Special Value Continuation Partners, LP - FORM 10-Q

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 - Special Value Continuation Partners, LP	s001086x1_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - Special Value Continuation Partners, LP	s001086x1_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - Special Value Continuation Partners, LP	s001086x1_ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended September 30, 2015

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 814-00897

SPECIAL VALUE CONTINUATION PARTNERS, LP

(Exact Name of Registrant as Specified in Charter)

Delaware	68-0631675
(State or Other Jurisdiction of Incorporation)	(IRS Employer Identification No.)

2951 28 ^th Street, Suite 1000 Santa Monica, California	90405
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (310) 566-1000

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 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ 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 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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller Reporting company ☐

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

The number of the Registrant’s common limited partner interests, outstanding as of September 30, 2015 was 844,221,411.

SPECIAL VALUE CONTINUATION PARTNERS, LP

FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

TABLE OF CONTENTS

Part I.	Financial Information

Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of September 30, 2015 (unaudited) and December 31, 2014	2
	Consolidated Schedule of Investments as of September 30, 2015 (unaudited) and December 31, 2014	3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2015 (unaudited) and September 30, 2014 (unaudited)	13
	Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2015 (unaudited) and year ended December 31, 2014	14
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 (unaudited) and September 30, 2014 (unaudited)	15
	Notes to Consolidated Financial Statements (unaudited)	16
	Consolidated Schedule of Changes in Investments in Affiliates for the nine months ended September 30, 2015 (unaudited) and year ended December 31, 2014	36
	Consolidated Schedule of Restricted Securities of Unaffiliated Issuers as of September 30, 2015 (unaudited) and December 31, 2014	38

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52

Item 4.	Controls and Procedures	52

Part II.	Other Information

Item 1.	Legal Proceedings	53

Item 1A.	Risk Factors	53

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53

Item 3.	Defaults upon Senior Securities	53

Item 4.	Mine Safety Disclosures	53

Item 5.	Other Information	53

Item 6.	Exhibits	53

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Statements of Assets and Liabilities

	September 30, 2015			December 31, 2014
	(unaudited)
Assets
Investments, at fair value:
Companies less than 5% owned (cost of $1,206,750,821 and $1,097,181,753, respectively)	$	1,187,883,822		$	1,081,901,384
Companies 5% to 25% owned (cost of $67,502,341 and $52,103,511, respectively)		66,890,774			48,716,425
Companies more than 25% owned (cost of $38,631,089 and $40,213,258 respectively)		14,386,043			15,918,077
Total investments (cost of $1,312,884,251 and $1,189,498,522, respectively)		1,269,160,639			1,146,535,886

Cash and cash equivalents		34,582,869			27,268,792
Deferred debt issuance costs		7,298,942			4,642,075
Receivable for investments sold		1,969,722			10,961,369
Accrued interest income:
Companies less than 5% owned		13,261,132			9,222,001
Companies 5% to 25% owned		750,685			253,987
Companies more than 25% owned		17,493			28,450
Unrealized appreciation on swaps		2,868,748			1,717,610
Options (cost of $51,750 and $51,750, respectively)		-			497
Prepaid expenses and other assets		774,507			2,000,525
Total assets		1,330,684,737			1,202,631,192

Liabilities
Debt		469,300,000			223,000,000
Payable for investments purchased		7,847,520			2,049,518
Incentive allocation payable		4,838,534			4,303,040
Interest payable		1,914,611			1,263,064
Payable to the Advisor		380,646			328,860
Payable to Parent		-			1,031,498
Accrued expenses and other liabilities		2,182,015			2,341,332
Total liabilities		486,463,326			234,317,312

Commitments and contingencies (Note 5)

Preferred equity facility
Series A preferred limited partner interests in Special Value Continuation Partners, LP; $20,000/interest liquidation preference; 0 and 6,700 interests authorized, issued and outstanding as of September 30, 2015 and December 31, 2014, respectively		-			134,000,000
Accumulated dividends on Series A preferred equity facility		-			497,790
Total preferred limited partner interests		-			134,497,790

Net assets applicable to common limited and general partners	$	844,221,411		$	833,816,090

Composition of net assets applicable to common limited and general partners
Paid-in capital in excess of par	$	982,458,327		$	978,731,888
Accumulated net investment income		31,664,031			22,994,510
Accumulated net realized losses		(128,429,161	)		(126,410,399	)
Accumulated net unrealized depreciation		(41,471,786	)		(41,499,909	)
Net assets applicable to common limited and general partners	$	844,221,411		$	833,816,090

See accompanying notes to consolidated financial statements.

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal		Cost			Value			% of Portfolio			Notes

Debt Investments ^(A)
Accounting, Tax and Payroll Services
EGS Holdings, Inc.	Holdco PIK Notes	LIBOR (A)		3.00%		10.00%		13.00%	10/3/2018	$	57,238	$	57,238		$	57,238			-
Expert Global Solutions, LLC	Second Lien Term Loan	LIBOR (Q)		1.50%		11.00%		12.50%	10/3/2018	$	15,249,675		15,031,105			15,402,171			1.18	%
													15,088,343			15,459,409			1.18	%
Advertising, Public Relations Services
Doubleplay III Limited (Exterion Media) (United Kingdom)	First Lien Facility A1 Term Loan	EURIBOR (Q)		1.25%		6.25%		7.50%	3/18/2018	€	12,249,157		15,848,565			13,759,337			1.06	%	D/H
InMobi, Inc. (Singapore)	First Lien Delayed Draw Tranche 1 Term Loan (1.25% Exit Fee)	LIBOR (M)		0.33%		10.17%		10.50%	9/1/2018	$	10,645,041		10,138,202			10,138,041			0.78	%	H/L
InMobi, Inc. (Singapore)	First Lien Delayed Draw Tranche 1 Term Loan (1.25% Exit Fee)	LIBOR (M)		0.33%		10.17%		N/A	9/1/2018	$	-		-			5			-		H/L
InMobi, Inc. (Singapore)	First Lien Delayed Draw Tranche 1 Term Loan (1.25% Exit Fee)	LIBOR (M)		0.33%		10.17%		N/A	9/1/2018	$	-		-			3			-		H/L
													25,986,767			23,897,386			1.84	%
Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	3/15/2017	$	137,608		137,608			139,612			0.01	%	F
N918DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	8/15/2018	$	253,943		253,943			258,932			0.02	%	F
N954DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	3/20/2019	$	360,363		360,363			367,458			0.03	%	F
N955DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	6/20/2019	$	385,135		385,135			392,963			0.03	%	F
N956DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	5/20/2019	$	381,663		381,663			389,397			0.03	%	F
N957DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	6/20/2019	$	388,503		388,503			396,402			0.03	%	F
N959DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	7/20/2019	$	395,285		395,285			403,338			0.03	%	F
N960DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	10/20/2019	$	418,755		418,755			427,312			0.03	%	F
N961DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	8/20/2019	$	408,799		408,799			417,143			0.03	%	F
N976DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	2/15/2018	$	238,743		238,743			243,132			0.02	%	F
Aircraft Leased to United Airlines, Inc.
N659UA	Aircraft Secured Mortgage	Fixed		-		12.00%		12.00%	2/28/2016	$	644,862		644,862			659,259			0.05	%	F
N661UA	Aircraft Secured Mortgage	Fixed		-		12.00%		12.00%	5/4/2016	$	879,217		879,217			907,623			0.07	%	F
Cargojet Airways LTD. (Canada)	Aircraft Acquisition Loan A	LIBOR (M)		-		8.50%		8.75%	1/31/2023	$	14,457,306		14,181,056			14,470,317			1.11	%	H
Cargojet Airways LTD. (Canada)	Aircraft Acquisition Loan A1	LIBOR (M)		-		8.50%		N/A	1/31/2023	$	-		-			14			-		H
Mesa Air Group, Inc.	Acquisition Delayed Draw Loan	LIBOR (M)		-		7.25%		N/A	6/17/2019	$	-		-			312,225			0.02	%
Mesa Air Group, Inc.	Acquisition Loan	LIBOR (M)		-		7.25%		7.50%	7/15/2022	$	16,463,185		16,173,182			16,841,839			1.29	%
One Sky Flight, LLC	Second Lien Term Loan	Fixed		-		12% Cash+3% PIK		15.00%	6/3/2019	$	32,904,104		32,115,500			33,891,227			2.60	%
													67,362,614			70,518,193			5.40	%
Apparel Manufacturing
Jones Apparel, LLC	First Lien FILO Term Loan	LIBOR (M)		1.00%		9.60%		10.60%	4/8/2019	$	4,697,022		4,662,802			4,697,022			0.36	%

Business Support Services
Enerwise Global Technologies, Inc.	Sr Secured Revolving Loan	LIBOR (Q)		0.23%		8.52%		8.75%	11/30/2017	$	–		(79,130	)		(50,625	)		-		K
Enerwise Global Technologies, Inc.	Sr Secured Term Loan (1.5% Exit Fee)	LIBOR (Q)		0.23%		9.27%		9.50%	11/30/2019	$	17,500,000		17,235,436			17,381,875			1.33	%	L
STG-Fairway Acquisitions, Inc. (First Advantage)	Second Lien Term Loan	LIBOR (Q)		1.00%		9.25%		10.25%	6/30/2023	$	31,000,000		30,537,872			31,930,000			2.45	%
													47,694,178			49,261,250			3.78	%
Chemicals
Anuvia Plant Nutrients Holdings, LLC	Sr Secured Term Loan (8.0 % Exit Fee)	LIBOR (M)		0.23%		10.27%		10.50%	2/1/2018	$	7,700,000		7,914,869			7,935,200			0.61	%	L
BioAmber, Inc.	Sr Secured Term Loan	LIBOR (M)		0.23%		9.27%		9.50%	12/1/2017	$	25,000,000		25,167,961			25,662,500			1.97	%
Green Biologics, Inc.	Sr Secured Delayed Draw Term Loan (7.0% Exit Fee)	Prime Rate		3.25%		7.75%		11.00%	5/1/2018	$	15,000,000		14,814,099			15,000,000			1.15	%	L
PeroxyChem, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		6.50%		7.50%	2/28/2020	$	8,832,681		8,717,037			8,832,681			0.68	%	G
													56,613,966			57,430,381			4.41	%
Communications Equipment Manufacturing
Globecomm Systems, Inc.	First Lien Term Loan	LIBOR (Q)		1.25%		7.63%		8.88%	12/11/2018	$	14,737,500		14,590,125			14,514,227			1.11	%	B

Computer Equipment Manufacturing
ELO Touch Solutions, Inc.	Second Lien Term Loan	LIBOR (Q)		1.50%		10.50%		12.00%	12/1/2018	$	12,000,000		11,681,018			11,692,200			0.90	%
Silicon Graphics International Corp.	First Lien Term Loan	LIBOR (Q)		1.00%		9.00%		10.00%	7/27/2018	$	18,550,882		18,247,955			18,690,013			1.43	%	J
													29,928,973			30,382,213			2.33	%
Computer Systems Design and Related Services
Autoalert, LLC	First Lien Term Loan	LIBOR (Q)		0.25%		4.75% Cash+4% PIK		9.00%	3/31/2019	$	31,235,295		30,786,178			31,140,027			2.39	%
MSC Software Corporation	Second Lien Term Loan	LIBOR (M)		1.00%		7.50%		8.50%	5/29/2021	$	6,993,035		6,935,034			6,800,727			0.52	%
OnX Enterprise Solutions, Ltd. (Canada)	First Lien Term Loan B	LIBOR (Q)		-		8.00%		8.28%	9/3/2018	$	2,343,667		2,343,667			2,327,730			0.18	%	H
OnX Enterprise Solutions, Ltd. (Canada)	First Lien Term Loan	LIBOR (Q)		-		7.00%		7.28%	9/3/2018	$	10,453,333		10,361,830			10,116,736			0.77	%	H
OnX USA, LLC	First Lien Term Loan B	LIBOR (Q)		-		8.00%		8.28%	9/3/2018	$	4,687,333		4,687,333			4,655,460			0.36	%
OnX USA, LLC	First Lien Term Loan	LIBOR (Q)		-		7.00%		7.28%	9/3/2018	$	5,226,667		5,184,603			5,058,368			0.39	%
Vistronix, LLC	First Lien Revolver	LIBOR (Q)		0.50%		8.00%		8.50%	12/4/2018	$	228,398		223,861			228,398			0.02	%
Vistronix, LLC	First Lien Term Loan	LIBOR (M)		0.50%		8.00%		8.50%	12/4/2018	$	6,288,020		6,233,315			6,256,580			0.48	%
Waterfall International, Inc.	First Lien Delayed Draw Term Loan	LIBOR (Q)		-		11.67%		12.00%	9/1/2018	$	4,800,000		4,648,512			4,648,800			0.36	%
													71,404,333			71,232,826			5.47	%
Data Processing and Hosting Services
Asset International, Inc.	Delayed Draw Term Loan	LIBOR (M)		1.00%		7.00%		8.00%	7/31/2020	$	3,033,145		2,997,251			3,032,459			0.23	%
Asset International, Inc.	Revolver Loan	LIBOR (M)		1.00%		7.00%		8.00%	7/31/2020	$	24,238		16,101			24,238			-
Asset International, Inc.	First Lien Term Loan	LIBOR (M)		1.00%		7.00%		8.00%	7/31/2020	$	8,130,008		7,993,988			8,169,032			0.63	%
Rightside Group, Ltd.	Second Lien Term Loan	LIBOR (Q)		0.50%		8.75%		9.25%	8/6/2019	$	4,812,500		4,002,763			4,767,744			0.36	%
The Telx Group, Inc.	Senior Notes	Fixed		-		13.5% PIK		13.50%	7/9/2021	$	4,746,800		4,746,800			4,889,204			0.38	%	E
United TLD Holdco, Ltd. (Rightside) (Cayman Islands)	Second Lien Term Loan	LIBOR (Q)		0.50%		8.75%		9.25%	8/6/2019	$	9,625,000		8,005,526			9,535,488			0.73	%	H
													27,762,429			30,418,165			2.33	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal		Cost			Value			% of Portfolio			Notes

Debt Investments (continued)
Electric Power Generation, Transmission and Distribution
Holocene Renewable Energy Fund 3, LLC (Conergy)	First Lien Term Loan	Fixed		-		9% Cash+1% PIK		10.00%	9/9/2017	$	7,463,901	$	7,390,860		$	7,389,263			0.57	%

Electrical Equipment Manufacturing
API Technologies Corp.	First Lien Term Loan	LIBOR (Q)		1.50%		7.50%		9.00%	2/6/2018	$	6,296,253		6,255,677			6,202,754			0.47	%
API Technologies Corp.	First Lien Term Loan	LIBOR (Q)		1.50%		7.50%		9.00%	2/6/2018	$	4,081,961		4,001,969			4,021,344			0.31	%
													10,257,646			10,224,098			0.78	%
Electronic Component Manufacturing
Central MN Renewables, LLC	Sr Secured Revolver	Fixed		-		8.25%		N/A	1/1/2016	$	-		-			2			-
Redaptive, Inc.	Frist Lien Delayed Draw Term Loan	LIBOR (Q)		-		10.72%		N/A	7/1/2018	$	-		(133,163	)		15			-
Soraa, Inc.	Sr Secured Term Loan (4.0% Exit Fee)	LIBOR (M)		0.23%		10.27%		10.50%	9/1/2017	$	22,500,000		22,392,029			21,696,750			1.66	%	L
SunEdison, Inc.	Senior Secured Letters of Credit	Fixed		-		3.75%		N/A	2/28/2017	$	-		(604,759	)		(750,340	)		(0.06	%)	J/K
													21,654,107			20,946,427			1.60	%
Equipment Leasing
Essex Ocean, LLC	Sr Secured Term Loan	Fixed		-		8.00%		8.00%	3/25/2019	$	-		-			22			-
Essex Ocean, LLC (Solexel)	Sr Secured Term Loan	Fixed		-		8.00%		8.00%	8/15/2018	$	2,855,401		2,855,401			2,855,401			0.22	%
													2,855,401			2,855,423			0.22	%
Financial Investment Activities
Magnolia Finance V plc (Cayman Islands)	Asset-Backed Credit Linked Notes	Fixed		-		13.13%		13.13%	8/2/2021	$	15,000,000		15,000,000			14,949,000			1.15	%	E/H
Institutional Shareholder Services, Inc.	Second Lien Term Loan	LIBOR (Q)		1.00%		7.50%		8.50%	4/30/2022	$	4,471,492		4,435,286			4,348,526			0.33	%
Marsico Capital Management	First Lien Term Loan	LIBOR (Q)		-		5.00%		5.31%	12/31/2022	$	10,583,316		13,304,224			1,455,206			0.11	%	I
													32,739,510			20,752,732			1.59	%
Gaming
AP Gaming I, LLC	First Lien Revolver	LIBOR (M)		-		8.25%		8.43%	12/20/2018	$	-		(1,914,221	)		(1,031,250	)		(0.08	%)	K

Grocery Stores
Bashas, Inc.	First Lien FILO Term Loan	LIBOR (M)		1.50%		7.00%		8.50%	10/8/2019	$	10,072,332		10,033,799			10,192,193			0.78	%
The Great Atlantic & Pacific Tea Company, Inc.	Term Loan Tranche B	LIBOR (M)		1.00%		8.85%		9.85%	9/17/2019	$	21,295,110		20,998,759			21,721,012			1.66	%
													31,032,558			31,913,205			2.44	%
Hospitals
Bioventus, LLC	Second Lien Term Loan	LIBOR (Q)		1.00%		10.00%		11.00%	4/10/2020	$	11,000,000		10,811,136			10,890,000			0.84	%
KPC Healthcare, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		9.25%		10.25%	8/28/2020	$	17,201,857		16,819,818			17,201,857			1.32	%
RegionalCare Hospital Partners, Inc.	Second Lien Term Loan	LIBOR (M)		1.00%		9.50%		10.50%	10/23/2019	$	21,017,525		20,765,157			21,201,428			1.62	%	G
UBC Healthcare Analytics, Inc. (Evidera)	First Lien Term Loan	LIBOR (Q)		1.00%		9.00%		10.00%	7/1/2018	$	4,105,044		4,084,519			4,094,782			0.31	%
													52,480,630			53,388,067			4.09	%
Insurance Carriers
Acrisure, LLC	Second Lien Incremental Notes	LIBOR (Q)		1.00%		8.25%		9.25%	11/19/2022	$	2,400,188		2,261,319			2,398,064			0.18	%
Acrisure, LLC	Second Lien Notes	LIBOR (Q)		1.00%		8.25%		9.25%	11/19/2022	$	12,720,998		12,540,755			12,717,182			0.98	%
JSS Holdings, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		6.25%		7.25%	8/31/2021	$	4,000,000		3,920,730			3,940,000			0.30	%
US Apple Holdco, LLC (Ventiv Technology)	First Lien Term Loan	LIBOR (Q)		0.50%		11.50%		12.00%	8/29/2019	$	20,000,000		19,339,345			19,870,000			1.52	%
													38,062,149			38,925,246			2.98	%
Insurance Related Activities
Confie Seguros Holding II Co.	Second Lien Term Loan	LIBOR (M)		1.25%		9.00%		10.25%	5/8/2019	$	11,061,809		10,946,807			11,043,336			0.85	%	G

Lessors of Nonfinancial Licenses
ABG Intermediate Holdings 2, LLC	Second Lien Term Loan	LIBOR (Q)		1.00%		8.50%		9.50%	5/27/2022	$	15,990,714		15,849,370			16,150,621			1.24	%
ABG Intermediate Holdings 2, LLC	Second Lien Incremental Term Loan	LIBOR (Q)		1.00%		8.50%		9.50%	5/27/2022	$	3,474,715		3,440,443			3,509,462			0.27	%
ABG Intermediate Holdings 2, LLC	Second Lien Incremental Delayed Draw Term Loan	LIBOR (Q)		1.00%		8.50%		9.50%	5/27/2022	$	-		(5,199	)		5,346			-
													19,284,614			19,665,429			1.51	%
Management, Scientific, and Technical Consulting Services
Dodge Data & Analytics, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		8.75%		9.75%	10/31/2019	$	24,877,617		24,302,704			24,794,277			1.90	%

Motion Picture and Video Industries
CORE Entertainment, Inc.	First Lien Term Loan	Fixed		-		9.00%		9.00%	6/21/2017	$	9,462,231		9,419,032			4,917,049			0.38	%
CORE Entertainment, Inc.	Second Lien Term Loan	Fixed		-		13.50%		13.50%	6/21/2018	$	7,569,785		7,700,187			518,530			0.04	%	C
													17,119,219			5,435,579			0.42	%
Nondepository Credit Intermediation
Caribbean Financial Group (Cayman Islands)	Sr Secured Notes	Fixed		-		11.50%		11.50%	11/15/2019	$	26,975,000		26,821,462			26,570,375			2.04	%	E/G/H
Trade Finance Funding I, Ltd. (Cayman Islands)	Secured Class B Notes	Fixed		-		10.75%		10.75%	11/13/2018	$	15,084,000		15,084,000			14,857,740			1.14	%	E/H
													41,905,462			41,428,115			3.18	%
Oil and Gas Extraction
Jefferson Gulf Coast Energy Partners, LLC	First Lien Term Loan B	LIBOR (M)		1.00%		8.50%		9.50%	2/27/2018	$	14,850,000		14,741,697			13,810,500			1.06	%
MD America Energy, LLC	Second Lien Term Loan	LIBOR (Q)		1.00%		8.50%		9.50%	8/4/2019	$	10,000,000		9,594,734			9,075,000			0.70	%
													24,336,431			22,885,500			1.76	%
Other Information Services
TCH-2 Holdings, LLC (TravelClick)	Second Lien Term Loan	LIBOR (M)		1.00%		7.75%		8.75%	11/6/2021	$	19,988,392		19,727,803			19,713,552			1.51	%	G

Other Manufacturing
AGY Holding Corp.	Sr Secured Term Loan	Fixed		-		12.00%		12.00%	9/15/2016	$	4,869,577		4,869,577			4,869,577			0.37	%	B
AGY Holding Corp.	Second Lien Notes	Fixed		-		11.00%		11.00%	11/15/2016	$	9,268,000		7,586,317			9,268,000			0.71	%	B/E
Boomerang Tube, LLC	Second Lien Term Loan	LIBOR (Q)		1.50%		9.50%		11.00%	10/11/2017	$	3,825,453		4,010,758			1,950,981			0.15	%	C
Boomerang Tube, LLC	Super Priority Debtor-in-Possession	LIBOR (M)		-		11.00%		11.20%	10/7/2015	$	1,124,444		1,123,221			1,124,444			0.09	%
													17,589,873			17,213,002			1.32	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal		Cost		Value		% of Portfolio			Notes

Debt Investments (continued)
Other Telecommunications
Securus Technologies, Inc.	Second Lien Term Loan	LIBOR (Q)		1.25%		7.75%		9.00%	4/30/2021	$	14,000,000	$	13,860,000	$	12,705,000		0.97	%

Other Publishing
MediMedia USA, Inc.	First Lien Revolver	LIBOR (M)		-		6.75%		6.95%	5/20/2018	$	4,107,500		3,477,158		3,732,168		0.29	%
MediMedia USA, Inc.	First Lien Term Loan	LIBOR (Q)		1.25%		6.25%		7.50%	11/20/2018	$	5,681,239		5,575,226		5,482,396		0.42	%	G
													9,052,384		9,214,564		0.71	%
Pharmaceuticals
Lantheus Medical Imaging, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		6.00%		7.00%	6/30/2022	$	5,985,000		5,891,843		5,685,750		0.44	%

Plastics Manufacturing
Iracore International, Inc.	Sr Secured Notes	Fixed		-		9.50%		9.50%	6/1/2018	$	13,600,000		13,600,000		9,911,000		0.76	%	E/G

Radio and Television Broadcasting
Fuse, LLC	Sr Secured Notes	Fixed		-		10.38%		10.38%	7/1/2019	$	7,312,000		7,312,000		5,630,240		0.43	%	E/G
NEP/NCP Holdco, Inc.	Second Lien Term Loan	LIBOR (M)		1.25%		8.75%		10.00%	7/22/2020	$	10,000,000		10,018,251		10,000,000		0.77	%
The Tennis Channel, Inc.	First Lien Term Loan	LIBOR (Q)		-		8.50%		8.81%	5/29/2017	$	32,355,355		32,152,571		32,347,267		2.48	%
													49,482,822		47,977,507		3.68	%
Real Estate Leasing
Hunt Companies, Inc.	Senior Secured Notes	Fixed		-		9.63%		9.63%	3/1/2021	$	3,584,000		3,547,045		3,333,120		0.26	%	E/G

Real Estate related Activities
Daymark Financial Acceptance, LLC	First Lien Delayed Draw Term Loan	LIBOR (Q)		-		9.50%		9.71%	1/12/2020	$	5,000,000		4,597,938		4,917,500		0.38	%
Greystone Select Holdings, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		8.00%		9.00%	3/26/2021	$	16,346,867		16,158,916		16,305,999		1.25	%
													20,756,854		21,223,499		1.63	%
Restaurants
RM OpCo, LLC (Real Mex)	Convertible Second Lien Term Loan Tranche B-1	Fixed		-		8.50%		8.50%	3/30/2018	$	1,745,268		1,737,600		1,745,268		0.13	%	B
RM OpCo, LLC (Real Mex)	First Lien Term Loan Tranche A	Fixed		-		7.00%		7.00%	3/21/2016	$	3,764,259		3,762,749		3,764,259		0.29	%	B
RM OpCo, LLC (Real Mex)	Second Lien Term Loan Tranche B	Fixed		-		8.50%		8.50%	3/30/2018	$	8,696,073		8,696,073		5,106,334		0.39	%	B
RM OpCo, LLC (Real Mex)	Second Lien Term Loan Tranche B-1	Fixed		-		8.50%		8.50%	3/30/2018	$	2,738,690		2,723,268		2,738,690		0.21	%	B
RM OpCo, LLC (Real Mex)	Sr Convertible Second Lien Term Loan B	Fixed		-		8.50%		8.50%	3/30/2018	$	1,336,498		1,336,478		1,336,478		0.10	%	B
													18,256,168		14,691,029		1.12	%
Retail
Kenneth Cole Productions, Inc.	First Lien FILO Term Loan	LIBOR (M)		1.00%		8.50%		9.50%	9/25/2020	$	13,409,090		13,265,477		13,543,181		1.04	%
Connexity, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		10.00%		11.00%	2/13/2020	$	6,435,000		6,435,000		6,371,615		0.49	%
													19,700,477		19,914,796		1.53	%
Satellite Telecommunications
Avanti Communications Group, PLC (United Kingdom)	Sr Secured Notes	Fixed		-		10.00%		10.00%	10/1/2019	$	9,393,000		9,393,000		8,406,735		0.64	%	E/G/H

Scientific Research and Development Services
Arcadia Biosciences, Inc.	Sr Secured Term Loan (3.0% Exit Fee)	LIBOR (M)		0.28%		8.72%		9.00%	11/1/2018	$	20,000,000		19,891,113		19,882,000		1.52	%	L
BPA Laboratories, Inc.	Senior Secured Notes	Fixed		-		12.25%		12.25%	4/1/2017	$	38,932,000		39,001,750		40,975,930		3.14	%	E/G
													58,892,863		60,857,930		4.66	%
Software Publishing
Acronis International GmbH (Switzerland)	First Lien Term Loan	LIBOR (Q)		1.00%		13.00%		14.00%	2/21/2017	$	29,868,216		29,733,384		27,846,138		2.14	%	H
ArcServe (USA), LLC	Second Lien Term Loan	LIBOR (Q)		0.50%		8.50%		9.00%	1/31/2020	$	30,000,000		29,506,047		28,300,500		2.17	%
BlackLine Systems, Inc.	First Lien Term Loan	LIBOR (Q)		1.50%		0.4% Cash+7.6% PIK		9.50%	9/25/2018	$	14,375,100		13,690,455		14,518,851		1.11	%
Coreone Technologies, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		3.75% Cash+5% PIK		9.75%	9/4/2018	$	14,617,894		14,442,148		14,800,618		1.14	%
Edmentum, Inc.	Jr Revolving Facility	Fixed		-		5.00%		5.00%	6/9/2020	$	-		-		3		-		B
Edmentum Ultimate Holdings, LLC	Sr PIK Notes	Fixed		-		8.50%		8.50%	6/9/2020	$	2,557,459		2,557,459		2,557,459		0.20	%	B
Edmentum Ultimate Holdings, LLC	Jr PIK Notes	Fixed		-		10.00%		10.00%	6/9/2020	$	11,500,853		10,860,493		11,063,821		0.85	%	B
Fidelis Acquisitionco, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		8.00%		9.00%	11/4/2019	$	41,710,961		40,933,708		41,615,025		3.19	%
Fidelis Acquisitionco, LLC	Revolver	LIBOR (Q)		1.00%		8.00%		9.00%	11/4/2019	$	3,182,143		3,182,143		3,174,824		0.24	%
SoundCloud, Ltd. (United Kingdom)	Sr Secured Term Loan	LIBOR (Q)		-		10.72%		11.00%	10/1/2018	$	22,535,714		22,261,446		22,355,879		1.71	%	H
Virgin Pulse Inc.	First Lien Term Loan	LIBOR (Q)		-		8.00%		8.31%	5/21/2020	$	7,500,000		7,393,672		7,443,750		0.57	%
													174,560,955		173,676,868		13.32	%
Textile Furnishings Mills
Lexmark Carpet Mills, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		10.00%		11.00%	12/19/2019	$	25,000,000		25,000,000		25,000,000		1.92	%
Lexmark Carpet Mills, Inc.	First Lien Term Loan B	LIBOR (Q)		1.00%		10.00%		11.00%	12/19/2019	$	8,575,581		8,368,998		8,575,581		0.66	%
													33,368,998		33,575,581		2.58	%
Utility System Construction
Kawa Solar Holdings Limited	Revolving Credit Facility	Fixed		-		8.00%		8.00%	7/2/2017	$	25,000,000		25,000,000		25,000,000		1.92	%

Wired Telecommunications Carriers
Alpheus Communications, LLC	First Lien Delayed Draw FILO Term Loan	LIBOR (Q)		1.00%		6.92%		7.92%	5/31/2018	$	710,370		694,744		709,033		0.05	%
Alpheus Communications, LLC	First Lien Delayed Draw FILO Term Loan	LIBOR (Q)		1.00%		6.92%		7.92%	5/31/2018	$	365,586		361,951		365,312		0.03	%
Alpheus Communications, LLC	First Lien FILO Term Loan	LIBOR (Q)		1.00%		6.92%		7.92%	5/31/2018	$	8,041,921		7,961,973		8,035,890		0.63	%
Integra Telecom Holdings, Inc.	Second Lien Term Loan	LIBOR (Q)		1.25%		8.50%		9.75%	2/22/2020	$	13,231,193		13,028,390		13,225,702		1.02	%
Oxford County Telephone and Telegraph Company	First Lien Term Loan	LIBOR (Q)		1.00%		7.13%		8.13%	8/31/2020	$	4,000,000		3,941,178		3,940,000		0.31	%
													25,988,236		26,275,937		2.04	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal or Shares		Cost		Value		% of Portfolio			Notes

Debt Investments (continued)
Wireless Telecommunications Carriers
Gogo, LLC	First Lien Term Loan	LIBOR (Q)		1.50%		9.75%		11.25%	3/21/2018	$	33,045,233	$	33,078,035	$	34,367,042		2.64	%	G
Gogo, LLC	First Lien Term Loan B-2	LIBOR (Q)		1.00%		6.50%		7.50%	3/21/2018	$	5,453,923		5,379,264		5,508,462		0.42	%
													38,457,299		39,875,504		3.06	%

Total Debt Investments										$	1,246,160,207		1,250,675,027		1,227,677,893		94.17	%

Equity Securities
Advertising and Public Relations Services
InMobi, Inc. (Singapore)	Warrants to Purchase Stock										17,578	$	230,569	$	230,569		0.02	%	C/E/H

Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL	Trust Beneficial Interests										1,237		84,261		110,116		0.01	%	E/F
N918DL	Trust Beneficial Interests										995		87,654		129,800		0.01	%	E/F
N954DL	Trust Beneficial Interests										923		98,474		76,429		0.01	%	E/F
N955DL	Trust Beneficial Interests										889		95,752		108,833		0.01	%	E/F
N956DL	Trust Beneficial Interests										897		95,687		105,056		0.01	%	E/F
N957DL	Trust Beneficial Interests										889		96,178		105,915		0.01	%	E/F
N959DL	Trust Beneficial Interests										880		96,670		106,796		0.01	%	E/F
N960DL	Trust Beneficial Interests										857		98,587		106,411		0.01	%	E/F
N961DL	Trust Beneficial Interests										872		98,023		101,805		0.01	%	E/F
N976DL	Trust Beneficial Interests										1,067		89,551		101,078		0.01	%	E/F
Aircraft Leased to United Airlines, Inc.
United N659UA-767, LLC (N659UA)	Trust Beneficial Interests										619		2,980,177		3,310,735		0.25	%	E/F
United N661UA-767, LLC (N661UA)	Trust Beneficial Interests										600		2,906,721		3,239,103		0.25	%	E/F
Flight Options Holdings I, Inc. (One Sky)	Warrants to Purchase Common Stock										1,843		1,162,350		3,665,844		0.28	%	C/E
													7,990,085		11,267,921		0.88	%
Business Support Services
Findly Talent, LLC	Membership Units										708,229		230,938		162,184		0.01	%	C/E
STG-Fairway Holdings, LLC (First Advantage)	Class A Units										841,479		325,432		2,491,619		0.19	%	C/E
													556,370		2,653,803		0.20	%
Chemicals
Green Biologics, Inc.	Warrants to Purchase Stock										376,147		272,594		163,323		0.01	%	C/E

Communications Equipment Manufacturing
Wasserstein Cosmos Co-Invest, L.P. (Globecomm)	Limited Partnership Units										5,000,000		5,000,000		4,198,500		0.32	%	B/C/E

Computer Systems Design and Related Services
Waterfall International, Inc.	Series B Preferred Stock										1,428,571		1,000,000		1,000,000		0.08	%	C/E
Waterfall International, Inc.	Warrants to Purchase Stock										857,143		57,026		57,000		-		C/E
													1,057,026		1,057,000		0.08	%
Data Processing and Hosting Services
Anacomp, Inc.	Class A Common Stock										1,255,527		26,711,048		1,581,964		0.12	%	C/E/F
Rightside Group, Ltd.	Warrants										498,855		2,778,622		835,058		0.06	%	C/E
													29,489,670		2,417,022		0.18	%
Electrical Equipment Manufacturing
NEXTracker, Inc.	Series B Preferred Stock										558,884		-		2,909,383		0.22	%	C/E
NEXTracker, Inc.	Series C Preferred Stock										17,640		-		91,830		0.01	%	C/E
													-		3,001,213		0.23	%
Electronic Component Manufacturing
Soraa, Inc.	Warrants to Purchase Common Stock										315,000		408,987		143,892		0.01	%	C/E

Equipment Leasing
Essex Ocean II, LLC	Membership Units										199,430		199,430		199,430		0.02	%	C/F

Financial Investment Activities
Marsico Holdings, LLC	Common Interest Units										168,698		172,694		2,530		-		C/E/I

Metal and Mineral Mining
EPMC HoldCo, LLC	Membership Units										1,312,720		-		682,614		0.05	%	B/E

Other Manufacturing
KAGY Holding Company, Inc.	Series A Preferred Stock										9,778		1,091,200		4,365,325		0.34	%	B/C/E
Precision Holdings, LLC	Class C Membership Interest										33		-		874		-		C/E
													1,091,200		4,366,199		0.34	%
Radio and Television Broadcasting
Fuse Media, LLC	Warrants to Purchase Common Stock										233,470		300,322		23		-		C/E

Restaurants
RM Holdco, LLC (Real Mex)	Equity Participation										24		-		-		-		B/C/E
RM Holdco, LLC (Real Mex)	Membership Units										13,161,000		2,010,777		-		-		B/C/E
													2,010,777		-		-
Retail
Shop Holding, LLC (Connexity)	Class A Units										507,167		480,049		278,739		0.02	%	C/E
Shop Holding, LLC (Connexity)	Warrants to Purchase Class A Units										326,691		-		7,569		-		C/E
													480,049		286,308		0.02	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

September 30, 2015

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor	Spread	Total Coupon	Maturity	Shares		Cost		Value		% of Portfolio			Notes

Equity Securities (continued)
Software Publishing
Blackline Intermediate, Inc.	Warrants to Purchase Common Stock							1,232,731	$	522,678	$	1,098,733		0.08	%	C/E
Edmentum Ultimate Holdings, LLC	Class A Common Units							159,515		680,226		680,218		0.05	%	B/C/E
SoundCloud, Ltd. (United Kingdom)	Warrants to Purchase Preferred Stock							676,070		56,487		54,356		-		C/E/H
										1,259,391		1,833,307		0.13	%

Wired Telecommunications Carriers
Integra Telecom, Inc.	Common Stock							1,274,522		8,433,884		5,269,511		0.40	%	C/E
Integra Telecom, Inc.	Warrants							346,939		19,920		221,174		0.02	%	C/E
V Telecom Investment S.C.A. (Vivacom) (Luxembourg)	Common Shares							1,393		3,236,256		3,488,407		0.27	%	C/D/E/H
										11,690,060		8,979,092		0.69	%

Total Equity Securities										62,209,224		41,482,746		3.18	%

Total Investments									$	1,312,884,251	$	1,269,160,639

Cash and Cash Equivalents
Cash Denominated in Foreign Currencies												295,487		0.02	%
Cash Held on Account at Various Institutions												34,287,382		2.63	%
Cash and Cash Equivalents												34,582,869		2.65	%

Total Cash and Investments											$	1,303,743,508		100.00	%	M

Notes to Consolidated Schedule of Investments:

^(A)	Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

^(B)	Non-controlled affiliate – as defined under the Investment Company Act of 1940 (ownership of between 5% and 25% of the outstanding voting securities of this issuer). See Consolidated Schedule of Changes in Investments in Affiliates.

^(C)	Non-income producing security.

^(D)

Principal amount denominated in foreign currency. Amortized cost and fair value converted from foreign currency to US dollars. Foreign currency denominated investments are generally hedged for currency exposure. At September 30, 2015, such hedging activities included the derivatives listed at the end of the Consolidated Schedule of Investments. (See Note 2)

^(E)	Restricted security. (See Note 2)

^(F)	Controlled issuer – as defined under the Investment Company Act of 1940 (ownership of 25% or more of the outstanding voting securities of this issuer). Investment is not more than 50% owned nor deemed to be a significant subsidiary. See Consolidated Schedule of Changes in Investments in Affiliates.

^(G)	Investment has been segregated to collateralize certain unfunded commitments.

^(H)

Non-U.S. company or principal place of business outside the U.S. and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Partnership may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Partnership's total assets.

^(I)

Deemed an investment company under Section 3(c) of the Investment Company Act and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Partnership may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Partnership's total assets.

^(J)

Publicly traded company with a market capitalization greater than $250 million and as a result the investment is not a qualifying asset under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Partnership may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Partnership's total assets.

^(K)	Negative balances relate to an unfunded commitment that was acquired and valued at a discount.

^(L)	In addition to the stated coupon, investment has an exit fee payable upon repayment of the loan in an amount equal to the percentage of the original principal amount shown.

^(M)	All cash and investments, except those referenced in Notes G above, are pledged as collateral under certain debt as described in Note 4 to the Consolidated Financial Statements.

LIBOR or EURIBOR resets monthly (M), quarterly (Q), semiannually (S), or annually (A).

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $423,348,068, and $305,505,796 respectively, for the nine months ended September 30, 2015. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments. The total value of restricted securities and bank debt as of September 30, 2015 was $1,268,961,209, or 97.3% of total cash and investments of the Partnership.

Options and swaps at September 30, 2015 were as follows:

Investment	Notional Amount		Fair Value

Interest Rate Cap with Deutsche Bank AG, 4%, expires 5/15/2016	$	25,000,000	$	-
Euro/US Dollar Cross-Currency Basis Swap with Wells Fargo Bank, N.A., Pay Euros/Receive USD, Expires 3/31/2017	$	16,401,467	$	2,868,748

See accompanying notes to consolidated financial statements.

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal		Cost			Value			% of Portfolio			Notes

Debt Investments^(A)
Accounting, Tax Preparation, Bookkeeping, and Payroll Services
EGS Holdings, Inc.	Holdco PIK Notes	LIBOR (A)		3.00%		10.00%		13.00%	10/3/2018	$	57,238	$	57,238		$	56,237			-
Expert Global Solutions, LLC	Second Lien Term Loan	LIBOR (Q)		1.50%		11.00%		12.50%	10/3/2018	$	7,124,902		6,959,593			7,096,403			0.60	%
													7,016,831			7,152,640			0.60	%
Activities Related to Real Estate
Greystone Select Holdings, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		8.00%		9.00%	3/26/2021	$	16,470,084		16,261,549			16,511,259			1.41	%

Advertising, Public Relations, and Related Services
Doubleplay III Limited (United Kingdom)	First Lien Facility A1 Term Loan	EURIBOR (Q)		1.25%		6.25%		7.50%	3/18/2018	€	13,165,705		16,791,646			15,450,034			1.32	%	D/H

Artificial Synthetic Fibers and Filaments Manufacturing
AGY Holding Corp.	Sr Secured Term Loan	Fixed		-		12.00%		12.00%	9/15/2016	$	4,869,577		4,869,577			4,869,577			0.41	%	B
AGY Holding Corp.	Second Lien Notes	Fixed		-		11.00%		11.00%	11/15/2016	$	9,268,000		7,586,318			9,017,764			0.77	%	B/E
													12,455,895			13,887,341			1.18	%
Basic Chemical Manufacturing
BioAmber, Inc.	Sr Secured Term Loan	LIBOR (M)		0.23%		9.27%		9.50%	12/1/2017	$	25,000,000		24,505,108			25,050,000			2.13	%
Green Biologics, Inc.	Sr Secured Term Loan	Prime Rate		3.25%		7.75%		11.00%	5/1/2018	$	15,000,000		14,503,743			14,730,000			1.25	%	L
M&G Chemicals S.A. (Luxembourg)	Sr Secured Term Loan	LIBOR (Q)		0.23%		8.50%		8.73%	3/18/2016	$	15,632,077		15,632,077			15,632,077			1.33	%	H
PeroxyChem, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		6.50%		7.50%	2/28/2020	$	8,932,500		8,783,187			8,932,500			0.76	%
VitAG Holdings, LLC	Sr Secured Term Loan	LIBOR (M)		0.23%		10.27%		10.50%	2/1/2018	$	7,700,000		7,555,099			7,646,000			0.65	%	L
													70,979,214			71,990,577			6.12	%
Beverage Manufacturing
Carolina Beverage Group, LLC	Secured Notes	Fixed		-		10.63%		10.63%	8/1/2018	$	4,780,000		4,780,000			4,851,700			0.41	%	E/G

Business Support Services
Enerwise Global Technologies, Inc.	Sr Secured Revolving Loan	LIBOR (Q)		0.23%		8.52%		8.75%	11/30/2017	$	–		(106,405	)		(60,000	)		(0.01	%)
Enerwise Global Technologies, Inc.	Sr Secured Term Loan	LIBOR (Q)		0.23%		9.27%		9.50%	11/30/2019	$	17,500,000		17,158,899			17,360,000			1.48	%	L
STG-Fairway Acquisitions, Inc.	Second Lien Term Loan	LIBOR (Q)		1.25%		9.25%		10.50%	8/28/2019	$	14,643,455		14,036,428			14,863,107			1.27	%
													31,088,922			32,163,107			2.74	%
Chemical Manufacturing
Archroma	Term Loan B	LIBOR (Q)		1.25%		8.25%		9.50%	9/30/2018	$	19,896,228		19,593,258			19,747,006			1.68	%

Communications Equipment Manufacturing
Globecomm Systems, Inc.	First Lien Term Loan	LIBOR (Q)		1.25%		7.63%		8.88%	12/11/2018	$	14,850,000		14,701,500			14,656,950			1.25	%	B

Computer Equipment Manufacturing
ELO Touch Solutions, Inc.	Second Lien Term Loan	LIBOR (Q)		1.50%		10.50%		12.00%	12/1/2018	$	12,000,000		11,638,008			11,520,000			0.98	%

Computer Systems Design and Related Services
Autoalert, LLC	First Lien Term Loan	LIBOR (Q)		0.25%		4.75% Cash+4% PIK		9.00%	3/31/2019	$	30,926,035		30,399,049			31,080,665			2.65	%
Blue Coat Systems, Inc.	First Lien Revolver	LIBOR (Q)		1.00%		3.50%		4.50%	5/31/2018	$	–		(727,290	)		(660,240	)		(0.06	%)	K
Blue Coat Systems, Inc.	Second Lien Term Loan	LIBOR (Q)		1.00%		8.50%		9.50%	6/28/2020	$	15,000,000		14,878,125			14,775,000			1.26	%
MSC Software Corporation	Second Lien Term Loan	LIBOR (M)		1.00%		7.50%		8.50%	5/29/2021	$	11,993,035		11,880,123			11,753,175			1.00	%
OnX Enterprise Solutions, Ltd. (Canada)	First Lien Term Loan B	LIBOR (Q)		-		8.00%		8.23%	9/3/2018	$	2,361,467		2,361,467			2,341,394			0.20	%
OnX Enterprise Solutions, Ltd. (Canada)	First Lien Term Loan	LIBOR (Q)		-		7.00%		7.23%	9/3/2018	$	10,533,333		10,415,821			10,259,467			0.87	%
OnX USA, LLC	First Lien Term Loan B	LIBOR (Q)		-		8.00%		8.23%	9/3/2018	$	4,722,933		4,722,933			4,682,788			0.40	%
OnX USA, LLC	First Lien Term Loan	LIBOR (Q)		-		7.00%		7.23%	9/3/2018	$	5,266,667		5,211,626			5,129,733			0.44	%
Vistronix, LLC	First Lien Revolver	LIBOR (Q)		0.50%		8.00%		8.50%	12/4/2018	$	–		(5,809	)		-			0.00	%
Vistronix, LLC	First Lien Term Loan	LIBOR (M)		0.50%		8.00%		8.50%	12/4/2018	$	6,535,333		6,466,509			6,551,671			0.56	%
Websense, Inc.	Second Lien Term Loan	LIBOR (Q)		1.00%		7.25%		8.25%	12/27/2020	$	7,200,000		7,164,000			6,930,000			0.59	%
													92,766,554			92,843,653			7.91	%
Cut and Sew Apparel Manufacturing
Jones Apparel, LLC	First Lien FILO Term Loan	LIBOR (M)		1.00%		9.60%		10.60%	4/8/2019	$	14,329,403		14,202,296			14,429,709			1.23	%

Data Processing, Hosting, and Related Services
Asset International, Inc.	Delayed Draw Term Loan	LIBOR (M)		1.00%		7.00%		8.00%	7/31/2020	$	–		(42,880	)		(29,158	)		0.00	%	K
Asset International, Inc.	Revolver	LIBOR (M)		1.00%		7.00%		8.00%	7/31/2020	$	484,752		475,358			477,885			0.04	%
Asset International, Inc.	First Lien Term Loan	LIBOR (M)		1.00%		7.00%		8.00%	7/31/2020	$	8,191,755		8,037,946			8,122,125			0.69	%
Rightside Group, Ltd.	Second Lien Term Loan	LIBOR (Q)		0.50%		8.75%		9.25%	8/6/2019	$	5,000,000		4,042,549			4,775,000			0.41	%
The Telx Group, Inc.	Senior Notes	Fixed		-		13.5% PIK		13.50%	7/9/2021	$	4,446,651		4,446,651			4,611,177			0.39	%	E
United TLD Holdco, Ltd. (Cayman Islands)	Second Lien Term Loan	LIBOR (Q)		0.50%		8.75%		9.25%	8/6/2019	$	10,000,000		8,085,098			9,550,000			0.81	%	H
													25,044,722			27,507,029			2.34	%
Electrical Equipment and Component Manufacturing
NEXTracker, Inc.	Sr Secured Revolver	LIBOR (M)		-		8.00%		8.00%	7/1/2016	$	2,500,000		508,086			1,126,250			0.10	%
NEXTracker, Inc.	Sr Secured Term Loan	LIBOR (M)		-		9.50%		9.50%	12/16/2016	$	2,500,000		2,216,771			2,303,750			0.20	%	L
Palladium Energy, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		9.00%		10.00%	12/26/2017	$	16,153,317		15,942,351			16,234,084			1.38	%
													18,667,208			19,664,084			1.68	%
Electrical Equipment Manufacturing
API Technologies Corp.	First Lien Term Loan	LIBOR (Q)		1.50%		7.50%		9.00%	2/6/2018	$	6,687,055		6,631,621			6,610,154			0.56	%

Fabricated Metal Product Manufacturing
Constellation Enterprises, LLC	First Lien Notes	Fixed		-		10.63%		10.63%	2/1/2016	$	2,900,000		2,858,907			2,392,500			0.20	%	E

Financial Investment Activities
Institutional Shareholder Services, Inc.	Second Lien Term Loan	LIBOR (Q)		1.00%		7.50%		8.50%	4/30/2022	$	6,471,492		6,411,582			6,374,420			0.54	%
Marsico Capital Management	First Lien Term Loan	LIBOR (M)		-		5.00%		5.25%	12/31/2022	$	10,500,040		13,220,948			2,274,991			0.19	%	I
													19,632,530			8,649,411			0.73	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal		Cost		Value		% of Portfolio			Notes

Debt Investments (continued)
Full-Service Restaurants
RM OpCo, LLC	Convertible Second Lien Term Loan Tranche B-1	Fixed		-		8.50%		8.50%	3/30/2018	$	1,636,314	$	1,614,711	$	1,636,314		0.14	%	B
RM OpCo, LLC	First Lien Term Loan Tranche A	Fixed		-		7.00%		7.00%	3/21/2016	$	3,900,025		3,898,911		3,900,025		0.33	%	B
RM OpCo, LLC	Second Lien Term Loan Tranche B	Fixed		-		8.50%		8.50%	3/30/2018	$	8,153,188		8,153,188		6,457,325		0.55	%	B
RM OpCo, LLC	Second Lien Term Loan Tranche B-1	Fixed		-		8.50%		8.50%	3/30/2018	$	2,567,717		2,546,166		2,567,717		0.22	%	B
RM OpCo, LLC	Sr Convertible Second Lien Term Loan B	Fixed		-		8.50%		8.50%	3/30/2018	$	631,164		631,164		631,164		0.05	%	B
													16,844,140		15,192,545		1.29	%
Gaming Industries
AP Gaming I, LLC	First Lien Revolver	LIBOR (Q)		-		8.25%		8.41%	12/20/2018	$	5,000,000		2,931,716		2,812,500		0.24	%
AP Gaming I, LLC	First Lien Term Loan B	LIBOR (Q)		1.00%		8.25%		9.25%	12/20/2020	$	14,850,000		14,450,326		14,850,000		1.27	%
													17,382,042		17,662,500		1.51	%
General Medical and Surgical Hospitals
RegionalCare Hospital Partners, Inc.	Second Lien Term Loan	LIBOR (M)		1.00%		9.50%		10.50%	10/23/2019	$	21,017,525		20,729,782		20,964,981		1.79	%

Grocery Stores
Bashas, Inc.	First Lien FILO Term Loan	LIBOR (M)		1.50%		7.00%		8.50%	10/8/2019	$	10,632,845		10,592,167		10,616,895		0.90	%
The Great Atlantic & Pacific Tea Company, Inc.	Term Loan Tranche B	LIBOR (M)		1.00%		8.85%		9.85%	9/17/2019	$	20,966,890		20,619,519		20,945,923		1.78	%
													31,211,686		31,562,818		2.68	%
Insurance Carriers
Acrisure, LLC	Second Lien Additional Notes	LIBOR (Q)		1.00%		10.50%		11.50%	3/31/2020	$	2,520,198		2,391,227		2,527,200		0.22	%
Acrisure, LLC	Second Lien Notes	LIBOR (Q)		1.00%		10.50%		11.50%	3/31/2020	$	29,288,298		28,725,701		29,317,586		2.50	%
US Apple Holdco, LLC	First Lien Term Loan	LIBOR (Q)		0.50%		11.50%		12.00%	8/29/2019	$	20,000,000		19,247,507		19,940,000		1.70	%
													50,364,435		51,784,786		4.42	%
Insurance Related Activities
Confie Seguros Holding II Co.	Second Lien Term Loan	LIBOR (M)		1.25%		9.00%		10.25%	5/8/2019	$	7,861,809		7,776,100		7,859,372		0.67	%

Lessors of Nonfinancial Intangible Assets
ABG Intermediate Holdings 2, LLC	Second Lien Term Loan	LIBOR (S)		1.00%		8.00%		9.00%	5/27/2022	$	15,990,714		15,838,253		16,110,644		1.37	%

Lessors of Real Estate
Hunt Companies, Inc.	Senior Secured Notes	Fixed		-		9.63%		9.63%	3/1/2021	$	13,084,000		12,935,462		13,476,520		1.15	%	E/G

Management, Scientific, and Technical Consulting Services
Dodge Data & Analytics, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		8.75%		9.75%	10/31/2019	$	27,923,077		27,174,478		27,853,269		2.37	%

Merchant Wholesalers
Envision Acquisition Company, LLC	Second Lien Term Loan	LIBOR (Q)		1.00%		8.75%		9.75%	11/4/2021	$	9,079,011		8,914,869		9,044,964		0.77	%

Motion Picture and Video Industries
CORE Entertainment, Inc.	First Lien Term Loan	Fixed		-		9.00%		9.00%	6/21/2017	$	9,462,231		9,402,044		8,203,755		0.70	%
CORE Entertainment, Inc.	Second Lien Term Loan	Fixed		-		13.50%		13.50%	6/21/2018	$	7,569,785		7,518,166		6,233,718		0.53	%
													16,920,210		14,437,473		1.23	%
Newspaper, Periodical, Book, and Directory Publishers
MediMedia USA, Inc.	First Lien Revolver	LIBOR (Q)		-		6.75%		6.99%	5/20/2018	$	3,875,000		3,065,963		3,596,543		0.31	%
MediMedia USA, Inc.	First Lien Term Loan	LIBOR (Q)		1.25%		6.75%		8.00%	11/20/2018	$	9,591,911		9,372,798		9,376,093		0.80	%
													12,438,761		12,972,636		1.11	%
Nondepository Credit Intermediation
Caribbean Financial Group (Cayman Islands)	Sr Secured Notes	Fixed		-		11.50%		11.50%	11/15/2019	$	10,000,000		9,846,274		10,300,000		0.88	%	E/G/H
Trade Finance Funding I, Ltd. (Cayman Islands)	Secured Class B Notes	Fixed		-		10.75%		10.75%	11/13/2018	$	15,084,000		15,084,000		15,008,580		1.28	%	E/H
													24,930,274		25,308,580		2.16	%
Nonscheduled Air Transportation
One Sky Flight, LLC	Second Lien Term Loan	Fixed		-	12% Cash+3% PIK			15.00%	6/3/2019	$	18,660,646		17,417,637		19,220,465		1.64	%

Oil and Gas Extraction
Jefferson Gulf Coast Energy Partners, LLC	First Lien Term Loan B	LIBOR (M)		1.00%		8.00%		9.00%	2/27/2018	$	14,962,500		14,824,074		14,289,188		1.22	%
MD America Energy, LLC	Second Lien Term Loan	LIBOR (Q)		1.00%		8.50%		9.50%	8/4/2019	$	10,000,000		9,533,785		9,600,000		0.82	%
													24,357,859		23,889,188		2.04	%
Other Information Services
TCH-2 Holdings, LLC	Second Lien Term Loan	LIBOR (M)		1.00%		7.75%		8.75%	11/6/2021	$	19,988,392		19,704,946		19,288,799		1.64	%

Other Telecommunications
Securus Technologies, Inc.	Second Lien Term Loan	LIBOR (Q)		1.25%		7.75%		9.00%	4/30/2021	$	14,000,000		13,860,000		13,790,000		1.17	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal		Cost			Value			% of Portfolio			Notes

Debt Investments (continued)
Petroleum and Coal Products Manufacturing
Boomerang Tube, LLC	Second Lien Term Loan	LIBOR (Q)		1.50%		9.50%		11.00%	10/11/2017	$	3,825,453	$	3,778,669		$	3,318,581			0.28	%

Plastics Products Manufacturing
Iracore International, Inc.	Sr Secured Notes	Fixed		-		9.50%		9.50%	6/1/2018	$	13,600,000		13,600,000			8,194,000			0.70	%	E/G

Radio and Television Broadcasting
SiTV, Inc.	Sr Secured Notes	Fixed		-		10.38%		10.38%	7/1/2019	$	7,312,000		7,312,000			6,818,440			0.58	%	E/G
The Tennis Channel, Inc.	First Lien Term Loan	LIBOR (Q)		-		8.50%		8.75%	5/29/2017	$	18,250,825		17,914,285			18,369,455			1.56	%
													25,226,285			25,187,895			2.14	%
Retail
Kenneth Cole Productions, Inc.	First Lien FILO Term Loan	LIBOR (M)		1.00%		10.40%		11.40%	9/25/2017	$	10,590,909		10,434,633			10,643,863			0.91	%
Connexity, Inc.	Second Lien Term Loan	LIBOR (Q)		-		12.50%		12.73%	3/31/2016	$	6,630,353		6,536,895			6,600,516			0.56	%
Shop Holding, LLC	Convertible Promissory Note	Fixed		-		5.00%		5.00%	8/5/2015	$	73,140		73,140			67,691			0.01	%	E
													17,044,668			17,312,070			1.48	%
Satellite Telecommunications
Avanti Communications Group, PLC (United Kingdom)	Sr Secured Notes	Fixed		-		10.00%		10.00%	10/1/2019	$	9,914,000		9,914,000			9,492,655			0.81	%	E/G/H

Scheduled Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	3/15/2017	$	205,106		205,106			209,168			0.02	%	F
N918DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	8/15/2018	$	313,694		313,694			320,440			0.03	%	F
N954DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	3/20/2019	$	429,007		429,007			437,679			0.04	%	F
N955DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	6/20/2019	$	451,165		451,165			460,258			0.04	%	F
N956DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	5/20/2019	$	448,792		448,792			457,902			0.04	%	F
N957DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	6/20/2019	$	455,112		455,112			464,283			0.04	%	F
N959DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	7/20/2019	$	461,378		461,378			470,601			0.04	%	F
N960DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	10/20/2019	$	483,873		483,873			493,258			0.04	%	F
N961DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	8/20/2019	$	475,489		475,489			484,908			0.04	%	F
N976DL	Aircraft Secured Mortgage	Fixed		-		8.00%		8.00%	2/15/2018	$	308,103		308,103			314,588			0.03	%	F
Aircraft Leased to United Airlines, Inc.
N659UA	Aircraft Secured Mortgage	Fixed		-		12.00%		12.00%	2/28/2016	$	1,582,136		1,582,136			1,659,003			0.14	%	F
N661UA	Aircraft Secured Mortgage	Fixed		-		12.00%		12.00%	5/4/2016	$	1,788,182		1,788,181			1,899,950			0.16	%	F
Mesa Air Group, Inc.	Acquisition Delayed Draw Loan	LIBOR (M)		-		7.25%		N/A	7/15/2022	$	–		(271,500	)		(135,750	)		(0.01	%)	K
Mesa Air Group, Inc.	Acquisition Loan	LIBOR (M)		-		7.25%		7.44%	7/15/2022	$	17,810,658		17,469,814			17,632,552			1.50	%
													24,600,350			25,168,840			2.15	%
Scientific Research and Development Services
BPA Laboratories, Inc.	Senior Secured Notes	Fixed		-		12.25%		12.25%	4/1/2017	$	38,932,000		39,001,750			41,754,570			3.56	%	E/G

Semiconductor and Other Electronic Component Manufacturing
Soraa, Inc.	Sr Secured Term Loan	LIBOR (M)		0.23%		10.27%		10.50%	9/1/2017	$	22,500,000		21,822,817			21,633,750			1.84	%	L
SunEdison, Inc.	Senior Secured Letters of Credit	Fixed		-		3.75%		N/A	2/28/2017	$	–		(1,031,717	)		(750,340	)		(0.06	%)	J/K
													20,791,100			20,883,410			1.78	%
Software Publishers
Acronis International GmbH (Switzerland)	First Lien Term Loan	LIBOR (Q)		1.00%		13.00%		14.00%	2/21/2017	$	30,634,068		30,429,609			28,949,194			2.47	%	H
ArcServe (USA), LLC	Second Lien Term Loan	LIBOR (Q)		0.50%		8.50%		9.00%	1/31/2020	$	30,000,000		29,439,740			30,015,000			2.57	%	H
BlackLine Systems, Inc.	First Lien Term Loan	LIBOR (Q)		1.50%		0.4% Cash+7.6% PIK		9.50%	9/25/2018	$	13,577,457		12,859,373			13,781,119			1.17	%
Coreone Technologies, LLC	First Lien Term Loan	LIBOR (Q)		1.00%		3.75% Cash+5% PIK		9.75%	9/4/2018	$	14,257,231		14,028,252			13,865,157			1.18	%
Deltek, Inc.	Second Lien Term Loan	LIBOR (Q)		1.25%		8.75%		10.00%	10/10/2019	$	15,000,000		14,831,408			15,099,975			1.29	%
Edmentum, Inc.	Second Lien Term Loan	LIBOR (Q)		1.50%		9.75%		11.25%	5/17/2019	$	21,500,000		21,361,215			11,287,500			0.96	%
													122,949,597			112,997,945			9.64	%
Specialty Hospitals
Bioventus, LLC	Second Lien Term Loan	LIBOR (Q)		1.00%		10.00%		11.00%	4/10/2020	$	11,000,000		10,786,339			10,945,000			0.93	%
UBC Healthcare Analytics, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		9.00%		10.00%	7/1/2018	$	4,401,081		4,379,076			4,390,078			0.37	%
													15,165,415			15,335,078			1.30	%
Structured Note Funds
Magnolia Finance V plc (Cayman Islands)	Asset-Backed Credit Linked Notes	Fixed		-		13.13%		13.13%	8/2/2021	$	15,000,000		15,000,000			15,123,000			1.29	%	E/H

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread		Total Coupon		Maturity	Principal or Shares		Cost		Value		% of Portfolio			Notes

Debt Investments (continued)
Textile Furnishings Mills
Lexmark Carpet Mills, Inc.	First Lien Term Loan	LIBOR (Q)		1.00%		10.00%		11.00%	12/19/2019	$	25,000,000	$	25,000,000	$	24,925,000		2.12	%

Utility System Construction
Kawa Solar Holdings Limited	Revolving Credit Facility	Fixed		-		8.00%		8.00%	7/2/2017	$	25,000,000		25,000,000		25,000,000		2.13	%

Wired Telecommunications Carriers
Alpheus Communications, LLC	Delayed Draw Term Loan	LIBOR (Q)		1.00%		6.92%		7.92%	5/31/2018	$	372,616		361,456		371,494		0.03	%
Alpheus Communications, LLC	First Lien FILO Term Loan	LIBOR (Q)		1.00%		6.92%		7.92%	5/31/2018	$	8,145,022		8,064,048		8,136,877		0.70	%
Integra Telecom Holdings, Inc.	Second Lien Term Loan	LIBOR (Q)		1.25%		8.50%		9.75%	2/22/2020	$	15,000,000		14,737,750		14,943,750		1.28	%
													23,163,254		23,452,121		2.01	%
Wireless Telecommunications Carriers
Gogo, LLC	First Lien Term Loan	LIBOR (Q)		1.50%		9.75%		11.25%	6/21/2017	$	19,083,140		18,579,398		19,655,634		1.67	%
Gogo, LLC	First Lien Term Loan B-2	LIBOR (Q)		1.00%		6.50%		7.50%	3/21/2018	$	5,510,950		5,414,893		5,345,622		0.46	%
													23,994,291		25,001,256		2.13	%

Total Debt Investments													1,128,140,974		1,113,593,115		94.87	%

Equity Securities
Architectural, Engineering, and Related Services
Alion Science & Technology Corporation	Warrants										300		-		3		-		C

Basic Chemical Manufacturing
Green Biologics, Inc.	Warrants to Purchase Stock										376,147		272,594		276,882		0.02	%	C/E

Business Support Services
Findly Talent, LLC	Membership Units										708,229		230,938		162,184		0.01	%	C/E
STG-Fairway Holdings, LLC	Class A Units										841,479		943,287		2,917,492		0.25	%	C/E
													1,174,225		3,079,676		0.26	%
Communications Equipment Manufacturing
Wasserstein Cosmos Co-Invest, L.P.	Limited Partnership Units										5,000,000		5,000,000		4,175,000		0.36	%	B/C/E

Data Processing, Hosting, and Related Services
Anacomp, Inc.	Class A Common Stock										1,255,527		26,711,048		916,535		0.08	%	C/E/F
Rightside Group, Ltd.	Warrants										498,855		2,778,622		693,748		0.06	%	C/E
													29,489,670		1,610,283		0.14	%
Electrical Equipment and Component Manufacturing
NEXTracker, Inc.	Series B Preferred Stock										268,817		999,999		999,999		0.09	%	C/E
NEXTracker, Inc.	Warrants to Purchase Stock										357,022		370,118		385,013		0.03	%	C/E
													1,370,117		1,385,012		0.12	%

Financial Investment Activities
Marsico Holdings, LLC	Common Interest Units										168,698		172,694		16,870		-		C/E/I

Full-Service Restaurants
RM Holdco, LLC	Equity Participation										24		-		792		-		B/C/E
RM Holdco, LLC	Membership Units										13,161,000		2,010,777		-		-		B/C/E
													2,010,777		792		-
Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing
Precision Holdings, LLC	Class C Membership Interest										33		-		1,469		-		C/E

Nonmetallic Mineral Mining and Quarrying
EPMC HoldCo, LLC	Membership Units										1,312,720		-		682,614		0.06	%	B/E

Nonscheduled Air Transportation
Flight Options Holdings I, Inc.	Warrants to Purchase Common Stock										1,843		1,274,000		3,311,430		0.28	%	C/E

Radio and Television Broadcasting
SiTV, Inc.	Warrants to Purchase Common Stock										233,470		300,322		331,527		0.03	%	C/E

Retail
Shop Holding, LLC	Class A Units										507,167		480,049		379,665		0.03	%	C/E
Shop Holding, LLC	Warrants to Purchase Class A Units										326,691		-		3		-		C/E
													480,049		379,668		0.03	%
Scheduled Air Transportation
Aircraft Leased to Delta Air Lines, Inc.
N913DL	Trust Beneficial Interests										1,009		87,287		117,497		0.01	%	E/F
N918DL	Trust Beneficial Interests										829		94,907		135,890		0.01	%	E/F
N954DL	Trust Beneficial Interests										775		110,643		72,604		0.01	%	E/F
N955DL	Trust Beneficial Interests										749		109,549		111,010		0.01	%	E/F
N956DL	Trust Beneficial Interests										756		109,486		106,801		0.01	%	E/F
N957DL	Trust Beneficial Interests										749		110,163		107,682		0.01	%	E/F
N959DL	Trust Beneficial Interests										743		110,838		108,579		0.01	%	E/F
N960DL	Trust Beneficial Interests										726		113,477		107,865		0.01	%	E/F
N961DL	Trust Beneficial Interests										737		112,742		102,826		0.01	%	E/F
N976DL	Trust Beneficial Interests										883		97,111		102,006		0.01	%	E/F
Aircraft Leased to United Airlines, Inc.
United N659UA-767, LLC (N659UA)	Trust Beneficial Interests										525		2,548,939		3,177,822		0.27	%	E/F
United N661UA-767, LLC (N661UA)	Trust Beneficial Interests										509		2,495,032		3,078,923		0.26	%	E/F
													6,100,174		7,329,505		0.63	%

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Investments (Unaudited) (continued)

December 31, 2014

Showing Percentage of Total Cash and Investments of the Partnership

Issuer	Instrument	Ref	Floor		Spread			Total Coupon	Maturity	Shares		Cost		Value		% of Portfolio			Notes

Equity Securities (continued)
Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing
KAGY Holding Company, Inc.	Series A Preferred Stock										9,778	$	1,091,200	$	121,975		0.01	%	B/C/E

Semiconductor and Other Electronic Component Manufacturing
Ichor Systems Holdings, LLC	Membership Units										352		-		229,504		0.02	%	C/E
Soraa, Inc.	Warrants to Purchase Common Stock										315,000		408,987		-		-		C/E
													408,987		229,504		0.02	%
Software Publishers
Blackline Intermediate, Inc.	Warrants to Purchase Common Stock										1,232,731		522,678		789,441		0.07	%	C/E

Wired Telecommunications Carriers
Integra Telecom, Inc.	Common Stock										1,274,522		8,433,885		5,295,511		0.44	%	C/E
Integra Telecom, Inc.	Warrants										346,939		19,920		226,482		0.02	%	C/E
V Telecom Investment S.C.A. (Luxembourg)	Common Shares										1,393		3,236,256		3,699,127		0.32	%	C/D/E/H
													11,690,061		9,221,120		0.78	%

Total Equity Securities													61,357,548		32,942,771		2.81	%

Total Investments													1,189,498,522		1,146,535,886

Cash and Cash Equivalents
Union Bank of California	Commercial Paper	Fixed		-		0.03	%		1/2/2015						6,999,994		0.60	%
Cash Denominated in Foreign Currencies															192,187		0.02	%
Cash Held on Account at Various Institutions															20,076,611		1.70	%
Cash and Cash Equivalents															27,268,792		2.32	%

Total Cash and Investments														$	1,173,804,678		100.00	%	M

Notes to Consolidated Schedule of Investments:

^(A)	Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

^(B)	Non-controlled affiliate – as defined under the Investment Company Act of 1940 (ownership of between 5% and 25% of the outstanding voting securities of this issuer). See Consolidated Schedule of Changes in Investments in Affiliates.

^(C)	Non-income producing security.

^(D)	Principal amount denominated in foreign currency. Amortized cost and fair value converted from foreign currency to US dollars. (See Note 2)

^(E)	Restricted security. (See Note 2)

^(F)	Controlled issuer – as defined under the Investment Company Act of 1940 (ownership of 25% or more of the outstanding voting securities of this issuer). Investment is not more than 50% owned nor deemed to be a significant subsidiary. See Consolidated Schedule of Changes in Investments in Affiliates.

^(G)	Investment has been segregated to collateralize certain unfunded commitments.

^(H)

^(I)

^(J)

^(K)	Negative balances relate to an unfunded commitment that was acquired and valued at a discount.

^(L)	In addition to the stated coupon, investment has a back-end fee payable upon repayment of the loan in the amount of 4.0% for Soraa, 8.0% for VitAg, 1.5% for Enerwise, 2.5% for NEXTracker, and 7.0% for Green Biologics.

^(M)	All cash and investments, except those referenced in Notes G above, are pledged as collateral under certain debt as described in Note 4 to the Consolidated Financial Statements.

LIBOR or EURIBOR resets monthly (M), quarterly (Q), semiannually (S), annually (A).

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $669,515,626, and $266,008,974 respectively, for the twelve months ended December 31, 2014. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments. The total value of restricted securities and bank debt as of December 31, 2014 was $1,146,535,883, or 97.7% of total cash and investments of the Partnership.

Options and swaps at December 31, 2014 were as follows:

Investment	Notional Amount		Fair Value

Interest Rate Cap with Deutsche Bank AG, 4%, expires 5/15/2016	$	25,000,000	$	497
Euro/US Dollar Cross-Currency Basis Swap with Wells Fargo Bank, N.A., Pay Euros/Receive USD, Expires 3/31/2017	$	16,401,467	$	1,717,610

See accompanying notes to consolidated financial statements.

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Statements of Operations (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014

Investment income
Interest income:
Companies less than 5% owned	$	32,171,144		$	24,699,976		$	98,581,508		$	65,174,101
Companies 5% to 25% owned		1,516,596			1,728,834			3,828,262			4,423,013
Companies more than 25% owned		125,074			214,091			444,168			706,553
Dividend income:
Companies 5% to 25% owned		-			-			-			1,968,748
Lease income:
Companies 5% to 25% owned		-			74,038			-			282,581
Companies more than 25% owned		354,958			262,905			978,000			726,477
Other income:
Companies less than 5% owned		1,178,060			210,622			3,267,066			1,164,938
Total investment income		35,345,832			27,190,466			107,099,004			74,446,411

Operating expenses
Management and advisory fees		4,703,999			3,513,238			13,681,411			9,504,317
Interest expense		2,224,148			1,027,640			5,927,481			2,252,933
Administrative expenses		394,920			392,794			1,177,357			1,029,069
Amortization of deferred debt issuance costs		375,723			375,316			1,109,752			1,151,598
Commitment fees		315,206			243,147			919,649			650,209
Legal fees, professional fees and due diligence expenses		177,924			167,646			706,876			542,232
Insurance expense		66,977			56,000			182,172			135,276
Custody fees		74,016			53,494			211,516			163,400
Director fees		45,083			58,930			156,843			171,289
Other operating expenses		435,226			169,329			1,260,979			361,892
Total operating expenses		8,813,222			6,057,534			25,334,036			15,962,215

Net investment income		26,532,610			21,132,932			81,764,968			58,484,196

Net realized and unrealized gain (loss) on investments and foreign currency
Net realized gain (loss):
Investments in companies less than 5% owned		5,735,352			544,212			(3,714,114	)		(5,317,388	)
Investments in companies 5% to 25% owned		395			383,670			1,185			383,670
Investments in companies more than 25% owned		-			-			19,167			-
Net realized gain (loss)		5,735,747			927,882			(3,693,762	)		(4,933,718	)

Change in net unrealized appreciation/depreciation		(7,621,948	)		(5,433,060	)		28,123			2,596,620
Net realized and unrealized gain (loss)		(1,886,201	)		(4,505,178	)		(3,665,639	)		(2,337,098	)

Net increase in net assets from operations		24,646,409			16,627,754			78,099,329			56,147,098

Gain on repurchase of Series A preferred interests		-			-			1,675,000			-
Dividends on Series A preferred equity facility		(460,836	)		(357,451	)		(1,251,930	)		(1,083,263	)
Net change in accumulated dividends on Series A
preferred equity facility		398,541			(4,718	)		497,790			5,394
Net increase in net assets applicable to common limited and general partners resulting from operations	$	24,584,114		$	16,265,585		$	79,020,189		$	55,069,229

See accompanying notes to consolidated financial statements.

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Statements of Changes in Net Assets

	Nine Months Ended September 30, 2015 (Unaudited)
	Total			Common Limited Partner			General Partner

Net assets applicable to common limited and general partners, beginning of year	$	833,816,090		$	833,816,090		$	-

Contributions from common limited partner		3,726,439			3,726,439			-

Net investment income		81,764,968			66,872,010			14,892,958
Net realized loss		(3,693,762	)		(3,693,762	)		-
Change in net unrealized appreciation/depreciation		28,123			28,123			-
Gain on repurchase of Series A preferred interests		1,675,000			1,675,000			-
Dividends paid on preferred equity facility		(1,251,930	)		(1,001,544	)		(250,386	)
Net change in accumulated dividends on preferred equity facility		497,790			398,232			99,558
Net increase in net assets applicable to common limited and general partners resulting from operations		79,020,189			64,278,059			14,742,130

Distributions to common limited and general partners from:
Net investment income		(72,341,307	)		(57,599,177	)		(14,742,130	)

Net assets applicable to common limited and general partners, end of period (including accumulated net investment income of $28,518,972 in the account of the Common Limited Partner)	$	844,221,411		$	844,221,411		$	-

	Year Ended December 31, 2014
	Total			Common Limited Partner			General Partner

Net assets applicable to common limited and general partners, beginning of year	$	552,263,625		$	551,095,042		$	1,168,583

Contributions from common limited partner		312,201,570			312,201,570			-

Net investment income		83,149,098			67,690,585			15,458,513
Net realized loss		(21,118,867	)		(20,215,019	)		(903,848	)
Change in net unrealized appreciation/depreciation		(6,185,711	)		(5,920,975	)		(264,736	)
Dividends paid on preferred equity facility		(1,444,634	)		(1,155,707	)		(288,927	)
Net change in accumulated dividends on preferred equity facility		6,462			5,170			1,292
Net increase in net assets applicable to common limited and general partners resulting from operations		54,406,348			40,404,054			14,002,294

Distributions to common limited and general partners from:
Net investment income		(85,055,453	)		(69,884,576	)		(15,170,877	)

Net assets applicable to common limited and general partners, end of period (including accumulated net investment income of $22,994,510 in the account of the Common Limited Partner)	$	833,816,090		$	833,816,090		$	-

See accompanying notes to consolidated financial statements.

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended September 30,
	2015			2014

Operating activities
Net increase in net assets applicable to common limited and general partners
from operations	$	79,020,189		$	55,069,229
Adjustments to reconcile net increase in net assets applicable to common limited and general partners resulting from operations to net cash used in operating activities:
Net realized loss		3,693,762			4,933,718
Change in net unrealized appreciation/depreciation of investments		(374,028	)		(2,614,461	)
Gain on repurchase of Series A preferred interests		(1,675,000	)		-
Dividends paid on Series A preferred equity facility		1,251,930			1,083,263
Net change in accumulated dividends on Series A preferred equity facility		(497,790	)		(5,394	)
Accretion of original issue discount on investments		(9,198,452	)		(3,044,889	)
Net accretion of market discount/premium		(54,404	)		(1,152,021	)
Interest and dividend income paid in kind		(4,854,335	)		(4,366,287	)
Amortization of deferred debt issuance costs		1,109,752			1,151,598
Changes in assets and liabilities:
Purchases of investment securities		(418,493,733	)		(481,674,735	)
Proceeds from sales, maturities and pay downs of investments		305,505,796			177,994,806
Increase in accrued interest income - companies less than 5% owned		(4,039,131	)		(3,394,734	)
Increase in accrued interest income - companies 5% to 25% owned		(496,698	)		(235,265	)
Decrease in accrued interest income - companies more than 25% owned		10,957			9,790
Decrease in receivable for investments sold		8,991,647			3,605,964
Decrease (increase) in prepaid expenses and other assets		1,226,018			(871,593	)
Increase (decrease) in payable for investments purchased		5,798,002			(13,456,911	)
Increase (decrease) in payable to the Advisor		51,786			(4,766	)
Increase in interest payable		651,547			394,868
Increase (decrease) in payable to parent		(1,031,498	)		101,872
Increase (decrease) in accrued expenses and other liabilities		(159,317	)		209,489
Net cash used in operating activities		(33,563,000	)		(266,266,459	)

Financing activities
Borrowings		415,300,000			411,500,000
Repayments of debt		(169,000,000	)		(293,000,000	)
Repurchase of Series A preferred interests		(132,325,000	)		-
Payments of debt issuance costs		(3,766,619	)		(2,496,168	)
Dividends paid on Series A preferred equity facility		(1,251,930	)		(1,083,263	)
Dividends paid to common limited partner		(57,599,177	)		(45,657,472	)
Distributions of incentive allocation to the General Partner		(14,206,636	)		(10,419,133	)
Contributions from the common limited partner		3,726,439			208,582,388
Net cash provided by financing activities		40,877,077			267,426,352

Net increase in cash and cash equivalents		7,314,077			1,159,893
Cash and cash equivalents at beginning of period		27,268,792			22,984,182
Cash and cash equivalents at end of period	$	34,582,869		$	24,144,075

Supplemental cash flow information
Interest payments	$	5,275,934		$	1,858,065

See accompanying notes to consolidated financial statements.

Table of Contents

Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

1.	Organization and Nature of Operations

Special Value Continuation Partners, LP (the “Partnership”) a Delaware limited partnership, commenced operations on July 31, 2006 as an externally managed, closed-end, non-diversified management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). On April 2, 2012, the Partnership elected to be treated as a business development company (“BDC”) under the 1940 Act (the “Conversion”). The Partnership’s investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection.

Investment operations are conducted either directly in the Partnership or in one of the Partnership’s wholly owned subsidiaries, TCPC Funding I, LLC, a Delaware limited liability company (“TCPC Funding”) and TCPC SBIC, LP, a Delaware limited partnership (the “SBIC”). The SBIC was organized in June 2013, and on April 22, 2014, received a license from the United States Small Business Administration (the “SBA”) to operate as a small business investment company under the provisions of Section 301(c) of the Small Business Investment Act of 1958. The Partnership, TCPC Funding, and the SBIC invest primarily in the debt of middle-market companies, including senior secured loans, junior loans, mezzanine debt and bonds. Such investments may include an equity component, and, to a lesser extent, the Partnership, TCPC Funding, and the SBIC may make equity investments directly. The Partnership, TCPC Funding, and the SBIC have elected to be treated as partnerships for U.S. federal income tax purposes. TCP Capital Corp. (“TCPC”) owns the entire common limited partner interest in the Partnership. TCPC has also elected to be treated as a business development company under the 1940 Act.

The general partner of the Partnership is SVOF/MM, LLC, which also serves as the administrator of TCPC and the Partnership (the “Administrator” or the “General Partner”). The managing member of the General Partner is Tennenbaum Capital Partners, LLC, which serves as the Advisor to TCPC, the Partnership, TCPC Funding and the SBIC. Most of the equity interests in the General Partner are owned directly or indirectly by the Advisor and its employees.

Partnership management consists of the General Partner and the board of directors. The General Partner directs and executes the day-to-day operations of the Partnership subject to oversight from the board of directors, which performs certain functions required by the 1940 Act. The board of directors has delegated investment management of the Partnership’s assets to the Advisor. The board of directors consists of five persons, three of whom are independent.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of the Partnership have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The Partnership is an investment company following accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. The following is a summary of the significant accounting policies of the Partnership.

Reclassifications

Certain prior period amounts relating to lease income have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although management believes these estimates and assumptions to be reasonable, actual results could differ from those estimates and differences could be material.

Investment Valuation

Management values investments at fair value in accordance with GAAP, based upon the principles and methods of valuation set forth in policies adopted by the board of directors. Fair value is generally defined as the amount for which an investment would be sold in an orderly transaction between market participants at the measurement date.

All investments are valued at least quarterly based on affirmative pricing or quotations from independent third- party sources, with the exception of investments priced directly by the Advisor which together comprise, in total, less than 5% of the capitalization of the Partnership. Investments listed on a recognized exchange or market quotation system, whether U.S. or foreign, are valued for financial reporting purposes as of the last business day of the reporting period using the closing price on the date of valuation. Liquid investments not listed on a recognized exchange or market quotation system are valued using prices provided by a nationally recognized pricing service or by using quotations from broker-dealers.

Investments not priced by a pricing service or for which market quotations are either not readily available or are determined to be unreliable are priced at fair value using affirmative valuations performed by independent valuation services approved by the board of directors or, for investments aggregating less than 5% of the total capitalization of the Partnership, using valuations determined directly by the Advisor. Such valuations are determined under a documented valuation policy that has been reviewed and approved by the board of directors.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

Pursuant to this policy, investment professionals of the Advisor provide recent portfolio company financial statements and other reporting materials to independent valuation firms as applicable, which firms evaluate such materials along with relevant observable market data to conduct independent appraisals each quarter, and their preliminary valuation conclusions are documented and discussed with senior management of the Advisor. The audit committee of the board of directors discusses the valuations, and the board of directors approves the fair value of the investments in good faith based on the input of the Advisor, the respective independent valuation firms as applicable, and the audit committee of the board of directors.

Generally, to increase objectivity in valuing the investments, the Advisor will utilize external measures of value, such as public markets or third-party transactions, whenever possible. The Advisor’s valuation is not based on long-term work-out value, immediate liquidation value, nor incremental value for potential changes that may take place in the future. The values assigned to investments that are valued by the Advisor are based on available information and do not necessarily represent amounts that might ultimately be realized, as these amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. The foregoing policies apply to all investments, including those in companies and groups of affiliated companies aggregating more than 5% of the Partnership’s assets.

Fair valuations of investments in each asset class are determined using one or more methodologies including the market approach, income approach, or, in the case of recent investments, the cost approach, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present value 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 may be taken into account include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, 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, merger and acquisition comparables, the principal market in which the investment trades and enterprise values, among other factors.

Investments may be categorized based on the types of inputs used in valuing such investments. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Transfers between levels are recognized as of the beginning of the reporting period.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

At September 30, 2015, the Partnership’s investments were categorized as follows:

Level	Basis for Determining Fair Value	Bank Debt		Other Corporate Debt		Equity Securities
1	Quoted prices in active markets for identical assets	$	-	$	-	$	-
2	Other observable market inputs ^*		101,347,633		43,940,470		-
3	Independent third-party pricing sources that employ significant unobservable inputs		986,414,413		94,850,874		39,055,086
3	Advisor valuations with significant unobservable inputs		1,124,503		-		2,427,660
Total		$	1,088,886,549	$	138,791,344	$	41,482,746

^* For example, quoted prices in inactive markets or quotes for comparable investments

Unobservable inputs used in the fair value measurement of Level 3 investments as of September 30, 2015 included the following:

Asset Type	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Avg.)
Bank Debt	$	763,574,930	Market rate approach	Market yields		4.3% - 22.7% (12.0%)
		152,703,450	Market quotations	Indicative bid/ask quotes		1 - 4(1)
		45,619,986	Market comparable companies	Revenue multiples		0.4x – 5.8x(3.0x)
		25,640,550	Market comparable companies	EBITDA multiples		3.3x – 16.5x(10.1x)
Other Corporate Debt		4,889,204	Market rate approach	Market yields		13.2% (13.2%)
		80,693,670	Market quotations	Indicative bid/ask quotes		1 - 2(1)
		9,268,000	Market comparable companies	EBITDA multiples		7.3x(7.3x)
Equity		7,801,506	Market rate approach	Market yields		5.9% - 26.2% (8.0%)
		6,553,914	Market quotations	Indicative bid/ask quotes		1 - 2(1)
		3,020,806	Market comparable companies	Revenue multiples		0.4x – 6.0x(3.0x)
		24,106,520	Market comparable companies	EBITDA multiples		4.8x – 11.0x(7.0x)
	$	1,123,872,536

Generally, a change in an unobservable input may result in a change to the value of an investment as follows:

Input	Impact to Value if Input Increases	Impact to Value if Input Decreases
Market yields	Decrease	Increase
Revenue multiples	Increase	Decrease
EBITDA multiples	Increase	Decrease

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

Changes in investments categorized as Level 3 during the three months ended September 30, 2015 were as follows:

	Independent Third-Party Valuation
	Bank Debt			Other Corporate Debt			Equity Securities
Beginning balance	$	908,884,909		$	96,136,194		$	38,634,245
Net realized and unrealized gains (losses)		(3,214,866	)		(1,285,320	)		6,167,397
Acquisitions		111,630,494			-			2,750,607
Dispositions		(30,596,992	)		-			(8,497,163	)
Reclassifications within Level 3 ^**		(289,132	)^†		-			-
Ending balance	$	986,414,413		$	94,850,874		$	39,055,086

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	(1,862,003	)	$	(1,285,320	)	$	4,284,045

^**	Comprised of one investment that reclassified from Advisor Valuation

^†	Negative balance relates to an unfunded commitment that was acquired and valued at a discount

	Advisor Valuation
	Bank Debt			Other Corporate Debt		Equity Securities
Beginning balance	$	(383,918	)^†	$	-	$	2,455,417
Net realized and unrealized gains (losses)		149,870			-		(26,540	)
Acquisitions		1,076,312			-		-
Dispositions		(6,893	)		-		(1,217	)
Reclassifications within Level 3 ^*		289,132			-		-
Ending balance	$	1,124,503		$	-	$	2,427,660

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	149,870		$	-	$	201,750

^* Comprised of one investment that reclassified to Independent Third-Party Valuation

^† Negative balance relates to an unfunded commitment that was acquired and valued at a discount

There were no transfers between Level 1 and 2 during the three months ended September 30, 2015.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

Changes in investments categorized as Level 3 during the nine months ended September 30, 2015 were as follows:

	Independent Third-Party Valuation
	Bank Debt			Other Corporate Debt			Equity Securities
Beginning balance	$	840,538,179		$	56,621,975		$	30,618,142
Net realized and unrealized gains (losses)		(14,665,802	)		897,833			13,506,731
Acquisitions		406,576,197			300,149			5,266,261
Dispositions		(223,620,986	)		(2,516,390	)		(10,336,048	)
Transfers out of Level 3 ^‡		(36,143,175	)		(16,311,095	)		-
Transfers into Level 3 ^§		13,730,000			51,247,224			-
Reclassifications within Level 3 ^**		-			4,611,178			-
Ending balance	$	986,414,413		$	94,850,874		$	39,055,086

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	(11,815,486	)	$	841,634		$	7,600,170

^‡	Comprised of five investments that transferred to Level 2 due to increased observable market activity

^§	Comprised of three investments that transferred from Level 2 due to reduced trading volumes

^**	Comprised of one investment that reclassified from Advisor Valuation

	Advisor Valuation
	Bank Debt			Other Corporate Debt			Equity Securities
Beginning balance	$	-		$	4,611,178		$	2,324,629
Net realized and unrealized gains (losses)		134,445			-			104,248
Acquisitions		1,725,243			-			-
Dispositions		(735,185	)		-			(1,217	)
Reclassifications within Level 3 ^*		-			(4,611,178	)		-
Ending balance	$	1,124,503		$	-		$	2,427,660

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	134,445		$	-		$	332,538

^* Comprised of one investment that reclassified to Independent Third-Party Valuation

There were no transfers between Level 1 and 2 during the nine months ended September 30, 2015.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

At December 31, 2014, the Partnership’s investments were categorized as follows:

Level	Basis for Determining Fair Value	Bank Debt		Other Corporate Debt		Equity Securities
1	Quoted prices in active markets for identical assets	$	-	$	-	$	-
2	Other observable market inputs ^*		131,946,338		79,875,445		-
3	Independent third-party pricing sources that employ significant unobservable inputs		840,538,179		56,621,975		30,618,142
3	Advisor valuations with significant unobservable inputs		-		4,611,178		2,324,629
Total		$	972,484,517	$	141,108,598	$	32,942,771

^* For example, quoted prices in inactive markets or quotes for comparable investments

Changes in investments categorized as Level 3 during the three months ended September 30, 2014 were as follows:

	Independent Third-Party Valuation
	Bank Debt			Other Corporate Debt			Equity Securities
Beginning balance	$	580,830,991		$	50,098,573		$	26,851,302
Net realized and unrealized gains (losses)		(2,348,229	)		(266,272	)		996,648
Acquisitions		205,639,764			5,624			4,046,906
Dispositions		(33,252,537	)		-			(1,006,480	)
Transfers out of Level 3 ^‡		(28,782,948	)		-			-
Transfers into Level 3 ^§		17,131,420			2,682,500			-
Reclassifications within Level 3 ^**		(455,459	)^†		-			1,115,183
Ending balance	$	738,763,002		$	52,520,425		$	32,003,559

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	(1,011,779	)	$	(266,272	)	$	629,452

^‡	Comprised of three investments that transferred to Level 2 due to increased observable market activity

^§	Comprised of three investments that transferred from Level 2 due to reduced trading volumes

^**	Comprised of three investments that reclassified from Advisor Valuation and one investment that reclassified to Advisor Valuation

^†	Negative balance relates to an unfunded commitment that was acquired and valued at a discount

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

	Advisor Valuation
	Bank Debt			Other Corporate Debt		Equity Securities
Beginning balance	$	(455,459	)^†	$	4,307,107	$	2,389,805
Net realized and unrealized gains (losses)		-			24,993		16,074
Reclassifications within Level 3 ^*		455,459			-		(1,115,183	)
Ending balance	$	-		$	4,332,100	$	1,290,696

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	-		$	24,993	$	16,075

^*	Comprised of three investments that reclassified to Independent Third-Party Valuation and one investment that reclassified from Independent Third-Party Valuation

^†	Negative balance relates to an unfunded commitment that was acquired and valued at a discount

There were no transfers between Level 1 and 2 during the three months ended September 30, 2014.

Changes in investments categorized as Level 3 during the nine months ended September 30, 2014 were as follows:

	Independent Third-Party Valuation
	Bank Debt			Other Corporate Debt			Equity Securities
Beginning balance	$	515,953,643		$	53,334,634		$	36,066,746
Net realized and unrealized gains (losses)		47,146			(14,913	)		(1,335,910	)
Acquisitions		424,280,318			174,943			5,882,955
Dispositions		(115,964,311	)		(22,549,239	)		(10,046,998	)
Transfers out of Level 3 ^†		(89,614,594	)		-			-
Transfers into Level 3 ^‡		4,060,800			21,575,000			-
Reclassifications within Level 3 ^§		-			-			1,436,766
Ending balance	$	738,763,002		$	52,520,425		$	32,003,559

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	1,089,298		$	1,005,398		$	(1,075,632	)

^† Comprised of nine investments that transferred to Level 2 due to increased observable market activity

^‡ Comprised of two investments that transferred from Level 2 due to reduced trading volumes

^§ Comprised of two investments that reclassified from Advisor Valuation and one that reclassified to Advisor Valuation

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

	Advisor Valuation
	Bank Debt			Other Corporate Debt			Equity Securities
Beginning balance	$	4,060,800		$	7,631,335		$	2,837,707
Net realized and unrealized losses		-			(504,281	)		(313,703	)
Acquisitions		-			4,303,962			230,937
Dispositions		(4,060,800	)		(7,098,916	)		(27,479	)
Reclassifications within Level 3 ^**		-			-			(1,436,766	)
Ending balance	$	-		$	4,332,100		$	1,290,696

Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above)	$	-		$	166,619		$	(341,183	)

^** Comprised of two investments that reclassified to Independent Third-Party Valuation and one that reclassified from Independent Third-Party Valuation

There were no transfers between Level 1 and 2 during the nine months ended September 30, 2014.

Investment Transactions

Investment transactions are recorded on the trade date, except for private transactions that have conditions to closing, which are recorded on the closing date. The cost of investments purchased is based upon the purchase price plus those professional fees which are specifically identifiable to the investment transaction. Realized gains and losses on investments are recorded based on the specific identification method, which typically allocates the highest cost inventory to the basis of investments sold.

Cash and Cash Equivalents

Cash consists of amounts held in accounts with brokerage firms and the custodian bank. Cash equivalents consist of highly liquid investments with an original maturity of generally three months or less. Cash and cash equivalents are carried at amortized cost which approximates fair value. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy.

Restricted Investments

The Partnership may invest without limitation in instruments that are subject to legal or contractual restrictions on resale. These instruments generally may be resold to institutional investors in transactions exempt from registration or to the public if the securities are registered. Disposal of these investments may involve time-consuming negotiations and additional expense, and prompt sale at an acceptable price may be difficult Information regarding restricted investments is included at the end of the Consolidated Schedule of Investments. Restricted investments, including any restricted investments in affiliates, are valued in accordance with the investment valuation policies discussed above.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

Foreign Investments

The Partnership may invest in instruments traded in foreign countries and denominated in foreign currencies. Foreign currency denominated investments comprised approximately 1.4% and 1.7% of total investments at September 30, 2015 and December 31, 2014, respectively. Such positions were converted at the respective closing foreign exchange rates in effect at September 30, 2015 and December 31, 2014 and reported in U.S. dollars. Purchases and sales of investments and income and expense items denominated in foreign currencies, when they occur, are translated into U.S. dollars based on the foreign exchange rates in effect on the respective dates of such transactions. The portion of gains and losses on foreign investments resulting from fluctuations in foreign currencies is included in net realized and unrealized gain or loss from investments.

Investments in foreign companies and securities of foreign governments may involve special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different transaction clearance and settlement practices, and potential future adverse political and economic developments.

Moreover, investments in foreign companies and securities of foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. government.

Derivatives

In order to mitigate certain currency exchange and interest rate risks, the Partnership has entered into certain swap and option transactions. All derivatives are reported at their gross amounts as either assets or liabilities in the Consolidated Statements of Assets and Liabilities. The transactions entered into are accounted for using the mark-to-market method with the resulting change in fair value recognized in earnings for the current period. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in interest rates and the value of foreign currency relative to the U.S. dollar. The Partnership is required under the terms of its derivative agreement to pledge assets as collateral to secure its obligation under the derivatives. As of September 30, 2015, $492,045 of cash was pledged as collateral under the Partnership’s derivative instrument.

The Partnership did not enter into any new derivative transactions during the nine months ended September 30, 2015. At September 30, 2015, the Partnership held an interest rate cap with a notional amount of $25,000,000 and a cross currency basis swap with a notional amount of $16,401,467. Gains and losses from derivatives during the nine months ended September 30, 2015 were included in net realized and unrealized loss on investments in the Consolidated Statements of Operations as follows:

Instrument	Realized Gains (Losses)		Unrealized Gains (Losses)
Cross currency basis swap	$	-	$	1,151,138
Interest rate cap		-		(497	)

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

The Partnership did not enter into any new derivative transactions during the nine months ended September 30, 2014. At September 30, 2014, the Partnership held an interest rate cap with a notional amount of $25,000,000 and a cross currency basis swap with a notional amount of $16,401,467. Gains and losses from derivatives during the nine months ended September 30, 2014 were included in net realized and unrealized loss on investments in the Consolidated Statements of Operations as follows:

Instrument	Realized Gains (Losses)		Unrealized Gains (Losses)
Cross currency basis swaps	$	-	$	1,402,313
Interest rate cap		-		(12,812	)

Valuations of derivatives held at September 30, 2015 and 2014 were determined using observable market inputs other than quoted prices in active markets for identical assets and, accordingly, are classified as Level 2 in the GAAP valuation hierarchy.

Debt Issuance Costs

Costs of approximately $1.6 million and $1.5 million were incurred during 2015 and 2013, respectively, in connection with the amendment and extension of the Partnership’s credit facility (see Note 4). Costs of approximately $1.9 million, $1.8 million and $1.6 million were incurred during 2015, 2014 and 2013, respectively, in connection with placing and extending TCPC Funding’s revolving credit facility (see Note 4). Costs of approximately $0.3 million and $1.5 million were incurred during 2015 and 2014, respectively, in connection with placing the SBIC’s SBA debentures (see Note 4). These costs were deferred and are being amortized on a straight-line basis over the estimated life of the respective instruments. The impact of utilizing the straight-line amortization method versus the effective-interest method is not material to the operations of the Partnership.

Revenue Recognition

Interest and dividend income, including income paid in kind, is recorded on an accrual basis. Origination, structuring, closing, commitment and other upfront fees, including original issue discounts, earned with respect to capital commitments are generally amortized or accreted into interest income over the life of the respective debt investment, as are end-of-term or exit fees receivable upon repayment of a debt investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income due upon the early repayment of a loan or debt security are recognized when receivable and are included in interest income.

Certain debt investments are purchased at a discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. GAAP generally requires that discounts on the acquisition of corporate bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method assuming there are no questions as to collectability. When principal payments on a loan are received in an amount in excess of the loan’s amortized cost, the excess principal payments are recorded as interest income.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

2.	Summary of Significant Accounting Policies (continued)

Income Taxes

The income or loss of the Partnership, TCPC Funding and the SBIC is reported in the respective partners’ income tax returns. Consequently, no income taxes are paid at the partnership level or reflected in the Partnership’s financial statements. In accordance with ASC Topic 740 – Income Taxes , the Partnership recognizes in its consolidated financial statements the effect of a tax position when it is determined that such position is more likely than not, based on the technical merits, to be sustained upon examination. As of September 30, 2015, all tax years of the Partnership, TCPC Funding and the SBIC since January 1, 2011 remain subject to examination by federal tax authorities. No such examinations are currently pending.

Cost and unrealized appreciation and depreciation of the Partnership’s investments (including derivatives) for U.S. federal income tax purposes at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015			December 31, 2014
Unrealized appreciation	$	39,427,027		$	32,342,656
Unrealized depreciation		(80,333,641	)		(73,638,935	)
Net unrealized depreciation	$	(40,906,614	)	$	(41,296,279	)

Cost	$	1,312,936,001		$	1,189,550,272

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. Under this new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 applies to all entities and, for public entities, is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, but no earlier than annual periods beginning after December 15, 2016 and interim periods within that reporting period. The Partnership is currently evaluating the impact this ASU will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs , which generally requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015, which clarified the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. ASU 2015-15 should be adopted concurrent with the adoption of ASU 2015-03. The Partnership does not expect adoption of this guidance to have a material impact on its consolidated financial statements.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

3.	Management Fees, Incentive Compensation and Other Expenses

The Partnership’s management fee is calculated at an annual rate of 1.5% of total assets (excluding cash and cash equivalents) of TCPC on a consolidated basis as of the beginning of each quarter and is payable to the Advisor quarterly in arrears.

Incentive compensation is only paid to the extent that TCPC’s total performance exceeds a cumulative 8% annual return since January 1, 2013 (the “Total Return Hurdle”). Beginning January 1, 2013, the incentive compensation equals 20% of net investment income (reduced by preferred dividends) and 20% of net realized gains (reduced by any net unrealized losses), subject to the Total Return Hurdle. The incentive compensation is payable quarterly in arrears as an allocation and distribution to the General Partner and is calculated as the difference between cumulative incentive compensation earned since January 1, 2013 and cumulative incentive compensation paid since January 1, 2013. A reserve for incentive compensation is allocated to the account of the General Partner based on the amount of additional incentive compensation that would have been distributable to the General Partner assuming a hypothetical liquidation of TCPC and the Partnership at net asset value on the balance sheet date. The General Partner’s equity interest in the Partnership is comprised entirely of such reserve amount, if any, and is reflected in the Consolidated Statement of Changes in Net Assets. As of September 30, 2015 and December 31, 2014, no such reserve was allocated.

The Partnership bears all expenses incurred in connection with its business, including fees and expenses of outside contracted services, such as custodian, administrative, legal, audit and tax preparation fees, costs of valuing investments, insurance costs, brokers’ and finders’ fees relating to investments, and any other transaction costs associated with the purchase and sale of investments.

Leverage

Leverage is comprised of amounts outstanding under a term loan issued by the Partnership (the “Term Loan”), amounts outstanding under a senior secured revolving credit facility issued by the Partnership (the “Revolving Credit Facility,” and together with the Term Loan, the “Partnership Facility”), amounts outstanding under a senior secured revolving credit facility issued by TCPC Funding (the “TCPC Funding Facility”), debentures guaranteed by the SBA (the “SBA Debentures”), and amounts outstanding under a preferred equity facility issued by the Partnership (the “Preferred Interests”) which were fully repurchased and retired by the Partnership on September 3, 2015.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

4.	Leverage (continued)

Total leverage outstanding and available at September 30, 2015 was as follows:

	Maturity	Rate			Carrying Value ^†		Available		Total Capacity
Partnership Facility
Revolving Credit Facility	2018		L+1.75	% ^*	$	109,000,000	$	7,000,000	$	116,000,000
Term Loan	2018		L+1.75	% ^*		100,500,000		-		100,500,000
TCPC Funding Facility	2020		L+2.50	% ^*§		221,000,000		129,000,000		350,000,000
SBA Debentures	2024-2025		2.84	% ^**		38,800,000		36,200,000		75,000,000	^‡
Total leverage					$	469,300,000	$	172,200,000	$	641,500,000

^*	Based on either LIBOR or the lender’s cost of funds, subject to certain limitations

^†	All carrying values are the same as the principal amounts outstanding

^§	Or L+2.25% subject to certain funding requirements

^**	Weighted-average interest rate, excluding fees of 0.36%

^‡	Anticipated total capacity of $150 million

Total leverage outstanding and available at December 31, 2014 was as follows:

	Maturity		Rate			Carrying Value ^†		Available		Total Capacity
Partnership Facility
Revolving Credit Facility	2016			L+2.50	%^*	$	70,000,000	$	46,000,000	$	116,000,000
TCPC Funding Facility	2017			L+2.50	%^*		125,000,000		125,000,000		250,000,000
SBA Debentures		2024-2025		3.02	%^**		28,000,000		47,000,000		75,000,000	^‡
Preferred Interests		2016		L+0.85	%^*		134,000,000		-		134,000,000
Total leverage						$	357,000,000	$	218,000,000	$	575,000,000

^*	Based on either LIBOR or the lender’s cost of funds, subject to certain limitations

^†	All carrying values are the same as the principal amounts outstanding

^**	Interest rate on pooled loans of $18.5 million, excluding fees of 0.36%. As of December 31, 2014, the remaining $9.5 million of the outstanding amount was not yet pooled, and bore interest at a temporary rate of 0.56% plus fees of 0.36% through March 25, 2015, the date of the next SBA pooling

^‡	Anticipated total capacity of $150 million

The combined weighted-average interest and dividend rates on total leverage outstanding at September 30, 2015 and December 31, 2014 were 2.44% and 2.15%, respectively.

Total expenses related to debt include:

	Nine Months Ended September 30,
	2015		2014
Interest expense	$	5,927,481	$	2,252,933
Amortization of deferred debt issuance costs		1,109,752		1,151,598
Commitment fees		919,649		650,209
Total	$	7,956,882	$	4,054,740

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

4.	Leverage (continued)

Amounts outstanding under the Partnership Facility, the TCPC Funding Facility and the SBA Debentures are carried at amortized cost in the Consolidated Statements of Assets and Liabilities. As of September 30, 2015, the estimated fair values of the Partnership Facility and the SBA Debentures approximated their carrying values, and the TCPC Funding Facility’s estimated fair value was $223.1 million. The estimated fair values of the Partnership Facility, the TCPC Funding Facility and the SBA Debentures are determined by discounting projected remaining payments using market interest rates for borrowings of the Partnership and entities with similar credit risks at the measurement date. At September 30, 2015, the fair values of the Partnership Facility, the TCPC Funding Facility and the SBA Debentures as prepared for disclosure purposes were deemed to be Level 3 in the GAAP valuation hierarchy.

Partnership Facility

The Partnership Facility consists of a $100.5 million fully-drawn senior secured term loan and a senior secured revolving credit facility which provides for amounts to be drawn up to $116 million, subject to certain collateral and other restrictions. The Partnership Facility matures on July 31, 2018. Most of the cash and investments held directly by the Partnership, as well as the net assets of TCPC Funding and the SBIC, are included in the collateral for the facility.

Advances under the Partnership Facility through July 31, 2014 bore interest at an annual rate equal to 0.44% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). Advances under the Partnership Facility for periods from July 31, 2014 through September 3, 2015 bore interest at an annual rate equal to 2.5% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). Advances under the Partnership Facility from September 3, 2015 through July 31, 2016 bear interest at an annual rate equal to 1.75% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). Advances under the Partnership facility from July 31, 2016 through the maturity date of the facility will bear interest at an annual rate of 2.5% plus either LIBOR or the lender’s cost of funds (subject to a cap of LIBOR plus 20 basis points). In addition to amounts due on outstanding debt, the Revolving Credit Facility accrues commitment fees of 0.20% per annum on the unused portion of the facility, or 0.25% per annum when less than $46.4 million in borrowings are outstanding. The facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Partnership fail to satisfy certain financial or other covenants. As of September 30, 2015, the Partnership was in full compliance with such covenants.

SBA Debentures

As of September 30, 2015, the SBIC is able to issue up to $75 million in SBA Debentures, subject to funded regulatory capital and other customary regulatory requirements. As of September 30 2015, the Partnership had committed $75 million of regulatory capital to the SBIC, $58.0 million of which had been funded. SBA Debentures are non-recourse and may be prepaid at any time without penalty. Once drawn, the SBIC debentures bear an interim interest rate of LIBOR plus 30 basis points. The rate then becomes fixed at the time of SBA pooling, which occurs twice each year, and is set to the then-current 10-year treasury rate plus a spread and an annual SBA charge.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

4.	Leverage (continued)

SBA Debentures outstanding as of September 30, 2015 were as follows:

Issuance Date	Maturity	Debenture Amount		Fixed Interest Rate			SBA Annual Charge
September 24, 2014	September 1, 2024	$	18,500,000		3.02	%		0.36	%
March 25, 2015	March 1, 2025		9,500,000		2.52	%		0.36	%
September 23, 2015	September 1, 2025		10,800,000		2.83	%		0.36	%
		$	38,800,000		2.84	%^*

^* Weighted-average interest rate

TCPC Funding Facility

The TCPC Funding Facility is a senior secured revolving credit facility which provides for amounts to be drawn up to $350 million, subject to certain collateral and other restrictions. The facility’s maturity is March 6, 2020, subject to extension by the lender at the request of TCPC Funding. The facility contains an accordion feature which allows for expansion of the facility to up to $400 million subject to consent from the lender and other customary conditions. The cash and investments of TCPC Funding are included in the collateral for the facility.

Borrowings under the TCPC Funding Facility bear interest at a rate of LIBOR plus 2.25% per annum, or LIBOR plus 2.50% per annum subject to certain funding requirements, plus an administration fee of 0.25% per annum. In addition to amounts due on outstanding debt, the facility accrues commitment fees of 0.50% per annum on the unused portion of the facility, or 0.75% per annum when the unused portion is greater than 33% of the total facility and an administrative fee of 0.25% per annum. The facility may be terminated, and any outstanding amounts thereunder may become due and payable, should TCPC Funding fail to satisfy certain financial or other covenants. As of September 30, 2015, TCPC Funding was in full compliance with such covenants.

Preferred Interests

As of September 30, 2015, the Partnership had fully repurchased and retired all outstanding Preferred Interests. The Preferred Interests were comprised of 6,700 Series A preferred limited partner interests with a liquidation preference of $20,000 per interest. The Preferred Interests accrued dividends at an annual rate equal to 0.85% plus either LIBOR or the interest holder’s cost of funds (subject to a cap of LIBOR plus 20 basis points).

On June 30, 2015, the Partnership repurchased and retired 1,675 of the previously outstanding 6,700 Preferred Interests at a price of $31,825,000. On September 3, 2015, the Partnership repurchased and retired the remaining 5,025 Preferred Interests outstanding at a price of $100,500,000.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

5.	Commitments, Contingencies, Concentration of Credit Risk and Off-Balance Sheet Risk

The Partnership, TCPC Funding and the SBIC conduct business with brokers and dealers that are primarily headquartered in New York and Los Angeles and are members of the major securities exchanges. Banking activities are conducted with a firm headquartered in the San Francisco area.

In the normal course of business, investment activities involve executions, settlement and financing of various transactions resulting in receivables from, and payables to, brokers, dealers and the custodian. These activities may expose the Partnership to risk in the event that such parties are unable to fulfill contractual obligations. Management does not anticipate any material losses from counterparties with whom it conducts business. Consistent with standard business practice, the Partnership, TCPC Funding and the SBIC enter into contracts that contain a variety of indemnifications, and are engaged from time to time in various legal actions. The maximum exposure under these arrangements and activities is unknown. However, management expects the risk of material loss to be remote.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

5.	Commitments, Contingencies, Concentration of Credit Risk and Off-Balance Sheet Risk (continued)

The Consolidated Schedule of Investments includes certain revolving loan facilities and other commitments held by the Partnership with unfunded balances at September 30, 2015 and December 31, 2014 as follows:

		Unfunded Balances
Issuer	Maturity	September 30, 2015		December 31, 2014
ABG Intermediate Holdings 2, LLC	5/27/2022	$	534,571	$	N/A
AP Gaming I, LLC	12/20/2018		12,500,000		7,500,000
Acrisure, LLC	11/19/2022		4,680,367		4,482,352
Alpheus Communications, LLC	5/31/2018		1,072,256		749,919
Anuvia Plant Nutrients Holdings, LLC (VitAG)	2/1/2018		4,300,000		4,300,000
Asset International, Inc.	7/31/2020		1,180,920		3,753,551
Blue Coat Systems, Inc.	5/31/2018		N/A		12,000,000
Cargojet Airways, LTD.	1/31/2023		14,457,306		N/A
Central MN Renewables, LLC	1/16/2016		2,100,000		N/A
Daymark Financial Acceptance, LLC	1/12/2020		20,000,000		N/A
Edmentum, Inc.	6/9/2020		3,368,586		N/A
Enerwise Global Technologies, Inc.	11/30/2017		7,500,000		7,500,000
InMobi, Inc.	9/1/2018		11,854,959		N/A
MediMedia USA, Inc.	5/20/2018		3,642,500		3,875,000
Mesa Air Group, Inc.	7/15/2022		13,575,000		13,575,000
NEXTracker, Inc.	7/1/2016		N/A		15,000,000
Redaptive, Inc.	7/1/2018		15,000,000		N/A
RM OpCo, LLC (Real Mex)	3/30/2018		1,259,355		1,889,033
SoundCloud Limited	10/1/2018		9,014,286		N/A
SunEdison, Inc.	2/28/2017		9,379,246		9,379,246
Vistronix, LLC	12/4/2018		342,597		570,996
Waterfall International, Inc.	9/1/2018		3,200,000		N/A
Total Unfunded Balances		$	138,961,949	$	84,575,096

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

6.	Related Party Transactions

TCPC, the Partnership, TCPC Funding, the SBIC, the Advisor, the General Partner and their members and affiliates may be considered related parties. From time to time, the Partnership advances payments to third parties on behalf of TCPC which are reimbursable through deductions from distributions to TCPC. From time to time, the Advisor advances payments to third parties on behalf of the Partnership and receives reimbursement from the Partnership. At September 30, 2015, amounts reimbursable to the Advisor totaled $380,646, as reflected in the Consolidated Statements of Assets and Liabilities.

Pursuant to an administration agreement between the Administrator the Partnership (the “Administration Agreement”), the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to the Partnership, as well as costs and expenses incurred by the Administrator or its affiliates relating to any administrative, operating, or other non-investment advisory services provided by the Administrator or its affiliates to the Partnership. For the nine months ended September 30, 2015 and 2014, expenses allocated pursuant to the Administration Agreements totaled $1,118,418 and $1,002,418, respectively.

On November 25, 2014, the Partnership obtained an exemptive order (the “Exemptive Order”) from the Securities and Exchange Commission permitting the Partnership to purchase certain investments from affiliated investment companies at fair value. The Exemptive Order exempts the Partnership from provisions of Sections 17(a) and 57(a) of the 1940 Act which would otherwise restrict such transfers. All such purchases are subject to the conditions set forth in the Exemptive Order, which among others include certain procedures to verify that each purchase is done at the current fair value of the respective investment. During the nine months ended September 30, 2015, the Partnership purchased approximately $94.5 million of investments from affiliates (as defined in the 1940 Act), which were classified as Level 2 in the GAAP valuation hierarchy at the time of the transfer and the selling party has no continuing involvement in the transferred assets. All of the transfers were consummated in accordance with the provisions of the Exemptive Order and were accounted for as a purchase in accordance with ASC 860, Transfers and Servicing.

7.	Distributions

The Partnership’s distributions are recorded on the record date. The timing of distributions is determined by the General Partner, which has provided the Advisor with certain criteria for such distributions.

8.	Subsequent Events

On November 3, 2015, the board of directors of the Partnership voted to add an additional independent director, Brian F. Wruble, to the board of directors effective as of November 5, 2015.

On November 5, 2015, TCPC’s board of directors declared a fourth quarter regular dividend of $0.36 per share payable on December 31, 2015 to stockholders of record as of the close of business on December 17, 2015.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

September 30, 2015

9.	Financial Highlights

	Nine Months Ended September 30, 2015

Return on invested assets ^{(1), (2)}		7.5	%

Gross return to common limited partner ⁽¹⁾		9.5	%
Less: General Partner incentive allocation ⁽¹⁾		(1.9	%)
Return to common limited partner ^{(1), (3)}		7.6	%

Ratios to average common equity: ^{(4), (5)}
Net investment income		13.0	%
Expenses		4.0	%
Expenses and General Partner allocation		5.8	%

Ending net assets attributable to common limited partner	$	844,221,411
Portfolio turnover rate ⁽¹⁾		25.3	%
Weighted-average leverage outstanding ⁽⁶⁾	$	400,350,549
Weighted-average interest rate on leverage ⁽⁷⁾		2.2	%

⁽¹⁾	Not annualized.

⁽²⁾	Return on invested assets is a time-weighted, geometrically linked rate of return and excludes cash and cash equivalents.

⁽³⁾	Returns (net of dividends on the preferred equity facility, allocations to General Partner and Partnership expenses, including financing costs and management fees) are calculated on a monthly geometrically linked, time-weighted basis.

⁽⁴⁾	Net investment income and expenses annualized. General Partner allocation not annualized.

⁽⁵⁾	These ratios include interest expense but do not reflect the effect of dividends on the preferred equity facility.

⁽⁶⁾	Includes both debt and preferred leverage.

⁽⁷⁾	Includes dividends on the preferred leverage facility.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Change in Investments in Affiliates ⁽¹⁾ (Unaudited)

Nine Months Ended September 30, 2015

Security	Dividends or Interest ⁽²⁾		Fair Value at December 31, 2014		Acquisitions ⁽³⁾		Dispositions ⁽⁴⁾			Fair Value at September 30, 2015

AGY Holding Corp., Senior Secured Term Loan, 12%, due 9/15/16	$	443,132	$	4,869,577	$	-	$	-		$	4,869,577
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/16		764,610		9,017,764		250,236		-			9,268,000
Anacomp, Inc., Class A Common Stock		-		916,535		665,429		-			1,581,964
Edmentum Ultimate Holdings, LLC, Junior PIK Notes, 10%, due 6/9/20		-		-		11,737,772		(673,951	)		11,063,821
Edmentum Ultimate Holdings, LLC, Senior PIK Notes, 8.5%, due 6/9/20		-		-		2,557,459		-			2,557,459
Edmentum, Inc., Junior Revolving Facility, 5%, due 6/9/20		-		-		2,105,370		(2,105,366	)		3
Edmentum Ultimate Holdings, LLC, Class A Common Units		-		-		680,218		-			680,218
EPMC HoldCo, LLC, Membership Units		-		682,614		-		-			682,614
Essex Ocean II, LLC, Membership Units		-		-		199,430		-			199,430
Globecomm Systems Inc., Senior Secured 1st Lien Term Loan, LIBOR + 7.625%, 1.25% LIBOR Floor, due 12/11/18		996,866		14,656,950		120,478		(263,201	)		14,514,227
KAGY Holding Company, Inc., Series A Preferred Stock		-		121,975		4,243,350					4,365,325
N659UA Aircraft Secured Mortgage, 12%, due 2/28/16		104,586		1,659,003		-		(999,744	)		659,259
N661UA Aircraft Secured Mortgage, 12%, due 5/4/16		117,000		1,899,950		-		(992,327	)		907,623
N913DL Aircraft Secured Mortgage, 8%, due 3/15/17		10,286		209,168		-		(69,556	)		139,612
N918DL Aircraft Secured Mortgage, 8%, due 8/15/18		17,033		320,440		-		(61,508	)		258,932
N954DL Aircraft Secured Mortgage, 8%, due 3/20/19		23,762		437,679		315		(70,535	)		367,458
N955DL Aircraft Secured Mortgage, 8%, due 6/20/19		25,167		460,258		539		(67,833	)		392,963
N956DL Aircraft Secured Mortgage, 8%, due 5/20/19		24,993		457,902		479		(68,984	)		389,397
N957DL Aircraft Secured Mortgage, 8%, due 6/20/19		25,387		464,283		544		(68,425	)		396,402
N959DL Aircraft Secured Mortgage, 8%, due 7/20/19		25,778		470,601		612		(67,874	)		403,338
N960DL Aircraft Secured Mortgage, 8%, due 10/20/19		27,156		493,258		831		(66,777	)		427,312
N961DL Aircraft Secured Mortgage, 8%, due 8/20/19		26,608		484,908		694		(68,460	)		417,143
N976DL Aircraft Secured Mortgage, 8%, due 2/15/18		19,410		314,588		-		(71,456	)		243,132
N913DL Equipment Trust Beneficial Interests		18,399		117,497		67,498		(74,879	)		110,116
N918DL Equipment Trust Beneficial Interests		15,200		135,890		60,946		(67,037	)		129,800
N954DL Equipment Trust Beneficial Interests		15,208		72,604		84,638		(80,813	)		76,429
N955DL Equipment Trust Beneficial Interests		14,331		111,010		77,650		(79,828	)		108,833
N956DL Equipment Trust Beneficial Interests		14,449		106,800		79,184		(80,927	)		105,056
N957DL Equipment Trust Beneficial Interests		14,229		107,682		78,827		(80,593	)		105,915
N959DL Equipment Trust Beneficial Interests		14,013		108,579		78,478		(80,261	)		106,796
N960DL Equipment Trust Beneficial Interests		13,283		107,865		78,555		(80,008	)		106,411
N961DL Equipment Trust Beneficial Interests		13,607		102,826		80,388		(81,410	)		101,805
N976DL Equipment Trust Beneficial Interests		14,916		102,006		75,991		(76,920	)		101,078
RM Holdco, LLC, Equity Participation		-		792		-		(792	)		-
RM Holdco, LLC, Membership Units		-		-		-		-			-
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 7%, due 3/21/16		204,710		3,900,025		13,996		(149,762	)		3,764,259
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B, 8.5%, due 3/30/18		544,806		6,457,325		542,885		(1,893,876	)		5,106,334
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18		177,706		2,567,717		180,623		(9,650	)		2,738,690
RM OpCo, LLC, Convertible 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18		123,274		1,636,314		122,889		(13,934	)		1,745,268
RM OpCo, LLC, Senior Convertible 2nd Lien Term Loan B, 8.5%, due 3/30/18		80,483		631,164		705,314		-			1,336,478
United N659UA-767, LLC (N659UA)		418,257		3,177,822		937,274		(804,361	)		3,310,735
United N661UA-767, LLC (N661UA)		412,105		3,078,923		908,965		(748,785	)		3,239,103
Wasserstein Cosmos Co-Invest, L.P., Limited Partnership Units		-		4,175,000		1,050,000		(1,026,500	)		4,198,500

Notes to Consolidated Schedule of Changes in Investments in Affiliates:

⁽¹⁾	The issuers of the securities listed on this schedule are considered affiliates under the Investment Company Act of 1940 due to the ownership by the Company of 5% or more of the issuers' voting securities.

⁽²⁾	Also includes fee and lease income as applicable.

⁽³⁾	Acquisitions include new purchases, PIK income and net unrealized appreciation.

⁽⁴⁾	Dispositions include decreases in the cost basis from sales, paydowns, mortgage amortizations, aircraft depreciation and net unrealized depreciation.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Changes in Investments in Affiliates ⁽¹⁾ (Unaudited)

Year Ended December 31, 2014

Security	Dividends or Interest ⁽²⁾		Fair Value at January 1, 2014		Acquisitions ⁽³⁾		Dispositions ⁽⁴⁾			Fair Value at December 31, 2014

AGY Holding Corp., Senior Secured Term Loan, 12%, due 9/15/16	$	327,716	$	2,056,927	$	2,812,650	$	-		$	4,869,577
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/16		1,019,480		9,268,000		-		(250,236	)		9,017,764
Anacomp, Inc., Class A Common Stock		-		1,004,422		-		(87,887	)		916,535
EPMC HoldCo, LLC, Membership Units		-		1,562,137		969,968		(1,849,491	)		682,614
ESP Holdings, Inc., Cumulative Preferred 15%		1,968,748		3,947,862		239,170		(4,187,032	)		-
ESP Holdings, Inc., Common Stock		289,315		2,856,346		6,981,836		(9,838,181	)		-
ESP Holdings, Inc., Junior Unsecured Subordinated Promissory Notes, 6% Cash + 10% PIK, due 12/31/19		205,175		7,959,369		-		(7,959,369	)		-
Globecomm Systems Inc., Senior Secured 1st Lien Term Loan, LIBOR + 7.625%, 1.25% LIBOR Floor, due 12/11/18		1,344,702		15,097,500		1,500		(442,050	)		14,656,950
KAGY Holding Company, Inc., Series A Preferred Stock		-		662,134		-		(540,159	)		121,975
N510UA Aircraft Secured Mortgage, 20%, due 10/26/16		52,092		404,605		-		(404,605	)		-
N512UA Aircraft Secured Mortgage, 20%, due 10/26/16		53,275		414,010		-		(414,010	)		-
N536UA Aircraft Secured Mortgage, 16%, due 9/29/14		4,678		114,000		-		(114,000	)		-
N545UA Aircraft Secured Mortgage, 16%, due 8/29/15		25,964		275,405		-		(275,405	)		-
N585UA Aircraft Secured Mortgage, 20%, due 10/25/16		27,571		486,115		-		(486,115	)		-
N659UA Aircraft Secured Mortgage, 12%, due 2/28/16		262,962		2,948,986		-		(1,289,983	)		1,659,003
N661UA Aircraft Secured Mortgage, 12%, due 5/4/16		274,461		3,171,026		-		(1,271,076	)		1,899,950
N510UA Equipment Trust Beneficial Interests		86,342		465,625		285,805		(751,430	)		-
N512UA Equipment Trust Beneficial Interests		85,549		458,277		281,999		(740,276	)		-
N536UA Equipment Trust Beneficial Interests		40,259		656,766		80,397		(737,163	)		-
N545UA Equipment Trust Beneficial Interests		107,483		641,840		163,935		(805,775	)		-
N585UA Equipment Trust Beneficial Interests		31,098		571,706		322,126		(893,832	)		-
N913DL Aircraft Secured Mortgage, 8%, due 3/15/17		19,714		296,820		-		(87,652	)		209,168
N918DL Aircraft Secured Mortgage, 8%, due 8/15/18		28,023		397,290		-		(76,850	)		320,440
N954DL Aircraft Secured Mortgage, 8%, due 3/20/19		37,801		524,620		-		(86,941	)		437,679
N955DL Aircraft Secured Mortgage, 8%, due 6/20/19		39,443		543,320		-		(83,062	)		460,258
N956DL Aircraft Secured Mortgage, 8%, due 5/20/19		39,309		542,640		-		(84,738	)		457,902
N957DL Aircraft Secured Mortgage, 8%, due 6/20/19		39,787		548,250		-		(83,967	)		464,283
N959DL Aircraft Secured Mortgage, 8%, due 7/20/19		40,262		553,520		-		(82,919	)		470,601
N960DL Aircraft Secured Mortgage, 8%, due 10/20/19		42,013		574,430		-		(81,172	)		493,258
N961DL Aircraft Secured Mortgage, 8%, due 8/20/19		41,423		568,310		-		(83,402	)		484,908
N976DL Aircraft Secured Mortgage, 8%, due 2/15/18		28,046		404,600		-		(90,012	)		314,588
N913DL Equipment Trust Beneficial Interests		18,477		125,970		85,559		(94,032	)		117,497
N918DL Equipment Trust Beneficial Interests		14,907		142,970		82,257		(89,336	)		135,890
N954DL Equipment Trust Beneficial Interests		14,119		68,000		112,356		(107,752	)		72,604
N955DL Equipment Trust Beneficial Interests		13,186		113,560		103,886		(106,436	)		111,010
N956DL Equipment Trust Beneficial Interests		13,244		108,800		105,904		(107,904	)		106,800
N957DL Equipment Trust Beneficial Interests		12,996		109,650		105,488		(107,456	)		107,682
N959DL Equipment Trust Beneficial Interests		12,756		110,500		105,095		(107,016	)		108,579
N960DL Equipment Trust Beneficial Interests		11,868		109,650		104,892		(106,676	)		107,865
N961DL Equipment Trust Beneficial Interests		12,161		103,870		107,504		(108,548	)		102,826
N976DL Equipment Trust Beneficial Interests		13,666		103,033		101,533		(102,560	)		102,006
RM Holdco, LLC, Equity Participation		-		-		-		-			-
RM Holdco, LLC, Membership Units		-		-		-		-			-
RM Holdco, LLC, Subordinated Convertible Term Loan, 1.12% PIK, due 3/21/18		58,663		2,197,621		3,026,338		(5,223,959	)		-
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 7%, due 3/21/16		400,651		3,626,947		465,190		(192,112	)		3,900,025
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B, 8.5%, due 3/30/18		1,349,228		6,825,328		1,327,860		(1,695,863	)		6,457,325
RM OpCo, LLC, Senior Secured 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18		444,445		2,150,088		437,146		(19,517	)		2,567,717
RM OpCo, LLC, Convertible 2nd Lien Term Loan Tranche B-1, 8.5%, due 3/30/18		279,505		1,370,199		274,827		(8,712	)		1,636,314
RM OpCo, LLC, Senior Convertible 2nd Lien Term Loan B, 8.5%, due 3/30/18		6,107		-		631,164					631,164
United N659UA-767, LLC (N659UA)		443,575		2,840,323		1,126,014		(788,515	)		3,177,822
United N661UA-767, LLC (N661UA)		436,533		2,852,677		1,092,004		(865,758	)		3,078,923
Wasserstein Cosmos Co-Invest, L.P., Limited Partnership Units		-		5,000,000		-		(825,000	)		4,175,000

Notes to Consolidated Schedule of Changes in Investments in Affiliates:

⁽¹⁾	The issuers of the securities listed on this schedule are considered affiliates under the Investment Company Act of 1940 due to the ownership by the Partnership of 5% or more of the issuers' voting securities.

⁽²⁾	Also includes fee and lease income as applicable.

⁽³⁾	Acquisitions include new purchases, PIK income and net unrealized appreciation.

⁽⁴⁾	Dispositions include decreases in the cost basis from sales, paydowns, mortgage amortizations, aircraft depreciation and net unrealized depreciation.

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Restricted Securities of Unaffiliated Issuers (Unaudited)

September 30, 2015

Investment		Acquisition Date

Avanti Communications Group, PLC, Senior Secured Notes, 10%, due 10/1/19		9/26/13
BlackLine Intermediate, Inc., Warrants to Purchase Common Stock		9/25/13
BPA Laboratories, Inc., Senior Secured Notes, 12.25%, due 4/1/17 (144A)		3/5/12
Caribbean Financial Group, Senior Secured Notes, 11.5%, due 11/15/19		10/19/12
Findly Talent, LLC, Membership Units		1/1/14
Flight Options Holdings I, Inc. (One Sky), Warrants to Purchase Common Stock		12/4/13
Fuse Media, LLC, Warrants to Purchase Common Stock		8/3/12
Fuse, LLC, Senior Secured Notes, 10.375%, due 7/1/19		6/18/14
Green Biologics, Inc., Warrants to Purchase Stock		12/22/14
Hunt Companies, Inc., Senior Secured Notes, 9.625%, due 3/1/21		2/25/14
Integra Telecom, Inc., Common Stock		11/19/09
Integra Telecom, Inc., Warrants		11/19/09
Iracore International, Inc., Senior Secured Notes, 9.5%, due 6/1/18		5/8/13
Magnolia Finance V plc, Asset-Backed Credit Linked Notes, 13.125%, due 8/2/21		8/1/13
Marsico Holdings, LLC Common Interest Units		9/10/12
NEXTracker, Inc., Series B Preferred Stock		Var. 2014 & 2015
NEXTracker, Inc., Series C Preferred Stock		6/12/15
Precision Holdings, LLC, Class C Membership Interests		Var. 2010 & 2011
Rightside Group, Ltd, Warrants		8/6/14
Shop Holding, LLC (Connexity), Class A Units		6/2/11
Shop Holding, LLC (Connexity), Warrants to Purchase Class A Units		6/2/11
Soraa, Inc., Warrants to Purchase Common Stock		8/29/14
SoundCloud, Ltd., Warrants to Purchase Preferred Stock		4/30/2015
STG-Fairway Holdings, LLC (First Advantage), Class A Units		12/30/10
The Telx Group, Inc., Senior Notes, 13.5% PIK, due 7/9/21		4/9/14
Trade Finance Funding I, Ltd., Secured Class B Notes, 10.75%, due 11/13/18		11/13/13
V Telecom Investment S.C.A. (Vivacom), Common Shares		11/9/12
Waterfall International, Inc., Series B Preferred Stock		9/16/2015
Waterfall International, Inc., Warrants to Purchase Stock		9/16/2015

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Special Value Continuation Partners, LP

(A Delaware Limited Partnership)

Consolidated Schedule of Restricted Securities of Unaffiliated Issuers

December 31, 2014

Investment		Acquisition Date

Avanti Communications Group, PLC, Senior Secured Notes, 10%, due 10/1/19		9/26/13
BlackLine Intermediate, Inc., Warrants to Purchase Common Stock		9/25/13
BPA Laboratories, Inc., Senior Secured Notes, 12.25%, due 4/1/17		3/5/12
Caribbean Financial Group, Senior Secured Notes, 11.5%, due 11/15/19		10/19/12
Carolina Beverage Group, LLC, Secured Notes, 10.625%, due 8/1/18		7/26/13
Constellation Enterprises, LLC, Senior Secured 1st Lien Notes, 10.625%, due 2/1/16		1/20/11
Findly Talent, LLC, Membership Units		1/1/14
Flight Options Holdings I, Inc., Warrants to Purchase Common Stock		12/4/13
Green Biologics, Inc., Warrants to purchase Stock		12/22/14
Hunt Companies, Inc., Senior Secured Notes, 9.625%, due 3/1/21		2/25/14
Ichor Systems Holdings, LLC, Membership Units		Var. 2009 & 2010
Integra Telecom, Inc., Common Stock		11/19/09
Integra Telecom, Inc., Warrants		11/19/09
Iracore International, Inc., Senior Secured Notes, 9.5%, due 6/1/18		5/8/13
Magnolia Finance V plc, Asset-Backed Credit Linked Notes, 13.125%, due 8/2/21		8/1/13
Marsico Holdings, LLC Common Interest Units		9/10/12
NEXTracker, Inc., Series B Preferred Stock		12/17/14
NEXTracker, Inc., Warrants to purchase Stock		12/17/14
Precision Holdings, LLC, Class C Membership Interests		Var. 2010 & 2011
Rightside Group, Ltd, Warrants		8/6/14
Shop Holdings, LLC, Convertible Promissory Note, 5%, due 8/5/15		2/5/14
Shop Holding, LLC, Class A Units		6/2/11
Shop Holding, LLC, Warrants to Purchase Class A Units		6/2/11
SiTV, Inc., Senior Secured Notes, 10.375%, due 7/1/19		6/18/14
SiTV, Inc., Warrants to Purchase Common Stock		8/3/12
Soraa, Inc., Warrants to Purchase Common Stock		8/29/14
STG-Fairway Holdings, LLC, Class A Units		12/30/10
The Telx Group, Inc., Senior Notes, 13.5% PIK, due 7/9/21		4/9/14
Trade Finance Funding I, Ltd., Secured Class B Notes, 10.75%, due 11/13/18		11/13/13
V Telecom Investment S.C.A, Common Shares		11/9/12

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Item 2.

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

The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. Some of the statements in this report (including in the following discussion) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or the future performance or financial condition of Special Value Continuation Partners, LP (the “Partnership,” “we,” “us,” or “our”). The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning:

•

our, or our portfolio companies’, future business, operations, operating results or prospects;

•

the return or impact of current and future investments;

•

the impact of a protracted decline in the liquidity of credit markets on our business;

•

the impact of fluctuations in interest rates on our business;

•

the impact of changes in laws or regulations governing our operations or the operations of our portfolio companies;

•

our contractual arrangements and relationships with third parties;

•

the general economy and its impact on the industries in which we invest;

•

the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;

•

our expected financings and investments;

•

the adequacy of our financing resources and working capital;

•

the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;

•

the timing of cash flows, if any, from the operations of our portfolio companies;

•

the timing, form and amount of any dividend distributions; and

•

our ability to maintain our qualification as a regulated investment company and as a business development company.

We use words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “could,” “may,” “plan” and similar words to identify forward-looking statements. The forward looking statements contained in this annual report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” in this report.

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

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Overview

The Partnership is a Delaware limited partnership formed on July 31, 2006 and is an externally managed, closed-end, non-diversified management investment company. On April 2, 2012, we elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Conversion”). The Partnership’s investment objective is to seek to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. The Partnership invests primarily in the debt of middle-market companies and small businesses, including senior secured loans, junior loans, mezzanine debt and bonds, either directly or in one of its wholly-owned subsidiaries, TCPC Funding I, LLC (“TCPC Funding”) and TCPC SBIC, LP (the “SBIC”). Such investments may include an equity component, and, to a lesser extent, the Partnership may make equity investments directly. TCP Capital Corp. (“TCPC”) owns 100% of the common limited partner interests of the Partnership. TCPC has also elected to be treated as a BDC under the 1940 Act. The General Partner of the Partnership is SVOF/MM, LLC (“SVOF/MM”), which also serves as the administrator (“Administrator”) of TCPC and the Partnership. The managing member of SVOF/MM is Tennenbaum Capital Partners, LLC (the “Advisor”), which serves as the investment manager to both TCPC and the Partnership. Most of the equity interests in the General Partner are owned directly or indirectly by the Advisor and its employees. The Partnership has elected to be treated as a partnership for U.S. federal income tax purposes.

The SBIC was organized as a Delaware limited partnership in June 2013. On April 22, 2014, the SBIC received a license from the United States Small Business Administration (the “SBA”) to operate as a small business investment company under the provisions of Section 301(c) of the Small Business Investment Act of 1958.

Our leverage program is comprised of $116 million in available debt under a senior secured revolving credit facility issued by the Partnership (the “Revolving Credit Facility”), a $100.5 million term loan issued by the Partnership (the “Term Loan,” and together with the Revolving Credit Facility, the “Partnership Facility”), $350 million in available debt under a senior secured revolving credit facility issued by TCPC Funding (the “TCPC Funding Facility”), and $75 million in committed leverage from the SBA (the “SBA Program,” and, together with the Partnership Facility, the TCPC Funding Facility, and the SBA Program, the “Leverage Program”).

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity, the general economic environment and the competitive environment for the types of investments we make.

As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies, public U.S. operating companies whose securities are not listed on a national securities exchange or registered under the Securities Exchange Act of 1934, as amended, public domestic operating companies having a market capitalization of less than $250 million, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We are also permitted to make certain follow-on investments in companies that were eligible portfolio companies at the time of initial investment but that no longer meet the definition. As of September 30, 2015, 84.5% of our total assets were invested in qualifying assets.

Revenues

We generate revenues primarily in the form of interest on the debt we hold. We also generate revenue from dividends on our equity interests, capital gains on the disposition of investments, and certain lease, fee, and other income. Our investments in fixed income instruments generally have an expected maturity of three to five years, although we have no lower or upper constraint on maturity. Interest on our debt investments is generally payable quarterly or semi-annually. Payments of principal of our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt investments and preferred stock investments may defer payments of cash interest or dividends or PIK. Any outstanding principal amount of our debt investments and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of prepayment fees, commitment, origination, structuring or due diligence fees, end-of-term or exit fees, fees for providing significant managerial assistance, consulting fees and other investment related income.

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Expenses

Our primary operating expenses include the payment of a base management fee and, depending on our operating results, incentive compensation, expenses reimbursable under the management agreement, administration fees and the allocable portion of overhead under the administration agreement. The base management fee and incentive compensation remunerates the Advisor for work in identifying, evaluating, negotiating, closing and monitoring our investments. Our administration agreement with SVOF/MM, LLC (the “Administrator”) provides that the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to us under the administration agreement, as well as any costs and expenses incurred by the Administrator or its affiliates relating to any non-investment advisory, administrative or operating services provided by the Administrator or its affiliates to us. We also bear all other costs and expenses of our operations and transactions, which may include those relating to:

•

our organization;

•

calculating our net asset value (including the cost and expenses of any independent valuation firms);

•

interest payable on debt, if any, incurred to finance our investments;

•

the base management fee and any incentive compensation;

•

dividends and distributions on our preferred shares, if any;

•

administration fees payable under the administration agreement;

•

fees payable to third parties relating to, or associated with, making investments;

•

transfer agent and custodial fees;

•

registration fees;

•

director fees and expenses;

•

costs of preparing and filing reports or other documents with the SEC;

•

costs of any reports, proxy statements or other notices to our common limited partner, including printing costs;

•

our fidelity bond;

•

directors and officers/errors and omissions liability insurance, and any other insurance premiums;

•

indemnification payments;

•

direct costs and expenses of administration, including audit and legal costs; and

•

all other expenses reasonably incurred by us and the Administrator in connection with administering our business, such as the allocable portion of overhead under the administration agreement, including rent and other allocable portions of the cost of certain of our officers and their respective staffs.

The investment management agreement provides that the base management fee be calculated at an annual rate of 1.5% of our total assets (excluding cash and cash equivalents) payable quarterly in arrears. For purposes of calculating the base management fee, “total assets” is determined without deduction for any borrowings or other liabilities. The base management fee is calculated based on the value of our total assets (excluding cash and cash equivalents) at the end of the most recently completed calendar quarter.

Additionally, the investment management agreement and the Amended and Restated Limited Partnership Agreement provide that the Advisor or its affiliates may be entitled to incentive compensation under certain circumstances. No incentive compensation was incurred prior to January 1, 2013. Beginning January 1, 2013, the incentive compensation equals the sum of (1) 20% of all of the ordinary income of TCPC since January 1, 2013 and (2) 20% of all net realized capital gains (net of any net unrealized capital depreciation) since January 1, 2013, with each component being subject to a total return requirement of 8% of TCPC’s contributed common equity annually. The incentive compensation is payable to the General Partner by the Partnership pursuant to the Amended and Restated Limited Partnership Agreement. The determination of incentive compensation is subject to limitations under the 1940 Act and the Advisers Act.

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Critical accounting policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management 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. Management considers the following critical accounting policies important to understanding the financial statements. In addition to the discussion below, our critical accounting policies are further described in the notes to our financial statements.

Valuation of portfolio investments

We value our portfolio investments at fair value based upon the principles and methods of valuation set forth in policies adopted by our board of directors. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Market participants are buyers and sellers in the principal (or most advantageous) market for the asset that (i) are independent of us, (ii) are knowledgeable, having a reasonable understanding about the asset based on all available information (including information that might be obtained through due diligence efforts that are usual and customary), (iii) are able to transact for the asset, and (iv) are willing to transact for the asset or liability (that is, they are motivated but not forced or otherwise compelled to do so).

Investments for which market quotations are readily available are valued at such market quotations unless the quotations are deemed not to represent fair value. We generally obtain market quotations from recognized exchanges, market quotation systems, independent pricing services or one or more broker-dealers or market makers. However, short term debt investments with remaining maturities within 90 days are generally valued at amortized cost, which approximates fair value. Debt and equity securities for which market quotations are not readily available, which is the case for many of our investments, or for which market quotations are deemed not to represent fair value, are valued at fair value using a consistently applied valuation process in accordance with our documented valuation policy that has been reviewed and approved by our board of directors, who also approve in good faith the valuation of such securities as of the end of each quarter. Due to the inherent uncertainty and subjectivity 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 may differ materially from the values that we may ultimately realize. In addition, changes in the market environment and other events may have differing impacts on the market quotations used to value some of our investments than on the fair values of our investments for which market quotations are not readily available. Market quotations may be deemed not to represent fair value in certain circumstances where we believe that facts and circumstances applicable to an issuer, a seller or purchaser, or the market for a particular security cause current market quotations to not reflect the fair value of the security. Examples of these events could include cases where a security trades infrequently causing a quoted purchase or sale price to become stale, where there is a “forced” sale by a distressed seller, where market quotations vary substantially among market makers, or where there is a wide bid-ask spread or significant increase in the bid-ask spread.

The valuation process approved by our board of directors with respect to investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value is as follows:

•

The investment professionals of the Advisor provide recent portfolio company financial statements and other reporting materials to independent valuation firms approved by our board of directors.

•

Such firms evaluate this information along with relevant observable market data to conduct independent appraisals each quarter, and their preliminary valuation conclusions are documented and discussed with senior management of the Advisor.

•

The fair value of smaller investments comprising in the aggregate less than 5% of our total capitalization may be determined by the Advisor in good faith in accordance with our valuation policy without the employment of an independent valuation firm.

•

The audit committee of the board of directors discusses the valuations, and the board of directors approves the fair value of the investments in our portfolio in good faith based on the input of the Advisor, the respective independent valuation firms (to the extent applicable) and the audit committee of the board of directors.

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Those investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued utilizing a market approach, an income approach, or both approaches, as appropriate. 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 amounts (for example, 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 we may take into account in determining the fair value of our investments include, as relevant and among other factors: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, 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, merger and acquisition comparables, our principal market (as the reporting entity) and enterprise values.

When valuing all of our investments, we strive to maximize the use of observable inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

Our investments may be categorized based on the types of inputs used in their valuation. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Investments are classified by GAAP into the three broad levels as follows:

Level 1 — Investments valued using unadjusted quoted prices in active markets for identical assets.

Level 2 — Investments valued using other unadjusted observable market inputs, e.g. quoted prices in markets that are not active or quotes for comparable instruments.

Level 3 — Investments that are valued using quotes and other observable market data to the extent available, but which also take into consideration one or more unobservable inputs that are significant to the valuation taken as a whole.

As of September 30, 2015, none of our investments were categorized as Level 1, 11.4% were categorized as Level 2, 88.3% were Level 3 investments valued based on valuations by independent third party sources, and 0.3% were Level 3 investments valued based on valuations by the Advisor.

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the financial statements.

Revenue recognition

Interest and dividend income, including income paid in kind, is recorded on an accrual basis to the extent that such amounts are determined to be collectible. Origination, structuring, closing, commitment and other upfront fees earned with respect to capital commitments, as well as any end-of-term or exit fees receivable upon the repayment of a debt investment, are generally amortized or accreted into interest income over the life of the respective investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income received upon the early repayment of a loan or debt security are included in interest income.

Certain of our debt investments may be purchased at a discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. GAAP generally requires that discounts on the acquisition of corporate bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method. GAAP also requires that we consider the collectability of interest when making accruals. Accordingly, when accounting for discounts and other interest accruals, we recognize income when it is probable that such amounts will be collected.

Net realized gains or losses and net change in unrealized appreciation or depreciation

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Realized gains and losses are computed using the specific identification method. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

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Portfolio and investment activity

During the three months ended September 30, 2015, we invested approximately $120.6 million, comprised of new investments in 7 new and 4 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, 98.7% were in senior secured debt, comprised of senior loans ($116.6 million, or 96.7% of total acquisitions) and senior secured notes ($2.5 million, or 2.0% of total acquisitions). The remaining $1.5 million (1.3% of total acquisitions) were equity investments. Additionally, we received approximately $65.3 million in proceeds from sales or repayments of investments during the three months ended September 30, 2015.

During the nine months ended September 30, 2015 we invested approximately $423.3 million, comprised of new investments in 16 new and 22 existing portfolio companies, as well as draws made on existing commitments and PIK received on prior investments. Of these investments, 99.5% were in senior secured debt, comprised of senior loans ($379.2 million, or 89.6% of total acquisitions) and senior secured notes ($41.9 million, or 9.9% of total acquisitions). The remaining $2.3 million (0.5% of total acquisitions) were equity investments. Additionally, we received approximately $305.5 million in proceeds from sales or repayments of investments during the nine months ended September 30, 2015.

At September 30, 2015, our investment portfolio of $1,269.2 million (at fair value) consisted of 91 portfolio companies and was invested 97% in debt investments, of which 100% was in senior secured debt. In aggregate, our investment portfolio was invested 84% in senior secured loans, 13% in senior secured notes, and 3% in equity investments. Our average portfolio company investment at fair value was approximately $13.9 million. Our largest portfolio company investment by value was approximately $44.8 million and our five largest portfolio company investments by value comprised approximately 15.6% of our portfolio at September 30, 2015. At December 31, 2014, our investment portfolio of $1,146.5 million (at fair value) consisted of 84 portfolio companies and was invested 97% in debt investments, of which 100% was in senior secured debt. In aggregate, our investment portfolio was invested 82% in senior secured loans, 15% in senior secured notes, and 3% in equity investments. Our average portfolio company investment at fair value was approximately $13.6 million. Our largest portfolio company investment by value was approximately $41.8 million and our five largest portfolio company investments by value comprised approximately 14% of our portfolio at December 31, 2014.

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The industry composition of our portfolio at fair value at September 30, 2015 was as follows:

Industry	Percent of Total Investments

Software Publishing		13.8	%
Air Transportation		6.4	%
Computer Systems Design and Related Services		5.7	%
Scientific Research and Development Services		4.8	%
Chemicals		4.5	%
Hospitals		4.2	%
Business Support Services		4.1	%
Radio and Television Broadcasting		3.8	%
Nondepository Credit Intermediation		3.3	%
Insurance Carriers		3.1	%
Wireless Telecommunications Carriers		3.1	%
Wired Telecommunications Carriers		2.8	%
Data Processing and Hosting Services		2.6	%
Textile Furnishings Mills		2.6	%
Grocery Stores		2.5	%
Computer Equipment Manufacturing		2.4	%
Management, Scientific, and Technical Consulting Services		2.0	%
Utility System Construction		2.0	%
Advertising and Public Relations Services		1.9	%
Oil and Gas Extraction		1.8	%
Electronic Component Manufacturing		1.7	%
Other Manufacturing		1.7	%
Real Estate Related Activities		1.7	%
Financial Investment Activities		1.6	%
Other Information Services		1.6	%
Retail		1.6	%
Communications Equipment Manufacturing		1.5	%
Lessors of Nonfinancial Licenses		1.5	%
Accounting, Tax and Payroll Services		1.2	%
Restaurants		1.2	%
Electrical Equipment Manufacturing		1.0	%
Other Telecommunications		1.0	%
Other		5.3	%

Total		100.0	%

The weighted average effective yield of the debt securities in our portfolio was 10.9% at September 30, 2015 and December 31, 2014. At September 30, 2015, 78.4% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate, and 21.6% bore interest at fixed rates. The percentage of our floating rate debt investments that bore interest based on an interest rate floor was 77.5% at September 30, 2015. At December 31, 2014, 78.3% of our debt investments bore interest based on floating rates, and 21.7% bore interest at fixed rates. The percentage of our floating rate debt investments that bore interest based on an interest rate floor was 83.1% at December 31, 2014.

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Results of operations

Investment income

Investment income totaled $35.3 million and $27.2 million, respectively, for the three months ended September 30, 2015 and 2014, of which $33.8 million and $26.7 million were attributable to interest on our debt investments, $0.3 million and $0.3 million to lease income, and $1.2 million and $0.2 million to other income, respectively. The increase in investment income in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 reflects an increase in interest income due to the larger investment portfolio in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 and an increase in other income primarily due to amendment fees received during the three months ended September 30, 2015..

Investment income totaled $107.1 million and $74.4 million, respectively, for the nine months ended September 30, 2015 and 2014, of which $102.9 million and $70.3 million were attributable to interest on our debt investments, $0.0 million and $1.9 million to dividends from equity securities, $1.0 million and $1.0 million to lease income and $3.2 million and $1.2 million to other income, respectively. The increase in investment income in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 reflects an increase in interest income due to the larger investment portfolio in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 and an increase in other income primarily due to amendment and structuring fees received during the nine months ended September 30, 2015, partially offset by a decrease in dividend income.

Expenses

Total operating expenses for the three months ended September 30, 2015 and 2014 were $8.8 million and $6.1 million respectively, comprised primarily of $4.7 million and $3.5 million in base management fees, $2.5 million and $1.3 million in interest expense and commitment fees, $0.4 million and $0.4 million in amortization of debt issuance costs, $0.4 million and $0.4 million in administrative expenses, $0.2 million and $0.2 million in legal and other professional fees, and $0.6 million and $0.3 million in other expenses, respectively. The increase in expenses in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 primarily reflects the increase in management fees due to the larger portfolio and the increase in interest expense and other costs related to the increase in available and outstanding debt.

Total operating expenses for the nine months ended September 30, 2015 and 2014 were $25.3 million and $16.0 million, respectively, comprised of $13.7 million and $9.5 million in base management fees, $6.8 million and $2.9 million in interest expense and commitment fees, $1.2 million and $1.0 million in administrative expenses, $1.1 million and $1.2 million in amortization of debt issuance costs, $0.7 million and $0.5 million in legal and professional fees, and $1.8 million and $0.9 million in other expenses, respectively. The increase in expenses in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 primarily reflects the increase in management fees due to the larger portfolio and the increase in interest expense and commitment fees related to the increase in available and outstanding debt.

Net investment income

Net investment income was $26.5 million and $21.1 million respectively, for the three months ended September 30, 2015 and 2014. The increase in in net investment income in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 primarily reflects the increased interest and other income in the three months ended September 30, 2015, partially offset by the increase in expenses.

Net investment income was $81.8 million and $58.5 million, respectively, for the nine months ended September 30, 2015 and 2014. The increase in in net investment income in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 primarily reflects the increased interest and other income in the nine months ended September 30, 2015, partially offset by the increase in expenses.

Net realized and unrealized gain or loss

Net realized gains for the three months ended September 30, 2015 and 2014 were $5.7 million and $0.9 million, respectively. The net realized gain during the three months ended September 30, 2015 was primarily comprised of a $5.9 million gain on the disposition of most of our investment in NEXTracker, Inc.

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For the three months ended September 30, 2015 and 2014, the change in net unrealized appreciation/depreciation was $(7.6) million and $(5.4) million, respectively. The change in net unrealized appreciation/depreciation for the three months ended September 30, 2015 was primarily comprised of a $4.0 million unrealized gain on our investment in KAGY Holding Company, Inc., a $3.6 million reversal of prior period unrealized appreciation on our investment in NEXTracker, Inc., $2.4 million in unrealized depreciation on our loan to CORE Entertainment, Inc., and other mark-to-market adjustments primarily due to increases in market yields and spreads. The change in net unrealized depreciation for the three months ended September 30, 2014 was primarily a result of increases in market yield spreads and a markdown on an investment made prior to our initial public offering as part of our legacy distressed strategy which has yielded significant income for many years.

Net realized losses for the nine months ended September 30, 2015 and 2014 were $3.7 million and $4.9 million, respectively. The net realized loss during the nine months ended September 30, 2015 was due primarily to the restructure of our loan to Edmentum, in which we received debt and equity in a delevered company, partially offset by the $5.9 million gain on the partial disposition of our NEXTracker investment. Net realized loss during the nine months ended September 30, 2014 was due primarily to the disposition of our investment in ESP Holdings, Inc., an investment made prior to our initial public offering as part of our legacy distressed strategy which generated substantial cash interest income. For the nine months ended September 30, 2015 and 2014, the change in net unrealized appreciation was $0.0 million and $2.6 million, respectively. The change in net unrealized appreciation for the nine months ended September 30, 2015 and 2014 was primarily due to reversals of prior period net unrealized depreciation and other mark to market adjustments as a result of market yield spreads during the period.

Gain on repurchase of Series A preferred interests

Gain on repurchase of Series A preferred interests was entirely comprised entirely of a $1.7 million gain on the repurchase of 1,675 Preferred Interests on June 30, 2015 at a price of $31.8 million.

Dividends to preferred limited partners

Dividends on the Preferred Interests for the three months ended September 30, 2015 and 2014 were $0.1 million and $0.4 million, respectively. The decrease in dividends on Preferred Interests during the three months ended September 30, 2015 was due to the full repurchase of the Preferred Interests on September 3, 2015. Dividends on the Preferred Interests for the nine months ended September 30, 2015 and 2014 were $0.8 million and $1.1 million, respectively. The decrease in dividends on Preferred Interests during the nine months ended September 30, 2015 was due to the full repurchase of the Preferred Interests on September 3, 2015.

Net increase in net assets allocable to common limited and general partners resulting from operations

The net increase in net assets resulting from operations was $24.6 million and $16.3 million for the three months ended September 30, 2015 and 2014, respectively. The higher net increase in net assets resulting from operations during the three months ended September 30, 2015 is primarily due to the increase in net investment income and the decrease in net realized and unrealized losses. The net increase in net assets resulting from operations was $79.0 million and $55.1 million for the nine months ended September 30, 2015 and 2014, respectively. The higher net increase in net assets resulting from operations during the nine months ended September 30, 2015 is primarily due to the increase in net investment income.

Liquidity and capital resources

Since our inception, our liquidity and capital resources have been generated primarily through contributions from the common limited partner of the Partnership (which came from the initial private placement of common shares of Special Value Continuation Fund, LLC (TCPC’s predecessor entity) which were subsequently converted to common stock of TCPC), the net proceeds from the initial and secondary public offerings of TCPC, amounts outstanding under our Leverage Program, and cash flows from operations, including investments sales and repayments and income earned from investments and cash equivalents. The primary uses of cash have been investments in portfolio companies, cash distributions to our equity holders, payments to service our Leverage Program and other general corporate purposes.

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Amounts outstanding and available under the combined Leverage Program at September 30, 2015 were as follows:

Total leverage outstanding and available at September 30, 2015 was as follows:

	Maturity	Rate			Carrying Value ^†		Available		Total Capacity
Partnership Facility
Revolving Credit Facility	2018		L+1.75	% ^*	$	109,000,000	$	7,000,000	$	116,000,000
Term Loan	2018		L+1.75	% ^*		100,500,000		-		100,500,000
TCPC Funding Facility	2020		L+2.50	% ^*§		221,000,000		129,000,000		350,000,000
SBA Debentures	2024-2025		2.84	% ^**		38,800,000		36,200,000		75,000,000	^‡
Total leverage					$	469,300,000	$	172,200,000	$	641,500,000

^*	Based on either LIBOR or the lender’s cost of funds, subject to certain limitations

^†	All carrying values are the same as the principal amounts outstanding

^§	Or L+2.25% subject to certain funding requirements

^**	Weighted-average interest rate, excluding fees of 0.36%

^‡	Anticipated total capacity of $150 million

On September 3, 2015, we fully repurchased and retired the remaining 5,025 Preferred Interests outstanding at a price of $100.5 million and expanded the Partnership Facility with a $100.5 million fully-drawn term loan and extended the maturity date to July 31, 2018.

On March 6, 2015, we expanded the TCPC Funding Facility by $50 million to $300 million, increased the accordion feature by $50 million to $350 million and extended the maturity date to March 6, 2019. On August 5, 2015, we expanded the TCPC Funding Facility by $50 million to $350 million and increased the accordion feature by $50 million to $400 million. On September 1, 2015, we extended the maturity date of the TCPC Funding Facility to March 6, 2020.

On July 13, 2015, we obtained exemptive relief from the SEC to permit us to exclude the debt of TCPC SBIC LP guaranteed by the SBA from our 200% asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 200% asset coverage test by permitting the SBIC to borrow up to $150 million more than it would otherwise be able to absent the receipt of this exemptive relief.

Net cash used in operating activities during the nine months ended September 30, 2015 was $33.6 million. Our primary use of cash in operating activities during this period consisted of the settlement of acquisitions of investments (net of dispositions) of $113.0 million, partially offset by net investment income less preferred dividends and incentive allocation (net of non-cash income and expenses) of approximately $79.4 million.

Net cash provided by financing activities was $40.9 million during the nine months ended September 30, 2015, consisting primarily of $246.3 million of net borrowings and $3.7 million of contributions from the common limited partner, reduced by the $132.3 million repurchase of the Preferred Interests, $57.6 million in distributions to TCPC, $14.2 million in distributions of incentive compensation to the General Partner, payment of $3.8 million in debt issuance costs and $1.2 million in dividends on the Preferred Interests.

At September 30, 2015, we had $34.6 million in cash and cash equivalents.

The Partnership Facility and the TCPC Funding Facility are secured by substantially all of the assets in our portfolio, including cash and cash equivalents, and are subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum shareholders’ equity, the maintenance of a ratio of not less than 200% of total assets (less total liabilities other than indebtedness) to the sum of total preferred equity and indebtedness (excluding indebtedness of TCPC SBIC LP), and restrictions on certain payments and the issuance of debt. Unfavorable economic conditions may result in a decrease in the value of our investments, which would affect both the asset coverage ratios and the value of the collateral securing the Partnership Facility and the TCPC Funding Facility, and may therefore impact our ability to borrow under the Partnership Facility and the TCPC Funding Facility. In addition to regulatory restrictions that restrict our ability to raise capital, the Leverage Program contains various covenants which, if not complied with, could accelerate repayment of debt, thereby materially and adversely affecting our liquidity, financial condition and results of operations. At September 30, 2015, we were in compliance with all financial and operational covenants required by the Leverage Program.

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Unfavorable economic conditions, while potentially creating attractive opportunities for us, may decrease liquidity and raise the cost of capital generally, which could limit our ability to renew, extend or replace the Leverage Program on terms as favorable as are currently included therein. If we are unable to renew, extend or replace the Leverage Program upon the various dates of maturity, we expect to have sufficient funds to repay the outstanding balances in full from our net investment income and sales of, and repayments of principal from, our portfolio company investments, as well as from anticipated debt and equity capital raises, among other sources. Unfavorable economic conditions may limit our ability to raise capital or the ability of the companies in which we invest to repay our loans or engage in a liquidity event, such as a sale, recapitalization or initial public offering. The Partnership Facility and the TCPC Funding Facility mature in July 2018 and March 2020, respectively. Any inability to renew, extend or replace the Leverage Program could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.

Challenges in the market are intensified for us by certain regulatory limitations under the Code and the 1940 Act. To maintain our qualification as a RIC, we must satisfy, among other requirements, an annual distribution requirement to pay out at least 90% of our ordinary income and short-term capital gains to our stockholders. Because we are required to distribute our income in this manner, and because the illiquidity of many of our investments may make it difficult for us to finance new investments through the sale of current investments, our ability to make new investments is highly dependent upon external financing. While we anticipate being able to continue to satisfy all covenants and repay the outstanding balances under the Leverage Program when due, there can be no assurance that we will be able to do so, which could lead to an event of default.

Contractual obligations

In addition to obligations under our Leverage Program, we have entered into several contracts under which we have future commitments. Pursuant to an investment management agreement, the Advisor manages our day-to-day operations and provides investment advisory services to us. Payments under the investment management agreement are equal to a percentage of the value of our gross assets (excluding cash and cash equivalents) and an incentive compensation, plus reimbursement of certain expenses incurred by the Advisor. Under our administration agreement, the Administrator provides us with administrative services, facilities and personnel. Payments under the administration agreement are equal to an allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations to us, and may include rent and our allocable portion of the cost of certain of our officers and their respective staffs. We are responsible for reimbursing the Advisor for due diligence and negotiation expenses, fees and expenses of custodians, administrators, transfer and distribution agents, counsel and directors, insurance, filings and registrations, proxy expenses, expenses of communications to investors, compliance expenses, interest, taxes, portfolio transaction expenses, costs of responding to regulatory inquiries and reporting to regulatory authorities, costs and expenses of preparing and maintaining our books and records, indemnification, litigation and other extraordinary expenses and such other expenses as are approved by the directors as being reasonably related to our organization, offering, capitalization, operation or administration and any portfolio investments, as applicable. The Advisor is not responsible for any of the foregoing expenses and such services are not investment advisory services under the 1940 Act. Either party may terminate each of the investment management agreement and administration agreement without penalty upon not less than 60 days’ written notice to the other.

Distributions

Distribution to the common limited partner

Our quarterly distributions to our common limited partner are recorded on the ex-dividend date. Distributions are declared considering our estimate of taxable income available for distribution and the amount of taxable income carried over from the prior year for distribution in the current year. We do not have a policy to pay distributions at a specific level and expect to continue to distribute substantially all of our taxable income. We cannot assure the common limited partner that it will receive any distributions or distributions at a particular level.

The following table summarizes our distributions to our common limited partner for the nine months ended September 30, 2015 and September 30, 2014:

Date Declared	Total Amount
March 10, 2015	$	17,605,485
May 7, 2015		21,506,970
August 6, 2015		18,486,722
Total for nine months ended September 30, 2015	$	57,599,177

March 6, 2014	$	13,785,196
May 7, 2014		15,522,656
August 7, 2014		16,649,620
Total for nine months ended September 30, 2014	$	45,957,472

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Distributions to the General Partner

TCPC’s performance during the nine months ended September 30, 2015 and 2014 exceeded the cumulative total return threshold; accordingly, incentive compensation of $14.7 million and $10.9 million for the nine months ended September 30, 2015 and September 30, 2014 respectively was distributable to the General Partner. We allocated a reserve amount of $0.5 million to the account of the General Partner at September 30, 2014, based on the amount of the additional incentive compensation which would have been distributable to the General Partner had TCPC and the Partnership liquidated at net asset value at September 30, 2014. No reserve was allocable at September 30, 2015.

Related Parties

We have entered into a number of business relationships with affiliated or related parties, including the following:

•

Each of the Partnership, TCPC, TCPC Funding, and the SBIC has entered into an investment management agreement with the Advisor.

•

The Administrator provides us with administrative services necessary to conduct our day-to-day operations. For providing these services, facilities and personnel, the Administrator may be reimbursed by us for expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our officers and the Administrator’s administrative staff and providing, at our request and on our behalf, significant managerial assistance to our portfolio companies to which we are required to provide such assistance.

•

Pursuant to its limited partnership agreement, the general partner of the Partnership is SVOF/MM, LLC. SVOF/MM, LLC is an affiliate of the Advisor and the general partner or managing member of certain other funds managed by the Advisor.

The Advisor and its affiliates, employees and associates currently do and in the future may manage other funds and accounts. The Advisor and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds or accounts. Accordingly, conflicts may arise regarding the allocation of investments or opportunities among us and those accounts. In general, the Advisor will allocate investment opportunities pro rata among us and the other funds and accounts (assuming the investment satisfies the objectives of each) based on the amount of committed capital each then has available. The allocation of certain investment opportunities in private placements is subject to independent director approval pursuant to the terms of the co-investment exemptive order applicable to us. In certain cases, investment opportunities may be made other than on a pro rata basis. For example, we may desire to retain an asset at the same time that one or more other funds or accounts desire to sell it or we may not have additional capital to invest at a time the other funds or accounts do. If the Advisor is unable to manage our investments effectively, we may be unable to achieve our investment objective. In addition, the Advisor may face conflicts in allocating investment opportunities between us and certain other entities that could impact our investment returns. While our ability to enter into transactions with our affiliates is restricted under the 1940 Act, we have received an exemptive order from the SEC permitting certain affiliated investments subject to certain conditions. As a result, we may face conflict of interests and investments made pursuant to the exemptive order conditions which could in certain circumstances affect adversely the price paid or received by us or the availability or size of the position purchased or sold by us.

Recent Developments

From October 1, 2015 through November 4, 2015, the Partnership invested approximately $15.0 million primarily in three senior secured loans with a combined effective yield of approximately 10.9% and a small yield generating equity position.

On November 3, 2015, the board of directors of the Partnership voted to add an additional independent director, Brian F. Wruble, to the board of directors effective as of November 5, 2015.

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Item 3:

Quantitative and qualitative disclosure about market risk

We are subject to financial market risks, including changes in interest rates. At September 30, 2015, 78.4% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to six months. At September 30, 2015, the percentage of our floating rate debt investments that bore interest based on an interest rate floor was 77.5%. Floating rate investments subject to a floor generally reset by reference to the current market index after one to six months only if the index exceeds the floor.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. We assess our portfolio companies periodically to determine whether such companies will be able to continue making interest payments in the event that interest rates increase. There can be no assurances that the portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.

Based on our September 30, 2015 balance sheet, the following table shows the annual impact on net income (excluding the related incentive compensation impact) of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure:

Basis Point Change	Interest income			Interest Expense			Net Income
Up 300 basis points	$	27,462,610		$	(12,915,000	)	$	14,547,610
Up 200 basis points		16,654,872			(8,610,000	)		8,044,872
Up 100 basis points		6,014,444			(4,305,000	)		1,709,444
Down 100 basis points		(1,052,095	)		1,425,386			373,290
Down 200 basis points		(1,052,095	)		1,425,386			373,290
Down 300 basis points		(1,052,095	)		1,425,386			373,290

Item 4.

Controls and Procedures

As of the period covered by this report, we, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on our evaluation, our management, including the chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective in timely alerting management, including the chief executive officer and chief financial officer, of material information about us required to be included in our periodic SEC filings. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, are based upon certain assumptions about the likelihood of future events and can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - Other Information

Item 1.

Legal Proceedings

Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, as of September 30, 2015, we are currently not a party to any pending material legal proceedings.

Item 1A.

Risk Factors

There have been no material changes from the risk factors previously disclosed in our most recent annual report on Form 10-K, as filed with the Securities and Exchange Commission on March 10, 2015.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4:

Mine Safety Disclosures.

None.

Item 5:

Other Information.

None.

Item 6:

Exhibits

Number		Description
3.1		Articles of Incorporation of the Registrant (1)
3.2		Bylaws of the Registrant (2)
31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*
31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*
32.1		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U. S. C. 1350)*

* Filed herewith.

⁽¹⁾	Incorporated by reference to Exhibit (a)(2) to the Registrant's Registration Statement under the Securities Act of 1933 (File No. 333-172669), on Form N-2, filed on May 13, 2011

⁽²⁾	Incorporated by reference to Exhibit (b)(2) to the Registrant's Registration Statement under the Securities Act of 1933 (File No. 333-172669), on Form N-2, filed on May 13, 2011

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

SPECIAL VALUE CONTINUATION PARTNERS, LP

Date: November 5, 2015
	By:	/s/ Howard M. Levkowitz
	Name:	Howard M. Levkowitz
	Title:	Chief Executive Officer

Date: November 5, 2015
	By:	/s/ Paul L. Davis
	Name:	Paul L. Davis
	Title:	Chief Financial Officer

Special Value Continuation Partners, LP - FORM 10-Q - November 5, 2015

Attached files

Special Value Continuation Partners, LP Reports