||||
CommerceHub, Inc. (4)(11) |
SF + 6.25% | 11.03 | % | 12/29/2027 | 64,904 | 60,406 | 60,472 | |||||||||||||||||
DS Admiral Bidco, LLC (4)(7)(12) |
L + 6.50% | 11.20 | % | 3/16/2026 | 966 | 108 | 91 | |||||||||||||||||
DS Admiral Bidco, LLC (4)(12) |
SF + 7.00% | 11.51 | % | 3/16/2028 | 39,743 | 38,557 | 38,558 | |||||||||||||||||
DS Admiral Bidco, LLC (4)(12) |
L + 5.75% | 10.16 | % | 3/16/2028 | 8,943 | 8,860 | 8,638 | |||||||||||||||||
DTI Holdco, Inc. (11) |
SF + 4.75% | 8.84 | % | 4/21/2029 | 29,925 | 29,365 | 27,643 | |||||||||||||||||
Endure Digital, Inc. (11) |
L + 3.50% | 7.72 | % | 2/10/2028 | 2,547 | 2,530 | 2,299 | |||||||||||||||||
Finthrive Software Intermediate Holdings Inc (9) |
L + 4.00% | 8.38 | % | 12/18/2028 | 13,102 | 12,855 | 11,148 | |||||||||||||||||
GoTo Group Inc (8) |
L + 4.75% | 9.14 | % | 8/31/2027 | 6,942 | 6,843 | 4,498 | |||||||||||||||||
Govcio Buyer Company (4)(12) |
SF + 5.50% | 10.08 | % | 8/18/2027 | 10,822 | 10,641 | 10,476 | |||||||||||||||||
Helios Software Holdings, Inc. (12) |
SF + 3.75% | 8.48 | % | 3/13/2028 | 16,670 | 16,517 | 16,396 | |||||||||||||||||
Huskies Parent, Inc. (4)(7)(11) |
11/3/2028 | 1,000 | (17 | ) | (93 | ) | ||||||||||||||||||
Huskies Parent, Inc. (4)(7)(11) |
L + 5.50% | 10.23 | % | 11/3/2027 | 1,000 | 690 | 623 | |||||||||||||||||
Huskies Parent, Inc. (4)(11) |
L + 5.50% | 10.23 | % | 11/3/2028 | 25,410 | 24,974 | 23,040 | |||||||||||||||||
Hyland Software, Inc. (11) |
L + 3.50% | 7.88 | % | 7/1/2024 | 15,585 | 15,483 | 15,408 | |||||||||||||||||
LMI Inc/DE (9) |
L + 3.75% | 8.13 | % | 10/2/2028 | 14,870 | 14,784 | 9,383 | |||||||||||||||||
Medallia, Inc. (4)(11) |
L + 6.50% PIK | 10.88 | % | 10/30/2028 | 73,495 | 73,495 | 69,997 | |||||||||||||||||
Mcafee Corp. (9) |
SF + 3.75% | 7.97 | % | 3/1/2029 | 7,960 | 7,924 | 7,431 | |||||||||||||||||
Mitchell International, Inc. (9) |
L + 3.75% | 8.41 | % | 10/16/2028 | 19,788 | 19,464 | 18,294 | |||||||||||||||||
New Era Technology, Inc. (4)(12) |
L + 6.25% | 10.66 | % | 10/31/2026 | 19,849 | 19,849 | 19,128 | |||||||||||||||||
Peraton Inc. (11) |
L + 3.75% | 8.13 | % | 2/1/2028 | 3,717 | 3,719 | 3,636 | |||||||||||||||||
Perforce Software, Inc. (4)(9) |
SF + 4.50% | 8.82 | % | 7/1/2026 | 19,900 | 19,464 | 19,105 | |||||||||||||||||
Ping Identity Holding Corp. (4)(7)(11) |
10/17/2028 | 6,068 | (147 | ) | (147 | ) | ||||||||||||||||||
Ping Identity Holding Corp. (4)(11) |
SF + 7.00% | 11.32 | % | 10/17/2029 | 59,003 | 57,538 | 57,571 | |||||||||||||||||
Prism Parent Co., Inc. (4)(7)(11) |
9/19/2028 | 10,833 | (215 | ) | (348 | ) | ||||||||||||||||||
Prism Parent Co., Inc. (4)(11) |
SF + 6.00% | 10.32 | % | 9/19/2028 | 43,225 | 42,391 | 41,837 | |||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) |
L + 4.00% | 8.39 | % | 4/26/2024 | 8,682 | 8,606 | 8,491 | |||||||||||||||||
Project Ruby Ultimate Parent Corp (11) |
L + 3.25% | 7.63 | % | 3/10/2028 | 7,368 | 7,361 | 6,983 | |||||||||||||||||
Quail Buyer, Inc. (4)(11) |
L + 5.25% | 10.18 | % | 10/1/2027 | 7,444 | 7,320 | 7,343 | |||||||||||||||||
Quasar Intermediate Holdings Ltd (9) |
SF + 4.25% | 8.49 | % | 2/1/2029 | 13,965 | 13,846 | 10,836 | |||||||||||||||||
Riley Mergeco LLC (4)(7)(12) |
9/23/2027 | 456 | (9 | ) | (23 | ) | ||||||||||||||||||
Riley Mergeco LLC (4)(7)(12) |
9/23/2027 | 304 | (6 | ) | (15 | ) | ||||||||||||||||||
Riley Mergeco LLC (4)(12) |
L + 6.00% (incl 2.75% PIK) |
10.38 | % | 9/23/2027 | 1,701 | 1,667 | 1,615 | |||||||||||||||||
Rocket Software, Inc. (8) |
L + 4.25% | 8.63 | % | 11/28/2025 | 11,283 | 11,096 | 10,876 | |||||||||||||||||
Smarsh Inc. (4)(7)(11) |
SF + 6.50% | 11.29 | % | 2/16/2029 | 4,286 | 2,067 | 1,920 | |||||||||||||||||
Smarsh Inc. (4)(7)(11) |
2/16/2029 | 1,071 | (19 | ) | (56 | ) | ||||||||||||||||||
Smarsh Inc. (4)(11) |
SF + 6.50% | 11.29 | % | 2/16/2029 | 17,143 | 16,834 | 16,250 | |||||||||||||||||
TA TT Buyer, LLC (4)(9) |
SF + 5.00% | 8.98 | % | 4/2/2029 | 14,963 | 14,822 | 14,588 | |||||||||||||||||
Tibco Software Inc (9) |
SF + 4.50% | 9.18 | % | 3/20/2029 | 13,010 | 11,882 | 11,651 | |||||||||||||||||
Tricentis Americas, Inc. (4)(7)(12) |
SF + 4.25% | 8.94 | % | 5/13/2024 | 8,748 | 3,144 | 3,055 | |||||||||||||||||
Tricentis Americas, Inc. (4)(7)(12) |
5/13/2024 | 499 | (3 | ) | (8 | ) | ||||||||||||||||||
Tricentis Americas, Inc. (4)(12) |
SF + 4.25% | 8.94 | % | 5/13/2024 | 15,353 | 15,260 | 15,102 | |||||||||||||||||
Trimech Acquisition Corp. (4)(7)(12) |
SF + 4.75% | 9.39 | % | 3/10/2028 | 3,289 | 345 | 311 | |||||||||||||||||
Trimech Acquisition Corp. (4)(12) |
SF + 4.75% | 9.48 | % | 3/10/2028 | 21,548 | 21,256 | 21,000 | |||||||||||||||||
Trimech Acquisition Corp. (4)(12) |
SN + 4.75% | 8.63 | % | 3/10/2028 | £ | 36,623 | 44,201 | 43,398 | ||||||||||||||||
UKG Inc (9) |
L + 3.25% | 7.00 | % | 5/4/2026 | 9,164 | 9,104 | 8,740 | |||||||||||||||||
F-135
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
User Zoom Technologies, Inc. (4)(11) |
SF + 5.75% | 9.35 | % | 4/5/2029 | 18,948 | 18,593 | 18,064 | |||||||||||||||||||
Zayo Group, LLC (8) |
L + 3.00% | 7.38 | % | 3/9/2027 | 5,351 | 5,290 | 4,358 | |||||||||||||||||||
Zelis Payments Buyer, Inc. (8) |
L + 3.50% | 7.88 | % | 9/30/2026 | 13,884 | 13,811 | 13,758 | |||||||||||||||||||
Zendesk Inc (4)(7)(11) |
11/22/2028 | 39,321 | (786 | ) | (772 | ) | ||||||||||||||||||||
Zendesk Inc (4)(7)(11) |
11/22/2028 | 17,940 | (352 | ) | (352 | ) | ||||||||||||||||||||
Zendesk Inc (4)(11) |
SF + 6.50% | 11.04 | % | 11/22/2028 | 157,283 | 154,163 | 154,193 | |||||||||||||||||||
| 1,160,317 | 1,134,286 | 32.83 | % | |||||||||||||||||||||||
Technology Hardware and Equipment |
||||||||||||||||||||||||||
Altar Bidco, Inc. (9) |
SF + 3.10% | 5.50 | % | 2/1/2029 | 7,960 | 7,937 | 7,623 | |||||||||||||||||||
CC WDW Borrower, Inc. (4)(7)(12) |
1/27/2028 | 22,837 | (618 | ) | (1,006 | ) | ||||||||||||||||||||
CC WDW Borrower, Inc. (4)(7)(12) |
1/27/2028 | 5,122 | (130 | ) | (226 | ) | ||||||||||||||||||||
CC WDW Borrower, Inc. (4)(12) |
SF + 6.75% | 10.95 | % | 1/27/2028 | 45,559 | 44,367 | 43,553 | |||||||||||||||||||
Excelitas Technologies Corp. (4)(7)(11) |
8/13/2029 | 6,522 | (123 | ) | (247 | ) | ||||||||||||||||||||
Excelitas Technologies Corp. (4)(11) |
SF + 5.75% | 10.12 | % | 8/13/2029 | 33,804 | 33,146 | 32,526 | |||||||||||||||||||
Excelitas Technologies Corp. (4)(8) |
E + 5.75% | 7.55 | % | 8/13/2029 | € | 5,587 | 5,651 | 5,746 | ||||||||||||||||||
Excelitas Technologies Corp. (4)(7)(11) |
SF + 5.75% | 10.12 | % | 8/14/2028 | 3,261 | 1,787 | 1,732 | |||||||||||||||||||
TechInsights Inc (4)(6)(12) |
L + 6.63% | 11.36 | % | 11/9/2027 | 993 | 974 | 962 | |||||||||||||||||||
TechInsights Inc (4)(6)(12) |
L + 6.63% | 11.36 | % | 11/9/2027 | 2,578 | 2,531 | 2,498 | |||||||||||||||||||
| 95,522 | 93,161 | 2.70 | % | |||||||||||||||||||||||
Telecommunications Equipment |
||||||||||||||||||||||||||
Delta Topco, Inc. (11) |
L + 3.75% | 8.15 | % | 12/1/2027 | 6,952 | 6,778 | 6,445 | |||||||||||||||||||
| 6,778 | 6,445 | 0.19 | % | |||||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||
Directv Financing, LLC (11) |
L + 5.00% | 9.38 | % | 8/2/2027 | 18,212 | 17,852 | 17,770 | |||||||||||||||||||
Dish DBS Corporation (8) |
5.25 | % | 12/1/2026 | 7,703 | 7,430 | 6,503 | ||||||||||||||||||||
Meriplex Communications, Ltd (4)(7)(11) |
SF + 5.00% | 9.42 | % | 7/17/2028 | 4,952 | 1,268 | 1,163 | |||||||||||||||||||
Meriplex Communications, Ltd (4)(7)(11) |
SF + 5.00% | 9.42 | % | 7/17/2028 | 1,143 | 98 | 74 | |||||||||||||||||||
Meriplex Communications, Ltd (4)(11) |
SF + 5.00% | 9.42 | % | 7/17/2028 | 13,905 | 13,706 | 13,416 | |||||||||||||||||||
Openmarket Inc. (4)(6)(11) |
L + 6.25% | 10.98 | % | 9/17/2026 | 4,938 | 4,841 | 4,714 | |||||||||||||||||||
Radiate Holdco LLC (11) |
L + 3.25% | 7.63 | % | 9/25/2026 | 14,880 | 14,815 | 12,156 | |||||||||||||||||||
| 60,010 | 55,796 | 1.61 | % | |||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||
AD1 LBV1, LLC (4)(7)(10) |
L + 6.75% | 10.87 | % | 12/10/2024 | 365 | 244 | 242 | |||||||||||||||||||
AD1 LBV1, LLC (4)(10) |
L + 6.75% | 10.87 | % | 12/10/2024 | 19,002 | 18,823 | 18,746 | |||||||||||||||||||
Artemis Bidco Limited (4)(6)(7)(8) |
SN + 6.00% | 9.45 | % | 9/8/2028 | £ | 2,437 | 298 | 2 | ||||||||||||||||||
Artemis Bidco Limited (4)(6)(8) |
SN + 6.00% | 9.45 | % | 9/8/2028 | £ | 7,749 | 10,047 | 8,346 | ||||||||||||||||||
Artemis Bidco Limited (4)(6)(8) |
SN + 6.00% | 9.45 | % | 9/8/2028 | £ | 4,509 | 5,888 | 4,857 | ||||||||||||||||||
Artemis Bidco Limited (4)(6)(8) |
SN + 6.00% | 9.45 | % | 9/8/2028 | £ | 4,676 | 6,107 | 5,037 | ||||||||||||||||||
Canoe Bidco Pty Limited (4)(6)(9) |
B + 6.00% | 9.39 | % | 5/20/2026 | A$ | 31,969 | 21,117 | 21,602 | ||||||||||||||||||
Canoe Bidco Pty Limited (4)(6)(9) |
B + 6.50% | 10.10 | % | 5/20/2026 | A$ | 137,468 | 95,005 | 92,889 | ||||||||||||||||||
F-136
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
IRB Holding Corp. (12) |
L + 2.75% | 7.13 | % | 2/5/2025 | 8,101 | 8,044 | 8,042 | |||||||||||||||||||
| 165,573 | 159,763 | 4.62 | % | |||||||||||||||||||||||
Total First Lien Debt |
$ | 5,755,124 | $ | 5,614,718 | 162.50 | % | ||||||||||||||||||||
Second Lien Debt |
||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||
Asurion Corporation (8) |
L + 5.25% | 9.63 | % | 1/31/2028 | $ | 5,165 | $ | 5,104 | $ | 4,059 | ||||||||||||||||
| 5,104 | 4,059 | 0.12 | % | |||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||
Charlotte Buyer Inc (9) |
SF + 8.25% | 12.53 | % | 8/3/2028 | 10,000 | 9,327 | 9,463 | |||||||||||||||||||
| 9,327 | 9,463 | 0.27 | % | |||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(9) |
SF + 8.25% | 12.57 | % | 4/29/2030 | 9,000 | 8,786 | 8,794 | |||||||||||||||||||
| 8,786 | 8,794 | 0.25 | % | |||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||
UKG Inc (9) |
L + 5.25% | 9.00 | % | 5/3/2027 | 24,852 | 24,547 | 22,932 | |||||||||||||||||||
| 24,547 | 22,932 | 0.66 | % | |||||||||||||||||||||||
Total Second Lien Debt |
$ | 47,764 | $ | 45,248 | 1.31 | % | ||||||||||||||||||||
Unsecured Debt |
||||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||
Vetcor Group Holdings LLC (4)(7)(8) |
9/3/2030 | $ | 251 | $ | (2 | ) | $ | (19 | ) | |||||||||||||||||
Vetcor Group Holdings LLC (4)(8) |
13.00% PIK | 13.00 | % | 9/3/2030 | 783 | 774 | 722 | |||||||||||||||||||
| 772 | 703 | 0.02 | % | |||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7)(8) |
12/28/2032 | 88 | (2 | ) | (2 | ) | ||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(8) |
12.50% PIK | 12.50 | % | 12/28/2032 | 923 | 894 | 905 | |||||||||||||||||||
| 892 | 903 | 0.03 | % | |||||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (8) |
6.75 | % | 10/15/2027 | 6,255 | 5,632 | 5,636 | ||||||||||||||||||||
USI Inc/NY (8) |
6.88 | % | 5/1/2025 | 2,457 | 2,365 | 2,371 | ||||||||||||||||||||
| 7,997 | 8,007 | 0.23 | % | |||||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (8) |
5.50 | % | 5/1/2026 | 7,000 | 7,102 | 6,787 | ||||||||||||||||||||
T-Mobile USA, Inc. (8) |
2.25 | % | 2/15/2026 | 10,000 | 9,539 | 9,112 | ||||||||||||||||||||
| 16,641 | 15,899 | 0.46 | % | |||||||||||||||||||||||
Total Unsecured Debt |
$ | 26,302 | $ | 25,512 | 0.74 | % | ||||||||||||||||||||
Structured Finance |
||||||||||||||||||||||||||
Structured Finance Investments |
||||||||||||||||||||||||||
ALM 2020 Ltd (6)(8) |
L + 6.00% | 10.08 | % | 10/15/2029 | $ | 3,330 | $ | 2,995 | $ | 2,937 | ||||||||||||||||
AMMC CLO 20 Ltd (6)(8) |
L + 5.81% | 9.89 | % | 4/17/2029 | 950 | 890 | 866 | |||||||||||||||||||
AMMC CLO 21 Ltd (6)(8) |
L + 3.10% | 7.56 | % | 11/2/2030 | 2,150 | 1,898 | 1,887 | |||||||||||||||||||
AMMC CLO 21 Ltd (6)(8) |
L + 6.50% | 10.96 | % | 11/2/2030 | 4,126 | 3,609 | 3,474 | |||||||||||||||||||
Carlyle Global Market Strategies (6)(8) |
L + 5.40% | 9.64 | % | 10/20/2027 | 1,750 | 1,480 | 1,475 | |||||||||||||||||||
F-137
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||
Carlyle Global Market Strategies (6)(8) |
L + 5.40% | 9.76 | % | 7/27/2031 | 1,200 | 912 | 976 | |||||||||||||||||||
Catskill Park CLO Ltd (6)(8) |
L + 6.00% | 10.24 | % | 4/20/2029 | 1,350 | 1,210 | 1,150 | |||||||||||||||||||
CENT CLO 16, L.P. (6)(8) |
SF + 8.07% | 10.57 | % | 7/24/2034 | 3,000 | 2,810 | 2,735 | |||||||||||||||||||
Dryden 108 CLO Ltd (6)(8) |
7/18/2035 | 2,900 | 2,291 | 2,204 | ||||||||||||||||||||||
Marble Point CLO XI Ltd (6)(8) |
L + 2.80% | 6.99 | % | 12/18/2030 | 1,850 | 1,534 | 1,580 | |||||||||||||||||||
Monroe Capital MML CLO XIV LLC (6)(8) |
SF + 10.02% | 14.08 | % | 10/24/2034 | 2,500 | 2,328 | 2,345 | |||||||||||||||||||
OCP CLO 2017-14 Ltd (6)(8) |
SF + 6.80% | 10.66 | % | 1/15/2033 | 1,469 | 1,273 | 1,326 | |||||||||||||||||||
Shackleton 2019-XV CLO Ltd (6)(8) |
L + 6.66% | 10.74 | % | 1/15/2032 | 3,000 | 2,612 | 2,697 | |||||||||||||||||||
Silver Creek CLO Ltd (6)(8) |
L + 5.62% | 9.86 | % | 7/20/2030 | 2,000 | 1,776 | 1,755 | |||||||||||||||||||
Voya CLO Ltd (6)(8) |
L + 3.55% | 7.63 | % | 4/17/2030 | 1,500 | 1,311 | 1,330 | |||||||||||||||||||
| 28,929 | 28,737 | 0.83 | % | |||||||||||||||||||||||
Total Structured Finance |
$ | 28,929 | $ | 28,737 | 0.83 | % | ||||||||||||||||||||
Equity Investments |
||||||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4) |
2 | $ | 67 | $ | 198 | |||||||||||||||||||||
| 67 | 198 | 0.01 | % | |||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||
Picard Holdco, Inc. - Preferred Shares (4)(9) |
|
SF + 12.00% PIK |
|
16.59 | % | 9/30/2032 | 1,000 | 970 | 1,012 | |||||||||||||||||
Picard Holdco, Inc. - Preferred Shares (4)(9) |
|
SF + 12.00% PIK |
|
16.59 | % | 9/30/2032 | 30 | 30 | 32 | |||||||||||||||||
| 1,000 | 1,044 | 0.03 | % | |||||||||||||||||||||||
Media |
||||||||||||||||||||||||||
Oneteam Partners, LLC - Preferred Shares (4)(5) |
8.00 | % | 9/15/2032 | 1,000 | 1,000 | 1,064 | ||||||||||||||||||||
| 1,000 | 1,064 | 0.03 | % | |||||||||||||||||||||||
Total Equity Investments |
$ | 2,067 | $ | 2,306 | 0.07 | % | ||||||||||||||||||||
Total Investments - Non-Controlled/Non-Affiliated |
$ | 5,860,186 | $ | 5,716,521 | 165.44 | % | ||||||||||||||||||||
Total Investment Portfolio |
$ | 5,860,186 | $ | 5,716,521 | 165.44 | % | ||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares |
53,347 | $ | 53,347 | $ | 53,347 | |||||||||||||||||||||
Cash |
20,894 | 20,894 | ||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 74,241 | $ | 74,241 | 2.15 | % | ||||||||||||||||||||
Total Investment Portfolio, Cash and Cash Equivalents |
$ | 5,934,427 | $ | 5,790,762 | 167.59 | % | ||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments and the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral under its credit facilities unless otherwise indicated. |
| (2) | The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), Prime Rate (“Prime” or “P”), Sterling Overnight Index Average (“SONIA” or “SN”), Euro Interbank Offer Rate (“Euribor” or “E”), Secured Overnight Financing Rate (“SOFR” or “SF”), Canadian Dollar Offered Rate (“CDOR” or “C”) or Bank Bill Swap Rate (“BBSW” or “B”) which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has |
F-138
| provided the spread over LIBOR, Prime, SONIA, E, SOFR, CDOR or BBSW and the current contractual interest rate in effect at December 31, 2022. Certain investments are subject to a LIBOR, Prime, or SOFR interest rate floor, or rate cap. Certain investments contain a Payment-in-Kind (“PIK”) provision. |
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | These debt investments are not pledged as collateral under HLEND-A Funding Facility, the HLEND-B Funding Facility, the Revolving Credit Facility and the Short Term Financing Transactions. |
| (6) | The investment is not a qualifying asset, in whole or in part, under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2022, non-qualifying assets represented 16.1% of total assets as calculated in accordance with regulatory requirements. |
| (7) | Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments: |
Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
United Musculoskeletal Partners Acquisition Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | $ | 50,408 | $ | (1,976 | ) | ||||
MB2 Dental Solutions, LLC |
1st Lien Senior Secured Delayed Draw Loan | 48,611 | (1,661 | ) | ||||||
Zendesk Inc |
1st Lien Senior Secured Delayed Draw Loan | 39,321 | (772 | ) | ||||||
SDC US Smilepay SPV |
1st Lien Senior Secured Delayed Draw Loan | 38,645 | (1,792 | ) | ||||||
Express Wash Concepts |
1st Lien Senior Secured Delayed Draw Loan | 37,286 | (2,375 | ) | ||||||
Foundation Automotive US Corp |
1st Lien Senior Secured Delayed Draw Loan | 34,033 | (1,236 | ) | ||||||
RSC Acquisition, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 28,274 | (753 | ) | ||||||
Zips Car Wash, LLC |
1st Lien Senior Secured Delayed Draw Loan | 24,213 | (472 | ) | ||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 22,875 | (1,001 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 22,837 | (1,006 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Delayed Draw Loan | 22,070 | (1,040 | ) | ||||||
Trupanion, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 21,000 | (837 | ) | ||||||
Club Car Wash Operating, LLC |
1st Lien Senior Secured Delayed Draw Loan | 20,717 | (911 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Delayed Draw Loan | 18,760 | (1,319 | ) | ||||||
IP Operating Portfolio I, LLC |
1st Lien Senior Secured Delayed Draw Loan | 18,168 | (542 | ) | ||||||
Zendesk Inc |
1st Lien Senior Secured Revolving Loan | 17,940 | (352 | ) | ||||||
Patriot Growth Insurance Services, LLC |
1st Lien Senior Secured Delayed Draw Loan | 16,982 | (465 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 16,751 | (159 | ) | ||||||
SimpliSafe Holding Corporation |
1st Lien Senior Secured Delayed Draw Loan | 15,106 | (455 | ) | ||||||
2080 Media, Inc. |
1st Lien Senior Secured Revolving Loan | 13,795 | (139 | ) | ||||||
Sequa Corp |
1st Lien Senior Secured Revolving Loan | 13,676 | (670 | ) | ||||||
PPV Intermediate Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 13,670 | (520 | ) | ||||||
Radwell Parent, LLC |
1st Lien Senior Secured Revolving Loan | 13,271 | (392 | ) | ||||||
Armstrong Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 12,991 | (69 | ) | ||||||
E.S.G. Movilidad, S.L.U. |
1st Lien Senior Secured Delayed Draw Loan | 12,039 | (688 | ) | ||||||
Formerra, LLC |
1st Lien Senior Secured Revolving Loan | 12,031 | (380 | ) | ||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Revolving Loan | 11,656 | (501 | ) | ||||||
Specialty Ingredients, LLC |
1st Lien Senior Secured Revolving Loan | 11,279 | (413 | ) | ||||||
Prism Parent Co., Inc. |
1st Lien Senior Secured Delayed Draw Loan | 10,833 | (348 | ) | ||||||
Coretrust Purchasing Group LLC |
1st Lien Senior Secured Delayed Draw Loan | 10,736 | (461 | ) | ||||||
Renaissance Financiere |
1st Lien Senior Secured Delayed Draw Loan | 10,702 | (428 | ) | ||||||
Plasma Buyer LLC |
1st Lien Senior Secured Revolving Loan | 9,458 | (411 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan | 9,000 | (321 | ) | ||||||
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Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
Dolcetto HoldCo S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 8,993 | (218 | ) | ||||||
Coding Solutions Acquisition, Inc. |
1st Lien Senior Secured Revolving Loan | 8,700 | (381 | ) | ||||||
Daphne S.P.A. |
1st Lien Senior Secured Delayed Draw Loan | 8,519 | (421 | ) | ||||||
Gusto Aus Bidco Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 8,161 | (238 | ) | ||||||
The NPD Group L.P. |
1st Lien Senior Secured Revolving Loan | 7,940 | (266 | ) | ||||||
Captive Resources Midco LLC |
1st Lien Senior Secured Revolving Loan | 7,557 | (142 | ) | ||||||
Yes Energy LLC |
1st Lien Senior Secured Delayed Draw Loan | 7,500 | (301 | ) | ||||||
Baart Programs, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 7,191 | (294 | ) | ||||||
123Dentist Inc |
1st Lien Senior Secured Delayed Draw Loan | 7,110 | (268 | ) | ||||||
Trupanion, Inc. |
1st Lien Senior Secured Revolving Loan | 6,576 | (262 | ) | ||||||
Excelitas Technologies Corp. |
1st Lien Senior Secured Delayed Draw Loan | 6,522 | (247 | ) | ||||||
Tilting Point Media LLC |
1st Lien Senior Secured Delayed Draw Loan | 6,372 | (600 | ) | ||||||
PPV Intermediate Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 6,366 | (242 | ) | ||||||
Advarra Holdings, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 6,340 | (226 | ) | ||||||
Avalara, Inc. |
1st Lien Senior Secured Revolving Loan | 6,324 | (153 | ) | ||||||
Ping Identity Holding Corp. |
1st Lien Senior Secured Revolving Loan | 6,068 | (147 | ) | ||||||
Tricentis Americas, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 5,551 | (91 | ) | ||||||
Royal Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 5,367 | (192 | ) | ||||||
Spotless Brands, LLC |
1st Lien Senior Secured Revolving Loan | 5,175 | (201 | ) | ||||||
CC WDW Borrower, Inc. |
1st Lien Senior Secured Revolving Loan | 5,122 | (226 | ) | ||||||
TMC Buyer Inc |
1st Lien Senior Secured Delayed Draw Loan | 4,569 | (400 | ) | ||||||
Spanx, LLC |
1st Lien Senior Secured Revolving Loan | 4,467 | (220 | ) | ||||||
Formerra, LLC |
1st Lien Senior Secured Delayed Draw Loan | 4,270 | (135 | ) | ||||||
PTSH Intermediate Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 3,953 | (261 | ) | ||||||
Integrity Marketing Acquisition LLC |
1st Lien Senior Secured Delayed Draw Loan | 3,818 | (156 | ) | ||||||
Asdam Operations Pty Ltd |
1st Lien Senior Secured Delayed Draw Loan | 3,691 | (168 | ) | ||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Delayed Draw Loan | 3,615 | (127 | ) | ||||||
CPI Buyer, LLC |
1st Lien Senior Secured Delayed Draw Loan | 3,491 | (97 | ) | ||||||
Pinnacle Fertility, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 3,125 | (93 | ) | ||||||
Arcfield Acquisition Corp |
1st Lien Senior Secured Revolving Loan | 2,990 | (129 | ) | ||||||
Thrasio LLC |
1st Lien Senior Secured Delayed Draw Loan | 2,972 | (338 | ) | ||||||
Tilting Point Media LLC |
1st Lien Senior Secured Revolving Loan | 2,916 | (274 | ) | ||||||
TriMech Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 2,895 | (74 | ) | ||||||
Arc Media Holdings Limited |
1st Lien Senior Secured Revolving Loan | 2,766 | (67 | ) | ||||||
Artemis Bidco Limited |
1st Lien Senior Secured Delayed Draw Loan | 2,622 | (286 | ) | ||||||
Galway Borrower LLC |
1st Lien Senior Secured Revolving Loan | 2,216 | (109 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Delayed Draw Loan | 2,143 | (112 | ) | ||||||
CPI Buyer, LLC |
1st Lien Senior Secured Revolving Loan | 2,115 | (43 | ) | ||||||
Spirit RR Holdings, Inc. |
1st Lien Senior Secured Revolving Loan | 1,806 | (74 | ) | ||||||
Excelitas Technologies Corp. |
1st Lien Senior Secured Revolving Loan | 1,413 | (50 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Revolving Loan | 1,358 | (95 | ) | ||||||
Calabrio, Inc. |
1st Lien Senior Secured Revolving Loan | 1,152 | (25 | ) | ||||||
Smarsh Inc. |
1st Lien Senior Secured Revolving Loan | 1,071 | (56 | ) | ||||||
IG Investments Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 1,036 | (32 | ) | ||||||
Meriplex Communications, LTD |
1st Lien Senior Secured Revolving Loan | 1,029 | (36 | ) | ||||||
Huskies Parent, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 1,000 | (93 | ) | ||||||
NBG Acquisition Corp. |
1st Lien Senior Secured Delayed Draw Loan | 952 | (67 | ) | ||||||
DS Admiral Bidco, LLC |
1st Lien Senior Secured Revolving Loan | 850 | (22 | ) | ||||||
Patriot Growth Insurance Services, LLC |
1st Lien Senior Secured Revolving Loan | 822 | (22 | ) | ||||||
AxiomSL Group, Inc. |
1st Lien Senior Secured Revolving Loan | 812 | — | |||||||
AxiomSL Group, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 744 | — | |||||||
850 Third Avenue Mezz I, LLC |
1st Lien Senior Secured Delayed Draw Loan | 643 | (90 | ) | ||||||
ERC Topco Holdings, LLC |
1st Lien Senior Secured Delayed Draw Loan | 620 | (17 | ) | ||||||
Pediatric Associates Holding Company, LLC |
1st Lien Senior Secured Delayed Draw Loan | 516 | (25 | ) | ||||||
Tricentis Americas, Inc. |
1st Lien Senior Secured Revolving Loan | 499 | (8 | ) | ||||||
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Investments-non-controlled/non-affiliated |
Commitment Type |
Unfunded Commitment |
Fair Value |
|||||||
RSC Acquisition, Inc. |
1st Lien Senior Secured Revolving Loan | 467 | (12 | ) | ||||||
Galway Borrower LLC |
1st Lien Senior Secured Delayed Draw Loan | 457 | (24 | ) | ||||||
Riley MergeCo LLC |
1st Lien Senior Secured Delayed Draw Loan | 456 | (23 | ) | ||||||
Associations Inc. |
1st Lien Senior Secured Revolving Loan | 403 | (6 | ) | ||||||
Bottomline Technologies, Inc. |
1st Lien Senior Secured Revolving Loan | 385 | (13 | ) | ||||||
ERC Topco Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 383 | (9 | ) | ||||||
Riley MergeCo LLC |
1st Lien Senior Secured Revolving Loan | 304 | (15 | ) | ||||||
Nexus Intermediate III, LLC |
1st Lien Senior Secured Delayed Draw Loan | 300 | (3 | ) | ||||||
Huskies Parent, Inc. |
1st Lien Senior Secured Revolving Loan | 294 | (24 | ) | ||||||
Time Manufacturing Holdings, LLC |
1st Lien Senior Secured Revolving Loan | 255 | (15 | ) | ||||||
VetCor Group Holdings LLC |
Unsecured Delayed Draw Loan | 250 | (19 | ) | ||||||
AD1 LBV1, LLC |
1st Lien Senior Secured Delayed Draw Loan | 119 | (2 | ) | ||||||
ABB/CON-CISE Optical Group LLC |
1st Lien Senior Secured Revolving Loan | 118 | (8 | ) | ||||||
DCA Acquisition Holdings LLC |
Unsecured Delayed Draw Loan | 88 | (2 | ) | ||||||
Aventine Intermediate LLC |
1st Lien Senior Secured Delayed Draw Loan | 80 | (4 | ) | ||||||
Higginbotham Insurance Agency, Inc. |
1st Lien Senior Secured Delayed Draw Loan | 28 | — | |||||||
Zips Car Wash, LLC |
1st Lien Senior Secured Delayed Draw Loan | 10 | — | |||||||
Total |
$ | 895,942 | $ | (33,961 | ) | |||||
| (8) | There are no interest rate floors on these investments. |
| (9) | The interest rate floor on these investments as of December 31, 2022 was 0.50%. |
| (10) | The interest rate floor on these investments as of December 31, 2022 was 0.60%. |
| (11) | The interest rate floor on these investments as of December 31, 2022 was 0.75%. |
| (12) | The interest rate floor on these investments as of December 31, 2022 was 1.00%. |
| (13) | The interest rate floor on these investments as of December 31, 2022 was 1.75%. |
| (14) | The interest rate floor on these investments as of December 31, 2022 was 2.00%. |
ADDITIONAL INFORMATION
Foreign currency forward contracts
Currency Purchased |
Currency Sold |
Counterparty |
Settlement Date |
Unrealized Appreciation (Depreciation) |
||||||||
U.S. Dollars 11,439 |
Australian Dollars 17,518 | Goldman Sachs Bank USA | 3/21/2023 | $ | (530 | ) | ||||||
U.S. Dollars 1,449 |
Australian Dollars 2,067 | Goldman Sachs Bank USA | 9/21/2023 | 28 | ||||||||
U.S. Dollars 4,010 |
Australian Dollars 6,291 | Goldman Sachs Bank USA | 12/21/2023 | (319 | ) | |||||||
U.S. Dollars 1,563 |
Canadian Dollars 2,024 | Goldman Sachs Bank USA | 9/21/2023 | 63 | ||||||||
U.S. Dollars 12,622 |
Euro 12,231 | Goldman Sachs Bank USA | 3/21/2023 | (545 | ) | |||||||
U.S. Dollars 77,725 |
Euro 72,453 | Goldman Sachs Bank USA | 6/21/2023 | (705 | ) | |||||||
U.S. Dollars 3,819 |
Euro 3,809 | Goldman Sachs Bank USA | 12/21/2023 | (339 | ) | |||||||
U.S. Dollars 893 |
Euro 846 | Goldman Sachs Bank USA | 9/23/2024 | (39 | ) | |||||||
U.S. Dollars 4,002 |
British Pound 3,280 | Goldman Sachs Bank USA | 3/21/2023 | 29 | ||||||||
U.S. Dollars 116,882 |
British Pound 95,507 | Goldman Sachs Bank USA | 6/21/2023 | 1,005 | ||||||||
U.S. Dollars 6,868 |
British Pound 6,303 | Goldman Sachs Bank USA | 10/15/2024 | (784 | ) | |||||||
Total |
$ | (2,136 | ) | |||||||||
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Interest Rate Swaps
Counterparty |
Hedged Instrument |
Company Receives |
Company Pays |
Maturity Date |
Notional Amount |
Fair Market Value |
||||||||||||||
Goldman Sachs Bank USA |
November 2025 Notes | 8.37 | % | SOFR + 4.08% | 11/14/2025 | $ | 85,000 | $ | 314 | |||||||||||
Goldman Sachs Bank USA |
November 2027 Notes | 8.43 | % | SOFR + 4.42% | 11/14/2027 | 77,500 | 677 | |||||||||||||
Total Interest Rate Swaps |
$ | 991 | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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HPS Corporate Lending Fund
Notes to Consolidated Financial Statements
(in thousands, except per share data, percentages and as otherwise noted)
Note 1. Organization
HPS Corporate Lending Fund (the “Company” or “HLEND”) is a Delaware statutory trust that was formed on December 23, 2020 and commenced operations on February 3, 2022. The Company seeks to invest primarily in newly originated senior secured debt and other securities of private U.S. companies within the upper middle market. The Company is a non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company is externally managed by HPS Advisors, LLC (the “Adviser”), a wholly-owned subsidiary of HPS Investment Partners, LLC (the “Administrator” or “HPS”). Prior to June 30, 2023, the Company was externally managed by HPS. The Company has elected to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a regulated investment company (“RIC”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company’s investment objective is to generate attractive risk-adjusted returns, predominately in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. The Company seeks to achieve its investment objective by investing primarily in newly originated, privately negotiated senior credit investments in high quality, established upper middle market companies, and in select situations, companies in special situations. Upper middle market companies generally mean companies with earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $75 million to $1 billion annually or $250 million to $5 billion in revenue annually at the time of investment.
The Company has and may continue to invest in smaller or larger companies if the opportunity presents attractive investment and risk-adjusted returns. In addition to corporate level obligations, the Company’s investments in such companies may also opportunistically include private asset-based financings such as equipment financings, financings against mission-critical corporate assets and mortgage loans, and/or investments that represent equity in portfolios of loans, receivables or other debt instruments. The Company may also selectively make investments that represent equity in portfolios of loans, receivables or other debt instruments. The Company may also participate in programmatic investments through partnerships or joint ventures with one or more unaffiliated banks or other financial institutions, including structures where a partner assumes senior exposure to each investment, and the Company participates in the junior exposure.
The Company’s investment strategy also includes a smaller allocation to more liquid credit investments such as broadly syndicated loans and corporate bonds. This allocation may also include senior secured loans, senior secured bonds, high yield bonds and structured credit instruments.
The strategy of the Company primarily focuses on companies in the United States, but also intends to leverage the Adviser’s presence to invest in companies in Europe, Australia and other locations outside the U.S. In addition, the Company may also invest in publicly traded securities of larger corporate issuers on an opportunistic basis when market conditions create compelling potential return opportunities, subject to compliance with BDC requirements to invest at least 70% of assets in “eligible portfolio companies.”
The Company offers on a continuous basis up to $8.0 billion of Common Shares of beneficial interest pursuant to an offering registered with the Securities and Exchange Commission (the “Offering”). The Company offers to sell any combination of four classes of Common Shares: Class I shares, Class D shares, Class F shares, and Class S shares, with a dollar value up to the maximum offering amount. The share classes have different ongoing shareholder servicing and/or distribution fees. The initial purchase price for the Common Shares of
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beneficial interest was $25.00 per share for Class I shares, Class D shares and Class F shares and the initial purchase price was $25.11 for Class S shares. Thereafter, the purchase price per share for each class of Common Shares equals the net asset value (“NAV”) per share, as of the effective date of the monthly share purchase date. Emerson Equity LLC (the “Managing Dealer”) will use its best efforts to sell shares, but is not obligated to purchase or sell any specific amount of shares in the offering. The Company may also engage in private offerings of its Common Shares.
The Company accepted purchase orders and held investors’ funds in an interest-bearing escrow account until the Company received purchase orders for at least $100.0 million, excluding shares purchased by HPS, its affiliates and trustees and officers but including any shares purchased in any private offering, in any combination of purchases of Class I shares, Class D shares, Class F shares, and Class S shares, and the Company’s Board of Trustees (the “Board”) authorized the release of funds in the escrow account. As of February 3, 2022, the Company had satisfied the minimum offering requirement and commenced its operations after the Company’s Board had authorized the release of proceeds from escrow. As of such date, the Company issued and sold 20,437,880 shares (consisting of 7,074,280 Class I shares, 1,268,000 Class D shares, and 12,095,600 Class F shares at an offering price of $25.00 per share), and the escrow agent released net proceeds of $510.9 million to the Company as payment for such shares. There were no Class S shares issued on such date, as Class S shares commenced operations on October 1, 2023.
Note 2. Significant Accounting Policies
Basis of Presentation
The annual consolidated financial statements have been prepared in accordance with U.S. GAAP for annual financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of the consolidated financial statements for the periods presented have been included. All intercompany balances and transactions have been eliminated.
As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”).
Basis of Consolidation
As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company.
The Company consolidated the results of its wholly-owned subsidiaries HLEND Holdings A, L.P. (“HLEND A”), HLEND Holdings B, L.P. (“HLEND B”), HLEND Holdings C, L.P. (“HLEND C”), HLEND Holdings D, L.P. (“HLEND D”), HLEND CLO 2023-1 INVESTMENTS, LLC, HLEND Proxima, LLC, HLEND FEP, LLC, HLEND OTM, LLC and HLEND Lux Sarl. All intercompany transactions have been eliminated in consolidation.
The Company does not consolidate its investment in the ULTRA III, LLC (“ULTRA III”) joint venture. For further description of the Company’s joint venture, see “Note 11. Joint Venture.”
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
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contingent assets and liabilities at the date of the consolidated financial statements. Actual amounts could differ from those estimates and such differences could be material.
Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.
Investments that are listed or traded on an exchange and are freely transferable are valued at either the closing price (in the case of securities and futures) or the mean of the closing bid and offer (in the case of options) on the principal exchange on which the investment is listed or traded. Investments for which other market quotations are readily available will typically be valued at those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Where it is possible to obtain reliable, independent market quotations from a third party vendor, the Company uses these quotations to determine the value of its investments. The Company utilizes mid-market pricing (i.e., mid-point of average bid and ask prices) to value these investments. The Adviser obtains these market quotations from independent pricing services, if available; otherwise from one or more broker quotes. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment.
Where prices or inputs are not available or, in the judgment of the Adviser, not reliable, valuation approaches based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available, as will be the case for a substantial portion of the Company’s investments, are valued at fair value as determined in good faith by the Adviser as the Company’s valuation designee under Rule 2a-5 under the 1940 Act, pursuant to the Company’s valuation policy, and under the oversight of the Board, based on, among other things, the input of one or more independent valuation firms retained by the Company to review the Company’s investments. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.
F-145
With respect to the quarterly valuation of investments, the Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available as of the last calendar day of each quarter, which includes, among other procedures, the following:
| • | The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in consultation with the Adviser’s investment professionals responsible for each portfolio investment; |
| • | In addition, independent valuation firms retained by the Company prepare quarter-end valuations of each such investment that was (i) originated or purchased prior to the first calendar day of the quarter and (ii) is not a de minimis investment, as determined by the Adviser. The independent valuation firms provide a final range of values on such investments to the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations; |
| • | The Adviser’s valuation committee with respect to the Company (the “Valuation Committee”) reviews the valuation recommendations prepared by the Adviser’s valuation team and, as appropriate, the independent valuation firms’ valuation ranges; |
| • | The Adviser’s Valuation Committee then determines fair value marks for each of the Company’s portfolio investments; and |
| • | The Board and Audit Committee periodically review the valuation process and provide oversight in accordance with the requirements of Rule 2a-5 under the 1940 Act. |
As part of the valuation process, the Company takes into account relevant factors in determining the fair value of the Company’s investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant: (i) the estimated enterprise value of a portfolio company, generally based on an analysis of discounted cash flows, publicly traded comparable companies and comparable transactions, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, and (v) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Adviser considers whether the pricing indicated by the external event corroborates its valuation.
The Company has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Company’s portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Adviser and the Company may reasonably rely on that assistance. However, the Adviser is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation policy, the Board’s oversight and a consistently applied valuation process.
Derivative Instruments
The Company may enter into foreign currency forward contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another, at a at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Notional amounts of foreign currency forward contract assets and liabilities are presented separately on the Consolidated Schedules of Investments. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. As it relates to foreign
pre-determined
price at a future date. Foreign currency forward contracts are marked-to-market
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currency forward contracts, the Company does not utilize hedge accounting and as such, the Company recognizes its derivatives at fair value with changes in the net unrealized appreciation (depreciation) on foreign currency forward contracts recorded on the Consolidated Statements of Operations.
Additionally, the Company uses interest rate swaps to mitigate interest rate risk associated with the Company’s fixed rate liabilities. The fair value of the interest rate swaps are included as derivative assets at fair value or derivative liabilities at fair value, as applicable, on the Company’s Consolidated Statements of Assets and Liabilities. The Company designated the interest rate swaps as the hedging instruments in a qualifying fair value hedge accounting relationship, and therefore the change in fair value of the hedging instrument and hedged item are recorded as components of interest expense in the Consolidated Statements of Operations. The change in fair value of the interest rate swap is offset by a change in the carrying value of the fixed rate debt.
The fair value of the Company’s derivatives are recorded on the Consolidated Statements of Assets and Liabilities by security type and counterparty on a net basis, if subject to an enforceable master netting agreement, not taking into account collateral posted which is recorded separately. As of December 31, 2023 and 2022, there was no collateral pledged.
Loan Participations
The Company follows the guidance in ASC 860 Transfers and Servicing when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on the Consolidated Statements of Assets and Liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. There were no participations that were accounted for as secured borrowings during the period.
Foreign Currency Transactions
Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates.
The Company does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included within the net realized and unrealized gains or losses on investments. Fluctuations arising from the translation of
non-investment
assets and liabilities are included with the net change in unrealized gains (losses) on foreign currency translations on the Consolidated Statements of Operations. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.
Revenue Recognition
Interest Income
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into
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interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period. For the years ended December 31, 2023 and 2022, the Company recorded
non-recurring
interest income of $16.4 million and $1.9 million, respectively (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts). Loans are generally placed on
non-accrual
status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual
status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual
status. Interest payments received on non-accrual
loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual
loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual
status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2023 and 2022, there were three and zero investments placed on non-accrual
status, respectively. PIK Income
The Company has loans in its portfolio that contain (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on
payment-in-kind
non-accrual
status. When a PIK investment is placed on non-accrual
status, the accrued, uncapitalized interest is generally reversed through interest income. To maintain the Company’s status as a RIC, this non-cash
source of income must be paid out to shareholders in the form of dividends, even though the Company has not yet collected cash. Dividend Income
Dividend income on preferred equity securities and on the Company’s membership interests in its joint ventures are recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the
ex-dividend
date for publicly-traded portfolio companies. To the extent a preferred equity security contains PIK provisions, PIK dividends, computed at the contractual rate specified in each applicable agreement, are accrued and recorded as dividend income and added to the principal balance of the preferred equity security. PIK dividends added to the principal balance are generally collected upon redemption of the equity. For the years ended December 31, 2023 and 2022, the Company recorded $0.5 million and $0.0 million, respectively, of dividend income, of which, $0.4 million and $0.0 million, respectively, relate to PIK dividends. Other Income
The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment, syndication and other miscellaneous fees as well as fees for managerial assistance rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered.
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Organization Costs
Organization expenses include, among other things, the cost of incorporating the Company and the cost of legal services and other fees pertaining to the Company’s organization.
Offering Expenses
The Company’s offering expenses include, among other things, legal fees, registration fees and other costs pertaining to the preparation of the Company’s registration statement (and any amendments or supplements thereto) relating to the offering and associated marketing materials. Offering costs are capitalized as a deferred charge and amortized to expense on a straight-line basis over a twelve-month period from incurrence.
Deferred Financing Costs and Debt Issuance Costs
Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These expenses are deferred and amortized into interest expense over the life of the related debt instrument using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the Company’s Statements of Assets and Liabilities. Debt issuance costs related to any issuance of installment debt or notes are presented net against the outstanding debt balance of the related security.
Income Taxes
The Company has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. Rather, any tax liability related to income earned and distributed by the Company would represent obligations of the Company’s shareholders and would not be reflected in the consolidated financial statements of the Company.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are
“more-likely-than-not”
to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not”
threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going
analyses of tax laws, regulations and interpretations thereof. The Company intends to make the requisite distributions to its shareholders, which will generally relieve the Company from corporate-level income taxes. To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certain and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses.
source-of-income
In addition, based on the excise tax distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner in each taxable year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of capital gain net income (both long-term and short-term) for the
one-year
period ending October 31 in that calendar year and (iii) any income realized, but not distributed, in prior years. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. To the extent that it determines that estimated current year annual taxable income will be in excess of estimated current year distributions from such taxable income, the Company will accrue excise taxes, if any, on estimated undistributed taxable income. F-149
For the years ended December 31, 2023 and 2022, the Company accrued $1.5 million and $0.8 million of U.S. federal excise tax, respectively.
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains and losses are allocated to each class of shares based upon the aggregate net asset value of that class in relation to the aggregate net asset value of the Company. Expenses that are specific to a class of shares are allocated to such class directly.
Distributions
To the extent that the Company has taxable income available, the Company intends to make monthly distributions to its shareholders. Distributions to shareholders are recorded on the record date. All distributions will be paid at the discretion of the Board and will depend on the Company’s earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time. Although the gross distribution per share is generally equivalent for each share class, the net distribution for each share class is reduced for any class specific expenses, including distribution and/or shareholder servicing fees, if any.
The Company has adopted a distribution reinvestment plan pursuant to which shareholders will have their cash distributions automatically reinvested in additional shares of the Company’s same class of Common Shares to which the distribution relates unless they elect to receive their distributions in cash.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all accounting standard updates (“ASUs”) issued by the Financial Accounting Standards Board. The Company has assessed currently issued ASUs and has determined that they are not applicable or are expected to have minimal impact on its consolidated financial statements.
Note 3. Fees, Expenses, Agreements and Related Party Transactions
Investment Advisory Agreement
On January 20, 2022, the Company entered into an investment advisory agreement with HPS, pursuant to which HPS managed the Company on a basis until June 30, 2023. On June 30, 2023, the Company entered into the Investment Advisory Agreement (the “Investment Advisory Agreement”) with the Adviser and HPS in connection with a corporate reorganization of the investment advisory operations with respect to the Company. The Adviser is responsible for determining the portfolio composition, making investment decisions, monitoring investments, performing due diligence on prospective portfolio companies and providing the Company with such other investment advisory and related services as may reasonably be required for the investment of capital.
day-to-day
The Investment Advisory Agreement is effective for an initial thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the Independent Trustees. The Company may terminate the Investment Advisory Agreement, without payment of any penalty, upon 60 days’ written notice. The Investment Advisory Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related Securities and Exchange Commission (the “SEC”) guidance and interpretations.
one-year
term ending on June 30, 2024 and will remain in effect from year-to-year
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Under the Investment Advisory Agreement, the Company pays the Adviser a fee for its services. The fee consists of two components: a management fee and an incentive fee. The cost of both the management fee and the incentive fee are ultimately borne by the shareholders.
Base Management Fee
The management fee is payable monthly in arrears at an annual rate of 1.25% of the value of the Company’s net assets as of the beginning of the first calendar day of the applicable month. For purposes of the Investment Advisory Agreement, net assets means the Company’s total assets less the carrying value of liabilities, determined in accordance with U.S. GAAP. For the first calendar month in which the Company had operations, net assets were measured as the beginning net assets as of the date on which the Company broke escrow for the Offering.
The Adviser agreed to waive the base management fee from the date on which the Company broke escrow for the Offering through December 31, 2022.
For the year ended December 31, 2023, base management fees were $52.9 million. For the year ended December 31, 2022, base management fees were $26.5 million, all of which were voluntarily waived by the Adviser. As of December 31, 2023 and 2022, $5.6 million and $0.0 million, respectively, were payable to the Adviser related to management fees.
Incentive Fees
The incentive fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the incentive fee is based on a percentage of the Company’s income and a portion is based on a percentage of the Company’s capital gains, each as described below.
(i) Income based incentive fee
The income based incentive fee is based on the Company’s
Pre-Incentive
Fee Net Investment Income Returns, as defined below. “Pre-Incentive
Fee Net Investment Income Returns” means dividends, cash interest or other distributions or other cash income and any third-party fees received from portfolio companies (such as upfront fees, commitment fees, origination fee, amendment fees, ticking fees and break-up
fees, as well as prepayments premiums, but excluding fees for providing managerial assistance) accrued during the quarter, minus operating expenses for the quarter (including the management fee, taxes, any expenses payable under the Investment Advisory Agreement and an administration agreement with the administrator, any expense of securitizations, and interest expense or other financing fees and any dividends paid on preferred stock, but excluding incentive fees and shareholder servicing and/or distribution fees). Pre-Incentive
Fee Net Investment Income Returns includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero-coupon
securities), accrued income that we have not yet received in cash. Pre-Incentive
Fee Net Investment Income Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive
Fee Net Investment Income Returns. Pre-Incentive
Fee Net Investment Income Returns, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding quarter, is compared to a “Hurdle Rate” defined as a return of 1.25% per quarter (5.0% annualized). The Company pays the Adviser an incentive fee quarterly in arrears with respect to the
Pre-Incentive
Fee Net Investment Income Returns in each calendar quarter as follows: | i. | No incentive fee will be paid on Pre-Incentive Fee Net Investment Income Returns in any calendar quarter in which the Pre-Incentive Fee Net Investment Income Returns do not exceed the Hurdle Rate; |
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| ii. | 100% of the dollar amount of the Pre-Incentive Fee Net Investment Income Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the Hurdle Rate but is less than a rate of return of 1.43% (5.72% annualized). This portion of the Pre-Incentive Fee Net Investment Income Returns (which exceeds the Hurdle Rate but is less than 1.43%) is referred to as the “Catch-Up.” The Catch-Up is meant to provide the Adviser with 12.5% of the Company’s Pre-Incentive Fee Net Investment Income Returns as if a Hurdle Rate did not apply if this net investment income exceeds 1.43% in any calendar quarter; and |
| iii. | 12.5% of the dollar amount of the Pre-Incentive Fee Net Investment Income Returns, if any, that exceed a rate of return of 1.43% (5.72% annualized). |
These calculations are prorated for any period of less than three months, including the first quarter the Company commenced operations, and are adjusted for any share issuances or repurchases during the relevant quarter.
The Adviser agreed to waive the income based incentive fee from the date on which the Company broke escrow for the Offering through December 31, 2022. For the year ended December 31, 2023, income based incentive fees were $70.5 million. For the year ended December 31, 2022, income based incentive fees were $23.2 million, all of which were voluntarily waived by the Adviser. As of December 31, 2023 and 2022, $20.3 million and $0.0 million, respectively, were payable to the Adviser relating to income based incentive fees.
(ii) Capital gains incentive fee
The second component of the incentive fee, the capital gains incentive fee, is payable at the end of each calendar year in arrears. The amount payable equals 12.5% of cumulative realized capital gains from inception through the end of such calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains as calculated in accordance with U.S. GAAP. U.S. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation, net of any expense associated with cumulative unrealized capital depreciation or appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 12.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods.
For the years ended December 31, 2023 and 2022, capital gains incentive fees were $3.5 million and $0.0 million, respectively. As of December 31, 2023 and 2022, the Company accrued $3.5 million and $0.0 million, respectively, of capital gains incentive fees, none of which were payable under the Investment Advisory Agreement.
Administration Agreement
On January 20, 2022, the Company entered into an agreement (the “Administration Agreement”), subsequently amended on June 30, 2023, with the Administrator under which the Administrator provides, or oversees the performance of, administrative and compliance services, including, but not limited to, maintaining financial records, overseeing the calculation of the Company’s NAV, compliance monitoring (including diligence and oversight of other service providers), preparing reports to shareholders and reports filed with the SEC and other regulators, preparing materials and coordinating meetings of the Company’s Board, managing the
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payment of expenses, the payment and receipt of funds for investments and the performance of administrative and professional services rendered by others and providing office space, equipment and office services. The Company reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations under the Administration Agreement. Such reimbursement includes the Company’s allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) the Company’s chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other
non-investment
professionals at the Administrator that perform duties for the Company; and (iii) any internal audit group personnel of the Administrator or any of its affiliates, subject to the limitations described in Investment Advisory and Administration Agreements. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and the Company will reimburse the Administrator for any services performed for the Company by such affiliate or third party. The amount of the reimbursement payable to the Administrator for administrative services will be the lesser of (1) Administrators’ actual costs incurred in providing such services and (2) the amount that the Company estimates it would be required to pay alternative service providers for comparable services in the same geographic location. The Administrator is required to allocate the cost of such services to the Company based on factors such as assets, revenues, time allocations and/or other reasonable metrics. The Company does not reimburse the Administrator for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of HPS.
Unless earlier terminated as described below, the Administration Agreement is effective for a thereafter if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the Independent Trustees. The Company may terminate the Administration Agreement, without payment of any penalty, upon 120 days’ written notice. The Administration Agreement will automatically terminate in the event of its assignment within the meaning of the 1940 Act and related SEC guidance and interpretations.
one-year
term ending on June 30, 2024 and will remain in effect from year-to-year
For the years ended December 31, 2023 and 2022, the Company incurred $2.5 million and $1.8 million, respectively, in expenses under the Administration Agreement, which are recorded in “administrative service expenses” in the Company’s Consolidated Statements of Operations. As of December 31, 2023 and 2022, there was $2.5 million and $1.8 million, respectively, of administrative service expenses payable by the Company which are included in “due to affiliates” in the Consolidated Statements of Assets and Liabilities.
Sub-Administration
and Fund Accounting Servicing Agreements HPS previously engaged U.S. Bancorp Fund Services, LLC (“U.S. Bancorp”) to assist in the provision of
sub-administrative
and fund accounting services. U.S. Bancorp received compensation for these services under sub-administration
and fund accounting servicing agreements. On August 30, 2023, the Company provided notice for the termination of the sub-administration
agreement dated as of November 30, 2021 by and among the Company, HPS and U.S. Bancorp. On August 28, 2023, the Company entered into a expenses properly incurred by Harmonic in respect of the services provided pursuant to the
Sub-Administration
Agreement (the “Sub-Administration
Agreement”) with HPS and Harmonic Fund Services (“Harmonic”) as the Company’s sub-administrator.
Pursuant to the Sub-Administration
Agreement, Harmonic provides certain administrative services necessary for the operations of the Company. The Company will bear all fees to be paid to Harmonic under the Sub-Administration
Agreement and Harmonic will be entitled to receive reimbursement from the Company for all out-of-pocket
Sub-Administration
Agreement. F-153
Managing Dealer Agreement
On August 3, 2021, the Company entered into a Managing Dealer Agreement (the “Managing Dealer Agreement”) with the Managing Dealer. Under the terms of the Managing Dealer Agreement, the Managing Dealer will serve as the Managing Dealer for the Offering. The Managing Dealer will be entitled to receive distribution and/or shareholder servicing fees monthly in arrears at an annual rate of 0.25%, 0.50% and 0.85% of the value of the Company’s net assets attributable to Class D shares, Class F shares and Class S shares, respectively, as of the beginning of the first calendar day of the month. No distribution and/or shareholding servicing fees will be paid with respect to Class I. The distribution and/or shareholder servicing fees will be payable to the Managing Dealer, but the Managing Dealer anticipates that all or a portion of the shareholder servicing and/or distribution fees will be retained by, or reallowed (paid) to, participating broker-dealers. As set forth in and pursuant to the Managing Dealer Agreement, the Company pays the Managing Dealer certain fees, including a $35,000 engagement fee that was previously paid, a $250,000 fixed managing dealer fee payable quarterly (which commenced in the first quarter of 2022) in arrears in five equal quarterly installments that was paid, and a two basis point (0.02%) variable managing dealer fee that is payable on any new capital raised in the offering following the expiration of the initial
15-month
period of the Offering. In addition, in connection with services provided by the Managing Dealer with respect to the sale of shares registered pursuant to the registration statement filed on Form N-2
on June 30, 2023 related to a follow-on
offering of shares of the Company, HPS agreed to pay and paid a one-time
fee of $60,000 to the Managing Dealer. For the avoidance of doubt, such fee was borne and paid in its entirety solely by HPS, and such fee (or any portion thereof) was not borne or paid directly or indirectly by the Company or the shareholders. The Company or the Adviser may also pay directly, or reimburse the Managing Dealer if the Managing Dealer pays on the Company’s behalf, any organization and offering expenses (other than any upfront selling commissions and shareholder servicing and/or distribution fees).
The Company will cease paying the distribution and/or shareholder servicing fees on the Class D shares, Class F shares and Class S shares on the earlier to occur of the following: (i) a listing of Class I shares, (ii) a merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of the Company’s assets or (iii) the date following the completion of the primary portion of the Offering on which, in the aggregate, underwriting compensation from all sources in connection with the Offering, including the distribution and/or shareholder servicing fees and other underwriting compensation, is equal to 10% of the gross proceeds from the Offering.
In addition, at the end of the month in which the Managing Dealer in conjunction with the transfer agent determines that total transaction or other fees, including upfront placement fees or brokerage commissions, and shareholder servicing and/or distribution fees paid with respect to any single share held in a shareholder’s account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such share (or a lower limit as determined by the Managing Dealer or the applicable selling agent), the Company will cease paying the shareholder servicing and/or distribution fee on either (i) each such share that would exceed such limit or (ii) all Class D shares, Class F shares and Class S shares in such shareholder’s account. At the end of such month, the applicable Class D shares, Class F shares or Class S shares in such shareholder’s account will convert into a number of Class I shares (including any fractional shares), with an equivalent aggregate NAV as such Class D, Class F or Class S shares.
The Managing Dealer is a broker-dealer registered with the SEC and is a member of the Financial Industry Regulatory Authority, or FINRA.
The Managing Dealer Agreement may be terminated at any time, without the payment of any penalty, by vote of a majority of the Company’s trustees who are not “interested persons”, as defined in the 1940 Act, of the Company and who have no direct or indirect financial interest in the operation of the Company’s distribution plan or the Managing Dealer Agreement or by vote of a majority of the outstanding voting securities of the
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Company, on not more than 60 days’ written notice to the Managing Dealer or the Adviser. The Managing Dealer Agreement will automatically terminate in the event of its assignment, as defined in the 1940 Act.
Either party may terminate the Managing Dealer Agreement upon 60 days’ written notice to the other party or immediately upon notice to the other party in the event such other party failed to comply with a material provision of the Managing Dealer Agreement. The Company’s obligations under the Managing Dealer Agreement to pay the shareholder servicing and/or distribution fees with respect to the Class S, Class D shares and Class F shares distributed shall survive termination of the agreement until such shares are no longer outstanding (including such shares that have been converted into Class I shares, as described above).
Distribution and Servicing Plan
On August 9, 2021, the Board approved a distribution and servicing plan (the “Distribution and Servicing Plan”). The following table shows the shareholder servicing and/or distribution fees the Company pays the Managing Dealer with respect to the Class I, Class D, Class F, and Class S on an annualized basis as a percentage of the Company’s NAV for such class.
|
Shareholder Servicing Distribution as a % of NAV |
and/or Fee |
|||||||
Class I shares |
— | % | ||||||
Class D shares |
0.25 | % | ||||||
Class F shares |
0.50 | % | ||||||
Class S shares |
0.85 | % | ||||||
The shareholder servicing and/or distribution fees are paid monthly in arrears, calculated using the net asset value of the applicable class as of the beginning of the first calendar day of the month and subject to FINRA and other limitations on underwriting compensation. The Managing Dealer agreed to waive shareholder servicing and/or distribution fees for Class D shares and Class F shares for the first nine months following the date on which the Company broke escrow for the Offering.
The Managing Dealer will reallow (pay) all or a portion of the shareholder servicing and/or distribution fees to participating brokers and servicing brokers for ongoing shareholder services performed by such brokers, and will waive shareholder servicing and/or distribution fees to the extent a broker is not eligible to receive it for failure to provide such services. Because the shareholder servicing and/or distribution fees with respect to Class D, Class F or Class S shares are calculated based on the aggregate net asset value for all of the outstanding shares of each such class, it reduces the net asset value with respect to all shares of each such class, including shares issued under the Company’s distribution reinvestment plan.
Eligibility to receive the shareholder servicing and/or distribution fee is conditioned on a broker providing the following ongoing services with respect to the Class D, Class F or Class S shares: assistance with recordkeeping, answering investor inquiries regarding the Company, including regarding distribution payments and reinvestments, helping investors understand their investments upon their request, and assistance with share repurchase requests. If the applicable broker is not eligible to receive the shareholder servicing and/or distribution fee due to failure to provide these services, the Managing Dealer will waive the shareholder servicing fee and/or distribution that broker would have otherwise been eligible to receive. The shareholder servicing and/or distribution fees are ongoing fees that are not paid at the time of purchase.
For the year ended December 31, 2023, the Company accrued distribution and/or shareholder servicing fees of $1.4 million, $13.1 million and $0.0 million, which were attributable to Class D, Class F, and Class S shares, respectively. For the year ended December 31, 2022, the Company accrued distribution and/or shareholder servicing fees of $0.6 million and $6.6 million, which were attributable to Class D and Class F shares,
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respectively, of which $0.5 million and $4.9 million, respectively, were waived during the period. As of December 31, 2023 and 2022, there was $1.5 million and $1.0 million, respectively, of shareholder servicing fees payable to the Managing Dealer.
Expense Support and Conditional Reimbursement Agreement
On January 20, 2022, the Company entered into an expense support and conditional reimbursement agreement with the Adviser. On June 30, 2023, the Company and the Adviser entered into an Amended and Restated Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”) in connection with the corporate reorganization of the investment advisory operations with respect to the Company. Pursuant to the Expense Support Agreement, on a monthly basis, the Adviser is obligated to advance all of the Company’s Other Operating Expenses (as defined hereafter) (each, a “Required Expense Payment”) to the extent that such expenses exceed 1.00% (on an annualized basis) of the Company’s NAV. The Adviser may elect to pay an additional portion of the Company’s expenses from time to time, which the Company will be obligated to reimburse to the Adviser at a later date if certain conditions are met.
“Other Operating Expenses” means the Company’s total organization and offering expenses, professional fees, trustee fees, administration fees, and other general and administrative expenses (including the Company’s allocable portion of compensation (including salaries, bonuses and benefits), overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement).
Any Required Expense Payment must be paid by the Adviser to the Company in any combination of cash or other immediately available funds and/or offset against amounts due from the Company to the Adviser or its affiliates.
The Adviser may elect to pay certain additional expenses on behalf of the Company (each, a “Voluntary Expense Payment” and together with a Required Expense Payment, the “Expense Payments”), provided that no portion of the payment will be used to pay any interest expense or distribution and/or shareholder servicing fees of the Company. Any Voluntary Expense Payment that the Adviser has committed to pay must be paid by the Adviser to the Company in any combination of cash or other immediately available funds no later than 45 days after such commitment was made in writing, and/or offset against amounts due from the Company to the Adviser or its affiliates.
Following any calendar month in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to the Company’s shareholders based on distributions declared with respect to record dates occurring in such calendar month (the amount of such excess being hereinafter referred to as “Excess Operating Funds”), the Company shall pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such calendar month have been reimbursed. Any payments required to be made by the Company shall be referred to herein as a “Reimbursement Payment.”
“Available Operating Funds” means the sum of (i) the Company’s net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).
The Company’s obligation to make a Reimbursement Payment shall automatically become a liability of the Company on the last business day of the applicable calendar month, except to the extent the Adviser has waived its right to receive such payment for the applicable month.
F-156
For the year ended December 31, 2023, the Adviser made no Expense Payments on behalf of the Company and there were no Reimbursement Payments made to the Adviser. For the year ended December 31, 2022, the Adviser made Expense Payments in the amount of $4.3 million and Reimbursement Payments made to the Adviser were $4.3 million. For the year ended December 31, 2021, the Adviser made Expense Payments in the amount of $1.2 million and there were no Reimbursement Payments made to the Adviser.
The following table presents a summary of Expense Payments and the related Reimbursement Payments for the year ended December 31, 2022:
For the Month Ended |
Expense Payments by the Adviser |
Reimbursement Payments to the Adviser |
Unreimbursed Expense Payments |
|||||||||
February 28, 2022 (1)
|
$ | 2,384 | $ | (2,384 | ) | $ | — | |||||
March 31, 2022 |
443 | (443 | ) | — | ||||||||
April 30, 2022 |
718 | (718 | ) | — | ||||||||
May 31, 2022 |
725 | (725 | ) | — | ||||||||
Total |
$ | 4,270 | $ | (4,270 | ) | $ | — | |||||
| (1) | Included in this amount is $1.2 million of Expense Payments made by the Adviser, relating to expenses incurred prior to the Company breaking escrow on February 3, 2022. Although such expenses became payable by the Company upon breaking escrow (as recorded in the Consolidated Statements of Operations within “Reimbursable expenses previously borne by Adviser”), they were supported by the Adviser under the prior expense support and conditional reimbursement agreement. |
Controlled/Affiliated Portfolio Companies
Under the 1940 Act, the Company is required to separately identify
non-controlled
investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act, “non-affiliated
investments” are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled,
non-affiliated;
non-controlled,
affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the Consolidated Schedules of Investments. The Company has made an investment in a joint venture, ULTRA III, which is considered a controlled/affiliated company. For a further description of ULTRA III, see “.”
Note 11. Joint Venture
F-157
Note 4. Investments
The composition of the Company’s investment portfolio at cost and fair value was as follows:
December 31, 2023 |
December 31, 2022 |
|||||||||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
|||||||||||||||||||
First lien debt |
$ | 8,919,865 | $ | 9,002,695 | 96.93 | % | $ | 5,755,124 | $ | 5,614,718 | 98.22 | % | ||||||||||||
Second lien debt |
64,782 | 67,087 | 0.72 | 47,764 | 45,248 | 0.79 | ||||||||||||||||||
Unsecured debt |
28,901 | 29,101 | 0.31 | 26,302 | 25,512 | 0.45 | ||||||||||||||||||
Structured finance investments |
28,427 | 29,868 | 0.32 | 28,929 | 28,737 | 0.50 | ||||||||||||||||||
Investments in joint ventures |
125,513 | 124,003 | 1.33 | — | — | — | ||||||||||||||||||
Equity investments |
36,313 | 36,656 | 0.39 | 2,067 | 2,306 | 0.04 | ||||||||||||||||||
Total |
$ | 9,203,801 | $ | 9,289,410 | 100.00 | % | $ | 5,860,186 | $ | 5,716,521 | 100.00 | % | ||||||||||||
The industry composition of investments at fair value was as follows:
December 31, 2023 |
December 31, 2022 |
|||||||||||||||
Fair Value |
% of Total Investments at Fair Value |
Fair Value |
% of Total Investments at Fair Value |
|||||||||||||
Software and Computer Services |
$ | 1,472,951 | 15.86 | % | $ | 1,158,262 | 20.26 | % | ||||||||
Industrial Support Services |
1,063,701 | 11.45 | 567,804 | 9.93 | ||||||||||||
Health Care Providers |
962,244 | 10.36 | 660,631 | 11.56 | ||||||||||||
Medical Equipment and Services |
802,273 | 8.64 | 210,831 | 3.69 | ||||||||||||
Consumer Services |
627,950 | 6.76 | 458,248 | 8.02 | ||||||||||||
Media |
605,503 | 6.52 | 505,035 | 8.83 | ||||||||||||
Non-life Insurance |
531,031 | 5.72 | 317,816 | 5.56 | ||||||||||||
Aerospace and Defense |
475,845 | 5.12 | 169,856 | 2.97 | ||||||||||||
General Industrials |
405,330 | 4.36 | 265,463 | 4.64 | ||||||||||||
Travel and Leisure |
332,032 | 3.57 | 159,763 | 2.79 | ||||||||||||
Pharmaceuticals and Biotechnology |
268,572 | 2.89 | 196,435 | 3.44 | ||||||||||||
Industrial Engineering |
254,138 | 2.74 | 186,373 | 3.26 | ||||||||||||
Investment Banking and Brokerage Services |
160,345 | 1.73 | 7,606 | 0.13 | ||||||||||||
Food Producers |
152,576 | 1.64 | 86,977 | 1.52 | ||||||||||||
Investments in Joint Ventures |
124,003 | 1.33 | — | — | ||||||||||||
Personal Care, Drug and Grocery Stores |
120,098 | 1.29 | 117,320 | 2.05 | ||||||||||||
Retailers |
113,500 | 1.22 | 20,322 | 0.36 | ||||||||||||
Automobiles and Parts |
112,957 | 1.22 | 118,440 | 2.07 | ||||||||||||
Electricity |
83,267 | 0.90 | 8,639 | 0.15 | ||||||||||||
Personal Goods |
76,471 | 0.82 | 70,050 | 1.23 | ||||||||||||
Telecommunications Service Providers |
70,997 | 0.76 | 71,695 | 1.25 | ||||||||||||
Technology Hardware and Equipment |
70,623 | 0.76 | 93,161 | 1.63 | ||||||||||||
Finance and Credit Services |
59,003 | 0.64 | 48,448 | 0.85 | ||||||||||||
Construction and Materials |
57,171 | 0.62 | 1,162 | 0.03 | ||||||||||||
Oil, Gas and Coal |
44,818 | 0.48 | — | — | ||||||||||||
Gas, Water and Multi-utilities |
43,604 | 0.47 | 43,242 | 0.76 | ||||||||||||
Real Estate Investment and Services |
39,500 | 0.43 | 44,822 | 0.78 | ||||||||||||
Industrial Transportation |
33,196 | 0.36 | 50,090 | 0.88 | ||||||||||||
Structured Finance |
29,868 | 0.32 | 28,737 | 0.50 | ||||||||||||
F-158
December 31, 2023 |
December 31, 2022 |
|||||||||||||||
Fair Value |
% of Total Investments at Fair Value |
Fair Value |
% of Total Investments at Fair Value |
|||||||||||||
Asset Based Lending and Fund Finance |
21,341 | 0.23 | — | — | ||||||||||||
Alternative Energy |
16,743 | 0.18 | — | — | ||||||||||||
Chemicals |
15,157 | 0.16 | 6,960 | 0.12 | ||||||||||||
Telecommunications Equipment |
14,880 | 0.16 | 6,445 | 0.11 | ||||||||||||
Industrial Metals and Mining |
11,895 | 0.13 | 2,922 | 0.05 | ||||||||||||
Household Goods and Home Construction |
6,937 | 0.07 | 17,918 | 0.31 | ||||||||||||
Life Insurance |
5,884 | 0.06 | 5,628 | 0.10 | ||||||||||||
Leisure Goods |
1,991 | 0.02 | 8,498 | 0.15 | ||||||||||||
Electronic and Electrical Equipment |
1,015 | 0.01 | 922 | 0.02 | ||||||||||||
Total |
$ | 9,289,410 | 100.00 | % | $ | 5,716,521 | 100.00 | % | ||||||||
The geographic composition of investments at cost and fair value was as follows:
December 31, 2023 |
||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Fair Value as % of Net Assets |
|||||||||||||
Australia |
$ | 264,309 | $ | 266,377 | 2.87 | % | 5.14 | % | ||||||||
Canada |
78,148 | 77,962 | 0.84 | 1.50 | ||||||||||||
France |
35,514 | 37,969 | 0.41 | 0.73 | ||||||||||||
Germany |
68,533 | 71,499 | 0.77 | 1.38 | ||||||||||||
Italy |
127,737 | 137,270 | 1.48 | 2.65 | ||||||||||||
Norway |
24,920 | 24,957 | 0.27 | 0.48 | ||||||||||||
Singapore |
31,713 | 32,862 | 0.35 | 0.63 | ||||||||||||
Spain |
31,515 | 33,196 | 0.36 | 0.64 | ||||||||||||
Taiwan |
46,557 | 40,359 | 0.43 | 0.78 | ||||||||||||
United Kingdom |
426,120 | 444,188 | 4.78 | 8.57 | ||||||||||||
United States |
8,068,735 | 8,122,771 | 87.44 | 156.65 | ||||||||||||
Total |
$ | 9,203,801 | $ | 9,289,410 | 100.00 | % | 179.15 | % | ||||||||
December 31, 2022 |
||||||||||||||||
Amortized Cost |
Fair Value |
% of Total Investments at Fair Value |
Fair Value as % of Net Assets |
|||||||||||||
Australia |
$ | 271,143 | $ | 269,430 | 4.71 | % | 7.80 | % | ||||||||
Canada |
40,335 | 37,399 | 0.65 | 1.08 | ||||||||||||
France |
24,513 | 25,139 | 0.44 | 0.73 | ||||||||||||
Italy |
122,826 | 127,443 | 2.23 | 3.69 | ||||||||||||
Spain |
31,337 | 29,958 | 0.52 | 0.87 | ||||||||||||
Taiwan |
43,619 | 42,321 | 0.74 | 1.22 | ||||||||||||
United Kingdom |
240,099 | 241,933 | 4.23 | 7.00 | ||||||||||||
United States |
5,086,314 | 4,942,898 | 86.48 | 143.05 | ||||||||||||
Total |
$ | 5,860,186 | $ | 5,716,521 | 100.00 | % | 165.44 | % | ||||||||
As of December 31, 2023, there were three investments on
non-accrual
status which represented 0.33% of total debt investments, at fair value. As of December 31, 2022, there were zero investments in the portfolio on non-accrual
status. F-159
As of December 31, 2023 and 2022, on a fair value basis, 98.6% and 99.1%, respectively, of performing debt and other income producing investments bore interest at a floating rate and 1.4% and 0.9%, respectively, of performing debt and other income producing investments bore interest at a fixed rate.
Note 5. Fair Value Measurements
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date.
The fair value hierarchy under ASC 820 prioritizes the inputs to valuation methodology used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows:
| • | Level 1: Inputs to the valuation methodology that reflect unadjusted quoted prices available in active markets for identical assets or liabilities as of the reporting date. |
| • | Level 2: Inputs to the valuation methodology other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. |
| • | Level 3: Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of the inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value.
Investments whose values are based on the listed closing price quoted on the securities’ principal exchange are classified within Level 1 and include active listed equities. The Adviser does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include investment-grade corporate bonds, structured products, and certain bank loans, less liquid listed equities, and high yield bonds. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or
non-transferability,
which are generally based on available market information. Investments classified within Level 3 have unobservable inputs, as they trade infrequently, or not at all. When observable prices are not available for these investments, the Adviser uses one or more valuation techniques (e.g., the market approach and the income approach) of which sufficient and reliable data is available. Within Level 3, the use of the market approach generally consists of using comparable market data, while the use of the income approach generally consists of the net present value of estimated future cash flows, which may be adjusted as appropriate for liquidity, credit, market and/or other risk factors.
F-160
Investments in senior loans primarily include first and second lien term loans, delayed draws and revolving credit. The Adviser analyzes enterprise value based on the weighted average of discounted cash flows, public comparables and merger and acquisition comparables. This analysis is done to ensure, among other things, that the investments have adequate collateral and asset coverage. Once the investment is determined to have adequate asset coverage, the Adviser monitors yields for senior loan investments made from the time of purchase to the month end average yields for similar investments and risk profiles. The Company uses market data, including newly funded transactions, and secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield. The change in yield is utilized by the Adviser to discount the anticipated cash flows of the debt investment in order to arrive at a fair value. Further, the Adviser adjusts for material changes in the underlying fundamentals of the issuer, including changes in leverage, as necessary. If the investment does not have adequate coverage, a tranched valuation approach is considered.
Derivative Instruments:
the-counter
(“OTC”) and include forward currency contracts and swap contracts. Forwards currency contracts and swap contracts are valued by the Adviser using observable inputs, such as market-based quotations received from the counterparty, dealers or brokers, whenever available and considered reliable. In instances where models are used, the value of an OTC derivative depends upon the contractual terms of, and specific risks inherent in the contract, as well as the availability and reliability of observable inputs. Such inputs include market prices for reference securities, yield curves, volatility assumptions and correlations of such inputs. Certain OTC derivatives can generally be corroborated by market data and are therefore classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded. Further inputs considered by the Adviser in estimating the value of investments may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt capital markets (by the investment or other comparable investments), whether the loan contains call protection and changes in financial ratios or cash flows. Level 3 investments may also be adjusted to reflect illiquidity and/or
non-transferability,
with the amount of such discount estimated by the Adviser in the absence of market information. The fair value measurement of Level 3 investments does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Adviser due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company’s consolidated results of operations. Rule
2a-5
under the 1940 Act was recently adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The rule permits boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. The new rule went into effect on March 8, 2021 and had a compliance date of September 8, 2022. In accordance with this rule, the Company’s Board of Trustees has designated our Adviser as the valuation designee primarily responsible for the valuation of the Company’s investments, subject to the oversight of the Board of Trustees. F-161
The following table presents the fair value hierarchy of investments and cash equivalents:
December 31, 2023 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
First lien debt |
$ | — | $ | 1,046,460 | $ | 7,956,235 | $ | 9,002,695 | ||||||||
Second lien debt |
— | 47,646 | 19,441 | 67,087 | ||||||||||||
Unsecured debt |
— | 13,165 | 15,936 | 29,101 | ||||||||||||
Structured finance investments |
— | 29,868 | — | 29,868 | ||||||||||||
Equity investments |
— | — | 36,656 | 36,656 | ||||||||||||
Total investments |
— | 1,137,139 | 8,028,268 | 9,165,407 | ||||||||||||
Investments measured at NAV (1)
|
— | — | — | 124,003 | ||||||||||||
Total |
$ | — | $ | 1,137,139 | $ | 8,028,268 | $ | 9,289,410 | ||||||||
Cash equivalents |
$ | 131,546 | $ | — | $ | — | $ | 131,546 | ||||||||
| (1) | Includes investment in ULTRA III (refer to Note 11). Certain investments that are measured at fair value using the NAV practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. |
December 31, 2022 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
First lien debt |
$ | — | $ | 732,325 | $ | 4,882,393 | $ | 5,614,718 | ||||||||
Second lien debt |
— | 36,454 | 8,794 | 45,248 | ||||||||||||
Unsecured debt |
— | 23,906 | 1,606 | 25,512 | ||||||||||||
Structured finance investments |
— | 28,737 | — | 28,737 | ||||||||||||
Equity investments |
— | — | 2,306 | 2,306 | ||||||||||||
Total investments |
$ | — | $ | 821,422 | $ | 4,895,099 | $ | 5,716,521 | ||||||||
Cash equivalents |
$ | 53,347 | $ | — | $ | — | $ | 53,347 | ||||||||
The following table presents change in the fair value of investments for which Level 3 inputs were used to determine fair value:
Year Ended December 31, 2023 |
||||||||||||||||||||
|
First Lien Debt |
Second Lien Debt |
Unsecured Debt |
Equity Investments |
Total Investments |
||||||||||||||||
Fair value, beginning of period |
$ | 4,882,393 | $ | 8,794 | $ | 1,606 | $ | 2,306 | $ | 4,895,099 | ||||||||||
Purchases of investments (1)
|
3,303,363 | 1,879 | 14,418 | 36,248 | 3,355,908 | |||||||||||||||
Proceeds from principal repayments and sales of investments |
(350,551 | ) | — | — | (1,374 | ) | (351,925 | ) | ||||||||||||
Accretion of discount/amortization of premium |
31,688 | 133 | (7 | ) | — | 31,814 | ||||||||||||||
Net realized gain (loss) |
466 | — | — | (630 | ) | (164 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) |
165,973 | (828 | ) | (81 | ) | 106 | 165,170 | |||||||||||||
Transfers into Level 3 (2)
|
2,256 | 9,463 | — | — | 11,719 | |||||||||||||||
Transfers out of Level 3 (2)
|
(79,353 | ) | — | — | — | (79,353 | ) | |||||||||||||
Fair value, end of period |
$ | 7,956,235 | $ | 19,441 | $ | 15,936 | $ | 36,656 | $ | 8,028,268 | ||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of December 31, 2023 |
$ | 156,202 | $ | (828 | ) | $ | (83 | ) | $ | 106 | $ | 155,397 | ||||||||
| (1) | Purchases include PIK interest and dividends, if applicable. |
F-162
| (2) | Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the year ended December 31, 2023, transfers into or out of Level 3 were primarily due to decreased or increased price transparency, respectively. |
Year Ended December 31, 2022 |
||||||||||||||||||||
|
First Lien Debt |
Second Lien Debt |
Unsecured Debt |
Equity Investments |
Total Investments |
||||||||||||||||
Fair value, beginning of period |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Purchases of investments (1)
|
5,076,535 | 8,776 | 1,651 | 2,068 | 5,089,030 | |||||||||||||||
Proceeds from principal repayments and sales of investments |
(114,556 | ) | — | — | — | (114,556 | ) | |||||||||||||
Accretion of discount/amortization of premium |
9,533 | 10 | 12 | — | 9,555 | |||||||||||||||
Net realized gain (loss) |
(78 | ) | — | — | — | (78 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) |
(89,041 | ) | 8 | (57 | ) | 238 | (88,852 | ) | ||||||||||||
Transfers into Level 3 (2)
|
— | — | — | — | — | |||||||||||||||
Transfers out of Level 3 (2)
|
— | — | — | — | — | |||||||||||||||
Fair value, end of period |
$ | 4,882,393 | $ | 8,794 | $ | 1,606 | $ | 2,306 | $ | 4,895,099 | ||||||||||
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of December 31, 2022 |
$ | (89,041 | ) | $ | 8 | $ | (57 | ) | $ | 238 | $ | (88,852 | ) | |||||||
| (1) | Purchases include PIK interest, if applicable. |
| (2) | Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the year ended December 31, 2022, there were no transfers into or out of Level 3. |
The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The table is not intended to be
all-inclusive
but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value. December 31, 2023 |
||||||||||||||||||||
Range |
||||||||||||||||||||
Fair Value (1)
|
Valuation Technique |
Unobservable Input |
Low |
High |
Weighted Average (2)
|
|||||||||||||||
Investments in first lien debt |
$ | 6,422,647 | Yield analysis | Discount rate | 8.09 | % | 35.64 | % | 12.03 | % | ||||||||||
| 21,039 | Recovery analysis | Recovery rate | 73.21 | % | 73.21 | % | 73.21 | % | ||||||||||||
Investments in second lien debt |
19,441 | Yield analysis | Discount rate | 12.96 | % | 17.24 | % | 15.39 | % | |||||||||||
Investments in unsecured debt |
1,295 | Yield analysis | Discount rate | 16.00 | % | 16.00 | % | 16.00 | % | |||||||||||
Investments in preferred equity |
1,510 | Yield analysis | Discount rate | 14.50 | % | 16.31 | % | 14.94 | % | |||||||||||
Investments in common equity |
2,532 | Discounted cash flow | Discount rate | 9.00 | % | 15.00 | % | 9.47 | % | |||||||||||
| Exit multiple | 10.00 | x | 10.00 | x | 10.00 | x | ||||||||||||||
| Terminal Growth Rate | 3.00 | % | 3.00 | % | 3.00 | % | ||||||||||||||
F-163
December 31, 2022 |
||||||||||||||||||||
Range |
||||||||||||||||||||
|
Fair Value (1)
|
Valuation Technique |
Unobservable Input |
Low |
High |
Weighted Average (2)
|
|||||||||||||||
Investments in first lien debt |
$ | 3,848,793 | Yield analysis | Discount rate | 8.14 | % | 17.70 | % | 11.47 | % | ||||||||||
Investments in unsecured debt |
704 | Yield analysis | Discount rate | 14.70 | % | 14.70 | % | 14.70 | % | |||||||||||
Investments in equity |
2,108 | Yield analysis | Discount rate | 7.08 | % | 16.95 | % | 11.96 | % | |||||||||||
| 198 | Discounted cash flow | Discount rate | 15.00 | % | 15.00 | % | 15.00 | % | ||||||||||||
| Exit multiple | 10.00 | x | 10.00 | x | 10.00 | x | ||||||||||||||
| (1) | As of December 31, 2023, included within the fair value of Level 3 assets of $8,028,268 is an amount of $1,559,804 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices). As of December 31, 2022, included within the fair value of Level 3 assets of $4,895,099 is an amount of $1,043,296 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices). |
| (2) | Weighted averages are calculated based on fair value of investments. |
The significant unobservable input used in the yield analysis is the discount rate based on comparable market yields. The significant unobservable inputs used in the income approach are the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment. Significant increases in discount rates would result in a significantly lower fair value measurement. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market comparable transactions or market multiples would result in an increase or decrease in the fair value.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.
Financial Instruments Not Carried at Fair Value
The following table presents fair value measurements of the Company’s debt obligations as of December 31, 2023 and 2022, had they been accounted for at fair value:
Debt
December 31, 2023 |
December 31, 2022 |
|||||||||||||||
|
Carrying Value |
Fair Value |
Carrying Value |
Fair Value |
|||||||||||||
HLEND A Funding Facility |
$ | 615,838 | $ | 615,838 | $ | 453,663 | $ | 453,663 | ||||||||
HLEND B Funding Facility |
513,747 | 513,747 | 482,084 | 482,084 | ||||||||||||
HLEND C Funding Facility |
487,500 | 487,500 | — | — | ||||||||||||
F-164
December 31, 2023 |
December 31, 2022 |
|||||||||||||||
|
Carrying Value |
Fair Value |
Carrying Value |
Fair Value |
|||||||||||||
HLEND D Funding Facility |
195,000 | 195,000 | — | — | ||||||||||||
Revolving Credit Facility |
1,025,294 | 1,025,294 | 704,819 | 704,819 | ||||||||||||
November 2025 Notes (1)
|
168,749 | 170,580 | 168,462 | 170,628 | ||||||||||||
November 2027 Notes (1)
|
154,366 | 155,934 | 153,958 | 156,354 | ||||||||||||
March 2026 Notes (1)
|
274,716 | 275,727 | — | — | ||||||||||||
March 2028 Notes (1)
|
123,588 | 123,672 | — | — | ||||||||||||
September 2027 Notes (1)
|
75,545 | 76,389 | — | — | ||||||||||||
September 2028 Notes (1)
|
252,814 | 255,315 | — | — | ||||||||||||
2023 CLO Secured Notes (2)
|
319,743 | 319,743 | — | — | ||||||||||||
Short-Term Borrowings |
— | — | 379,081 | 379,081 | ||||||||||||
Total |
$ | 4,206,900 | $ | 4,214,739 | $ | 2,342,067 | $ | 2,346,629 | ||||||||
| (1) | The carrying value of the Company’s November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(1.2) million, $(1.4) million, $(1.8) million, $(0.9) million, $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the increase (decrease) in the notes carrying value of $(0.0) million, $0.7 million, $0.6 million, $0.5 million, $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above. The carrying value of the Company’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.9) million and $(1.7) million, respectively, as of December 31, 2022 and includes the change in the notes carrying value of $0.3 million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (2) | The carrying value of the Company’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023. |
The following table presents the fair value hierarchy of the Company’s debt obligations as of December 31, 2023 and 2022:
December 31, 2023 |
December 31, 2022 |
|||||||
Level 1 |
$ | — | $ | — | ||||
Level 2 |
— | — | ||||||
Level 3 |
4,214,739 | 2,346,629 | ||||||
Total |
$ | 4,214,739 | $ | 2,346,629 | ||||
As of December 31, 2023 and 2022, the carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value due to their short maturities. Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company’s marketplace credit ratings, if applicable, or market quotes, if available.
Note 6. Derivative Instruments
The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. The Company enters into swap contracts in the normal course of business to manage its interest rate risk exposure. For derivative contracts, the Company enters into netting arrangements with its counterparties. In accordance with authoritative guidance, the Company offsets fair value amounts recognized for derivative instruments with the same security type and counterparty under a master netting arrangement.
F-165
During the years ended December 31, 2023 and 2022, the average notional exposure for foreign currency forward contracts were $334.4 million and $220.7 million, respectively, and the average notional exposure for interest rate swaps were $626.0 million and $27.1 million, respectively.
The following tables summarize the aggregate notional amount and fair value of the Company’s derivative financial instruments as of December 31, 2023 and 2022.
December 31, 2023 |
||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total Fair Value |
Notional |
||||||||||||||||
Derivative Assets |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | 429 | $ | — | $ | 429 | $ | 94,135 | ||||||||||
Interest rate swaps |
— | 8,396 | — | 8,396 | 802,500 | |||||||||||||||
Total derivative assets, at fair value |
$ | — | $ | 8,825 | $ | — | $ | 8,825 | $ | 896,635 | ||||||||||
Derivative Liabilities |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | (9,533 | ) | $ | — | $ | (9,533 | ) | $ | 603,276 | ||||||||
Interest rate swaps |
— | (43 | ) | — | (43 | ) | 85,000 | |||||||||||||
Total derivative liabilities, at fair value |
$ | — | $ | (9,576 | ) | $ | — | $ | (9,576 | ) | $ | 688,276 | ||||||||
December 31, 2022 |
||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total Fair Value |
Notional |
||||||||||||||||
Derivative Assets |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | 1,125 | $ | — | $ | 1,125 | $ | 123,895 | ||||||||||
Interest rate swaps |
— | 991 | — | 991 | 162,500 | |||||||||||||||
Total derivative assets, at fair value |
$ | — | $ | 2,116 | $ | — | $ | 2,116 | $ | 286,395 | ||||||||||
Derivative Liabilities |
||||||||||||||||||||
Foreign currency forward contracts |
$ | — | $ | (3,261 | ) | $ | — | $ | (3,261 | ) | $ | 117,375 | ||||||||
Total derivative liabilities, at fair value |
$ | — | $ | (3,261 | ) | $ | — | $ | (3,261 | ) | $ | 117,375 | ||||||||
The effect of transactions in derivative instruments that are not designated in a qualifying hedge accounting relationship on the Consolidated Statements of Operations during the years ended December 31, 2023 and 2022 were as follows:
|
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Net change in unrealized gain (loss) on foreign currency forward contracts |
$ | (6,968 | ) | $ | (2,136 | ) | ||
Realized gain (loss) on foreign currency forward contracts |
$ | (7,613 | ) | $ | 4,010 | |||
F-166
The following table presents both gross and net information about derivative instruments eligible for offset in the Consolidated Statements of Assets and Liabilities as of December 31, 2023 and 2022.
December 31, 2023 |
||||||||||||||||||||||
Counterparty |
Account in the Consolidated Statements of Asset and Liabilities |
Gross Amount of Assets |
Gross Amount of (Liabilities) |
Net amounts presented in the Consolidated Statements of Assets and Liabilities |
Collateral Received/ Pledged (1)
|
Net Amounts (2)
|
||||||||||||||||
Goldman Sachs Bank USA |
Derivative liabilities, at fair value
|
$ | 35 | $ | (8,225 | ) | $ | (8,190 | ) | $ | — | $ | (8,190 | ) | ||||||||
SMBC Capital Markets, Inc. |
Derivative liabilities, at fair value
|
$ | 394 | $ | (1,308 | ) | $ | (914 | ) | $ | — | $ | (914 | ) | ||||||||
Goldman Sachs Bank USA |
Derivative assets, at fair value
|
$ | 8,396 | $ | (43 | ) | $ | 8,353 | $ | — | $ | 8,353 | ||||||||||
December 31, 2022 |
||||||||||||||||||||||
Counterparty |
Account in the Consolidated Statements of Asset and Liabilities |
Gross Amount of Assets |
Gross Amount of (Liabilities) |
Net amounts presented in the Consolidated Statements of Assets and Liabilities |
Collateral Received/ Pledged (1)
|
Net Amounts (2)
|
||||||||||||||||
Goldman Sachs Bank USA |
Derivative liabilities, at fair value
|
$ | 1,125 | $ | (3,261 | ) | $ | (2,136 | ) | $ | — | $ | (2,136 | ) | ||||||||
Goldman Sachs Bank USA |
Derivative assets, at fair value
|
$ | 991 | $ | — | $ | 991 | $ | — | $ | 991 | |||||||||||
| (1) | Amount excludes excess cash collateral paid. |
| (2) | Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts, if applicable. |
Hedging
The Company designated certain interest rate swaps as the hedging instrument in a qualifying fair value hedge accounting relationship.
For derivative instruments designated in qualifying hedge relationships, the change in fair value of the hedging instrument and hedged item are recorded in interest expense and recognized as components of Interest expense in the Consolidated Statements of Operations.
The table below presents the carrying value of unsecured borrowings as of December 31, 2023 and 2022, that are designated in a qualifying hedging relationship and the related cumulative hedging adjustment (increase/decrease) from current and prior hedging relationships included in such carrying values:
December 31, 2023 |
December 31, 2022 |
|||||||||||||||
Description |
Carrying Value |
Cumulative Hedging Adjustments |
Carrying Value |
Cumulative Hedging Adjustments |
||||||||||||
Unsecured Notes |
$ | 888,221 | $ | (1,369 | ) | $ | 322,420 | $ | (953 | ) | ||||||
Note 7. Borrowings
In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of December 31, 2023 and 2022, the Company’s asset coverage was 223.2% and 247.4%, respectively.
F-167
SPV Financing Facilities
From time to time, wholly-owned subsidiaries of the Company may enter into secured financing facilities (“SPV Financing Facilities”), as described below. The obligations of each special purpose vehicle (“SPV”) to the lenders are secured by a first priority security interest in all of the SPV’s portfolio investments and cash. The obligations of each SPV under the applicable SPV Financing Facility are
non-recourse
to the Company, and the Company’s exposure to the credit facility is limited to the value of its investment in the SPV, other than as described below with respect to the HLEND C Funding Facility. In connection with the SPV Financing Facilities, the applicable SPV has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. Each SPV Financing Facility contains customary events of default for similar financing transactions, including if a change of control of the applicable SPV occurs. Upon the occurrence and during the continuation of an event of default, the lender under the SPV Financing Facility may declare the outstanding advances and all other obligations under the SPV Financing Facility immediately due and payable. The occurrence of an event of default (as described above) triggers a requirement that the SPV obtains the consent of the lenders under the SPV Financing Facility prior to entering into any sale or disposition with respect to portfolio investments.
As of December 31, 2023 and 2022, the Company was in compliance with all covenants and other requirements of the Credit Facilities, the Unsecured Notes and the 2023 CLO Notes, as applicable.
As of December 31, 2023 and 2022, the Company had four and two SPV Financing Facilities, respectively, as discussed below.
HLEND A Funding Facility
On February 3 2022, HLEND A, entered into a SPV Financing Facility with Morgan Stanley Bank, N.A. (“HLEND A Funding Facility”). Morgan Stanley Senior Funding, Inc. serves as administrative agent and U.S. Bank Trust Company, National Association services as collateral agent. On December 23, 2022, HLEND A entered into an amendment to, among other things, increase the aggregate commitments under the HLEND A Funding Facility from $600 million to $800 million.
Loans under the HLEND A Funding Facility bear interest at a per annum rate equal to the benchmark in effect for the currency of the applicable advances, then in effect plus the applicable spread of 2.40% per annum.
As of December 31, 2023, the maximum principal amount under the HLEND A Funding Facility was $800 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND A Funding Facility may be used to fund portfolio investments by HLEND A and to make advances under revolving loans or delayed draw term loans where HLEND A is a lender. The period during which HLEND A may make borrowings under the HLEND A Funding Facility expires two business days prior to February 3, 2025 and the HLEND A Funding Facility will mature and all amounts outstanding under credit facility must be repaid by February 3, 2027.
HLEND B Funding Facility
On July 19 2022, HLEND B, entered into a SPV Financing Facility with Bank of America, N.A. (“HLEND B Funding Facility”). Bank of America N.A. serves as administrative agent, U.S. Bank Trust Company, National Association, as collateral administrator, and U.S. Bank National Association, as collateral custodian. On September 16, 2022, HLEND B entered into an amendment to, among other things, increase the maximum principal amount under the HLEND B Funding Facility from $500 million to $1,000 million.
F-168
Loans under the HLEND B Funding Facility bear interest at a per annum rate equal to the benchmark in effect for the currency of the applicable advances, plus an applicable margin of 1.90% for Broadly Syndicated Loan (“BSL”) assets and 2.45% for
non-BSL
assets, subject to a blended floor of 2.30%. As of December 31, 2023, the maximum principal amount under the HLEND B Funding Facility was $1,000 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND B Funding Facility may be used to fund portfolio investments by HLEND B, to make advances under revolving loans or delayed draw term loans where HLEND B is a lender. The period during which HLEND B may make borrowings under the HLEND B Funding Facility expires on July 19, 2025 and the HLEND B Funding Facility will mature and all amounts outstanding under credit facility must be repaid by July 19, 2027.
HLEND C Funding Facility
On January 12, 2023, HLEND C, as borrower, and the Company, as equity holder, entered into a SPV Financing Facility with U.S. Bank Trust Company, National Association, as administrative agent and U.S. collateral agent (the “HLEND C Funding Facility”), Blackstone Asset Based Finance Advisors LP, as Blackstone Asset Based Finance Representative, and U.S. Bank National Association, as custodian. On June 22, 2023, HLEND C entered into an amendment to, among other things, increase the maximum principal amount under the HLEND C Funding Facility from $400 million to $750 million. The Company has agreed to provide a limited guaranty of a portion of amounts owed under the HLEND C Funding Facility in the event of certain bad acts, including fraud and certain other willful and intentional breaches of the facility documents.
Loans under the HLEND C Funding Facility bear interest at a per annum rate equal to Term SOFR plus the applicable margin of 2.95% per annum. On or after the anticipated repayment date of January 11, 2030, the applicable margin on any remaining outstanding advances will be increased by 2.00% per annum.
As of December 31, 2023, the maximum principal amount under the HLEND C Funding Facility was $750 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND C Funding Facility may be used to fund portfolio investments by HLEND C. All amounts outstanding under the credit facility must be repaid by April 12, 2030.
HLEND D Funding Facility
On March 31 2023, HLEND D, as borrower, and the Company, as equity holder, entered into a SPV Financing Facility with BNP Paribas (“HLEND D Funding Facility”). BNP Paribas serves as administrative agent, and U.S. Bank Trust Company, National Association, as collateral agent. On August 1, 2023, HLEND D entered into an amendment to, among other things, increase the maximum principal amount under the HLEND D Funding Facility from $250 million to $500 million.
Loans under the HLEND D Funding Facility bear interest at a per annum rate equal to (i)(a) with respect to Dollar Advances, Term SOFR, (b) with respect to GBP Advances, Adjusted Cumulative Compounded SONIA, (c) with respect to Euro Advances, EURIBOR, (d) with respect to CAD Advances, CDOR, and (e) with respect to AUD Advances, BBSW, plus (ii) the Applicable Margin of 2.90% per annum, plus (iii) in the case of any Advance denominated in an Available Currency (other than Dollars), the Foreign Currency Advance Margin of 0.15% per annum.
As of December 31, 2023, the maximum principal amount under the HLEND D Funding Facility was $500 million, subject to availability under the borrowing base. Proceeds from borrowings under the HLEND D Funding Facility may be used to fund portfolio investments by HLEND D. The period during which HLEND D may make borrowings under the HLEND D Funding Facility expires on March 31, 2026 and amounts outstanding under the credit facility must be repaid by March 31, 2028.
F-169
Revolving Credit Facility
On June 23, 2022, the Company, as Borrower, entered into a senior secured revolving credit facility (the “Revolving Credit Facility,” together with HLEND A Funding Facility, HLEND B Funding Facility, HLEND C Funding Facility, and HLEND D Funding Facility the “Credit Facilities”) (which was most recently amended on October 30, 2023, and as further amended from time to time) pursuant to a Senior Secured Revolving Credit Agreement (the “Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders party thereto (the “Lenders”).
The Company may borrow amounts in U.S. dollars or certain other permitted currencies under the Revolving Credit Facility. Advances under the Revolving Credit Facility drawn in U.S. dollars will initially bear interest at a per annum rate equal to 0.75% or 0.875% plus an “alternate base rate” in the case of any ABR Loan and 1.75% or 1.875% plus the Adjusted Term SOFR Rate in the case of any other Loan, in each case, depending on the Company’s rate option election and borrowing base. Advances under the Revolving Credit Facility drawn in currencies other than U.S. dollars will initially bear interest at a per annum rate equal to 1.75% or 1.875%, in each case depending on the Company’s borrowing base, plus any applicable credit spread adjustment, plus certain local rates consistent with market standards. The Company also pays a fee of 0.375% on average daily undrawn amounts under the Revolving Credit Facility.
The maximum principal amount of the Revolving Credit Facility is $1,275 million (increased from $1,125 million to $1,275 million on July 12, 2023), subject to availability under the borrowing base, which is based on the Company’s portfolio investments and other outstanding indebtedness, with an accordion provision to permit increases to the total facility amount up to $1,912.5 million subject to the satisfaction of certain conditions.
The Revolving Credit Facility is guaranteed by certain subsidiaries of the Company, and will be guaranteed by certain domestic subsidiaries of the Company that are formed or acquired by the Company in the future (collectively, the “Guarantors”). Proceeds of the Revolving Credit Facility may be used for general corporate purposes, including, without limitation, repaying outstanding indebtedness, making distributions, contributions and investments, and acquisition and funding, and such other uses as permitted under the Agreement.
The Revolving Credit Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $200 million limit for swingline loans.
The availability period under the Revolving Credit Facility will terminate on October 30, 2027 (the “Commitment Termination Date”) (other than with respect to the commitment of a lender in the amount of $100 million, which terminates on June 23, 2026), and the Revolving Credit Facility will mature on October 30, 2028 (the “Maturity Date”) (other than with respect to the commitment of a lender in the amount of $100 million, which matures on June 23, 2027). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make mandatory prepayments under the Revolving Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Unsecured Notes
The Company issued unsecured notes, as further described below: November 2025 Notes, November 2027 Notes, March 2026 Notes, March 2028 Notes, September 2027 Notes and September 2028 Notes (each as defined below), which are collectively referred to herein as the “Unsecured Notes”.
Interest on the Unsecured Notes will be due semiannually. The interest rate is subject to increase (up to a maximum increase of 2.00% above the stated rate) in the event that, subject to certain exceptions, the Unsecured
F-170
Notes cease to have an investment grade rating and the Company’s minimum secured debt ratio exceeds certain thresholds. In addition, the Company is obligated to offer to repay the Unsecured Notes at par if certain change in control events occur. The Unsecured Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company.
November 2025 Notes
On November 14, 2022, the Company entered into a Master Note Purchase Agreement (the “2022 Note Purchase Agreement”) governing the issuance of $170 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “November 2025 Notes”) to institutional investors in a private placement. The November 2025 Notes have a fixed interest rate of 8.37% per annum and are due on November 14, 2025.
In connection with the November 2025 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.37% per annum and pays a floating interest rate of SOFR + 4.08% per annum on $85 million of the November 2025 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
November 2027 Notes
On November 14, 2022, the Company entered into the 2022 Note Purchase Agreement governing the issuance of $155 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “November 2027 Notes”) to institutional investors in a private placement. The November 2027 Notes have a fixed interest rate of 8.43% per annum and are due on November 14, 2027.
In connection with the November 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.43% per annum and pays a floating interest rate of SOFR + 4.42% per annum on $77.5 million of the November 2027 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
March 2026 Notes
On March 15, 2023, the Company entered into a Master Note Purchase Agreement (the “2023 Note Purchase Agreement”) governing the issuance of $276 million in aggregate principal amount of its Series A Senior Notes, Tranche A (the “March 2026 Notes”) to institutional investors in a private placement. The March 2026 Notes have a fixed interest rate of 8.12% per annum and are due on March 15, 2026.
In connection with the March 2026 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.12% per annum and pays a floating interest rate of SOFR + 3.761% per annum on $276 million of the March 2026 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
March 2028 Notes
On March 15, 2023, the Company entered into the 2023 Note Purchase Agreement governing the issuance of $124 million in aggregate principal amount of its Series A Senior Notes, Tranche B (the “March 2028 Notes”) to institutional investors in a private placement. The March 2028 Notes have a fixed interest rate of 8.17% per annum and are due on March 15, 2028.
F-171
In connection with the March 2028 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.18% per annum and pays a floating interest rate of SOFR + 4.241% per annum on $124 million of the March 2028 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
September 2027 Notes
On September 14, 2023, the Company entered into a First Supplement to the 2023 Note Purchase Agreement, governing the issuance of $75 million in aggregate principal amount of its Series
2023-B
Senior Notes, Tranche A (the “September 2027 Notes”) to institutional investors in a private placement. The September 2027 Notes have a fixed interest rate of 8.67% per annum and are due on September 14, 2027. In connection with the September 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.67% per annum and pays a floating interest rate of
3-month
Term SOFR plus 4.3055% per annum on $75 million of the September 2027 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship. September 2028 Notes
On September 14, 2023, the Company entered into the First Supplement to the 2023 Note Purchase Agreement, governing the issuance of $250 million in aggregate principal amount of its Series
2023-B
Senior Notes, Tranche B (the “September 2028 Notes”) to institutional investors in a private placement. The September 2028 Notes have a fixed interest rate of 8.80% per annum and are due on September 14, 2028. In connection with the September 2028 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 8.80% per annum and pays a floating interest rate of
3-month
Term SOFR plus 4.5365% per annum on $250 million of the September 2028 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship. Debt Securitizations
The Company has determined that the securitization vehicle noted below operates as an extension of the Company and therefore, will be consolidated by the Company.
2023 Debt Securitization
On October 5, 2023 (the “Closing Date”), the Company completed a $429.1 million term debt securitization (the “2023 Debt Securitization”), consisting of three tranches of secured notes (the “2023 CLO Secured Notes”) and subordinated notes (the “2023 CLO Subordinated Notes”). The 2023 CLO Secured Notes together with the 2023 CLO Subordinated Notes are collectively referred to as the “2023 CLO Notes.” Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The 2023 CLO Notes offered in the 2023 Debt Securitization were issued by HLEND CLO
2023-1,
LLC (the “2023 Issuer”), an indirect, wholly-owned and consolidated subsidiary of the Company, and are backed by a diversified portfolio of middle-market commercial loans and participation F-172
interests therein. The 2023 CLO Notes are scheduled to mature on October 22, 2035; however, the 2023 CLO Notes may be redeemed by the 2023 Issuer, at the written direction of (i) a majority of the 2023 CLO Subordinated Notes with the consent of the Company or (ii) the Company, in each case, on any business day on or after October 22, 2025.
The following table presents information on the 2023 CLO Secured Notes and 2023 CLO Unsecured Notes issued in the 2023 Debt Securitization:
Description |
Type |
Principal Outstanding |
Interest Rate |
Credit Rating |
||||||
Class A Notes |
Senior Secured Floating Rate | $ | 246,500 | SF + 2.60% | AAA | |||||
Class B Notes |
Senior Secured Floating Rate | 42,500 | SF + 3.35% | AA | ||||||
Class C Notes |
Secured Deferrable Floating Rate | 34,000 | SF + 4.15% | A | ||||||
Total Secured Notes |
$ | 323,000 | ||||||||
Subordinated Notes (1)
|
106,100 | None | Not rated | |||||||
Total Notes |
$ | 429,100 | ||||||||
| (1) | The Company retained all of the 2023 CLO Subordinated Notes issued in the 2023 Debt Securitization which are eliminated in consolidation. |
On the Closing Date and in connection with the 2023 Debt Securitization, the 2023 Issuer and the Company entered into a note purchase agreement with BofA Securities, Inc., as the initial purchaser (the “Initial Purchaser”), pursuant to which the Initial Purchaser purchased the 2023 CLO Secured Notes issued pursuant to an indenture as part of the 2023 Debt Securitization. HLEND CLO
2023-1
Investments, LLC, a wholly-owned subsidiary of the Company, retained all of the 2023 CLO Subordinated Notes issued in the 2023 Debt Securitization. The 2023 CLO Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.
The Company serves as collateral manager for the 2023 Issuer under a collateral management agreement and has agreed to irrevocably waive all collateral management fees payable to it so long as it is the collateral manager under the collateral management agreement.
Short-Term Borrowings
In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements, whereby the Company sells to a third party an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, generally not to exceed
180-days
from the date it was sold (each a “Short Term Financing Transaction”). As of December 31, 2023, the Company had no borrowings under Short Term Financing Transactions with a third party.
In accordance with ASC 860, Transfers and Servicing, the Short Term Financing Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by these agreements remains on the Company’s Consolidated Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to a third party which is reported as debt on the Company’s Statements of Assets and Liabilities. The repurchase obligation is secured by the respective investment that is the subject of the repurchase agreement. Interest expense associated with the repurchase obligation is reported on the Company’s Consolidated Statements of Operations within interest expense.
F-173
The Company’s outstanding debt obligations were as follows:
December 31, 2023 |
||||||||||||||||||||
|
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 615,838 | $ | 615,838 | $ | 184,162 | $ | 38,218 | ||||||||||
HLEND B Funding Facility (4)
|
1,000,000 | 513,747 | 513,747 | 486,253 | 356,891 | |||||||||||||||
HLEND C Funding Facility |
750,000 | 487,500 | 487,500 | 262,500 | 12,576 | |||||||||||||||
HLEND D Funding Facility |
500,000 | 195,000 | 195,000 | 305,000 | 205,018 | |||||||||||||||
Revolving Credit Facility (5)
|
1,275,000 | 1,025,294 | 1,025,294 | 249,706 | 249,706 | |||||||||||||||
November 2025 Notes (6)
|
170,000 | 170,000 | 168,749 | — | — | |||||||||||||||
November 2027 Notes (6)
|
155,000 | 155,000 | 154,366 | — | — | |||||||||||||||
March 2026 Notes (7)
|
276,000 | 276,000 | 274,716 | — | — | |||||||||||||||
March 2028 Notes (7)
|
124,000 | 124,000 | 123,588 | — | — | |||||||||||||||
September 2027 Notes (8)
|
75,000 | 75,000 | 75,545 | — | — | |||||||||||||||
September 2028 Notes (8)
|
250,000 | 250,000 | 252,814 | — | — | |||||||||||||||
2023 CLO Secured Notes (9)
|
323,000 | 323,000 | 319,743 | — | — | |||||||||||||||
Total |
$ | 5,698,000 | $ | 4,210,379 | $ | 4,206,900 | $ | 1,487,621 | $ | 862,409 | ||||||||||
| (1) | The unused portion is the amount upon which commitment fees, if any, are based. |
| (2) | The amount available reflects any limitations related to each respective credit facility’s borrowing base. |
| (3) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Company had outstanding borrowings denominated in Euros (EUR) of 7.5 million, in Australian Dollars (AUD) of 156.0 million, and in British Pounds (GBP) of 42.9 million. |
| (4) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Company had outstanding borrowings denominated in Euros (EUR) of 3.4 million, in Australian Dollars (AUD) of 108.0 million, and in British Pounds (GBP) of 90.3 million. |
| (5) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2023, the Company had outstanding borrowings denominated in Euros (EUR) of 312.1 million, in Australian Dollars (AUD) of 95.2 million, in Canadian Dollars (CAD) of 47.1 million and in British Pounds (GBP) of 64.2 million. |
| (6) | The carrying value of the Company’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(1.2) million and $(1.4) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $(0.0) million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (7) | The carrying value of the Company’s March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.8) million and $(0.9) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $0.6 million and $0.5 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (8) | The carrying value of the Company’s September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.7) million and $(2.5) million, respectively, as of December 31, 2023 and includes the change in the notes carrying value of $1.3 million and $5.3 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (9) | The carrying value of the Company’s 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.3) million as of December 31, 2023. |
F-174
December 31, 2022 |
||||||||||||||||||||
|
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 453,663 | $ | 453,663 | $ | 346,337 | $ | 138,870 | ||||||||||
HLEND B Funding Facility (4)
|
1,000,000 | 482,084 | 482,084 | 517,916 | 104,760 | |||||||||||||||
Revolving Credit Facility (5)
|
1,125,000 | 704,819 | 704,819 | 420,181 | 420,181 | |||||||||||||||
November 2025 Notes (6)
|
170,000 | 170,000 | 168,462 | — | — | |||||||||||||||
November 2027 Notes (6)
|
155,000 | 155,000 | 153,958 | — | — | |||||||||||||||
Short-Term Borrowings |
379,081 | 379,081 | 379,081 | — | — | |||||||||||||||
Total |
$ |
3,629,081 |
$ |
2,344,647 |
$ |
2,342,067 |
$ |
1,284,434 |
$ |
663,811 |
||||||||||
| (1) | The unused portion is the amount upon which commitment fees, if any, are based. |
| (2) | The amount available reflects any limitations related to each respective credit facility’s borrowing base. |
| (3) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2022, the Company had outstanding borrowings denominated in Euros (EUR) of 8.3 million, in Australian Dollars (AUD) of 34.9 million, and in British Pounds (GBP) of 14.3 million. |
| (4) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2022, the Company had outstanding borrowings denominated in Euros (EUR) of 3.4 million, in Australian Dollars (AUD) of 39.0 million, and in British Pounds (GBP) of 36.3 million. |
| (5) | The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of December 31, 2022, the Company had outstanding borrowings denominated in Euros (EUR) of 111.2 million, in Australian Dollars (AUD) of 285.3 million, in Canadian Dollars (CAD) of 47.1 million and in British Pounds (GBP) of 59.5 million. |
| (6) | The carrying value of the Company’s November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $1.9 million and $1.7 million, respectively, as of December 31, 2022 and includes the change in the notes carrying value of $0.3 million and $0.7 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
As of December 31, 2023 and 2022, $57.3 million and $16.6 million, respectively, of interest expense and $1.5 million and $0.8 million, respectively, of unused commitment fees were included in interest payable. For the years ended December 31, 2023 and 2022, the weighted average interest rate on all borrowings outstanding was 8.24% and 5.96% (including unused fees and amortization of deferred financing and debt issuance costs), respectively, and the average principal debt outstanding was $3,131.0 million and $912.4 million, respectively.
F-175
The components of interest expense were as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Borrowing interest expense |
$ | 235,933 | $ | 44,368 | ||||
Facility unused fees |
6,608 | 2,637 | ||||||
Amortization of financing and debt issuance costs |
8,360 | 2,496 | ||||||
Financing fees (refer to Footnote 8) |
— | 3,366 | ||||||
Backstop fees (refer to Footnote 8) |
— | 1,059 | ||||||
Gain (loss) from interest rate swaps accounted for as hedges and the related hedged items: |
||||||||
Interest rate swaps |
7,362 | 991 | ||||||
Hedged items |
(416 | ) | (953 | ) | ||||
Total interest expense |
$ | 257,847 | $ | 53,964 | ||||
Cash paid for interest expense |
$ | 208,141 | $ | 36,524 | ||||
Note 8. Commitments and Contingencies
In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.
The Company’s investment portfolio may contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of December 31, 2023 and 2022, the Company had unfunded delayed draw term loans, revolvers and preferred equity in the aggregate principal amount of $760.7 million and $895.9 million, respectively.
The Adviser agreed to bear all of the Company’s expenses, including organization and offering expenses, through February 3, 2022, the date on which the Company broke escrow for the initial offering of its Common Shares, on which date the Company became obligated to reimburse the Adviser for such advanced expenses upon breaking escrow for the offering and the Adviser subsequently requested reimbursement of these expenses and was paid pursuant to the Expense Support and Conditional Reimbursement Agreement.
From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of December 31, 2023, management is not aware of any pending or threatened material litigation.
Warehousing Transactions
Beginning August 17, 2021, the Company entered into multiple sale and purchase agreements (the “Purchase Agreements”) with Macquarie US Trading LLC and Macquarie Bank Limited (together, the “Financing Provider”), whereby the Company agreed, subject to certain conditions, to purchase certain assets from unaffiliated parties. The transactions under the Purchase Agreements related primarily to newly originated, privately negotiated senior secured term loans to middle market companies consistent with the Company’s investment objective and strategies (the “Warehousing Transactions”). The Warehousing Transactions were designed to assist the Company with deploying capital upon receipt of subscription proceeds. Under the Purchase Agreements, the Company had forward obligations to settle the purchase of certain investments (the “Warehouse Investments”) from the Financing Provider, each of whom was obligated to settle the sale of such investments subject to the following conditions: (a) that the Company had received subscriptions of at least $300 million; and (b) that the Board of the Company had approved the purchase of the specific Warehouse Investments (collectively, the “Warehouse Conditions”).
F-176
Pursuant to the Purchase Agreements, the Company could request that the Financing Provider acquire such Warehouse Investments as the Company may designate from time to time, which a Financing Provider could approve or reject in its sole and absolute discretion. Prior to any sale to the Company, the Warehouse Investments were owned and held solely for the account of the relevant Financing Provider. Until such time as the Company satisfied the Warehouse Conditions, which occurred on February 3, 2022, it had no obligation to purchase the Warehouse Investments nor be entitled to any benefits or subject to any obligations under the Purchase Agreements. On such date, the Company recognized $656.3 million of investments at principal ($106.9 million of which was unfunded) from the Financing Provider. Since February 3, 2022, the Company has not entered into any Purchase Agreement with the Financing Provider. Until such time the Company enters into additional Purchase Agreements, the Company will not incur any additional fees with respect to any Purchase Agreements. As of December 31, 2023, there are no forward obligations to settle the purchase of Portfolio Investments from the Financing Provider.
In consideration for the forward arrangement provided by the Financing Provider, the Company agreed to pay, subject to the satisfaction of the Warehouse Conditions, certain fees and expenses to the Financing Provider, including a financing fee with respect to the portion of the purchase amount that is funded equivalent to 2.75% to 2.95% per annum. For the year ended December 31, 2022, financing fees of $3.4 million, were paid to the Financing Provider, which are included in interest expense on the Consolidated Statements of Operations.
The Company’s obligations to the Financing Provider under the Purchase Agreements were guaranteed by an affiliate of HPS. Beginning October 14, 2021 and December 10, 2021, certain of the Company’s obligations to the Financing Provider under the Purchase Agreements were guaranteed by two
non-affiliated
entities. In consideration of the two
non-affiliated
guarantors entering into the guarantees, the Company paid a fee based on the Net Carry with respect to each transaction to the respective guarantor of each investment. “Net Carry” means, an amount equal to the sum of (a) the interest (paid and accrued and unpaid) less (b) the financing fee paid to the Financing Provider plus (c) the net realized gains/losses on each investment. For the year ended December 31, 2022, $1.1 million, of fees (the “backstop fees”) were paid to the two
non-affiliated
guarantors, which are included in interest expense on the Consolidated Statements of Operations. For the year ended December 31, 2022, all of the income, expenses and gain/loss under all Purchase Agreements, in addition to other economic rights and obligations held by the Company, were recognized in the Company’s consolidated financial statements.
mark-to-market
Note 9. Net Assets
In connection with its formation, the Company has the authority to issue an unlimited number of Class I, Class D, Class F and Class S common shares of beneficial interest at $0.01 per share par value. On July 23, 2021, HPS purchased 100 shares of the Company’s Class I common shares of beneficial interest at $25.00 per share.
As of February 3, 2022, the Company had satisfied the minimum offering requirement, and the Company’s Board had authorized the release of proceeds from escrow. As of such date, the Company issued and sold 20,437,880 shares (consisting of 7,074,280 Class I shares, 1,268,000 Class D Shares, and 12,095,600 Class F shares at an offering price of $25.00 per share), and the Escrow Agent released net proceeds of $510.9 million, of which $10.0 million was from an affiliate of HPS, to the Company as payment for such shares. Under the terms of the Company’s Declaration of Trust, all Common Shares have equal rights as to voting and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. On October 1, 2023 Class S shares commenced operations at an offering price of $25.11.
The share classes have different ongoing distribution and/or shareholder servicing fees. Until the release of proceeds from escrow, the per share purchase price for Common Shares in the Offering was $25.00 per share. Thereafter, the purchase price per share for each class of Common Shares will equal the NAV per share, as of the effective date of the monthly share purchase date.
F-177
The following table summarizes transactions in common shares of beneficial interest during the year ended December 31, 2023:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
15,800,152 | $ | 393,222 | |||||
Share transfers between classes |
1,288,666 | 31,876 | ||||||
Distributions reinvested |
1,516,435 | 37,411 | ||||||
Share repurchases |
(1,249,621 | ) | (31,023 | ) | ||||
Early repurchase deduction |
— | 38 | ||||||
Net increase (decrease) |
17,355,632 | $ | 431,524 | |||||
CLASS D |
||||||||
Subscriptions |
11,538,818 | $ | 285,908 | |||||
Share transfers between classes |
(182,120 | ) | (4,757 | ) | ||||
Distributions reinvested |
1,004,668 | 24,835 | ||||||
Share repurchases |
(1,706,906 | ) | (42,429 | ) | ||||
Early repurchase deduction |
— | 20 | ||||||
Net increase (decrease) |
10,654,460 | $ | 263,577 | |||||
CLASS F |
||||||||
Subscriptions |
35,926,975 | $ | 891,120 | |||||
Share transfers between classes |
(1,161,369 | ) | (28,496 | ) | ||||
Distributions reinvested |
4,571,037 | 112,818 | ||||||
Share repurchases |
(6,014,694 | ) | (149,380 | ) | ||||
Early repurchase deduction |
— | 101 | ||||||
Net increase (decrease) |
33,321,949 | $ | 826,163 | |||||
CLASS S |
||||||||
Subscriptions |
802,164 | $ | 20,150 | |||||
Share transfers between classes |
54,823 | 1,377 | ||||||
Distributions reinvested |
892 | 22 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
857,879 | $ | 21,549 | |||||
Total net increase (decrease) |
62,189,920 | $ | 1,542,813 | |||||
The following table summarizes transactions in common shares of beneficial interest during the year ended December 31, 2022:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
34,268,897 | $ | 849,178 | |||||
Share transfers between classes |
206,333 | 4,956 | ||||||
Distributions reinvested |
626,549 | 15,279 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | 57 | ||||||
Net increase (decrease) |
35,101,779 | $ | 869,470 | |||||
CLASS D |
||||||||
Subscriptions |
17,287,026 | $ | 427,775 | |||||
Share transfers between classes |
— | — | ||||||
F-178
Shares |
Amount |
|||||||
Distributions reinvested |
251,233 | 6,105 | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | 28 | ||||||
Net increase (decrease) |
17,538,259 | $ | 433,908 | |||||
CLASS F |
||||||||
Subscriptions |
91,204,624 | $ | 2,254,046 | |||||
Share transfers between classes |
(206,333 | ) | (4,956 | ) | ||||
Distributions reinvested |
1,560,238 | 37,939 | ||||||
Share repurchases |
(499,017 | ) | (11,948 | ) | ||||
Early repurchase deduction |
— | 149 | ||||||
Net increase (decrease) |
92,059,512 | $ | 2,275,230 | |||||
Total net increase (decrease) |
144,699,550 | $ | 3,578,608 | |||||
The following table summarizes transactions in common shares of beneficial interest during the year ended December 31, 2021:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
100 | $ | 3 | |||||
Share transfers between classes |
— | — | ||||||
Distributions reinvested |
— | — | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
100 | $ | 3 | |||||
CLASS D |
||||||||
Subscriptions |
— | $ | — | |||||
Share transfers between classes |
— | — | ||||||
Distributions reinvested |
— | — | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
— | $ | — | |||||
CLASS F |
||||||||
Subscriptions |
— | $ | — | |||||
Share transfers between classes |
— | — | ||||||
Distributions reinvested |
— | — | ||||||
Share repurchases |
— | — | ||||||
Early repurchase deduction |
— | — | ||||||
Net increase (decrease) |
— | $ | — | |||||
Total net increase (decrease) |
100 | $ | 3 | |||||
F-179
Net Asset Value per Share and Offering Price
The Company determines NAV for each class of shares as of the last day of each calendar month. Share issuances related to monthly subscriptions are effective the first calendar day of each month. Shares are issued at an offering price equivalent to the most recent NAV per share available for each share class, which will be the prior calendar day NAV per share (i.e. the prior
month-end
NAV). The following table summarizes each month-end
NAV per share for Class I, Class D, Class F, and Class S common shares of beneficial interest during the years ended December 31, 2023 and 2022: NAV Per Share |
||||||||||||||||
For the Months Ended |
Class I |
Class D |
Class F |
Class S (1)
|
||||||||||||
January 31, 2023 |
$ | 24.36 | $ | 24.36 | $ | 24.36 | $ | — | ||||||||
February 28, 2023 |
$ | 24.56 | $ | 24.56 | $ | 24.56 | $ | — | ||||||||
March 31, 2023 |
$ | 24.40 | $ | 24.40 | $ | 24.40 | $ | — | ||||||||
April 30, 2023 |
$ | 24.42 | $ | 24.42 | $ | 24.42 | $ | — | ||||||||
May 31, 2023 |
$ | 24.45 | $ | 24.45 | $ | 24.45 | $ | — | ||||||||
June 30, 2023 |
$ | 24.72 | $ | 24.72 | $ | 24.72 | $ | — | ||||||||
July 31, 2023 |
$ | 24.87 | $ | 24.87 | $ | 24.87 | $ | — | ||||||||
August 31, 2023 |
$ | 24.88 | $ | 24.88 | $ | 24.88 | $ | — | ||||||||
September 30, 2023 |
$ | 25.11 | $ | 25.11 | $ | 25.11 | $ | — | ||||||||
October 31, 2023 |
$ | 25.05 | $ | 25.05 | $ | 25.05 | $ | 25.05 | ||||||||
November 30, 2023 |
$ | 25.15 | $ | 25.15 | $ | 25.15 | $ | 25.15 | ||||||||
December 31, 2023 |
$ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 25.06 | ||||||||
NAV Per Share |
||||||||||||||||
For the Months Ended |
Class I |
Class D |
Class F |
Class S (1)
|
||||||||||||
February 28, 2022 |
$ | 25.10 | $ | 25.10 | $ | 25.10 | $ | — | ||||||||
March 31, 2022 |
$ | 25.09 | $ | 25.09 | $ | 25.09 | $ | — | ||||||||
April 30, 2022 |
$ | 24.94 | $ | 24.94 | $ | 24.94 | $ | — | ||||||||
May 31, 2022 |
$ | 24.61 | $ | 24.61 | $ | 24.61 | $ | — | ||||||||
June 30, 2022 |
$ | 24.32 | $ | 24.32 | $ | 24.32 | $ | — | ||||||||
July 31, 2022 |
$ | 24.48 | $ | 24.48 | $ | 24.48 | $ | — | ||||||||
August 31, 2022 |
$ | 24.51 | $ | 24.51 | $ | 24.51 | $ | — | ||||||||
September 30, 2022 |
$ | 24.21 | $ | 24.21 | $ | 24.21 | $ | — | ||||||||
October 31, 2022 |
$ | 24.02 | $ | 24.02 | $ | 24.02 | $ | — | ||||||||
November 30, 2022 |
$ | 24.00 | $ | 24.00 | $ | 24.00 | $ | — | ||||||||
December 31, 2022 |
$ | 23.88 | $ | 23.88 | $ | 23.88 | $ | — | ||||||||
| (1) | Class S commenced operations on October 1, 2023. |
Distributions
The Board authorizes and declares monthly distribution amounts per share of Class I, Class D, Class F, and Class S common shares of beneficial interest payable monthly in arrears. The record date for each distribution was the last calendar date of the month in which such distribution was declared. The following table presents distributions that were declared during the year ended December 31, 2023:
Class I |
||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||
January 19, 2023 |
February 28, 2023 | $ | 0.1600 | $ | 0.0210 | $ | — | $ | 0.1810 | $ | 6,441 | |||||||||||
February 28, 2023 |
March 31, 2023 | 0.1600 | 0.0300 | — | 0.1900 | 6,980 | ||||||||||||||||
March 28, 2023 |
April 28, 2023 | 0.1600 | 0.0430 | — | 0.2030 | 7,518 | ||||||||||||||||
F-180
Class I |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
April 28, 2023 |
May 31, 2023 | 0.1600 | 0.0440 | — | 0.2040 | 7,561 | ||||||||||||||||||
May 26, 2023 |
June 30, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 7,668 | ||||||||||||||||||
June 28, 2023 |
July 31, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 7,907 | ||||||||||||||||||
July 31, 2023 |
August 31, 2023 | 0.1600 | 0.0450 | — | 0.2050 | 8,119 | ||||||||||||||||||
August 31, 2023 |
September 29, 2023 | 0.1600 | 0.0550 | 0.1500 | 0.3650 | 16,009 | ||||||||||||||||||
September 27, 2023 |
October 31, 2023 | 0.1600 | 0.0550 | — | 0.2150 | 9,577 | ||||||||||||||||||
October 27, 2023 |
November 30, 2023 | 0.1600 | 0.0550 | — | 0.2150 | 10,450 | ||||||||||||||||||
November 27, 2023 |
December 29, 2023 | 0.1600 | 0.0550 | — | 0.2150 | 11,042 | ||||||||||||||||||
December 29, 2023 |
January 31, 2024 | 0.1600 | 0.0550 | 0.1500 | 0.3650 | 19,305 | ||||||||||||||||||
Total |
$ | 1.9200 | $ | 0.5480 | $ | 0.3000 | $ | 2.7680 | $ | 118,577 | ||||||||||||||
Class D |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
February 28, 2023 | $ | 0.1549 | $ | 0.0210 | $ | — | $ | 0.1759 | $ | 3,173 | |||||||||||||
February 28, 2023 |
March 31, 2023 | 0.1553 | 0.0300 | — | 0.1853 | 3,351 | ||||||||||||||||||
March 28, 2023 |
April 28, 2023 | 0.1548 | 0.0430 | — | 0.1978 | 3,752 | ||||||||||||||||||
April 28, 2023 |
May 31, 2023 | 0.1550 | 0.0440 | — | 0.1990 | 3,951 | ||||||||||||||||||
May 26, 2023 |
June 30, 2023 | 0.1548 | 0.0450 | — | 0.1998 | 4,081 | ||||||||||||||||||
June 28, 2023 |
July 31, 2023 | 0.1550 | 0.0450 | — | 0.2000 | 4,285 | ||||||||||||||||||
July 31, 2023 |
August 31, 2023 | 0.1548 | 0.0450 | — | 0.1998 | 4,426 | ||||||||||||||||||
August 31, 2023 |
September 29, 2023 | 0.1547 | 0.0550 | 0.1500 | 0.3597 | 8,319 | ||||||||||||||||||
September 27, 2023 |
October 31, 2023 | 0.1549 | 0.0550 | — | 0.2099 | 5,441 | ||||||||||||||||||
October 27, 2023 |
November 30, 2023 | 0.1547 | 0.0550 | — | 0.2097 | 5,701 | ||||||||||||||||||
November 27, 2023 |
December 29, 2023 | 0.1549 | 0.0550 | — | 0.2099 | 5,923 | ||||||||||||||||||
December 29, 2023 |
January 31, 2024 | 0.1547 | 0.0550 | 0.1500 | 0.3597 | 10,390 | ||||||||||||||||||
Total |
$ | 1.8585 | $ | 0.5480 | $ | 0.3000 | $ | 2.7065 | $ | 62,793 | ||||||||||||||
Class F |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
January 19, 2023 |
February 28, 2023 | $ | 0.1499 | $ | 0.0210 | $ | — | $ | 0.1709 | $ | 16,003 | |||||||||||||
February 28, 2023 |
March 31, 2023 | 0.1507 | 0.0300 | — | 0.1807 | 16,992 | ||||||||||||||||||
March 28, 2023 |
April 28, 2023 | 0.1496 | 0.0430 | — | 0.1926 | 18,590 | ||||||||||||||||||
April 28, 2023 |
May 31, 2023 | 0.1500 | 0.0440 | — | 0.1940 | 18,948 | ||||||||||||||||||
May 26, 2023 |
June 30, 2023 | 0.1496 | 0.0450 | — | 0.1946 | 19,516 | ||||||||||||||||||
June 28, 2023 |
July 31, 2023 | 0.1500 | 0.0450 | — | 0.1950 | 20,103 | ||||||||||||||||||
July 31, 2023 |
August 31, 2023 | 0.1495 | 0.0450 | — | 0.1945 | 20,194 | ||||||||||||||||||
August 31, 2023 |
September 29, 2023 | 0.1494 | 0.0550 | 0.1500 | 0.3544 | 38,128 | ||||||||||||||||||
September 27, 2023 |
October 31, 2023 | 0.1498 | 0.0550 | — | 0.2048 | 23,210 | ||||||||||||||||||
October 27, 2023 |
November 30, 2023 | 0.1493 | 0.0550 | — | 0.2043 | 23,928 | ||||||||||||||||||
November 27, 2023 |
December 29, 2023 | 0.1497 | 0.0550 | — | 0.2047 | 25,038 | ||||||||||||||||||
December 29, 2023 |
January 31, 2024 | 0.1493 | 0.0550 | 0.1500 | 0.3543 | 44,922 | ||||||||||||||||||
Total |
$ | 1.7968 | $ | 0.5480 | $ | 0.3000 | $ | 2.6448 | $ | 285,572 | ||||||||||||||
F-181
Class S (2)
|
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
October 27, 2023 |
November 30, 2023 | $ | 0.1419 | $ | 0.0550 | $ | — | $ | 0.1969 | $ | 20 | |||||||||||||
November 27, 2023 |
December 29, 2023 | 0.1425 | 0.0550 | — | 0.1975 | 62 | ||||||||||||||||||
December 29, 2023 |
January 31, 2024 | 0.1418 | 0.0550 | 0.1500 | 0.3468 | 298 | ||||||||||||||||||
Total |
$ | 0.4262 | $ | 0.1650 | $ | 0.1500 | $ | 0.7412 | $ | 380 | ||||||||||||||
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees. |
| (2) | Class S Shares commenced operations on October 1, 2023. |
The following table presents distributions that were declared during the year ended December 31, 2022:
Class I |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share |
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
February 27, 2022 |
March 31, 2022 | $ | 0.13542 | $ | — | $ | — | $ | 0.13542 | $ | 958 | |||||||||||||
March 30, 2022 |
April 29, 2022 | 0.14640 | — | — | 0.14640 | 1,572 | ||||||||||||||||||
April 29, 2022 |
May 31, 2022 | 0.14640 | — | — | 0.14640 | 2,524 | ||||||||||||||||||
May 31, 2022 |
June 30, 2022 | 0.14640 | — | — | 0.14640 | 2,942 | ||||||||||||||||||
June 29, 2022 |
July 29, 2022 | 0.14640 | — | — | 0.14640 | 3,291 | ||||||||||||||||||
July 29, 2022 |
August 31, 2022 | 0.14640 | — | — | 0.14640 | 3,467 | ||||||||||||||||||
August 26, 2022 |
September 30, 2022 | 0.14640 | — | — | 0.14640 | 4,265 | ||||||||||||||||||
September 30, 2022 |
October 31, 2022 | 0.14640 | — | — | 0.14640 | 4,683 | ||||||||||||||||||
October 26, 2022 |
November 30, 2022 | 0.14640 | — | — | 0.14640 | 4,803 | ||||||||||||||||||
October 31, 2022 |
November 29, 2022 | — | — | 0.10000 | 0.10000 | 3,281 | ||||||||||||||||||
November 30, 2022 |
December 30, 2022 | 0.14640 | — | — | 0.14640 | 4,880 | ||||||||||||||||||
December 29, 2022 |
January 31, 2023 | 0.14640 | — | — | 0.14640 | 5,139 | ||||||||||||||||||
December 29, 2022 |
January 30, 2023 | — | — | 0.13000 | 0.13000 | 4,563 | ||||||||||||||||||
Total |
$ | 1.59942 | $ | — | $ | 0.23000 | $ | 1.82942 | $ | 46,368 | ||||||||||||||
Class D |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
February 27, 2022 |
March 31, 2022 | $ | 0.13542 | $ | — | $ | — | $ | 0.13542 | $ | 172 | |||||||||||||
March 30, 2022 |
April 29, 2022 | 0.14640 | — | — | 0.14640 | 688 | ||||||||||||||||||
April 29, 2022 |
May 31, 2022 | 0.14640 | — | — | 0.14640 | 1,107 | ||||||||||||||||||
May 31, 2022 |
June 30, 2022 | 0.14640 | — | — | 0.14640 | 1,282 | ||||||||||||||||||
June 29, 2022 |
July 29, 2022 | 0.14640 | — | — | 0.14640 | 1,493 | ||||||||||||||||||
July 29, 2022 |
August 31, 2022 | 0.14640 | — | — | 0.14640 | 1,608 | ||||||||||||||||||
August 26, 2022 |
September 30, 2022 | 0.14640 | — | — | 0.14640 | 1,957 | ||||||||||||||||||
September 30, 2022 |
October 31, 2022 | 0.14640 | — | — | 0.14640 | 2,346 | ||||||||||||||||||
October 26, 2022 |
November 30, 2022 | 0.14640 | — | — | 0.14640 | 2,364 | ||||||||||||||||||
October 31, 2022 |
November 29, 2022 | — | — | 0.10000 | 0.10000 | 1,615 | ||||||||||||||||||
November 30, 2022 |
December 30, 2022 | 0.14180 | — | — | 0.14180 | 2,422 | ||||||||||||||||||
December 29, 2022 |
January 31, 2023 | 0.14130 | — | — | 0.14130 | 2,478 | ||||||||||||||||||
December 29, 2022 |
January 30, 2023 | — | — | 0.13000 | 0.13000 | 2,280 | ||||||||||||||||||
Total |
$ | 1.58972 | $ | — | $ | 0.23000 | $ | 1.81972 | $ | 21,812 | ||||||||||||||
F-182
Class F |
||||||||||||||||||||||||
Declaration Date |
Payment Date |
Base Distribution Per Share (1)
|
Variable Supplemental Distribution Per Share |
Special Distribution Per Share |
Total Distribution Per Share |
Distribution Amount |
||||||||||||||||||
February 27, 2022 |
March 31, 2022 | $ | 0.13542 | $ | — | $ | — | $ | 0.13542 | $ | 1,638 | |||||||||||||
March 30, 2022 |
April 29, 2022 | 0.14640 | — | — | 0.14640 | 3,072 | ||||||||||||||||||
April 29, 2022 |
May 31, 2022 | 0.14640 | — | — | 0.14640 | 4,768 | ||||||||||||||||||
May 31, 2022 |
June 30, 2022 | 0.14640 | — | — | 0.14640 | 6,535 | ||||||||||||||||||
June 29, 2022 |
July 29, 2022 | 0.14640 | — | — | 0.14640 | 8,147 | ||||||||||||||||||
July 29, 2022 |
August 31, 2022 | 0.14640 | — | — | 0.14640 | 9,135 | ||||||||||||||||||
August 26, 2022 |
September 30, 2022 | 0.14640 | — | — | 0.14640 | 10,403 | ||||||||||||||||||
September 30, 2022 |
October 31, 2022 | 0.14640 | — | — | 0.14640 | 12,097 | ||||||||||||||||||
October 26, 2022 |
November 30, 2022 | 0.14640 | — | — | 0.14640 | 12,616 | ||||||||||||||||||
October 31, 2022 |
November 29, 2022 | — | — | 0.10000 | 0.10000 | 8,628 | ||||||||||||||||||
November 30, 2022 |
December 30, 2022 | 0.13720 | — | — | 0.13720 | 12,449 | ||||||||||||||||||
December 29, 2022 |
January 31, 2023 | 0.13620 | — | — | 0.13620 | 12,596 | ||||||||||||||||||
December 29, 2022 |
January 30, 2023 | — | — | 0.13000 | 0.13000 | 12,022 | ||||||||||||||||||
Total |
$ | 1.58002 | $ | — | $ | 0.23000 | $ | 1.81002 | $ | 114,106 | ||||||||||||||
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees. |
Distribution Reinvestment Plan
The Company has adopted a distribution reinvestment plan, pursuant to which the Company will reinvest all cash distributions declared by the Board on behalf of our shareholders who do not elect to receive their distributions in cash as provided below. As a result, if the Board authorizes, and the Company declares, a cash distribution, then shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional shares as described below, rather than receiving the cash distribution. Distributions on fractional shares will be credited to each participating shareholder’s account to three decimal places.
Character of Distributions
The Company may fund its cash distributions to shareholders from any source of funds available to the Company, including but not limited to offering proceeds, net investment income from operations, capital gains proceeds from the sale of assets, borrowings, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies and expense support from the Adviser, which is subject to recoupment.
Through December 31, 2023, a portion of the Company’s distributions resulted from expense support from the Adviser, and future distributions may result from expense support from the Adviser, each of which is subject to repayment by the Company within three years from the date of payment. The purpose of this arrangement avoids distributions being characterized as a return of capital for U.S. federal income tax purposes. Shareholders should understand that any such distribution is not based solely on the Company’s investment performance, and can only be sustained if the Company achieves positive investment performance in future periods and/or the Adviser continues to provide expense support. Shareholders should also understand that the Company’s future repayments of expense support will reduce the distributions that they would otherwise receive. There can be no assurance that the Company will achieve the performance necessary to sustain these distributions, or be able to pay distributions at all.
F-183
Sources of distributions, other than net investment income and realized gains on a U.S. GAAP basis, include required adjustments to U.S. GAAP net investment income in the current period to determine taxable income available for distributions. The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its Common Shares during the year ended December 31, 2023:
Class I |
Class D |
Class F |
Class S |
|||||||||||||||||||||||||||||
Source of Distribution |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
||||||||||||||||||||||||
Net investment income |
$ | 2.7680 | $ | 118,577 | $ | 2.7065 | $ | 62,793 | $ | 2.6448 | $ | 285,572 | $ | 0.7412 | $ | 380 | ||||||||||||||||
Net realized gains |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total |
$ | 2.7680 | $ | 118,577 | $ | 2.7065 | $ | 62,793 | $ | 2.6448 | $ | 285,572 | $ | 0.7412 | $ | 380 | ||||||||||||||||
The following table reflects the sources of cash distributions on a U.S. GAAP basis that the Company has declared on its Common Shares during the year ended December 31, 2022:
Class I |
Class D |
Class F |
||||||||||||||||||||||
Source of Distribution |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
||||||||||||||||||
Net investment income |
$ | 1.8294 | $ | 46,368 | $ | 1.8197 | $ | 21,812 | $ | 1.8100 | $ | 114,106 | ||||||||||||
Net realized gains |
— | — | — | — | — | — | ||||||||||||||||||
Total |
$ | 1.8294 | $ | 46,368 | $ | 1.8197 | $ | 21,812 | $ | 1.8100 | $ | 114,106 | ||||||||||||
Share Repurchase Program
The Company has commenced a share repurchase program in which the Company intends to repurchase, in each quarter, up to 5% of the Company’s Common Shares outstanding (by number of shares) as of the close of the previous calendar quarter. The Board may amend, suspend or terminate the share repurchase program if it deems such action to be in the best interest of the Company and the best interest of the shareholders. As a result, share repurchases may not be available each quarter. The Company intends to conduct such repurchase offers in accordance with the requirements of Rule
13e-4
promulgated under the Securities Exchange Act of 1934, as amended, and the 1940 Act. All shares purchased pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares. Under the Company’s share repurchase program, to the extent the Company offers to repurchase shares in any particular quarter, the Company expects to repurchase shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an “Early Repurchase Deduction”). The
one-year
holding period is measured as of the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction may be waived, at the Company’s discretion, in the case of repurchase requests arising from the death, divorce or qualified disability of the holder. The Early Repurchase Deduction will be retained by the Company for the benefit of remaining shareholders across all shares. The following table summarizes the share repurchases completed during the year ended December 31, 2023:
|
Repurchase Deadline Request |
Percentage of Outstanding Shares the Company Offered to Repurchase (1)
|
Repurchase Pricing Date |
Amount Repurchased (all classes) (2)
|
Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Purchased (1)
|
|||||||||||||
March 2, 2023 |
5.00 | % | March 31, 2023 | $ | 25,836 | 1,058,869 | 0.73 | % | ||||||||||
May 30, 2023 |
5.00 | % | June 30, 2023 | $ | 98,692 | 3,992,380 | 2.64 | % | ||||||||||
August 31, 2023 |
5.00 | % | September 30, 2023 | $ | 34,830 | 1,387,108 | 0.87 | % | ||||||||||
December 1, 2023 |
5.00 | % | December 31, 2023 | $ | 63,474 | 2,532,864 | 1.39 | % | ||||||||||
F-184
The following table summarizes the share repurchases completed during the year ended December 31, 2022:
|
Repurchase Deadline Request |
Percentage of Outstanding Shares the Company Offered to Repurchase (1)
|
Repurchase Pricing Date |
Amount Repurchased (all classes) (2)
|
Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Purchased (1)
|
|||||||||||||
May 31, 2022 |
5.00 | % | June 30, 2022 | $ | 1,000 | 41,118 | 0.11 | % | ||||||||||
August 30, 2022 |
5.00 | % | September 30, 2022 | $ | 938 | 38,736 | 0.04 | % | ||||||||||
November 30, 2022 |
5.00 | % | December 31, 2022 | $ | 10,010 | 419,163 | 0.32 | % | ||||||||||
| (1) | Percentage is based on total shares as of the close of the previous calendar quarter. All repurchase requests were satisfied in full. |
| (2) | Amounts not inclusive of Early Repurchase Deduction. |
Note 10. Financial Highlights
The following are the financial highlights for the year ended December 31, 2023:
Year Ended December 31, 2023 |
||||||||||||||||
Class I |
Class D |
Class F |
Class S (7)
|
|||||||||||||
Per Share Data: |
||||||||||||||||
Net asset value, beginning of period |
$ | 23.88 | $ | 23.88 | $ | 23.88 | $ | 25.11 | ||||||||
Net investment income (1)
|
2.86 | 2.80 | 2.74 | 0.63 | ||||||||||||
Net unrealized and realized gain (loss) (2)
|
1.09 | 1.09 | 1.08 | 0.06 | ||||||||||||
Net increase (decrease) in net assets resulting from operations |
3.95 | 3.89 | 3.82 | 0.69 | ||||||||||||
Distributions from net investment income (3)
|
(2.77 | ) | (2.71 | ) | (2.64 | ) | (0.74 | ) | ||||||||
Distributions from net realized gains (3)
|
— | — | — | — | ||||||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(2.77 | ) | (2.71 | ) | (2.64 | ) | (0.74 | ) | ||||||||
Early repurchase deduction fees (6)
|
— | — | — | — | ||||||||||||
Total increase (decrease) in net assets |
1.18 | 1.18 | 1.18 | (0.05 | ) | |||||||||||
Net asset value, end of period |
$ | 25.06 | $ | 25.06 | $ | 25.06 | $ | 25.06 | ||||||||
Shares outstanding, end of period |
52,457,511 | 28,192,719 | 125,381,461 | 857,879 | ||||||||||||
Total return based on NAV (4)
|
17.28 | % | 16.99 | % | 16.70 | % | 2.78 | % | ||||||||
Ratios: |
||||||||||||||||
Ratio of net expenses to average net assets (5)
|
9.68 | % | 10.02 | % | 10.18 | % | 10.68 | % | ||||||||
Ratio of net investment income to average net assets (5)
|
11.73 | % | 11.57 | % | 11.24 | % | 10.20 | % | ||||||||
Portfolio turnover rate |
9.31 | % | 9.31 | % | 9.31 | % | 9.31 | % | ||||||||
Supplemental Data: |
||||||||||||||||
Net assets, end of period |
$ | 1,314,775 | $ | 706,613 | $ | 3,142,475 | $ | 21,501 | ||||||||
Asset coverage ratio |
223.2 | % | 223.2 | % | 223.2 | % | 223.2 | % | ||||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
F-185
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9). |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fees, if any. |
| (5) | For the year ended December 31, 2023, amounts are annualized except for excise tax, and capital gains incentive fee. |
| (6) | The per share amount rounds to less than $0.01 per share. |
| (7) | Class S Shares commenced operations on October 1, 2023. |
The following are the financial highlights for the year ended December 31, 2022:
Year Ended December 31, 2022 |
||||||||||||
Class I |
Class D |
Class F |
||||||||||
Per Share Data: |
||||||||||||
Net asset value, beginning of period |
$ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||
Net investment income (1)
|
2.21 | 2.19 | 2.20 | |||||||||
Net unrealized and realized gain (loss) (2)
|
(1.50 | ) | (1.49 | ) | (1.51 | ) | ||||||
Net increase (decrease) in net assets resulting from operations |
0.71 | 0.70 | 0.69 | |||||||||
Distributions from net investment income (3)
|
(1.83 | ) | (1.82 | ) | (1.81 | ) | ||||||
Distributions from net realized gains (3)
|
— | — | — | |||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(1.83 | ) | (1.82 | ) | (1.81 | ) | ||||||
Total increase (decrease) in net assets |
(1.12 | ) | (1.12 | ) | (1.12 | ) | ||||||
Net asset value, end of period |
$ | 23.88 | $ | 23.88 | $ | 23.88 | ||||||
Shares outstanding, end of period |
35,101,879 | 17,538,259 | 92,059,512 | |||||||||
Total return based on NAV (4)
|
2.93 | % | 2.89 | % | 2.85 | % | ||||||
Ratios: |
||||||||||||
Ratio of net expenses to average net assets (5)
|
3.11 | % | 3.09 | % | 3.28 | % | ||||||
Ratio of net investment income to average net assets (5)
|
9.95 | % | 9.88 | % | 9.91 | % | ||||||
Portfolio turnover rate |
6.82 | % | 6.82 | % | 6.82 | % | ||||||
Supplemental Data: |
||||||||||||
Net assets, end of period |
$ | 838,207 | $ | 418,798 | $ | 2,198,267 | ||||||
Asset coverage ratio |
247.4 | % | 247.4 | % | 247.4 | % | ||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
| (2) | The amount shown does not correspond with the aggregate amount for the period as it includes the effect of the timing of capital transactions. |
| (3) | The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 9). |
| (4) | Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming distributions are reinvested in accordance with the Company’s distribution reinvestment plan) divided by the beginning NAV per share. Total return does not include upfront transaction fee, if any. |
F-186
| (5) | For the year ended December 31, 2022, amounts are annualized except for non-recurring expenses. For the year ended December 31, 2022, the ratio of total operating expenses to average net assets was 5.42%, 5.55% and 5.93% on Class I, Class D and Class F, respectively, on an annualized basis, excluding the effect of expense support/(recoupment), distribution and/or shareholder servicing fees waiver, and management fee and income based incentive fee waivers by the Adviser which represented 2.30%, 2.46% and 2.66% on Class I, Class D and Class F, respectively, of average net assets. |
Note 11. Joint Venture
On June 1, 2023, the Company entered into a limited liability company agreement (the “LLC Agreement”) with the Capital One Member (“COM”) to establish a joint venture to make certain unitranche loans to U.S. middle-market companies. The joint venture is called ULTRA III, LLC (“ULTRA III”). The Company and COM will provide capital to ULTRA III in the form of membership interests. The initial maximum investment amounts in ULTRA III for the Company and COM are approximately $200.0 million and $28.6 million, respectively, which correspond to initial membership interests of approximately 87.5% and 12.5%, respectively. The LLC Agreement is effective as of June 1, 2023.
The Company and COM may, from make additional contributions of capital or may receive returns of capital from ULTRA III. As of December 31, 2023, the Company had contributed $129.7 million and COM had contributed $18.5 million of capital and $70.3 million and $10.1 million of capital remained uncalled from the Company and COM, respectively. As of December 31, 2023, the Company and COM’s membership interests are 87.5% and 12.5%, respectively.
time-to-time,
All portfolio decisions and generally all other decisions in respect of ULTRA III must be approved by a credit committee of ULTRA III consisting of representatives of the Company and COM (generally with approval from a representative of each required). A Capital One entity is providing a senior revolving financing facility to ULTRA III.
The Company has determined that ULTRA III is an investment company under ASC 946, and in accordance with ASC 946, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary. The Company and COM have equal voting rights with respect to the joint venture. The Company will not consolidate the assets and liabilities of the ULTRA III joint venture.
The Company’s investment in ULTRA III is disclosed on the Company’s Schedule of Investments as of December 31, 2023.
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ULTRA III, LLC
Schedule of Investments
December 31, 2023
(in thousands)
The following table presents the schedule of investments of ULTRA III as of December 31, 2023
Company (1) |
Reference Rate and Spread (2) |
Interest Rate (2) |
Maturity Date |
Par Amount/ Units |
Amortized Cost (3) |
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(5) |
SF + 6.00% | 11.37% | 11/8/2029 | $ | 245,500 | $ | 239,514 | $ | 239,511 | |||||||||||||||||||
| 239,514 | 239,511 | 169.01 | % | |||||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||
EHOB, LLC (4)(5) |
SF + 5.75% | 11.13% | 12/18/2029 | 125,000 | 122,205 | 122,204 | ||||||||||||||||||||||
| 122,205 | 122,204 | 86.23 | % | |||||||||||||||||||||||||
Total First Lien Debt |
$ | 361,719 | $ | 361,715 | 255.24 | % | ||||||||||||||||||||||
Total Investment Portfolio |
$ | 361,719 | $ | 361,715 | 255.24 | % | ||||||||||||||||||||||
Cash and Cash Equivalents |
||||||||||||||||||||||||||||
Cash |
2,317 | 2,317 | 1.63 | % | ||||||||||||||||||||||||
Total Cash and Cash Equivalents |
$ | 2,317 | $ | 2,317 | 1.63 | % | ||||||||||||||||||||||
Total Portfolio Investments, Cash and Cash Equivalents |
$ | 364,036 | $ | 364,032 | 256.87 | % | ||||||||||||||||||||||
| (1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company are denominated in dollars. All debt investments are income producing unless otherwise indicated. Certain portfolio company investments are subject to contractual restrictions on sales. The total par amount is presented for debt investments. |
| (2) | The investments bear interest at a rate that is determined by reference to the Secured Overnight Financing Rate (“SOFR” or “SF”), which reset, monthly or quarterly. For each such investment, the Company has provided the spread over SOFR and the current contractual interest rate in effect at December 31, 2023. Certain investments are subject to a SOFR interest rate floor, or rate cap. SOFR based contracts may include a credit spread adjustment, which is included within the stated all-in interest rate, if applicable, that is charged in addition to the base rate and the stated spread. |
| (3) | The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
| (4) | These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by the Adviser as the Company’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”) (see Note 2 and Note 5), pursuant to the Company’s valuation policy. |
| (5) | The interest rate floor on these investments as of December 31, 2023 was 1.00%. |
F-188
The following table presents the selected statement of assets and liabilities information of ULTRA III as of December 31, 2023:
December 31, 2023 |
||||
ASSETS |
||||
Investments at fair value (amortized cost of $361,719 at December 31, 2023) |
$ | 361,715 | ||
Cash and cash equivalents |
2,317 | |||
Interest receivable |
2,401 | |||
Total assets |
$ | 366,433 | ||
LIABILITIES |
||||
Debt |
$ | 222,300 | ||
Interest payable and other liabilities |
2,415 | |||
Total liabilities |
224,715 | |||
MEMBERS’ EQUITY |
||||
Members’ Equity |
141,718 | |||
Total Members’ Equity |
141,718 | |||
Total liabilities and members’ equity |
$ | 366,433 | ||
The following table presents the selected statement of operations information of ULTRA III for the year ended December 31, 2023:
|
Year Ended December 31, 2023 |
||||
Investment income: |
||||
Interest income |
$ | 4,887 | ||
Total investment income |
4,887 | |||
Expenses: |
||||
Interest expense |
(2,159 | ) | ||
Other expenses |
(256 | ) | ||
Total expenses |
(2,415 | ) | ||
Net investment income |
2,472 | |||
Net realized and change in unrealized gain (loss) on investments |
||||
Net realized gain (loss) on investments |
— | |||
Net change in unrealized appreciation (depreciation) on investments |
(4 | ) | ||
Net realized and change in unrealized gain (loss) on investments |
(4 | ) | ||
Net increase (decrease) in net assets resulting from operations |
$ | 2,468 | ||
Note 12. Income Taxes
Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, as gains and losses are generally not included in taxable income until they are realized; (2) income or loss recognition on exited investments; (3) income or loss recognition on foreign currency transactions; (4) significant debt modifications; and (5) other
non-deductible
expenses. The Company makes certain adjustments to the classification of net assets as a result of permanent differences, which include differences in the book and tax basis of certain assets and liabilities, and
book-to-tax
F-189
non-deductible
expenses, among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, undistributed net investment income or undistributed net realized gains on investments, as appropriate. For the years ended December 31, 2023 and 2022, permanent differences were as follows: Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Undistributed net investment income (loss) |
$ | (11,599 | ) | $ | 9,805 | |||
Accumulated net realized gain (loss) |
14,866 | (6,922 | ) | |||||
Paid In Capital |
$ | 3,267 | $ | 2,883 | ||||
During the years ended December 31, 2023 and 2022, permanent differences were principally related to
non-deductible
offering costs, market discount, and other nondeductible expenses. The following reconciles the increase in net assets resulting from operations to taxable income for the years ended December 31, 2023 and 2022:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Net increase (decrease) in net assets resulting from operations |
$ | 654,601 | $ | 58,947 | ||||
Net unrealized (appreciation) depreciation |
(214,133 | ) | 157,391 | |||||
Realized gain (loss) for tax not included in book income |
5,497 | 1,621 | ||||||
Other non-deductible expenses and excise taxes |
3,267 | 2,884 | ||||||
Other book/tax differences |
33,473 | (6,506 | ) | |||||
Taxable income |
$ | 482,705 | $ | 214,337 | ||||
The components of accumulated gains / losses as calculated on a tax basis for the years ended December 31, 2023 and 2022 were as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Distributable ordinary income |
$ | 34,049 | $ | 37,792 | ||||
Distributable capital gains/(losses) |
(20,701 | ) | (857 | ) | ||||
Net unrealized appreciation/(depreciation) on investments |
56,742 | (157,391 | ) | |||||
Total accumulated under-distributed (over-distributed) earnings |
$ | 70,090 | $ | (120,456 | ) | |||
The cost and unrealized gain (loss) of the Company’s investments, as calculated on a tax basis, at December 31, 2023 and 2022 is as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Gross unrealized appreciation |
$ | 166,817 | $ | 71,292 | ||||
Gross unrealized depreciation |
(95,061 | ) | (222,079 | ) | ||||
Net unrealized appreciation (depreciation) |
$ | 71,756 | $ | (150,787 | ) | |||
Tax cost of investments |
$ | 9,217,654 | $ | 5,853,583 | ||||
The difference between GAAP-basis and tax basis unrealized gains (losses) is attributable primarily to net mark to market gains (losses) on foreign currency contracts, market discount, and significant modification of debt securities.
F-190
Under the Regulated Investment Company Modernization Act of 2010, net capital losses recognized by the Company may get carried forward indefinitely, and retain their character as short-term and/or long-term losses. Any such losses will be deemed to arise on the first day of the next taxable year. Capital losses for the year ended December 31, 2023 and 2022, which will be deemed to arise on the first day of the tax year ended December 31, 2024 and 2023, were as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Short-term |
$ | 3,650 | $ | — | ||||
Long-term |
$ | 9,892 | $ | — | ||||
All of the distributions declared during the years ended December 31, 2023 and 2022 were derived from ordinary income, as determined on a tax basis and 86.94% and 89.7%, respectively, of distributed ordinary income qualified as interest related dividends which is exempt from U.S. withholding tax applicable to
non-U.S.
shareholders. Management has analyzed the Company’s tax positions taken, or to be taken, on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Company’s financial statements. The Company’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed.
Note 13. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no additional subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the consolidated financial statements as of December 31, 2023, except as discussed below.
Subscriptions
The Company received $282.1 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F shares and Class S shares for subscriptions effective January 1, 2024.
The Company received $393.2 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F shares and Class S shares for subscriptions effective February 1, 2024.
The Company received $307.8 million of net proceeds relating to the issuance of Class I shares, Class D shares, Class F shares and Class S shares for subscriptions effective March 1, 2024.
Share Repurchases
On February 1, 2024, the Company offered to purchase up to 5% of its Common Shares at a price equal to the net asset value per Share as of March 31, 2024. The offer expired on March 1, 2024. Approximately 2.35 million Common Shares, representing 1.13% of Common Shares outstanding at the beginning of the quarter, were validly tendered and not withdrawn prior to the expiration of the offer.
Distribution Declarations
On January 30, 2024, the Company declared net distributions of $0.1600 per Class I share, $0.1547 per Class D share, $0.1494 per Class F share, and $0.1420 per Class S share, all of which are payable on February 29, 2024 to shareholders of record as of January 31, 2024. Additionally, the Company’s Board declared variable supplemental distributions of $0.0550 for all share classes outstanding, all of which are payable on February 29, 2024 to shareholders of record as of January 31, 2024.
F-191
On February 29, 2024, the Company declared net distributions of $0.1600 per Class I share, $0.1550 per Class D share, $0.1500 per Class F share, and $0.1431 per Class S share, all of which are payable on March 29, 2024 to shareholders of record as of February 29, 2024. Additionally, the Board declared variable supplemental distributions for each class of its Common Shares in the amount of $0.0550 per share, which is payable on March 29, 2024 to shareholders of record as of February 29, 2024.
Financing Transactions
On January 17, 2024, the Company entered into a Commitment Increase Agreement (the “Commitment Increase Agreement”) among the Company, Deutsche Bank AG New York Branch, as the increasing lender (the “Increasing Lender”), and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to the our Revolving Credit Facility (defined above).
The Commitment Increase Agreement provides for an increase in the Increasing Lender’s commitment, thereby bringing aggregate commitments of the lenders under the Revolving Credit Facility from $1,275.0 million to $1,300.0 million through the accordion feature in the Revolving Credit Facility. The accordion feature in the Revolving Credit Facility allows us, under certain circumstances, to increase the total size of the facility to a maximum aggregate commitment of $1,912.5 million.
On January 25, 2024, the Company entered into that certain Amendment No. 2 to the Credit Agreement (the “Amendment No. 2”) among the Company, as servicer, HLEND Holdings B, L.P., Bank of America, N.A., as administrative agent, U.S. Bank Trust Company, National Association, as collateral administrator, U.S. Bank National Association, as collateral custodian, and the lenders party thereto, amending HLEND B Funding Facility (defined above).
The Amendment provides for, among other things, an increase in the aggregate commitments of the lenders under HLEND B Funding Facility from $1,000.0 million to $1,250.0 million and an extension of the Availability Period (as defined therein) from July 2025 to January 2027 and the Maturity Date (as defined therein) from July 2027 to January 2029. In addition, the Amendment provides that Daily Simple CORRA will be used as the benchmark for loans denominated in Canadian Dollars, and adjusts the definition of Applicable Rate such that the Applicable Rate is calculated as the greater of (x) (i) 2.00% multiplied by the balance of all Broadly Syndicated Loans, plus 2.40% multiplied by the balance of Large Corporate Loans, plus 2.65% multiplied by the balance of all other eligible collateral assets, divided by (ii) the balance of all eligible collateral assets and (y) 2.35%.
On January 30, 2024, the Company and U.S. Bank Trust Company, National Association (the “Trustee”) entered into an Indenture (the “Base Indenture”) and a Supplemental Indenture (the “First Supplemental Indenture” and, together with the Base Indenture, the “January 2029 Notes Indenture”). The First Supplemental Indenture relates to the Company’s issuance of $550.0 million in aggregate principal amount of our 6.750% notes due 2029 (the “January 2029 Notes”). The January 2029 Notes will mature on January 30, 2029 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the January 2029 Notes Indenture. The January 2029 Notes bear interest at a rate of 6.750% per year payable semi-annually on January 30 and July 30 of each year, commencing on July 30, 2024. The January 2029 Notes are the Company’s general unsecured obligations that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the January 2029 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.
In connection with the January 2029 Notes, the Company entered into an interest rate swap to more closely align the interest rates of the Company’s liabilities with the Company’s investment portfolio, which consists of
F-192
predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 6.75% per annum and pays a floating interest rate of SOFR + 2.876% per annum on $550.0 million of the January 2029 Notes. The Company designated the interest rate swap as the hedging instrument in a qualifying hedge accounting relationship.
ULTRA III Maximum Investment
On February 1, 2024 the Company entered into an amendment (“Amendment No. 1”) to the LLC Agreement with COM to increase the maximum investment amounts for the Company and COM in ULTRA III from $200.0 million and $28.6 million, respectively, to $400.0 million and $57.1 million, respectively. The increased investment amounts for the Company and COM correspond to membership interests of 87.5% and 12.5%, respectively.
F-193
| HPS Corporate Lending Fund Subscription Agreement |
|
|||
| 1 | Your Investment | ||||||||||||||
| Investment Amount $ | ||||||||||||||
| Investment Type | ☐ Initial Investment | ☐ Additional Investment | ||||||||||||
| Share Class (Must select one) | ||||||||||||||
| ☐ | Class S | ☐ Class F | ☐ Class D | ☐ Class I | ||||||||||
| $2,500 minimum initial investment | $2,500 minimum initial investment | $2,500 minimum initial investment | $10,000 minimum initial investment for qualifying investors (otherwise $1,000,000 minimum initial investment)1 | |||||||||||
| 2 | Form of Ownership | ||||||||||||||
| See Appendix A for supplemental document requirements by investor type. | ||||||||||||||
| I.Individual / Joint Accounts | Retirement Accounts | Entity Accounts | ||||||||||||
| ☐ | Individual | ☐ | IRA | ☐ | Trust | |||||||||
| ☐ | Joint Tenants with Rights of | ☐ | Roth IRA | ☐ | C Corporation | |||||||||
| ☐ | Survivorship Tenants in Common | ☐ | SEP IRA | ☐ | S Corporation | |||||||||
| ☐ | Community Property | ☐ | Rollover IRA | ☐ | Partnership | |||||||||
| ☐ | Tenants by Entirety | ☐ | Inherited IRA | ☐ | Limited Liability Corporation | |||||||||
| ☐ | Uniform Gift / Transfer to Minors State: | ☐ | Other: | ☐ | Other: | |||||||||
| Brokerage Account Number: | Custodian Account Number: | Brokerage Account Number: |
||||||||||||
| Custodian Name: | ||||||||||||||
| Custodian Tax ID: | ||||||||||||||
| Please print, sign, and scan this page if applicable. | ||||||||||||||||||
| X | ||||||||||||||||||
| Custodian Signature / Stamp | ||||||||||||||||||
| 1 | HPS Corporate Lending Fund (the “Fund”) waives or reduces to $10,000 or less Class I investment minimums for purchases (1) through fee-based programs, also known as wrap accounts, sponsored by participating brokers or other intermediaries that provide access to Class I shares, (2) through participating brokers that have alternative fee arrangements with their clients to provide access to Class I shares, (3) through transaction/brokerage platforms at participating brokers, (4) by our executive officers and Trustees and their immediate family members, as well as officers and employees of the Adviser or other affiliates and their immediate family members, and, if approved by our Board, joint venture partners, consultants and other service providers, and (5) by other categories of investors that we name in an amendment or supplement to the Fund’s prospectus. The foregoing categories of investors who are granted waivers or reductions by the Managing Dealer from the Class I investment minimums include investors described in the foregoing sentence who make purchases for eligible retirement plans and IRAs. Waivers and reductions are subject to the terms and conditions of agreements that the Managing Dealer enters into with participating intermediaries, as applicable, and the prospectus. |
A-1
HPS Corporate Lending Fund | Subscription Agreement
3 | Investor Information
The information provided in this section must be compliant with IRS Form W-9 and related instructions (see www.irs.gov for instructions). Legal addresses must include a residential street address (P.O. boxes will not be accepted).
1. Primary Account Holder / Minor (if Uniform Gift / Transfer to Minors Account) / Trustee / Authorized Signatory
| Name (first, middle, last) | ||||||||
| Social Security Number | Date of Birth (mm/dd/yyyy) | |||||||
| Legal Street Address City State Zip | ||||||||
| Mailing Street Address City State Zip | ||||||||
| Email Address | Phone Number | |||||||
Please indicate if you are a:
| ☐ U.S. Citizen | ☐ Resident Alien | ☐ Non-Resident Alien | Country of Citizenship if non-U.S. Citizen | |||
| (A completed applicable Form W-8 is required for subscription) |
||||||
2. Joint Account Holder / Custodian (if Uniform Gift / Transfer to Minors Account) / Co-Trustee / Authorized Signatory
| Name (first, middle, last) | ||||||||
| Social Security Number | Date of Birth (mm/dd/yyyy) | |||||||
| Legal Street Address City State Zip | ||||||||
| Mailing Street Address City State Zip | ||||||||
| Email Address | Phone Number | |||||||
Please indicate if you are a:
| ☐ U.S. Citizen | ☐ Resident Alien | ☐ Non-Resident Alien | Country of Citizenship if non-U.S. Citizen | |||
| (A completed applicable Form W-8 is required for subscription) |
||||||
3. Joint Account Holder / Co-Trustee / Authorized Signatory
| Name (first, middle, last) | ||||||||
| Social Security Number | Date of Birth (mm/dd/yyyy) | |||||||
| Legal Street Address City State Zip | ||||||||
| Mailing Street Address City State Zip | ||||||||
| Email Address | Phone Number | |||||||
Please indicate if you are a:
| ☐ U.S. Citizen | ☐ Resident Alien | ☐ Non-Resident Alien | Country of Citizenship if non-U.S. Citizen | |||
| (A completed applicable Form W-8 is required for subscription) |
||||||
A-2
HPS Corporate Lending Fund | Subscription
Entity Information (only required for entity account types)
| Entity Name |
|
|||||||||||
| Tax ID Number |
|
Date of Formation (mm/dd/yyyy) |
|
|||||||||
| Legal Street Address |
|
City |
|
State |
|
Zip |
|
| Country of Domicile (Form W-8 required for non-U.S.) |
|
|||||||||||||
| Exemptions per Form W-9 (see Form W-9 instructions at www.irs.gov) |
|
|||||||||||||
| Exemptions for FATCA Reporting Code (if any) |
|
|||||||||||||
| Please indicate if you are a: | ☐ Pension Plan | ☐ Profit Sharing Plan | ☐ Not-for-Profit Organization |
Affiliation with HPS Investment Partners, LLC (“HPS”)
Do any of the following apply to the Subscriber: (i) the Subscriber controls, or is controlled by or under common control with, the HPS Corporate Lending Fund or HPS, (ii) the Subscriber is an employee or officer of the HPS Corporate Lending Fund or HPS, (iii) the Subscriber is a member of the immediate family of any of the foregoing or (iv) the Subscriber is a trust or other entity established for the benefit of any of the foregoing?
☐ Yes ☐ No
If you are an employee, affiliate, or director of HPS or any affiliate of HPS, or a spouse, a minor child, or a child residing in the same residence as such an employee or director, please check the appropriate box below (required):
☐ HPS Employee ☐ HPS Affiliate ☐ HPS Corporate Lending Fund Officer or Director
☐ Immediate Family Member2 of HPS Corporate Capital Solutions Fund Officer or Director ☐ Not Applicable
4 | Transfer on Death Beneficiary Information (Optional for Individual / Joint Accounts)
Please designate the beneficiary information for your account. If completed, all information is required. Secondary beneficiary information may only include whole percentages and must total 100%. (Not available for Louisiana residents).
| ☐ Primary | ||||||||||
| First Name | MI | Last Name | SSN | Date of Birth | ☐ Secondary % | |||||
| ☐ Primary |
||||||||||
| First Name | MI | Last Name | SSN | Date of Birth | ☐ Secondary % | |||||
| 2 | Immediate family member means a spouse, a minor child, or a child residing in the same residence as an employee or director of HPS or any affiliate of HPS. |
A-3
| HPS Corporate Lending Fund | Subscription |
||||||||||
| ☐ Primary | ||||||||||
| First Name | MI | Last Name | SSN | Date of Birth | ☐ Secondary % | |||||
| ☐ Primary | ||||||||||
| First Name | MI | Last Name | SSN | Date of Birth | ☐ Secondary % | |||||
5 | ERISA Plan Asset Regulations
Are you or will you be during any time in which you hold any interest in HPS Corporate Lending Fund a “benefit plan investor”3 within the meaning of the Plan Asset Regulations4 or are you or will you use the assets of a “benefit plan investor” to invest or hold any interest in HPS Corporate Lending Fund? ☐ Yes ☐ No
Are you or will you be during any time in which you hold any interest in HPS Corporate Lending Fund a “controlling person”5 within the meaning of the Plan Asset Regulations4? ☐ Yes ☐ No
| 3 | The term “benefit plan investor” includes, for e.g.: (i) an “employee benefit plan” as defined in section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is subject to Title I of ERISA (such as employee welfare benefit plans (generally, plans that provide for health, medical or other welfare benefits) and employee pension benefit plans (generally, plans that provide for retirement or pension income)); (ii) “plans” described in section 4975(e)(1) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), that is subject to section 4975 of the Code (including, for e.g., an “individual retirement account”, an “individual retirement annuity”, a “Keogh” plan, a pension plan, an Archer MSA described in section 220(d) of the Code, a Coverdell education savings account described in section 530 of the Code and a health savings account described in section 223(d) of the Code) and (iii) an entity that is, or whose assets would be deemed to constitute the assets of, one or more “employee benefit plans” or “plans” (such as for e.g., a master trust or a plan assets fund) under ERISA or the Plan Asset Regulations. |
| 4 | “Plan Asset Regulations” means the regulations issued by the United States Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the United States Code of Federal Regulations, as modified by Section 3(42) of ERISA, as the same may be amended from time to time. |
| 5 | “Controlling Person” includes any person (other than a “benefit plan investor”) that has discretionary authority or control with respect to the assets of HPS Corporate Lending Fund or that provides investment advice for a fee (direct or indirect) with respect to such assets, and any affiliate of any such person. An “affiliate” for these purposes includes any person, directly or indirectly through one or more intermediaries, controlling, controlled by or under common control with the person, and control with respect to a person other than an individual means the power to exercise a controlling influence over the management or policies of such person. |
A-4
HPS Corporate Lending Fund | Subscription
6 | Distribution Instructions
You are automatically enrolled in our Distribution Reinvestment Plan, unless you are a resident of ALABAMA, ARKANSAS, CALIFORNIA, IDAHO, KANSAS, KENTUCKY, MAINE, MARYLAND, MASSACHUSETTS, NEBRASKA, NEW JERSEY, NORTH CAROLINA, OHIO, OREGON, TENNESSEE, VERMONT, or WASHINGTON.
☐ If you are not a resident of the states listed above, you are automatically enrolled in the Distribution Reinvestment Plan. PLEASE CHECK HERE IF YOU DO NOT WISH TO BE ENROLLED in the Distribution Reinvestment Plan and complete the cash distribution information in the box below. For IRA (custodial held accounts), if you elect cash distributions, the funds must be sent to the custodian on a direct deposit basis.
| ☐ Direct Deposit to third party financial institution (complete section below) |
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| I authorize HPS Corporate Lending Fund or its agent to deposit my distribution into my checking or savings account. This authority will remain in force until I notify HPS Corporate Lending Fund in writing to cancel it. In the event that HPS Corporate Lending Fund deposits funds erroneously into my account, they are authorized to debit my account for an amount not to exceed the amount of the erroneous deposit. | ||||||||
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| Mailing Address | City | State | Zip Code | |||||
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| Account Number | ||||||||
| ☐ Mail a check (to Primary Account Holder mailing address for individual / joint accounts or Entity legal address for entity accounts)
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☐ If you are a resident of Alabama, Arkansas, California, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Nebraska, New Jersey, North Carolina, Ohio, Oregon, Tennessee, Vermont or Washington, you are not automatically enrolled in the Distribution Reinvestment Plan. PLEASE CHECK HERE IF YOU WISH TO ENROLL in the Distribution Reinvestment Plan. You will automatically receive cash distributions unless you elect to enroll in the Distribution Reinvestment Plan.
7 | Investment Funding Method
| ☐ Broker / Financial Advisor will make payment on your behalf |
☐ By Wire: Please wire funds according to the instructions below. |
☐ By Check: Please attach your check6 to this agreement and make payable to: |
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| Account No.: 182383642895 |
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| ABA: 075000022 |
HPS Corporate Lending Fund |
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| Account Name: U.S. Bancorp Fund Services, LLC FBO HPS Corporate Lending Fund |
Mailing Address: 615 E. Michigan St Milwaukee, WI 53202 |
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| 6 | Only personal, same name checks are accepted |
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HPS Corporate Lending Fund | Subscription
8 | Electronic Delivery Consent (Optional)
Instead of receiving paper copies of the prospectus, prospectus supplements, annual reports, proxy statements, and other shareholder communications and reports, you may elect to receive electronic delivery of shareholder communications from HPS Corporate Lending Fund. If you would like to consent to electronic delivery, including pursuant to email, please sign below.
By consenting below to electronically receive shareholder communications, including your account-specific information, you authorize said offering(s) to either (i) email shareholder communications to you directly or (ii) make them available on our website and notify you by email when and where such documents are available. You will not receive paper copies of these electronic materials unless specifically requested, the delivery of electronic materials is prohibited or we, in our sole discretion, elect to send paper copies of the materials.
By consenting to electronic access, you will be responsible for certain costs, such as your customary internet service provider charges, and may be required to download software in connection with access to these materials. You understand this electronic delivery program may be changed or discontinued and that the terms of this agreement may be amended at any time. You understand that there are possible risks associated with electronic delivery such as emails not transmitting, links failing to function properly and system failure of online service providers, and that there is no warranty or guarantee given concerning the transmissions of email, the availability of the website, or information on it, other than as required by law.
Please print, sign, and scan this page if applicable.
| X |
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HPS Corporate Lending Fund | Subscription
9 | Subscriber Representations and Signatures
HPS Corporate Lending Fund is required by law to obtain, verify and record certain personal information from you or persons on your behalf in order to establish the account. Required information includes name, date of birth, permanent residential address and social security/taxpayer identification number. We may also ask to see other identifying documents. If you do not provide the information, HPS Corporate Lending Fund may not be able to open your account. By signing the Subscription Agreement, you agree to provide this information and confirm that this information is true and correct. If we are unable to verify your identity, or that of another person(s) authorized to act on your behalf, or if we believe we have identified potentially criminal activity, we reserve the right to take action as we deem appropriate which may include closing your account.
Please separately initial each of the representations below. Except in the case of fiduciary accounts, you may not grant any person a power of attorney to make the representations on your behalf.
In order to induce HPS Advisors, LLC to accept this subscription, I (we) hereby represent and warrant as follows (Each account holder must hand-initial representations 1 – 11, to the extent applicable):
| Primary Investor |
Co- Investor |
Co- Investor |
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| 1. I (we) have received the prospectus (as amended or supplemented) for HPS Corporate Lending Fund at least five business days prior to the date hereof. |
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| 2. I (we) have (A) a minimum net worth (not including home, home furnishings and personal automobiles) of at least $250,000, or (B) a minimum net worth (as previously described) of at least $70,000 and a minimum annual gross income of at least $70,000. If I am an entity that was formed for the purpose of purchasing shares, each individual that owns an interest in the entity meets this requirement.6 |
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| 3. I am (we are) a resident of Alabama, California, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Missouri, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Tennessee, or Vermont and in addition to the general suitability requirements described above, I meet the higher suitability requirements, if any, imposed by my state of primary residence as set forth in the prospectus under “SUITABILITY STANDARDS.” If I am an entity that was formed for the purpose of purchasing shares, each individual that owns an interest in the entity meets this requirement.7 |
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| 4. I am (we are) domiciled or have a registered office in the European Economic Area or in the United Kingdom, and qualify as (i) a “professional investor,” within the meaning of Annex II to Directive 2014/65/EU or the United Kingdom Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773) as amended, as applicable, or (ii) a “certified sophisticated investor” as defined under the Financial Services and Markets Act 2000 of the United Kingdom. |
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| 5. I acknowledge that there is no public market for the shares, shares of this offering are not liquid and appropriate only as a long-term investment. |
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| 6. I am purchasing the shares for my own account, or if I am purchasing shares on behalf of a trust or other entity of which I am a trustee or authorized agent, I have due authority to execute this subscription agreement and do hereby legally bind the trust or other entity of which I am trustee or authorized agent. |
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| 7. I acknowledge that HPS Corporate Lending Fund may enter into transactions with HPS affiliates that involve conflicts of interest as described in the prospectus. |
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| 7 | In the case of sales to fiduciary accounts, the minimum standards set forth in the prospectus under “SUITABILITY STANDARDS” shall be met by the beneficiary, the fiduciary, account, or, by the donor or grantor, who directly or indirectly supplies the funds to purchase the shares if the donor or grantor is the fiduciary. |
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HPS Corporate Lending Fund | Subscription
| 8. I acknowledge that subscriptions must be submitted at least five business days prior to first day of each month and my investment will be executed as of the first day of the applicable month at the NAV per share as of the day preceding day. I acknowledge that I will not know the NAV per share at which my investment will be executed at the time I subscribe and the NAV per share as of the last day of each month will generally be made available at www.hlend.com within 20 business days of the last day of each month. |
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| 9. I acknowledge that my subscription request will not be accepted any earlier than two business days before the first calendar day of each month. I acknowledge that I am not committed to purchase shares at the time my subscription order is submitted and I may cancel my subscription at any time before the time it has been accepted as described in the previous sentence. I understand that I may withdraw my purchase request by notifying the transfer agent at 888-484- 1944 or through my financial intermediary. |
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| 10. New Jersey investors are advised that if they buy Class S shares, Class D shares, Class I shares or Class F shares through certain financial intermediaries, such intermediaries may directly charge you transaction or other fees, including upfront placement or brokerage commissions, in such amounts as they may determine, provided that they limit such charges to a 3.5% cap on NAV for Class S shares, a 2.0% cap on NAV for Class D shares, a 2.0% cap on NAV for Class I shares and a 2.0% cap on NAV for Class F shares. |
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| 11. I am (we are) a resident of New Jersey and have either (a) a minimum liquid net worth of at least $100,000 and a minimum annual gross income of not less than $85,000, or (b) a minimum liquid net worth of $350,000. For these purposes, “liquid net worth” is defined as that portion of net worth (total assets exclusive of home, home furnishings, and automobiles, minus total liability) that consists of cash, cash equivalent and readily marketable securities. In addition, a New Jersey investor’s investment in HPS Corporate Lending Fund, its affiliates, and other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) may not exceed ten percent (10%) of his or her liquid net worth. |
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If you do not have another broker-dealer or other financial intermediary introducing you to HPS Corporate Lending Fund, then HPS Securities, LLC may be deemed to be acting as your broker-dealer of record in connection with any investment in HPS Corporate Lending Fund. For important information in this respect, see Section 10 below.
I declare that the information supplied in this Subscription Agreement is true and correct and may be relied upon by HPS Corporate Lending Fund. I acknowledge that the Broker / Financial Advisor indicated in Section 10 of this Subscription Agreement and its designated clearing agent, if any, will have full access to my account information, including the number of shares I own, tax information (including the Form 1099) and redemption information. Investors may change the Broker / Financial Advisor of record at any time by contacting HPS Corporate Lending Fund Investor Relations at the number indicated below at any time by contacting the transfer agent at 888-484-1988.
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HPS Corporate Lending Fund | Subscription
| SUBSTITUTE IRS FORM W-9 CERTIFICATIONS (required for U.S. investors):
Under penalties of perjury, I certify that:
1. The number shown on this Subscription Agreement is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and
2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRA has notified me that I am no longer subject to backup withholding; and
3. I am a U.S. citizen or other U.S. person (including a resident alien) (defined in IRS Form W-9; and
4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.
Each Account Holder / Trustee / Authorized Signatory must sign below. Please print, sign, and scan this page if applicable.
(Custodians must sign in Section 2 on a custodial account)
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| Owner or Authorized Person | Date (mm/dd/yyyy) | |||
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| Co-Investor or Authorized Person | Date (mm/dd/yyyy) | |||
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| Co-Investor or Authorized Person | Date (mm/dd/yyyy) | |||
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HPS Corporate Lending Fund | Subscription
10 | Broker / Financial Advisor Information and Signature
The Financial Advisor must sign below to complete the order. The Financial Advisor hereby warrants that he/she is duly licensed and may lawfully sell shares in the state designated as the investor’s legal residence.
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Please note that unless previously agreed to in writing by HPS Corporate Lending Fund, all sales of securities must be made through a Broker, including when an RIA has introduced the sale. In all cases, Section 10 must be completed.
The undersigned confirm(s), which confirmation is made on behalf of the Broker with respect to sales of securities made through a Broker, that they (i) have reasonable grounds to believe that the information and representations concerning the investor identified herein are true, correct and complete in all respects; (ii) have discussed such investor’s prospective purchase of shares with such investor; (iii) have advised such investor of all pertinent facts with regard to the lack of liquidity and marketability of the shares; (iv) have delivered or made available a current prospectus and related supplements, if any, to such investor; (v) have reasonable grounds to believe that the investor is purchasing these shares for his or her own account; (vi) have reasonable grounds to believe that the purchase of shares is a suitable investment for such investor, that such investor meets the suitability standards applicable to such investor set forth in the prospectus and related supplements, if any, and that such investor is in a financial position to enable such investor to realize the benefits of such an investment and to suffer any loss that may occur with respect thereto; and (vii) have advised such investor that the shares have not been registered and are not expected to be registered under the laws of any country or jurisdiction outside of the United States except as otherwise described in the prospectus. The undersigned Broker, Financial Advisor or Financial Representative listed in Section 10 further represents and certifies that, in connection with this subscription for shares, he/she has complied with and has followed all applicable policies and procedures of his or her firm relating to, and performed functions required by, federal and state securities laws, rules promulgated under the Securities Exchange Act of 1934, as amended, including, but not limited to Rule 151-1 (“Regulation Best Interest”) and FINRA rules and regulations including, but not limited to Know Your Customer, Suitability and PATRIOT Act (Anti Money Laundering, Customer Identification) as required by its relationship with the investor(s) identified on this document.
THIS SUBSCRIPTION AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
If you do not have another broker-dealer or other financial intermediary introducing you to HPS Corporate Lending Fund, then HPS Securities, LLC may be deemed to act as your broker of record in connection with any investment in HPS Corporate Lending Fund. If you want to receive financial advice regarding a prospective investment in the shares, contact your broker-dealer or other financial intermediary.
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HPS Corporate Lending Fund | Subscription
Please print, sign, and scan this page if applicable.
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| Financial Advisor / Representative Signature | Date (mm/dd/yyyy) | |||
11 | Other Important Information
If investors participating in the Distribution Reinvestment Plan or making subsequent purchases of shares of HPS Corporate Lending Fund experience a material adverse change in their financial condition or can no longer make the representations or warranties set forth in Section 9 above, they are asked to promptly notify HPS Corporate Lending Fund and the Broker in writing. The Broker may notify HPS Corporate Lending Fund if an investor participating in the Distribution Reinvestment Plan can no longer make the representations or warranties set forth in Section 9 above, and HPS Corporate Lending Fund may rely on such notification to terminate such investor’s participation in the Distribution Reinvestment Plan.
No sale of shares may be completed until at least five business days after you receive the final prospectus. Subscribers are encouraged to read the prospectus in its entirety for a complete explanation of an investment in the shares of HPS Corporate Lending Fund.
To be accepted, a subscription request must be made with a completed and executed Subscription Agreement in good order and payment of the full purchase price at least five business days prior to the first calendar day of the month (unless waived). All items on the Subscription Agreement, other than those marked optional, must be completed in order for your Subscription Agreement to be processed. You will receive a written confirmation of your purchase.
The Company and the Managing Dealer will direct any dealers to, upon receipt of any and all checks, drafts, and money orders received from prospective purchasers of shares, transmit same together with a copy of this executed Subscription Agreement or copy of the signature page of such agreement, stating among other things, the name of the purchaser, current address, and the amount of the investment to U.S. Bank Global Fund Services (a) by the end of the next business day following receipt where internal supervisory review is conducted at the same location at which subscription documents and checks are received, or (b) by the end of the second business day following receipt where internal supervisory review is conducted at a different location than which subscription documents and checks are received.
Return the completed Subscription Agreement to:
HPS Corporate Lending Fund
c/o U.S. Bank Global Fund Services
615 E. Michigan St
Milwaukee, WI 53202
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Appendix A | Supporting Document Requirements
Please provide the following supporting documentation based on your account type.
| Individual |
If a non-U.S. person, Form W-8BEN | |
| Joint (including JTWROS, Tenants in Common, Community Property) |
For each non-U.S. Person account holder, Form W-8BEN |
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| IRA (including ROTH, SEP, Rollover, Inherited) |
None | |
| Trust |
Certificate of Trust or Declaration of Trust | |
| Appropriate W-8 series form (see https://www.irs.gov/forms-pubs/about-form-w-8) |
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| Corporation (including C Corp., S Corp., LLC) |
Formation documents | |
| Articles of incorporation | ||
| Authorized signatory list | ||
| Appropriate W-8 series form (see https://www.irs.gov/forms-pubs/about-form-w-8) |
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| Partnership |
Formation documents | |
| Authorized signatory list | ||
| Appropriate W-8 series form (see https://www.irs.gov/forms-pubs/about-form-w-8) |
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HPS Corporate Lending Fund
Maximum Offering of $15,000,000,000 in Common Shares
PROSPECTUS
You should rely only on the information contained in this prospectus. No intermediary, salesperson or other person is authorized to make any representations other than those contained in this prospectus and supplemental literature authorized by HPS Corporate Lending Fund and referred to in this prospectus, and, if given or made, such information and representations must not be relied upon. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of these securities. You should not assume that the delivery of this prospectus or that any sale made pursuant to this prospectus implies that the information contained in this prospectus will remain fully accurate and correct as of any time subsequent to the date of this prospectus.
June 12, 2024
PART C
Other Information
| Item 25. | Financial Statements and Exhibits |
| (1) | Financial Statements |
The following financial statements of HPS Corporate Lending Fund are included in Part A of this Registration Statement.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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| F-2 | ||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| Consolidated Schedules of Investments as of March 31, 2024 (Unaudited) and December 31, 2023 |
F-8 | |||
| F-55 | ||||
| F-102 | ||||
| Consolidated Statements of Assets and Liabilities as of December 31, 2023 and December 31, 2022 |
F-104 | |||
| F-106 | ||||
| F-108 | ||||
| F-109 | ||||
| Consolidated Schedules of Investments as of December 31, 2023 and December 31, 2022 |
F-111 | |||
| F-143 | ||||
HPS Corporate Lending Fund
| (2) | Exhibits |
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| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |
| Item 26. | Marketing Arrangements |
The information contained under the heading “Plan of Distribution” in this Registration Statement is incorporated herein by reference.
| Item 27. | Other Expenses Of Issuance And Distribution |
| SEC registration fee |
$ | 1,877,600 | ||
| FINRA filing fee |
$ | 676,500 | ||
| Legal |
$ | 4,260,593 | * | |
| Printing |
$ | 718,226 | * | |
| Accounting |
$ | 180,000 | * | |
| Blue Sky Expenses |
$ | 1,364,269 | * | |
| Advertising and sales literature |
$ | 127,367 | * | |
| Due Diligence |
$ | 337,500 | * | |
| Miscellaneous fees and expenses |
$ | 1,151,580 | * | |
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| Total |
$ | 10,693,635 |
| * | Amounts are estimates. |
| Item 28. | Persons Controlled By Or Under Common Control |
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:
| Name |
Jurisdiction | Percentage | ||||
| HLEND Holdings A, L.P. |
Delaware | 100 | % | |||
| HLEND Holdings B, L.P. |
Delaware | 100 | % | |||
| HLEND Holdings C, L.P. |
Delaware | 100 | % | |||
| HLEND Holdings D, L.P. |
Delaware | 100 | % | |||
| HLEND Holdings E, L.P. |
Delaware | 100 | % | |||
| HLEND Holdings A Lux SARL |
Luxembourg | 100 | % | |||
| HLEND Holdings B Lux SARL |
Luxembourg | 100 | % | |||
| HLEND Holdings A GP, LLC |
Delaware | 100 | % | |||
| HLEND Holdings B GP, LLC |
Delaware | 100 | % | |||
| HLEND Holdings C GP, LLC |
Delaware | 100 | % | |||
| HLEND Holdings D GP, LLC |
Delaware | 100 | % | |||
| HLEND Holdings E GP, LLC |
Delaware | 100 | % | |||
| HLEND CLO 2023-1, LLC |
Delaware | 100 | % | |||
| HLEND CLO 2023-1 Investments, LLC |
Delaware | 100 | % | |||
| HLEND Proxima, LLC |
Delaware | 100 | % | |||
| HLEND FEP, LLC |
Delaware | 100 | % | |||
| HLEND OTM, LLC |
Delaware | 100 | % | |||
| HLEND Lux SARL |
Luxembourg | 100 | % | |||
| HLEND CLO 2024-2, LLC |
Delaware | 100 | % | |||
| HLEND CLO 2024-2 Investments, LLC |
Delaware | 100 | % | |||
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| Item 29. | Number Of Holders Of Securities |
The following table sets forth the number of record holders of the Registrant’s common shares as of May 1, 2024.
| Title of Class |
Number of Record Holders |
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| Class S |
647 | |||
| Class D |
52 | |||
| Class I |
469 | |||
| Class F |
2 | |||
| Item 30. | Indemnification |
The information contained under the heading “Description of our Common Shares.” “Advisory Agreement and Administration Agreement” and “Plan of Distribution—Indemnification” in this Registration Statement is incorporated herein by reference.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to Trustees, officers and controlling persons of the Registrant pursuant to the provisions described above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission 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 the Registrant of expenses incurred or paid by a Trustee, officer or controlling person in the successful defense of an action suit or proceeding) is asserted by a Trustee, officer or controlling person in connection with the securities being registered, the Registrant 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.
The Registrant has obtained and maintains liability insurance for the benefit of its Trustees and officers (other than with respect to claims resulting from the willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office) on a claims-made basis.
| Item 31. | Business and Other Connections of Adviser |
A description of any other business, profession, vocation or employment of a substantial nature in which HPS Advisors, LLC or its affiliates, and each managing director, director or executive officer of HPS Advisors, LLC or its affiliates, 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 section entitled “Management of the Fund.” Additional information regarding HPS Advisors, LLC and its officers and managing member is set forth in its Form ADV, as filed with the Securities and Exchange Commission (SEC File No. 801-127446), 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, as amended, and the rules thereunder are maintained at the offices of:
| (1) | the Registrant; |
| (2) | the transfer agent; |
| (3) | the Custodian; |
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| (4) | the Adviser; and |
| (5) | the Administrator. |
| Item 33. | Management Services |
Not Applicable.
| Item 34. | Undertakings |
We hereby undertake:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of those securities at that time will be deemed to be the initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
(4) that, for the purpose of determining liability under the Securities Act to any purchaser, if the Registrant is subject to Rule 430C 17 CFR 230.430C: Each prospectus filed pursuant to Rule 497(b), (c), (d) or (e) under the Securities Act 17 CFR 230.497(b), (c), (d) or (e) as part of a registration statement relating to an offering, other than prospectuses filed in reliance on Rule 430A under the Securities Act 17 CFR 230.430A, will be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and
(5) that for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of securities, the undersigned Registrant undertakes that in an offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:
(i) any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 497 under the Securities Act 17 CFR 230.497;
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(ii) the portion of any advertisement pursuant to Rule 482 under the Securities Act 17 CFR 230.482 relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
(iii) any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended (the “Securities Act”), the Registrant certifies that Registration Statement meets all of the requirements for effectiveness under Rule 486(b) under the Securities Act and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York on the 12th day of June, 2024.
| HPS CORPORATE LENDING FUND | ||
| By: | /s/ Michael Patterson |
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| Name: | Michael Patterson | |
| Title: | Chairperson, Chief Executive Officer and Trustee | |
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
| Signature |
Title |
Date |
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| /s/ Michael Patterson Michael Patterson |
Chairperson, Chief Executive Officer and Trustee (Principal Executive Officer) | June 12, 2024 | ||
| /s/ Robert Busch Robert Busch |
Chief Financial Officer and Principal Accounting Officer | June 12, 2024 | ||
| /s/ Grishma Parekh Grishma Parekh* |
Trustee and President | June 12, 2024 | ||
| /s/ Randall Lauer Randall Lauer* |
Trustee | June 12, 2024 | ||
| /s/ Robin Melvin Robin Melvin* |
Trustee | June 12, 2024 | ||
| /s/ Donna Milia Donna Milia* |
Trustee | June 12, 2024 | ||
| /s/ Robert Van Dore Robert Van Dore* |
Trustee | June 12, 2024 | ||
| *By: | /s/ Tyler Thorn |
|
| Tyler Thorn | ||
| As Agent or Attorney-in-Fact |
The original powers of attorney authorizing Yoohyun K. Choi and Tyler Thorn to execute the Registration Statement, and any amendments thereto, for the trustees of the Registrant on whose behalf this Amendment is filed have been executed and filed as Exhibits and are incorporated by reference from the Registrant’s registration statement on Form N-2 (SEC File No. 333-259453) filed on September 10, 2021, and from the Registrant’s registration statement on Form N-2 (SEC File No. 333-270667) filed on March 17, 2023, as applicable.
EXHIBIT INDEX
| (e) |
Amended and Restated Distribution Reinvestment Plan | |
| (l) |
Opinion of Dechert LLP | |
| (n)(1) |
Consent of Independent Registered Public Accounting Firm | |
| (n)(2) |
Report of Independent Registered Public Accounting Firm | |
| (s)(2) |
Filing Fee Table | |
| 101.INS |
Inline XBRL Instance Document | |
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |