486BPOS: Post-effective amendment [Rule 485(b)]
Published on April 30, 2025
Securities Act File No.
File
No. 333-280139
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. |
(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 (date) pursuant to paragraph (b) of Rule 486. |
| 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: |
☐ |
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”)). |
| ☐ | 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
This filing is being made solely for the purpose of correcting the file number under which HPS Corporate Lending Fund previously filed Post-Effective Amendment No. 1 to the registration statement on Form N-2 dated April 24, 2025 (Accession No. 0001193125-25-093511) (the “Post-Effective Amendment”). The Post-Effective Amendment was filed on EDGAR under an incorrect file number due to a clerical error. This filing corrects such clerical error and does not otherwise amend, modify or alter the Post-Effective Amendment in any other respect.
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 33 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. |
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Because you may be unable to sell your shares, you will be unable to reduce your exposure in any market downturn. |
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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. |
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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.” |
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You will bear substantial fees and expenses in connection with your investment. See “Fees and Expenses.” |
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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. |
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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.
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 |
$ | 25.51 | $ | 3,750,000,000 | ||||
Class D Shares, per Share |
$ | 25.51 | $ | 3,750,000,000 | ||||
Class I Shares, per Share |
$ | 25.51 | $ | 3,750,000,000 | ||||
Class F Shares, per Share |
$ | 25.51 | $ | 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 February 28, 2025. |
| (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, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV, and (c) for Class F shares, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV, in each case payable on a monthly basis in arrears as of the first calendar day of the month. 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 April 24, 2025
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
other 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. This condition does not apply, directly or indirectly, to federally covered 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 registered broker-dealers to provide a brief summary to retail investors. This relationship summary, referred to as
iii
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 December 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 second amended and restated investment advisory agreement between the Fund and the Adviser (as amended and/or restated from time to time, the “Investment Advisory Agreement”) and the third 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 $149 billion of assets under management as of December 31, 2024. HPS invests primarily in credit and manages various strategies across the capital structure, including 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 and high yield bonds; asset-based finance and real estate. HPS has approximately 250 investment professionals and more than 770 total employees, working from fourteen 1 offices globally, as of December 31, 2024. HPS was established in 2007 as a unit of Highbridge Capital Management, LLC (“HCM”), a subsidiary of J.P. Morgan Asset Management (“JPMAM”). On March 31, 2016, the senior executives of HPS acquired HPS and its subsidiaries from JPMAM and HCM (the “Transaction”). Following the Transaction, JPMAM retained a passive minority investment in HPS, which was subsequently redeemed in April 2022. In June 2018, affiliates of Dyal Capital Partners 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, which was subsequently increased in August 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 $170 billion in privately originated transactions across
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1 |
Excludes certain smaller, regional offices. |
1
more than 890 investments.
2
Our objective is to bring HPS’s leading credit investment platform to the non-exchange
traded BDC industry. On December 3, 2024, HPS and BlackRock Inc. (“BlackRock”) entered into an agreement for BlackRock to acquire the business and assets of HPS with 100% of consideration paid in BlackRock equity (the “HPS/BlackRock Transaction”). The HPS/BlackRock Transaction is expected to close
in mid-2025 subject
to receipt of certain consents from investors in HPS funds and accounts, regulatory approvals and satisfaction of other customary closing conditions. The HPS/BlackRock Transaction is expected to bring together BlackRock’s corporate and asset owner relationships with HPS’s diversified origination and capital flexibility, and create an integrated private credit franchise with approximately $220 billion in client assets. If the HPS/BlackRock Transaction occurs, BlackRock and HPS will form a new private financing solutions business unit led by Scott Kapnick, Scot French, and Michael Patterson. This combined platform is expected to have broad capabilities across senior and junior credit solutions, asset-based finance, real estate, private placements, and CLOs. As part of the HPS/BlackRock Transaction, Scott Kapnick, Scot French, and Michael Patterson will join BlackRock’s Global Executive Committee and Scott Kapnick will be an observer to the BlackRock Board of Directors. There can be no assurances that the HPS/BlackRock Transaction will take place, or if it does, what the impact will be on HPS or the Fund. 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. |
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” generally to mean companies with earnings before interest expense, income tax expense, 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. We have and may continue to invest in smaller or larger companies if an 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
non-investment
grade broadly syndicated loans, leveraged loans, secured and unsecured corporate bonds, and securitized credit. We intend to use these investments to maintain liquidity for our share repurchase |
2 |
As of December 31, 2024. Based on the total face value committed to private credit investments that are part of the Strategic Investment Partners strategy, Special Situations Opportunities strategy (private special situations investments), Specialty Direct Lending strategy, Core Senior Lending strategy, and any additional private credit investments made by one or more business development companies, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are solely part of the High Grade Corporate-Focused, High Grade Asset-Based, Real Estate, Asset Value, or Sustainability & Energy Transition strategies. |
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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
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 our
non-U.S.
dollar denominated investments. 3
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 $149 billion of assets under management as of December 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 $170 billion in privately originated transactions across more than 890 investments.
3
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 |
|
3 |
As of December 31, 2024. Based on the total face value committed to private credit investments that are part of the Strategic Investment Partners strategy, Special Situations Opportunities strategy (private special situations investments), Specialty Direct Lending strategy, Core Senior Lending strategy, and any additional private credit investments made by one or more business development companies, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are solely part of the High Grade Corporate-Focused, High Grade Asset-Based, Real Estate, Asset Value, or Sustainability & Energy Transition strategies. |
4
| • | Diversified Sourcing Network 4 HPS believes that its ability to source from non-sponsor channels significantly reduces the competitive intensity and allows it to focus on structuring improved economics, stricter financial covenants and stronger loan documentation. In addition, direct dialogue with borrower management teams can result in a better understanding of the underlying borrowers and better positioning to actively manage investments throughout their life. HPS also actively engages 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 December 31, 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 more than 250 investment professionals managed approximately $149 billion as of December 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, in turn, 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. |
|
4 |
As of December 31, 2024. Based on the total face value committed to private credit investments that are part of the Specialty Direct Lending strategy, Core Senior Lending strategy, and any additional private credit investments made by one or more business development companies, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are solely part of the Strategic Investment Partners, Special Situations Opportunities (private special situations investments), High Grade Corporate-Focused, High Grade Asset-Based, Real Estate, Asset Value, or Sustainability & Energy Transition strategies. The Fund had a lower percentage of private credit investments sourced from channels other than financial sponsors as of December 31, 2024. There is no guarantee that the Fund will be able to source a similar or higher percentage of private credit investments from channels other than financial sponsors. |
5
returns taking into account the additional work required. Leveraging HPS’s multi-strategy approach to credit may provide the Fund with distinctive vantage points in determining the relative value of and appropriate pricing for, an investment opportunity in light of the risk. HPS believes that the capability to navigate complexity to identify potentially mispriced investment opportunities is important in volatile and uncertain investment environments. |
| • | 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 focus its portfolio 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 can offer greater downside protection, as larger businesses typically possess the benefits of scale and a greater critical mass through diversification of customers and suppliers. HPS believes that it can generally negotiate commensurate or better terms with respect to borrowers in the upper middle market segment and that those borrowers can provide us with increased downside protection, potentially resulting in attractive risk-adjusted returns compared to the smaller-end and core-middle market. |
| • | Emphasis on Capital Preservation. |
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 as of December 31, 2024. 5 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 |
|
5 |
Source: Preqin, Preqin Special Report: The Future of Alternatives in 2029. Data as of December 31, 2024. |
6
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” 6 . 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 in 2024 as compared to over 49% in 20007 . 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 |
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 strengthen our portfolio with attractive investment economics and risk/reward profile. |
|
6 |
Source: S&P LCD Quarterly Leveraged Lending Review 4Q 2022, Primary Investor Market: Banks vs. Non-Bank. |
|
7 |
Source: S&P LCD Middle Market Deal Size Category Factsheet 4Q 2024. |
7
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 and resources 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 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. |
8
of senior secured loan investments that the Investment Team believes will generate an attractive risk-adjusted return profile. |
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 , 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-investments
and joint transactions with affiliates, which, in certain circumstances, limit the Fund’s ability to make investments or enter into 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 Criteria”) clearly defining 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 CLOs 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 |
9
| 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 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.
10
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. |
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 March 1, 2025, HPS, its affiliates and employees held approximately $38.97 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 |
11
| 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 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 day of each month. A subscription must be received in good order at least five business days prior to the first 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 calendar day of each month. |
12
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 calendar 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 844-700-1479. |
Q: |
What is the per share purchase price? |
A: |
Common Shares will be sold at the then-current NAV per share, as described above. |
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.” |
13
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 (net of applicable withholding taxes) 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 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, Mississippi, 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, SS&C GIDS Inc. (“SS&C”), at HPS Corporate Lending Fund, c/o SS&C GIDS Inc., PO Box 219025, Kansas City, MO 64121-9025. |
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
14
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 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 or suspend 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 15
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 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 Investment 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 Investment 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 Investment 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 |
16
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 “Investment 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; |
| • | 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. 17
| 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 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 18
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 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.
19
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 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 |
20
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. |
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 $9,590,000,000 in Common Shares as of March 1, 2025. 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. |
21
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 other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement; provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the North American Securities Administrators Association’s Omnibus Guidelines Statement of Policy, as amended from time to time (the “Omnibus Guidelines”)) of the Administrator. See “Investment Advisory Agreement and Administration Agreement—Administration Agreement.” |
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, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV, and (c) for Class F shares, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV, in each case payable on a monthly basis in arrears as of the first calendar day of the month. 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
22
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 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 and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement; provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator).
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 |
23
other hand. For example, the incentive fee creates an incentive for the Adviser to recommend more speculative investments for the Fund than it would otherwise in the absence of such performance-based compensation. |
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.
• |
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
24
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 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).
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.
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 SS&C GIDS Inc., 430 W 7th Street, Suite 219025, Kansas City, MO 64105-1407. |
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 ( assets attributable to our Common Shares (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 $10.5 billion for the fiscal year ending December 31, 2025 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. |
26
| • | 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 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 “Investment Advisory Agreement and Administration Agreement” for more information concerning the incentive fees.
(6) |
Subject to 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, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV, and (c) for Class F shares, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV, in each case payable on a monthly basis in arrears as of the first calendar day of the month. 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, 2025, and that the average annual cost of borrowings, including the amortization of cost associated with obtaining borrowings, unused commitment fees and original issue discounts on the amount borrowed is 6.94%. Our ability to incur leverage depends, in large |
27
| 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 “Investment 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, 2025 and estimated average net assets of $10.5 billion for the fiscal year ending December 31, 2025. |
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 shareholder servicing and/or distribution 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 “Investment 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, 2024, 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. 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, 2024, December 31, 2023 and December 31, 2022, which may be obtained from www.sec.gov
The following are the financial highlights for the year ended December 31, 2024:
Year Ended December 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) |
2.77 | 2.72 | 2.66 | 2.52 | ||||||||||||
Net unrealized and realized gain (loss) (2) |
0.34 | 0.33 | 0.32 | 0.37 | ||||||||||||
Net increase (decrease) in net assets resulting from operations |
3.11 | 3.05 | 2.98 | 2.89 | ||||||||||||
Distributions from net investment income (3) |
(2.58 | ) | (2.52 | ) | (2.45 | ) | (2.36 | ) | ||||||||
Distributions from net realized gains (3) |
— | — | — | — | ||||||||||||
Net increase (decrease) in net assets from shareholders’ distributions |
(2.58 | ) | (2.52 | ) | (2.45 | ) | (2.36 | ) | ||||||||
Early repurchase deduction fees (5) |
— | — | — | — | ||||||||||||
Total increase (decrease) in net assets |
0.53 | 0.53 | 0.53 | 0.53 | ||||||||||||
Net asset value, end of period |
$ | 25.59 | $ | 25.59 | $ | 25.59 | $ | 25.59 | ||||||||
Shares outstanding, end of period |
106,227,563 | 43,120,380 | 176,150,014 | 15,868,679 | ||||||||||||
Total return based on NAV (4) |
12.95 | % | 12.67 | % | 12.39 | % | 12.01 | % | ||||||||
Ratios: |
||||||||||||||||
Ratio of net expenses to average net assets |
8.78 | % | 9.05 | % | 9.31 | % | 9.54 | % | ||||||||
Ratio of net investment income to average net assets |
10.82 | % | 10.62 | % | 10.39 | % | 9.83 | % | ||||||||
Portfolio turnover rate |
21.21 | % | 21.21 | % | 21.21 | % | 21.21 | % | ||||||||
Supplemental Data: |
||||||||||||||||
Net assets, end of period |
$ | 2,717,857 | $ | 1,103,246 | $ | 4,506,823 | $ | 406,006 | ||||||||
Asset coverage ratio |
216.3 | % | 216.3 | % | 216.3 | % | 216.3 | % | ||||||||
| (1) | The per share data was derived by using the weighted average shares outstanding during the period. |
30
| (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. Net Assets |
| (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. |
| (5) | The per share amount rounds to less than $0.01 per share. |
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. |
31
| (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 |
| (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. |
| (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), shareholder servicing and/or distribution 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. |
32
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 the Fund’s 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 December 31, 2024, we had approximately $4,785.7 million of outstanding borrowings under our credit facilities (collectively, the “Credit Facilities”) $2,000.0 million in aggregate principal amount outstanding of unsecured notes comprised of $170 million in aggregate principal amount of our Series A Senior Notes, Tranche A (the “November 2025 Notes”), $155 million in aggregate principal amount of our Series A Senior Notes, Tranche B (the “November 2027 Notes”), $276 million in aggregate principal amount of our Series A
Senior Notes, Tranche A (the “March 2026 Notes”), $124 million in aggregate principal amount of our Series A Senior Notes, Tranche B (the “March 2028 Notes”), $75 million in aggregate principal amount of our 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 our Series 2023-B
Senior Notes, Tranche B (the “September 2028 Notes”), $550 million in aggregate principal amount of our 6.75% notes due in 2029 (the “January 2029 Notes”), and $400 million in aggregate principal amount of our 6.25% notes due in 2029 (the “September 2029” notes, together with the November 2025 Notes, the November 2027 Notes, the March 2026 Notes, the March 2028 Notes, the September 2027 Notes, the September 2028 Notes and the January 2029 notes, the “Unsecured Notes”), $323 million in aggregate principal amount outstanding of the 2023 CLO Secured Notes, and $400 million in aggregate principal amount of the 2024 CLO Secured Notes. The weighted average stated interest rate on our principal amount of outstanding indebtedness as of December 31, 2024 was 6.66% (excluding deferred financing costs, deferred issuance costs, original issue discounts 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.
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 December 31, 2024. As a result, it has not been updated to take into account any changes in assets or leverage since December 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 December 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 6.66% by the approximately $7,508.7 million of principal debt outstanding) is subtracted to determine the return available to shareholders. The return available to shareholders is then divided by the total value of our net assets as of December 31, 2024 to determine the “Corresponding Return to Common Shareholders.” |
Based on our outstanding indebtedness of $7,508.7 million as of December 31, 2024 and the effective weighted average annual interest rate of 6.66% as of that date (excluding deferred financing costs, deferred issuance costs, original issue discounts and unused fees), our investment portfolio would have been required to experience an annual return of at least 3.01% 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.
Fund’s cash proceeds are required to meet principal payments, the shareholders may be allocated income (and therefore incur tax liability) in excess of cash available for distribution; (iv) in certain circumstances the Fund 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 Investment 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, misconduct, negligence 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, or by reason of the Adviser’s violation of the fiduciary duty owed by the Adviser to the Fund and its shareholders. 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 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 Adviser and Administrator will have an incentive to contract certain services to third parties due to a number of factors, including because the fees, costs and expenses of such service providers will be borne by the Fund as Fund expenses and will reduce the Adviser’s and/or Administrator’s internal overhead and compensation and benefits costs for employees who might otherwise perform such services. Moreover, the involvement of service providers may present a number of risks due to, among other factors, the Adviser’s and/or Administrator’s reduced control over the functions that are contracted. There can be no assurances that the Adviser and/or Administrator, through conducting oversight of the service providers, will be able to identify, prevent or mitigate the risks of engaging service providers. The Fund may suffer adverse consequences from actions, errors or failures to act by such third parties, and will have obligations, including indemnity obligations, toward and limited recourse against them as discussed above.
In certain circumstances, service providers may
sub-delegate
particular duties to additional third-party service providers, and there is no guarantee that the Adviser and/or Administrator will have consent rights to such sub-delegation
in all cases. Such sub-delegation
of services by service providers exacerbates the risks described above as none of the Adviser, the Administrator or the Fund would be in contractual privity with sub-delegates.
Further, the Fund’s investors, the Adviser, the Administrator and the Fund will have to rely on the service providers for appropriate selection and oversight of such sub-delegates.
Contracting certain services may not occur uniformly for the Fund and other clients of the Adviser and/or its affiliates, and the expenses that may be borne by such vehicles and accounts vary. Accordingly, certain costs may be incurred by (or allocated to) the Fund through the use of third-party service providers that are not incurred by (or allocated to) certain other clients of the Adviser and/or its affiliates for similar services.
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.
discretion, determine that it is advisable to disclose certain information about the Fund and the shareholders, including investments held directly or indirectly by the Fund and the names and level of beneficial ownership of certain of the shareholders, to regulatory or taxing authorities of certain jurisdictions, which have or assert jurisdiction over the disclosing party or in which the Fund directly or indirectly invests. Disclosure of confidential information under such circumstances will not be regarded as a breach of any duty of confidentiality and, in certain circumstances, the Fund, the Adviser or any of their affiliates, Service Providers or agents, may be prohibited from disclosing to any shareholder that any such disclosure has been made.
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. 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.
respective professionals, power outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes. Such damage or interruptions to information technology systems may cause losses to a shareholder by interfering with the processing of investor transactions, affecting the Fund’s ability to calculate net asset value or impeding or sabotaging the investment process. The Fund may also incur substantial costs as the result of a cybersecurity breach, including those associated with forensic analysis of the origin and scope of the breach, increased and upgraded cybersecurity, identity theft, unauthorized use of proprietary information, litigation, adverse investor reaction, the dissemination of confidential and proprietary information and reputational damage. Any such breach could expose the Fund and the Adviser to civil liability as well as regulatory inquiry and/or action (and the Adviser may be indemnified by the Fund in connection with any such liability, inquiry or action). In addition, any such breach could cause substantial withdrawals from the Fund. Shareholders could also be exposed to losses resulting from unauthorized use of their personal information.
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.
Further, the potential utilization of artificial intelligence, machine learning technology, data analytics or similar technology (collectively, “AI Tools”) as described further below, may expose investors to enhanced cybersecurity and data privacy risks, including risks that cannot yet be predicted given the rapid development of such technologies and uncertain legal and regulatory climate. 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.
The Fund is Subject to Risks Associated with Use of Artificial Intelligence and Machine Learning Technology
may utilize AI Tools in connection with their business activities, including management and review of the Fund and the Fund’s investment portfolio. There are significant risks involved in utilizing AI Tools and no assurance can be provided that the usage of such AI Tools will enhance the Fund’s portfolio or assist the Fund or its investments in being more efficient or profitable. For example, certain AI Tools may utilize historical market or sector data in their analytics. To the extent that such historical data are not indicative of the current or future conditions in the applicable market or sector, or the AI Tools fail to filter biases in the underlying data or collection methods, the usage of AI Tools may lead the Adviser and/or its affiliates, and their service providers, to make determinations on behalf of the Fund, including potential investment decisions, that have an adverse effect on the Fund’s investments. Similarly, AI Tools are generally highly reliant on the collection and analysis of large amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that AI Tools utilize to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error – potentially materially so – and could otherwise be inadequate or flawed, which would be likely to degrade the effectiveness of AI Tools. While AI Tools may improve the efficiency of data analytics and reduce investment costs, there is no assurance that returns from investments utilizing AI Tools will be higher than they would be if investment decisions were made solely using human analytics or that the expenses related to AI Tools directly or indirectly borne by the Fund will outweigh such reduced investment costs or outweigh such risks. AI Tools may also be subject to data herding and interconnectedness (i.e., multiple market participants utilizing the same data), which may adversely impact the markets in which the Fund invests, and in turn, the Fund’s investments. In addition, the Adviser, its affiliates, the Fund, and the Board (as applicable) will not be in a position to control the manner in which service providers utilize AI Tools. The foregoing risks with respect to AI Tools may similarly apply with respect to the Fund’s portfolio companies. The Adviser, its affiliates, the Fund, and the Board (as applicable) will not be in a position to control the manner in which the portfolio companies or their third-party service providers utilize AI Tools. Further, AI Tools and their applications, including in the private investment and financial sectors, continue to develop rapidly, and it is impossible to predict the future risks that may arise from such developments.
In addition, the use of AI Tools may enhance cybersecurity risks and operational and technological risks. The technologies underlying AI Tools and their use cases are rapidly developing, and remain subject to existing laws, including privacy, consumer protection and federal equal opportunity laws. As a result, it is not possible to predict all of the legal, operational or technological risks related to the use of AI Tools. Moreover, AI Tools are the subject of evolving review by various regulatory agencies, including the SEC and the U.S. Federal Trade Commission, and changes in the regulation of the use of AI Tools may adversely affect the ability of the Adviser, its affiliates, and their respective service providers to use AI Tools to manage the Fund and its investments.
The Fund is Subject to Risks Associated with Technological Innovation.
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 may not be given an opportunity (or 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. In certain cases, the Adviser or its affiliates may have an ownership interest in one or more sourcing partners, in order to incentivize such sourcing partners to direct the deal flow to the Adviser and/or its affiliates or otherwise, and therefore may indirectly benefit from the compensation received from the Fund by such sourcing partners. The Fund’s share of such fees will not offset or otherwise reduce the management fees payable by the Fund’s investors. In all circumstances, fees received by the Adviser will be consistent with applicable laws. The existence of any 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. Investors should be aware that sourcing, operating and joint venture partners are not expected to owe any fiduciary duties to the Fund or its investors.
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 “
and
” above.
–
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
.
The Fund May Need to Raise Additional Capital
.
The Fund is Subject to Counterparty Risks
.
46
the Fund. The Fund may have a limited number of potential counterparties for certain of its investments, which may significantly impair the Fund’s ability to reduce its exposure to counterparty risk. In addition, difficulty reaching an agreement with any single counterparty could limit or eliminate the Fund’s ability to execute such investments altogether. Because certain purchases, sales, hedging, financing arrangements and other instruments in which the Fund will engage are not traded on an exchange but are instead traded between counterparties based on contractual relationships, the Fund is subject to the risk that a counterparty will not perform its obligations under the related contracts. Although the Fund intends to pursue its remedies under any such contracts, there can be no assurance that a counterparty will not default and that the Fund will not sustain a loss on a transaction as a result.
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
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 taxable loss on the sale of Common Shares. The Board Has the Discretion to Not Repurchase Common Shares and to Suspend the Share Repurchase Program.
time in its discretion. You may not be able to sell your shares at all in the event our Board amends or suspends the share repurchase program, absent a liquidity event, and we currently do not intend to undertake a liquidity event, and we are not obligated by our Declaration of Trust or otherwise to effect a liquidity event at any time. We will notify you of such developments in our quarterly reports or other filings. If less than the full amount of Common Shares requested to be repurchased in any given repurchase offer are repurchased, funds will be allocated pro rata based on the total number of Common Shares being repurchased without regard to class. The share repurchase program has many limitations and should not be relied upon as a method to sell shares promptly or at a desired price.
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.
The Fund Faces Risks Associated With the Deployment of Capital.
In the event the Fund is 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 the Fund’s 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 the Fund fails to timely invest the net proceeds of sales of Common Shares or does not deploy sufficient capital to meet its targeted leverage, its results of operations and financial condition may be adversely affected.
Transactions Denominated in Foreign Currencies Subject Us to Foreign Currency Risks.
assets and income may decrease due to factors outside of our control, which can have a negative effect on our net asset value and cash available for distribution. Any such changes in foreign currency exchange rates may impact the measurement of such assets or liabilities for purposes of maintaining RIC tax treatment or the requirements under the 1940 Act. We may seek to hedge against currency exchange rate fluctuations by borrowing in foreign currencies or by using financial instruments such as futures, options, swaps and forward contracts, subject to the requirements of the 1940 Act, but there is no guarantee such efforts will be successful and such hedging strategies create additional costs.
The Fund’s 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 the conflict in the Middle East, 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 will be available to us in the future, if at all, may 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.
The Fund is 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.
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.
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. Where the Fund receives payment in kind or “PIK” interest with respect to an investment, over time such investment’s principal balance will increase, making such investment more highly leveraged.
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.
–
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
Topic 820”). This means that the Fund’s portfolio valuations will be based on unobservable inputs and the Fund’s assumptions about how market participants would price the asset or liability in question. The Fund expects that inputs into the determination of fair value of portfolio investments will require significant management judgment or estimation. Even if observable market data are available, such information may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The
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.
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.
realize its investment objective by sale or other disposition at attractive prices or will otherwise be unable to complete any exit strategy. Accordingly, the Adviser is unable to predict with confidence what, if any, exit strategies will ultimately be available for any given asset. Exit strategies which appear to be viable when an investment is initiated may be precluded by the time the investment is ready to be realized due to economic, legal or other reasons, and the Fund may not be able to sell assets when the Fund desires to do so or to realize what the Adviser perceives to be the fair value of its assets in the event of a sale. Further, although the Adviser may at the time of making investments expect a certain portion of such investments to be refinanced or repaid before maturity, depending on economic conditions, interest rates and other variables, borrowers may not finance or repay loans early. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. In addition, in times of extreme market disruption, there may be no market at all for one or more asset classes, potentially resulting in the inability of the Fund to dispose of its assets for an indefinite period of time. Even if investments are successful, they are unlikely to produce a realized return to shareholders for a period of years. Furthermore, a portion of interest on investments is paid in kind rather than in cash to the Fund.
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.
From time to time, the Fund may invest in unitranche loans with
“first-out”
and “last-out”
payment streams (either set up at closing or arranged after closing) (each, a “Retranched Loan”). Each Retranched Loan is generally expected to be documented under a single credit agreement with a single set of security agreements. Retranched Loans effectively create senior and junior loans with so called ‘first out lenders’ (“First Out Lenders”) receiving payments in priority to ‘last out lenders’ (“Last Out Lenders”) under certain circumstances. Interest is typically allocated in a manner which provides the First Out Lenders with an effective lower interest rate than the Last Out Lenders as a result of the lower risk profile in connection with being ‘first out’. In such arrangements, principal is typically allocated pro rata as between the First Out Lenders and Last Out Lenders until the occurrence of a trigger event, following which First Out Lenders will rank senior in priority to Last Out Lenders in terms of both interest and principal. In such an event, if the Last Out Lenders are not receiving cash interest payments, they will typically receive payment in kind or “PIK” interest (i.e., an increase to the principal balance of their loans). As a result, if the Fund acquires positions as Last Out Lenders, this would be more akin to that of second lien lenders and therefore the Fund would not expect to recover any of its outstanding principal or interest until the First Out Lenders have been repaid in full. Further, any veto rights with respect to voting and/or enforcement as between the First Out Lenders and the Last Out Lenders may also be negotiated for each transaction. As a result, even where the Fund acquires a majority stake in Retranched Loans, there can be no assurance that the Fund, as a Last Out Lender, will be in a position to direct enforcement of the security granted in respect of the Retranched Loans or be able to prevent certain decisions being taken by the First Out Lenders that may be adverse to the interests of the Fund. An agreement among lenders may also have restrictions on assignment, including requiring the Fund (as a lender) to give a right of first refusal to other lenders in the same Retranched Loan. Consequently, the Fund may not have the same liquidity in Retranched Loans as it would in a stand-alone credit facility. 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 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 Invests in Loans with Limited Amortization Requirements
.
The Fund is Subject to Risks Relating to Potential Early Redemption of Some Investments.
The Fund is Subject to Risks Relating to Licensing Requirements
.
The Fund is Subject to Risks Relating to Minority Investments; Joint Ventures;
Co-Investment
or Sourcing Programs.
co-invest
with other parties including through partnerships, joint ventures, sourcing and syndication programs. In certain these cases, the Adviser may share management fees, incentive fees and/or other forms of compensation with such parties and the Fund may pay, and is expected to pay, fees or other compensation to sourcing partners or other third parties to access deal opportunities, as described in “ –The Fund is Subject to Risks Associated with Sourcing, Operating or Joint Venture Partners
voting determinations and may be required to vote in a manner it would not otherwise have chosen to vote absent such agreement. It is expected that any such voting requirements would also be applicable to any future assignee of the loan or other debt instrument, which could negatively affect the Fund’s ability to sell or otherwise transfer the investment.
Where a joint venture, sourcing or
co-investing
partner or third party has controlling or blocking rights or decision-making power with respect to a joint venture matter or an underlying investment, 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 Fund’s ability to act quickly. Cooperation among joint venture partners, sourcing partners or operations of a joint venture may be delegated to the joint venture partner and its employees. In such circumstances, the Adviser may not have, or may not have timely, visibility to issues that are not raised by the joint venture partner to the governing body of the joint venture, which issues may adversely impact the Fund’s investments.
co-investors
on existing and future business decisions will be an important factor for the sound operation and financial success of any joint venture, sourcing or other business relationships in which the Fund is involved. In particular, a joint venture or sourcing 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. Disputes with sourcing partners may limit the Fund’s investment opportunities in the future. In addition, the Fund may in certain circumstances be liable for actions of, or be obligated to indemnify, its joint venture or sourcing partners. In certain circumstances, the day-to-day
In certain cases, conflicts of interest may arise between the Fund and a joint venture,
co-investment
or sourcing partner, for example, because such partner has invested in a different level of the issuer’s capital structure, it has different investment goals or timelines, because its management team may have an incentive plan which incentivizes risk-taking, or because it has a different or more expansive commercial relationship with the underlying portfolio company or asset owner, or in the case of a joint venture partner, because the partner also acts as lender to the joint venture. There can be no assurance that the partner with divergent interests from the Fund will cause the joint venture or other sourcing or co-investment
programs to be managed in a manner that is favorable to the Fund. Those conflicts of interest may become more acute where the Fund has agreed to limit its voting rights with respect to investments sourced by such partner. 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
.
these risks, the possibility of successful claims cannot be precluded, nor can there be any assurance as to whether laws, rules, regulations and court decisions will be expanded or otherwise applied in a manner that is adverse to portfolio companies and the Fund and the shareholders.
The Fund is Subject to Social Media Risk.
mis-information
dissemination. Many social media platforms immediately publish the content their subscribers and participants post often without filters or checks on accuracy of the content posted. Information posted on such platforms at any time may be adverse to the interests of the Adviser, its affiliates, the Fund or a portfolio company. The dissemination of negative or inaccurate information related to the Adviser, its affiliates, the Fund or a portfolio company via social media could harm their business, reputation, financial condition, and results of operations, which could adversely affect the Fund’s investments and, due to reputational considerations, may influence the Adviser’s and/or its affiliate’s decision as to whether to remain invested in such investments. 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.
In response to market events, the SEC and other national regulators have imposed, and may continue to impose, restrictions on and reporting obligations with respect to short selling. Uncertainty surrounding the confidential nature of the required disclosures of the Fund’s short sales could discourage short selling by the Fund in circumstances where HPS believes that the public disclosure of such short sales may be adverse to the Fund’s interests. In addition, limitations on the short selling of securities could interfere with the ability of the Fund to execute certain aspects of its investment programs, including its ability to hedge certain exposures and execute transactions to implement its risk management guidelines, and any such limitations may adversely affect the performance of the Fund.
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
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.
acceleration of the subordinated debt or the exercise by holders of subordinated debt of other rights they may have as creditors. Accordingly, the Fund may not be able to take the steps necessary or sufficient to protect its investments in a timely manner or at all. In addition, subordinated loans may not always be protected by financial covenants or limitations upon additional indebtedness, may have limited liquidity and may not be rated by a 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.
and liquidation proceedings. Although the terms of such financing may result in significant financial returns to the Fund, they involve a substantial degree of risk. Issuers of lower-rated securities generally are more vulnerable to real or perceived economic changes, political changes or adverse industry developments. If an issuer’s financial condition deteriorates, accurate financial and business information may be limited or unavailable. In 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.
such investments may produce different investment results for the Fund and the Affiliated Group Accounts. The Adviser will seek to manage the Fund, and HPS and the Adviser will seek to manage the Affiliated Group Accounts in accordance with their respective investment objectives and guidelines; however, the Affiliated Group including the Distressed Investment Team, may give advice and take action with respect to any current or 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.
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. It is possible that an interest in any such CLO held by us may be considered a “nonqualifying” portfolio investment for purposes of the 1940 Act. 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. Losing our RIC status could subject us to corporate-level income tax.
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.
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.
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.
coverage, as defined in the 1940 Act, would at least equal 150% (equivalent to $2 of debt outstanding for each $1 of equity) immediately after each such loan. The risks in lending portfolio securities, as with other extensions of 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 Investment 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
75
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.
The Fund is Subject to Risks Relating to
Portfolio Company Reputation.
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.
assets
” unless, at the time of and after giving effect to such acquisition, at least 70% of the Fund’s total assets are 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. 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.
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 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 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.
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.
Changes to the Dodd-Frank Act May Adversely Impact the Fund.
CFIUS
& National Security/Investment Clearance Considerations.
non-U.S.
national security/investment clearance regulators depending on the beneficial ownership and control of interests in the entity purchasing such business, including with respect to CFIUS, where a co-investor
or other partner is a “foreign person” under applicable regulations. Certain of the Fund’s investors are expected to be “foreign persons,” and in the aggregate, may comprise a substantial portion of the Fund’s subscriptions, which may increase the risks of an investment being subject to CFIUS’ jurisdiction and the likelihood of CFIUS imposing restrictions on an investment. CFIUS agency practice is evolving rapidly, and CFIUS exercises substantial discretion in deciding how to interpret, apply and enforce the implementation of regulations. As a result, there can be no guarantee that investments by the Fund will not be reviewable by CFIUS and/or non-U.S.
national security/investment clearance regulators or that CFIUS and/or non-U.S.
national security/investment clearance regulators will not seek to evaluate the Fund’s investment activities. In the event that CFIUS or another regulator reviews – or would be expected to review – one or more of the proposed or existing investments of the Fund, there can be no assurances that the Adviser and/or its affiliates will be able to maintain, or proceed with, such transactions on terms acceptable to Adviser and/or its affiliates, or that such investment would be allocated to, or consummated by, the Fund rather than to one or more clients of the Adviser and/or its affiliates. CFIUS or another regulator may seek to impose limitations on or prohibit all or a portion of the transaction. Such limitations or restrictions may prevent the Fund from (i) maintaining or pursuing investments, (ii) disposing of investments, which could adversely affect the performance of the Fund and/or (iii) disclosing all information regarding certain transactions to all the Fund’s investors. Beginning on January 2, 2025, the U.S. Department of the Treasury’s Outbound Investment Security Program went into effect, which prohibits or requires notification of certain types of outbound investments by U.S. persons into certain entities located in or subject to the jurisdiction of China, Hong Kong, and Macau (as well as certain entities subject to Chinese ownership or control) that are engaged in the development of certain national security technologies and products (presently, certain semiconductors and microelectronics, quantum information technologies, and artificial intelligence technologies), as well as any other countries that are or may be designated under the program’s regulations. Together, these regulations may affect the Fund’s business and
operations. In the event that CFIUS, the U.S. Department of Treasury administering the Outbound Investment Security Program, or a
non-U.S.
national security/investment clearance regulator reviews one or more of the proposed or existing investments of the Fund, there can be no assurances that the Fund will be able to maintain, or proceed with, such transactions on terms acceptable to the Adviser and/or its affiliates. Such regulator may seek to impose limitations on or prohibit all or a portion of the transaction. Such limitations or restrictions may prevent the Fund from (i) maintaining or pursuing investments in certain jurisdictions and/or (ii) disposing of investments already made in such jurisdictions, or may increase the cost and time associated with such activities, which could adversely affect the performance of our investment vehicles and in turn adversely affect our profitability. 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, including any changes (or uncertainty around future changes) to
international
trade agreements, tariffs and related regulations may adversely affect the business operations and performance of the Fund and its portfolio companies. These governmental policies could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact our business. 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.
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 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
Risks Related to the HPS/BlackRock Transaction
The HPS/BlackRock Transaction could Create a Conflict of Interest in the Allocation of the Adviser
’
s Time and Focus.
If the HPS/BlackRock Transaction occurs, HPS and thus, the Adviser, will be owned by BlackRock. There is no guarantee that HPS, or the Adviser, will be able to successfully transition, maintain and continue to build its business after the HPS/BlackRock Transaction or that HPS and BlackRock will be able to successfully optimize their joint business operations. In particular, as with any change in ownership, HPS and the Adviser will be subject to substantial risks, including with respect to the long-term retention of key employees, the successful consolidation of corporate, technological and administrative infrastructures and the retention of existing business and operational relationships. It is possible that employees currently involved in the operation of HPS and the Adviser may not continue with HPS and/or the Adviser after the HPS/BlackRock Transaction and the operations
and business relationships of HPS and the Adviser may be disrupted following the HPS/BlackRock Transaction. The integration of HPS and the Adviser into BlackRock will be a complex, costly and time-consuming process and if HPS or the Adviser experiences difficulties in this process, any anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on HPS or the Adviser for an undetermined period. In addition, there can be no assurances that HPS and BlackRock will realize the potential operating efficiencies, synergies and other benefits currently anticipated from the HPS/BlackRock Transaction, and a failure to obtain such synergies may adversely affect the operations of HPS and the Adviser. Some of the challenges presented by the integration of the businesses are outside of HPS’s or the Adviser’s control, and any of them could result in delays, increased costs and diversion of management’s time and energy, which could materially affect HPS’s or the Adviser’s financial position, results of operations, and cash flows. In the event that the HPS/BlackRock Transaction has an adverse impact on HPS or the Adviser, including for the foregoing reasons, the operations of the Fund may be adversely affected.
BlackRock is one of the largest and most diverse financial institutions in the world. As a result, although not expected, it may have other business units that compete with HPS or seek investment opportunities that are appropriate for the Fund, and it has policies and procedures that may limit or otherwise impact the operations of HPS, the Adviser and/or the Fund. Further, certain issuers may prefer to work with a smaller or independent sponsor, which may adversely affect the Adviser’s ability to source new investment opportunities for the
Fund
. 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.
83
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 $9.0 million of organizational and offering expenses (excluding the shareholder servicing and/or distribution fee) in connection with the offering, or approximately 0.06% 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 588,004,704 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 $25.51 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)
|
$ |
2,243,000 |
0.06 |
% |
||||
Net Proceeds Available for Investment |
$ |
3,747,757,000 |
99.94 |
% |
||||
84
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 |
100.00 |
% |
||||
Upfront Sales Load (2)
|
$ |
— |
0 |
% |
||||
Organization and Offering Expenses (3)
|
$ |
2,243,000 |
0.06 |
% |
||||
Net Proceeds Available for Investment |
$ |
3,747,757,000 |
99.94 |
% |
||||
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 |
100.00 |
% |
||||
Upfront Sales Load (2)
|
$ |
— |
0 |
% |
||||
Organization and Offering Expenses (3)
|
$ |
2,243,000 |
0.06 |
% |
||||
Net Proceeds Available for Investment |
$ |
3,747,757,000 |
99.94 |
% |
||||
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 |
100.00 |
% |
||||
Upfront Sales Load (2)
|
$ |
— |
0 |
% |
||||
Organization and Offering Expenses (3)
|
$ |
2,243,000 |
0.06 |
% |
||||
Net Proceeds Available for Investment |
$ |
3,747,757,000 |
99.94 |
% |
||||
(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, (b) for Class D shares, a shareholder servicing fee equal to 0.25% per annum of the aggregate NAV, and (c) for Class F shares only, a shareholder servicing and/or distribution fee equal to 0.50% per annum of the aggregate NAV, in each case, payable on a monthly basis in arrears as of the first calendar day of the month. 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 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 |
85
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. 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. |
86
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 Investment 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; provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator.
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 generally to 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 an 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
non-investment
grade broadly syndicated loans, leveraged loans, secured and unsecured corporate bonds, and securitized credit. 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 87
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.
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 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 Investment Advisory Agreement; |
88
• |
our allocable portion of compensation (including salaries, bonuses, and benefits), overhead 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; provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator; |
• |
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 Agreement with the Adviser. For additional information see “” to the consolidated financial statements included elsewhere in this prospectus.
Note 3. Fees, Expenses, Agreements and Related Party Transactions
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 year ended December 31, |
||||||||||||
2024 |
2023 |
2022 |
||||||||||
Total investments, beginning of period |
$ |
9,203,801 |
$ |
5,860,186 |
$ |
— |
||||||
New investments purchased |
9,199,117 |
4,001,591 |
6,109,226 |
|||||||||
Payment-in-kind |
72,365 |
32,220 |
9,168 |
|||||||||
Net accretion of discount on investments |
93,070 |
39,470 |
11,163 |
|||||||||
Net realized gain (loss) on investments |
(12,744 |
) |
(17,633 |
) |
(2,467 |
) |
||||||
Investments sold or repaid |
(2,484,531 |
) |
(712,033 |
) |
(266,904 |
) |
||||||
Total investments, end of period |
$ |
16,071,078 |
$ |
9,203,801 |
$ |
5,860,186 |
||||||
89
The following table presents certain selected information regarding our investment portfolio:
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Weighted average yield on debt and income producing investments, at amortized cost (1)
|
10.4 |
% |
12.2 |
% |
10.9 |
% |
||||||
Weighted average yield on debt and income producing investments, at fair value (1)
|
10.4 |
% |
12.1 |
% |
11.1 |
% |
||||||
Weighted average yield on total portfolio, at amortized cost (2)
|
10.3 |
% |
12.0 |
% |
10.9 |
% |
||||||
Weighted average yield on total portfolio, at fair value (2)
|
10.3 |
% |
11.9 |
% |
11.1 |
% |
||||||
Number of portfolio companies |
315 |
239 |
195 |
|||||||||
Weighted average EBITDA (3)
|
$ |
215 |
$ |
193 |
$ |
178 |
||||||
Weighted average loan-to-value (4)
|
40 |
% |
39 |
% |
41 |
% |
||||||
Percentage of performing debt investments bearing a floating rate, at fair value |
99.3 |
% |
98.6 |
% |
99.1 |
% |
||||||
Percentage of performing debt investments bearing a fixed rate, at fair value |
0.7 |
% |
1.4 |
% |
0.9 |
% |
||||||
(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. Excludes investments on non-accrual status. 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. Excludes investments on non-accrual status. Figures are derived from the most recent financial statements from portfolio companies. |
90
Our investments consisted of the following:
December 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 |
$ | 15,491,454 | $ | 15,529,180 | 96.27 | % | $ | 8,919,865 | $ | 9,002,695 | 96.93 | % | ||||||||||||
Second lien debt |
35,984 | 31,340 | 0.19 | 64,782 | 67,087 | 0.72 | ||||||||||||||||||
Other secured debt |
68,340 | 68,501 | 0.42 | — | — | — | ||||||||||||||||||
Unsecured debt |
45,923 | 46,022 | 0.29 | 28,901 | 29,101 | 0.31 | ||||||||||||||||||
Structured finance investments |
72,893 | 75,392 | 0.47 | 28,427 | 29,868 | 0.32 | ||||||||||||||||||
Investments in joint ventures |
297,747 | 320,350 | 1.99 | 125,513 | 124,003 | 1.33 | ||||||||||||||||||
Equity investments |
58,737 | 60,471 | 0.37 | 36,313 | 36,656 | 0.39 | ||||||||||||||||||
Total |
$ | 16,071,078 | $ | 16,131,256 | 100.00 | % | $ | 9,203,801 | $ | 9,289,410 | 100.00 | % | ||||||||||||
As of December 31, 2024 and 2023, the Fund had certain investments in eight and three portfolio companies on
non-accrual
status, respectively. The following table shows the fair value of our performing debt and other income producing securities, and non-accrual
investments as of December 31, 2024 and 2023: December 31, 2024 |
December 31, 2023 |
|||||||||||||||
Fair Value |
Percentage |
Fair Value |
Percentage |
|||||||||||||
Performing debt and income producing investments (1)
|
$ | 15,671,885 | 99.30 | % | $ | 9,118,309 | 99.67 | % | ||||||||
Non-accrual
(2)
|
110,346 | 0.70 | 30,368 | 0.33 | ||||||||||||
Total |
$ | 15,782,231 | 100.00 | % | 9,148,677 | 100.00 | % | |||||||||
| (1) | Excludes investments in joint ventures. |
| (2) | Investments on non-accrual represented 1.00% and 0.40% of amortized cost of total debt and income producing investments as of December 31, 2024 and 2023, respectively. |
The table below describes investments by industry composition based on fair value:
December 31, 2024 |
December 31, 2023 |
|||||||
Aerospace and Defense |
3.47 | % | 5.12 | % | ||||
Alternative Energy |
0.15 | 0.18 | ||||||
Asset Based Lending and Fund Finance |
0.33 | 0.23 | ||||||
Automobiles and Parts |
0.53 | 1.22 | ||||||
Chemicals |
0.11 | 0.16 | ||||||
Construction and Materials |
1.25 | 0.62 | ||||||
Consumer Services |
4.41 | 6.76 | ||||||
Electricity |
0.72 | 0.90 | ||||||
Electronic and Electrical Equipment |
0.69 | 0.01 | ||||||
Finance and Credit Services |
0.40 | 0.64 | ||||||
Food Producers |
1.11 | 1.64 | ||||||
Gas, Water and Multi-utilities |
0.27 | 0.47 | ||||||
General Industrials |
2.34 | 4.36 | ||||||
Health Care Providers |
10.98 | 10.36 | ||||||
Household Goods and Home Construction |
0.04 | 0.07 | ||||||
Industrial Engineering |
1.90 | 2.74 | ||||||
91
December 31, 2024 |
December 31, 2023 |
|||||||
Industrial Metals and Mining |
1.25 | 0.13 | ||||||
Industrial Support Services |
12.03 | 11.45 | ||||||
Industrial Transportation |
0.75 | 0.36 | ||||||
Investment Banking and Brokerage Services |
4.35 | 1.73 | ||||||
Investments in Joint Ventures |
1.99 | 1.33 | ||||||
Leisure Goods |
0.01 | 0.02 | ||||||
Life Insurance |
0.09 | 0.06 | ||||||
Media |
4.89 | 6.52 | ||||||
Medical Equipment and Services |
7.90 | 8.64 | ||||||
Non-life Insurance |
3.90 | 5.72 | ||||||
Oil, Gas and Coal |
0.46 | 0.48 | ||||||
Personal Care, Drug and Grocery Stores |
3.02 | 1.29 | ||||||
Personal Goods |
0.52 | 0.82 | ||||||
Pharmaceuticals and Biotechnology |
3.75 | 2.89 | ||||||
Real Estate Investment and Services |
0.54 | 0.43 | ||||||
Retailers |
1.90 | 1.22 | ||||||
Software and Computer Services |
20.14 | 15.86 | ||||||
Structured Finance |
0.47 | 0.32 | ||||||
Technology Hardware and Equipment |
0.36 | 0.76 | ||||||
Telecommunications Equipment |
0.50 | 0.16 | ||||||
Telecommunications Service Providers |
0.20 | 0.76 | ||||||
Travel and Leisure |
2.28 | 3.57 | ||||||
Total |
100.00 | % | 100.00 | % | ||||
The table below describes investments by geographic composition based on fair value:
December 31, 2024 |
December 31, 2023 |
|||||||
United States |
84.40 | % | 87.44 | % | ||||
United Kingdom |
6.02 | 4.78 | ||||||
Sweden |
2.44 | — | ||||||
Australia |
1.64 | 2.87 | ||||||
Spain |
1.28 | 0.36 | ||||||
France |
0.83 | 0.41 | ||||||
Italy |
0.79 | 1.48 | ||||||
Germany |
0.72 | 0.77 | ||||||
Austria |
0.56 | — | ||||||
Canada |
0.54 | 0.84 | ||||||
Taiwan |
0.29 | 0.43 | ||||||
Singapore |
0.20 | 0.35 | ||||||
Norway |
0.13 | 0.27 | ||||||
Belgium |
0.09 | — | ||||||
Luxembourg |
0.07 | — | ||||||
Total |
100.00 | % | 100.00 | % | ||||
92
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; |
| • | 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 December 31, 2024, the Fund and COM have committed to contribute up to $550.0 million and $78.6 million, respectively, of capital to ULTRA III. As of December 31, 2024, the Fund had contributed (net of returns of capital) $307.4 million and COM had contributed (net of returns of capital) $43.9 million of capital and $236.2 million and $33.7 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 December 31, 2024 and 2023:
December 31, 2024 |
December 31, 2023 |
|||||||
Total senior secured debt investments at fair value |
$ | 1,093,548 | $ | 361,715 | ||||
Number of portfolio companies |
7 | 2 | ||||||
Weighted average yield on debt investments, at amortized cost (1)
|
10.3 | % | 12.0 | % | ||||
Weighted average yield on debt investments, at fair value (1)
|
10.1 | % | 12.0 | % | ||||
Percentage of performing debt investments bearing a floating rate, at fair value |
100 | % | 100 | % | ||||
Percentage of performing 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 December 31, 2024 and 2023. |
93
Results of Operations
The following table represents our operating results:
Year Ended December 31, |
||||||||||||
2024 |
2023 |
2022 |
||||||||||
Total investment income |
$ | 1,425,945 | $ | 893,380 | $ | 278,518 | ||||||
Net expenses |
657,357 | 416,671 | 67,466 | |||||||||
Net investment income before excise tax |
768,588 | 476,709 | 211,052 | |||||||||
Excise tax expense |
5,120 | 1,531 | 824 | |||||||||
Net investment income after excise tax |
763,468 | 475,178 | 210,228 | |||||||||
Net realized gain (loss) |
20,240 | (34,710 | ) | 6,110 | ||||||||
Net change in unrealized appreciation (depreciation) |
55,216 | 214,133 | (157,391 | ) | ||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 838,924 | $ | 654,601 | $ | 58,947 | ||||||
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:
Year Ended December 31, |
||||||||||||
2024 |
2023 |
2022 |
||||||||||
Interest income |
$ | 1,316,851 | $ | 854,132 | $ | 267,488 | ||||||
Payment-in-kind |
71,589 | 35,821 | 9,584 | |||||||||
Dividend Income |
31,861 | 489 | — | |||||||||
Other income |
5,644 | 2,938 | 1,446 | |||||||||
Total investment income |
$ | 1,425,945 | $ | 893,380 | $ | 278,518 | ||||||
Total investment income increased to $1,425.9 million for the year ended December 31, 2024 from $893.4 million in the prior year primarily driven by our deployment of capital, the increased balance of our investments and by increased dividend income. Interest income increased as a result of an increase in our accruing debt investment’s funded par, which increased to $15,756.7 million as of December 31, 2024, from $9,248.2 million in the prior year. This was partially offset by a decline in SOFR rates during 2024 as compared to 2023. The increase in dividend income is primarily from ULTRA III, which was $27.8 million for the year ended December 31, 2024, as compared to zero for the prior year. The size of our investment portfolio at fair value was $16,131.3 million and our weighted average yield on debt and income producing securities at fair value was 10.4%.
For the years ended December 31, 2024 and 2023, PIK income represented 5.3% and 4.1% of total investment income, respectively. We expect that PIK income will vary based on the elections of certain borrowers.
94
Total investment income increased to $893.4 million for the year ended December 31, 2023 from $278.5 million in the prior year primarily driven by our deployment of capital, increased benchmark interest rates and the increased balance of our investments. The size of our investment portfolio at fair value was $9,289.4 million and our weighted average yield on debt and income producing securities at fair value was 12.1%.
Expenses
Expenses were as follows:
Year Ended December 31, |
||||||||||||
2024 |
2023 |
2022 |
||||||||||
Interest expense |
$ | 398,722 | $ | 257,847 | $ | 53,964 | ||||||
Management fees |
90,242 | 52,852 | 26,485 | |||||||||
Income based incentive fee |
113,862 | 70,466 | 23,211 | |||||||||
Capital gains incentive fee |
9,432 | 3,518 | — | |||||||||
Shareholder servicing and/or distribution fees |
||||||||||||
Class D |
2,386 | 1,403 | 631 | |||||||||
Class F |
19,735 | 13,137 | 6,642 | |||||||||
Class S |
2,012 | 23 | — | |||||||||
Professional fees |
4,016 | 4,945 | 2,312 | |||||||||
Board of Trustees’ fees |
598 | 600 | 502 | |||||||||
Administrative service expenses |
4,477 | 2,459 | 1,768 | |||||||||
Other general & administrative |
9,780 | 7,685 | 3,718 | |||||||||
Amortization of continuous offering costs |
2,095 | 1,736 | 2,059 | |||||||||
Excise tax expense |
5,120 | 1,531 | 824 | |||||||||
Total expenses (including excise tax expense) |
662,477 | 418,202 | 122,116 | |||||||||
Expense support |
— | — | (4,270 | ) | ||||||||
Recoupment of expense support |
— | — | 4,270 | |||||||||
Reimbursable expenses previously borne by Adviser |
— | — | 1,196 | |||||||||
Shareholder servicing and/or distribution fees waived |
— | — | (5,326 | ) | ||||||||
Management fees waived |
— | — | (26,485 | ) | ||||||||
Incentive fees waived |
— | — | (23,211 | ) | ||||||||
Net expenses (including excise tax expense) |
$ | 662,477 | $ | 418,202 | $ | 68,290 | ||||||
Interest Expense
Total interest expense (including unused fees, amortization of deferred financing costs, debt issuance costs and original issue discounts) increased to $398.7 million for the year ended December 31, 2024 from $257.8 million in the prior year primarily driven by an increase in the weighted average interest rate on our borrowings relative to the prior year and an increase in borrowings under the Credit Facilities, Unsecured Notes and debt securitization issuances. Our weighted average interest rate increased to 8.59% for the year ended December 31, 2024 from 8.24% in the prior year. The average principal debt outstanding increased to $4,643.2 million for the year ended December 31, 2024 from $3,131.0 million in the prior year.
Total interest expense (including unused fees, amortization of deferred financing costs, financing fees and backstop fees) increased to $257.8 million for the year ended December 31, 2023 from $54.0 million in the prior year primarily driven by increased borrowings under the Credit Facilities, short-term borrowings, Unsecured Notes, and debt securitization issuances. The average principal debt outstanding increased to $3,131.0 million for the year ended December 31, 2023 from $912.4 million in the prior year.
95
Management Fees
Management fees increased to $90.2 million for the year ended December 31, 2024 from $52.9 million in the prior year primarily due to an increase in net assets. Management fees increased to $52.9 million for the year ended December 31, 2023 from $26.5 million 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. The Adviser agreed to waive the management fee from the date on which the Fund broke escrow for the Offering through December 31, 2022, which resulted in a waiver of $26.5 million for the year ended December 31, 2022. There was no waiver for the years ended December 31, 2023 and 2024.
Income Based Incentive Fee
Income based incentive fees increased to $113.9 million for the year ended December 31, 2024 from $70.5 million in the prior year primarily due to our deployment of capital and an increase in
Pre-Incentive
Fee Net Investment Income Returns. Income based incentive fees increased to $70.5 million for the year ended December 31, 2023 from $23.2 million in the prior year primarily due to our deployment of capital and an increase in Pre-Incentive
Fee Net Investment Income Returns. The Adviser agreed to waive the income based incentive fee from the date on which the Fund broke escrow for the Offering through December 31, 2022, which resulted in a waiver of $23.2 million for the year ended December 31, 2022. There was no waiver for the years ended December 31, 2023 and 2024. 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 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 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 $9.4 million for the year ended December 31, 2024, from $3.5 million in the prior year primarily due to higher net unrealized gains earned in the current year relative to cumulative unrealized gains through December 31, 2023, none of which were payable under the Investment Advisory Agreement. Capital gains based incentive fees increased to $3.5 million for the year ended December 31, 2023 from $0.0 million 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
96
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 $21.0 million for the year ended December 31, 2024, from $17.4 million in the prior year primarily driven by an increase of administrative service expenses and other general & administrative expenses due to servicing a growing portfolio.
Total other expenses increased to $17.4 million for the year ended December 31, 2023 from $10.4 million in the prior year primarily driven by an increase of professional fees, administrative service expenses and other general & administrative expenses due to servicing a growing portfolio.
Under the terms of the Administration Agreement and Investment 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 year ended December 31, 2024, the Administrator charged $4.5 million, an increase from $2.5 million in the prior year, for certain costs and expenses allocable to the Fund under the terms of the Administration Agreement. For the year ended December 31, 2023, the Administrator charged $2.5 million, an increase from $1.8 million 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 $24.1 million for the year ended December 31, 2024 from $14.6 million in the prior year primarily due to an increase in shares outstanding. Shareholder servicing and/or distributions fees increased to $14.6 million for the year ended December 31, 2023 from $7.3 million in the prior year primarily due to an increase in shares outstanding.
Additionally, 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 we broke escrow for the Offering.
We entered into an Expense Support Agreement with the Adviser. For additional information see to the consolidated financial statements included elsewhere in this prospectus.
“Note 3. Fees, Expenses, Agreements and Related Party Transactions”
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. 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.
97
For the years ended December 31, 2024, 2023, and 2022, we incurred U.S. federal excise tax of $5.1 million, $1.5 million and $0.8 million, respectively.
Net Realized Gain (Loss)
Net realized gains and losses were comprised of the following:
Year Ended December 31, |
||||||||||||
2024 |
2023 |
2022 |
||||||||||
Non-controlled/non-affiliated |
$ | (12,744 | ) | $ | (16,769 | ) | $ | (2,467 | ) | |||
Non-controlled/affiliated investments |
— | (864 | ) | — | ||||||||
Foreign currency forward contracts |
27,225 | (7,613 | ) | 4,010 | ||||||||
Foreign currency transactions |
5,759 | (9,464 | ) | 4,567 | ||||||||
Net realized gain (loss) |
$ | 20,240 | $ | (34,710 | ) | $ | 6,110 | |||||
For the year ended December 31, 2024, we generated net realized gains (losses) on investments of $(12.7) million, which included net realized losses on investments of $(9.0) million primarily from the sales of syndicated loans and bonds and the restructuring of a private debt investment, and net foreign currency realized losses on investments of $(3.7) million primarily due to repayments on investments denominated in AUD and GBP. We generated realized gains of $27.2 million on foreign currency forwards contracts, primarily as a result of fluctuations in the AUD and EUR exchange rates. There were realized gains of $5.8 million on foreign currency transactions, as a result of repayments of foreign borrowings and conversions of foreign cash balances, primarily attributable to fluctuations in the AUD, GBP and CAD exchange rates.
For the year ended December 31, 2023, we generated realized gains (losses) of $(34.7) million driven primarily by realized losses on broadly syndicated loans and bonds of $(17.8) million as well as losses on foreign currency forward contracts and foreign currency transactions, primarily as a result of fluctuations in the GBP, EUR and AUD exchange rates. For the year ended December 31, 2022, we generated realized gains (losses) of $6.1 million, which was primarily comprised of net realized gains on foreign currency transactions and currency forwards, partially offset by realized losses on broadly syndicated loans and bonds.
Net Change in Unrealized Appreciation (Depreciation)
Net change in unrealized appreciation (depreciation) was comprised of the following:
Year Ended December 31, |
||||||||||||
2024 |
2023 |
2022 |
||||||||||
Non-controlled/non-affiliated |
$ | (49,917 | ) | $ | 230,599 | $ | (143,665 | ) | ||||
Non-controlled/affiliated investments |
373 | 185 | — | |||||||||
Controlled/affiliated investments |
24,113 | (1,510 | ) | — | ||||||||
Foreign currency forward contracts |
52,107 | (6,968 | ) | (2,136 | ) | |||||||
Translation of assets and liabilities in foreign currencies |
28,540 | (8,173 | ) | (11,590 | ) | |||||||
Net change in unrealized appreciation (depreciation) |
$ | 55,216 | $ | 214,133 | $ | (157,391 | ) | |||||
For the year ended December 31, 2024, the change in unrealized appreciation (depreciation) on investment portfolio was $68.3 million (excluding the impact of foreign currency) due to spread tightening in both the public and private credit markets. The remaining $(13.0) million of the net unrealized appreciation (depreciation) of $55.2 million represents the net unrealized losses as a result of foreign currency fluctuations impacting the value of the investment portfolio, foreign currency forward contracts, foreign debt and cash balances.
98
For the year ended December 31, 2024, the net realized and unrealized gains/(losses) on foreign currency fluctuations impacting the value of the investment portfolio, foreign currency forward contracts, foreign debt and cash balances was $16.3 million.
For the year ended December 31, 2023, the fair value of our debt investments increased due to spread tightening in both the public and private credit markets. For the year ended December 31, 2023, we generated foreign currency unrealized gains of $32.4 million on investments (included in unrealized gains on investments) primarily as a result of fluctuations in the GBP and EUR exchange rates. For the year ended December 31, 2022, the fair value of our debt investments decreased due to spread widening in both the public and private credit markets.
non-controlled/non-affiliated
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.
Note 2. Significant Accounting Policies
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 December 31, 2024 and 2023, we had several asset-based leverage facilities, a corporate-level revolving credit facility, unsecured note issuances and debt securitization issuances. 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 December 31, 2024 and 2023, we had an aggregate amount of $7,508.7 million and $4,210.4 million, respectively, of principal debt outstanding and our asset coverage ratio was 216.3% 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 December 31, 2024, taken together with our $1,539.3 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 December 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 $1,264.3 million of syndicated loans and other liquid investments as of December 31, 2024, which could provide additional liquidity if necessary.
99
Although we were able to close on credit facilities and issue debt securities during the year ended December 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.
As of December 31, 2024, we had $228.9 million in cash and cash equivalents. During the year ended December 31, 2024, cash used in operating activities was $5,971.8 million, primarily as a result of funding portfolio investments of $9,196.1 million and partially offset by proceeds from sale of investments and principal repayments of $2,481.5 million and other operating uses of $742.8 million. Cash provided by financing activities was $6,011.9 million during the period, primarily as a result of new share issuances related to $3,400.9 million of subscriptions and net borrowings (repayments) of $3,328.7 million.
Equity
The following table summarizes transactions in common shares of beneficial interest during the year ended December 31, 2024:
Shares |
Amount |
|||||||
CLASS I |
||||||||
Subscriptions |
55,226,525 | $ | 1,404,559 | |||||
Share transfers between classes |
1,180,147 | 30,134 | ||||||
Distributions reinvested |
2,348,282 | 59,737 | ||||||
Share repurchases |
(4,984,903 | ) | (127,182 | ) | ||||
Early repurchase deduction |
— | 8 | ||||||
Net increase (decrease) |
53,770,051 | $ | 1,367,256 | |||||
CLASS D |
||||||||
Subscriptions |
14,495,667 | $ | 368,292 | |||||
Share transfers between classes |
218,726 | 5,475 | ||||||
Distributions reinvested |
1,779,713 | 45,258 | ||||||
Share repurchases |
(1,566,444 | ) | (39,986 | ) | ||||
Early repurchase deduction |
— | 3 | ||||||
Net increase (decrease) |
14,927,662 | $ | 379,042 | |||||
CLASS F |
||||||||
Subscriptions |
49,560,391 | $ | 1,258,874 | |||||
Share transfers between classes |
(1,667,355 | ) | (42,449 | ) | ||||
Distributions reinvested |
6,842,269 | 173,966 | ||||||
Share repurchases |
(3,966,751 | ) | (101,243 | ) | ||||
Early repurchase deduction |
— | 14 | ||||||
Net increase (decrease) |
50,768,554 | $ | 1,289,162 | |||||
CLASS S |
||||||||
Subscriptions |
14,523,921 | $ | 369,150 | |||||
Share transfers between classes |
268,482 | 6,840 | ||||||
Distributions reinvested |
349,066 | 8,907 | ||||||
Share repurchases |
(130,670 | ) | (3,344 | ) | ||||
Early repurchase deduction |
— | 1 | ||||||
Net increase (decrease) |
15,010,799 | $ | 381,554 | |||||
Total net increase (decrease) |
134,477,066 | $ | 3,417,014 | |||||
100
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 |
— | — | ||||||
Distributions reinvested |
251,233 | 6,105 | ||||||
101
Shares |
Amount |
|||||||
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 | |||||
Distributions and Distribution Reinvestment
The following tables summarize our distributions declared and payable for the year ended December 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 | ||||||||||||||||||
April 25, 2024 |
May 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 15,054 | ||||||||||||||||||
May 31, 2024 |
June 28, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 16,339 | ||||||||||||||||||
June 26, 2024 |
July 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 17,490 | ||||||||||||||||||
July 26, 2024 |
August 30, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 18,130 | ||||||||||||||||||
August 27, 2024 |
September 30, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 18,993 | ||||||||||||||||||
September 26, 2024 |
October 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 19,529 | ||||||||||||||||||
October 23, 2024 |
November 29, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 20,329 | ||||||||||||||||||
November 27, 2024 |
December 31, 2024 | 0.1600 | 0.0550 | — | 0.2150 | 21,878 | ||||||||||||||||||
December 23, 2024 |
January 30, 2025 | 0.1600 | 0.0550 | — | 0.2150 | 23,307 | ||||||||||||||||||
Total |
$ | 1.9200 | $ | 0.6600 | $ | — | $ | 2.5800 | $ | 210,733 | ||||||||||||||
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 | ||||||||||||||||
April 25, 2024 |
May 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 7,225 | ||||||||||||||||
May 31, 2024 |
June 28, 2024 | 0.1546 | 0.0550 | — | 0.2096 | 7,404 | ||||||||||||||||
June 26, 2024 |
July 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 7,622 | ||||||||||||||||
July 26, 2024 |
August 30, 2024 | 0.1546 | 0.0550 | — | 0.2096 | 8,144 | ||||||||||||||||
102
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 |
||||||||||||||||||
| August 27, 2024
|
September 30, 2024 | 0.1546 | 0.0550 | — | 0.2096 | 8,270 | ||||||||||||||||||
| September 26, 2024
|
October 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 8,810 | ||||||||||||||||||
| October 23, 2024
|
November 29, 2024 | 0.1546 | 0.0550 | — | 0.2096 | 8,768 | ||||||||||||||||||
| November 27, 2024
|
December 31, 2024 | 0.1548 | 0.0550 | — | 0.2098 | 8,855 | ||||||||||||||||||
| December 23, 2024
|
January 30, 2025 | 0.1546 | 0.0550 | — | 0.2096 | 9,254 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total
|
$ | 1.8566 | $ | 0.6600 | $ | — | $ | 2.5166 | $ | 94,370 | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
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 | ||||||||||||||||||
| April 25, 2024
|
May 31, 2024 | 0.1496 | 0.0550 | — | 0.2046 | 29,919 | ||||||||||||||||||
| May 31, 2024
|
June 28, 2024 | 0.1492 | 0.0550 | — | 0.2042 | 30,325 | ||||||||||||||||||
| June 26, 2024
|
July 31, 2024 | 0.1495 | 0.0550 | — | 0.2045 | 31,356 | ||||||||||||||||||
| July 26, 2024
|
August 30, 2024 | 0.1492 | 0.0550 | — | 0.2042 | 31,763 | ||||||||||||||||||
| August 27, 2024
|
September 30, 2024 | 0.1492 | 0.0550 | — | 0.2042 | 32,810 | ||||||||||||||||||
| September 26, 2024
|
October 31, 2024 | 0.1495 | 0.0550 | — | 0.2045 | 33,739 | ||||||||||||||||||
| October 23, 2024
|
November 29, 2024 | 0.1492 | 0.0550 | — | 0.2042 | 34,348 | ||||||||||||||||||
| November 27, 2024
|
December 31, 2024 | 0.1495 | 0.0550 | — | 0.2045 | 35,376 | ||||||||||||||||||
| December 23, 2024
|
January 30, 2025 | 0.1492 | 0.0550 | — | 0.2042 | 36,172 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total
|
$ | 1.7928 | $ | 0.6600 | $ | — | $ | 2.4528 | $ | 380,379 | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
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 | ||||||||||||||||||
| April 25, 2024
|
May 31, 2024 | 0.1423 | 0.0550 | — | 0.1973 | 1,204 | ||||||||||||||||||
| May 31, 2024
|
June 28, 2024 | 0.1417 | 0.0550 | — | 0.1967 | 1,550 | ||||||||||||||||||
| June 26, 2024
|
July 31, 2024 | 0.1422 | 0.0550 | — | 0.1972 | 1,767 | ||||||||||||||||||
| July 26, 2024
|
August 30, 2024 | 0.1416 | 0.0550 | — | 0.1966 | 1,954 | ||||||||||||||||||
| August 27, 2024
|
September 30, 2024 | 0.1417 | 0.0550 | — | 0.1967 | 2,126 | ||||||||||||||||||
| September 26, 2024
|
October 31, 2024 | 0.1422 | 0.0550 | — | 0.1972 | 2,467 | ||||||||||||||||||
| October 23, 2024
|
November 29, 2024 | 0.1416 | 0.0550 | — | 0.1966 | 2,692 | ||||||||||||||||||
| November 27, 2024
|
December 31, 2024 | 0.1422 | 0.0550 | — | 0.1972 | 2,930 | ||||||||||||||||||
| December 23, 2024
|
January 30, 2025 | 0.1416 | 0.0550 | — | 0.1966 | 3,144 | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total
|
$ | 1.7040 | $ | 0.6600 | $ | — | $ | 2.3640 | $ | 21,888 | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
103
| (1) | Distributions per share are net of shareholder servicing and/or distribution fees.
|
The following tables summarize our distributions declared and payable for the year ended December 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 | ||||||||||||||||||
| 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 | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||||||
104
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 | ||||||||||||||
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 |
||||||||||||||||||
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 summarizes our distributions declared and payable for the year ended December 31, 2022 (dollar amounts in thousands, except per share amounts), and the record date for each distribution was the last calendar date 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 |
||||||||||||||||
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 | ||||||||||||||||
105
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 |
||||||||||||||||||
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 | ||||||||||||||
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. |
106
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, other than a shareholder that has “opted out” of the distribution reinvestment plan or who is located in a state that does not permit automatic enrollment in 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.
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 year ended December 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 |
$ | 2.5800 | $ | 210,733 | $ | 2.5166 | $ | 94,370 | $ | 2.4528 | $ | 380,379 | $ | 2.3640 | $ | 21,888 | ||||||||||||||||
Net realized gains |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total |
$ | 2.5800 | $ | 210,733 | $ | 2.5166 | $ | 94,370 | $ | 2.4528 | $ | 380,379 | $ | 2.3640 | $ | 21,888 | ||||||||||||||||
The following table reflects the sources of cash distributions on a U.S. GAAP basis that we declared on our 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 we declared on our 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
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 or suspend 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 Exchange Act 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. 107
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 tables summarize the share repurchases completed during the years ended December 31, 2024, December 31, 2023, and December 31, 2022:
|
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 Repurchased (1)
|
|||||||||||||||
March 1, 2024 |
5.00 | % | March 31, 2024 | $ | 59,526 | 2,347,231 | 1.13 | % | ||||||||||||
May 30, 2024 |
5.00 | % | June 30, 2024 | $ | 56,260 | 2,204,546 | 0.89 | % | ||||||||||||
August 29, 2024 |
5.00 | % | September 30, 2024 | $ | 45,164 | 1,766,987 | 0.64 | % | ||||||||||||
December 2, 2024 |
5.00 | % | December 31, 2024 | $ | 110,805 | 4,330,004 | 1.40 | % | ||||||||||||
|
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 Repurchased (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 | % | ||||||||||||
|
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 Repurchased (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. |
Borrowings
Our outstanding debt obligations were as follows:
December 31, 2024 |
||||||||||||||||||||
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND A Funding Facility (3)
|
$ | 800,000 | $ | 683,184 | $ | 683,184 | $ | 116,816 | $ | 94,431 | ||||||||||
HLEND B Funding Facility (3)
|
1,250,000 | 955,572 | 955,572 | 294,428 | 148,973 | |||||||||||||||
HLEND C Funding Facility |
750,000 | 487,500 | 487,500 | 262,500 | 31,775 | |||||||||||||||
HLEND D Funding Facility (3)
|
1,000,000 | 830,343 | 830,343 | 169,657 | 96,737 | |||||||||||||||
108
December 31, 2024 |
||||||||||||||||||||
Aggregate Principal Committed |
Outstanding Principal |
Carrying Value |
Unused Portion (1)
|
Amount Available (2)
|
||||||||||||||||
HLEND E Funding Facility |
1,000,000 | 642,800 | 642,800 | 357,200 | 81,202 | |||||||||||||||
Revolving Credit Facility (3)
|
1,525,000 | 1,186,264 | 1,186,264 | 338,736 | 338,736 | |||||||||||||||
November 2025 Notes (4)
|
170,000 | 170,000 | 169,403 | — | — | |||||||||||||||
November 2027 Notes (4)
|
155,000 | 155,000 | 153,652 | — | — | |||||||||||||||
March 2026 Notes (5)
|
276,000 | 276,000 | 274,866 | — | — | |||||||||||||||
March 2028 Notes (5)
|
124,000 | 124,000 | 121,989 | — | — | |||||||||||||||
September 2027 Notes (6)
|
75,000 | 75,000 | 74,649 | — | — | |||||||||||||||
September 2028 Notes (6)
|
250,000 | 250,000 | 248,111 | — | — | |||||||||||||||
January 2029 Notes (7)
|
550,000 | 550,000 | 530,894 | — | — | |||||||||||||||
September 2029 Notes (8)
|
400,000 | 400,000 | 390,055 | — | — | |||||||||||||||
2023 CLO Secured Notes (9)
|
323,000 | 323,000 | 320,018 | — | — | |||||||||||||||
2024 CLO Secured Notes (10)
|
400,000 | 400,000 | 376,280 | — | — | |||||||||||||||
Total |
$ | 9,048,000 | $ | 7,508,663 | $ | 7,445,580 | $ | 1,539,337 | $ | 791,854 | ||||||||||
| (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) | We 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 December 31, 2024, we had outstanding borrowings denominated in the following
non-USD
currencies: | • | Australian Dollars (AUD) of 34.4 million |
| • | British Pounds (GBP) of 12.9 million |
Under the HLEND B Funding Facility, as of December 31, 2024, we had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 3.4 million |
| • | Australian Dollars (AUD) of 25.5 million |
| • | British Pounds (GBP) of 90.3 million |
Under the HLEND D Funding Facility, as of December 31, 2024, we had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 42.5 million |
Under the Revolving Credit Facility, as of December 31, 2024, we had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 457.8 million |
| • | Australian Dollars (AUD) of 62.5 million |
| • | British Pounds (GBP) of 212.7 million |
| (4) | The carrying value of our November 2025 Notes and November 2027 Notes are presented net of unamortized debt issuance costs of $(0.6) million and $(1.0) million, respectively, as of December 31, 2024 and includes the change in the notes carrying value of $(0.0) million and $(0.3) million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
109
| (5) | The carrying value of our March 2026 Notes and March 2028 Notes are presented net of unamortized debt issuance costs of $(1.0) million and $(0.7) million, respectively, as of December 31, 2024 and includes the change in the notes carrying value of $(0.1) million and $(1.3) million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (6) | The carrying value of our September 2027 Notes and September 2028 Notes are presented net of unamortized debt issuance costs of $(0.5) million and $(1.9) million, respectively, as of December 31, 2024 and includes the change in the notes carrying value of $0.2 million and $0.1 million, respectively, as a result of the qualifying fair value hedge relationship as described above. |
| (7) | The carrying value of our January 2029 Notes are presented net of unamortized debt issuance costs and original issue discount of $(10.4) million as of December 31, 2024 and includes the change in the notes carrying value of $(8.7) million as a result of the qualifying fair value hedge relationship as described above. |
| (8) | The carrying value of our September 2029 Notes are presented net of unamortized debt issuance costs and original issue discount of $(8.7) million as of December 31, 2024 and includes the change in the notes carrying value of $(1.2) million as a result of the qualifying fair value hedge relationship as described above. |
| (9) | The carrying value of our 2023 CLO Secured Notes are presented net of unamortized debt issuance costs of $(3.0) million as of December 31, 2024. |
| (10) | The carrying value of our 2024 CLO Secured Notes are presented net of unamortized debt issuance costs and original issue discount of $(23.7) million as of December 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 (3)
|
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 (3)
|
1,275,000 | 1,025,294 | 1,025,294 | 249,706 | 249,706 | |||||||||||||||
November 2025 Notes (4)
|
170,000 | 170,000 | 168,749 | — | — | |||||||||||||||
November 2027 Notes (4)
|
155,000 | 155,000 | 154,366 | — | — | |||||||||||||||
March 2026 Notes (5)
|
276,000 | 276,000 | 274,716 | — | — | |||||||||||||||
March 2028 Notes (5)
|
124,000 | 124,000 | 123,588 | — | — | |||||||||||||||
September 2027 Notes (6)
|
75,000 | 75,000 | 75,545 | — | — | |||||||||||||||
September 2028 Notes (6)
|
250,000 | 250,000 | 252,814 | — | — | |||||||||||||||
2023 CLO Secured Notes (7)
|
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) | We 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 December 31, 2023, we had outstanding borrowings denominated in the following
non-USD
currencies: | • | Euros (EUR) of 7.5 million |
| • | Australian Dollars (AUD) of 156.0 million |
| • | British Pounds (GBP) of 42.9 million |
110
Under the HLEND B Funding Facility, as of December 31, 2023, we had outstanding borrowings denominated in the following
non-USD
currencies: • |
Euros (EUR) of 3.4 million |
• |
Australian Dollars (AUD) of 108.0 million |
• |
British Pounds (GBP) of 90.3 million |
Under the Revolving Credit Facility, as of December 31, 2023, we had outstanding borrowings denominated in the following
non-USD
currencies: • |
Euros (EUR) of 312.1 million |
• |
Australian Dollars (AUD) of 95.2 million |
• |
Canadian Dollars (CAD) of 47.1 million |
• |
British Pounds (GBP) of 64.2 million |
(4) |
The carrying value of our 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. |
(5) |
The carrying value of our 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. |
(6) |
The carrying value of our 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. |
(7) |
The carrying value of our 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 December 31, 2024, is as follows:
December 31, 2024 |
||||||||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
After 5 years |
||||||||||||||||
| HLEND A Funding Facility |
$ |
683,184 |
$ |
— |
$ |
— |
$ |
683,184 |
$ |
— |
||||||||||
| HLEND B Funding Facility |
955,572 |
— |
— |
955,572 |
— |
|||||||||||||||
| HLEND C Funding Facility |
487,500 |
— |
— |
— |
487,500 |
|||||||||||||||
| HLEND D Funding Facility |
830,343 |
— |
— |
830,343 |
— |
|||||||||||||||
| HLEND E Funding Facility |
642,800 |
— |
— |
642,800 |
— |
|||||||||||||||
| Revolving Credit Facility |
1,186,264 |
— |
78,454 |
1,107,810 |
— |
|||||||||||||||
| 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 |
— |
|||||||||||||||
| September 2029 Notes |
400,000 |
— |
— |
400,000 |
— |
|||||||||||||||
111
December 31, 2024 |
||||||||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
After 5 years |
||||||||||||||||
| 2023 CLO Secured Notes |
323,000 |
— |
— |
— |
323,000 |
|||||||||||||||
| 2024 CLO Secured Notes |
400,000 |
— |
— |
— |
400,000 |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ |
7,508,663 |
$ |
170,000 |
$ |
584,454 |
$ |
5,543,709 |
$ |
1,210,500 |
||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
For additional information on our debt obligations see “” to the consolidated financial statements included elsewhere in this prospectus.
Note 7. Borrowings
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 December 31, 2024 and 2023, we had unfunded delayed draw term loans, revolvers and preferred equity with an aggregate principal amount of $2,128.7 million and $760.7 million, respectively.
Other Commitments and Contingencies
As of December 31, 2024 and December 31, 2023, $236.2 million and $70.3 million, respectively, of capital committed remained uncalled from the Fund in relation to capital commitments to ULTRA III. Such amount is subject to the approval of each joint venture member.
From time to time, we may become a party to certain legal proceedings incidental to the normal course of its business. As of December 31, 2024, management is not aware of any material pending or threatened litigation.
Related-Party Transactions
We entered into a number of business relationships with affiliated or related parties, including the following:
• |
the Investment Advisory Agreement; |
• |
the Administration Agreement; and |
• |
Expense Support 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 ” to the consolidated financial statements included elsewhere in this prospectus.
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
Recent Developments
See “” to the consolidated financial statements included elsewhere in this prospectus for a summary of recent developments.
Note 13. Subsequent Events
112
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 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 |
113
| 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 “” to the consolidated financial statements included elsewhere in this prospectus for more information on the fair value of the Fund’s investments.
Note 5. Fair Value Measurements
114
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” generally to 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 an 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 non-investment grade broadly syndicated loans, leveraged loans, secured and unsecured corporate bonds, and securitized credit. 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 loan-to-value 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.
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 our 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 other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement; provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator.
HPS is a leading global credit-focused alternative investment firm with $149 billion of assets under management as of December 31, 2024. HPS invests primarily in credit and manages various strategies across the capital structure, including 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 and high yield bonds; asset-based finance and real estate. HPS has approximately 250 investment professionals and more than 770 total employees, working from fourteen offices globally, as of December 31, 2024. HPS was established in 2007 as a unit of HCM, a subsidiary of JPMAM. On March 31, 2016, the senior executives of HPS acquired HPS and its subsidiaries from JPMAM and HCM. Following the Transaction, JPMAM retained a passive minority investment in HPS, which was subsequently redeemed in April 2022. In June 2018, affiliates of Dyal Capital Partners 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, which was subsequently increased in August 2024.
On December 3, 2024, HPS and BlackRock entered into the HPS/BlackRock Transaction. The HPS/BlackRock Transaction is expected to close in mid-2025 subject to receipt of certain consents from investors in HPS funds and accounts, regulatory approvals and satisfaction of other customary closing conditions. The HPS/BlackRock Transaction is expected to bring together BlackRock’s corporate and asset owner relationships with HPS’s diversified origination and capital flexibility, and create an integrated private credit franchise with approximately $220 billion in client assets. If the HPS/BlackRock Transaction occurs, BlackRock and HPS will form a new private financing solutions business unit led by Scott Kapnick, Scot French, and Michael Patterson. This combined platform is expected to have broad capabilities across senior and junior credit solutions, asset-based finance, real estate, private placements, and CLOs. As part of the HPS/BlackRock Transaction, Scott Kapnick, Scot French, and Michael Patterson will join BlackRock’s Global Executive Committee and Scott Kapnick will be an observer to the BlackRock Board of Directors. There can be no assurances that the HPS/BlackRock Transaction will take place, or if it does, what the impact will be on HPS or us.
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 as of December 31, 2024.
8
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 |
8 |
Source: Preqin, Preqin Special Report: The Future of Alternatives in 2029. Data as of December 31, 2024. |
| attractive return attribute in an elevated interest rate environment. In addition to a current income component, senior secured loans typically include original issue discount, closing payments, commitment fees, SOFR (or similar rate) floors, call protection, and/or prepayment penalties and related fees that are additive components of total return. The relative seniority and security of senior secured loans, coupled with the privately negotiated nature of direct lending, help mitigate downside risk. |
• |
Regulatory Actions Continue to Drive Demand towards Private Financing 9 . 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 in 2024 as compared to over 49% in 200010 . 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 |
9 |
Source: S&P LCD Quarterly Leveraged Lending Review 4Q 2022, Primary Investor Market: Banks vs. Non-Bank. |
10 |
Source: S&P LCD Middle Market Deal Size Category Factsheet 4Q 2024. |
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 $149 billion of assets under management as of December 31, 2024.
Since its inception in 2007, HPS has committed approximately $170 billion in privately originated transactions across more than 890 investments.
11
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 12 HPS |
11 |
As of December 31, 2024. Based on the total face value committed to private credit investments that are part of the Strategic Investment Partners strategy, Special Situations Opportunities strategy (private special situations investments), Specialty Direct Lending strategy, Core Senior Lending strategy, and any additional private credit investments made by one or more business development companies, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are solely part of the High Grade Corporate-Focused, High Grade Asset-Based, Real Estate, Asset Value, or Sustainability & Energy Transition strategies. |
12 |
As of December 31, 2024. Based on the total face value committed to private credit investments that are part of the Specialty Direct Lending strategy, Core Senior Lending strategy, and any additional private credit investments made by one or more business development companies, private credit CLOs, separately managed funds or accounts, or private credit-focused joint ventures, excluding investments that are solely part of the Strategic Investment Partners, Special Situations Opportunities (private special situations investments), High Grade Corporate-Focused, High Grade Asset-Based, Real Estate, Asset Value, or Sustainability & Energy Transition strategies. The Fund had a lower percentage of private credit investments sourced from channels other than financial sponsors as of December 31, 2024. There is no guarantee that the Fund will be able to source a similar or higher percentage of private credit investments from channels other than financial sponsors. |
| believes that its ability to source from non-sponsor channels significantly reduces the competitive intensity and allows it to focus on structuring improved economics, stricter financial covenants and stronger loan documentation. In addition, direct dialogue with borrower management teams can result in a better understanding of the underlying borrowers and better positioning to actively manage investments throughout their life. HPS also actively engages 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 December 31, 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 |
• |
Willingness to Navigate Complexity to Evaluate a Mispriced Opportunity. |
• |
Focus on the Upper Middle Market |
• |
Emphasis on Capital Preservation. |
The Board
Overall responsibility for the Fund’s oversight rests with the Board. We have entered into the Investment Advisory Agreement with the Adviser, pursuant to which the Adviser manages the Fund on a day-to-day 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.
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 strengthen 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. These characteristics 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 and resources by focusing on screening for opportunities
121
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 intends to work closely with involved counterparties, such as financial intermediaries, or directly with a borrower’s management team, which is expected to provide certain due diligence advantages by facilitating access to the 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 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 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 closely 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.
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 day-to-day 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.
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 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 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 (, based on investment strategy). The 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.
e.g.
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 Investment 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); provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator.
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.
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
Affiliated Transactions
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.
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.
128
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 |
||||||||||||||||
December 31, 2024 |
$ |
|
N/A | |||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
December 31, 2022 |
|
N/A | ||||||||||||||
HLEND B Funding Facility |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
December 31, 2022 |
|
N/A | ||||||||||||||
HLEND C Funding Facility |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
HLEND D Funding Facility |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
HLEND E Funding Facility |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
Revolving Credit Facility |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
December 31, 2022 |
|
N/A | ||||||||||||||
November 2025 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
December 31, 2022 |
|
N/A | ||||||||||||||
November 2027 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
December 31, 2022 |
|
N/A | ||||||||||||||
March 2026 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
March 2028 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
September 2027 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
September 2028 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
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)
|
|||||||||||||
January 2029 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
September 2029 Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
2023 CLO Secured Notes |
||||||||||||||||
December 31, 2024 |
|
N/A | ||||||||||||||
December 31, 2023 |
|
N/A | ||||||||||||||
2024 CLO Secured Notes |
||||||||||||||||
December 31, 2024 |
||||||||||||||||
Short-Term Borrowings |
||||||||||||||||
December 31, 2024 |
|
|
|
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 December 31, 2024, the aggregate principal amount of indebtedness outstanding was $7,508.7 million. As of December 31, 2023, the aggregate principal amount of indebtedness outstanding was $4,210.4 million.
130
PORTFOLIO COMPANIES
The following table sets forth certain information as of December 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 December 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.
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Non-Controlled/Non-Affiliated Investments |
||||||||||||||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||||||
Aerospace and Defense |
||||||||||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(6)(8) |
14295 Park Meadow Drive, Chantilly, VA 20151 | 10/28/2031 | $ | 11,100 | $ | (27 | ) | $(27) | ||||||||||||||||||||||||
Arcfield Acquisition Corp (4)(8) |
14295 Park Meadow Drive, Chantilly, VA 20151 | SF + 5.00% | 9.62 | % | 10/28/2031 | 81,695 | 81,496 | 81,496 | ||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
153 Keys Rd, Moorabbin, Victoria 3189, Australia | B + 5.75% | 10.12 | % | 8/22/2028 | A$ | 3,614 | 2,428 | 2,237 | |||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(6)(8) |
153 Keys Rd, Moorabbin, Victoria 3189, Australia | 8/22/2028 | A$ | 5,421 | (73 | ) | — | |||||||||||||||||||||||||
Asdam Operations Pty Ltd (4)(5)(8) |
153 Keys Rd, Moorabbin, Victoria 3189, Australia | B + 5.75% | 10.12 | % | 8/22/2028 | A$ | 41,558 | 28,023 | 25,720 | |||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(6)(10) |
2655 Seely Avenue, San Jose, CA, 95134 | SF + 5.00% | 9.61 | % | 5/3/2028 | 17,561 | 7,720 | 8,000 | ||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
2655 Seely Avenue, San Jose, CA, 95134 | SF + 5.00% | 9.63 | % | 5/3/2029 | 41,009 | 40,111 | 41,419 | ||||||||||||||||||||||||
Cadence - Southwick, Inc. (4)(10) |
2655 Seely Avenue, San Jose, CA, 95134 | SF + 5.00% | 9.47 | % | 5/3/2029 | 3,081 | 3,031 | 3,112 | ||||||||||||||||||||||||
Carbon Topco, Inc. (4)(6)(9) |
1955 Surveyor Ave, Simi Valley, CA 93063 | 5/1/2030 | 11,985 | (232 | ) | (233) | ||||||||||||||||||||||||||
Carbon Topco, Inc. (4)(9) |
1955 Surveyor Ave, Simi Valley, CA 93063 | SF + 6.75% (incl 3.75% PIK) | 11.17 | % | 11/1/2030 | 72,110 | 70,708 | 70,707 | ||||||||||||||||||||||||
Fastener Distribution Holdings, LLC (4)(6)(9) |
5200 Sheila Street, Commerce, CA 90040 | 11/4/2031 | 28,345 | (280 | ) | (277) | ||||||||||||||||||||||||||
Fastener Distribution Holdings, LLC (4)(9) |
5200 Sheila Street, Commerce, CA 90040 | SF + 4.75% | 9.31 | % | 11/4/2031 | 75,822 | 75,081 | 75,081 | ||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(6)(9) |
4350 Centennial Blvd, Colorado Springs, CO, 80907 | 1/10/2028 | 6,864 | (114 | ) | — | ||||||||||||||||||||||||||
131
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
4350 Centennial Blvd, Colorado Springs, CO, 80907 | SF + 5.00% | 9.49 | % | 1/9/2030 | 37,052 | 36,245 | 37,052 | ||||||||||||||||||||||||
Frontgrade Technologies Holdings Inc. (4)(9) |
4350 Centennial Blvd, Colorado Springs, CO, 80907 | SF + 5.00% | 9.49 | % | 1/9/2030 | 7,801 | 7,679 | 7,801 | ||||||||||||||||||||||||
Goat Holdco LLC (5)(7) |
123 Main St Bristol, CT, 06010-6307 United States | SF + 3.00% | 7.33 | % | 12/10/2031 | 4,375 | 4,364 | 4,384 | ||||||||||||||||||||||||
WP CPP Holdings, LLC (4)(6)(10) |
1621 Euclid Avenue, Suite 1850 Cleveland, Ohio 44115 | 11/30/2029 | 26,285 | (538 | ) | — | ||||||||||||||||||||||||||
WP CPP Holdings, LLC (4)(10) |
1621 Euclid Avenue, Suite 1850 Cleveland, Ohio 44115 | SF + 7.50% (incl 4.13% PIK) | 11.97 | % | 11/30/2029 | 202,524 | 198,716 | 202,825 | ||||||||||||||||||||||||
| 554,338 | 559,297 | 6.40 | % | |||||||||||||||||||||||||||||
Alternative Energy |
||||||||||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
1 Refinery Rd, Box 40, Come By Chance, Newfoundland and Labrador A0B 1N0, Canada | SF + 7.00% | 11.43 | % | 11/9/2026 | 12,830 | 12,671 | 11,971 | ||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
1 Refinery Rd, Box 40, Come By Chance, Newfoundland and Labrador A0B 1N0, Canada | SF + 7.00% | 11.43 | % | 11/9/2026 | 984 | 971 | 918 | ||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
1 Refinery Rd, Box 40, Come By Chance, Newfoundland and Labrador A0B 1N0, Canada | SF + 7.00% | 11.43 | % | 11/9/2026 | 10,736 | 10,579 | 10,017 | ||||||||||||||||||||||||
Braya Renewable Fuels (Newfoundland) LP (4)(5)(15) |
1 Refinery Rd, Box 40, Come By Chance, Newfoundland and Labrador A0B 1N0, Canada | SF + 7.00% | 11.43 | % | 11/9/2026 | 976 | 963 | 910 | ||||||||||||||||||||||||
| 25,184 | 23,816 | 0.27 | % | |||||||||||||||||||||||||||||
Automobiles and Parts |
||||||||||||||||||||||||||||||||
Clarios Global LP (7) |
Florist Tower, 5757 N. Green Bay Ave., Glendale, WI 53209 | SF + 2.50% | 6.86 | % | 5/6/2030 | 10,723 | 10,677 | 10,781 | ||||||||||||||||||||||||
Foundation Automotive US Corp (4)(7)(18) |
211 Highland Cross Drive, Ste 260, Houston, TX 77073 | SF + 7.75% PIK | 12/24/2027 | 4,755 | 4,714 | 3,011 | ||||||||||||||||||||||||||
Foundation Automotive Corp (4)(5)(7)(18) |
2424 4 St SW Suite 520, Calgary, Alberta, Canada | SF + 7.75% PIK | 12/24/2027 | 15,156 | 15,032 | 9,597 | ||||||||||||||||||||||||||
Foundation Automotive US Corp (4)(7)(18) |
211 Highland Cross Drive, Ste 260, Houston, TX 77073 | SF + 7.75% PIK | 12/24/2027 | 20,940 | 20,732 | 13,259 | ||||||||||||||||||||||||||
Foundation Automotive US Corp (4)(6)(7)(18) |
211 Highland Cross Drive, Ste 260, Houston, TX 77073 | SF + 7.75% | 12/24/2027 | 2,701 | 782 | 810 | ||||||||||||||||||||||||||
132
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
4511 Willow Rd, Suite 1 Pleasanton, CA 94588 | SF + 6.75% | 11.41 | % | 2/8/2027 | 40,181 | 40,000 | 40,181 | ||||||||||||||||||||||||
Oil Changer Holding Corporation (4)(10) |
4511 Willow Rd, Suite 1 Pleasanton, CA 94588 | SF + 6.75% | 11.56 | % | 2/8/2027 | 8,436 | 8,398 | 8,436 | ||||||||||||||||||||||||
| 100,335 | 86,075 | 0.99 | % | |||||||||||||||||||||||||||||
Chemicals |
||||||||||||||||||||||||||||||||
Lummus Technology Holdings V LLC (7) |
5825 N. Sam Houston Pkwy. W., #600, Houston, TX 77086 | SF + 3.00% | 7.36 | % | 12/31/2029 | 18,130 | 17,946 | 18,292 | ||||||||||||||||||||||||
| 17,946 | 18,292 | 0.21 | % | |||||||||||||||||||||||||||||
Construction and Materials |
||||||||||||||||||||||||||||||||
Enstall Group B.V. (4)(5)(6)(8) |
Londenstraat 16, 7418EE Deventer, Netherlands | 8/30/2028 | € | 1,117 | (23 | ) | (77) | |||||||||||||||||||||||||
Enstall Group B.V. (4)(5)(8) |
Londenstraat 16, 7418EE Deventer, Netherlands | E + 6.25% | 9.31 | % | 8/30/2028 | € | 66,970 | 71,315 | 64,756 | |||||||||||||||||||||||
Fire Flow Intermediate Corporation (4)(9) |
2001 Spring Road, Suite 300, Oak Brook, IL 60523 | SF + 5.00% | 9.59 | % | 7/10/2031 | 123,991 | 122,823 | 125,148 | ||||||||||||||||||||||||
Hobbs & Associates LLC (7) |
4850 Brookside Court #100, Norfolk, VA 23502 | SF + 3.25% | 7.65 | % | 7/23/2031 | 907 | 907 | 913 | ||||||||||||||||||||||||
Hobbs & Associates LLC (7) |
4850 Brookside Court #100, Norfolk, VA 23502 | SF + 3.25% | 7.61 | % | 7/23/2031 | 9,091 | 9,070 | 9,152 | ||||||||||||||||||||||||
Nexus Intermediate III, LLC (4)(9) |
20 Odyssey, Irvine, CA 92618 | SF + 4.75% | 9.18 | % | 12/6/2027 | 1,052 | 1,065 | 1,051 | ||||||||||||||||||||||||
NRO Holdings III Corp. (4)(6)(9) |
851 E I-65 Service Road, Suite 300, Mobile, AL 36606 | 7/15/2031 | 214 | (4 | ) | — | ||||||||||||||||||||||||||
NRO Holdings III Corp. (4)(6)(9) |
851 E I-65 Service Road, Suite 300, Mobile, AL 36606 | SF + 5.25% | 9.59 | % | 7/15/2030 | 100 | 7 | 8 | ||||||||||||||||||||||||
NRO Holdings III Corp. (4)(9) |
851 E I-65 Service Road, Suite 300, Mobile, AL 36606 | SF + 5.25% | 9.91 | % | 7/15/2031 | 684 | 671 | 684 | ||||||||||||||||||||||||
| 205,831 | 201,635 | 2.31 | % | |||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||||||
Aesthetics Australia Group Pty Ltd (4)(5)(8) |
40 Miller Street, North Sydney , New South Wales 2060, Australia | B + 6.25% | 10.93 | % | 3/21/2028 | A$ | 57,095 | 36,246 | 33,048 | |||||||||||||||||||||||
AI Learning (Singapore) PTE. LTD. (4)(5)(12) |
101 Thomson Road, Singapore, Singapore 307591 | SORA + 7.50% | 9.82 | % | 5/25/2027 | 45,400 | S$ | 32,957 | 33,059 | |||||||||||||||||||||||
American Academy Holdings, LLC (4)(17) |
2233 S Presidents Drive Suite F, Salt Lake City, UT 84120 | SF + 9.75% (incl 5.25% PIK) | 14.22 | % | 6/30/2027 | 56,763 | 56,763 | 55,821 | ||||||||||||||||||||||||
Auctane Inc (4)(9) |
4301 Bull Creek Rd Ste 300 Austin, TX 78731 | SF + 5.75% | 10.94 | % | 10/5/2028 | 24,313 | 24,313 | 24,313 | ||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
1591 East Prathersville Road, Columbia, MO 65201 | SF + 5.50% | 9.98 | % | 6/16/2027 | 39,203 | 38,658 | 39,192 | ||||||||||||||||||||||||
133
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
1591 East Prathersville Road, Columbia, MO 65201 | SF + 5.50% | 9.98 | % | 6/16/2027 | 12,441 | 12,307 | 12,437 | ||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(10) |
1591 East Prathersville Road, Columbia, MO 65201 | SF + 5.50% | 9.98 | % | 6/16/2027 | 25,457 | 25,274 | 25,450 | ||||||||||||||||||||||||
Club Car Wash Operating, LLC (4)(6)(10) |
1591 East Prathersville Road, Columbia, MO 65201 | SF + 5.50% | 9.98 | % | 6/16/2027 | 77,108 | 28,233 | 28,874 | ||||||||||||||||||||||||
Corporation Service Company (8) |
251 Little Falls Dr., Wilmington, DE 19808 | SF + 2.50% | 6.86 | % | 11/2/2029 | 1,662 | 1,627 | 1,672 | ||||||||||||||||||||||||
Express Wash Concepts, LLC (4)(10) |
13375 National Rd Ste D, Etna, OH 43068 | SF + 5.00% | 9.46 | % | 4/30/2027 | 46,751 | 46,530 | 46,751 | ||||||||||||||||||||||||
Express Wash Concepts, LLC (4)(10) |
13375 National Rd Ste D, Etna, OH 43068 | SF + 5.00% | 9.46 | % | 4/30/2027 | 26,258 | 26,130 | 26,258 | ||||||||||||||||||||||||
Houghton Mifflin Harcourt Company (8) |
125 High St., Boston, MA 02110 | SF + 5.25% | 9.71 | % | 4/9/2029 | 24,995 | 24,514 | 24,680 | ||||||||||||||||||||||||
IXM Holdings, Inc. (4)(11) |
250 Ridge Rd, Dayton, NJ 08810 | SF + 6.25% | 10.82 | % | 12/14/2029 | 18,426 | 18,197 | 18,611 | ||||||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) |
250 Ridge Rd, Dayton, NJ 08810 | SF + 6.25% | 10.80 | % | 12/14/2029 | 1,638 | 1,125 | 1,163 | ||||||||||||||||||||||||
IXM Holdings, Inc. (4)(6)(11) |
250 Ridge Rd, Dayton, NJ 08810 | SF + 6.25% | 10.77 | % | 12/14/2029 | 2,184 | 104 | 131 | ||||||||||||||||||||||||
KUEHG Corp. (8) |
650 North East Holladay Street Portland, OR 97232 | SF + 3.25% | 7.84 | % | 6/12/2030 | 2,386 | 2,381 | 2,414 | ||||||||||||||||||||||||
Learning Care Group, Inc. (8) |
21333 Haggerty Rd., Suite 300 Novi, MI 48375 | SF + 4.00% | 8.60 | % | 8/11/2028 | 1,975 | 1,954 | 1,997 | ||||||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
218 LIBERTY ST, WARREN, PA 16365 | SF + 5.00% | 9.62 | % | 3/12/2029 | 46,332 | 45,414 | 46,112 | ||||||||||||||||||||||||
Mckissock Investment Holdings, LLC (9) |
218 LIBERTY ST, WARREN, PA 16365 | SF + 5.00% | 9.80 | % | 3/12/2029 | 12,390 | 12,312 | 12,331 | ||||||||||||||||||||||||
Polyconcept North America Holdings, Inc. (9) |
400 Hunt Valley Road New Kensington, PA 15068 | SF + 5.50% | 9.83 | % | 5/18/2029 | 22,776 | 22,477 | 22,292 | ||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 | SF + 5.75% | 10.03 | % | 7/25/2028 | 21,320 | 21,064 | 21,379 | ||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 | SF + 5.75% | 10.03 | % | 7/25/2028 | 15,821 | 15,632 | 15,865 | ||||||||||||||||||||||||
Spotless Brands, LLC (4)(10) |
2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 | SF + 5.75% | 10.03 | % | 7/25/2028 | 104,263 | 102,984 | 104,550 | ||||||||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) |
2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 | 7/25/2028 | 5,175 | (60 | ) | — | ||||||||||||||||||||||||||
Spotless Brands, LLC (4)(6)(10) |
2 Mid America Plaza, Suite 450, Oakbrook Terrace, IL 60181 | SF + 5.50% | 10.06 | % | 7/25/2028 | 31,069 | 16,690 | 16,783 | ||||||||||||||||||||||||
Thrasio LLC (4)(10) |
85 West Street, Suite 4, Walpole, MA 02081 | SF + 10.00% PIK | 14.89 | % | 6/18/2029 | 362 | 360 | 362 | ||||||||||||||||||||||||
134
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|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
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Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Thrasio LLC (4)(7)(18) |
85 West Street, Suite 4, Walpole, MA 02081 | SF + 10.00% PIK | 6/18/2029 | 1,055 | 1,029 | 819 | ||||||||||||||||||||||||||
TruGreen Limited Partnership (9) |
860 Ridge Lake Blvd, Memphis, TN 38120 | SF + 4.00% | 8.46 | % | 11/2/2027 | 8,487 | 8,423 | 8,285 | ||||||||||||||||||||||||
Zips Car Wash, LLC (4)(7)(18) |
8400 Belleview Dr, 210, Plano, TX 75024 | SF + 7.25% PIK | 2/3/2025 | 26,854 | 26,854 | 23,103 | ||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(7)(18) |
8400 Belleview Dr, 210, Plano, TX 75024 | SF + 7.25% PIK | 2/3/2025 | 15,850 | 15,848 | 13,635 | ||||||||||||||||||||||||||
Zips Car Wash, LLC (4)(7)(18) |
8400 Belleview Dr, 210, Plano, TX 75024 | SF + 7.25% PIK | 2/3/2025 | 1,016 | 1,016 | 874 | ||||||||||||||||||||||||||
| 667,356 | 662,261 | 7.58 | % | |||||||||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||||||||
Hamilton Projects Acquiror, LLC (7) |
13860 Ballantyne Corporate Place Suite 300, Charlotte NC 28273 | SF + 3.00% | 7.33 | % | 5/31/2031 | 16,788 | 16,750 | 16,941 | ||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(7) |
548 Market St Ste 68743, San Francisco, CA 94104 | 7.88 | % | 12/31/2029 | 27,116 | 26,691 | 26,848 | |||||||||||||||||||||||||
IP Operations II Investco, LLC (4)(15) |
9450 SW Gemini Drive, PMB 68743, Beaverton, US-OR, 97008 | SF + 5.50% | 9.85 | % | 6/26/2029 | 26,547 | 26,072 | 26,292 | ||||||||||||||||||||||||
IP Operations II Investco, LLC (4)(6)(15) |
9450 SW Gemini Drive, PMB 68743, Beaverton, US-OR, 97008 | SF + 5.50% | 9.86 | % | 12/31/2025 | 24,986 | 14,035 | 14,139 | ||||||||||||||||||||||||
Sunzia UpperCo LLC (4)(16) |
1088 Sansome Street, San Francisco, CA 94111 | SF + 5.00% | 9.43 | % | 6/27/2025 | 25,000 | 24,900 | 24,997 | ||||||||||||||||||||||||
Thunder Generation Funding LLC (7) |
251 Little Falls Drive, Wilmington, Delaware 19808 | SF + 3.00% | 7.33 | % | 10/3/2031 | 5,868 | 5,839 | 5,913 | ||||||||||||||||||||||||
| 114,287 | 115,130 | 1.32 | % | |||||||||||||||||||||||||||||
Electronic and Electrical Equipment |
||||||||||||||||||||||||||||||||
Dwyer Instruments Inc(4)(6)(9) |
102 Indiana Highway 212, PO Box 373, Michigan City, IN 46360, United States | 7/20/2029 | 13,403 | (132 | ) | (131) | ||||||||||||||||||||||||||
Dwyer Instruments Inc(4)(6)(13) |
102 Indiana Highway 212, PO Box 373, Michigan City, IN 46360, United States | 7/20/2029 | 19,177 | (187 | ) | (187) | ||||||||||||||||||||||||||
Dwyer Instruments Inc(4)(9) |
102 Indiana Highway 212, PO Box 373, Michigan City, IN 46360, United States | SF + 4.75% | 9.27 | % | 7/20/2029 | 112,452 | 111,352 | 111,355 | ||||||||||||||||||||||||
| 111,033 | 111,037 | 1.27 | % | |||||||||||||||||||||||||||||
Finance and Credit Services |
||||||||||||||||||||||||||||||||
PCP CW Aggregator Holdings II, L.P. (4)(5)(10) |
101 Crossways Park West, Woodbury, NY 11797 | SF + 9.25% PIK | 13.93 | % | 2/9/2027 | 22,478 | 22,322 | 22,568 | ||||||||||||||||||||||||
Yes Energy LLC (4)(10) |
1877 Broadway St. Suite 606, Boulder, CO 80302 | SF + 5.00% | 9.36 | % | 4/21/2028 | 9,925 | 9,800 | 9,925 | ||||||||||||||||||||||||
135
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Address |
Reference Rate and Spread (2)
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Interest Rate (2)
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% of Class Held at 12/31/2024 |
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Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Yes Energy LLC (4)(10) |
1877 Broadway St. Suite 606, Boulder, CO 80302 | SF + 5.00% | 9.36 | % | 4/21/2028 | 4,837 | 4,721 | 4,885 | ||||||||||||||||||||||||
Yes Energy LLC (4)(6)(10) |
1877 Broadway St. Suite 606, Boulder, CO 80302 | SF + 5.00% | 9.37 | % | 4/21/2028 | 4,208 | 1,021 | 1,152 | ||||||||||||||||||||||||
Yes Energy LLC (4)(10) |
1877 Broadway St. Suite 606, Boulder, CO 80302 | SF + 5.00% | 9.36 | % | 4/21/2028 | 25,805 | 25,392 | 25,805 | ||||||||||||||||||||||||
| 63,256 | 64,335 | 0.74 | % | |||||||||||||||||||||||||||||
Food Producers |
||||||||||||||||||||||||||||||||
Aspire Bakeries Holdings LLC (7) |
6701 Center Dr W Ste 850 Los Angeles, CA, 90045-1695 United States | SF + 4.25% | 8.61 | % | 12/23/2030 | 7,299 | 7,263 | 7,381 | ||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(6)(9) |
546 West St., Watertown, WI 53094 | SF + 6.00% | 10.46 | % | 2/12/2029 | 11,279 | 6,625 | 6,767 | ||||||||||||||||||||||||
Specialty Ingredients, LLC (4)(9) |
546 West St., Watertown, WI 53094 | SF + 6.00% | 10.46 | % | 2/12/2029 | 88,894 | 87,742 | 88,894 | ||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(6)(10) |
580 W Industrial Ct. Villa Rica, GA 30180 | 10/2/2030 | 14,474 | (139 | ) | 145 | ||||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) |
580 W Industrial Ct. Villa Rica, GA 30180 | SF + 5.25% | 9.65 | % | 10/2/2030 | 16,417 | 16,104 | 16,581 | ||||||||||||||||||||||||
Sugar PPC Buyer LLC (4)(10) |
580 W Industrial Ct. Villa Rica, GA 30180 | SF + 5.25% | 9.70 | % | 10/2/2030 | 59,100 | 58,007 | 59,691 | ||||||||||||||||||||||||
| 175,602 | 179,459 | 2.05 | % | |||||||||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||||||||
Core & Main LP (5)(7) |
1830 Craig Park Ct Saint Louis, MO, 63146 | SF + 2.00% | 6.38 | % | 2/9/2031 | 1,826 | 1,826 | 1,834 | ||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(7) |
100 First Stamford Place, Suite 440, Stamford, CT 06902 | |
13.50% (incl 6.35% PIK) |
|
4/26/2029 | 791 | 771 | 772 | ||||||||||||||||||||||||
Floating Infrastructure Holdings Finance LLC (4)(5)(10) |
2445 Technology Forest Blvd, Suite 500, The Woodlands, TX 77381 | SF + 5.75% | 10.18 | % | 8/13/2027 | 40,936 | 40,517 | 40,936 | ||||||||||||||||||||||||
| 43,114 | 43,542 | 0.50 | % | |||||||||||||||||||||||||||||
General Industrials |
||||||||||||||||||||||||||||||||
Bakelite US Holdco Inc (7) |
1040 Crown Pointe Pkwy Suite 700, Atlanta, GA 30338, United States | SF + 3.75% | 8.09 | % | 12/23/2031 | 6,207 | 6,145 | 6,191 | ||||||||||||||||||||||||
BP Purchaser, LLC (4)(9) |
2650 Galvin Drive, Elgin, IL 60124 | SF + 5.50% | 10.16 | % | 12/11/2028 | 27,303 | 26,982 | 25,389 | ||||||||||||||||||||||||
Bright Light Buyer, Inc. (4)(10) |
3360 Davie Road, Suite 509 Davie, FL 33314 | SF + 6.00% | 10.40 | % | 11/8/2029 | 74,250 | 72,749 | 74,105 | ||||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(10) |
Rivergate, Handelskai 92, 1200 Vienna, Austria | E + 6.75% (incl 2.50% PIK) | 10.00 | % | 1/3/2030 | € | 13,398 | 14,213 | 13,989 | |||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(10) |
Rivergate, Handelskai 92, 1200 Vienna, Austria | E + 6.75% (incl 2.50% PIK) | 10.00 | % | 1/3/2030 | € | 72,123 | 76,509 | 75,300 | |||||||||||||||||||||||
Capripack Debtco PLC (4)(5)(6)(10) |
Rivergate, Handelskai 92, 1200 Vienna, Austria | 1/3/2030 | € | 29,873 | (1,138 | ) | 241 | |||||||||||||||||||||||||
136
| Company
(1)
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Address
|
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and Spread (2)
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Value
|
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|||||||||||||||||||||||
| Capripack Debtco PLC (4)(5)(6)(10)
|
Rivergate, Handelskai 92, 1200 Vienna, Austria | 1/3/2030 | € | 26,139 | (996 | ) | 211 | |||||||||||||||||||||||||
| Formerra, LLC (4)(10)
|
1250 Windham Pkwy, Romeoville, IL 60446 | SF + 7.25% | 11.71 | % | 11/1/2028 | 4,209 | 4,118 | 4,175 | ||||||||||||||||||||||||
| Formerra, LLC (4)(6)(10)
|
1250 Windham Pkwy, Romeoville, IL 60446 | 11/1/2028 | 12,031 | (249 | ) | (96) | ||||||||||||||||||||||||||
| Formerra, LLC (4)(10)
|
1250 Windham Pkwy, Romeoville, IL 60446 | SF + 7.25% | 11.71 | % | 11/1/2028 | 104,619 | 102,398 | 103,781 | ||||||||||||||||||||||||
| Marcone Group Inc (4)(9)
|
One City Place, Ste 400, St Louis, MO 63141 | SF + 7.00% | 11.67 | % | 6/23/2028 | 11,861 | 11,791 | 11,147 | ||||||||||||||||||||||||
| Marcone Group Inc (4)(9)
|
One City Place, Ste 400, St Louis, MO 63141 | SF + 7.00% (incl 3.25% PIK) | 11.74 | % | 6/23/2028 | 49,482 | 49,034 | 46,501 | ||||||||||||||||||||||||
| Marcone Group Inc (4)(9)
|
One City Place, Ste 400, St Louis, MO 63141 | SF + 7.00% | 11.74 | % | 6/23/2028 | 4,362 | 4,336 | 4,099 | ||||||||||||||||||||||||
| Marcone Group Inc (4)(9)
|
One City Place, Ste 400, St Louis, MO 63141 | SF + 7.00% (incl 3.25% PIK) | 11.74 | % | 6/23/2028 | 13,126 | 13,049 | 12,335 | ||||||||||||||||||||||||
| |
|
|
|
|
|
|||||||||||||||||||||||||||
| 378,941 | 377,368 | 4.32 | % | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|||||||||||||||||||||||||||
| Health Care Providers
|
||||||||||||||||||||||||||||||||
| 123Dentist Inc (4)(5)(6)(9)
|
4321 Still Creek Drive, Suite 200, Burnaby, British Columbia V5C 6S7, Canada | C + 5.00% | 8.30 | % | 8/10/2029 | C$ | 23,866 | 4,133 | 4,243 | |||||||||||||||||||||||
| 123Dentist Inc (4)(5)(9)
|
4321 Still Creek Drive, Suite 200, Burnaby, British Columbia V5C 6S7, Canada | C + 5.00% | 8.30 | % | 8/10/2029 | C$ | 56,771 | 43,361 | 39,584 | |||||||||||||||||||||||
| AB Centers Acquisition Corporation (4)(9)
|
1601 S Mo Pac Expy, Suite C-300, Austin, Texas 78746 | SF + 5.25% | 9.84 | % | 7/2/2031 | 158,606 | 156,397 | 158,908 | ||||||||||||||||||||||||
| AB Centers Acquisition Corporation (4)(6)(9)
|
1601 S Mo Pac Expy, Suite C-300, Austin, Texas 78746 | SF + 5.25% | 9.89 | % | 7/2/2031 | 28,837 | 1,560 | 2,032 | ||||||||||||||||||||||||
| AB Centers Acquisition Corporation (4)(6)(9)
|
1601 S Mo Pac Expy, Suite C-300, Austin, Texas 78746 | 7/2/2031 | 16,655 | (232 | ) | — | ||||||||||||||||||||||||||
| AB Centers Acquisition Corporation (4)(9)
|
1601 S Mo Pac Expy, Suite C-300, Austin, Texas 78746 | SF + 5.25% | 9.61 | % | 7/2/2031 | 53,243 | 52,807 | 53,345 | ||||||||||||||||||||||||
| Aspen Dental Management Inc. (8)
|
1040 W Randolph St, Chicago, Illinois 60607 | SF + 3.75% | 8.22 | % | 12/23/2027 | 3,302 | 3,245 | 3,252 | ||||||||||||||||||||||||
| Aspen Dental Management Inc. (7)
|
1040 W Randolph St, Chicago, Illinois 60607 | SF + 5.75% | 10.11 | % | 12/23/2027 | 854 | 860 | 859 | ||||||||||||||||||||||||
| Accelerated Health Systems LLC (8)
|
2122 York Road, Ste. 300 Oak Brook, IL 60523 | SF + 4.25% | 8.73 | % | 2/15/2029 | 7,871 | 7,857 | 6,104 | ||||||||||||||||||||||||
137
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Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
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Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
ATI Holdings Acquisition, Inc. (4)(5)(10) |
790 Remington Blvd, Bolingbrook, IL 60440 | SF + 7.25% | 11.50 | % | 2/24/2028 | 41,092 | 40,655 | 39,597 | ||||||||||||||||||||||||
Baart Programs, Inc. (4)(10) |
1720 Lakepointe Dr. Suite 117, Lewisville, TX 75057 | SF + 5.00% | 9.59 | % | 6/11/2027 | 10,019 | 9,972 | 9,633 | ||||||||||||||||||||||||
Charlotte Buyer Inc (8) |
500 West Main Street, Louisville, KY 40202 | SF + 4.75% | 9.20 | % | 2/11/2028 | 23,755 | 22,855 | 23,928 | ||||||||||||||||||||||||
Diagnostic Services Holdings, Inc. (4)(6)(10) |
251 Country Road 120 Suite D, ST Cloud, MN 56303, United States | SF + 5.50% | 9.95 | % | 3/15/2027 | 2,993 | 676 | 676 | ||||||||||||||||||||||||
Diagnostic Services Holdings, Inc. (4)(10) |
251 Country Road 120 Suite D, ST Cloud, MN 56303, United States | SF + 5.50% | 9.95 | % | 3/15/2027 | 122,322 | 121,428 | 121,427 | ||||||||||||||||||||||||
Diagnostic Services Holdings, Inc. (4)(10) |
251 Country Road 120 Suite D, ST Cloud, MN 56303, United States | SF + 5.50% | 9.95 | % | 3/15/2027 | 15,692 | 15,578 | 15,577 | ||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(6)(7)(18) |
7351 E. Lowry Blvd, Ste 200, Denver, CO 80230 | SF + 6.25% (incl 3.25% PIK) | 11/10/2027 | 1,000 | 708 | 354 | ||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(18) |
7351 E. Lowry Blvd, Ste 200, Denver, CO 80230 | SF + 6.25% (incl 3.25% PIK) | 11/10/2028 | 25,291 | 23,852 | 14,157 | ||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(18) |
7351 E. Lowry Blvd, Ste 200, Denver, CO 80230 | SF + 6.25% PIK | 11/10/2028 | 417 | 417 | 233 | ||||||||||||||||||||||||||
ERC Topco Holdings, LLC (4)(7)(18) |
7351 E. Lowry Blvd, Ste 200, Denver, CO 80230 | SF + 6.25% PIK | 11/10/2028 | 11 | 11 | 7 | ||||||||||||||||||||||||||
FC Compassus, LLC (4)(6)(9) |
10 Cadillac Dr Ste 400 Brentwood, TN, 37027-1001 United States | 11/26/2030 | 15,811 | (235 | ) | (233) | ||||||||||||||||||||||||||
FC Compassus, LLC (4)(6)(9) |
10 Cadillac Dr Ste 400 Brentwood, TN, 37027-1001 United States | 11/26/2030 | 128 | (2 | ) | (2) | ||||||||||||||||||||||||||
FC Compassus, LLC (4)(9) |
10 Cadillac Dr Ste 400 Brentwood, TN, 37027-1001 United States | SF + 5.75% (incl 1.50% PIK) | 11.45 | % | 11/26/2030 | 1,163 | 1,146 | 1,145 | ||||||||||||||||||||||||
FC Compassus, LLC (4)(6)(7) |
10 Cadillac Dr Ste 400 Brentwood, TN, 37027-1001 United States | 11/26/2030 | 19,127 | (282 | ) | (282) | ||||||||||||||||||||||||||
FC Compassus, LLC (4)(9) |
10 Cadillac Dr Ste 400 Brentwood, TN, 37027-1001 United States | SF + 5.75% (incl 1.50% PIK) | 10.27 | % | 11/26/2030 | 144,937 | 142,797 | 142,798 | ||||||||||||||||||||||||
Indigo Purchaser, Inc. (4)(6)(9) |
5700 Granite Pkwy Ste 455 Plano, TX, 75024 United States | 11/21/2031 | 25,608 | (381 | ) | (378) | ||||||||||||||||||||||||||
Indigo Purchaser, Inc. (4)(6)(9) |
5700 Granite Pkwy Ste 455 Plano, TX, 75024 United States | 11/21/2031 | 17,478 | (258 | ) | (258) | ||||||||||||||||||||||||||
Indigo Purchaser, Inc. (4)(9) |
5700 Granite Pkwy Ste 455 Plano, TX, 75024 United States | SF + 5.00% | 9.33 | % | 11/21/2031 | 112,394 | 110,735 | 110,734 | ||||||||||||||||||||||||
Kabafusion Parent LLC (4)(6)(9) |
17777 Center Court Drive North Ste 550 Cerritos, CA, 90703 United States | 11/24/2031 | 11,700 | (115 | ) | (115) | ||||||||||||||||||||||||||
138
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Kabafusion Parent LLC (4)(9) |
17777 Center Court Drive North Ste 550 Cerritos, CA, 90703 United States | SF + 5.00% | 9.33 | % | 11/24/2031 | 90,000 | 89,113 | 89,114 | ||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) |
2403 Lacy Lane, Carrollton, TX 75006 | 2/13/2031 | 13,909 | (243 | ) | (136) | ||||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(9) |
2403 Lacy Lane, Carrollton, TX 75006 | SF + 5.50% | 9.86 | % | 2/13/2031 | 154,914 | 152,732 | 153,401 | ||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(6)(9) |
2403 Lacy Lane, Carrollton, TX 75006 | SF + 5.50% | 9.86 | % | 2/13/2031 | 54,046 | 10,016 | 10,498 | ||||||||||||||||||||||||
MB2 Dental Solutions, LLC (4)(9) |
2403 Lacy Lane, Carrollton, TX 75006 | SF + 5.50% | 10.02 | % | 2/13/2031 | 22,375 | 21,937 | 22,156 | ||||||||||||||||||||||||
Medline Borrower LP (8) |
Three Lakes Drive Northfield, IL 60093 | SF + 2.25% | 6.61 | % | 10/23/2028 | 15,060 | 14,959 | 15,130 | ||||||||||||||||||||||||
MPH Acquisition Holdings LLC (8) |
115 5th Avenue, New York, NY 10003 | SF + 4.25% | 9.03 | % | 9/1/2028 | 2,246 | 2,209 | 1,938 | ||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 | SF + 5.00% | 9.28 | % | 6/3/2030 | 44,311 | 43,473 | 43,871 | ||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 | SF + 5.00% | 9.28 | % | 6/3/2030 | 14,770 | 14,491 | 14,624 | ||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) |
FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 | 6/1/2029 | 4,032 | (89 | ) | (40) | ||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(6)(10) |
FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 | 6/3/2030 | 9,160 | (91 | ) | (91) | ||||||||||||||||||||||||||
Pareto Health Intermediate Holdings, Inc. (4)(10) |
FMC Tower, Suite 1500, 2929 Walnut Street Philadelphia, PA 19104 | SF + 5.00% | 9.36 | % | 6/3/2030 | 16,646 | 16,481 | 16,481 | ||||||||||||||||||||||||
Phoenix Newco Inc (8) |
2520 Meridian Pkwy, Research Triangle Park, Suite 200, Durham, NC 27713 | SF + 3.00% | 7.36 | % | 11/15/2028 | 16,715 | 16,641 | 16,851 | ||||||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) |
6720 N Scottsdale Rd, Ste 160, Scottsdale, Arizona 85253 | SF + 5.00% | 9.53 | % | 3/14/2028 | 9,164 | 9,072 | 9,164 | ||||||||||||||||||||||||
Pinnacle Fertility, Inc. (4)(9) |
6720 N Scottsdale Rd, Ste 160, Scottsdale, Arizona 85253 | SF + 5.00% | 9.53 | % | 3/14/2028 | 26,744 | 26,448 | 26,744 | ||||||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(9) |
141 Longwater Dr, Suite 108, Norwell, MA 02061 | SF + 5.75% | 10.26 | % | 8/31/2029 | 107,652 | 106,322 | 107,652 | ||||||||||||||||||||||||
PPV Intermediate Holdings, LLC (4)(6)(9) |
141 Longwater Dr, Suite 108, Norwell, MA 02061 | 8/31/2029 | 8,145 | (108 | ) | — | ||||||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
1100 Circle 75 Pkwy, Ste 1400, Atlanta, GA 30339 | SF + 5.50% | 9.98 | % | 12/17/2027 | 3,901 | 3,858 | 3,900 | ||||||||||||||||||||||||
PTSH Intermediate Holdings, LLC (4)(9) |
1100 Circle 75 Pkwy, Ste 1400, Atlanta, GA 30339 | SF + 5.50% | 9.98 | % | 12/17/2027 | 20,468 | 20,256 | 20,460 | ||||||||||||||||||||||||
139
| Company
(1)
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|
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| Raven Acquisition Holdings LLC (6)(7)
|
434 W Acension Way 6th Floor, Salt Lake City, UT 84123, United States | 11/19/2031 | 1,333 | (7 | ) | 5 | ||||||||||||||||||||||||||
| Raven Acquisition Holdings LLC (7)
|
434 W Acension Way 6th Floor, Salt Lake City, UT 84123, United States | SF + 3.25% | 7.61 | % | 11/19/2031 | 18,667 | 18,575 | 18,732 | ||||||||||||||||||||||||
| Southern Veterinary Partners LLC (7)
|
2204 Lakeshore Dr Ste 325 Birmingham, AL, 35209 United States | SF + 3.25% | 7.71 | % | 12/4/2031 | 4,673 | 4,650 | 4,712 | ||||||||||||||||||||||||
| Tenet Healthcare Corp (5)(7)
|
14201 Dallas Parkway, Dallas, TX 75254 | 5.13 | % | 11/1/2027 | 2,695 | 2,716 | 2,642 | |||||||||||||||||||||||||
| Tivity Health Inc (4)(9)
|
4031 Aspen Grove Drive, Suite 250, Franklin, TN 37067 | SF + 5.00% | 9.36 | % | 6/28/2029 | 129,821 | 128,039 | 131,119 | ||||||||||||||||||||||||
| United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9)
|
400 Perimeter Center Terrace Suite 875 Atlanta, GA 30346 | SF + 5.75% | 10.32 | % | 7/17/2028 | 32,506 | 32,125 | 32,122 | ||||||||||||||||||||||||
| United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9)
|
400 Perimeter Center Terrace Suite 875 Atlanta, GA 30346 | SF + 5.75% | 10.38 | % | 7/17/2028 | 26,279 | 25,972 | 25,969 | ||||||||||||||||||||||||
| United Musculoskeletal Partners Acquisition Holdings, LLC (4)(9)
|
400 Perimeter Center Terrace Suite 875 Atlanta, GA 30346 | SF + 5.75% | 10.40 | % | 7/17/2028 | 42,851 | 42,326 | 42,345 | ||||||||||||||||||||||||
| WCAS XIV Primary Care Investors, L.P. (4)(10)
|
500 W. Main St., Louisville, KY 40202 | SF + 6.25% | 10.58 | % | 12/31/2032 | 56,433 | 55,404 | 55,664 | ||||||||||||||||||||||||
| WCAS XIV Primary Care Investors, L.P. (4)(10)
|
500 W. Main St., Louisville, KY 40202 | SF + 6.25% | 10.58 | % | 12/31/2032 | 8,342 | 8,185 | 8,228 | ||||||||||||||||||||||||
| WCAS XIV Primary Care Investors, L.P. (4)(10)
|
500 W. Main St., Louisville, KY 40202 | SF + 6.25% | 10.58 | % | 12/31/2032 | 15,932 | 15,624 | 15,715 | ||||||||||||||||||||||||
| WCAS XIII Primary Care Investors, L.P. (4)(10)
|
500 W. Main St., Louisville, KY 40202 | SF + 6.25% | 10.58 | % | 12/31/2029 | 135,630 | 133,680 | 133,326 | ||||||||||||||||||||||||
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| 1,774,311 | 1,769,621 | 20.26 | % | |||||||||||||||||||||||||||||
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| Household Goods and Home Construction
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| LHS Borrower LLC (8)
|
1595 Georgetown Rd, Hudson, OH 44236 | SF + 4.75% | 9.21 | % | 2/16/2029 | 6,876 | 6,835 | 6,589 | ||||||||||||||||||||||||
| |
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|||||||||||||||||||||||||||
| 6,835 | 6,589 | 0.08 | % | |||||||||||||||||||||||||||||
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| Industrial Engineering
|
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| LSF12 Donnelly Bidco, LLC (4)(10)
|
16430 N Scottsdale Road, Suite 450, Scottsdale, AZ, 85254 | SF + 6.50% | 10.86 | % | 10/2/2029 | 19,678 | 19,288 | 19,678 | ||||||||||||||||||||||||
| Radwell Parent, LLC (4)(6)(9)
|
1 Millennium Drive, Willingboro, NJ 08046 | SF + 5.50% | 9.83 | % | 4/3/2028 | 13,271 | 2,452 | 2,654 | ||||||||||||||||||||||||
| Radwell Parent, LLC (4)(9)
|
1 Millennium Drive, Willingboro, NJ 08046 | SF + 5.50% | 9.83 | % | 4/2/2029 | 152,270 | 149,181 | 152,510 | ||||||||||||||||||||||||
| Roper Industrial Products Investment Co (8)
|
6496 University Parkway, Sarasota, FL 34240 | SF + 2.75% | 7.08 | % | 11/22/2029 | 18,184 | 17,745 | 18,252 | ||||||||||||||||||||||||
| Rotation Buyer, LLC (4)(6)(9)
|
2760 Baglyos Circle Bethlehem, PA, 18020 United States | 12/27/2031 | 17,062 | (170 | ) | (170) | ||||||||||||||||||||||||||
140
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Address |
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|
Fair Value |
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|||||||||||||||||||||||
Rotation Buyer, LLC (4)(6)(9) |
2760 Baglyos Circle Bethlehem, PA, 18020 United States | SF + 4.75% | 9.08 | % | 12/27/2031 | 8,731 | 1,869 | 1,869 | ||||||||||||||||||||||||
Rotation Buyer, LLC (4)(9) |
2760 Baglyos Circle Bethlehem, PA, 18020 United States | SF + 4.75% | 9.08 | % | 12/27/2031 | 66,540 | 65,876 | 65,876 | ||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 | E + 6.50% (incl 2.00% PIK) | 9.89 | % | 12/1/2027 | € | 4,779 | 4,986 | 4,289 | |||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(6)(9) |
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 | SF + 6.50% (incl 2.00% PIK) | 11.31 | % | 12/1/2027 | 1,000 | 476 | 365 | ||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 | SF + 6.50% (incl 2.00% PIK) | 11.49 | % | 12/1/2027 | 12,133 | 12,000 | 10,653 | ||||||||||||||||||||||||
Time Manufacturing Holdings, LLC (4)(9) |
7601 Imperial Drive, P.O. Box 20368, Waco, TX 76712 | E + 6.50% (incl 2.00% PIK) | 9.89 | % | 12/1/2027 | € | 8,416 | 9,408 | 7,553 | |||||||||||||||||||||||
TK Elevator US Newco Inc (5)(8) |
788 Circle 75 Parkway SE, Suite 500, Atlanta, GA 30339 | SF + 3.50% | 8.59 | % | 4/30/2030 | 12,448 | 12,313 | 12,553 | ||||||||||||||||||||||||
Wec US Holdings Inc (7) |
1000 Westinghouse Drive, Cranberry Township, PA 16066 | SF + 2.25% | 6.80 | % | 1/27/2031 | 9,975 | 9,907 | 9,995 | ||||||||||||||||||||||||
| 305,331 | 306,077 | 3.50 | % | |||||||||||||||||||||||||||||
Industrial Metals and Mining |
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Alchemy US Holdco 1 LLC (4)(10) |
2601 Weck Drive, Research Triangle Park, North Carolina 27709 | SF + 6.50% | 11.09 | % | 7/31/2029 | 121,353 | 116,459 | 116,634 | ||||||||||||||||||||||||
Alchemy US Holdco 1 LLC (4)(10) |
2601 Weck Drive, Research Triangle Park, North Carolina 27709 | E + 6.50% | 9.56 | % | 7/31/2029 | € | 25,605 | 26,597 | 25,496 | |||||||||||||||||||||||
Alchemy US Holdco 1 LLC (4)(6)(10) |
2601 Weck Drive, Research Triangle Park, North Carolina 27709 | SF + 6.50% | 11.02 | % | 7/31/2029 | 10,262 | 894 | 920 | ||||||||||||||||||||||||
BLY US Holdings Inc. (4)(5)(10) |
2455 South 3600 West, West Valley City, UT 84119 | SF + 6.00% | 10.33 | % | 4/10/2029 | 60,360 | 59,054 | 59,341 | ||||||||||||||||||||||||
| 203,004 | 202,391 | 2.32 | % | |||||||||||||||||||||||||||||
Industrial Support Services |
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AI Circle Bidco Limited (4)(5)(6)(10) |
Level 24, 32 London Bridge Street, London, England SE1 9SG, GB | 2/8/2031 | € | 6,374 | (257 | ) | 13 | |||||||||||||||||||||||||
AI Circle Bidco Limited (4)(5)(10) |
Level 24, 32 London Bridge Street, London, England SE1 9SG, GB | E + 6.75% | 10.24 | % | 2/8/2031 | € | 44,620 | 46,399 | 46,316 | |||||||||||||||||||||||
Allied Universal Holdco LLC (8) |
1551 N Tustin Ave, Santa Ana, CA 92705 | SF + 3.75% | 8.21 | % | 5/12/2028 | 7,459 | 7,431 | 7,492 | ||||||||||||||||||||||||
Argos Health Holdings, Inc. (4)(9) |
5440 Harvest Hill Rd, Dallas, TX 75230 | SF + 6.25% | 10.90 | % | 12/6/2027 | 647 | 640 | 613 | ||||||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(10) |
4 Tri Harbor Court Port Washington, NY 11050 | SF + 8.50% (incl 4.00% PIK) | 13.09 | % | 10/31/2029 | 116,720 | 114,465 | 115,480 | ||||||||||||||||||||||||
Atlas Intermediate III, L.L.C. (4)(6)(10) |
4 Tri Harbor Court Port Washington, NY 11050 | 10/31/2029 | 13,445 | (271 | ) | (143) | ||||||||||||||||||||||||||
141
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Address |
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Interest Rate (2)
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|
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AVSC Holding Corp. (4)(6)(9) |
5100 North River Road Ste 300 Schiller Park, IL, 60176 United States | 12/5/2029 | 8,660 | (171 | ) | (171) | ||||||||||||||||||||||||||
AVSC Holding Corp. (4)(9) |
5100 North River Road Ste 300 Schiller Park, IL, 60176 United States | SF + 5.00% | 9.36 | % | 12/5/2031 | 74,189 | 72,720 | 72,720 | ||||||||||||||||||||||||
Axiom Buyer, LLC (4)(6)(10) |
1290 Hercules Ave, Houston, Texas 77058, US | 1/14/2030 | 16,189 | (387 | ) | (346) | ||||||||||||||||||||||||||
Axiom Buyer, LLC (4)(6)(10) |
1290 Hercules Ave, Houston, Texas 77058, US | SF + 6.50% | 10.86 | % | 1/14/2030 | 18,189 | 2,183 | 2,210 | ||||||||||||||||||||||||
Axiom Buyer, LLC (4)(10) |
1290 Hercules Ave, Houston, Texas 77058, US | SF + 6.50% | 10.86 | % | 1/14/2030 | 149,954 | 146,528 | 146,749 | ||||||||||||||||||||||||
Captive Resources Midco LLC (4)(6)(9) |
1100 N. Arlington Heights Road, Itasca, IL 60143 | 7/3/2028 | 7,558 | (88 | ) | — | ||||||||||||||||||||||||||
Captive Resources Midco LLC (4)(9) |
1100 N. Arlington Heights Road, Itasca, IL 60143 | SF + 4.75% | 9.11 | % | 7/2/2029 | 92,942 | 91,794 | 92,942 | ||||||||||||||||||||||||
CD&R Galaxy UK Intermediate 3 Limited (4)(5)(6)(10)(18) |
New Century House, The Havens, Ipswich, Suffolk, England, IP3 9SJ | 1/15/2026 | 1,115 | — | — | |||||||||||||||||||||||||||
CD&R Galaxy UK Intermediate 3 Limited (4)(5)(7)(18) |
New Century House, The Havens, Ipswich, Suffolk, England, IP3 9SJ | SF + 11.50% PIK | 1/15/2026 | 422 | 422 | 422 | ||||||||||||||||||||||||||
Chartis Group LLC (4)(9) |
220 West Kinzie Street, Third Floor, Chicago, IL 60654, US | SF + 4.50% | 8.85 | % | 9/17/2031 | 81,797 | 81,013 | 81,454 | ||||||||||||||||||||||||
Chartis Group LLC (4)(6)(9) |
220 West Kinzie Street, Third Floor, Chicago, IL 60654, US | 9/17/2031 | 25,040 | (245 | ) | (105) | ||||||||||||||||||||||||||
Chartis Group LLC (4)(6)(9) |
220 West Kinzie Street, Third Floor, Chicago, IL 60654, US | 9/17/2031 | 14,716 | (140 | ) | (62) | ||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
601 11th Avenue, Suite 700, Nashville, TN 37203, US | 10/1/2029 | 10,736 | (258 | ) | 107 | ||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
601 11th Avenue, Suite 700, Nashville, TN 37203, US | 10/1/2029 | 11,656 | (237 | ) | — | ||||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(9) |
601 11th Avenue, Suite 700, Nashville, TN 37203, US | SF + 5.25% | 9.61 | % | 10/1/2029 | 80,280 | 78,706 | 81,083 | ||||||||||||||||||||||||
Coretrust Purchasing Group LLC (4)(6)(9) |
601 11th Avenue, Suite 700, Nashville, TN 37203, US | 10/1/2029 | 4,423 | (39 | ) | 44 | ||||||||||||||||||||||||||
Eagle 2021 Lower Merger Sub, LLC (4)(9) |
5440 Harvest Hill Rd, Dallas, TX 75230 | SF + 6.25% | 10.90 | % | 12/6/2027 | 808 | 800 | 766 | ||||||||||||||||||||||||
EIS Legacy Holdco, LLC (4)(6)(9) |
2018 Powers Ferry Rd SE Ste 500 Atlanta, GA, 30339-7202 United States | 11/5/2031 | 30,682 | (303 | ) | (300) | ||||||||||||||||||||||||||
EIS Legacy Holdco, LLC (4)(6)(9) |
2018 Powers Ferry Rd SE Ste 500 Atlanta, GA, 30339-7202 United States | 11/5/2030 | 13,000 | (127 | ) | (127) | ||||||||||||||||||||||||||
142
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|
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EIS Legacy Holdco, LLC (4)(9) |
2018 Powers Ferry Rd SE Ste 500 Atlanta, GA, 30339-7202 United States | SF + 4.75% | 9.30 | % | 11/5/2031 | 64,432 | 63,802 | 63,802 | ||||||||||||||||||||||||
Employbridge, LLC (9) |
1845 Satellite Blvd, Suite 300, Duluth, GA 30097 | SF + 4.75% | 9.62 | % | 7/19/2028 | 9,707 | 9,675 | 6,450 | ||||||||||||||||||||||||
Empower Payments Investor, LLC (4)(6)(9) |
1131 4th Avenue S, Ste 330, Nashville, TN 37210 | 3/12/2031 | 14,426 | (272 | ) | — | ||||||||||||||||||||||||||
Empower Payments Investor, LLC (4)(6)(9) |
1131 4th Avenue S, Ste 330, Nashville, TN 37210 | 3/12/2030 | 9,704 | (168 | ) | — | ||||||||||||||||||||||||||
Empower Payments Investor, LLC (4)(9) |
1131 4th Avenue S, Ste 330, Nashville, TN 37210 | SF + 4.50% | 8.86 | % | 3/12/2031 | 101,182 | 99,391 | 101,182 | ||||||||||||||||||||||||
Galaxy US Opco Inc. (5)(8) |
100 Cambridge St, 14th floor, Boston, MA 02114 | SF + 4.75% | 9.34 | % | 4/29/2029 | 13,769 | 13,547 | 12,306 | ||||||||||||||||||||||||
Guidehouse Inc. (4)(9) |
1676 International Drive Suite 800, McLean, VA 22102 | SF + 5.75% (incl 2.00% PIK) | 10.11 | % | 12/16/2030 | 188,878 | 186,766 | 190,767 | ||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(6)(13) |
1224 Hammond Drive, Suite 1500, Atlanta, GA 30346 | 9/22/2028 | 10,221 | (126 | ) | (39) | ||||||||||||||||||||||||||
IG Investments Holdings, LLC (4)(9) |
1224 Hammond Drive, Suite 1500, Atlanta, GA 30346 | SF + 5.00% | 9.57 | % | 9/22/2028 | 88,901 | 88,443 | 88,560 | ||||||||||||||||||||||||
Madison Safety & Flow LLC (7) |
444 West Lake, Suite 4400, Chicago, IL 60606 | SF + 3.25% | 7.61 | % | 9/26/2031 | 3,679 | 3,670 | 3,711 | ||||||||||||||||||||||||
NBG Acquisition Corp. (4)(6)(9) |
721 N Eckhoff St, Orange, CA 92868 | SF + 5.50% | 9.93 | % | 11/6/2028 | 2,876 | 2,120 | 2,018 | ||||||||||||||||||||||||
NBG Acquisition Corp. (4)(9) |
721 N Eckhoff St, Orange, CA 92868 | SF + 5.50% | 9.93 | % | 11/6/2028 | 3,325 | 3,281 | 3,188 | ||||||||||||||||||||||||
NBG Acquisition Corp. (4)(9) |
721 N Eckhoff St, Orange, CA 92868 | SF + 5.50% | 10.24 | % | 11/6/2028 | 21,118 | 21,029 | 20,251 | ||||||||||||||||||||||||
NTH Degree Purchaser, Inc (4)(6)(10) |
3237 Satellite Boulevard, Suite 600, Duluth, GA 30096 | 9/10/2030 | 30,800 | (600 | ) | (442) | ||||||||||||||||||||||||||
NTH Degree Purchaser, Inc (4)(6)(10) |
3237 Satellite Boulevard, Suite 600, Duluth, GA 30096 | 9/10/2030 | 16,125 | (306 | ) | (231) | ||||||||||||||||||||||||||
NTH Degree Purchaser, Inc (4)(10) |
3237 Satellite Boulevard, Suite 600, Duluth, GA 30096 | SF + 5.25% | 9.68 | % | 9/10/2030 | 101,621 | 99,694 | 100,162 | ||||||||||||||||||||||||
PEX Holdings LLC (4)(7) |
805 3rd Avenue, 24th Floor, New York, NY 10022, United States | SF + 2.75% | 7.08 | % | 11/26/2031 | 15,000 | 14,963 | 15,094 | ||||||||||||||||||||||||
PG Polaris BidCo Sarl (5)(7) |
6, Rue Eugene Ruppert Luxembourg, 2453 Luxembourg | SF + 3.00% | 7.33 | % | 3/26/2031 | 11,967 | 11,951 | 12,080 | ||||||||||||||||||||||||
Planet US Buyer LLC (5)(7) |
22 Bishopsgate, 26th Floor, London EC2N 4BQ, UK | SF + 3.00% | 7.52 | % | 2/7/2031 | 7,463 | 7,446 | 7,536 | ||||||||||||||||||||||||
Royal Buyer, LLC (4)(9) |
751 Canyon Dr., Ste. 100, Coppell, TX 75019 | SF + 5.50% | 10.24 | % | 8/31/2028 | 8,939 | 8,828 | 8,939 | ||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
751 Canyon Dr., Ste. 100, Coppell, TX 75019 | 8/31/2028 | 7,000 | (85 | ) | — | ||||||||||||||||||||||||||
143
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Interest Rate (2)
|
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Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Royal Buyer, LLC (4)(9) |
751 Canyon Dr., Ste. 100, Coppell, TX 75019 | SF + 5.50% | 10.01 | % | 8/31/2028 | 44,100 | 43,548 | 44,100 | ||||||||||||||||||||||||
Royal Buyer, LLC (4)(6)(9) |
751 Canyon Dr., Ste. 100, Coppell, TX 75019 | SF + 5.50% | 10.02 | % | 8/31/2028 | 23,538 | 9,087 | 9,297 | ||||||||||||||||||||||||
Royal Buyer, LLC (4)(9) |
751 Canyon Dr., Ste. 100, Coppell, TX 75019 | SF + 5.50% | 10.24 | % | 8/31/2028 | 70,318 | 69,750 | 70,318 | ||||||||||||||||||||||||
Sedgwick Claims Management Services, Inc. (7) |
8125 Sedgwick Way Memphis, TN 38125 | SF + 3.00% | 7.59 | % | 7/31/2031 | 19,061 | 18,890 | 19,199 | ||||||||||||||||||||||||
SimpliSafe Holding Corporation (4)(9) |
100 Summer Street, Suite 300, Boston, MA 02110 | SF + 6.25% | 10.61 | % | 5/2/2028 | 14,991 | 14,806 | 14,991 | ||||||||||||||||||||||||
SimpliSafe Holding Corporation (4)(9) |
100 Summer Street, Suite 300, Boston, MA 02110 | SF + 6.25% | 10.61 | % | 5/2/2028 | 117,830 | 116,488 | 117,830 | ||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
11 East 26th Street, 12th Floor, New York, NY 10010 | 9/13/2028 | 3,579 | (47 | ) | — | ||||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(9) |
11 East 26th Street, 12th Floor, New York, NY 10010 | SF + 4.75% | 9.18 | % | 9/13/2028 | 42,668 | 42,089 | 42,668 | ||||||||||||||||||||||||
Spirit RR Holdings, Inc. (4)(6)(9) |
11 East 26th Street, 12th Floor, New York, NY 10010 | SF + 4.75% | 9.43 | % | 9/13/2028 | 5,956 | 2,888 | 2,963 | ||||||||||||||||||||||||
Transnetwork LLC (4)(8) |
4900 Woodway Dr., Houston, TX 77056 | SF + 4.75% | 9.08 | % | 12/29/2030 | 72,578 | 71,747 | 73,122 | ||||||||||||||||||||||||
TruckPro, LLC (4)(12) |
1900 Charles Bryan Rd, Cordova, Tennessee 38106 | SF + 7.75% | 12.49 | % | 8/16/2028 | 69,649 | 68,135 | 67,475 | ||||||||||||||||||||||||
TTF Lower Intermediate LLC (7) |
5550 Peachtree Parkway, Suite 500, Atlanta, GA 30092, United States | SF + 3.75% | 8.11 | % | 7/18/2031 | 8,249 | 8,172 | 8,208 | ||||||||||||||||||||||||
Vaco Holdings LLC (9) |
5501 Virginia Way Ste 120 Brentwood, TN 37027 | SF + 5.00% | 9.48 | % | 1/21/2029 | 13,103 | 13,064 | 12,164 | ||||||||||||||||||||||||
W3 TopCo LLC (4)(10) |
607 E Sam Houston Pkwy S, Pasadena, Texas 77503 | SF + 6.50% | 11.14 | % | 3/22/2029 | 89,237 | 86,225 | 86,561 | ||||||||||||||||||||||||
YA Intermediate Holdings II, LLC (4)(6)(9) |
12851 Manchester Rd Ste 160 Des Peres, MO, 63131 United States | 10/1/2031 | 19,820 | (147 | ) | (191) | ||||||||||||||||||||||||||
YA Intermediate Holdings II, LLC (4)(6)(13) |
12851 Manchester Rd Ste 160 Des Peres, MO, 63131 United States | P + 4.00% | 11.50 | % | 10/1/2031 | 9,750 | 441 | 393 | ||||||||||||||||||||||||
YA Intermediate Holdings II, LLC (4)(9) |
12851 Manchester Rd Ste 160 Des Peres, MO, 63131 United States | SF + 5.00% | 9.59 | % | 10/1/2031 | 47,568 | 47,339 | 47,109 | ||||||||||||||||||||||||
| 1,886,102 | 1,898,698 | 21.74 | % | |||||||||||||||||||||||||||||
Industrial Transportation |
||||||||||||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(6)(7) |
C/ ALBACETE, 3 Edificio Mizar Planta 1, 28027 Madrid | E + 6.25% | 8.94 | % | 5/31/2029 | € | 11,245 | 3,404 | 3,495 | |||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
C/ ALBACETE, 3 Edificio Mizar Planta 1, 28027 Madrid | E + 6.25% | 8.94 | % | 5/31/2029 | € | 8,096 | 8,522 | 8,387 | |||||||||||||||||||||||
144
Company (1)
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Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
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% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
E.S.G. Movilidad, S.L.U. (4)(5)(7) |
C/ ALBACETE, 3 Edificio Mizar Planta 1, 28027 Madrid | E + 6.25% | 8.94 | % | 5/31/2029 | € | 22,264 | 23,436 | 23,066 | |||||||||||||||||||||||
Truck-Lite Co, LLC (4)(6)(9) |
20600 Civic Center Dr, Southfield, Michigan 48076 | 2/13/2031 | 9,338 | (163 | ) | 11 | ||||||||||||||||||||||||||
Truck-Lite Co, LLC (4)(6)(9) |
20600 Civic Center Dr, Southfield, Michigan 48076 | 2/13/2030 | 11,973 | (204 | ) | — | ||||||||||||||||||||||||||
Truck-Lite Co, LLC (4)(9) |
20600 Civic Center Dr, Southfield, Michigan 48076 | SF + 5.75% | 10.27 | % | 2/13/2031 | 85,725 | 84,227 | 85,826 | ||||||||||||||||||||||||
| 119,222 | 120,785 | 1.38 | % | |||||||||||||||||||||||||||||
Investment Banking and Brokerage Services |
||||||||||||||||||||||||||||||||
Apex Group Treasury LLC (5)(8) |
175 Bloor St East, Suite 807 South Tower, Toronto, Ontario M4W 3R8, CA | SF + 4.00% | 9.08 | % | 7/27/2028 | 6,912 | 6,834 | 6,984 | ||||||||||||||||||||||||
Ascensus Holdings, Inc. (7) |
200 Dryden Road, Suite 4000, Dresher, PA 19025 | SF + 3.00% | 7.36 | % | 8/2/2028 | 7,563 | 7,515 | 7,639 | ||||||||||||||||||||||||
Baker Tilly Advisory Group, LP (4)(9) |
205 N. Michigan Ave., 28th Floor, Chicago, IL 60601 | SF + 4.75% | 9.11 | % | 6/3/2031 | 102,831 | 101,414 | 103,312 | ||||||||||||||||||||||||
Baker Tilly Advisory Group, LP (4)(6)(9) |
205 N. Michigan Ave., 28th Floor, Chicago, IL 60601 | 6/3/2031 | 15,518 | (223 | ) | 73 | ||||||||||||||||||||||||||
Baker Tilly Advisory Group, LP (4)(6)(9) |
205 N. Michigan Ave., 28th Floor, Chicago, IL 60601 | 6/3/2030 | 23,539 | (319 | ) | — | ||||||||||||||||||||||||||
DRW Holdings LLC (7) |
540 W Madison St Ste 2500 Chicago, IL, 60661-2555 United States | SF + 3.50% | 8.59 | % | 6/26/2031 | 10,000 | 9,950 | 10,019 | ||||||||||||||||||||||||
Eisner Advisory Group LLC (8) |
733 Third Avenue, New York, NY 10017, US | SF + 4.00% | 8.36 | % | 2/28/2031 | 6,002 | 5,949 | 6,078 | ||||||||||||||||||||||||
Grant Thornton LLP (6)(7) |
30 Finsbury Square, London, EC2A 1AG | 6/2/2031 | 380 | — | 1 | |||||||||||||||||||||||||||
Grant Thornton LLP (7) |
30 Finsbury Square, London, EC2A 1AG | SF + 2.75% | 7.08 | % | 6/2/2031 | 6,860 | 6,860 | 6,870 | ||||||||||||||||||||||||
June Purchaser LLC (6)(7) |
1717 Arch Street, Philadelphia, PA 19103 | 11/28/2031 | 1,619 | (6 | ) | 20 | ||||||||||||||||||||||||||
June Purchaser LLC (7) |
1717 Arch Street, Philadelphia, PA 19103 | SF + 3.25% | 7.58 | % | 11/28/2031 | 9,714 | 9,675 | 9,834 | ||||||||||||||||||||||||
Madonna Bidco Limited (4)(5)(6)(7) |
Focus House, Ham Road, Shoreham-By-Sea, BN43 6PA, United Kingdom | 10/25/2031 | £ | 10,435 | (267 | ) | (254) | |||||||||||||||||||||||||
Madonna Bidco Limited (4)(5)(7) |
Focus House, Ham Road, Shoreham-By-Sea, BN43 6PA, United Kingdom | SN + 5.25% | 9.99 | % | 10/25/2031 | £ | 51,131 | 64,985 | 62,764 | |||||||||||||||||||||||
MAI Capital Management Intermediate LLC (4)(6)(9) |
6050 Oak Tree Blvd., Suite 500, Cleveland, Ohio 44131 | SF + 4.75% | 9.11 | % | 8/29/2031 | 16,300 | 5,003 | 5,081 | ||||||||||||||||||||||||
MAI Capital Management Intermediate LLC (4)(6)(9) |
6050 Oak Tree Blvd., Suite 500, Cleveland, Ohio 44131 | SF + 4.75% | 9.08 | % | 8/29/2031 | 6,100 | 755 | 783 | ||||||||||||||||||||||||
145
Company (1)
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Address |
Reference Rate and Spread (2)
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Interest Rate (2)
|
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% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
MAI Capital Management Intermediate LLC (4)(9) |
6050 Oak Tree Blvd., Suite 500, Cleveland, Ohio 44131 | SF + 4.75% | 9.11 | % | 8/29/2031 | 27,600 | 27,337 | 27,463 | ||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
1676 N. California Blvd, Suite 400 Walnut Creek, CA 94596 | 9/3/2030 | 5,484 | (102 | )55 | |||||||||||||||||||||||||||
More Cowbell II, LLC (4)(6)(9) |
1676 N. California Blvd, Suite 400 Walnut Creek, CA 94596 | SF + 5.00% | 9.26 | % | 9/4/2029 | 7,590 | 2,918 | 3,036 | ||||||||||||||||||||||||
More Cowbell II, LLC (4)(9) |
1676 N. California Blvd, Suite 400 Walnut Creek, CA 94596 | SF + 5.00% | 8.89 | % | 9/3/2030 | 49,839 | 49,031 | 50,337 | ||||||||||||||||||||||||
Neon Maple US Debt Mergersub Inc (5)(7) |
Prudential Tower 800 Boylston Street Boston, MA, 02199 United States | SF + 3.00% | 7.44 | % | 11/17/2031 | 3,160 | 3,137 | 3,171 | ||||||||||||||||||||||||
Orthrus Limited (4)(5)(6)(7) |
26 New Street St Helier Jersey, JE2 3RA, United Kingdom | 12/5/2031 | £ | 15,961 | (354 | ) | (346 | ) | ||||||||||||||||||||||||
Orthrus Limited (4)(5)(7) |
26 New Street St Helier Jersey, JE2 3RA, United Kingdom | E + 6.25% (incl 2.75% PIK) | 9.13 | % | 12/5/2031 | € | 30,652 | 31,887 | 31,206 | |||||||||||||||||||||||
Orthrus Limited (4)(5)(7) |
26 New Street St Helier Jersey, JE2 3RA, United Kingdom | SN + 6.25% (incl 2.75% PIK) | 10.97 | % | 12/5/2031 | £ | 34,325 | 43,016 | 42,227 | |||||||||||||||||||||||
Orthrus Limited (4)(5)(10) |
26 New Street St Helier Jersey, JE2 3RA, United Kingdom | SF + 6.25% (incl 2.75% PIK) | 10.72 | % | 12/5/2031 | 80,984 | 79,582 | 79,581 | ||||||||||||||||||||||||
Osaic Holdings Inc (7) |
18700 N. Hayden Rd., Ste. 255, Scottsdale, AZ 85255 | SF + 3.50% | 7.86 | % | 8/17/2028 | 11,793 | 11,752 | 11,856 | ||||||||||||||||||||||||
Rockefeller Capital Management (4)(8) |
45 Rockefeller Plaza, Floor 5, New York, NY 10111 | SF + 4.75% | 9.08 | % | 4/4/2031 | 69,825 | 69,195 | 69,734 | ||||||||||||||||||||||||
Rockefeller Capital Management (4)(6)(8) |
45 Rockefeller Plaza, Floor 5, New York, NY 10111 | 4/4/2031 | 15,000 | (112 | ) | (20 | ) | |||||||||||||||||||||||||
Summit Acquisition Inc (4)(7) |
12651 High Bluff Drive, Suite 250, San Diego, CA 92130 | SF + 3.75% | 8.08 | % | 10/16/2031 | 17,500 | 17,415 | 17,631 | ||||||||||||||||||||||||
Travelex Issuerco 2 PLC (4)(5)(14) |
Worldwide House, Thorpe Wood, Peterborough, United Kingdom, PE3 6SB | SN + 8.00% | 12.71 | % | 9/22/2028 | £ | 22,553 | 26,785 | 28,650 | |||||||||||||||||||||||
Violin Finco Guernsey Limited (4)(5)(7) |
45 Gresham, Street London, EC2V 7BG, GB | SN + 5.50% | 10.20 | % | 6/24/2031 | £ | 93,262 | 117,236 | 117,793 | |||||||||||||||||||||||
Violin Finco Guernsey Limited (4)(5)(6)(7) |
45 Gresham, Street London, EC2V 7BG, GB | 6/24/2031 | £ | 6,211 | (76 | ) | 69 | |||||||||||||||||||||||||
| 696,772 | 701,647 | 8.03 | % | |||||||||||||||||||||||||||||
Leisure Goods |
||||||||||||||||||||||||||||||||
Jam City, Inc. (4)(10) |
3562 Eastham Drive, Culver City, CA 90232 | SF + 7.00% | 11.59 | % | 9/7/2027 | 1,966 | 1,957 | 1,986 | ||||||||||||||||||||||||
| 1,957 | 1,986 | 0.02 | % | |||||||||||||||||||||||||||||
Life Insurance |
||||||||||||||||||||||||||||||||
OneDigital Borrower LLC (8) |
200 Galleria Pkwy SE, Suite 1950, Atlanta, GA 30339 | SF + 3.25% | 7.61 | % | 7/2/2031 | 14,811 | 14,748 | 14,867 | ||||||||||||||||||||||||
| 14,748 | 14,867 | 0.17 | % | |||||||||||||||||||||||||||||
146
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
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Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Media |
||||||||||||||||||||||||||||||||
2080 Media, Inc. (4)(9) |
2990 Brandywine Rd, Suite 300, Atlanta, GA 30341 | SF + 5.25% | 9.58 | % | 3/14/2029 | 12,521 | 12,380 | 12,521 | ||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
2990 Brandywine Rd, Suite 300, Atlanta, GA 30341 | 3/14/2028 | 13,795 | (147 | ) | — | ||||||||||||||||||||||||||
2080 Media, Inc. (4)(9) |
2990 Brandywine Rd, Suite 300, Atlanta, GA 30341 | SF + 5.25% | 9.58 | % | 3/14/2029 |
53,939 | 53,262 | 53,939 | ||||||||||||||||||||||||
2080 Media, Inc. (4)(6)(9) |
2990 Brandywine Rd, Suite 300, Atlanta, GA 30341 | 3/14/2029 | 18,859 | (189 | ) | — | ||||||||||||||||||||||||||
AMR GP Limited (4)(5)(7) |
Aston Martin Formula One Team, Silverstone, Towcester, Northamptonshire, United Kingdom, NN12 8TJ | |
10.50% (incl 5.25% PIK) |
|
7/10/2034 | 1,030 | 1,001 | 1,025 | ||||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(6)(10) |
Unit 4 Fulwood Park, Caxton Rd, Fulwood, Preston PR2 9NZ, United Kingdom | SF + 7.25% | 11.83 | % | 10/29/2027 | 2,766 | 1,745 | 1,766 | ||||||||||||||||||||||||
Arc Media Holdings Limited (4)(5)(10) |
Unit 4 Fulwood Park, Caxton Rd, Fulwood, Preston PR2 9NZ, United Kingdom | SF + 7.25% | 11.99 | % | 10/29/2027 | 39,914 | 39,342 | 39,651 | ||||||||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
19762 MacArthur Blvd Suite 150, Irvine, CA 92612 | SF + 6.00% (incl 3.00% PIK) | 10.43 | % | 6/18/2027 | 1,118 | 1,109 | 1,065 | ||||||||||||||||||||||||
Aventine Intermediate LLC (4)(9) |
19762 MacArthur Blvd Suite 150, Irvine, CA 92612 | SF + 6.00% (incl 3.00% PIK) | 10.43 | % | 6/18/2027 | 19,648 | 19,481 | 18,718 | ||||||||||||||||||||||||
Global Music Rights, LLC (4)(6)(9) |
1100 Glendon Avenue Ste 2000 Los Angeles, CA, 90024 United States | SF + 4.75% | 9.10 | % | 12/20/2031 | 46,796 | 4,214 | 4,214 | ||||||||||||||||||||||||
Global Music Rights, LLC (4)(9) |
1100 Glendon Avenue Ste 2000 Los Angeles, CA, 90024 United States | SF + 5.25% (incl 2.88% PIK) | 9.60 | % | 12/20/2031 | 439,167 | 434,796 | 434,794 | ||||||||||||||||||||||||
IEHL US Holdings, Inc. (4)(12) |
630 Ninth Avenue, Suite 800, New York, NY 10036 | SF + 7.00% | 11.59 | % | 10/29/2029 | 6,604 | 6,455 | 6,670 | ||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
72 Welbeck Street LONDON, W1G 0AY United Kingdom | SN + 7.40% | 12.14 | % | 10/29/2029 | £ | 15,493 | 18,879 | 19,590 | |||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
72 Welbeck Street LONDON, W1G 0AY United Kingdom | E + 7.00% | 10.06 | % | 10/29/2029 | € | 2,540 | 2,737 | 2,658 | |||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(10) |
72 Welbeck Street LONDON, W1G 0AY United Kingdom | E + 7.00% | 10.06 | % | 10/29/2029 | € | 3,048 | 3,192 | 3,189 | |||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(6)(12) |
72 Welbeck Street LONDON, W1G 0AY United Kingdom | 4/27/2029 | 5,080 | (129 | ) | 51 | ||||||||||||||||||||||||||
International Entertainment Investments Ltd (4)(5)(12) |
72 Welbeck Street LONDON, W1G 0AY United Kingdom | SF + 7.00% | 11.59 | % | 10/29/2029 | 30,478 | 29,811 | 30,783 | ||||||||||||||||||||||||
147
Company (1)
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Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
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Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
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LOCI Bidco Limited (4)(5)(8) |
330 High Holborn Holborn Gate, London, England WC1V 7QT, GB | SF + 5.25% | 9.64 | % | 5/19/2031 | 12,087 | 11,812 | 12,029 | ||||||||||||||||||||||||
LOCI Bidco Limited (4)(5)(8) |
330 High Holborn Holborn Gate, London, England WC1V 7QT, GB | SN + 5.25% | 9.98 | % | 5/19/2031 | £ | 73,522 | 91,290 | 91,583 | |||||||||||||||||||||||
LOCI Bidco Limited (4)(5)(6)(8) |
330 High Holborn Holborn Gate, London, England WC1V 7QT, GB | 5/19/2031 | 46,320 | (1,106 | ) | (225 | ) | |||||||||||||||||||||||||
McGraw-Hill Education Inc (8) |
1325 Avenue of the Americas, New York, NY 10019 | SF + 4.00% | 8.33 | % | 8/6/2031 | 10,010 | 9,877 | 10,136 | ||||||||||||||||||||||||
Renaissance Financiere (4)(5)(7) |
6, rue Léo Delibes, 75116 Paris, France | E + 7.00% | 10.65 | % | 7/26/2028 | € | 34,871 | 35,637 | 35,169 | |||||||||||||||||||||||
Renaissance Holding Corp. (8) |
2911 Peach Street, Wisconsin Rapids, WI 54494, US | SF + 4.00% | 8.36 | % | 4/5/2030 | 7,900 | 7,764 | 7,891 | ||||||||||||||||||||||||
| 783,213 | 787,217 | 9.01 | % | |||||||||||||||||||||||||||||
Medical Equipment and Services |
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ABB/CON-CISE Optical Group LLC (4)(9) |
12301 NW 39th Street, Coral Springs, FL 33065 | SF + 7.50% | 11.98 | % | 2/23/2028 | 21,259 | 20,963 | 19,686 | ||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
1 Baxter Pkwy, Deerfield, Illinois 60015 | SF + 5.25% | 9.77 | % | 9/30/2030 | 15,520 | 8,728 | 9,110 | ||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
1 Baxter Pkwy, Deerfield, Illinois 60015 | 9/30/2030 | 2,855 | (28 | ) | (5 | ) | |||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
1 Baxter Pkwy, Deerfield, Illinois 60015 | 9/30/2030 | 2,855 | (29 | ) | (5 | ) | |||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(6)(10) |
1 Baxter Pkwy, Deerfield, Illinois 60015 | 10/1/2029 | 21,254 | (504 | ) | — | ||||||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
1 Baxter Pkwy, Deerfield, Illinois 60015 | E + 5.25% | 8.25 | % | 9/30/2030 | € | 63,105 | 65,172 | 65,377 | |||||||||||||||||||||||
Bamboo US BidCo LLC (4)(10) |
1 Baxter Pkwy, Deerfield, Illinois 60015 | SF + 5.25% | 9.77 | % | 9/30/2030 | 83,371 | 81,391 | 83,223 | ||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
6509 Windcrest Drive, Suite 165, Plano, TX 75024 | 8/7/2031 | 23,581 | (345 | ) | (181 | ) | |||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(6)(9) |
6509 Windcrest Drive, Suite 165, Plano, TX 75024 | SF + 5.00% | 9.33 | % | 8/7/2031 | 16,674 | 14,354 | 14,461 | ||||||||||||||||||||||||
Coding Solutions Acquisition, Inc. (4)(9) |
6509 Windcrest Drive, Suite 165, Plano, TX 75024 | SF + 5.00% | 9.25 | % | 8/7/2031 | 154,751 | 152,904 | 153,560 | ||||||||||||||||||||||||
Femur Buyer, Inc. (4)(6)(10) |
1365 North Cedar Street, Mason, MI 48854 | SF + 7.50% | 11.86 | % | 9/18/2029 | 13,350 | 515 | 218 | ||||||||||||||||||||||||
Femur Buyer, Inc. (4)(10) |
1365 North Cedar Street, Mason, MI 48854 | SF + 8.25% (incl 4.50% PIK) | 12.60 | % | 3/18/2030 | 142,359 | 139,373 | 139,567 | ||||||||||||||||||||||||
148
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Limpio Bidco GMBH (4)(5)(7) |
Robert-Koch-Str. 2, 22851 Norderstedt | E + 5.20% | 8.25 | % | 10/31/2030 | € | 63,783 | 65,912 | 67,269 | |||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
710 Bridgeport Avenue, Shelton, CT 06484 | SF + 5.00% | 9.34 | % | 3/13/2029 | 110,940 | 108,126 | 112,050 | ||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(10) |
710 Bridgeport Avenue, Shelton, CT 06484 | SF + 5.00% | 9.34 | % | 3/13/2029 | 61,964 | 60,981 | 62,583 | ||||||||||||||||||||||||
PerkinElmer U.S. LLC (4)(6)(10) |
710 Bridgeport Avenue, Shelton, CT 06484 | SF + 5.00% | 9.34 | % | 3/13/2029 | 67,039 | 49,332 | 50,918 | ||||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
5301 Virginia Way, Brentwood, TN 37027 | SF + 6.25% | 10.58 | % | 5/12/2029 | 3,140 | 2,464 | 2,413 | ||||||||||||||||||||||||
Plasma Buyer LLC (4)(6)(9) |
5301 Virginia Way, Brentwood, TN 37027 | SF + 5.75% | 10.08 | % | 5/12/2028 | 9,458 | 5,191 | 5,023 | ||||||||||||||||||||||||
Plasma Buyer LLC (4)(9) |
5301 Virginia Way, Brentwood, TN 37027 | SF + 5.75% | 10.08 | % | 5/12/2029 | 83,210 | 82,130 | 80,495 | ||||||||||||||||||||||||
Resonetics, LLC (9) |
26 Whipple St, Nashua, New Hampshire 03060 | SF + 3.25% | 7.60 | % | 6/18/2031 | 38,540 | 38,451 | 38,837 | ||||||||||||||||||||||||
SDC US Smilepay SPV (4)(7)(18) |
414 Union St., Nashville, TN 37219 | P + 9.75% | 10/27/2025 | 14,798 | 8,057 | 3,275 | ||||||||||||||||||||||||||
TecoStar Holdings Inc (4)(10) |
18 Commerce Way, Suite 4800, Wilmington, MA 01801 | SF + 8.50% (incl 4.50% PIK) | 13.18 | % | 7/6/2029 | 125,455 | 123,229 | 124,215 | ||||||||||||||||||||||||
Viant Medical Holdings, Inc. (7) |
2 Hampshire Street Foxborough, MA, 02035 United States | SF + 4.00% | 8.60 | % | 10/29/2031 | 1,738 | 1,730 | 1,759 | ||||||||||||||||||||||||
Viant Medical Holdings, Inc. (7) |
2 Hampshire Street Foxborough, MA, 02035 United States | SF + 4.00% | 8.60 | % | 10/29/2031 | 15,762 | 15,684 | 15,955 | ||||||||||||||||||||||||
Vital Care Buyer, LLC (4)(9) |
12 Cadillac Drive, Suite 230, Brentwood, TN 37212 | SF + 4.50% | 8.83 | % | 7/30/2031 | 90,262 | 89,414 | 90,262 | ||||||||||||||||||||||||
Vital Care Buyer, LLC (4)(6)(9) |
12 Cadillac Drive, Suite 230, Brentwood, TN 37212 | 7/30/2031 | 13,271 | (125 | ) | (1 | ) | |||||||||||||||||||||||||
Zeus Company LLC (4)(6)(9) |
3740 Industrial Blvd, Orangeburg, South Carolina 29118 | SF + 5.50% | 9.83 | % | 2/28/2031 | 23,088 | 7,757 | 8,312 | ||||||||||||||||||||||||
Zeus Company LLC (4)(6)(9) |
3740 Industrial Blvd, Orangeburg, South Carolina 29118 | 2/28/2030 | 21,506 | (277 | ) | — | ||||||||||||||||||||||||||
Zeus Company LLC (4)(9) |
3740 Industrial Blvd, Orangeburg, South Carolina 29118 | SF + 5.50% | 9.83 | % | 2/28/2031 | 123,480 | 121,847 | 124,715 | ||||||||||||||||||||||||
| 1,262,397 | 1,273,091 | 14.58 | % | |||||||||||||||||||||||||||||
Non-life Insurance |
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Accession Risk Management Group, Inc. (4)(9) |
160 Federal Street, Boston, MA 02110 | SF + 4.75% | 9.26 | % | 10/30/2029 | 7,932 | 7,850 | 7,932 | ||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
160 Federal Street, Boston, MA 02110 | SF + 4.75% | 9.26 | % | 11/1/2029 | 39,250 | 39,037 | 39,250 | ||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(9) |
160 Federal Street, Boston, MA 02110 | SF + 4.75% | 9.34 | % | 11/1/2029 | 14,125 | 14,125 | 14,125 | ||||||||||||||||||||||||
Accession Risk Management Group, Inc. (4)(6)(9) |
160 Federal Street, Boston, MA 02110 | SF + 4.75% | 9.34 | % | 11/1/2029 | 21,852 | 3,200 | 3,301 | ||||||||||||||||||||||||
149
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Accession Risk Management Group, Inc. (4)(6)(9) |
160 Federal Street, Boston, MA 02110 | 11/1/2029 | 2,903 | (11 | ) | — | ||||||||||||||||||||||||||
Acrisure LLC (7) |
100 Ottawa Ave SW, Grand Rapids, Michigan 49503 | SF + 3.00% | 7.36 | % | 11/6/2030 | 20,058 | 20,047 | 20,116 | ||||||||||||||||||||||||
Alera Group, Inc. (4)(9) |
3 Parkway North, Suite 500, Deerfield, IL 60015 | SF + 5.25% | 9.61 | % | 10/2/2028 | 21,337 | 21,201 | 21,337 | ||||||||||||||||||||||||
Alera Group, Inc. (4)(9) |
3 Parkway North, Suite 500, Deerfield, IL 60015 | SF + 5.25% | 9.61 | % | 10/2/2028 | 12,271 | 12,265 | 12,271 | ||||||||||||||||||||||||
Alera Group, Inc. (4)(9) |
3 Parkway North, Suite 500, Deerfield, IL 60015 | SF + 5.25% | 9.61 | % | 10/2/2028 | 43,278 | 43,255 | 43,278 | ||||||||||||||||||||||||
Alera Group, Inc. (4)(6)(9) |
3 Parkway North, Suite 500, Deerfield, IL 60015 | SF + 5.75% | 10.09 | % | 10/2/2028 | 5,177 | 4,855 | 4,952 | ||||||||||||||||||||||||
Alliant Holdings Intermediate, LLC (7) |
1301 Dove Street, Suite 200, Newport Beach, CA 92660 | SF + 2.75% | 7.11 | % | 9/19/2031 | 18,698 | 18,547 | 18,769 | ||||||||||||||||||||||||
AmWINS Group Inc (9) |
4725 Piedmont Row Drive, Suite 600, Charlotte, NC 28210 | SF + 2.25% | 6.72 | % | 2/19/2028 | 7,497 | 7,475 | 7,528 | ||||||||||||||||||||||||
Amynta Agency Borrower Inc (7) |
909 3rd Avenue 33rd Floor, New York, NY 10022 | SF + 3.00% | 7.34 | % | 12/29/2031 | 20,015 | 19,626 | 20,040 | ||||||||||||||||||||||||
BroadStreet Partners, Inc. (7) |
580 North Fourth Street Suite 450, Columbus, OH 43215 | SF + 3.00% | 7.36 | % | 6/13/2031 | 11,118 | 11,043 | 11,169 | ||||||||||||||||||||||||
Galway Borrower LLC (4)(6)(9) |
1 California Street, Suite 400, San Francisco, CA 94111 | SF + 4.50% | 8.82 | % | 9/29/2028 | 5,017 | 394 | 420 | ||||||||||||||||||||||||
Galway Borrower LLC (4)(6)(9) |
1 California Street, Suite 400, San Francisco, CA 94111 | SF + 4.50% | 8.82 | % | 9/29/2028 | 6,384 | 76 | 115 | ||||||||||||||||||||||||
Galway Borrower LLC (4)(9) |
1 California Street, Suite 400, San Francisco, CA 94111 | SF + 4.50% | 8.83 | % | 9/29/2028 | 133,662 | 133,266 | 133,662 | ||||||||||||||||||||||||
Goosehead Insurance Holdings LLC (4)(5)(7) |
1500 Solana Blvd Ste 4500 Westlake, TX, 76262 United States | SF + 3.50% | 7.83 | % | 1/8/2032 | 3,509 | 3,500 | 3,500 | ||||||||||||||||||||||||
Higginbotham Insurance Agency Inc (4)(6)(10) |
500 W 13th St, Fort Worth, TX 76102 | SF + 4.75% | 9.11 | % | 11/24/2028 | 14,317 | 4,015 | 4,145 | ||||||||||||||||||||||||
Higginbotham Insurance Agency Inc (4)(14) |
500 W 13th St, Fort Worth, TX 76102 | SF + 4.50% | 8.86 | % | 11/24/2028 | 31,964 | 31,714 | 31,964 | ||||||||||||||||||||||||
HUB International Ltd (7) |
150 N. Riverside Plaza, 17th Floor Chicago, IL 60606 | 7.25 | % | 6/15/2030 | 10,517 | 10,517 | 10,789 | |||||||||||||||||||||||||
HUB International Ltd (7) |
150 N Riverside Plaza, 17th Floor, Chicago IL 60606 | SF + 2.75% | 7.37 | % | 6/20/2030 | 13,749 | 13,626 | 13,850 | ||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) |
1445 Ross Avenue, 40th Floor, Dallas, TX 75202 | 8/27/2028 | 2,638 | (22 | ) | 7 | ||||||||||||||||||||||||||
Integrity Marketing Acquisition LLC (4)(6)(9) |
1445 Ross Avenue, 40th Floor, Dallas, TX 75202 | 8/27/2028 | 362 | (2 | ) | — | ||||||||||||||||||||||||||
150
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|
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Integrity Marketing Acquisition LLC (4)(9) |
1445 Ross Avenue, 40th Floor, Dallas, TX 75202 | SF + 5.00% | 9.51 | % | 8/27/2028 | 65,028 | 64,658 | 65,194 | ||||||||||||||||||||||||
Jones Deslauriers Insurance Management Inc. (5)(7) |
2375 Skymark Avenue, Mississauga, ON L4W 4Y6, Canada | 8.50 | % | 3/15/2030 | 14,487 | 14,470 | 15,319 | |||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(9) |
501 Office Center Drive, Suite 215, Ft. Washington, PA 19034 | SF + 5.00% | 9.48 | % | 10/16/2028 | 18,047 | 17,823 | 18,047 | ||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(6)(9) |
501 Office Center Drive, Suite 215, Ft. Washington, PA 19034 | SF + 5.00% | 9.46 | % | 10/14/2028 | 822 | 402 | 411 | ||||||||||||||||||||||||
Patriot Growth Insurance Services LLC (4)(9) |
501 Office Center Drive, Suite 215, Ft. Washington, PA 19034 | SF + 5.00% | 9.48 | % | 10/16/2028 | 7,114 | 7,033 | 7,114 | ||||||||||||||||||||||||
Sig Parent Holdings, LLC (4)(6)(9) |
530 Oak Court Drive, Suite 250, Memphis, TN 38117 | SF + 5.00% | 9.48 | % | 8/21/2031 | 15,223 | 258 | 258 | ||||||||||||||||||||||||
Sig Parent Holdings, LLC (4)(6)(9) |
530 Oak Court Drive, Suite 250, Memphis, TN 38117 | 8/21/2031 | 3,045 | (14 | ) | (15 | ) | |||||||||||||||||||||||||
Sig Parent Holdings, LLC (4)(9) |
530 Oak Court Drive, Suite 250, Memphis, TN 38117 | SF + 5.00% | 9.36 | % | 8/21/2031 | 26,388 | 26,263 | 26,256 | ||||||||||||||||||||||||
TIH Insurance Holdings LLC (7) |
214 N Tryon St Charlotte, NC 28202 | SF + 2.75% | 7.08 | % | 5/6/2031 | 6,129 | 6,115 | 6,157 | ||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
6100 4th Ave South Suite 200, Seattle, WA 98108 | SF + 5.00% | 9.48 | % | 3/25/2027 | 25,756 | 25,585 | 25,756 | ||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(6)(9) |
6100 4th Ave South Suite 200, Seattle, WA 98108 | 3/25/2027 | 6,576 | (44 | ) | — | ||||||||||||||||||||||||||
Trupanion, Inc. (4)(5)(9) |
6100 4th Ave South Suite 200, Seattle, WA 98108 | SF + 5.00% | 9.48 | % | 3/25/2027 | 20,423 | 20,278 | 20,423 | ||||||||||||||||||||||||
USI Inc/NY (7) |
100 Summit Lake Drive, Suite 400, Valhalla, NY 10595 | SF + 2.25% | 6.58 | % | 9/29/2030 | 12,872 | 12,853 | 12,869 | ||||||||||||||||||||||||
USI Inc/NY (7) |
100 Summit Lake Drive, Suite 400, Valhalla, NY 10595 | SF + 2.25% | 6.58 | % | 11/21/2029 | 1,924 | 1,924 | 1,923 | ||||||||||||||||||||||||
| 617,203 | 622,232 | 7.12 | % | |||||||||||||||||||||||||||||
Oil, Gas and Coal |
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Camin Cargo Control Holdings, Inc. (4)(6)(10) |
16025 Jacintoport Boulevard, Houston, Texas 77015 | 12/7/2029 | 9,685 | (200 | ) | (95 | ) | |||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(6)(10) |
16025 Jacintoport Boulevard, Houston, Texas 77015 | SF + 5.50% | 9.93 | % | 12/7/2029 | 9,702 | 5,213 | 5,273 | ||||||||||||||||||||||||
Camin Cargo Control Holdings, Inc. (4)(10) |
16025 Jacintoport Boulevard, Houston, Texas 77015 | SF + 5.50% | 9.98 | % | 12/7/2029 | 63,922 | 62,895 | 63,295 | ||||||||||||||||||||||||
CVR CHC LP (4)(5)(7) |
2277 Plaza Dr Ste 500, Sugar Land, TX 77479 United States | SF + 4.00% | 8.35 | % | 12/30/2027 | 5,417 | 5,371 | 5,372 | ||||||||||||||||||||||||
| 73,279 | 73,845 | 0.85 | % | |||||||||||||||||||||||||||||
151
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Personal Care, Drug and Grocery Stores |
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DIA Finance S.L.U. (4)(5)(9) |
Calle Jacinto Benavente, 2—A 28232, Las Rozas de Madrid, Madrid Spain | E + 6.75% | 9.50 | % | 12/27/2029 | € | 170,600 | 172,546 | 171,451 | |||||||||||||||||||||||
Parfums Holding Company, Inc. (4)(10) |
750 E. Main Street, Stamford, CT 06902 | SF + 5.25% | 9.58 | % | 6/27/2030 | 119,426 | 118,333 | 120,277 | ||||||||||||||||||||||||
Parfums Holding Company, Inc. (4)(6)(10) |
750 E. Main Street, Stamford, CT 06902 | 6/27/2029 | 9,034 | (81 | ) | — | ||||||||||||||||||||||||||
Puma Buyer LLC (4)(8) |
24 Summit Park Drive, Pittsburgh, PA 15275 | SF + 5.50% | 9.93 | % | 7/16/2029 | 60,760 | 57,870 | 60,760 | ||||||||||||||||||||||||
SWF Holdings I Corp (6)(10) |
7549 Graber Road, Middleton, WI 53562, United States | 12/19/2029 | 94 | — | 1 | |||||||||||||||||||||||||||
SWF Holdings I Corp (10) |
7549 Graber Road, Middleton, WI 53562, United States | SF + 4.50% | 8.86 | % | 12/19/2029 | 73 | 69 | 74 | ||||||||||||||||||||||||
SWF Holdings I Corp (10) |
7549 Graber Road, Middleton, WI 53562, United States | SF + 4.00% | 8.47 | % | 10/6/2028 | 667 | 625 | 600 | ||||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
Quarter One, Level 2, 1 Epping Road, North Ryde, NSW 2113, Australia | B + 5.75% | 10.22 | % | 3/23/2028 | A$ | 20,953 | 14,223 | 12,968 | |||||||||||||||||||||||
Vermont Aus Pty Ltd (4)(5)(9) |
Quarter One, Level 2, 1 Epping Road, North Ryde, NSW 2113, Australia | B + 5.75% | 10.22 | % | 3/23/2028 | A$ | 34,767 | 25,582 | 21,517 | |||||||||||||||||||||||
Vital Bidco AB (4)(5)(6)(10) |
Sturegatan 11, 114 36 Stockholm, Sweden | SF + 4.50% | 8.86 | % | 10/29/2030 | 16,892 | 3,793 | 3,793 | ||||||||||||||||||||||||
Vital Bidco AB (4)(5)(10) |
Sturegatan 11, 114 36 Stockholm, Sweden | SF + 4.50% | 8.83 | % | 10/29/2031 | 97,895 | 95,984 | 95,985 | ||||||||||||||||||||||||
| 488,944 | 487,426 | 5.58 | % | |||||||||||||||||||||||||||||
Personal Goods |
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Daphne S.P.A. (4)(5)(6)(7) |
VIA DELL’ECONOMIA, 91, VICENZA, Vicenza 36100, Italy | 5/23/2028 | € | 3,978 | (106 | ) | (362 | ) | ||||||||||||||||||||||||
Daphne S.P.A. (4)(5)(7) |
VIA DELL’ECONOMIA, 91, VICENZA, Vicenza 36100, Italy | E + 6.75% | 9.36 | % | 5/23/2028 | € | 45,354 | 47,871 | 42,855 | |||||||||||||||||||||||
Spanx, LLC (4)(6)(9) |
3035 Peachtree Rd NE, Atlanta, GA 30305 | 11/18/2027 | 5,000 | (50 | ) | — | ||||||||||||||||||||||||||
Spanx, LLC (4)(9) |
3035 Peachtree Rd NE, Atlanta, GA 30305 | SF + 5.25% | 9.71 | % | 11/20/2028 | 29,100 | 28,762 | 29,100 | ||||||||||||||||||||||||
S&S Holdings LLC (8) |
220 Remington Blvd, Bolingbrook, IL 60440 | SF + 5.00% | 9.36 | % | 10/1/2031 | 11,970 | 11,792 | 11,966 | ||||||||||||||||||||||||
| 88,269 | 83,559 | 0.96 | % | |||||||||||||||||||||||||||||
Pharmaceuticals and Biotechnology |
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Advarra Holdings, Inc. (4)(10) |
6100 Merriweather Dr., Suite 600,Columbia, MD 21044 | SF + 4.50% | 8.86 | % | 9/13/2031 | 68,762 | 67,599 | 68,915 | ||||||||||||||||||||||||
152
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Advarra Holdings, Inc. (4)(6)(10) |
6100 Merriweather Dr., Suite 600,Columbia, MD 21044 | 9/13/2031 | 6,020 | (29 | ) | 13 | ||||||||||||||||||||||||||
Advarra Holdings, Inc. (4)(10) |
6100 Merriweather Dr., Suite 600,Columbia, MD 21044 | SF + 4.50% | 8.86 | % | 9/13/2031 | 127,562 | 126,951 | 127,844 | ||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
625 East Bunker Ct, Vernon Hills, IL 60061 | SF + 5.50% | 10.28 | % | 11/1/2028 | 1,331 | 1,321 | 1,297 | ||||||||||||||||||||||||
CPI Buyer, LLC (4)(6)(9) |
625 East Bunker Ct, Vernon Hills, IL 60061 | 10/30/2026 | 2,115 | (17 | ) | (30 | ) | |||||||||||||||||||||||||
CPI Buyer, LLC (4)(9) |
625 East Bunker Ct, Vernon Hills, IL 60061 | SF + 5.50% | 10.28 | % | 11/1/2028 | 24,703 | 24,478 | 24,068 | ||||||||||||||||||||||||
Creek Parent, Inc. (4)(6)(9) |
14 Schoolhouse Road, Somerset, NJ 08873, United States | 12/18/2031 | 22,379 | (362 | ) | (362 | ) | |||||||||||||||||||||||||
Creek Parent, Inc. (4)(9) |
14 Schoolhouse Road, Somerset, NJ 08873, United States | SF + 5.25% | 9.63 | % | 12/18/2031 | 122,875 | 120,889 | 120,888 | ||||||||||||||||||||||||
Dechra Finance US LLC (5)(7) |
7015 College Blvd, Ste 525, Overlan Park, KS 66211-1551, United States | SF + 3.25% | 7.58 | % | 12/4/2031 | 4,167 | 4,156 | 4,191 | ||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(6)(7) |
via Turati 40, Milano, Mi 20124, Italy | 10/27/2028 | € | 8,400 | (163 | ) | — | |||||||||||||||||||||||||
Dolcetto HoldCo S.P.A. (4)(5)(7) |
via Turati 40, Milano, Mi 20124, Italy | E + 5.50% | 8.39 | % | 10/27/2028 | € | 82,300 | 80,711 | 85,263 | |||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(6)(8) |
Level 10, 12 Help Street, Chatswood NSW 2067, Australia | 11/15/2031 | A$ | 24,086 | (126 | ) | (121 | ) | ||||||||||||||||||||||||
Gusto Aus Bidco Pty Ltd (4)(5)(8) |
Level 10, 12 Help Street, Chatswood NSW 2067, Australia | B + 4.75% | 9.46 | % | 11/15/2031 | A$ | 243,533 | 155,947 | 149,498 | |||||||||||||||||||||||
Syneos Health Inc (7) |
1030 Sync Street, Morrisville, North Carolina, 27560 | SF + 4.00% | 8.33 | % | 9/27/2030 | 15,036 | 14,947 | 14,714 | ||||||||||||||||||||||||
| 596,302 | 596,178 | 6.83 | % | |||||||||||||||||||||||||||||
Real Estate Investment and Services |
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Associations Finance, Inc. (4)(10) |
5401 N Central Expy, Ste 300, Dallas, TX, 75205 | SF + 6.50% | 11.32 | % | 7/3/2028 | 55,555 | 55,509 | 56,111 | ||||||||||||||||||||||||
Associations Finance, Inc. (4)(6)(10) |
5401 N Central Expy, Ste 300, Dallas, TX, 75205 | SF + 6.50% | 11.32 | % | 7/3/2028 | 4,316 | 717 | 763 | ||||||||||||||||||||||||
Associations Finance, Inc. (4)(6)(10) |
5401 N Central Expy, Ste 300, Dallas, TX, 75205 | SF + 6.50% | 11.28 | % | 7/3/2028 | 3,459 | 1,726 | 1,729 | ||||||||||||||||||||||||
| 57,952 | 58,603 | 0.67 | % | |||||||||||||||||||||||||||||
Retailers |
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AI Grace Aus Bidco Pty Ltd (4)(5)(9) |
120 Dunning Avenue Rosebery NSW 2018, Australia | E + 5.25% | 8.13 | % | 12/5/2029 | € | 21,626 | 22,770 | 22,405 | |||||||||||||||||||||||
Belron Finance 2019 LLC (8) |
2400 Farmers Drive, Columbus, OH 43235, United States | SF + 2.75% | 7.27 | % | 10/16/2031 | 14,106 | 14,072 | 14,258 | ||||||||||||||||||||||||
BradyplusUS Holdings, LLC (4)(6)(10) |
7055 S Lindell Road, Las Vegas, NV 89118 | SF + 5.00% | 9.40 | % | 10/31/2029 | 427 | 87 | 92 | ||||||||||||||||||||||||
153
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BradyplusUS Holdings, LLC (4)(10) |
7055 S Lindell Road, Las Vegas, NV 89118 | SF + 5.00% | 9.52 | % | 10/31/2029 | 14,496 | 14,370 | 14,496 | ||||||||||||||||||||||||
Johnstone Supply LLC (7) |
11632 NE Ainsworth Circle, Portland, OR 97220 | SF + 2.50% | 6.88 | % | 6/9/2031 | 6,291 | 6,282 | 6,319 | ||||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
One Tablots Drive Hingham, MA 02043 | SF + 7.75% | 12.49 | % | 7/28/2027 | 44,549 | 43,690 | 44,218 | ||||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
One Tablots Drive Hingham, MA 02043 | SF + 7.75% | 12.49 | % | 7/28/2027 | 38,537 | 37,424 | 38,250 | ||||||||||||||||||||||||
Knitwell Borrower LLC (4)(10) |
One Tablots Drive Hingham, MA 02043 | SF + 7.75% | 12.42 | % | 7/28/2027 | 98,288 | 96,418 | 97,557 | ||||||||||||||||||||||||
Petsmart LLC (9) |
19601 N 27th Ave, Phoenix, AZ 85027 | SF + 3.75% | 8.21 | % | 2/11/2028 | 15,275 | 15,212 | 15,244 | ||||||||||||||||||||||||
Staples, Inc. (8) |
500 Staples Drive, Framingham, MA 01702 | SF + 5.75% | 10.18 | % | 9/4/2029 | 31,186 | 29,878 | 29,885 | ||||||||||||||||||||||||
Thermostat Purchaser III Inc (9) |
10 Parkway North, Suite 100, Deerfield, IL 60015, United States | SF + 4.25% | 8.58 | % | 8/31/2028 | 7,980 | 7,980 | 7,980 | ||||||||||||||||||||||||
White Cap Buyer, LLC (7) |
6250 Brook Hollow Pkwy, Norcross, Georgia 30071 | SF + 3.25% | 7.61 | % | 10/19/2029 | 15,393 | 15,332 | 15,442 | ||||||||||||||||||||||||
| 303,515 | 306,146 | 3.51 | % | |||||||||||||||||||||||||||||
Software and Computer Services |
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Acuris Finance US, Inc (7) |
1345 Sixth Avenue, 50th Floor, New York, 10105, United States | SF + 3.75% | 8.08 | % | 2/16/2028 | 8,362 | 8,242 | 8,427 | ||||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
10 Oakwood Drive, Loughborough, LE11 3QF, England, United Kingdom | SN + 5.25% | 9.95 | % | 6/28/2029 | £ | 47,995 | 56,036 | 59,920 | |||||||||||||||||||||||
Armstrong Bidco Limited (4)(5)(7) |
10 Oakwood Drive, Loughborough, LE11 3QF, England, United Kingdom | SN + 5.25% | 9.95 | % | 6/28/2029 | £ | 91,991 | 110,265 | 114,847 | |||||||||||||||||||||||
Artifact Bidco, Inc. (4)(6)(8) |
3300 Triumph Blvd, Ste. 800, Lehi, UT 84043 | 7/26/2031 | 11,207 | (109 | ) | 107 | ||||||||||||||||||||||||||
Artifact Bidco, Inc. (4)(8) |
3300 Triumph Blvd, Ste. 800, Lehi, UT 84043 | SF + 4.50% | 8.83 | % | 7/26/2031 | 45,788 | 45,359 | 46,230 | ||||||||||||||||||||||||
Artifact Bidco, Inc. (4)(6)(8) |
3300 Triumph Blvd, Ste. 800, Lehi, UT 84043 | 7/26/2030 | 2,562 | (24 | ) | (1 | ) | |||||||||||||||||||||||||
Artifact Bidco, Inc. (4)(6)(8) |
3300 Triumph Blvd, Ste. 800, Lehi, UT 84043 | 7/26/2030 | 5,443 | (50 | ) | (1 | ) | |||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
75 Network Dr, Burlington, MA 01803 | SF + 7.00% | 11.39 | % | 11/7/2029 | 39,600 | 38,800 | 39,503 | ||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(6)(10) |
75 Network Dr, Burlington, MA 01803 | 11/7/2029 | 6,000 | (121 | ) | (15 | ) | |||||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
75 Network Dr, Burlington, MA 01803 | E + 7.00% | 10.05 | % | 11/7/2029 | € | 18,428 | 19,312 | 19,059 | |||||||||||||||||||||||
Artisan Bidco, Inc. (4)(10) |
75 Network Dr, Burlington, MA 01803 | SF + 7.00% | 11.44 | % | 11/7/2029 | 1,000 | 990 | 998 | ||||||||||||||||||||||||
Auditboard, Inc. (4)(6)(9) |
12900 Park Plaza Drive, Suite 200
Cerritos, CA 90703
|
7/14/2031 | 75,714 | (732 | ) | 379 | ||||||||||||||||||||||||||
154
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Auditboard, Inc. (4)(6)(9) |
12900 Park Plaza Drive, Suite 200
Cerritos, CA 90703
|
7/14/2031 | 30,286 | (282 | ) | — | ||||||||||||||||||||||||||
Auditboard, Inc. (4)(9) |
12900 Park Plaza Drive, Suite 200
Cerritos, CA 90703
|
SF + 4.75% | 9.08 | % | 7/14/2031 | 159,000 | 157,518 | 159,795 | ||||||||||||||||||||||||
Aurelia Netherlands Midco 2 B.V. (4)(5)(7) |
Grensen 5, Oslo, Norway 0159 | E + 5.75% | 8.93 | % | 5/22/2031 | € | 46,878 | 49,811 | 49,052 | |||||||||||||||||||||||
Avalara, Inc. (4)(6)(13) |
255 South King St., Suite 1800, Seattle, WA 98104 | 10/19/2028 | 6,324 | (100 | ) | — | ||||||||||||||||||||||||||
Avalara, Inc. (4)(9) |
255 South King St., Suite 1800, Seattle, WA 98104 | SF + 6.25% | 10.58 | % | 10/19/2028 | 56,918 | 55,997 | 57,345 | ||||||||||||||||||||||||
Barracuda Networks Inc (8) |
3175 Winchester Blvd Campbell, CA 95008 | SF + 4.50% | 9.09 | % | 8/15/2029 | 13,722 | 13,450 | 12,729 | ||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(6)(9) |
100 International Drive, Suite 200 Portsmouth, NH 03801 | 5/15/2028 | 385 | (2 | ) | — | ||||||||||||||||||||||||||
Bottomline Technologies, Inc. (4)(9) |
100 International Drive, Suite 200 Portsmouth, NH 03801 | SF + 5.25% | 9.61 | % | 5/14/2029 | 4,512 | 4,482 | 4,512 | ||||||||||||||||||||||||
Calabrio, Inc. (4)(6)(10) |
241 North 5th Avenue, Suite 1200, Minneapolis, MN 55401 | SF + 5.50% | 10.02 | % | 4/16/2027 | 2,687 | 1,152 | 1,152 | ||||||||||||||||||||||||
Calabrio, Inc. (4)(10) |
241 North 5th Avenue, Suite 1200, Minneapolis, MN 55401 | SF + 5.50% | 10.01 | % | 4/16/2027 | 22,201 | 22,201 | 22,201 | ||||||||||||||||||||||||
Calabrio, Inc. (4)(10) |
241 North 5th Avenue, Suite 1200, Minneapolis, MN 55401 | SF + 5.50% | 10.01 | % | 4/16/2027 | 3,256 | 3,211 | 3,256 | ||||||||||||||||||||||||
Central Parent LLC (7) |
11809 Domain Dr Austin, TX 78758 | SF + 3.25% | 7.58 | % | 7/6/2029 | 24,938 | 24,856 | 24,640 | ||||||||||||||||||||||||
Certinia Inc. (4)(6)(10) |
301 Congress Avenue, Suite 800, Austin, TX 78701 | 8/2/2030 | 5,449 | (125 | ) | (53 | ) | |||||||||||||||||||||||||
Certinia Inc. (4)(10) |
301 Congress Avenue, Suite 800, Austin, TX 78701 | SF + 5.25% | 9.74 | % | 8/4/2030 | 52,071 | 51,026 | 51,561 | ||||||||||||||||||||||||
Cloud Software Group Inc (8) |
851 Cypress Creek Road, Fort Lauderdale, FL 33309 | SF + 3.75% | 8.08 | % | 3/21/2031 | 4,789 | 4,789 | 4,810 | ||||||||||||||||||||||||
Cloud Software Group Inc (8) |
851 Cypress Creek Road, Fort Lauderdale, FL 33309 | SF + 3.50% | 7.83 | % | 3/30/2029 | 13,835 | 13,276 | 13,893 | ||||||||||||||||||||||||
Cloud Software Group Inc (7) |
851 Cypress Creek Road, Fort Lauderdale, FL 33309 | 6.50 | % | 3/31/2029 | 7,740 | 6,881 | 7,607 | |||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
950 Tower Ln Fl 20, Foster City, CA 94404 | 2/27/2030 | 7,123 | (151 | ) | 71 | ||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(6)(9) |
950 Tower Ln Fl 20, Foster City, CA 94404 | 2/27/2029 | 6,211 | (108 | ) | — | ||||||||||||||||||||||||||
Coupa Holdings, LLC (4)(9) |
950 Tower Ln Fl 20, Foster City, CA 94404 | SF + 5.50% | 10.09 | % | 2/27/2030 | 79,378 | 78,006 | 80,172 | ||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
53 rue de Châteaudun 75009 Paris, France | E + 5.75% | 8.43 | % | 8/29/2030 | € | 9,441 | 9,835 | 9,976 | |||||||||||||||||||||||
155
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|
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Denali Bidco Limited (4)(5)(7) |
53 rue de Châteaudun 75009 Paris, France | E + 5.75% | 8.43 | % | 8/29/2030 | € | 6,742 | 7,190 | 7,124 | |||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
53 rue de Châteaudun 75009 Paris, France | SN + 5.75% | 10.45 | % | 8/29/2030 | £ | 23,265 | 28,834 | 29,708 | |||||||||||||||||||||||
Denali Bidco Limited (4)(5)(6)(7) |
53 rue de Châteaudun 75009 Paris, France | 8/29/2030 | £ | 14,557 | (340 | ) | 182 | |||||||||||||||||||||||||
Denali Bidco Limited (4)(5)(7) |
53 rue de Châteaudun 75009 Paris, France | E + 5.25% | 7.93 | % | 8/29/2030 | € | 15,916 | 16,655 | 16,654 | |||||||||||||||||||||||
EasyPark Strategy AB (4)(5)(6)(8) |
Birger Jarlsgatan 57 B, 113 56 Stockholm, Sweden | 12/19/2031 | € | 34,030 | (528 | ) | (526 | ) | ||||||||||||||||||||||||
EasyPark Strategy AB (4)(5)(8) |
Birger Jarlsgatan 57 B, 113 56 Stockholm, Sweden | E + 5.00% | 7.65 | % | 12/19/2031 | € | 73,844 | 75,383 | 75,361 | |||||||||||||||||||||||
EasyPark Strategy AB (4)(5)(8) |
Birger Jarlsgatan 57 B, 113 56 Stockholm, Sweden | N + 5.00% | 9.68 | % | 12/19/2031 | 231,454 kr | 19,912 | 20,034 | ||||||||||||||||||||||||
EasyPark Strategy AB (4)(5)(8) |
Birger Jarlsgatan 57 B, 113 56 Stockholm, Sweden | SF + 5.00% | 9.27 | % | 12/19/2031 | 45,034 | 44,362 | 44,362 | ||||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) |
200 Metroplex Drive, Suite 300 Edison, NJ 08817 | SF + 4.75% | 9.11 | % | 4/29/2031 | 10,431 | 10,337 | 10,535 | ||||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) |
200 Metroplex Drive, Suite 300 Edison, NJ 08817 | SF + 4.75% | 9.11 | % | 4/29/2031 | 8,681 | 8,603 | 8,768 | ||||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) |
200 Metroplex Drive, Suite 300 Edison, NJ 08817 | SN + 5.00% | 9.70 | % | 4/29/2031 | £ | 33,323 | 41,482 | 41,809 | |||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) |
200 Metroplex Drive, Suite 300 Edison, NJ 08817 | SN + 5.00% | 9.70 | % | 4/29/2031 | £ | 14,938 | 18,587 | 18,742 | |||||||||||||||||||||||
Elements Finco Limited (4)(5)(7) |
200 Metroplex Drive, Suite 300 Edison, NJ 08817 | SN + 5.00% | 9.70 | % | 4/29/2031 | £ | 49,854 | 61,683 | 62,550 | |||||||||||||||||||||||
Enverus Holdings Inc (4)(9) |
2901 Vía Fortuna #100, Austin, TX 78746 | SF + 5.50% | 9.86 | % | 12/24/2029 | 64,093 | 63,296 | 64,734 | ||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
2901 Vía Fortuna #100, Austin, TX 78746 | 12/24/2029 | 3,229 | (44 | ) | 32 | ||||||||||||||||||||||||||
Enverus Holdings Inc (4)(6)(9) |
2901 Vía Fortuna #100, Austin, TX 78746 | SF + 5.50% | 9.86 | % | 12/24/2029 | 4,913 | 85 | 146 | ||||||||||||||||||||||||
HT Intermediary III, Inc. (4)(6)(9) |
180 W Ostend St, Suite 267A, Baltimore, MD 21230, United States | 11/12/2030 | 10,286 | (51 | ) | (50 | ) | |||||||||||||||||||||||||
HT Intermediary III, Inc. (4)(6)(9) |
180 W Ostend St, Suite 267A, Baltimore, MD 21230, United States | SF + 4.75% | 9.23 | % | 11/12/2030 | 3,857 | 495 | 495 | ||||||||||||||||||||||||
HT Intermediary III, Inc. (4)(9) |
180 W Ostend St, Suite 267A, Baltimore, MD 21230, United States | SF + 4.75% | 9.20 | % | 11/12/2030 | 42,429 | 42,221 | 42,221 | ||||||||||||||||||||||||
Huskies Parent, Inc. (4)(6)(9) |
170 Huyshope Avenue, Hartford, CT 06106 | SF + 5.50% | 9.96 | % | 11/3/2027 | 1,000 | 637 | 641 | ||||||||||||||||||||||||
Huskies Parent, Inc. (4)(9) |
170 Huyshope Avenue, Hartford, CT 06106 | SF + 5.50% | 9.96 | % | 11/3/2028 | 24,898 | 24,618 | 24,721 | ||||||||||||||||||||||||
IRI Group Holdings, Inc. (4)(9) |
203 North LaSalle Street, Suite 1500, Chicago, IL 60601 | SF + 5.00% | 9.59 | % | 12/1/2028 | 152,782 | 151,014 | 154,309 | ||||||||||||||||||||||||
IRI Group Holdings, Inc. (4)(6)(13) |
203 North LaSalle Street, Suite 1500, Chicago, IL 60601 | SF + 5.00% | 9.36 | % | 12/1/2027 | 9,023 | 1,701 | 1,805 | ||||||||||||||||||||||||
156
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Kona Buyer, LLC (4)(6)(9) |
201 W. Saint John St., Spartanburg, SC 29306 | SF + 4.50% | 9.13 | % | 7/23/2031 | 33,256 | 6,307 | 6,959 | ||||||||||||||||||||||||
Kona Buyer, LLC (4)(6)(9) |
201 W. Saint John St., Spartanburg, SC 29306 | 7/23/2031 | 33,273 | (322 | ) | 321 | ||||||||||||||||||||||||||
Kona Buyer, LLC (4)(9) |
201 W. Saint John St., Spartanburg, SC 29306 | SF + 4.50% | 9.13 | % | 7/23/2031 | 113,129 | 112,069 | 114,220 | ||||||||||||||||||||||||
Kona Buyer, LLC (4)(6)(9) |
201 W. Saint John St., Spartanburg, SC 29306 | 7/23/2031 | 15,463 | (145 | ) | — | ||||||||||||||||||||||||||
Kryptona Bidco US, LLC (4)(6)(9) |
1081 Cam Del Rio S Mission Valley, San Digeo, CA 92108, United States | 12/18/2031 | 16,852 | (335 | ) | (335 | ) | |||||||||||||||||||||||||
Kryptona Bidco US, LLC (4)(7) |
1081 Cam Del Rio S Mission Valley, San Digeo, CA 92108, United States | E + 5.75% | 8.61 | % | 12/18/2031 | € | 35,648 | 36,225 | 36,197 | |||||||||||||||||||||||
Kryptona Bidco US, LLC (4)(9) |
1081 Cam Del Rio S Mission Valley, San Digeo, CA 92108, United States | SF + 5.75% | 10.10 | % | 12/18/2031 | 154,039 | 150,975 | 150,974 | ||||||||||||||||||||||||
LMI Inc/DE (8) |
1255 Battery St, Suite 500, San Francisco, CA 94111 | SF + 3.50% | 7.96 | % | 10/2/2028 | 2,176 | 2,168 | 2,146 | ||||||||||||||||||||||||
McAfee Corp (8) |
6220 Stoneridge Mall Rd Floor 2, Pleasanton, CA 94588 | SF + 3.00% | 7.37 | % | 3/1/2029 | 7,840 | 7,819 | 7,857 | ||||||||||||||||||||||||
Medallia, Inc. (4)(9) |
6220 America Center Drive, San Jose, CA 95002 | SF + 6.50% (incl 4.00% PIK) | 10.85 | % | 10/30/2028 | 79,937 | 79,937 | 75,427 | ||||||||||||||||||||||||
Meralm Bidco AB (4)(5)(6)(8) |
Luntmakargatan 96, 2 tr, Stockholm, Stockholm 113 51, SE | 8/29/2031 | € | 5,188 | (84 | ) | (51 | ) | ||||||||||||||||||||||||
Meralm Bidco AB (4)(5)(8) |
Luntmakargatan 96, 2 tr, Stockholm, Stockholm 113 51, SE | E + 5.25% | 8.64 | % | 8/29/2031 | € | 32,844 | 35,785 | 33,701 | |||||||||||||||||||||||
Meralm Bidco AB (4)(5)(8) |
Luntmakargatan 96, 2 tr, Stockholm, Stockholm 113 51, SE | SF + 5.25% | 9.69 | % | 8/29/2031 | 13,695 | 13,500 | 13,564 | ||||||||||||||||||||||||
Meralm Bidco AB (4)(5)(8) |
Luntmakargatan 96, 2 tr, Stockholm, Stockholm 113 51, SE | ST + 5.25% | 8.33 | % | 8/29/2031 | 413,484 kr | 39,690 | 37,016 | ||||||||||||||||||||||||
Meralm Bidco AB (4)(5)(8) |
Luntmakargatan 96, 2 tr, Stockholm, Stockholm 113 51, SE | N + 5.25% | 9.99 | % | 8/29/2031 | 263,366 kr | 24,479 | 22,921 | ||||||||||||||||||||||||
Meralm Bidco AB (4)(5)(8) |
Luntmakargatan 96, 2 tr, Stockholm, Stockholm 113 51, SE | E + 8.50% | 11.89 | % | 8/29/2031 | € | 46,695 | 50,875 | 47,891 | |||||||||||||||||||||||
Mitchell International, Inc. (8) |
9771 Clairemont Mesa Blvd, STE. A, San Diego, CA 92124 | SF + 3.25% | 7.61 | % | 6/17/2031 | 9,975 | 9,929 | 9,993 | ||||||||||||||||||||||||
NAB Holdings, LLC (8) |
250 Stephenson Highway, Troy, MI 48083, United States | SF + 2.75% | 7.08 | % | 11/23/2028 | 2,909 | 2,906 | 2,929 | ||||||||||||||||||||||||
Newfold Digital Holdings Group Inc (9) |
5335 Gate Pkwy Jacksonville, FL 32256 | SF + 3.50% | 8.14 | % | 2/10/2028 | 1,775 | 1,768 | 1,206 | ||||||||||||||||||||||||
New Era Technology, Inc. (4)(10) |
1370 Avenue of the Americas, 10th Floor, New York, NY 10019 | SF + 6.25% | 10.99 | % | 10/31/2026 | 19,013 | 19,013 | 18,036 | ||||||||||||||||||||||||
OEConnection LLC (9) |
3600 Embassy Pkwy, Suite 300, Fairlawn, OH 44333 | SF + 5.00% | 9.36 | % | 4/22/2031 | 67,288 | 66,682 | 67,162 | ||||||||||||||||||||||||
157
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|||||||||||||||||||||||
OEConnection LLC (6)(9) |
3600 Embassy Pkwy, Suite 300, Fairlawn, OH 44333 | 4/22/2031 | 11,741 | (112 | ) | (22 | ) | |||||||||||||||||||||||||
OEConnection LLC (6)(9) |
3600 Embassy Pkwy, Suite 300, Fairlawn, OH 44333 | 4/22/2031 | 7,338 | (66 | ) | (14 | ) | |||||||||||||||||||||||||
Onesource Virtual, Inc. (4)(10) |
9001 Cypress Waters Blvd, Coppell, Texas 75019 | SF + 5.00% | 9.33 | % | 5/28/2030 | 205,136 | 202,366 | 205,668 | ||||||||||||||||||||||||
Onesource Virtual, Inc. (4)(6)(10) |
9001 Cypress Waters Blvd, Coppell, Texas 75019 | 5/28/2030 | 25,318 | (342 | ) | — | ||||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(6)(10) |
33 N Garden Ave, Ste 1200, Clearwater, FL 33755 | 2/1/2029 | 4,657 | (79 | ) | (39 | ) | |||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) |
33 N Garden Ave, Ste 1200, Clearwater, FL 33755 | SF + 7.75% | 12.32 | % | 2/1/2029 | 33,837 | 33,262 | 33,552 | ||||||||||||||||||||||||
Oranje Holdco, Inc. (4)(10) |
33 N Garden Ave, Ste 1200, Clearwater, FL 33755 | SF + 7.25% | 11.82 | % | 2/1/2029 | 15,917 | 15,635 | 15,657 | ||||||||||||||||||||||||
Peraton Inc. (9) |
1875 Explorer Street Reston, VA 20190 | SF + 3.75% | 8.21 | % | 2/1/2028 | 6,265 | 6,230 | 5,846 | ||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(6)(9) |
1001 17th Street, Suite 100, Denver, CO 80202 | 10/17/2028 | 8,513 | (99 | ) | — | ||||||||||||||||||||||||||
Ping Identity Holding Corp. (4)(9) |
1001 17th Street, Suite 100, Denver, CO 80202 | SF + 4.75% | 9.08 | % | 10/17/2029 | 82,061 | 81,013 | 82,405 | ||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(6)(9) |
21251 Ridgetop Circle, Suite 100, Dulles, VA 20166 | SF + 5.00% | 9.34 | % | 9/19/2028 | 4,333 | 1,695 | 1,742 | ||||||||||||||||||||||||
Prism Parent Co., Inc. (4)(9) |
21251 Ridgetop Circle, Suite 100, Dulles, VA 20166 | SF + 5.00% | 9.37 | % | 9/19/2028 | 42,358 | 41,822 | 42,358 | ||||||||||||||||||||||||
Project Alpha Intermediate Holding, Inc. (8) |
211 South Gulph Road Suite 500 King of Prussia, PA 19406 | SF + 3.25% | 7.58 | % | 10/26/2030 | 18,957 | 18,704 | 19,102 | ||||||||||||||||||||||||
Project Ruby Ultimate Parent Corp (7) |
11300 Switzer Road Overland Park, KS 66210 | SF + 3.00% | 7.47 | % | 3/10/2028 | 14,469 | 14,400 | 14,555 | ||||||||||||||||||||||||
Proofpoint, Inc. (8) |
892 Ross Drive Sunnyvale, CA 94089 | SF + 3.00% | 7.36 | % | 8/31/2028 | 2,366 | 2,366 | 2,381 | ||||||||||||||||||||||||
QBS Parent, Inc. (6)(9) |
811 Main Street, Suite 2200, Houston, TX 77002, United States | 11/7/2031 | 3,820 | (19 | ) | (31 | ) | |||||||||||||||||||||||||
QBS Parent, Inc. (9) |
811 Main Street, Suite 2200, Houston, TX 77002, United States | SF + 4.75% | 9.27 | % | 11/7/2031 | 36,180 | 36,003 | 36,135 | ||||||||||||||||||||||||
Quail Buyer, Inc. (4)(9) |
3760 Haven Avenue, Menlo Park, CA 94025 | SF + 5.50% | 10.02 | % | 10/1/2027 | 7,236 | 7,167 | 7,236 | ||||||||||||||||||||||||
Quail Buyer, Inc. (4)(9) |
3760 Haven Avenue, Menlo Park, CA 94025 | SF + 5.50% | 10.02 | % | 10/1/2027 | 39,638 | 39,150 | 39,638 | ||||||||||||||||||||||||
Red Planet Borrower, LLC (8) |
1255 Battery St, Suite 500, San Francisco, CA 94111, United States | SF + 5.25% | 9.61 | % | 10/2/2028 | 2,188 | 2,103 | 2,196 | ||||||||||||||||||||||||
Riley MergeCo LLC (4)(6)(10) |
470 Nevada St, Auburn, CA 95603 | 9/23/2027 | 197 | (2 | ) | — | ||||||||||||||||||||||||||
Riley MergeCo LLC (4)(10) |
470 Nevada St, Auburn, CA 95603 | SF + 5.50% | 9.97 | % | 9/23/2027 | 1,799 | 1,780 | 1,799 | ||||||||||||||||||||||||
Severin Acquisition, LLC (4)(6)(9) |
150 Parkshore Drive, Folsom, CA 95630, United States | 10/1/2031 | 63,014 | (619 | ) | (608 | ) | |||||||||||||||||||||||||
158
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Severin Acquisition, LLC (4)(6)(9) |
150 Parkshore Drive, Folsom, CA 95630, United States | 10/1/2031 | 44,454 | (429 | ) | (429 | ) | |||||||||||||||||||||||||
Severin Acquisition, LLC (4)(9) |
150 Parkshore Drive, Folsom, CA 95630, United States | SF + 5.00% (incl 2.25% PIK) | 9.36 | % | 10/1/2031 | 301,020 | 298,133 | 298,117 | ||||||||||||||||||||||||
Smarsh Inc. (4)(6)(9) |
851 SW 6TH Ave., Suite 800, Portland, OR 97204 | SF + 5.75% | 10.08 | % | 2/16/2029 | 4,286 | 2,086 | 2,143 | ||||||||||||||||||||||||
Smarsh Inc. (4)(6)(9) |
851 SW 6TH Ave., Suite 800, Portland, OR 97204 | SF + 5.75% | 10.11 | % | 2/16/2029 | 1,071 | 416 | 429 | ||||||||||||||||||||||||
Smarsh Inc. (4)(9) |
851 SW 6TH Ave., Suite 800, Portland, OR 97204 | SF + 5.75% | 10.08 | % | 2/16/2029 | 17,143 | 16,935 | 17,143 | ||||||||||||||||||||||||
Tango Bidco SAS (4)(5)(6)(7) |
8, Avenue Hoche, Paris, 75008, France | E + 5.00% | 7.85 | % | 10/17/2031 | € | 16,592 | 9,228 | 9,178 | |||||||||||||||||||||||
Tango Bidco SAS (4)(5)(6)(7) |
8, Avenue Hoche, Paris, 75008, France | 10/17/2031 | € | 3,130 | (51 | ) | (46 | ) | ||||||||||||||||||||||||
Tango Bidco SAS (4)(5)(7) |
8, Avenue Hoche, Paris, 75008, France | E + 5.00% | 8.18 | % | 10/17/2031 | € | 41,812 | 44,636 | 42,700 | |||||||||||||||||||||||
Technology Growth Capital Pty Ltd (4)(5)(10) |
447 Sutter St San Francisco, CA, 94108 | SF + 6.50% | 11.09 | % | 7/2/2030 | 30,127 | 29,367 | 29,833 | ||||||||||||||||||||||||
TriMech Acquisition Corp. (4)(6)(14) |
4461 Cox Road, Suite 302, Glen Allen, VA 23060 | P + 3.75% | 11.25 | % | 3/10/2028 | 3,289 | 164 | 197 | ||||||||||||||||||||||||
TriMech Acquisition Corp. (4)(10) |
4461 Cox Road, Suite 302, Glen Allen, VA 23060 | SF + 4.75% | 9.08 | % | 3/10/2028 | 21,113 | 20,936 | 21,113 | ||||||||||||||||||||||||
TriMech Acquisition Corp. (4)(10) |
4461 Cox Road, Suite 302, Glen Allen, VA 23060 | SN + 4.75% | 9.39 | % | 3/10/2028 | £ | 35,885 | 43,555 | 44,925 | |||||||||||||||||||||||
UKG Inc (7) |
2250 North Commerce Parkway, Weston, FL 33326 | SF + 3.00% | 7.62 | % | 2/10/2031 | 9,878 | 9,868 | 9,960 | ||||||||||||||||||||||||
User Zoom Technologies, Inc. (4)(9) |
10 Almaden Blvd, Ste. 250, San Jose, CA 95113 | SF + 7.00% | 12.25 | % | 4/5/2029 | 18,948 | 18,704 | 18,948 | ||||||||||||||||||||||||
Wave Distribution Holdings LLC (10) |
3 Van de Graaff Drive, 2nd Floor, Burlington, MA 01803, United States | SF + 3.50% | 7.95 | % | 3/5/2027 | 2,378 | 2,375 | 2,396 | ||||||||||||||||||||||||
Zelis Payments Buyer, Inc. (7) |
2 Concourse Parkway, Suite 300, Atlanta, GA 30328 | SF + 2.75% | 7.11 | % | 9/28/2029 | 10,911 | 10,866 | 10,942 | ||||||||||||||||||||||||
Zelis Payments Buyer, Inc. (7) |
2 Concourse Parkway, Suite 300, Atlanta, GA 30328 | SF + 3.25% | 7.61 | % | 11/26/2031 | 5,000 | 4,975 | 5,024 | ||||||||||||||||||||||||
Zendesk Inc (4)(6)(9) |
181 S. Fremont St., San Francisco, CA 94103 | 11/22/2028 | 39,321 | (620 | ) | — | ||||||||||||||||||||||||||
Zendesk Inc (4)(6)(9) |
181 S. Fremont St., San Francisco, CA 94103 | 11/22/2028 | 17,940 | (233 | ) | — | ||||||||||||||||||||||||||
Zendesk Inc (4)(9) |
181 S. Fremont St., San Francisco, CA 94103 | SF + 5.00% | 9.33 | % | 11/22/2028 | 160,987 | 158,911 | 160,987 | ||||||||||||||||||||||||
| 3,221,244 | 3,247,779 | 37.19 | % | |||||||||||||||||||||||||||||
159
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Technology Hardware and Equipment |
||||||||||||||||||||||||||||||||
Altar Bidco Inc (8) |
15 Elizabeth Drive, Chelmsford, MA 0182 | SF + 3.10% | 7.25 | % | 2/1/2029 | 8,780 | 8,734 | 8,774 | ||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(6)(10) |
11010 Prairie Lakes Drive, Suite 155, Eden Prairie, MN 55344 | SF + 6.75% | 11.49 | % | 1/27/2028 | 5,122 | 972 | 907 | ||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10) |
11010 Prairie Lakes Drive, Suite 155, Eden Prairie, MN 55344 | SF + 6.75% | 11.49 | % | 1/27/2028 | 44,646 | 43,933 | 43,403 | ||||||||||||||||||||||||
CC WDW Borrower, Inc. (4)(10) |
11010 Prairie Lakes Drive, Suite 155, Eden Prairie, MN 55344 | SF + 6.75% | 11.23 | % | 1/27/2028 | 2,318 | 2,318 | 2,253 | ||||||||||||||||||||||||
TechInsights Inc (4)(5)(10) |
1891 Robertson Road, Suite 500, Ottawa, ON K2H 5B7, Canada | SF + 6.63% | 11.11 | % | 11/9/2027 | 973 | 962 | 973 | ||||||||||||||||||||||||
TechInsights Inc (4)(5)(10) |
1891 Robertson Road, Suite 500, Ottawa, ON K2H 5B7, Canada | SF + 6.63% | 11.11 | % | 11/9/2027 | 2,526 | 2,499 | 2,526 | ||||||||||||||||||||||||
| 59,418 | 58,836 | 0.67 | % | |||||||||||||||||||||||||||||
Telecommunications Equipment |
||||||||||||||||||||||||||||||||
Delta Topco, Inc. (7) |
3111 Coronado Drive, Santa Clara, CA 95054 | SF + 3.50% | 8.20 | % | 11/30/2029 | 18,242 | 18,201 | 18,407 | ||||||||||||||||||||||||
Guardian US Holdco LLC (8) |
550 West 34th Street, 48th Floor, New York, NY 10001 | SF + 3.50% | 7.83 | % | 1/31/2030 | 7,880 | 7,763 | 7,906 | ||||||||||||||||||||||||
Ribbon Communications Operating Company, Inc (4)(5)(10) |
6500 Chase Oaks Blvd., Suite 100, Plano, TX 75023 | SF + 6.25% | 10.59 | % | 6/21/2029 | 55,978 | 54,978 | 55,057 | ||||||||||||||||||||||||
Ribbon Communications Operating Company, Inc (4)(5)(6)(10) |
6500 Chase Oaks Blvd., Suite 100, Plano, TX 75023 | 6/21/2029 | 6,365 | (114 | ) | (105 | ) | |||||||||||||||||||||||||
| 80,828 | 81,265 | 0.93 | % | |||||||||||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||||||||
Directv Financing, LLC (9) |
2260 E Imperial Hwy, El Segundo, CA 90245 | SF + 5.00% | 9.85 | % | 8/2/2027 | 7,360 | 7,274 | 7,398 | ||||||||||||||||||||||||
Meriplex Communications, LTD (4)(9) |
10111 Richmond Avenue, Suite 500 Houston, TX 77042 | SF + 5.00% | 9.46 | % | 7/17/2028 | 2,912 | 2,890 | 2,912 | ||||||||||||||||||||||||
Meriplex Communications, LTD (4)(9) |
10111 Richmond Avenue, Suite 500 Houston, TX 77042 | SF + 5.00% | 9.46 | % | 7/17/2028 | 1,143 | 1,133 | 1,143 | ||||||||||||||||||||||||
Meriplex Communications, LTD (4)(9) |
10111 Richmond Avenue, Suite 500 Houston, TX 77042 | SF + 5.00% | 9.46 | % | 7/17/2028 | 13,707 | 13,580 | 13,707 | ||||||||||||||||||||||||
| 24,877 | 25,160 | 0.29 | % | |||||||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(6)(7)(18) |
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom | SN + 6.00% | 9/8/2028 | £ | 2,437 | 315 | 189 | |||||||||||||||||||||||||
160
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7)(18) |
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom | SN + 6.00% | 9/8/2028 | £ | 7,749 | 10,099 | 6,990 | |||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7)(18) |
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom | SN + 6.00% | 9/8/2028 | £ | 4,509 | 5,909 | 4,068 | |||||||||||||||||||||||||
Artemis Bidco Limited (4)(5)(7)(18) |
200 Maylands Avenue, Hemel Hempstead Industrial Estate, Hemel Hempstead, HP2 7TG, England, United Kingdom | SN + 6.00% | 9/8/2028 | £ | 4,676 | 6,126 | 4,219 | |||||||||||||||||||||||||
Fertitta Entertainment LLC/NV (8) |
1510 West Loop South, Houston, TX 77027 | SF + 3.50% | 7.86 | % | 1/27/2029 | 9,853 | 9,613 | 9,901 | ||||||||||||||||||||||||
Havila Kystruten Operations AS (4)(5)(15) |
Mjølstadnesvegen 6092 Fosnavåg, Norway | E + 8.75% (incl 2.00% PIK) | 11.82 | % | 7/27/2026 | € | 19,254 | 21,342 | 20,894 | |||||||||||||||||||||||
HB AcquisitionCo PTY LTD (4)(5)(6)(8) |
235 North Terrace, Adelaide, South Australia 5000, AU | B + 6.50% | 10.97 | % | 8/7/2029 | A$ | 3,579 | 417 | 351 | |||||||||||||||||||||||
HB AcquisitionCo PTY LTD (4)(5)(8) |
235 North Terrace, Adelaide, South Australia 5000, AU | B + 6.50% | 10.97 | % | 8/7/2029 | A$ | 32,211 | 21,202 | 19,107 | |||||||||||||||||||||||
IRB Holding Corp. (9) |
3 Glenlake Pkwy, Atlanta, GA 30328, United States | SF + 2.50% | 6.86 | % | 12/15/2027 | 2,670 | 2,670 | 2,676 | ||||||||||||||||||||||||
Legends Hospitality Holding Company, LLC (4)(6)(9) |
614 FREYLINGHUYSEN AVE, Newark, New Jersey 07114 | 8/22/2031 | 5,522 | (108 | ) | (132 | ) | |||||||||||||||||||||||||
Legends Hospitality Holding Company, LLC (4)(6)(9) |
614 FREYLINGHUYSEN AVE, Newark, New Jersey 07114 | SF + 5.00% | 9.37 | % | 8/22/2030 | 14,733 | 1,196 | 892 | ||||||||||||||||||||||||
Legends Hospitality Holding Company, LLC (4)(9) |
614 FREYLINGHUYSEN AVE, Newark, New Jersey 07114 | SF + 5.50% (incl 2.75% PIK) | 10.02 | % | 8/22/2031 | 94,534 | 91,998 | 92,276 | ||||||||||||||||||||||||
Life Time, Inc. (7) |
2902 Corporate Pl, Chanhassen, MN 55317, United States | SF + 2.50% | 7.03 | % | 11/5/2031 | 3,318 | 3,310 | 3,335 | ||||||||||||||||||||||||
The One Group, LLC (4)(10) |
1624 Market St. STE. 311, Denver, CO 80202 | SF + 6.50% | 11.09 | % | 5/1/2029 | 50,665 | 49,350 | 49,421 | ||||||||||||||||||||||||
The One Group, LLC (4)(6)(7) |
1624 Market St. STE. 311, Denver, CO 80202 | 10/31/2028 | 6,649 | (170 | ) | (250 | ) | |||||||||||||||||||||||||
Travel Leaders Group, LLC (4)(14) |
3033 Campus Drive, Suite W320, Plymouth, MN 55441 | SF + 8.50% (incl 3.00% PIK) | 12.96 | % | 3/27/2028 | 140,024 | 137,830 | 141,425 | ||||||||||||||||||||||||
UFC Holdings LLC (5)(7) |
6650 South Torrey Pines Drive, Las Vegas, NV, 89118, United States | SF + 2.25% | 6.77 | % | 11/21/2031 | 2,105 | 2,103 | 2,119 | ||||||||||||||||||||||||
| 363,202 | 357,481 | 4.09 | % | |||||||||||||||||||||||||||||
Total First Lien Debt |
$ | 15,486,148 | $ | 15,523,726 | 177.74 | % | ||||||||||||||||||||||||||
161
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Second Lien Debt |
||||||||||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||||||
Charlotte Buyer Inc (4)(8) |
500 West Main Street, Louisville, KY 40202 | SF + 8.25% | 12.70 | % | 8/11/2028 | $ | 535 | $ | 511 | $ | 532 | |||||||||||||||||||||
| 511 | 532 | 0.01 | % | |||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||||||
Galaxy US Opco Inc. (4)(5)(7)(18) |
100 Cambridge St, 14th floor, Boston, MA 02114 | SF + 8.25% | 4/29/2030 | 9,000 | 8,832 | 3,938 | ||||||||||||||||||||||||||
Sedgwick Claims Management Services, Inc. (4)(7) |
8125 Sedgwick Way Memphis, TN 38125 | SF + 5.00% | 9.59 | % | 7/30/2032 | 25,000 | 24,760 | 24,938 | ||||||||||||||||||||||||
| 33,592 | 28,876 | 0.33 | % | |||||||||||||||||||||||||||||
Total Second Lien Debt |
$ | 34,103 | $ | 29,408 | 0.34 | % | ||||||||||||||||||||||||||
Other Secured Debt |
||||||||||||||||||||||||||||||||
Asset Based Lending and Fund Finance |
||||||||||||||||||||||||||||||||
TPG VIII Merlin New Holdings I, L.P. (4)(5)(10) |
2260 E Imperial Hwy, El Segundo, CA 90245 | SF + 6.50% | 11.09 | % | 3/15/2027 | $ | 53,265 | $ | 52,483 | $ | 52,644 | |||||||||||||||||||||
| $ | 52,483 | $ | 52,644 | 0.60 | % | |||||||||||||||||||||||||||
Real Estate and Investment Services |
||||||||||||||||||||||||||||||||
Link Apartments Opportunity Zone REIT, LLC(4)(6)(16) |
4601 Park Road, Ste 450, Charlotte, NC 28209, United States | 12/27/2029 | 9,355 | (187 | ) | (187 | ) | |||||||||||||||||||||||||
Link Apartments Opportunity Zone REIT, LLC(4)(16) |
4601 Park Road, Ste 450, Charlotte, NC 28209, United States | SF + 7.50% | 11.83 | % | 12/27/2029 | 16,371 | 16,044 | 16,044 | ||||||||||||||||||||||||
| 15,857 | 15,857 | 0.18 | % | |||||||||||||||||||||||||||||
Total Other Secured Debt |
$ | 68,340 | $ | 68,501 | 0.78 | % | ||||||||||||||||||||||||||
Unsecured Debt |
||||||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||||||
Wildcat Car Wash Holdings, LLC (4)(7) |
888 7th Avenue, 37th Floor New York, New York 10106 | |
15.00% PIK |
|
7/16/2029 | $ | 15,520 | $ | 15,520 | $ | 15,520 | |||||||||||||||||||||
| 15,520 | 15,520 | 0.18 | % | |||||||||||||||||||||||||||||
Health Care Providers |
||||||||||||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7) |
141 Longwater Dr, Suite 108, Norwell, MA 02061 | |
13.75% PIK |
|
9/3/2030 | 323 | 319 | 320 | ||||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7) |
141 Longwater Dr, Suite 108, Norwell, MA 02061 | |
14.75% PIK |
|
9/3/2030 | 277 | 272 | 283 | ||||||||||||||||||||||||
VetCor Group Holdings LLC (4)(7) |
141 Longwater Dr, Suite 108, Norwell, MA 02061 | |
13.75% PIK |
|
9/3/2030 | 1,025 | 1,012 | 1,016 | ||||||||||||||||||||||||
| 1,603 | 1,619 | 0.02 | % | |||||||||||||||||||||||||||||
Medical Equipment and Services |
||||||||||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
6240 Lake Osprey Dr, Sarasota, FL 34240 | |
13.13% PIK |
|
12/28/2032 | 112 | 111 | 89 | ||||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
6240 Lake Osprey Dr, Sarasota, FL 34240 | |
13.13% PIK |
|
12/28/2032 | 202 | 198 | 161 | ||||||||||||||||||||||||
162
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
DCA Acquisition Holdings LLC (4)(7) |
6240 Lake Osprey Dr, Sarasota, FL 34240 | |
13.13% PIK |
|
12/28/2032 | 1,190 | 1,175 | 947 | ||||||||||||||||||||||||
| 1,484 | 1,197 | 0.01 | % | |||||||||||||||||||||||||||||
Non-life Insurance |
||||||||||||||||||||||||||||||||
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (7) |
1301 Dove Street, Suite 200, Newport Beach, CA 92660 | 6.75% | 10/15/2027 | 6,255 | 5,885 | 6,210 | ||||||||||||||||||||||||||
| 5,885 | 6,210 | 0.07 | % | |||||||||||||||||||||||||||||
Real Estate Investment and Services |
||||||||||||||||||||||||||||||||
Associations Finance, Inc. (4)(7) |
5401 N Central Expy, Ste 300, Dallas, TX, 75205 | |
14.25% PIK |
|
5/3/2030 | 8,946 | 8,909 | 8,946 | ||||||||||||||||||||||||
Associations Finance, Inc. (4)(7) |
5401 N Central Expy, Ste 300, Dallas, TX, 75205 | |
14.25% PIK |
|
5/3/2030 | 3,416 | 3,402 | 3,416 | ||||||||||||||||||||||||
| 12,311 | 12,362 | 0.14 | % | |||||||||||||||||||||||||||||
Software and Computer Services |
||||||||||||||||||||||||||||||||
Elements Midco 1 Limited (4)(5)(8) |
200 Metroplex Drive, Suite 300 Edison, NJ 08817 | SN + 8.00% PIK | 12.74% | 4/29/2032 | £ | 1,688 | 2,079 | 2,128 | ||||||||||||||||||||||||
| 2,079 | 2,128 | 0.02 | % | |||||||||||||||||||||||||||||
Telecommunications Service Providers |
||||||||||||||||||||||||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp (7) |
400 Washington Blvd., Stamford, CT 06902 | 5.50% | 5/1/2026 | 7,000 | 7,041 | 6,986 | ||||||||||||||||||||||||||
| 7,041 | 6,986 | 0.08 | % | |||||||||||||||||||||||||||||
Total Unsecured Debt |
$ | 45,923 | $ | 46,022 | 0.53 | % | ||||||||||||||||||||||||||
Structured Finance |
||||||||||||||||||||||||||||||||
Structured Finance Investments |
||||||||||||||||||||||||||||||||
720 East CLO V Ltd (5)(7) |
c/o Appleby Global Services (Cayman) Limited 71 Fort Street P.O. Box 500 Grand Cayman KY1-1106 Cayman Islands | SF + 6.30% | 11.33 | % | 7/20/2037 | $ | 4,000 | $ | 4,000 | $ | 4,076 | |||||||||||||||||||||
AMMC CLO 21 LTD (5)(7) |
PO Box 1093, Queensgate House, South Church Street, George Town, KY1-1102, Cayman Islands | SF + 6.76% | 11.32 | % | 11/2/2030 | 4,126 | 3,733 | 4,121 | ||||||||||||||||||||||||
AMMC CLO XII Ltd (5)(7) |
c/o MapleFS Limited, PO Box 1093, Queensgate House, Grand Cayman, George Town, KY1-1102, KY | SF + 6.18% | 11.30 | % | 11/10/2030 | 2,000 | 2,002 | 2,014 | ||||||||||||||||||||||||
ARES CLO Ltd (5)(7) |
c/o MaplesFS Limited P.O. Box 1093 Boundary Hall, Cricket Square Grand Cayman, KY1-1102 Cayman Islands | SF + 6.70% | 11.32 | % | 4/20/2037 | 5,000 | 5,000 | 5,126 | ||||||||||||||||||||||||
163
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Bain Capital Credit CLO 2024-3 Ltd (5)(7) |
C/O MaplesFS Limited, PO Box 1093, Queensgate House, Grand Cayman, George Town, KY1-1102, KY | SF + 6.25% | 11.49 | % | 7/16/2037 | 2,000 | 2,000 | 2,060 | ||||||||||||||||||||||||
Barings CLO Ltd 2024-IV (5)(7) |
190 Elgin Avenue, Grand Cayman, George Town, KY1-9008, KY | SF + 5.95% | 10.77 | % | 10/20/2037 | 4,500 | 4,500 | 4,639 | ||||||||||||||||||||||||
Benefit Street Partners CLO XXXVI Ltd (5)(7) |
c/o MaplesFS Limited, PO Box 1093, Queensgate House, Grand Cayman, George Town, KY1-1102, KY | SF + 5.50% | 9.91 | % | 1/25/2038 | 4,750 | 4,750 | 4,762 | ||||||||||||||||||||||||
Carlyle Global Market Strategies (5)(7) |
C/O Walkers Fiduciary Limited, 190 Elgin Avenue, George Town, KY1-9008, Cayman Islands | L + 5.40% | 10.28 | % | 7/27/2031 | 1,200 | 975 | 1,194 | ||||||||||||||||||||||||
Columbia Cent CLO 33 Ltd (5)(7) |
Maples Fiduciary Services (Jersey) Limited, 2nd Floor, Sir Walter Raleigh House, 48-50 Esplanade, St. Helier, JE2 3QB, Jersey, Channel Islands | SF + 7.16% | 11.78 | % | 4/20/2037 | 2,000 | 1,962 | 2,031 | ||||||||||||||||||||||||
Dryden 108 CLO Ltd (5)(7) |
2nd Floor Sir Walter Raleigh House, 48-50 Esplanade, St. Helier, JE2 3QB, Jersey | 7/18/2035 | 2,900 | 2,291 | 2,219 | |||||||||||||||||||||||||||
Monroe Capital MML CLO XIV LLC (5)(7) |
c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, US-DE 19801 | SF + 10.02% | 14.65 | % | 10/24/2034 | 2,500 | 2,356 | 2,518 | ||||||||||||||||||||||||
Monroe Capital Mml Clo XVII Ltd (5)(7) |
PO Box 536, 13-14 Esplande, JE4 5UR, St. Helier, JE | Jersey | SF + 4.65% | 9.09 | % | 1/15/2037 | 1,000 | 1,000 | 1,016 | ||||||||||||||||||||||||
Monroe Capital Mml Clo XVII Ltd (5)(7) |
PO Box 536, 13-14 Esplande, JE4 5UR, St. Helier, JE | Jersey | SF + 7.91% | 12.35 | % | 1/15/2037 | 5,000 | 4,901 | 5,046 | ||||||||||||||||||||||||
Oaktree CLO 2019-4 Ltd (5)(7) |
c/o Intertrust SPV (Cayman) Limited One Nexus Way Camana Bay Grand Cayman KY1-9005 Cayman Islands | SF + 6.59% | 11.21 | % | 7/20/2037 | 3,000 | 2,971 | 3,070 | ||||||||||||||||||||||||
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 | SF + 6.80% | 11.46 | % | 1/15/2033 | 1,469 | 1,309 | 1,477 | ||||||||||||||||||||||||
OCP CLO Ltd (5)(7) |
c/o Ocorian Trust (Cayman) Limited, Windward 3, Regattta Office Park, PO Box 1350, George Town, KY1-1108, KY | L + 6.52% | 11.43 | % | 10/17/2030 | 2,008 | 2,010 | 2,011 | ||||||||||||||||||||||||
164
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Octagon 52 Ltd (5)(7) |
250 Park Avenue, 15th Floor, New York, NY 10177 | SF + 7.33% | 11.96 | % | 7/23/2037 | 5,000 | 4,952 | 5,116 | ||||||||||||||||||||||||
Octagon 63 Ltd (5)(7) |
250 Park Avenue, 15th Floor, New York, NY 10177 | SF + 6.50% | 11.12 | % | 7/20/2037 | 3,000 | 3,000 | 3,066 | ||||||||||||||||||||||||
Octagon Investment Partners 29 Ltd (5)(7) |
250 Park Avenue, 15th Floor, New York, NY 10177 | SF + 7.17% | 11.80 | % | 7/18/2039 | 3,000 | 2,986 | 3,086 | ||||||||||||||||||||||||
Onex Clo Subsidiary 2024-3 Ltd (5)(7) |
PO BOX 536, 13-14 ESPLANADE, ST. HELIER, JE4 5UR, JE | SF + 6.00% | 11.02 | % | 7/20/2037 | 5,000 | 5,000 | 5,092 | ||||||||||||||||||||||||
Rad CLO Ltd (5)(7) |
c/o MaplesFS Limited P.O. Box 1093, Boundary Hall Cricket Square Grand Cayman, KY1-1102 Cayman Islands | SF + 6.51% | 11.17 | % | 4/15/2034 | 2,500 | 2,504 | 2,522 | ||||||||||||||||||||||||
Shackleton 2019-XV CLO Ltd (5)(7) |
C/O Walkers Fiduciary Limited, 190 Elgin Avenue, Grand Cayman, George Town, KY1-9008, Cayman Islands | SF + 6.92% | 11.58 | % | 1/15/2032 | 3,000 | 2,691 | 3,027 | ||||||||||||||||||||||||
Vibrant CLO XII Ltd (5)(7) |
190 Elgin Avenue, c/o Walkers Fiduciary Limited, George Town, Grand Cayman, KY1-9008, KY | SF + 6.94% | 11.56 | % | 4/20/2034 | 2,000 | 2,000 | 2,000 | ||||||||||||||||||||||||
Voya CLO Ltd (5)(7) |
PO Box 1093, Queensgate House, South Church Street, George Town, KY1-1102, Cayman Islands | SF + 6.00% | 10.82 | % | 7/20/2037 | 4,000 | 4,000 | 4,103 | ||||||||||||||||||||||||
| 72,893 | 75,392 | 0.86 | % | |||||||||||||||||||||||||||||
Total Structured Finance |
$ | 72,893 | $ | 75,392 | 0.86 | % | ||||||||||||||||||||||||||
Equity Investments |
||||||||||||||||||||||||||||||||
Consumer Services |
||||||||||||||||||||||||||||||||
CG Parent Intermediate Holdings, Inc. (4)(21) |
399 S Spring Ave, 108 St Louis, Missouri 63110 | 0.48 | % | 2,000 | $ | 1,940 | $ | 2,325 | ||||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)(21) |
1591 East Prathersville Road, Columbia, MO 65201 | |
15.00 |
% PIK |
9.28 | % | 8,817 | 8,817 | 8,817 | |||||||||||||||||||||||
Club Car Wash Preferred, LLC (4)(21) |
1591 East Prathersville Road, Columbia, MO 65201 | |
15.00 |
% PIK |
9.28 | % | 13,118 | 13,118 | 13,118 | |||||||||||||||||||||||
Rapid Express Preferred, LLC (4)(21) |
12055 Farm to Market Rd 2154, College Station, TX 77845 | |
15.00 |
% PIK |
9.28 | % | 2,784 | 2,784 | 2,784 | |||||||||||||||||||||||
Rapid Express Preferred, LLC (4)(21) |
12055 Farm to Market Rd 2154, College Station, TX 77845 | |
15.00 |
% PIK |
9.28 | % | 5,868 | 5,868 | 5,868 | |||||||||||||||||||||||
Thrasio Holdings, Inc. (4)(21) |
85 West Street, Suite 4, Walpole, MA 02081 | 0.38 | % | 19,015 | — | — | ||||||||||||||||||||||||||
| 32,527 | 32,912 | 0.38 | % | |||||||||||||||||||||||||||||
165
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Electricity |
||||||||||||||||||||||||||||||||
IP Operating Portfolio I, LLC (4)(21) |
9450 SW Gemini Drive PMB #68743, Beaverton, OR 97008 | 3 | 68 | 433 | ||||||||||||||||||||||||||||
| 68 | 433 | — | % | |||||||||||||||||||||||||||||
Gas, Water and Multi-utilities |
||||||||||||||||||||||||||||||||
Eagle LNG Partners Jacksonville II LLC (4)(21) |
2445 Technology Forest Blvd, Suite 500 The Woodlands, TX 77381 | — | % | — | — | — | ||||||||||||||||||||||||||
ELNG Equity LLC (4)(21) |
Research Forest Lakeside No. 4, 2445 Technology Forest Blvd, Suite 500, The Woodlands, TX 77381 | 0.05 | % | 78,038 | — | — | ||||||||||||||||||||||||||
| — | — | — | % | |||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||||||
BCPE Virginia HoldCo, Inc. (4)(21) |
1676 International Drive Suite 800 McLean, VA 22102 | 0.40 | % | 2,000 | 1,960 | 2,350 | ||||||||||||||||||||||||||
| 1,960 | 2,350 | 0.03 | % | |||||||||||||||||||||||||||||
Media |
||||||||||||||||||||||||||||||||
OneTeam Partners, LLC (4)(21) |
1901 L Street, NW 7th Floor, Washington, DC 20036 | 8.00 | % | 0.21 | % | 1,000 | 1,000 | 1,209 | ||||||||||||||||||||||||
Racing Point UK Holdings Limited (4)(5)(21) |
5 St James’s Square, London, United Kingdom, SW1Y 4JU | 0.06 | % | 168 | 1,008 | 976 | ||||||||||||||||||||||||||
| 2,008 | 2,185 | 0.03 | % | |||||||||||||||||||||||||||||
Pharmaceuticals and Biotechnology |
||||||||||||||||||||||||||||||||
Creek Feeder, L.P.(4)(21) |
14 Schoolhouse Road, Somerset, NJ 08873, United States | 0.34 | % | 9,000 | 9,000 | 9,000 | ||||||||||||||||||||||||||
| 9,000 | 9,000 | 0.10 | % | |||||||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||||||
The ONE Group Hospitality, Inc. (4)(21) |
1624 Market St. STE. 311, Denver, CO 80202 | 0.02 | % | 6,667 | 12 | 3 | ||||||||||||||||||||||||||
The ONE Group Hospitality, Inc. (4)(21) |
1624 Market St. STE. 311, Denver, CO 80202 | 0.03 | % | 11,911 | 61 | 35 | ||||||||||||||||||||||||||
The ONE Group Hospitality, Inc. (4)(21) |
1624 Market St. STE. 311, Denver, CO 80202 | 0.63 | % | 1,000 | 877 | 970 | ||||||||||||||||||||||||||
| 950 | 1,008 | 0.01 | % | |||||||||||||||||||||||||||||
Total Equity Investments |
$ | 46,513 | $ | 47,888 | 0.55 | % | ||||||||||||||||||||||||||
Total Investments—Non-Controlled/Non-Affiliated |
$ | 15,753,920 | $ | 15,790,937 | 180.80 | % | ||||||||||||||||||||||||||
166
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Non-Controlled/Affiliated Investments |
||||||||||||||||||||||||||||||||
First Lien Debt |
||||||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(18)(19) |
626 West Main Street Suite 400 Louisville, KY 40202 | SF + 7.50% PIK | 5/1/2028 | $ | 5,454 | $ | 5,306 | $ | 5,454 | |||||||||||||||||||||||
| 5,306 | 5,454 | 0.06 | % | |||||||||||||||||||||||||||||
Total First Lien Debt |
$ | 5,306 | $ | 5,454 | 0.06 | % | ||||||||||||||||||||||||||
Second Lien Debt |
||||||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||||||
Southern Graphics Inc. (4)(7)(18)(19) |
626 West Main Street Suite 400 Louisville, KY 40202 | SF + 7.50% PIK | 10/30/2028 | $ | 1,932 | $ | 1,881 | $ | 1,932 | |||||||||||||||||||||||
| 1,881 | 1,932 | 0.02 | % | |||||||||||||||||||||||||||||
Total Second Lien Debt |
$ |
1,881 |
$ |
1,932 |
0.02 |
% |
||||||||||||||||||||||||||
Equity Investments |
||||||||||||||||||||||||||||||||
Industrial Support Services |
||||||||||||||||||||||||||||||||
Southern Graphics Holdings LLC (4)(19)(21) |
626 West Main Street Suite 400 Louisville, KY 40202 | 2.74 | % | 274 | $ | 2,333 | $ | 3,069 | ||||||||||||||||||||||||
| 2,333 | 3,069 | 0.04 | % | |||||||||||||||||||||||||||||
Travel and Leisure |
||||||||||||||||||||||||||||||||
SLF V AD1 Holdings, LLC (4)(19)(20)(21) |
1955 Harrison St #200 Hollywood, FL 33020 | 11.54 | % | 10,101 | 9,891 | 9,514 | ||||||||||||||||||||||||||
| 9,891 | 9,514 | 0.11 | % | |||||||||||||||||||||||||||||
Total Equity Investments |
$ | 12,224 | $ | 12,583 | 0.14 | % | ||||||||||||||||||||||||||
Total Investments—Non-Controlled/Affiliated |
$ | 19,411 | $ | 19,969 | 0.23 | % | ||||||||||||||||||||||||||
Controlled/Affiliated Investments |
||||||||||||||||||||||||||||||||
Investments in Joint Ventures |
||||||||||||||||||||||||||||||||
ULTRA III, LLC (5)(19)(21) |
40 West 57th Street, New York, NY 10019 | 87.50 | % | $ | 297,747 | $ | 320,350 | |||||||||||||||||||||||||
Total Investments in Joint Ventures |
$ | 297,747 | $ | 320,350 | 3.67 | % | ||||||||||||||||||||||||||
Total Investments—Controlled/Affiliated |
$ | 297,747 | $ | 320,350 | 3.67 | % | ||||||||||||||||||||||||||
Total Investment Portfolio |
$ | 16,071,078 | $ | 16,131,256 | 184.70 | % | ||||||||||||||||||||||||||
167
Company (1)
|
Address |
Reference Rate and Spread (2)
|
Interest Rate (2)
|
Maturity Date |
% of Class Held at 12/31/2024 |
Par Amount/ Units |
Amortized Cost (3)
|
Fair Value |
Percentage of Net Assets |
|||||||||||||||||||||||
Cash Equivalents |
||||||||||||||||||||||||||||||||
J.P. Morgan U.S. Government Fund, Institutional Shares (5) |
4.35 | % | $ | 155,290 | $ | 155,290 | $ | 155,290 | ||||||||||||||||||||||||
Total Cash Equivalents |
$ | 155,290 | $ | 155,290 | 1.78 | % | ||||||||||||||||||||||||||
Total Investment Portfolio, Cash Equivalents |
$ | 16,226,368 | $ | 16,286,546 | 186.47 | % | ||||||||||||||||||||||||||
| (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 for purposes of the 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 (in thousands) is presented for debt investments and the number of shares or units (in whole amounts) 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”), Stockholm Interbank Offered Rate (“STIBOR” or “ST”), Norwegian Interbank Offered Rate (“NIBOR” or “N”), Bloomberg Short Term Bank Yield Index (“BS”), or Bank Bill Swap Bid Rate (“BBSY” 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, STIBOR, NIBOR, BS or BBSW and the current contractual interest rate in effect at December 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 Fund’s valuation designee, subject to the oversight of the Board of Trustees (the “Board”), 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 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 December 31, 2024, non-qualifying assets represented 21.0% 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 footnote 6 to the Fund’s Consolidated Schedule of Investments in its Annual Report on Form 10-K for the period ended December 31, 2024 for more information on the Company’s unfunded commitments. |
| (7) | There are no interest rate floors on these investments. |
| (8) | The interest rate floor on these investments as of December 31, 2024 was 0.50%. |
168
| (9) | The interest rate floor on these investments as of December 31, 2024 was 0.75%. |
| (10) | The interest rate floor on these investments as of December 31, 2024 was 1.00%. |
| (11) | The interest rate floor on these investments as of December 31, 2024 was 1.25%. |
| (12) | The interest rate floor on these investments as of December 31, 2024 was 1.50%. |
| (13) | The interest rate floor on these investments as of December 31, 2024 was 1.75%. |
| (14) | The interest rate floor on these investments as of December 31, 2024 was 2.00%. |
| (15) | The interest rate floor on these investments as of December 31, 2024 was 2.50%. |
| (16) | The interest rate floor on these investments as of December 31, 2024 was 3.00%. |
| (17) | The interest rate floor on these investments as of December 31, 2024 was 3.25%. |
| (18) | Loan was on non-accrual status as of December 31, 2024. |
| (19) | Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, 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 December 31, 2024, the Fund’s controlled/affiliated and non-controlled/affiliated investments were as follows: |
169
Fair Value as of December 31, 2023 |
Gross Additions |
Gross Reductions |
Change in Unrealized Gains (Loss) |
Net Realized Gain (Loss) |
Fair Value as of December 31, 2024 |
Dividend and Interest Income |
||||||||||||||||||||||
Non-Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
Southern Graphics Inc. |
$ | 9,947 | $ | — | $ | (228 | ) | $ | 736 | $ | — | $ | 10,455 | $ | — | |||||||||||||
SLF V AD1 Holdings, LLC |
9,877 | — | — | (363 | ) | — | 9,514 | — | ||||||||||||||||||||
Total Non-Controlled/Affiliated Investments |
$ | 19,824 | $ | — | $ | (228 | ) | $ | 373 | $ | — | $ | 19,969 | $ | — | |||||||||||||
Controlled/Affiliated Investments |
||||||||||||||||||||||||||||
ULTRA III, LLC |
$ | 124,003 | $ | 184,157 | $ | (11,923 | ) | $ | 24,113 | $ | — | $ | 320,350 | $ | 27,828 | |||||||||||||
Total Controlled/Affiliated Investments |
$ | 124,003 | $ | 184,157 | $ | (11,923 | ) | $ | 24,113 | $ | — | $ | 320,350 | $ | 27,828 | |||||||||||||
| (20) | These investments are not pledged as collateral under the Credit Facilities, 2023 CLO Secured Notes and/or 2024 CLO Secured Notes. |
| (21) | Security acquired in transaction exempt from registration under the Securities Act of 1933, and may be deemed to be “restricted security” under the Securities Act. As of December 31, 2024, the aggregate fair value of these securities is $380,821, or 4.36% of the Fund’s net assets. The acquisition dates of the restricted securities are as follows: |
Portfolio Company |
Investment |
Acquisition Date |
||
| CG Parent Intermediate Holdings, Inc. | Senior Preferred Stock | November 20, 2023 | ||
| Club Car Wash Preferred, LLC | Preferred Stock | November 15, 2023 | ||
| Rapid Express Preferred, LLC | Preferred Stock | November 15, 2023 | ||
| Club Car Wash Preferred, LLC | Preferred Stock | November 15, 2023 | ||
| Rapid Express Preferred, LLC | Preferred Stock | November 15, 2023 | ||
| Thrasio Holdings, Inc. | Common Stock | June 18, 2024 | ||
| IP Operating Portfolio I, LLC | Class B Units | February 3, 2022 | ||
| Eagle LNG Partners Jacksonville II LLC | Warrants | March 8, 2023 | ||
| ELNG Equity LLC | Warrants | April 26, 2024 | ||
| BCPE Virginia HoldCo, Inc. | Senior Preferred Stock | December 14, 2023 | ||
| Racing Point UK Holdings Limited | Ordinary Shares | July 9, 2024 | ||
| OneTeam Partners, LLC | Class D Units | September 15, 2022 | ||
| Creek Feeder, L.P. | LP Interest | December 16, 2024 | ||
| The ONE Group Hospitality, Inc. | A-2 Warrants | May 1, 2024 | ||
| The ONE Group Hospitality, Inc. | B-2 Warrants | May 1, 2024 | ||
| The ONE Group Hospitality, Inc. | Series A Preferred Stock | May 1, 2024 | ||
| Southern Graphics Holdings LLC | Class A Units | April 28, 2023 | ||
| SLF V AD1 Holdings, LLC | LLC Interest | September 6, 2023 | ||
| ULTRA III, LLC | LLC Interest | June 1, 2023 |
170
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). | |||||
Robin Melvin |
1963 | Trustee | Since 2021 | Director, Bank of New York Mellon Family of Funds (1995-Present). | Trustee, HPS Corporate Capital Solutions Fund (2023-Present); Director, Bank of New York Mellon Family of (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); Trustee, Grayscale Funds Trust (2024-Present) | |||||
Robert Van Dore |
1959 | Trustee | Since 2021 | Partner at Deloitte & Touche LLP (1981-2021). | Trustee, HPS Corporate Capital Solutions Fund (2023-Present). | |||||
171
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. On January 15, 2025, Grishma Parekh notified the Board that she is resigning from the Board effective and contingent upon the closing of the HPS/BlackRock Transaction pursuant to which BlackRock and certain of its affiliates will acquire 100% of the business and assets of HPS in order to comply with the Section 15(f) safe harbor provisions of the 1940 Act. Following the closing of the HPS/BlackRock Transaction, Ms. Parekh is expected to continue to serve as President of the Fund, a member of the Investment Committee of the Fund and in her existing role at HPS and the Adviser. If the Transaction does not close, Ms. Parekh will not resign from the Board, and she is expected to continue to serve as Trustee of the Fund and in her existing role at HPS and the Adviser. Ms. Parekh’s notice to resign from the Board was not the result of any disagreement with the Fund on any matter relating to the Fund’s operations, policies or practices.
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.
Interested Trustees
Michael Patterson,
Trustee and Chief Executive Officer.
172
School of Business, where he was an Arjay Miller Scholar. Mr. Patterson joined the Board of the Fund in August 2021. Mr. Patterson also serves as an Interested Trustee on the Board of HPS Corporate Capital Solutions Fund.
Grishma Parekh,
Trustee and President
and 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 Family of Funds. 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 Head of School 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
173
to 2017. Prior to BlackRock, she spent six years at The Millburn Corporation in the Accounting Group and three years as an auditor with Grant Thornton LLP. Ms. Milia brings extensive accounting and audit knowledge to the Board and is an Audit Committee Financial Expert, as defined by the Securities and Exchange Commission. She holds a B.S. in Accounting from Lehigh University and is a CPA. Ms. Milia joined the Board of the Fund in February 2023. Ms. Milia also serves as an Independent Trustee on the Board of HPS Corporate Capital Solutions Fund. Ms. Milia is a Trustee of the Grayscale Funds Trust, where she is Chairman of the Audit Committee and serves on the Nominating and Governance Committee.
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.
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.
174
Investment Management Group, where she specialized in advising asset management firms on all aspects of fund structuring and formation, regulatory matters and matters relating to investor communications. Ms. Choi holds a JD from Georgetown University Law Center.
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, 2024, the Audit Committee met four times. 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. 175
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, 2024, the Nominating and Governance Committee met four 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, 2024.
Total Compensation earned from the Fund for Fiscal Year 2024 (4)
|
Total Compensation earned from the Fund Complex for Fiscal Year 2024 (5)
|
|||||||
Interested Trustees |
||||||||
Michael Patterson (1)
|
None | None | ||||||
Grishma Parekh (1)
|
None | None | ||||||
Independent Trustees |
||||||||
Randall Lauer (2)
|
$ | 143,000 | $ | 209,000 | ||||
Robin Melvin (2)
|
$ | 153,000 | $ | 229,000 | ||||
Robert Van Dore (2)
|
$ | 158,000 | $ | 239,000 | ||||
Donna Milia (3)
|
$ | 143,000 | $ | 209,000 | ||||
(1)
These are interested trustees and, as such, do not receive compensation from the Fund for their services as trustees. (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. 176
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 Investment 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.
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.
177
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 Exchange 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, 2024, such persons complied with all such filing requirements.
178
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 December 31, 2024, HPS was staffed with approximately 250 investment personnel, including the investment personnel noted above, and more than 770 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, 2024:
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 $1,000,000. |
Other Accounts Managed by Portfolio Manager
The portfolio manager primarily responsible for the management of the Fund also manages other registered investment companies, other pooled investment vehicles and other accounts, as indicated below. The following table identifies, as of December 31, 2024: (i) the number of other registered investment companies, other pooled investment vehicles and other accounts managed by the portfolio manager; (ii) the total assets of such companies, vehicles and accounts; and (iii) the number and total assets of such companies, vehicles and accounts that are subject to an advisory fee based on performance.
day-to-day
Type of Account |
Number of Accounts |
Assets of Accounts ($ millions) |
Number of Accounts Subject to a performance Fee |
Assets Subject to a performance Fee ($ millions) |
||||||||||||
Registered Investment companies |
0 | 0 | 0 | 0 | ||||||||||||
Other pooled investment vehicles: |
32 | 25,745,565 | 32 | 25,745,565 | ||||||||||||
Other accounts |
61 | 32,015,322 | 58 | 23,293,860 | ||||||||||||
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 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
179
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.
Colbert Cannon
180
the Credit Investment effort from 2009 to 2012. Prior to joining Glenview, Mr. Cannon was a Principal at Audax Group, a Boston-based Private Equity firm. Mr. Cannon began his career in Mergers and Acquisitions Investment Banking at Goldman Sachs. Mr. Cannon holds an AB in Social Studies from Harvard College.
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
181
INVESTMENT 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
Investment Advisory Agreement
The Adviser provides management services to us pursuant to the Investment Advisory Agreement. Under the terms of the Investment 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 Investment 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.
The closing of the HPS/BlackRock Transaction will result in the automatic termination of the Fund’s current Investment Advisory Agreement with the Adviser (the “Current Investment Advisory Agreement”) under the 1940 Act. Accordingly, the Board approved a new Investment Advisory Agreement between the Fund and the Adviser (the “New Investment Advisory Agreement”), which, subject to the approval of the Fund’s shareholders, will replace the Current Investment Advisory Agreement and become effective at the closing of the HPS/BlackRock Transaction. During a special meeting of shareholders held on April 16, 2025, the shareholders approved the New Investment Advisory Agreement.
The Fund’s investment strategy and team, including the Fund’s executive officers, are expected to remain materially unchanged, and the HPS/BlackRock Transaction is not expected to have a material impact on the Fund’s operations. All material terms will remain unchanged from the Current Investment Advisory Agreement, including the management and incentive fees payable by the Fund, except as otherwise described in the proxy statement mailed to the Fund’s shareholders.
Compensation of Adviser
We pay the Adviser a fee for its services under the Investment 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.
182
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 Investment 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 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 Investment 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. |
183
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 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 Investment 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 Investment 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 | % | ||||||
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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. Example 2 — Incentive Fee on Capital Gains
Assumptions
| Year 1: | No net realized capital gains or losses |
| Year 2: | 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) 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 185
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 (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator.
Certain Terms of the Investment Advisory Agreement and Administration Agreement
Each of the Investment Advisory Agreement and the Administration Agreement has been approved by the Board. Unless earlier terminated as described below, each of the Investment Advisory Agreement and the Administration 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 Investment 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 Investment Advisory Agreement upon 120 days’ written notice and the Administrator may terminate the Administration Agreement upon 120 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 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 Investment 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, misconduct, negligence or gross negligence on its part in the performance of its duties or by reason of the reckless disregard of its duties and obligations or, solely with respect to the Adviser, by reason of the Adviser’s violation of the fiduciary duty owed by the Adviser to the Fund and its shareholders (“disabling conduct”). Each of the Investment 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 Investment 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
186
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 behalf of or performing services for us; (3) we have determined, in good faith, such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnified Party is the Adviser, the Administrator or an affiliate thereof, or (B) gross negligence or willful misconduct, in the case that the Indemnified Party is a trustee of the Fund who is not also an officer of the Fund, an officer of the Adviser or the Administrator, or an affiliate of the Adviser or the Administrator; 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 Investment Advisory Agreement;
2. our allocable portion of compensation (including salaries, bonuses, and benefits), overhead 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; provided, that such expenses shall exclude (1) rent or depreciation, utilities, capital equipment and other administrative items of the Administrator, and (2) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any “Controlling Person” (as defined in the Omnibus Guidelines) of the Administrator; 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 |
187
| 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; |
| (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 |
188
| 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 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; |