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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2013

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from                      to                     

Commission file number 814-00789

 

 

THL CREDIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   27-0344947

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

100 Federal St., 31st Floor, Boston, MA   02110
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: 800-454-4424

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨    Accelerated filer   x
Non-Accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  ¨    No  x

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding at November 4, 2013 was 33,905,202.

 

 

 


Table of Contents

THL CREDIT, INC.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2013

Table of Contents

 

   

INDEX

   PAGE
NO.
 

PART I.

  FINANCIAL INFORMATION   

Item 1.

  Financial Statements   
  Consolidated Statements of Assets and Liabilities as of September 30, 2013 (unaudited) and December 31, 2012      2   
  Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (unaudited)      3   
  Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2013 and 2012 (unaudited)      4   
  Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited)      5   
  Consolidated Schedules of Investments as of September 30, 2013 (unaudited) and December 31, 2012      6   
  Notes to Consolidated Financial Statements (unaudited)      19   

Item 2.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations      40   

Item 3.

  Quantitative and Qualitative Disclosures About Market Risk      63   

Item 4.

  Controls and Procedures      64   

PART II.

  OTHER INFORMATION   

Item 1.

  Legal Proceedings      64   

Item 1A.

  Risk Factors      64   

Item 2.

  Unregistered Sales of Equity Securities and Use of Proceeds      67   

Item 3.

  Defaults Upon Senior Securities      67   

Item 4.

  Mine Safety Disclosures      68   

Item 5.

  Other Information      68   

Item 6.

  Exhibits      68   

SIGNATURES 

       69   


Table of Contents

PART 1. FINANCIAL INFORMATION

In this Quarterly Report, “Company”, “we”, “us” and “our” refer to THL Credit, Inc. and its wholly owned subsidiaries unless the context states otherwise.

 

Item 1. Financial Statements

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Assets and Liabilities

(in thousands, except per share data)

 

     September 30,
2013
(unaudited)
    December 31,
2012
 

Assets:

    

Investments at fair value:

    

Non-controlled, non-affiliated investments (cost of $571,168 and $391,699, respectively)

   $ 571,686      $ 394,339   

Non-controlled, affiliated investments (cost of $10 and $10, respectively)

     10        10   
  

 

 

   

 

 

 

Total investments at fair value (cost of $571,178 and $391,709, respectively)

     571,696        394,349   

Cash

     10,008        4,819   

Deferred financing costs

     4,295        3,817   

Interest receivable

     8,286        2,594   

Escrow receivable

     2,000        —     

Due from affiliate

     904        420   

Receivable for paydown of investments

     608        125   

Prepaid expenses and other assets

     450        134   
  

 

 

   

 

 

 

Total assets

   $ 598,247      $ 406,258   
  

 

 

   

 

 

 

Liabilities:

    

Loans payable

   $ 125,900      $ 50,000   

Payable for investment purchased

     9,100        —     

Accrued incentive fees

     3,543        3,279   

Base management fees payable

     2,081        1,514   

Deferred tax liability

     1,436        454   

Accrued expenses

     843        739   

Due to affiliate

     580        —     

Accrued credit facility fees and interest

     513        115   

Interest rate derivative

     314        1,053   

Income taxes payable

     109        —     

Accrued administrator expenses

     50        304   

Dividends payable

     —          1,316   
  

 

 

   

 

 

 

Total liabilities

     144,469        58,774   

Commitments and contingencies (Note 8)

    

Net Assets:

    

Preferred stock, par value $.001 per share, 100,000 preferred shares authorized, no preferred shares issued and outstanding

     —          —     

Common stock, par value $.001 per share, 100,000 common shares authorized, 33,905 and 26,315 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively.

     34        26   

Paid-in capital in excess of par

     449,893        343,723   

Net unrealized (depreciation) appreciation on investments, net of provision for taxes of $1,436 and $454, respectively

     (918     2,187   

Net unrealized depreciation on interest rate derivative

     (314     (1,053

Interest rate derivative periodic interest payments, net

     (500     (180

Accumulated undistributed net realized gains

     —          348   

Accumulated undistributed net investment income

     5,583        2,433   
  

 

 

   

 

 

 

Total net assets

     453,778        347,484   
  

 

 

   

 

 

 

Total liabilities and net assets

   $ 598,247      $ 406,258   
  

 

 

   

 

 

 

Net asset value per share

   $ 13.38      $ 13.20   
  

 

 

   

 

 

 

See accompanying notes to these consolidated financial statements.

 

2


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

(in thousands, except per share data)

 

     Three months  ended
September 30,
    Nine months  ended
September 30,
 
     2013     2012     2013     2012  

Investment Income:

        

From non-controlled, non-affiliated investments:

        

Interest income

   $ 17,694      $ 13,570      $ 48,472      $ 34,724   

Dividend income

     356        —          4,884        —     

Other income

     142        109        687        240   

From non-controlled, affiliated investment:

        

Other income

     872        558        2,116        1,782   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

     19,064        14,237        56,159        36,746   

Expenses:

        

Base management fees

     2,081        1,282        5,278        3,429   

Incentive fee

     2,053        1,697        8,093        4,759   

Credit facility interest and fees

     1,403        1,026        3,898        2,239   

Administrator expenses

     800        726        2,450        2,227   

Other general and administrative expenses

     508        363        1,354        981   

Professional fees

     311        278        953        841   

Amortization of debt issuance costs

     274        259        1,039        708   

Directors’ fees

     152        129        438        399   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     7,582        5,760        23,503        15,583   

Income tax (benefit) provision

     (120     —          376        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     11,602        8,477        32,280        21,163   

Realized and Unrealized Gain on Investments:

        

Net realized (loss) gain on non-controlled, non-affiliated investments

     (390     —          2,393        —     

Income tax benefit, realized gain

     1,097        —          —          —     

Net change in unrealized appreciation on investments:

        

Non-controlled, non-affiliated investments

     (3,141     (1,687     (2,123     (2,125

Non-controlled, affiliated investments

     —          —          —          (1
  

 

 

   

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation on investments

     (3,141     (1,687     (2,123     (2,126
  

 

 

   

 

 

   

 

 

   

 

 

 

Provision for taxes on unrealized gain on investments

     (1,050     —          (981     —     

Interest rate derivative periodic interest payments, net

     (113     (87     (321     (86

Unrealized depreciation on interest rate derivative

     (248     (534     739        (1,109
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in net assets resulting from operations

   $ 7,757      $ 6,169      $ 31,987      $ 17,842   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income per common share:

        

Basic and diluted

   $ 0.34      $ 0.41      $ 1.11      $ 1.04   

Net increase in net assets resulting from operations per common share:

        

Basic and diluted

   $ 0.23      $ 0.30      $ 1.10      $ 0.88   

Weighted average shares of common stock outstanding:

        

Basic and diluted

     33,905        20,618        29,068        20,354   

See accompanying notes to these consolidated financial statements.

 

3


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Changes in Net Assets (unaudited)

(in thousands, except per share data)

 

     For the nine months ended September 30,  
     2013     2012  

Increase in net assets from operations:

    

Net investment income

   $ 32,280      $ 21,163   

Interest rate derivative periodic interest payments, net

     (321     (86

Realized gain on investments

     2,393        —     

Net change in unrealized appreciation on investments

     (2,123     (2,126

Provision for taxes on unrealized gain on investments

     (981     —     

Net change in unrealized depreciation on interest rate derivative

     739        (1,109
  

 

 

   

 

 

 

Net increase in net assets resulting from operations

     31,987        17,842   

Distributions to stockholders

     (31,871     (19,412

Capital share transactions:

    

Issuance of common stock

     110,966        85,879   

Less offering costs

     (4,788     (4,176
  

 

 

   

 

 

 

Net increase in net assets from capital share transactions

     106,178        81,703   
  

 

 

   

 

 

 

Total increase in net assets

     106,294        80,133   

Net assets at beginning of period

     347,484        267,617   
  

 

 

   

 

 

 

Net assets at end of period

   $ 453,778      $ 347,750   
  

 

 

   

 

 

 

Common shares outstanding at end of period

     33,905        26,315   
  

 

 

   

 

 

 

Capital share activity:

    

Shares sold

     7,590        6,095   
  

 

 

   

 

 

 
     7,590        6,095   
  

 

 

   

 

 

 

See accompanying notes to these consolidated financial statements.

 

4


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)

(in thousands)

 

     For the nine months ended September 30,  
     2013     2012  

Cash flows from operating activities

    

Net increase in net assets resulting from operations

   $ 31,987      $ 17,842   

Adjustments to reconcile net increase in net assets resulting from operations to net cash used for operating activities:

    

Increase in payable for investment purchased

     9,100        —     

Net change in unrealized appreciation on investments

     2,123        2,126   

Unrealized depreciation on interest rate derivative

     (739     1,109   

Purchases of investments

     (297,159     (172,105

Proceeds from sale and paydown of investments

     123,142        73,107   

Increase in investments due to PIK

     (2,590     (2,928

Amortization of deferred financing costs

     1,039        708   

Accretion of discounts on investments and other fees

     (3,346     (2,009

Increase in interest receivable

     (5,692     (2,500

Increase in escrow receivable

     (2,000     —     

Increase in due from affiliate

     (484     (106

Increase in prepaid expenses and other assets

     (316     (18

Increase in accrued expenses

     78        188   

Increase in accrued credit facility fees and interest

     398        122   

Increase in income taxes payable

     109        —     

Increase in deferred tax liability

     982        —     

Increase in base management fees payable

     567        269   

Decrease in accrued administrator expenses

     (255     (316

Increase in incentive fees payable

     265        214   

Decrease in dividends payable

     (1,316     —     

Increase (decrease) in due to affiliate

     580        (21
  

 

 

   

 

 

 

Net cash used in operating activities

     (143,527     (84,318

Cash flows from financing activities

    

Borrowings under credit facility

     311,600        184,900   

Repayments under credit facility

     (235,700     (139,900

Issuance of shares of common stock

     110,966        85,878   

Offering costs paid

     (4,788     (3,849

Distributions paid to stockholders

     (31,871     (19,411

Increase in deferred financing costs

     (1,491     (2,924
  

 

 

   

 

 

 

Net cash provided by financing activities

     148,716        104,694   
  

 

 

   

 

 

 

Net increase in cash

     5,189        20,376   

Cash, beginning of period

     4,819        5,573   
  

 

 

   

 

 

 

Cash, end of period

   $ 10,008      $ 25,949   
  

 

 

   

 

 

 

Supplemental Disclosure of Cash Flow Information:

    

Cash interest paid

   $ 2,536      $ 948   

Income taxes paid

   $ 621      $ —     

See accompanying notes to these consolidated financial statements.

 

5


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited)

September 30, 2013

(dollar amounts in thousands)

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No. of  Shares /
No. of Units
     Cost      Fair Value  

Non-controlled/non-affiliated
investments —125.99% of net
asset value

                    

20-20 Technologies Inc.

                    

Senior Secured Term Loan(4)

   IT Services    13.3%(5)      09/12/12         09/12/17       $ 13,738       $ 13,450       $ 13,634   
                 

 

 

    

 

 

 
                    13,450         13,634   

Adirondack Park CLO Ltd.

                    

Subordinated Notes,
Residual Interest
(4)

   Financial services    13.7%(12)      03/27/13         04/15/24       $ 10,000         9,336         9,300   
                 

 

 

    

 

 

 
                    9,336         9,300   

AIM Media Texas Operating,
LLC

                    

Second Lien Loan

   Media, entertainment and leisure   

16.0%(6)

(13.0%

Cash and 3.0% PIK)

     06/21/12         06/21/17       $ 5,830         5,711         6,005   

Member interest(7)(8)

           06/21/12         —           0.763636         764         1,000   
                 

 

 

    

 

 

 
                    6,475         7,005   

Airborne Tactical Advantage
Company, LLC

                    

Senior Secured Note

   Aerospace & defense    11.0%      09/07/11         03/07/16       $ 4,000         3,883         3,960   

Class A Warrants(9)

           09/07/11         —           511,812         113         135   

Series A Preferred Stock(9)

           09/17/13         —           225,000         169         255   
                 

 

 

    

 

 

 
                    4,165         4,350   

Blue Coat Systems, Inc.

                    

Second Lien Term Loan

   IT Services   

9.5% (LIBOR

+ 8.5%)

     06/27/13         06/27/20       $ 15,000         14,855         15,000   
                 

 

 

    

 

 

 
                    14,855         15,000   

C&K Market, Inc.

                    

Senior Subordinated Note

   Retail & grocery    18.0%(19)      11/03/10         11/03/15       $ 13,650         13,302         10,237   

Warrant for Class B

           11/03/10         —           156,552         349         —     
                 

 

 

    

 

 

 
                    13,651         10,237   

Connecture, Inc.

                    

Second Lien Term Loan

   Healthcare   

12.5% (LIBOR

+ 11.0%)

     03/18/13         07/15/18       $ 7,000         6,870         7,000   
                 

 

 

    

 

 

 
                    6,870         7,000   

Country Pure Foods, LLC

                    

Subordinated Term Loan

   Food & beverage    13.0%      08/13/10         02/13/17       $ 16,181         16,181         16,060   
                 

 

 

    

 

 

 
                    16,181         16,060   

CRS Reprocessing, LLC

                    

Senior Secured Term Loan

   Manufacturing   

10.5% (LIBOR

+ 9.5%)

     06/16/11         06/16/15       $ 18,302         18,227         18,302   
                 

 

 

    

 

 

 
                    18,227         18,302   

Cydcor LLC

                    

Senior Secured Term Loan

   Business services   

9.8% (LIBOR

+7.3%)

     06/17/13         06/12/17       $ 13,727         13,727         13,727   
                 

 

 

    

 

 

 
                    13,727         13,727   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

6


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) – (Continued)

September 30, 2013

(dollar amounts in thousands)

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost      Fair Value  

Dr. Fresh, LLC

                    

Subordinated Term Loan

   Consumer products   

14.0%(6)

(12.0% Cash and 2.0% PIK)

     05/15/12         11/15/17       $ 14,374         14,139         14,302   
                 

 

 

    

 

 

 
                    14,139         14,302   

Dryden CLO, Ltd.

                    

Subordinated Notes, Residual Interest(4)

   Financial services    13.5%(12)      09/12/13         11/15/25       $ 10,000         9,100         9,200   
                 

 

 

    

 

 

 
                    9,100         9,200   

Duff & Phelps Corporation

                    

Tax Receivable Agreement Payment Rights(11)

   Financial services    17.2%(12)      06/01/12         12/31/29         —           12,262         14,381   

Senior Secured Term Loan(11)

     

4.5% (LIBOR

+ 3.5%)

     05/15/13         04/23/20       $ 249         253         251   
                 

 

 

    

 

 

 
                    12,515         14,632   

Embarcadero Technologies, Inc.

                    

First Lien Term Loan

   IT Services    10.2%(5)      02/15/13         12/28/17       $ 9,946         9,812         9,846   
                 

 

 

    

 

 

 
                    9,812         9,846   

Expert Global Solutions, Inc.

                    

Second Lien Term Loan

   Business services   

12.5% (LIBOR

+ 10.2% and 0.8% PIK)

     06/21/13         10/03/18       $ 18,727         18,997         18,997   
                 

 

 

    

 

 

 
                    18,997         18,997   

Express Courier International, Inc.

                    

Secured Subordinated Term Loan

   Business services   

15.0%(13)

(PIK)

     01/17/12         07/17/16       $ 7,766         7,652         6,368   
                 

 

 

    

 

 

 
                    7,652         6,368   

Firebirds International, LLC

                    

Common stock(9)

   Restaurants         05/17/11            1,906         191         234   
                 

 

 

    

 

 

 
                    191         234   

Food Processing Holdings, LLC

                    

Senior Subordinated Note (15)

   Food & beverage   

15.0%(6)

(12.0% Cash

and 3.0% PIK)

     02/28/12         08/28/17       $ 14,165         14,059         14,165   

Class A Units(9)

           04/20/10            162.44         163         202   

Class B Units(9)

           04/20/10            406.09         408         150   
                 

 

 

    

 

 

 
                    14,630         14,517   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

7


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) – (Continued)

September 30, 2013

(dollar amounts in thousands)

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest
Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost      Fair Value  

Freeport Financial SBIC Fund LP

                    

Member interest(17)

   Financial services         06/14/13            —           147         147   
                 

 

 

    

 

 

 
                    147         147   

Gold, Inc.

                    

Subordinated Term Loan

   Consumer products   

15.0%(6)

(13.0% Cash and 2.0% PIK)

     12/31/12         12/31/17       $ 16,647         16,352         16,647   
                 

 

 

    

 

 

 
                    16,352         16,647   

Gryphon Partners 3.5, L.P.

                    

Partnership interest (17)

   Financial services         11/20/12         12/21/18         —           143         384   
                 

 

 

    

 

 

 
                    143         384   

Harrison Gypsum, LLC

                    

Senior Secured Term Loan

   Industrials   

10.5%(6)

(LIBOR +

8.5% and 0.5% PIK)

     12/21/12         12/21/17       $ 24,623         24,300         24,500   
                 

 

 

    

 

 

 
                    24,300         24,500   

Hart InterCivic, Inc.

                    

Senior Secured Term Loan

   IT Services    10.5% (LIBOR + 9.0%)      07/01/11         07/01/16       $ 8,775         8,667         8,643   

Senior Secured Revolving Loan(10)

      10.5% (LIBOR + 9.0%)      07/01/11         07/01/16       $ 800         767         800   
                 

 

 

    

 

 

 
                    9,434         9,443   

HEALTHCAREfirst, Inc.

                    

Senior Secured Term Loan

   Healthcare    11.5%(5)      08/31/12         08/30/17       $ 9,300         9,068         8,881   
                 

 

 

    

 

 

 
                    9,068         8,881   

Holland Intermediate Acquisition Corp.

                    

Senior Secured Term Loan

   Energy / Utilities    10.0% (LIBOR + 9.0%)      05/29/13         05/29/18       $ 24,227         23,730         23,730   
                 

 

 

    

 

 

 
                    23,730         23,730   

Ingenio Acquisition, LLC

                    

Senior Secured Term Loan

   Media, entertainment and leisure   

12.8% (6)

(11.3% Cash and 1.5% PIK)

     05/10/13         05/10/18       $ 9,636         9,455         9,492   
                 

 

 

    

 

 

 
                    9,455         9,492   

Jefferson Management Holdings, LLC

                    

Member interest(7)(8)

   Healthcare         04/20/10            1,393         1,393         937   
                 

 

 

    

 

 

 
                    1,393         937   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

8


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) – (Continued)

September 30, 2013

(dollar amounts in thousands)

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost     Fair Value  

Key Brand Entertainment, Inc.

                   

Senior Secured Term Loan

   Media, entertainment and leisure    9.8% (LIBOR + 8.50%)      08/08/13         08/08/18       $ 13,178         12,921        12,921   

Senior Secured Revolving
Loan
(10)(14)

      9.8% (LIBOR + 8.50%)      08/08/13         08/08/18       $ —           (29     —     
                 

 

 

   

 

 

 
                    12,892        12,921   

LCP Capital Fund LLC

                   

Member interest(8)(16)(17)

   Financial services    12.6%(12)      04/20/10         02/15/15       $ 8,354         8,354        8,354   
                 

 

 

   

 

 

 
                    8,354        8,354   

Loadmaster Derrick & Equipment,
Inc.

                   

Senior Secured Term Loan

   Energy / Utilities    9.3% (LIBOR + 8.3%)      09/28/12         09/28/17       $ 9,709         9,493        9,370   
                 

 

 

   

 

 

 
                    9,493        9,370   

Martex Fiber Southern Corp.

                   

Subordinated Term Loan

   Industrials   

13.5%(6)

(12.0% Cash and 1.5% PIK)

     04/30/12         10/31/19       $ 8,856         8,741        8,502   
                 

 

 

   

 

 

 
                    8,741        8,502   

NCM Group Holdings, LLC

                   

Senior Secured Term Loan

   Industrials    12.5% (LIBOR + 11.5%)      08/29/13         08/29/18       $ 26,727         25,672        25,672   
                 

 

 

   

 

 

 
                    25,672        25,672   

Oasis Legal Finance Holding
Company LLC

                   

Second Lien Term Loan

   Financial services    10.5%      09/30/13         09/30/18       $ 23,943         23,465        23,465   
                 

 

 

   

 

 

 
                    23,465        23,465   

Octagon Income Note XIV, Ltd.

                   

Income Notes, Residual
Interest
(4)

   Financial services    15.5%(12)      12/19/12         01/15/24       $ 9,304         8,805        8,711   
                 

 

 

   

 

 

 
                    8,805        8,711   

OEM Group, Inc.

                   

Senior Secured Note

   Manufacturing   

15.0%(6)

(12.5% Cash

and 2.5%

PIK)

     10/07/10         10/07/15       $ 15,066         14,855        14,312   

Warrant for Common

           10/07/10         —           —           —          —     
                 

 

 

   

 

 

 
                    14,855        14,312   

SeaStar Solutions (f.k.a. Marine
Acquisition Corp)

                   

Senior Subordinated Note

   Manufacturing   

13.5%(6)

(11.5% Cash

and 2.0%

PIK)

     09/18/12         05/18/17       $ 16,500         16,192        16,500   
                 

 

 

   

 

 

 
                    16,192        16,500   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

9


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) – (Continued)

September 30, 2013

(dollar amounts in thousands)

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost      Fair Value  

Sheplers, Inc.

                    

Senior Secured (2nd lien)
Term Loan

   Retail & grocery   

13.2%

(LIBOR + 11.7%)

     12/20/11         12/20/16       $ 11,426         11,219         11,255   

Mezzanine Loan

     

17.0%(18)

(10.0% Cash and 7.0% PIK)

     12/20/11         12/20/17       $ 1,871         1,845         1,848   
                 

 

 

    

 

 

 
                    13,064         13,103   

Sheridan Square CLO, Ltd

                    

Income Notes, Residual
Interest
(4)

   Financial services    13.2%(12)      03/12/13         04/15/25       $ 6,338         6,225         6,213   
                 

 

 

    

 

 

 
                    6,225         6,213   

Specialty Brands Holdings, LLC

                    

Second Lien Term Loan

   Restaurants   

11.3% (LIBOR

+ 9.8%)

     07/16/13         07/16/18       $ 20,977         20,571         20,571   
                 

 

 

    

 

 

 
                    20,571         20,571   

The Studer Group, L.L.C.

                    

Senior Subordinated Note

   Healthcare    12.0%      09/29/11         1/31/19       $ 16,910         16,910         16,910   
                 

 

 

    

 

 

 
                    16,910         16,910   

Surgery Center Holdings, Inc.

                    

Second Lien Term Loan

   Healthcare   

9.8% (LIBOR

+ 8.5%)

     04/19/13         04/11/20       $ 15,000         14,642         15,000   

Member interest(8)(9)

           04/20/10            469,673         470         2,000   
                 

 

 

    

 

 

 
                    15,112         17,000   

Tri Starr Management Services,
Inc.

                    

Senior Subordinated Note

   IT Services    15.0%(6) (12.5% Cash and 2.5% PIK)      03/04/13         03/04/19       $ 18,183         17,847         17,865   
                 

 

 

    

 

 

 
                    17,847         17,865   

Trinity Services Group, Inc.

                    

Senior Subordinated Note

   Food & beverage    14.5%(6) (12.0% Cash and 2.5% PIK)      03/29/12         09/29/17       $ 14,305         14,138         13,876   
                 

 

 

    

 

 

 
                    14,138         13,876   

Vision Solutions, Inc.

                    

Second Lien Term Loan

   IT Services    9.5% (LIBOR + 8.0%)      03/31/11         07/23/17       $ 11,625         11,558         11,625   
                 

 

 

    

 

 

 
                    11,558         11,625   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

10


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) – (Continued)

September 30, 2013

(dollar amounts in thousands)

 

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No. of  Shares /
No. of Units
     Cost      Fair Value  

Washington Inventory Service

                    

Senior Secured Term Loan

   Business services   

10.3% (LIBOR

+ 9.0%)

     12/27/12         06/20/19       $ 11,000         10,854         11,165   
                 

 

 

    

 

 

 
                    10,854         11,165   

Wingspan Portfolio Holdings, Inc.

                    

Subordinated Term Loan

   Financial services   

13.5% (6)

(12.0% Cash

and 1.5%

PIK)

     05/21/13         11/21/16       $ 18,768         18,425         17,079   
                 

 

 

    

 

 

 
                    18,425         17,079   

YP Equity Investors, LLC

                    

Member interest(7)(8)

   Media, entertainment and leisure         05/08/12         —           —           —           1,600   
                 

 

 

    

 

 

 
                    —           1,600   
                 

 

 

    

 

 

 

Non-controlled/non-affiliated investments—125.99% of net asset value

                  $ 571,168       $ 571,686   
                 

 

 

    

 

 

 
                    
                    

Non-controlled/affiliated investments —0.00% of net asset value

                    

THL Credit Greenway Fund LLC

                    

Member interest(8)(17)

   Financial services         01/27/11         1/14/2021         —           6         6   
                 

 

 

    

 

 

 
                    6         6   

THL Credit Greenway Fund II LLC

                    

Member interest(8)(17)

   Financial services         03/01/13            —           4         4   
                 

 

 

    

 

 

 
                    4         4   
                 

 

 

    

 

 

 

Total investments—125.99% of net asset value

                  $ 571,178       $ 571,696   
                 

 

 

    

 

 

 
                    

 

Derivative Instruments  
Counterparty    Instrument    Interest Rate    Expiration
Date
     # of Contracts    Notional      Cost      Fair Value  

ING Capital Markets, LLC

  

Interest Rate Swap –

Pay Fixed/Receive

Floating

   1.1425%/LIBOR      5/10/2017       1    $ 50,000       $ —         $ (314
                 

 

 

    

 

 

 

Total derivative instruments—(0.07%) of net asset value

            $ —         $ (314
                 

 

 

    

 

 

 

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

11


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited)

September 30, 2013

(dollar amounts in thousands)

 

(1) All debt investments are income-producing. Equity and member interests are non-income-producing unless otherwise noted.
(2) Variable interest rate investments bear interest in reference to LIBOR or ABR, which are effective as of September 30, 2013. These variable rates reset monthly or quarterly, subject to interest rate floors.
(3) Principal includes accumulated PIK, or paid-in-kind, interest and is net of repayments.
(4) Foreign company at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940.
(5) Unitranche investment; interest rate reflected represents the effective yield earned on the investment for the most recent quarter.
(6) At the option of the issuer, interest can be paid in cash or cash and PIK. The percentage of PIK shown is the maximum PIK that can be elected by the company.
(7) Interest held by a wholly owned subsidiary of THL Credit, Inc.
(8) Member interests of limited liability companies are the equity equivalents of the stock of corporations.
(9) Equity ownership may be held in shares or units of companies related to the portfolio company.
(10) Issuer pays 0.50% unfunded commitment fee on revolving loan facility.
(11) Publicly-traded company with a market capitalization in excess of $250 million at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940.
(12) Income-producing security with no stated coupon; interest rate reflects an estimation of an effective yield to expected maturity as of September 30, 2013.
(13) Loan was on non-accrual status as of September 30, 2013. Issuer’s contractual rate is 15.0% PIK until December 31, 2013 and then 13.0% cash thereafter.
(14) The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(15) Interest held in companies related to the portfolio company.
(16) The Company’s investment in LCP Capital Fund LLC is in the form of membership interests and its contributed capital is for the most recent quarter maintained in a collateral account held by a custodian and acts as collateral for certain credit default swaps for the Series 2005-1 equity interest. See Note 2 in the Notes to the Consolidated Financial Statements.
(17) Non-registered investment company at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940.
 
(18) Issuer has the option to increase its aggregate interest rate to 18.5% all PIK for a period of time under certain conditions in the credit agreement.
(19) Loan was on non-accrual status as of September 30, 2013. Contractual default rate of interest is 18.0%.

See accompanying notes to these consolidated financial statements.

 

12


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments

December 31, 2012

(dollar amounts in thousands)

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost      Fair Value  

Non-controlled/non-affiliated
investments—113.49% of
net asset value

                    

20-20 Technologies Inc.

                    

Senior Secured Term
Loan
(4)

   IT Services   

13.2%(5)

(LIBOR + 11.0%)

     09/12/12         09/12/17       $ 14,000       $ 13,666       $ 13,666   
                 

 

 

    

 

 

 
                    13,666         13,666   

AIM Media Texas Operating, LLC

                    

Second Lien Loan

   Media, entertainment and leisure    16.0%      06/21/12         06/21/17       $ 9,976         9,743         9,775   

Member interest(7)(8)

           06/21/12         —           0.763636         764         764   
                 

 

 

    

 

 

 
                    10,507         10,539   

Airborne Tactical Advantage
Company, LLC

                    

Senior Secured Note

   Aerospace & defense    11.0%      09/07/11         03/07/16       $ 4,000         3,854         3,900   

Class A Warrants(9)

           09/07/11         —           511,812         113         120   

Senior Secured Delayed Draw Term
Loans
(10)

      11.0%      09/07/11         03/07/16         —           —           —     
                 

 

 

    

 

 

 
                    3,967         4,020   

C&K Market, Inc.

                    

Senior Subordinated Note

   Retail & grocery   

16.0%

(14.0% Cash

and 2.0%

PIK)

     11/03/10         11/03/15       $ 13,582         13,176         13,480   

Warrant for Class B

           11/03/10         —           157,552         349         350   
                 

 

 

    

 

 

 
                    13,525         13,830   

Country Pure Foods, LLC

                    

Subordinated Term Loan

   Food & beverage   

15%

(12.5% Cash

and 2.5% PIK)

     08/13/10         02/13/16       $ 16,079         15,871         15,758   
                 

 

 

    

 

 

 
                    15,871         15,758   

CRS Reprocessing, LLC

                    

Senior Secured Term Loan

   Manufacturing   

10.3%

(LIBOR +

9.3%)

     06/16/11         06/16/15       $ 8,438         8,327         8,375   
                 

 

 

    

 

 

 
                    8,327         8,375   

Cydcor LLC

                    

Senior Secured Term Loan

   Business services   

12.3%

(LIBOR

+9.8%)

     09/18/12         09/17/16       $ 14,649         14,270         14,270   
                 

 

 

    

 

 

 
                    14,270         14,270   

Dr. Fresh, LLC

                    

Subordinated Term Loan

   Consumer products   

14.0%(6)

(12.0% Cash

and 2.0%

PIK)

     05/15/12         11/15/17       $ 14,158         13,893         13,946   
                 

 

 

    

 

 

 
                    13,893         13,946   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

13


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments – (Continued)

December 31, 2012

(dollar amounts in thousands)

 

 

Portfolio company/Type of Investment(1)

  

Industry

 

Interest Rate(2)

  Initial
Acquisition
Date
    Maturity/
Dissolution
Date
    Principal(3)
No. of  Shares /
No. of Units
    Cost     Fair Value  

Duff & Phelps Corporation

              

Tax Receivable Agreement
Payment Rights
(11)

   Financial services   16.4%(12)     06/01/12        12/31/29        —          12,262        12,262   
            

 

 

   

 

 

 
               12,262        12,262   

Express Courier International, Inc.

              

Secured Subordinated
Term Loan

   Business services  

15.0% (13)

(PIK)

    01/17/12        07/17/16      $ 7,479        7,358        6,357   
            

 

 

   

 

 

 
               7,358        6,357   

Firebirds International, LLC

              

Senior Secured Term Loan

   Restaurants  

10.5%

(LIBOR +

9.0)

    05/17/11        05/17/16      $ 8,200        8,080        8,200   

Senior Secured Revolving
Loan
(14)(15)

    

10.5%

(LIBOR +

9.0)

    05/17/11        05/17/16        —          (67     —     

Common stock(9)

         05/17/11        —          1,906        191        215   
            

 

 

   

 

 

 
               8,204        8,415   

Food Processing Holdings, LLC

              

Senior Subordinated Note (16)

   Food & beverage  

15.0%(6)

(12.0%  Cash

and 3.0%

PIK)

    02/28/12        08/28/17      $ 13,847        13,727        13,397   

Class A Units(9)

         04/20/10        —          162.44        163        181   

Class B Units(9)

         04/20/10        —          406.09        408        150   
            

 

 

   

 

 

 
               14,298        13,728   

Gold, Inc.

              

Subordinated Term Loan

   Consumer products  

15.0%(6)

(13.0% Cash

and 2.0%

PIK)

    12/31/12        12/31/17      $ 36,800        36,064        36,064   
            

 

 

   

 

 

 
               36,064        36,064   

Gryphon Partners 3.5, L.P.

              

Partnership interest

   Financial services       11/20/12        12/21/18        —          1,195        1,895   
            

 

 

   

 

 

 
               1,195        1,895   

Harrison Gypsum, LLC

              

Senior Secured Term Loan

   Industrials  

10.5%(6)

(LIBOR +

8.5% and

0.5% PIK)

    12/21/12        12/21/17      $ 25,380        25,001        25,001   
            

 

 

   

 

 

 
               25,001        25,001   

Hart InterCivic, Inc.

              

Senior Secured Term Loan

   IT Services  

10.5%

(LIBOR +

9.0%)

    07/01/11        07/01/16      $ 9,594        9,450        9,499   

Senior Secured Revolving
Loan
(10)(15)

    

10.5%

(LIBOR +

9.0%)

    07/01/11        07/01/16      $ —          (42     —     
            

 

 

   

 

 

 
               9,408        9,499   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

14


Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments – (Continued)

December 31, 2012

(dollar amounts in thousands)

 

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost      Fair Value  

HEALTHCAREfirst, Inc.

                    

Senior Secured Term Loan

   Healthcare   

11.5%(5) (LIBOR

+ 10.0%)

     08/31/12         08/30/17       $ 9,875         9,594         9,594   
                 

 

 

    

 

 

 
                    9,594         9,594   

IMDS Corporation

                    

Subordinated Term Loan

   Healthcare   

15.5%(6)

(12.5% Cash

and 3.0%

PIK)

     05/02/12         11/02/17       $ 13,266         12,967         12,404   
                 

 

 

    

 

 

 
                    12,967         12,404   

Jefferson Management Holdings,
LLC

                    

Member interest(7)(8)

   Healthcare    N/A      04/20/10         —           1,393         1,393         1,388   
                 

 

 

    

 

 

 
                    1,393         1,388   

LCP Capital Fund LLC

                    

Member interest(8)(17)(18)

   Financial services    16.2%(19)      04/20/10         02/15/15       $ 8,354         8,354         8,354   
                 

 

 

    

 

 

 
                    8,354         8,354   

Loadmaster Derrick & Equipment, Inc.

                    

Senior Secured Term Loan

   Energy / Utilities   

9.3% (LIBOR

+ 8.3%)

     09/28/12         09/28/17       $ 9,709         9,462         9,462   

Senior Secured Revolving
Loan
(10)

     

9.3% (LIBOR

+ 8.3%)

     09/28/12         09/28/17       $ 290         290         290   

Senior Secured Delayed Draw
Term Loans

     

9.3% (LIBOR

+ 8.3%)

     09/28/12         09/28/17       $ —           —           —     
                 

 

 

    

 

 

 
                    9,752         9,752   

Marine Acquisition Corp.
(Teleflex Marine)

                    

Senior Subordinated Note

   Manufacturing    13.5%(6)      09/18/12         05/18/17       $ 16,500         16,146         16,170   
                 

 

 

    

 

 

 
                    16,146         16,170   

Martex Fiber Southern Corp.

                    

Subordinated Term Loan

   Industrials   

13.5%(6)

(12.0% Cash

and 1.5%

PIK)

     04/30/12         10/31/19       $ 8,756         8,632         8,580   
                 

 

 

    

 

 

 
                    8,632         8,580   

Octagon Income Note XIV, Ltd.

                    

Income Notes, Residual
Interest
(4)

   Financial services    15.5%(20)      12/19/12         01/15/24       $ 10,000         9,400         9,400   
                 

 

 

    

 

 

 
                    9,400         9,400   

OEM Group, Inc.

                    

Senior Secured Note

   Manufacturing   

15.0%(6)

(12.5% Cash

and 2.5%

PIK)

     10/07/10         10/07/15       $ 14,784         14,510         13,601   

Warrant for Common

           —           —           —           —           —     
                 

 

 

    

 

 

 
                    14,510         13,601   

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

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THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments – (Continued)

December 31, 2012

(dollar amounts in thousands)

 

 

Portfolio company/Type of Investment(1)

  

Industry

  

Interest Rate(2)

   Initial
Acquisition
Date
     Maturity/
Dissolution
Date
     Principal(3)
No.  of Shares /
No. of Units
     Cost      Fair Value  

Pinnacle Operating Corporation

                    

Senior Secured Term Loan

   Industrials   

11.5% (LIBOR

+ 10.3%)

     11/26/12         05/15/19       $ 10,000         9,508         9,508   
                 

 

 

    

 

 

 
                    9,508         9,508   

Sheplers, Inc.

                    

Senior Secured (2nd lien) Term Loan(7)

   Retail & grocery   

13.2% (LIBOR

+ 11.7%)

     12/20/11         12/20/16       $ 11,426         11,182         11,369   

Mezzanine Loan(7)

     

17.0%(21)

(10.0% Cash

and 7.0%

PIK)

     12/20/11         12/20/17       $ 1,776         1,747         1,768   
                 

 

 

    

 

 

 
                    12,929         13,137   

The Studer Group, L.L.C.

                    

Senior Subordinated Note

   Healthcare   

14.0%

(12.0% Cash

and 2.0% PIK)

     09/29/11         03/29/17       $ 12,454         12,251         12,361   
                 

 

 

    

 

 

 
                    12,251         12,361   

Surgery Center Holdings, Inc.

                    

Senior Subordinated Note

   Healthcare    15.0%      04/20/10         08/04/17       $ 18,773         18,405         18,960   

Member interest(8)(9)

           —           —           469,673         470         1,850   
                 

 

 

    

 

 

 
                    18,875         20,810   

Trinity Services Group, Inc.

                    

Senior Subordinated Note

   Food & beverage   

13.5%(6)

(12.0% Cash

and 1.5%

PIK)

     03/29/12         09/29/17       $ 14,143         13,954         14,073   
                 

 

 

    

 

 

 
                    13,954         14,073   

Vision Solutions, Inc.

                    

Second Lien Term Loan

   IT Services   

9.5% (LIBOR

+ 8.0%)

     03/31/11         07/23/17       $ 11,625         11,547         11,625   
                 

 

 

    

 

 

 
                    11,547         11,625   

Washington Inventory Service

                    

Senior Secured Term Loan

   Business services   

10.3% (LIBOR

+ 9.0%)

     12/27/12         06/20/19       $ 11,000         10,835         10,835   
                 

 

 

    

 

 

 
                    10,835         10,835   

YP Equity Investors, LLC

                    

Senior Secured Term Loan

   Media, entertainment and leisure   

15.0% (12.0%

Cash and 3.0%

PIK)

     05/08/12         05/08/17       $ 3,322         3,236         3,322   

Member interest(7)(8)

           05/08/12         05/08/17         —           —           1,800   
                 

 

 

    

 

 

 
                    3,236         5,122   
                 

 

 

    

 

 

 

Non-controlled/non-affiliated investments—113.49% of net asset value

                  $ 391,699       $ 394,339   
                 

 

 

    

 

 

 
                    
                    

 

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

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Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments – (Continued)

December 31, 2012

(dollar amounts in thousands)

 

 

Portfolio company/Type of Investment(1)

 

Industry

 

Interest Rate(2)

  

Initial
Acquisition
Date

  

Maturity/
Dissolution
Date

  Principal(3)
No.  of Shares /
No. of Units
    Cost     Fair Value  

Non-controlled/affiliated
investments—0.00% of net
asset value

               

THL Credit Greenway Fund LLC

               

Member interest

  Financial services      01/27/11    1/14/2021     —          10        10   
             

 

 

   

 

 

 
                10        10   
             

 

 

   

 

 

 

Total investments—113.49% of net asset value

          $ 391,709      $ 394,349   
             

 

 

   

 

 

 
Derivative Instruments  
Counterparty   Instrument       Interest Rate        Expiration
Date
   # of Contracts   Notional     Cost     Fair Value  

ING Capital Markets, LLC

 

Interest Rate Swap

– Pay

Fixed/Receive

Floating

 

1.1425%/

LIBOR

   5/10/2017    1   $ 50,000      $ —        $ (1,053
             

 

 

   

 

 

 

Total derivative instruments—(0.30)% of net asset value

          $ —        $ (1,053
             

 

 

   

 

 

 

 

(1) All debt investments are income-producing. Equity and member interests are non-income-producing unless otherwise noted.
(2) Variable interest rate investments bear interest in reference to LIBOR or ABR, which reset monthly or quarterly, subject to interest rate floors. Unless otherwise noted, for each debt investment we have provided the interest rate in effect as of December 31, 2012.
(3) Principal includes accumulated PIK, or paid-in-kind, interest and is net of repayments.
(4) Foreign company at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940.
(5) Unitranche investment; yield reflected represents the effective yield earned on the investment.
(6) At the option of the issuer, interest can be paid in cash or cash and PIK. The percentage of PIK shown is the maximum PIK that can be elected by the company.
(7) Interest held by a wholly owned subsidiary of THL Credit, Inc.
(8) Member interests of limited liability companies are the equity equivalents of the stock of corporations.
(9) Equity ownership may be held in shares or units of companies related to the portfolio company.
(10) Issuer pays 0.5% unfunded commitment fee on facility.
(11) Publicly-traded company with a market capitalization in excess of $250 million at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940.
(12) Income-producing security with no stated coupon; yield from initial investment through December 31, 2012 was approximately 16.4%.
(13) Issuer will pay 15% PIK until April 1, 2013, 13.0% cash interest thereafter.
(14) Issuer pays 0.25% unfunded commitment fee on revolving loan quarterly.
(15) The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(16) Interest held in companies related to the portfolio company.
(17) The Company’s investment in LCP Capital Fund LLC is in the form of membership interests and its contributed capital is maintained in a collateral account held by a custodian and acts as collateral for certain credit default swaps for the Series 2005-1 equity interest. See Note 2 in the Notes to the Consolidated Financial Statements.
(18) Non-registered investment company at the time of investment and, as a result, is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940.

 

(Continued on next page)

 

See accompanying notes to these consolidated financial statements.

 

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Table of Contents

THL Credit, Inc. and Subsidiaries

Consolidated Schedule of Investments

December 31, 2012

(dollar amounts in thousands)

 

(19) Income producing security with no stated coupon; cash yield for the three months ended December 31, 2012 was approximately 16.2%.
(20) Income producing security with no stated coupon; cash yield for the three months ended December 31, 2012 was approximately 15.5%.
(21) Issuer has the option to increase its aggregate interest rate to 18.5% all PIK for a period of time under certain conditions in the credit agreement.

See accompanying notes to these consolidated financial statements.

 

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Table of Contents

THL Credit, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2013

(in thousands, except per share data)

1. Organization

THL Credit, Inc., or the Company, was organized as a Delaware corporation on May 26, 2009. The Company has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or 1940 Act. The Company has elected to be treated for tax purposes as a regulated investment company, or RIC, under the Internal Revenue Code of 1986, or the Code, as amended. In 2009, the Company was treated for tax purposes as a corporation. The Company’s investment objective is to generate both current income and capital appreciation, primarily through privately negotiated investments in debt and equity securities of middle-market companies.

The Company was initially funded on July 23, 2009, issuing 7 shares of common stock at an aggregate purchase price of $101 to THL Credit Opportunities, L.P., an affiliate of THL Credit Advisors LLC, or the Advisor. While the Company incurred certain costs in connection with an anticipated initial public offering, which ultimately would have been borne by the Advisor had the offering not closed; the Company did not formally commence principal operations until the completion of the offering on April 21, 2010, as described below.

On April 20, 2010, in anticipation of completing an initial public offering and formally commencing principal operations, the Company entered into a purchase and sale agreement with THL Credit Opportunities, L.P. and THL Credit Partners BDC Holdings, L.P., or BDC Holdings, an affiliate of the Company, to effectuate the sale by THL Credit Opportunities, L.P. to the Company of certain securities valued at $62,107, as determined by the Company’s board of directors, and on the same day issued 4,140 shares of common stock to BDC Holdings valued at $15.00 per share, pursuant to such agreement, in exchange for the aforementioned securities. Subsequently, the Company filed an election to be regulated as a BDC.

On April 21, 2010, the Company completed its initial public offering, formally commencing principal operations, and sold 9,000 shares of its common stock through a group of underwriters at a price of $13.00 per share, less an underwriting discount and commissions totaling $0.8125 per share. Concurrently, the Company sold 6,308 shares of its common stock to BDC Holdings at $13.00 per share, the sale of which was not subject to an underwriting discount and commission. On April 27, 2010, the Company closed the sale of the aforementioned 15,308 shares and received $190,684 of net proceeds, which includes an underwriting discount and offering expenses.

On May 26, 2010, the underwriters exercised their over-allotment option under the underwriting agreement and elected to purchase an additional 337 shares of common stock at $13.00 per share resulting in additional net proceeds of $3,892, which includes an underwriting discount and offering expenses.

On September 25, 2012, the Company closed a public equity offering selling 6,095 shares of its common stock through a group of underwriters at a price of $14.09 per share, less an underwriting discount and offering expenses, and received $81,657 in net proceeds.

On June 24, 2013, the Company closed a public equity offering selling 7,590 shares of its common stock through a group of underwriters at a price of $14.62 per share, less an underwriting discount and offering expenses, and received $106,178 in net proceeds.

The Company has established wholly owned subsidiaries, THL Credit AIM Media Holdings Inc., THL Credit Holdings, Inc. and THL Credit YP Holdings Inc, which are structured as Delaware entities, or tax blockers, to hold equity or equity-like investments in portfolio companies organized as limited liability companies, or LLCs (or other forms of pass-through entities). Tax blockers are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.

The Company has a wholly owned subsidiary, THL Corporate Finance, Inc., which serves as the administrative agent on certain investment transactions.

THL Credit SBIC, LP, or SBIC LP, and its general partner, THL Credit SBIC GP, LLC, or SBIC GP, were organized in Delaware on August 25, 2011 as a limited partnership and limited liability company, respectively. On January 16, 2013, the Company withdrew its application with the Investment Division of the U.S. Small Business Administration, or SBA, to license a small business investment company, or SBIC. Both the SBIC LP and SBIC GP remain consolidated wholly owned subsidiaries of the Company.

 

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Table of Contents

2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In accordance with Article 6 of Regulation S-X under the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, as amended, the Company generally will not consolidate its interest in any company other than in investment company subsidiaries and controlled operating companies substantially all of whose business consists of providing services to the Company.

The accompanying consolidated financial statements of the Company have been presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the unaudited financial results included herein contain all adjustments, consisting solely of normal accruals, considered necessary for the fair statement of financial statements for the interim period included herein. The current period’s results of operations are not necessarily indicative of the operating results to be expected for the period ended December 31, 2013. The financial results of our portfolio companies are not consolidated in the financial statements. The accounting records of the Company are maintained in U.S. dollars.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Changes in the economic environment, financial markets, credit worthiness of our portfolio companies and any other parameters used in determining these estimates could cause actual results to differ and these differences could be material.

Cash

Cash consists of funds held in demand deposit accounts at several financial institutions and, at certain times, balances may exceed the Federal Deposit Insurance Corporation insured limit and is therefore subject to credit risk. There were no cash equivalents as of September 30, 2013 and December 31, 2012.

Deferred Financing Costs

Deferred financing costs consist of fees and expenses paid in connection with the closing of credit facilities and are capitalized at the time of payment. Deferred financing costs are amortized using the straight line method over the term of the credit facilities.

Deferred Offering Costs

Deferred offering costs consist of fees and expenses incurred in connection with the offer and sale of the Company’s common stock, including legal, accounting, printing fees and other related expenses, as well as costs incurred in connection with the filing of a shelf registration statement. These costs are capitalized when incurred and recognized as a reduction of offering proceeds when the offering becomes effective.

Escrow Receivable

Escrow receivable represents the Company’s claims to amounts set aside for indemnification claims or purchase price adjustments from the sale of certain investments. Escrow receivable is presented at net realizable value on the Consolidated Statements of Assets and Liabilities. There is a risk that some or all of the escrow amounts might not be ultimately collected by the Company.

Interest Rate Derivative

The Company recognizes derivatives as either interest rate derivative assets or liabilities at fair value on its Consolidated Statements of Assets and Liabilities with valuation changes and interest rate payments recorded as net change in unrealized appreciation (depreciation) on interest rate derivative and interest rate derivative periodic interest payments, net, respectively, on the Consolidated Statements of Operations. See also the disclosure in Note 7, Interest Rate Derivative.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued expenses, approximate fair value due to their short-term nature. The carrying amounts and fair values of the Company’s long-term obligations are disclosed in Note 6, Credit Facility.

 

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Table of Contents

Valuation of Investments

Investments, for which market quotations are readily available, are valued using market quotations, which are generally obtained from an independent pricing service or broker-dealers or market makers. Debt and equity securities, for which market quotations are not readily available, are valued at fair value as determined in good faith by the Company’s board of directors. Because we expect that there will not be a readily available market value for many of the investments in the Company’s portfolio, it is expected that many of the Company’s portfolio investments’ values will be determined in good faith by the Company’s board of directors in accordance with a documented valuation policy that has been reviewed and approved by our board of directors. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

With respect to investments for which market quotations are not readily available, the Company’s board of directors undertakes a multi-step valuation process each quarter, as described below:

 

   

the Company’s quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the portfolio investment;

 

   

preliminary valuation conclusions are then documented and discussed with senior management of the Advisor;

 

   

to the extent determined by the audit committee of the Company’s board of directors, independent valuation firms engaged by the Company conduct independent appraisals and review the Advisor’s preliminary valuations in light of their own independent assessment;

 

   

the audit committee of our board of directors reviews the preliminary valuations of the Advisor and independent valuation firms and, if necessary, responds and supplements the valuation recommendation of the independent valuation firm to reflect any comments; and

 

   

our board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of the Advisor and the respective independent valuation firms.

The types of factors that the Company may take into account in fair value pricing our investments include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. The Company utilizes an income approach to value its debt investments and a combination of income and market approaches to value its equity investments. With respect to unquoted securities, the Advisor and the Company’s board of directors, in consultation with the Company’s independent third party valuation firm, values each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors, which valuation is then approved by the board of directors. For debt investments, the Company determines the fair value primarily using an income, or yield, approach that analyzes the discounted cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of each portfolio investments. The Company’s estimate of the expected repayment date is generally the legal maturity date of the instrument. The yield analysis considers changes in leverage levels, credit quality, portfolio company performance and other factors.

The Company values its interest rate derivative agreement using an income approach that analyzes the discounted cash flows associated with the interest rate derivative agreement. Significant inputs to the discounted cash flows methodology include the forward interest rate yield curves in effect as of the end of the measurement period and an evaluation of the counterparty’s credit risk.

The Company values its residual interest investments in collateralized loan obligations using an income approach that analyzes the discounted cash flows of our residual interest. The discounted cash flows model utilizes prepayment, re-investment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow, and comparable yields for similar collateralized loan obligation fund subordinated notes or equity, when available. Specifically, the Company uses Intex cash flow models, or an appropriate substitute to form the basis for the valuation of the Company’s residual interest. The models use a set of assumptions including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated cash flows. The assumptions are based on available market data and projections provided by third parties as well as management estimates.

The Company values its investment in payment rights using an income approach that analyzes the discounted projected future cash flow streams assuming an appropriate discount rate, which will among other things consider other transactions in the market, the current credit environment, performance of the underlying portfolio company and the length of the remaining payment stream.

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future cash flows or earnings to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair value pricing the Company’s investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, the current investment

 

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Table of Contents

performance rating, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, transaction comparables, our principal market as the reporting entity and enterprise values, among other factors.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2—Quoted prices in markets that are not considered to be active or financial instruments for which significant inputs are observable, either directly or indirectly;

Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by management.

The Company considers whether the volume and level of activity for the asset or liability have significantly decreased and identifies transactions that are not orderly in determining fair value. Accordingly, if the Company determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. Valuation techniques such as an income approach might be appropriate to supplement or replace a market approach in those circumstances.

The Company has adopted the authoritative guidance under GAAP for estimating the fair value of investments in investment companies that have calculated net asset value per share in accordance with the specialized accounting guidance for Investment Companies. Accordingly, in circumstances in which net asset value per share of an investment is determinative of fair value, the Company estimates the fair value of an investment in an investment company using the net asset value per share of the investment (or its equivalent) without further adjustment, if the net asset value per share of the investment is determined in accordance with the specialized accounting guidance for investment companies as of the reporting entity’s measurement date.

Investment Risk

The value of investments will generally fluctuate with, among other things, changes in prevailing interest rates, federal tax rates, counterparty risk, general economic conditions, the condition of certain financial markets, developments or trends in any particular industry and the financial condition of the issuer. During periods of limited liquidity and higher price volatility, the Company’s ability to dispose of investments at a price and time that the Company deems advantageous may be impaired. The extent of this exposure is reflected in the carrying value of these financial assets and recorded in the Consolidated Statements of Assets and Liabilities.

Lower-quality debt securities involve greater risk of default or price changes due to changes in the credit quality of the issuer. The value of lower-quality debt securities often fluctuates in response to company, political, or economic developments and can decline significantly over short periods of time or during periods of general or regional economic difficulty. Lower-quality debt securities can be thinly traded or have restrictions on resale, making them difficult to sell at an acceptable price. The default rate for lower-quality debt securities is likely to be higher during economic recessions or periods of high interest rates.

As of September 30, 2013, we had two loans on non-accrual with an amortized cost basis of $20,954 and fair value of $16,605. As of December 31, 2012, we had no loans on non-accrual.

Security Transactions, Payment-in-Kind, Income Recognition, Realized/Unrealized Gains or Losses

Security transactions are recorded on a trade-date basis. The Company measures realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method. The Company reports changes in fair value of investments that are measured at fair value as a component of net change in unrealized appreciation on investments in the Consolidated Statements of Operations. The Company reports changes in fair value of the interest rate derivative that is measured at fair value as a component of net change in unrealized appreciation or depreciation on interest rate derivative in the Consolidated Statements of Operations.

 

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Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis to the extent that the Company expects to collect such amounts. Dividend income is recognized on the ex-dividend date. Original issue discount, principally representing the estimated fair value of detachable equity or warrants obtained in conjunction with the acquisition of debt securities, and market discount or premium are capitalized and accreted or amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion/amortization of discounts and premiums and upfront loan origination fees.

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or when it is no longer probable that principal or interest will be collected. However, we may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.

The Company has investments in its portfolio which contain a contractual paid-in-kind, or PIK, interest provision. PIK interest is computed at the contractual rate specified in each investment agreement, is added to the principal balance of the investment, and is recorded as income. The Company will cease accruing PIK interest if there is insufficient value to support the accrual or if it does not expect amounts to be collectible. To maintain the Company’s status as a RIC, PIK interest income, which is considered investment company taxable income, must be paid out to stockholders in the form of dividends even though the Company has not yet collected the cash. Amounts necessary to pay these dividends may come from available cash.

The following shows a rollforward of PIK income activity for the nine months ended September 30, 2013 and for the year ended December 31, 2012:

 

Accumulated PIK balance at December 31, 2011

   $ 3,488   

PIK income capitalized/receivable

     4,124   

PIK received in cash from full repayments

     (1,805
  

 

 

 

Accumulated PIK balance at December 31, 2012

     5,807   

PIK income capitalized/receivable

     2,588   

PIK received in cash from full repayments

     (2,255
  

 

 

 

Accumulated PIK balance at September 30, 2013

   $ 6,140   
  

 

 

 

Interest income from the Company’s TRA and CLO residual interests is recorded based upon an estimation of an effective yield to expected maturity using anticipated cash flows. Amounts in excess of income recognized are recorded as a reduction to the cost basis of the investment. The Company monitors the anticipated cash flows from its TRA and CLO residual interests and will adjust its effective yield periodically as needed.

The Company capitalizes and amortizes upfront loan origination fees received in connection with the closing of investments. The unearned income from such fees is accreted into interest income over the contractual life of the loan based on the effective interest method. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees, and unamortized discounts are recorded as interest income.

In certain investment transactions, the Company may provide advisory services. For services that are separately identifiable and external evidence exists to substantiate fair value, income is recognized as earned. The Company had no income from advisory services related to portfolio companies for the three and nine months ended September 30, 2013 and 2012, respectively.

Other income includes commitment fees, fees related to the management of Greenway and Greenway II, structuring fees, amendment fees and unused commitment fees associated with investments in portfolio companies.

 

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The following is a summary of the levels within the fair value hierarchy in which the Company invests as of September 30, 2013:

 

Description

   Fair Value         Level 1          Level 2     Level 3  

First lien secured debt

   $ 183,729      $ —         $ —        $ 183,729   

Subordinated debt

     170,359        —           —          170,359   

Second lien debt

     154,395        —           —          154,395   

CLO residual interests

     33,424        —           —          33,424   

Investment in payment rights

     14,381        —           —          14,381   

Investments in funds

     8,895        —           —          8,895   

Equity investments

     6,513        —           —          6,513   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total investments

   $ 571,696      $ —         $ —        $ 571,696   
  

 

 

   

 

 

    

 

 

   

 

 

 

Interest rate derivative

     (314     —           (314     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liability at fair value

   $ (314   $ —         $ (314   $ —     
  

 

 

   

 

 

    

 

 

   

 

 

 

The following is a summary of the levels within the fair value hierarchy in which the Company invests as of December 31, 2012:

 

Description

   Fair Value         Level 1          Level 2     Level 3  

Subordinated debt

   $ 183,319      $ —         $ —        $ 183,319   

First lien secured debt

     102,256        —           —          102,256   

Second lien debt

     70,035        —           —          70,035   

Investment in payment rights

     12,262        —           —          12,262   

Investments in funds

     10,259        —           —          10,259   

CLO residual interests

     9,400        —           —          9,400   

Equity investments

     6,818        —           —          6,818   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total investments

   $ 394,349      $ —         $ —        $ 394,349   
  

 

 

   

 

 

    

 

 

   

 

 

 

Interest rate derivative

     (1,053     —           (1,053     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liability at fair value

   $ (1,053   $ —         $ (1,053   $ —     
  

 

 

   

 

 

    

 

 

   

 

 

 

The following is a summary of the industry classification in which the Company invests as of September 30, 2013:

 

Industry

   Cost      Fair Value      % of
Net Assets
 

Financial services

   $ 96,525       $ 97,494         21.49

IT Services

     76,956         77,414         17.06

Industrials

     58,714         58,673         12.93

Healthcare

     49,354         50,729         11.18

Business services

     51,230         50,258         11.08

Manufacturing

     49,274         49,115         10.82

Food & beverage

     44,949         44,452         9.80

Energy / Utilities

     33,223         33,099         7.29

Media, entertainment and leisure

     28,821         31,018         6.84

Consumer Products

     30,491         30,949         6.82

Retail & grocery

     26,715         23,340         5.14

Restaurants

     20,762         20,805         4.58

Aerospace & defense

     4,164         4,350         0.96
  

 

 

    

 

 

    

 

 

 

Total Investments

   $ 571,178       $ 571,696         125.99
  

 

 

    

 

 

    

 

 

 

 

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Table of Contents

The following is a summary of the geographical concentration of our investment portfolio as of September 30, 2013:

 

Region

   Cost      Fair Value      % of
Net Assets
 

Northeast

   $ 133,394       $ 135,274         29.81

West

     126,567         127,861         28.18

Midwest

     103,215         103,458         22.80

Southwest

     98,611         97,006         21.38

Southeast

     82,290         84,225         18.56

International

     13,450         13,635         3.00

Northwest

     13,651         10,237         2.26
  

 

 

    

 

 

    

 

 

 

Total Investments

   $ 571,178       $ 571,696         125.99
  

 

 

    

 

 

    

 

 

 

The following is a summary of the industry classification in which the Company invests as of December 31, 2012(1):

 

Industry

   Cost      Fair Value      % of
Net Assets
 

Healthcare

   $ 55,080       $ 56,558         16.27

Consumer Products

     49,957         50,010         14.39

Food & beverage

     44,124         43,559         12.54

Industrials

     43,142         43,089         12.40

Manufacturing

     38,982         38,145         10.98

IT services

     34,621         34,790         10.01

Financial services

     31,221         31,921         9.19

Business services

     32,464         31,462         9.05

Retail & grocery

     26,455         26,967         7.76

Media, entertainment and leisure

     13,742         15,661         4.51

Energy / Utilities

     9,752         9,752         2.81

Restaurants

     8,203         8,415         2.42

Aerospace & defense

     3,966         4,020         1.16
  

 

 

    

 

 

    

 

 

 
   $ 391,709       $ 394,349         113.49
  

 

 

    

 

 

    

 

 

 

 

(1) The Company has changed the industry classification of certain investments to conform to new industry classifications adopted as of September 30, 2013.

The following is a summary of the geographical concentration of our investment portfolio as of December 31, 2012:

 

Region

   Cost      Fair Value      % of
Net Assets
 

Southeast

   $ 101,401       $ 104,146         29.98

West

     87,804         88,635         25.51

Southwest

     73,786         72,432         20.84

Midwest

     62,867         63,033         18.14

Northeast

     38,659         38,607         11.11

Northwest

     13,526         13,830         3.98

International

     13,666         13,666         3.93
  

 

 

    

 

 

    

 

 

 

Total Investments

   $ 391,709       $ 394,349         113.49
  

 

 

    

 

 

    

 

 

 

 

25


Table of Contents

The following table rolls forward the changes in fair value during the nine months ended September 30, 2013 for investments classified within Level 3:

 

    First lien
debt
    Second
lien debt
    Subordinated
debt
    Investments
in Funds
    Equity
investments
    Investment in
payment
rights
    CLO residual
interests
    Totals  

Beginning balance, January 1 2013

  $ 102,256      $ 70,035      $ 183,319      $ 10,259      $ 6,819      $ 12,261      $ 9,400      $ 394,349   

Purchases

    121,468        100,397        49,645        366        169        —          25,114        297,159   

Sales and repayments

    (41,021     (18,537     (61,589     (1,270     —          —          (1,208     (123,625

Unrealized appreciation (depreciation)(1)

    (39     1,323        (4,549     (460     (475     2,120        (43     (2,123

Net amortization of premiums, discounts and fees

    966        857        1,362        —          —          —          161        3,346   

PIK

    99        320        2,171