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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

 

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

 

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

COMMISSION FILE NUMBER: 814-00757

 

 

FS Investment Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   26-1630040
(State of Incorporation)  

(I.R.S. Employer

Identification Number)

201 Rouse Boulevard
Philadelphia, Pennsylvania
  19112
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (215) 495-1150

 

 

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 (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨.

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

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

 

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

There were 242,847,016 shares of the registrant’s common stock outstanding as of November 6, 2015.

 

 

 


Table of Contents

TABLE OF CONTENTS

 

          Page  

PART I—FINANCIAL INFORMATION

  

ITEM 1.

  

FINANCIAL STATEMENTS

     1   
  

Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014

     1   
  

Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014

     2   
  

Unaudited Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2015 and 2014

     3   
  

Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014

     4   
  

Consolidated Schedules of Investments as of September 30, 2015 (Unaudited) and December 31, 2014

     5   
  

Notes to Unaudited Consolidated Financial Statements

     23   

ITEM 2.

  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     58   

ITEM 3.

  

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     85   

ITEM 4.

  

CONTROLS AND PROCEDURES

     86   

PART II—OTHER INFORMATION

  

ITEM 1.

  

LEGAL PROCEEDINGS

     87   

ITEM 1A.

  

RISK FACTORS

     87   

ITEM 2.

  

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     87   

ITEM 3.

  

DEFAULTS UPON SENIOR SECURITIES

     87   

ITEM 4.

  

MINE SAFETY DISCLOSURES

     87   

ITEM 5.

  

OTHER INFORMATION

     87   

ITEM 6.

  

EXHIBITS

     88   
  

SIGNATURES

     92   


Table of Contents

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements.

FS Investment Corporation

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

 

 

    September 30, 2015     December 31,  
    (Unaudited)     2014  

Assets

   

Investments, at fair value—unaffiliated (amortized cost—$4,059,093 and $4,164,166, respectively)

  $ 3,975,021      $ 4,168,654   

Investments, at fair value—affiliated (amortized cost—$91,581 and $17,931, respectively)

    125,058        14,793   

Cash

    85,609        95,205   

Foreign currency, at fair value (cost—$325 and $1,661, respectively)

    326        1,639   

Receivable for investments sold and repaid

    24,221        8,976   

Interest receivable

    50,419        51,814   

Deferred financing costs

    3,281        13,097   

Prepaid expenses and other assets

    969        708   
 

 

 

   

 

 

 

Total assets

  $ 4,264,904      $ 4,354,886   
 

 

 

   

 

 

 

Liabilities

   

Payable for investments purchased

  $ —        $ 28,095   

Credit facilities payable

    31,812        188,827   

Unsecured notes payable

    989,159        725,000   

Repurchase agreement payable(1)

    800,000        950,000   

Stockholder distributions payable

    53,965        17,885   

Management fees payable

    18,845        19,560   

Accrued capital gains incentive fees(2)

    2,657        21,075   

Subordinated income incentive fees payable(2)

    12,490        13,089   

Administrative services expense payable

    401        1,410   

Interest payable

    18,417        15,850   

Directors’ fees payable

    219        296   

Deferred financing costs payable

    —          473   

Other accrued expenses and liabilities

    980        6,340   
 

 

 

   

 

 

 

Total liabilities

    1,928,945        1,987,900   
 

 

 

   

 

 

 

Commitments and contingencies(3)

    —          —     

Stockholders’ equity

   

Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding

    —          —     

Common stock, $0.001 par value, 450,000,000 shares authorized, 242,274,372 and 240,896,559 shares issued and outstanding, respectively

    242        241   

Capital in excess of par value

    2,272,178        2,258,548   

Accumulated undistributed net realized gain/loss on investments and gain/loss on foreign currency(4)

    (43,105     33,758   

Accumulated undistributed (distributions in excess of) net investment income(4)

    150,183        68,658   

Net unrealized appreciation (depreciation) on investments and unrealized gain/loss on foreign currency

    (43,539     5,781   
 

 

 

   

 

 

 

Total stockholders’ equity

    2,335,959        2,366,986   
 

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 4,264,904      $ 4,354,886   
 

 

 

   

 

 

 

Net asset value per share of common stock at period end

  $ 9.64      $ 9.83   

  

 

(1) See Note 8 for a discussion of the Company’s repurchase transaction.

 

(2) See Note 2 and Note 4 for a discussion of the methodology employed by the Company in calculating the capital gains incentive fees and subordinated income incentive fees.

 

(3) See Note 9 for a discussion of the Company’s commitments and contingencies.

 

(4) See Note 5 for a discussion of the sources of distributions paid by the Company.

See notes to unaudited consolidated financial statements.

 

1


Table of Contents

FS Investment Corporation

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share amounts)

 

 

 

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

Investment income

        

Interest income—unaffiliated

   $ 99,468      $ 104,823      $ 319,180      $ 311,630   

Interest income—affiliated

     910        —          1,628        —     

Fee income—unaffiliated

     3,290        10,606        33,707        39,141   

Dividend income—unaffiliated

     —          488        5,519        663   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

     103,668        115,917        360,034        351,434   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

Management fees(1)

     18,852        20,000        56,993        65,066   

Capital gains incentive fees(2)

     (13,811     (910     (18,418     6,194   

Subordinated income incentive fees(2)

     12,485        14,794        47,661        45,033   

Administrative services expenses

     900        1,202        2,773        3,591   

Stock transfer agent fees

     30        4        140        1,001   

Accounting and administrative fees

     261        172        822        824   

Interest expense

     19,352        18,940        55,699        45,769   

Directors’ fees

     232        266        688        795   

Listing advisory fees

     —          —          —          5,043   

Other general and administrative expenses

     1,601        1,346        4,737        7,002   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     39,902        55,814        151,095        180,318   

Management fee waiver(1)

     —          —          —          (2,837
  

 

 

   

 

 

   

 

 

   

 

 

 

Net expenses

     39,902        55,814        151,095        177,481   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     63,766        60,103        208,939        173,953   
  

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain/loss

        

Net realized gain (loss) on investments—unaffiliated

     (21,246     5,421        (42,135     25,959   

Net realized gain (loss) on foreign currency

     266        (338     (631     (243

Net change in unrealized appreciation (depreciation) on investments—unaffiliated

     (74,848     (8,901     (88,560     6,140   

Net change in unrealized appreciation (depreciation) on investments—affiliated

     27,220        (747     36,615        (1,046

Net change in unrealized gain (loss) on foreign currency

     (437     61        2,625        207   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net realized and unrealized gain (loss) on investments

     (69,045     (4,504     (92,086     31,017   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

   $ (5,279   $ 55,599      $ 116,853      $ 204,970   
  

 

 

   

 

 

   

 

 

   

 

 

 

Per share information—basic and diluted

        

Net increase (decrease) in net assets resulting from operations (Earnings per Share)

   $ (0.02   $ 0.23      $ 0.48      $ 0.81   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding

     242,227,762        239,548,922        241,659,230        251,603,035   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) See Note 4 for a discussion of the waiver by FB Income Advisor, LLC, the Company’s investment adviser, of certain management fees to which it was otherwise entitled during the nine months ended September 30, 2014.

 

(2) See Note 2 and Note 4 for a discussion of the methodology employed by the Company in calculating the capital gains incentive fees and subordinated income incentive fees.

See notes to unaudited consolidated financial statements.

 

2


Table of Contents

FS Investment Corporation

Unaudited Consolidated Statements of Changes in Net Assets

(in thousands)

 

 

 

     Nine Months Ended  
     September 30,  
     2015     2014  

Operations

    

Net investment income (loss)

   $ 208,939      $ 173,953   

Net realized gain (loss) on investments and foreign currency

     (42,766     25,716   

Net change in unrealized appreciation (depreciation) on investments

     (51,945     5,094   

Net change in unrealized gain (loss) on foreign currency

     2,625        207   
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

     116,853        204,970   
  

 

 

   

 

 

 

Stockholder distributions(1)

    

Distributions from net investment income

     (127,414     (118,620

Distributions from net realized gain on investments

     (34,097     (71,629
  

 

 

   

 

 

 

Net decrease in net assets resulting from stockholder distributions

     (161,511     (190,249
  

 

 

   

 

 

 

Capital share transactions(2)

    

Reinvestment of stockholder distributions

     13,631        48,974   

Repurchases of common stock

     —          (258,903
  

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from capital share transactions

     13,631        (209,929
  

 

 

   

 

 

 

Total increase (decrease) in net assets

     (31,027     (195,208

Net assets at beginning of period

     2,366,986        2,640,992   
  

 

 

   

 

 

 

Net assets at end of period

   $ 2,335,959      $ 2,445,784   
  

 

 

   

 

 

 

Accumulated undistributed (distributions in excess of) net investment income(1)

   $ 150,183      $ 90,655   
  

 

 

   

 

 

 

 

(1) See Note 5 for a discussion of the sources of distributions paid by the Company.

 

(2) See Note 3 for a discussion of the Company’s capital share transactions.

See notes to unaudited consolidated financial statements.

 

3


Table of Contents

FS Investment Corporation

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

 

     Nine Months Ended  
     September 30,  
     2015     2014  

Cash flows from operating activities

    

Net increase (decrease) in net assets resulting from operations

   $ 116,853      $ 204,970   

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

    

Purchases of investments

     (1,084,274     (1,641,221

Paid-in-kind interest

     (15,236     (10,376

Proceeds from sales and repayments of investments

     1,114,231        1,523,890   

Net realized (gain) loss on investments

     42,135        (25,959

Net change in unrealized (appreciation) depreciation on investments

     51,945        (5,094

Accretion of discount

     (25,433     (20,183

Amortization of deferred financing costs and discount

     2,788        4,464   

Unrealized (gain)/loss on borrowings in foreign currency

     (2,804     —     

(Increase) decrease in receivable for investments sold and repaid

     (15,245     17,220   

(Increase) decrease in interest receivable

     1,395        (5,028

(Increase) decrease in prepaid expenses and other assets

     (261     (877

Increase (decrease) in payable for investments purchased

     (28,095     82,002   

Increase (decrease) in management fees payable

     (715     (2,691

Increase (decrease) in accrued capital gains incentive fees

     (18,418     4,604   

Increase (decrease) in subordinated income incentive fees payable

     (599     491   

Increase (decrease) in administrative services expense payable

     (1,009     (165

Increase (decrease) in interest payable

     2,567        2,238   

Increase (decrease) in directors’ fees payable

     (77     38   

Increase (decrease) in other accrued expenses and liabilities

     (5,360     (4,991
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     134,388        123,332   
  

 

 

   

 

 

 

Cash flows from financing activities

    

Reinvestment of stockholder distributions

     13,631        48,974   

Repurchases of common stock

     —          (258,903

Stockholder distributions

     (125,431     (191,101

Borrowings under credit facilities(1)

     114,200        288,686   

Borrowings under unsecured notes(1)

     275,000        400,000   

Repayments of credit facilities(1)

     (268,411     (448,074

Repayments under repurchase agreement(2)

     (150,000     —     

Deferred financing costs paid

     (4,286     (10,258
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (145,297     (170,676
  

 

 

   

 

 

 

Total increase (decrease) in cash

     (10,909     (47,344

Cash and foreign currency at beginning of period

     96,844        227,328   
  

 

 

   

 

 

 

Cash and foreign currency at end of period

   $ 85,935      $ 179,984   
  

 

 

   

 

 

 

Supplemental disclosure

    

Local and excise taxes paid

   $ 5,638      $ 5,407   
  

 

 

   

 

 

 

 

(1) See Note 8 for a discussion of the Company’s credit facilities and unsecured notes. During the nine months ended September 30, 2015 and 2014, the Company paid $27,851 and $15,653, respectively, in interest expense on the credit facilities and unsecured notes.

 

(2) See Note 8 for a discussion of the Company’s repurchase transaction. During the nine months ended September 30, 2015 and 2014, the Company paid $22,493 and $23,414, respectively, in interest expense pursuant to the repurchase agreement.

See notes to unaudited consolidated financial statements.

 

4


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Senior Secured Loans—First Lien—83.0%

               

A.P. Plasman Inc.

  (e)(f)(g)(h)   Capital Goods   L+775   1.0%   12/29/19   $ 171,584      $ 171,584      $ 172,871   

Allen Systems Group, Inc.

  (e)(g)(p)   Software & Services   L+789, 1.2% PIK
(1.2% Max PIK)
  1.0%   4/30/20     37,826        37,826        38,204   

Altus Power America, Inc.

  (g)   Energy   L+750   1.5%   10/10/21     1,474        1,474        1,489   

Altus Power America, Inc.

  (g)(m)   Energy   L+750   1.5%   10/10/21     1,651        1,651        1,667   

American Racing and Entertainment, LLC

  (e)   Consumer Services   L+800   1.0%   7/1/18     5,750        5,750        5,793   

AP Exhaust Acquisition, LLC

  (f)(g)   Automobiles & Components   L+775   1.5%   1/16/21     15,811        15,811        15,811   

Aspect Software, Inc.

  (g)   Software & Services   L+550   1.8%   5/7/16     1,161        1,153        1,138   

Atlas Aerospace LLC

  (g)   Capital Goods   L+807   1.0%   5/8/19     20,000        20,000        19,900   

Atlas Aerospace LLC

  (g)(m)   Capital Goods   L+750   1.0%   5/8/19     7,619        7,619        7,581   

BenefitMall Holdings, Inc.

  (g)   Commercial & Professional Services   L+725   1.0%   11/24/20     14,888        14,888        14,888   

BenefitMall Holdings, Inc.

  (g)(m)   Commercial & Professional Services   L+725   1.0%   11/24/20     5,455        5,455        5,455   

Blue Coat Holdings, Inc.

  (g)(m)   Technology Hardware & Equipment   L+350   1.0%   5/20/20     2,136        2,136        2,103   

Blueprint Sub, Inc.

  (e)   Software & Services   L+750   1.0%   5/7/21     26,954        26,954        26,954   

Blueprint Sub, Inc.

  (g)(m)   Software & Services   L+750   1.0%   5/7/21     3,509        3,509        3,509   

Blueprint Sub, Inc.

  (g)(m)   Software & Services   L+450   1.0%   5/7/21     1,404        1,404        1,404   

Cadence Aerospace Finance, Inc.

  (g)   Capital Goods   L+525   1.3%   5/9/18     76        76        75   

Caesars Entertainment Operating Co., Inc.

  (e)(g)(h)(j)   Consumer Services   L+575     3/1/17     12,621        12,141        11,192   

Caesars Entertainment Operating Co., Inc.

  (e)(h)(j)   Consumer Services   L+675     3/1/17     2,363        2,298        2,117   

Caesars Entertainment Operating Co., Inc.

  (e)(f)(g)(h)(j)   Consumer Services   L+875   1.0%   3/1/17     84,594        84,135        72,689   

Caesars Entertainment Resort Properties, LLC

  (e)(g)   Consumer Services   L+600   1.0%   10/11/20     22,125        21,086        20,726   

Corel Corp.

  (e)(f)(g)(h)   Software & Services   L+825     6/7/19     135,933        135,933        137,462   

Corel Corp.

  (g)(h)(m)   Software & Services   Prime+725     6/7/18     10,000        10,000        10,000   

Corner Investment PropCo, LLC

  (e)(g)   Consumer Services   L+975   1.3%   11/2/19     43,062        43,208        42,416   

CoSentry.Net, LLC

  (e)(g)   Software & Services   L+800   1.3%   12/31/19     62,490        62,490        62,881   

Crestwood Holdings LLC

  (g)   Energy   L+600   1.0%   6/19/19     5,235        5,219        4,685   

Eastman Kodak Co.

  (g)   Consumer Durables & Apparel   L+625   1.0%   9/3/19     10,664        10,512        10,261   

Flanders Corp.

  (e)(g)   Capital Goods   L+950   1.5%   5/14/18     34,493        34,032        35,355   

Fronton Holdings, LLC

  (e)   Consumer Services   15.0%     4/30/19     3,736        3,706        3,736   

Greystone Bridge Manager LLC

  (g)(h)   Diversified Financials   L+1050     5/1/20     2,101        2,101        2,080   

Greystone Bridge Manager LLC

  (g)(h)(m)   Diversified Financials   L+1050     5/1/20     1,855        1,855        1,837   

Gruden Acquisition, Inc.

  (g)   Transportation   L+475   1.0%   8/18/22     3,545        3,510        3,504   

 

See notes to unaudited consolidated financial statements.

 

5


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

H.M. Dunn Co., Inc.

  (g)   Capital Goods   L+809   1.0%   3/26/21   $ 1,000      $ 1,000      $ 1,000   

H.M. Dunn Co., Inc.

  (g)(m)   Capital Goods   L+725   1.0%   3/26/21     357        357        357   

Imagine Communications Corp.

  (e)(f)(g)   Media   L+825   1.0%   4/29/20     105,782        105,782        105,782   

Imagine Communications Corp.

  (g)(m)   Media   L+825   1.0%   4/29/20     30,000        30,000        30,000   

Industrial Group Intermediate Holdings, LLC

  (g)   Materials   L+800   1.3%   5/31/20     13,572        13,572        13,572   

Industry City TI Lessor, L.P.

  (g)   Consumer Services   5.0%, 5.3% PIK

(5.3% Max PIK)

    6/30/26     25,466        25,466        27,121   

JSS Holdings, Inc.

  (g)   Capital Goods   L+650   1.0%   8/31/21     2,000        1,861        1,970   

JW Aluminum Co.

  (g)   Materials   L+750   1.0%   5/15/17     1,160        1,160        1,160   

Latham Pool Products, Inc.

  (e)   Commercial & Professional Services   L+775   1.0%   6/29/21     70,000        70,000        69,300   

Leading Edge Aviation Services, Inc.

  (e)(f)(g)   Capital Goods   L+875   1.5%   6/30/19     32,415        32,167        31,929   

LEAS Acquisition Co Ltd.

  (g)(h)   Capital Goods   L+875   1.5%   6/30/19   28,125        38,505        30,922   

LEAS Acquisition Co Ltd.

  (f)(h)   Capital Goods   L+875   1.5%   6/30/19   $ 10,219        10,219        10,065   

MB Precision Holdings LLC

  (g)   Capital Goods   L+725   1.3%   1/23/20     12,889        12,889        12,760   

Micronics, Inc.

  (e)(g)   Capital Goods   L+800   1.3%   12/11/19     64,272        63,986        64,272   

Micronics, Inc.

  (g)(m)   Capital Goods   L+800   1.3%   12/11/19     13,500        13,500        13,500   

MMM Holdings, Inc.

  (g)   Health Care Equipment & Services   L+825   1.5%   12/12/17     8,414        8,331        6,408   

MSO of Puerto Rico, Inc.

  (g)   Health Care Equipment & Services   L+825   1.5%   12/12/17     6,117        6,056        4,658   

New Star Metals Inc.

  (e)(g)   Capital Goods   L+800   1.3%   3/20/20     36,275        36,275        35,912   

Nobel Learning Communities, Inc.

  (g)   Consumer Services   L+845   1.0%   4/27/21     1,056        1,056        1,052   

Nobel Learning Communities, Inc.

  (g)(m)   Consumer Services   L+450   1.0%   4/27/20     140        140        140   

Nova Wildcat Amerock, LLC

  (g)   Consumer Durables & Apparel   L+316, 5.4% PIK
(5.4% Max PIK)
  1.3%   9/10/19     18,580        18,580        16,536   

PHRC License, LLC

  (f)(g)   Consumer Services   L+900   1.5%   8/14/20     44,689        44,689        44,689   

Polymer Additives, Inc.

  (g)   Materials   L+838   1.0%   12/20/21     10,511        10,511        10,643   

Reddy Ice Corp.

  (g)   Food, Beverage & Tobacco   L+550   1.3%   5/1/19     1,161        1,153        968   

Roadrunner Intermediate Acquisition Co., LLC

  (e)(f)(g)   Health Care Equipment & Services   L+800   1.0%   9/22/21     37,000        37,000        37,000   

Rogue Wave Software, Inc.

  (e)(f)(g)   Software & Services   L+857   1.0%   9/25/21     31,313        31,313        31,313   

Safariland, LLC

  (e)(g)   Capital Goods   L+800   1.3%   9/20/19     172,976        172,976        177,300   

Shell Topco L.P.

  (g)   Materials   L+750   1.5%   9/28/18     30,000        29,750        30,150   

Smile Brands Group Inc.

  (g)   Health Care Equipment & Services   L+625   1.3%   8/16/19     20,090        19,777        14,121   

Sorenson Communications, Inc.

  (e)(g)   Telecommunication Services   L+575   2.3%   4/30/20     92,795        92,426        93,259   

Southcross Holdings Borrower LP

  (g)   Energy   L+500   1.0%   8/4/21     313        312        238   

 

See notes to unaudited consolidated financial statements.

 

6


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity     Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Spencer Gifts LLC

  (g)   Retailing   L+425   1.0%     7/16/21      $ 998      $ 993      $ 985   

Sports Authority, Inc.

  (g)   Retailing   L+600   1.5%     11/16/17        6,318        6,321        4,848   

Stallion Oilfield Holdings, Inc.

  (g)   Energy   L+675   1.3%     6/19/18        4,773        4,745        3,476   

SunGard Availability Services Capital, Inc.

  (g)   Software & Services   L+500   1.0%     3/29/19        4,424        4,159        3,777   

Sunnova Asset Portfolio 5 Holdings, LLC

  (g)   Energy   12.0% PIK
(12.0% Max PIK)
      11/14/21        6,814        6,814        6,814   

Sunnova Asset Portfolio 5 Holdings, LLC

  (g)(m)   Energy   12.0% PIK
(12.0% Max PIK)
      11/14/21        517        517        517   

Swiss Watch International, Inc.

  (e)(g)   Consumer Durables & Apparel   L+725   1.3%     11/8/18        41,375        40,890        35,169   

Transplace Texas, LP

  (e)(f)   Transportation   L+747   1.0%     9/16/21        20,000        20,000        20,000   

U.S. Xpress Enterprises, Inc.

  (e)(f)   Transportation   L+1000, 0.0% PIK
(1.5% Max PIK)
  1.5%     5/30/19        68,082        68,082        68,422   

Vertellus Performance Chemicals LLC

  (f)(g)   Materials   L+950   1.0%     1/30/20        38,000        38,000        37,210   

VPG Group Holdings LLC

  (e)(g)   Materials   L+900   1.0%     10/4/18        73,945        73,695        73,483   

Warren Resources, Inc.

  (f)(g)   Energy   L+850   1.0%     5/22/20        3,157        3,157        2,904   

Warren Resources, Inc.

  (g)(m)   Energy   L+850   1.0%     5/22/20        431        431        397   

Waste Pro USA, Inc.

  (e)(f)(g)   Commercial & Professional Services   L+750   1.0%     10/15/20        86,237        86,237        87,531   

Waste Pro USA, Inc.

  (g)(m)   Commercial & Professional Services   L+750   1.0%     10/15/20        9,444        9,444        9,586   

Weight Watchers International, Inc.

  (g)(h)   Consumer Services   L+300       4/2/16        5,786        5,268        5,257   

Zeta Interactive Holdings Corp.

  (g)   Software & Services   L+750   1.0%     7/9/21        8,000        8,000        7,985   

Zeta Interactive Holdings Corp.

  (g)(m)   Software & Services   L+750   1.0%     7/9/21        4,571        4,571        4,563   
             

 

 

   

 

 

 

Total Senior Secured Loans—First Lien

                2,061,649        2,030,804   

Unfunded Loan Commitments

                (92,589     (92,589
             

 

 

   

 

 

 

Net Senior Secured Loans—First Lien

                1,969,060        1,938,215   
             

 

 

   

 

 

 

Senior Secured Loans—Second Lien—37.8%

             

AdvancePierre Foods, Inc.

  (e)(f)(g)   Food, Beverage & Tobacco   L+825   1.3%     10/10/17        17,556        17,418        17,578   

Affordable Care, Inc.

  (e)(f)(g)   Health Care Equipment & Services   L+925   1.3%     12/26/19        34,314        34,018        33,971   

Alison US LLC

  (g)(h)   Capital Goods   L+850   1.0%     8/29/22        4,444        4,282        3,837   

American Racing and Entertainment, LLC

  (f)   Consumer Services   12.0%       7/1/18        5,800        5,679        5,844   

AP Exhaust Acquisition, LLC

  (f)   Automobiles & Components   12.0%       9/28/21        3,243        3,243        3,243   

Arena Energy, LP

  (g)   Energy   L+900   1.0%     1/24/21        5,000        5,000        4,816   

 

See notes to unaudited consolidated financial statements.

 

7


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Ascent Resources - Utica, LLC

  (e)(f)(g)   Energy   L+950, 2.0% PIK
(2.0% Max PIK)
  1.5%   9/30/18   $ 182,161      $ 181,334      $ 172,142   

Brock Holdings III, Inc.

  (g)   Energy   L+825   1.8%   3/16/18     6,923        6,869        6,490   

Byrider Finance, LLC

  (f)(g)   Automobiles & Components   L+1000   1.3%   8/22/20     10,000        10,000        9,800   

Compuware Corp.

  (g)   Software & Services   L+825   1.0%   12/15/22     6,550        5,871        5,928   

DEI Sales, Inc.

  (e)(f)   Consumer Durables & Apparel   L+900   1.5%   1/15/18     57,500        57,084        54,266   

EagleView Technology Corp.

  (g)   Software & Services   L+825   1.0%   7/14/23     11,538        11,368        11,135   

Eastman Kodak Co.

  (e)(f)   Consumer Durables & Apparel   L+950   1.3%   9/3/20     50,000        49,023        48,375   

FullBeauty Brands, Inc.

  (e)(f)(g)   Consumer Durables & Apparel   L+800   1.3%   9/17/21     165,000        165,000        165,000   

Gruden Acquisition, Inc.

  (g)   Transportation   L+850   1.0%   8/18/23     15,000        14,259        14,325   

National Surgical Hospitals, Inc.

  (e)   Health Care Equipment & Services   L+900   1.0%   6/1/23     30,000        30,000        29,489   

Nielsen & Bainbridge, LLC

  (g)   Consumer Durables & Apparel   L+925   1.0%   8/15/21     16,675        16,443        16,425   

Paw Luxco II Sarl

  (f)(h)   Consumer Durables & Apparel   EURIBOR+950     1/29/19   16,364        20,448        13,950   

PSAV Acquisition Corp.

  (e)(g)   Technology Hardware & Equipment   L+825   1.0%   1/24/22   $ 80,000        78,979        80,000   

Sequential Brands Group, Inc.

  (e)(h)   Consumer Durables & Apparel   L+900   1.0%   4/8/21     60,124        60,124        60,124   

Spencer Gifts LLC

  (e)(g)   Retailing   L+825   1.0%   6/29/22     60,000        59,712        59,100   

Stadium Management Corp.

  (e)   Consumer Services   L+825   1.0%   2/27/21     57,500        57,500        57,788   

Stardust Finance Holdings, Inc.

  (g)(h)   Materials   L+950   1.0%   3/13/23     9,875        9,834        9,814   
             

 

 

   

 

 

 

Total Senior Secured Loans—Second Lien

                903,488        883,440   
             

 

 

   

 

 

 

Senior Secured Bonds—14.1%

             

Advanced Lighting Technologies, Inc.

  (f)(g)   Materials   10.5%     6/1/19     78,500        77,314        49,455   

Aspect Software, Inc.

  (f)(g)   Software & Services   10.6%     5/15/17     8,500        8,412        7,480   

Avaya Inc.

  (e)(f)(g)   Technology Hardware & Equipment   10.5%     3/1/21     49,800        45,435        23,033   

Caesars Entertainment Resort Properties, LLC

  (e)(g)   Consumer Services   11.0%     10/1/21     29,248        28,992        26,725   

FourPoint Energy, LLC

  (e)(f)   Energy   8.0%     12/31/20     92,531        89,646        81,428   

FourPoint Energy, LLC

  (f)(m)   Energy   8.0%     12/31/20     5,906        5,877        5,198   

Global A&T Electronics Ltd.

  (g)(h)   Semiconductors & Semiconductor Equipment   10.0%     2/1/19     7,000        6,932        5,635   

JW Aluminum Co.

  (e)(f)(g)   Materials   11.5%, 1.0% PIK
(1.0% Max PIK)
    11/15/17     70,462        70,193        65,617   

Lightstream Resources Ltd.

  (f)(h)   Energy   9.9%     6/15/19     2,112        2,112        1,811   

Logan’s Roadhouse, Inc.

  (f)(g)   Consumer Services   10.8%     10/15/17     56,294        48,926        39,089   

 

See notes to unaudited consolidated financial statements.

 

8


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

SandRidge Energy, Inc.

  (g)   Energy   8.8%     6/1/20   $ 19,500      $ 19,455      $ 11,919   

Sorenson Communications, Inc.

  (f)   Telecommunication Services   9.0%     10/31/20     19,898        19,223        19,202   
             

 

 

   

 

 

 

Total Senior Secured Bonds

                422,517        336,592   

Unfunded Bond Commitments

                (5,877     (5,877
             

 

 

   

 

 

 

Net Senior Secured Bonds

                416,640        330,715   
             

 

 

   

 

 

 

Subordinated Debt—19.0%

             

Alta Mesa Holdings, LP

  (g)   Energy   9.6%     10/15/18     11,165        11,099        5,923   

Aurora Diagnostics, LLC

  (e)(f)   Health Care Equipment & Services   10.8%     1/15/18     18,065        18,089        14,271   

Bellatrix Exploration Ltd.

  (g)(h)   Energy   8.5%     5/15/20     5,000        4,906        3,881   

Brooklyn Basketball Holdings, LLC

  (f)(g)   Consumer Services   L+725     10/25/19     19,873        19,873        19,773   

CEC Entertainment, Inc.

  (f)   Consumer Services   8.0%     2/15/22     5,000        5,012        4,950   

Ceridian Corp.

  (f)(g)   Commercial & Professional Services   11.0%     3/15/21     10,800        11,377        9,896   

EV Energy Partners, L.P.

  (f)(h)   Energy   8.0%     4/15/19     265        236        184   

Flanders Corp.

  (e)(f)   Capital Goods   13.8% PIK
(13.8% Max PIK)
    5/14/18     24,785        24,680        23,236   

Flanders Corp.

  (f)(g)   Capital Goods   17.5% PIK
(17.5% Max PIK)
    5/14/18     24,636        23,320        25,437   

Frontier Communications Corp.

  (g)(h)   Telecommunication Services   11.0%     9/15/25     5,250        5,250        5,083   

Global Jet Capital Inc.

  (g)   Commercial & Professional Services   15.0%, 0.0% PIK
(15.0% Max PIK)
    1/30/25     620        620        620   

Global Jet Capital Inc.

  (g)   Commercial & Professional Services   15.0%, 0.0% PIK
(15.0% Max PIK)
    4/30/25     4,826        4,826        4,826   

Global Jet Capital Inc.

  (g)   Commercial & Professional Services   15.0%, 0.0% PIK
(15.0% Max PIK)
    9/3/25     875        875        875   

Global Jet Capital Inc.

  (g)   Commercial & Professional Services   15.0%, 0.0% PIK
(15.0% Max PIK)
    9/29/25     999        999        999   

Imagine Communications Corp.

  (g)   Media   12.5% PIK
(12.5% Max PIK)
    8/4/18     501        501        501   

Jupiter Resources Inc.

  (f)(g)(h)   Energy   8.5%     10/1/22     6,425        5,377        3,831   

KODA Distribution Group, Inc.

  (e)   Materials   11.3%     9/30/19     49,500        48,714        49,809   

Mood Media Corp.

  (f)(g)(h)   Media   9.3%     10/15/20     43,135        42,225        31,165   

Navistar International Corp.

  (f)(h)   Capital Goods   8.3%     11/1/21     8,345        8,158        6,676   

 

See notes to unaudited consolidated financial statements.

 

9


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

NewStar Financial, Inc.

  (g)(h)   Diversified Financials   8.3%, 0.0% PIK
(8.8% Max PIK)
    12/4/24   $ 62,500      $ 48,052      $ 46,875   

P.F. Chang’s China Bistro, Inc.

  (f)(g)   Consumer Services   10.3%     6/30/20     11,433        11,829        11,462   

PriSo Acquisition Corp.

  (g)   Capital Goods   9.0%     5/15/23     6,000        5,941        5,910   

Sequel Industrial Products Holdings, LLC

  (f)   Commercial & Professional Services   12.0%, 2.5% PIK
(2.5% Max PIK)
    9/30/19     7,000        6,922        7,175   

Sorenson Communications, Inc.

  (f)   Telecommunication Services   13.0%     10/31/21     15,122        14,173        15,727   

SunGard Availability Services Capital, Inc.

  (f)(g)   Software & Services   8.8%     4/1/22     10,750        8,020        6,880   

ThermaSys Corp.

  (e)(f)   Capital Goods   9.0%, 1.8% PIK
(5.0% Max PIK)
    5/3/20     135,072        135,072        132,033   

VPG Group Holdings LLC

  (e)   Materials   11.0%, 2.0% PIK
(2.0% Max PIK)
    7/15/19     5,221        5,221        5,044   
             

 

 

   

 

 

 

Total Subordinated Debt

                471,367        443,042   
             

 

 

   

 

 

 

Collateralized Securities—4.4%

             

ACASC 2013-2A Class Subord. B

  (f)(g)(h)   Diversified Financials   9.8%     10/25/25     30,500        22,393        21,211   

Dryden CDO 23A Class Subord.

  (g)(h)   Diversified Financials   22.5%     7/17/23     10,000        4,913        5,849   

JPMorgan Chase Bank, N.A. Credit-Linked Notes

  (f)(h)   Diversified Financials   14.0%     12/20/21     16,740        16,705        16,531   

NewStar Clarendon 2014-1A Class D

  (g)(h)   Diversified Financials   L+435     1/25/27     1,560        1,461        1,454   

NewStar Clarendon 2014-1A Class Subord. B

  (g)(h)   Diversified Financials   13.4%     1/25/27     17,900        16,948        16,219   

Rampart CLO 2007 1A Class Subord.

  (g)(h)   Diversified Financials   30.4%     10/25/21     10,000        2,609        4,276   

Stone Tower CLO VI Class Subord.

  (f)(h)   Diversified Financials   36.2%     4/17/21     5,000        1,878        3,151   

Wind River CLO Ltd. 2012 1A Class Subord. B

  (g)(h)   Diversified Financials   14.7%     1/15/24     42,504        31,171        34,370   
             

 

 

   

 

 

 

Total Collateralized Securities

                98,078        103,061   
             

 

 

   

 

 

 

 

See notes to unaudited consolidated financial statements.

 

10


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

   Number of
Shares
     Amortized
Cost
     Fair
Value(d)
 

Equity/Other—17.2%(i)

                  

Allen Systems Group, Inc., Common Equity

  (g)(j)(p)   Software & Services            1,689,767       $ 36,422       $ 68,774   

Altus Power America Holdings, LLC, Preferred Equity

  (g)(j)   Energy            491,425         491         885   

Amaya Inc., Warrants, 5/15/2024

  (g)(h)(j)   Consumer Services            2,000,000         16,832         24,560   

AP Exhaust Holdings, LLC, Common Equity

  (g)(j)(l)   Automobiles & Components            811         811         584   

Aquilex Corp., Common Equity, Class A Shares

  (e)   Commercial & Professional Services            15,128         1,088         4,050   

Aquilex Corp., Common Equity, Class B Shares

  (e)(f)   Commercial & Professional Services            32,637         1,690         8,737   

Ascent Resources Utica Holdings, LLC, Common Equity

  (g)(j)(k)   Energy            10,192,939         9,700         6,625   

Burleigh Point, Ltd., Warrants, 7/16/2020

  (g)(h)(j)   Retailing            17,256,081         1,898         3,624   

CoSentry.Net, LLC, Preferred Equity

  (f)(j)   Software & Services            2,632         2,500         4,424   

Eastman Kodak Co., Common Equity

  (e)(g)(j)   Consumer Durables & Apparel            61,859         1,202         966   

Flanders Corp., Common Equity

  (f)(j)   Capital Goods            6,829,973         7,183         8,196   

FourPoint Energy, LLC, Common Equity, Class C Units

  (g)(j)(l)   Energy            21,000         21,000         25,515   

FourPoint Energy, LLC, Common Equity, Class D Units

  (g)(j)(l)   Energy            3,937         2,601         4,823   

Fronton Investor Holdings, LLC, Class B Units

  (g)(j)(l)(p)   Consumer Services            14,943         17,333         18,080   

Global Jet Capital Holdings, LP, Preferred Equity

  (g)(j)   Commercial & Professional Services            3,137,062         3,137         3,137   

Imagine Communications Corp., Common Equity, Class A Units

  (g)(j)   Media            33,034         3,783         4,562   

Industrial Group Intermediate Holdings, LLC, Common Equity

  (g)(j)(l)   Materials            347,107         347         538   

JW Aluminum Co., Common Equity

  (f)(j)   Materials            37,500         3,225         —     

Leading Edge Aviation Services, Inc., Common Equity

  (f)(j)   Capital Goods            4,401         464         22   

Leading Edge Aviation Services, Inc., Preferred Equity

  (f)(j)   Capital Goods            1,303         1,303         1,303   

MB Precision Investment Holdings LLC, Class A-2 Units

  (f)(j)   Capital Goods            490,213         490         319   

Micronics, Inc., Common Equity

  (g)(j)   Capital Goods            53,073         553         791   

Micronics, Inc., Preferred Equity

  (g)(j)   Capital Goods            55         553         689   

Milagro Holdings, LLC, Common Equity

  (f)(j)   Energy            12,057         50         —     

Milagro Holdings, LLC, Preferred Equity

  (g)(j)   Energy            283,947         11,181         —     

New Star Metals Inc., Common Equity

  (g)   Capital Goods            741,082         750         815   

NewStar Financial, Inc., Warrants, 11/4/2024

  (g)(h)(j)(n)   Diversified Financials            3,000,000         15,058         14,640   

Plains Offshore Operations Inc., Preferred Equity

  (e)(f)   Energy            52,666         64,732         71,417   

Plains Offshore Operations Inc., Warrants, 11/18/2019

  (e)(f)(j)   Energy            1,067,481         1,722         —     

PSAV Holdings LLC, Common Equity

  (f)   Technology Hardware & Equipment            10,000         10,000         26,500   

Safariland, LLC, Common Equity

  (f)(j)   Capital Goods            25,000         2,500         15,458   

Safariland, LLC, Preferred Equity

  (f)   Capital Goods            2,042         23,409         24,695   

Safariland, LLC, Warrants, 7/27/2018

  (f)(j)   Capital Goods            2,263         246         1,399   

 

See notes to unaudited consolidated financial statements.

 

11


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

   Number of
Shares
     Amortized
Cost
     Fair
Value(d)
 

Safariland, LLC, Warrants, 9/20/2019

  (f)(j)   Capital Goods            2,273       $ 227       $ 1,406   

Sequel Industrial Products Holdings, LLC, Common Equity

  (f)(g)(j)   Commercial & Professional Services            33,306         3,400         8,307   

Sequel Industrial Products Holdings, LLC, Preferred Equity

  (f)(g)   Commercial & Professional Services            8,000         10,823         10,831   

Sequel Industrial Products Holdings, LLC, Warrants, 9/28/2022

  (g)(j)   Commercial & Professional Services            1,293         1         166   

Sequel Industrial Products Holdings, LLC, Warrants, 5/10/2022

  (f)(j)   Commercial & Professional Services            19,388         12         2,897   

Sequential Brands Group, Inc., Common Equity

  (g)(h)(j)   Consumer Durables & Apparel            206,664         2,790         2,598   

Sorenson Communications, Inc., Common Equity

  (f)(j)   Telecommunication Services            46,163                 25,381   

ThermaSys Corp., Common Equity

  (f)(j)   Capital Goods            51,813         1           

ThermaSys Corp., Preferred Equity

  (f)(j)   Capital Goods            51,813         5,181         2,435   

VPG Group Holdings LLC, Class A-2 Units

  (f)(j)   Materials            3,637,500         3,638         2,183   

Zeta Interactive Holdings Corp., Preferred Equity

  (g)(j)   Software & Services            215,662         1,714         1,714   
               

 

 

    

 

 

 

Total Equity/Other

                  292,041         404,046   
               

 

 

    

Unfunded Contingent Warrant Commitment

  (o)                    (2,440
                  

 

 

 

Net Equity/Other

                     401,606   
               

 

 

    

 

 

 

TOTAL INVESTMENTS—175.5%

                $ 4,150,674         4,100,079   
               

 

 

    

LIABILITIES IN EXCESS OF OTHER ASSETS—(75.5%)

                     (1,764,120
                  

 

 

 

NET ASSETS—100%

                   $ 2,335,959   
                  

 

 

 

 

(a) Security may be an obligation of one or more entities affiliated with the named company.

 

(b) Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. As of September 30, 2015, the three-month London Interbank Offered Rate, or LIBOR, was 0.33%, the Euro Interbank Offered Rate, or EURIBOR, was (0.04)% and the U.S. Prime Lending Rate, or Prime, was 3.25%.

 

(c) Denominated in U.S. dollars unless otherwise noted.

 

(d) Fair value determined by the Company’s board of directors (see Note 7).

 

(e) Security or portion thereof held within Locust Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the Class A Notes issued to Race Street Funding LLC pursuant to an indenture with Citibank, N.A., as trustee (see Note 8).

 

(f) Security or portion thereof held within Race Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the repurchase agreement with JPMorgan Chase Bank, N.A., London Branch (see Note 8).

 

(g) Security or portion thereof is pledged as collateral supporting the amounts outstanding under the revolving credit facility with ING Capital LLC (see Note 8).

 

See notes to unaudited consolidated financial statements.

 

12


Table of Contents

FS Investment Corporation

Unaudited Consolidated Schedule of Investments (continued)

As of September 30, 2015

(in thousands, except share amounts)

 

 

 

(h) The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of September 30, 2015, 81.2% of the Company’s total assets represented qualifying assets.

 

(i) Listed investments may be treated as debt for GAAP or tax purposes.

 

(j) Security is non-income producing.

 

(k) Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company.

 

(l) Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company.

 

(m) Security is an unfunded commitment.

 

(n) Includes 500,000 NewStar Financial, Inc., or NewStar, warrants, which is the maximum number of warrants that the Company will forfeit in the event that the Company declines to fund additional subordinated debt investments in NewStar in an amount not to exceed $12,500, upon the request of NewStar.

 

(o) Represents the maximum number of NewStar warrants that the Company will forfeit in the event the Company declines to fund additional subordinated debt investments in NewStar in an amount not to exceed $12,500, upon the request of NewStar.

 

(p) Under the 1940 Act, the Company generally is deemed to be an “affiliated person” of a portfolio company if it owns 5% or more of the portfolio company’s voting securities and generally is deemed to “control” a portfolio company if it owns 25% or more of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of September 30, 2015, the Company held investments in two portfolio companies of which it is deemed to be an “affiliated person” but would not be deemed to “control”. The following table presents certain financial information with respect to such portfolio companies for the nine months ended September 30, 2015:

 

Portfolio Company

   Purchases      Sales and
Repayments
     Interest Income      Dividend Income      Net Realized Gain (Loss)      Net Change in Unrealized
Appreciation (Depreciation)
 

Senior Secured Loans—First Lien

        

Allen Systems Group, Inc.

   $ 37,634         —         $ 1,628         —           —         $ 378   

Equity/Other

        

Allen Systems Group, Inc., Common Equity

   $ 36,422         —           —           —           —         $ 32,352   

Fronton Investor Holdings, LLC, Class B Units

     —           —           —           —           —         $ 3,885   

 

See notes to unaudited consolidated financial statements.

 

13


Table of Contents

FS Investment Corporation

Consolidated Schedule of Investments

As of December 31, 2014

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Senior Secured Loans—First Lien—93.2%

               

A.P. Plasman Inc.

  (f)(g)(h)(i)(k)   Capital Goods   L+775   1.0%   12/29/19   $ 137,875      $ 137,875      $ 137,875   

A.P. Plasman Inc.

  (i)(k)(p)   Capital Goods   L+775   1.0%   12/29/19     36,919        36,919        36,919   

AccentCare, Inc.

  (i)   Health Care Equipment & Services   L+500   1.5%   12/22/16     1,954        1,855        1,712   

Allen Systems Group, Inc.

  (f)(i)   Software & Services   L+1,425   1.0%   12/14/17     1,539        1,718        1,897   

Allen Systems Group, Inc.

  (f)(i)   Software & Services   L+1,625   1.0%   12/14/17     36,832        41,114        45,410   

Altus Power America, Inc.

  (i)   Energy   L+750   1.5%   10/10/21     762        762        762   

Altus Power America, Inc.

  (i)(p)   Energy   L+750   1.5%   10/10/21     2,363        2,363        2,363   

American Racing and Entertainment, LLC

  (f)   Consumer Services   L+700     7/1/15     12,500        12,500        12,484   

American Racing and Entertainment, LLC

  (f)   Consumer Services   9.0%     7/1/15     7,750        7,750        7,769   

American Racing and Entertainment, LLC

  (f)   Consumer Services   L+800   1.0%   7/1/18     5,495        5,495        5,516   

American Racing and Entertainment, LLC

  (f)(p)   Consumer Services   L+800   1.0%   7/1/18     1,005        1,005        1,009   

AP Exhaust Acquisition, LLC

  (h)   Automobiles & Components   L+775   1.5%   1/16/21     14,595        14,595        14,157   

Aspect Software, Inc.

  (i)   Software & Services   L+550   1.8%   5/7/16     1,172        1,158        1,149   

Azure Midstream Energy LLC

  (i)   Energy   L+550   1.0%   11/15/18     327        323        294   

BenefitMall Holdings, Inc.

  (h)   Commercial & Professional Services   L+725   1.0%   11/24/20     15,000        15,000        15,000   

BenefitMall Holdings, Inc.

  (i)(p)   Commercial & Professional Services   L+725   1.0%   11/24/20     5,455        5,455        5,455   

Boomerang Tube, LLC

  (i)   Energy   L+950   1.5%   10/11/17     17,864        17,521        15,497   

Cadillac Jack, Inc.

  (f)(h)(i)(k)   Consumer Services   L+850   1.0%   5/15/19     74,450        73,320        76,590   

Caesars Entertainment Operating Co., Inc.

  (e)(f)(k)   Consumer Services   L+575     3/1/17     12,621        11,822        11,073   

Caesars Entertainment Operating Co., Inc.

  (f)(k)   Consumer Services   L+675     3/1/17     2,363        2,266        2,077   

Caesars Entertainment Operating Co., Inc.

  (e)(f)(g)(i)(k)   Consumer Services   L+875   1.0%   1/28/18     84,594        84,032        73,738   

Caesars Entertainment Resort Properties, LLC

  (e)(f)(i)   Consumer Services   L+600   1.0%   10/11/20     72,178        68,410        67,727   

Corel Corp.

  (f)(g)(h)(i)(k)   Software & Services   L+825     6/7/19     151,063        151,063        151,063   

Corel Corp.

  (i)(k)(p)   Software & Services   Prime+725     6/7/18     10,000        10,000        10,000   

Corner Investment PropCo, LLC

  (f)(i)   Consumer Services   L+975   1.3%   11/2/19     44,723        44,878        44,500   

CoSentry.Net, LLC

  (f)(h)(i)   Software & Services   L+800   1.3%   12/31/19     57,945        57,945        58,235   

Crestwood Holdings LLC

  (i)   Energy   L+600   1.0%   6/19/19     5,452        5,432        5,176   

Dent Wizard International Corp.

  (f)(h)(i)   Commercial & Professional Services   L+800     4/25/19     123,165        122,252        125,320   

Dent Wizard International Corp.

  (i)(p)   Commercial & Professional Services   Prime+325     4/25/19     5,000        5,000        5,000   

Eastman Kodak Co.

  (i)   Consumer Durables & Apparel   L+625   1.0%   9/3/19     10,745        10,572        10,777   

Flanders Corp.

  (f)(h)   Capital Goods   L+950   1.5%   5/14/18     35,993        35,444        36,218   

 

See notes to unaudited consolidated financial statements.

 

14


Table of Contents

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Fronton Holdings, LLC

  (f)   Consumer Services   15.0%     4/30/19   $ 3,736      $ 3,703      $ 3,736   

HBC Solutions, Inc.

  (f)(g)(i)   Media   L+875   1.5%   2/4/18     84,990        84,990        84,990   

Industrial Group Intermediate Holdings, LLC

  (h)   Materials   L+800   1.3%   5/31/20     13,894        13,894        13,894   

Industry City TI Lessor, L.P.

  (i)   Consumer Services   5.0%, 5.3% PIK
(5.3% Max PIK)
    6/30/26     24,885        24,885        24,512   

Infiltrator Systems, Inc.

  (f)(g)(h)(i)   Capital Goods   L+841   1.3%   6/27/18     226,000        225,860        224,870   

Intralinks, Inc.

  (f)(i)(k)   Software & Services   L+525   2.0%   2/24/19     9,900        9,817        9,776   

Lantiq Deutschland GmbH

  (f)(i)(k)   Software & Services   L+900   2.0%   11/16/15     7,968        7,781        7,928   

Larchmont Resources, LLC

  (h)   Energy   L+725   1.0%   8/7/19     5,988        5,940        5,824   

Leading Edge Aviation Services, Inc.

  (f)(g)(h)(i)   Capital Goods   L+875   1.5%   6/30/19     33,799        33,485        33,292   

LEAS Acquisition Co Ltd.

  (i)(k)   Capital Goods   L+875   1.5%   6/30/19   29,250        40,045        34,864   

LEAS Acquisition Co Ltd.

  (g)(k)   Capital Goods   L+875   1.5%   6/30/19   $ 10,628        10,628        10,468   

Maritime Telecommunications Network, Inc.

  (f)   Telecommunication Services   L+600   1.5%   3/4/16     3,242        3,230        3,161   

MB Precision Holdings LLC

  (h)   Capital Goods   L+725   1.3%   1/23/20     13,365        13,365        13,231   

Micronics, Inc.

  (f)(h)(i)   Capital Goods   L+800   1.3%   3/28/19     43,228        42,893        43,228   

MMM Holdings, Inc.

  (h)(i)   Health Care Equipment & Services   L+825   1.5%   12/12/17     8,956        8,841        8,687   

MModal Inc.

  (i)   Health Care Equipment & Services   L+775   1.3%   1/31/20     4,322        4,302        4,241   

Mood Media Corp.

  (i)(k)   Media   L+600   1.0%   5/1/19     698        692        685   

MSO of Puerto Rico, Inc.

  (h)(i)   Health Care Equipment & Services   L+825   1.5%   12/12/17     6,511        6,427        6,316   

New Star Metals Inc.

  (f)(h)(i)   Capital Goods   L+800   1.3%   3/20/20     36,575        36,575        36,575   

Nova Wildcat Amerock, LLC

  (h)(i)   Consumer Durables & Apparel   L+798   1.3%   9/10/19     20,000        20,000        19,600   

Panda Sherman Power, LLC

  (f)   Energy   L+750   1.5%   9/14/18     496        500        493   

Panda Temple Power, LLC (TLA)

  (f)   Energy   L+700   1.5%   7/17/18     2,583        2,582        2,619   

PHRC License, LLC

  (g)(h)(i)   Consumer Services   L+900   1.5%   8/14/20     45,000        45,000        44,550   

Polymer Additives, Inc.

  (i)   Materials   L+838   1.0%   12/20/21     10,511        10,510        10,511   

Production Resource Group, LLC

  (h)(i)   Media   L+750   1.0%   7/23/19     32,500        32,500        32,663   

PRV Aerospace, LLC

  (i)   Capital Goods   L+525   1.3%   5/9/18     80        80        79   

Reddy Ice Holdings, Inc.

  (i)   Food & Staples Retailing   L+550   1.3%   5/1/19     1,170        1,160        1,032   

Safariland, LLC

  (f)(h)(i)   Capital Goods   L+800   1.3%   9/20/19     150,400        150,400        152,656   

Shell Topco L.P.

  (h)(i)   Materials   L+750   1.5%   9/28/18     30,000        29,698        30,525   

Smile Brands Group Inc.

  (i)   Health Care Equipment & Services   L+625   1.3%   8/16/19     20,243        19,878        19,383   

Sorenson Communications, Inc.

  (e)(f)(h)(i)   Telecommunication Services   L+575   2.3%   4/30/20     93,500        93,081        94,435   

Southcross Holdings Borrower LP

  (i)   Energy   L+500   1.0%   8/4/21     316        314        283   

 

See notes to unaudited consolidated financial statements.

 

15


Table of Contents

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Sports Authority, Inc.

  (h)   Consumer Durables & Apparel   L+600   1.5%   11/16/17   $ 6,318      $ 6,321      $ 5,607   

Stallion Oilfield Holdings, Inc.

  (h)   Energy   L+675   1.3%   6/19/18     4,810        4,775        4,119   

SunGard Availability Services Capital, Inc.

  (e)   Software & Services   L+500   1.0%   3/29/19     4,975        4,623        4,455   

Sunnova Asset Portfolio 5 Holdings, LLC.

  (i)   Energy   12.0% PIK
(12.0% Max PIK)
    11/14/21     1,803        1,803        1,803   

Sunnova Asset Portfolio 5 Holdings, LLC.

  (i)(p)   Energy   12.0% PIK
(12.0% Max PIK)
    11/14/21     3,200        3,200        3,200   

Swiss Watch International, Inc.

  (f)(h)(i)   Consumer Durables & Apparel   L+725   1.3%   11/8/18     47,000        46,359        45,355   

U.S. Xpress Enterprises, Inc.

  (f)(g)   Transportation   L+850, 1.5% PIK
(1.5% Max PIK)
  1.5%   5/30/19     74,813        74,813        74,813   

Virtual Radiologic Corp.

  (i)   Health Care Equipment & Services   L+550   1.8%   12/22/16     3,484        3,452        2,645   

VPG Group Holdings LLC

  (f)(h)(i)   Materials   L+900   1.0%   10/4/16     79,195        78,764        79,393   

Waste Pro USA, Inc.

  (f)(g)(h)   Commercial & Professional Services   L+750   1.0%   10/15/20     86,889        86,889        86,889   

Waste Pro USA, Inc.

  (i)(p)   Commercial & Professional Services   L+750   1.0%   10/15/20     9,444        9,444        9,444   
             

 

 

   

 

 

 

Total Senior Secured Loans—First Lien

                2,289,343        2,279,592   

Unfunded Loan Commitments

                (73,386     (73,386
             

 

 

   

 

 

 

Net Senior Secured Loans—First Lien

                2,215,957        2,206,206   
             

 

 

   

 

 

 

Senior Secured Loans—Second Lien—29.9%

               

Advance Pierre Foods, Inc.

  (e)(f)(g)   Food & Staples Retailing   L+825   1.3%   10/10/17     17,556        17,379        17,292   

Affordable Care, Inc.

  (f)(g)(i)   Health Care Equipment & Services   L+925   1.3%   12/26/19     44,314        43,893        43,871   

Alison US LLC

  (i)(k)   Capital Goods   L+850   1.0%   8/29/22     4,444        4,273        4,161   

American Energy - Utica, LLC

  (f)   Energy   L+400, 5.5% PIK
(5.5% Max PIK)
  1.5%   9/30/18     79,987        79,987        78,387   

American Energy - Utica, LLC

  (g)   Energy   L+400, 5.5% PIK
(5.5% Max PIK)
  1.5%   9/30/18     54,324        54,324        53,238   

American Racing and Entertainment, LLC

  (g)   Consumer Services   12.0%     7/1/18     16,800        16,380        16,800   

BPA Laboratories, Inc.

  (i)   Pharmaceuticals, Biotechnology & Life Sciences   2.5%     7/3/17     593        475        526   

Brasa (Holdings) Inc.

  (f)   Consumer Services   L+950   1.5%   1/20/20     6,211        6,031        6,149   

Brock Holdings III, Inc.

  (i)   Energy   L+825   1.8%   3/16/18     6,923        6,855        5,573   

Byrider Finance, LLC

  (g)(i)   Automobiles & Components   L+1000   1.3%   8/22/20     10,000        10,000        10,000   

Compuware Corp.

  (e)(i)(j)   Software & Services   L+825   1.0%   12/9/22     10,000        8,700        9,250   

Consolidated Precision Products Corp.

  (f)   Capital Goods   L+775   1.0%   4/30/21     10,925        10,877        10,434   

 

See notes to unaudited consolidated financial statements.

 

16


Table of Contents

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

DEI Sales, Inc.

  (f)(g)   Commercial & Professional Services   L+900   1.5%   1/15/18   $ 57,500      $ 56,978      $ 55,991   

Eastman Kodak Co.

  (f)(g)   Consumer Durables & Apparel   L+950   1.3%   9/3/20     50,000        48,918        50,000   

Nielsen & Bainbridge, LLC

  (i)   Consumer Services   L+925   1.0%   8/15/21     15,000        14,786        14,775   

OSP Group, Inc.

  (f)(g)(i)   Consumer Durables & Apparel   L+800   1.3%   7/31/20     145,000        145,000        144,275   

Paw Luxco II Sarl

  (g)(k)   Consumer Durables & Apparel   EURIBOR+950     1/29/19   16,364        20,200        17,203   

Pelican Products, Inc.

  (i)   Capital Goods   L+825   1.0%   4/9/21   $ 4,222        4,194        4,169   

PSAV Acquisition Corp.

  (f)(i)   Technology Hardware & Equipment   L+825   1.0%   1/24/22     80,000        78,898        80,500   

Sensus USA Inc.

  (i)   Capital Goods   L+725   1.3%   5/9/18     3,000        3,027        2,873   

Sequential Brands Group, Inc.

  (f)   Consumer Durables & Apparel   L+800   1.0%   8/15/20     25,000        25,000        25,000   

Stadium Management Corp.

  (f)   Consumer Services   L+825   1.0%   2/15/22     57,500        57,500        57,788   
             

 

 

   

 

 

 

Total Senior Secured Loans—Second Lien

                713,675        708,255   
             

 

 

   

 

 

 

Senior Secured Bonds—15.2%

               

Advanced Lighting Technologies, Inc.

  (f)(g)   Materials   10.5%     6/1/19     78,500        77,139        52,203   

Allen Systems Group, Inc.

  (f)(g)(i)(m)(q)   Software & Services   10.5%     11/15/16     38,448        31,201        13,457   

Aspect Software, Inc.

  (e)   Software & Services   10.6%     5/15/17     6,000        5,991        5,700   

Avaya Inc.

  (e)(f)(g)   Technology Hardware & Equipment   10.5%     3/1/21     39,250        36,194        33,853   

Caesars Entertainment Resort Properties, LLC

  (e)(f)(g)   Consumer Services   11.0%     10/1/21     60,138        59,854        55,026   

FourPoint Energy, LLC

  (f)(g)   Energy   8.0%     12/31/20     70,875        67,690        62,370   

FourPoint Energy, LLC

  (f)(g)(p)   Energy   8.0%     12/31/20     27,563        27,563        24,255   

Global A&T Electronics Ltd.

  (i)(k)   Technology Hardware & Equipment   10.0%     2/1/19     9,000        9,000        8,118   

JW Aluminum Co.

  (f)(g)(i)   Materials   11.5%, 1.0% PIK
(1.0% Max PIK)
    11/15/17     66,297        65,818        66,297   

Logan’s Roadhouse Inc.

  (e)(g)   Consumer Services   10.8%     10/15/17     56,294        46,855        41,728   

Sorenson Communications, Inc.

  (g)   Telecommunication Services   9.0%     10/31/20     19,898        19,158        18,903   

Speedy Cash Intermediate Holdings Corp.

  (f)   Diversified Financials   10.8%     5/15/18     5,000        5,061        4,928   
             

 

 

   

 

 

 

Total Senior Secured Bonds

                451,524        386,838   

Unfunded Bond Commitments

                (27,563     (27,563
             

 

 

   

 

 

 

Net Senior Secured Bonds

                423,961        359,275   
             

 

 

   

 

 

 

Subordinated Debt—19.6%

               

Alta Mesa Holdings, L.P.

  (e)   Energy   9.6%     10/15/18     11,165        11,084        9,468   

Aurora Diagnostics, LLC

  (f)(g)   Pharmaceuticals, Biotechnology & Life Sciences   10.8%     1/15/18     18,065        18,099        15,717   

 

See notes to unaudited consolidated financial statements.

 

17


Table of Contents

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

Brooklyn Basketball Holdings, LLC

  (g)(i)   Consumer Services   L+800     10/15/19   $ 19,873      $ 19,873      $ 19,674   

Cadillac Jack, Inc.

  (g)(k)   Consumer Services   6.0%, 7.0% PIK
(7.0% Max PIK)
    5/15/20     52,268        36,561        54,947   

Comstock Resources, Inc.

  (f)(k)   Energy   9.5%     6/15/20     7,500        7,232        5,063   

Flanders Corp.

  (f)(g)   Capital Goods   13.8% PIK
(13.8% Max PIK)
    5/14/18     22,344        22,217        19,495   

Flanders Corp.

  (g)(i)   Capital Goods   17.5% PIK
(17.5% Max PIK)
    5/14/18     21,595        20,227        21,325   

Global Jet Capital, Inc.

  (i)   Commercial & Professional Services   8.0% PIK (8.0%
Max PIK)
    1/30/15     313        313        313   

HBC Solutions, Inc.

  (i)   Media   12.5% PIK
(12.5% Max PIK)
    8/4/18     303        303        303   

HBC Solutions, Inc.

  (i)(p)   Media   12.5% PIK
(12.5% Max PIK)
    8/4/18     150        150        150   

Jupiter Resources, Inc.

  (e)(g)(k)   Energy   8.5%     10/1/22     6,425        5,306        4,819   

Kinetic Concepts, Inc.

  (e)(f)   Health Care Equipment & Services   12.5%     11/1/19     15,000        14,256        16,500   

KODA Distribution Group, Inc.

  (f)   Materials   11.3%     9/30/19     35,000        34,440        35,000   

Lightstream Resources, Ltd.

  (g)(k)   Energy   8.6%     2/1/20     1,650        1,290        1,163   

Mood Media Corp.

  (e)(f)(g)(k)   Media   9.3%     10/15/20     43,135        42,124        35,263   

NewStar Financial, Inc.

  (f)(i)(k)   Diversified Financials   8.3%, 0.0% PIK
(8.8% Max PIK)
    12/4/24     50,000        34,997        37,500   

P.F. Chang’s China Bistro, Inc.

  (e)   Consumer Services   10.3%     6/30/20     1,390        1,384        1,397   

RKI Exploration & Production, LLC

  (e)(g)   Energy   8.5%     8/1/21     12,550        12,362        10,229   

Samson Investment Co.

  (e)(f)(g)(i)   Energy   9.8%     2/15/20     14,200        13,397        5,964   

Sandridge Energy, Inc.

  (e)(i)(k)   Energy   8.8%     1/5/20     7,500        6,321        5,119   

Sequel Industrial Products Holdings, LLC

  (g)   Energy   12.0%, 2.5% PIK
(2.5% Max PIK)
    5/10/18     7,000        6,909        7,245   

Sidewinder Drilling Inc.

  (f)   Energy   9.8%     11/15/19     4,328        4,328        2,532   

Sorenson Communications, Inc.

  (g)   Telecommunication Services   13.0%     10/31/21     15,122        14,112        15,425   

Talos Production, LLC

  (g)   Energy   9.8%     2/15/18     1,500        1,364        1,358   

ThermaSys Corp.

  (f)(g)   Capital Goods   9.0%, 1.8% PIK
(5.0% Max PIK)
    5/3/20     133,295        133,295        132,628   

 

See notes to unaudited consolidated financial statements.

 

18


Table of Contents

FS Investment Corporation

Consolidated Schedule of Investments (continued)

As of December 31, 2014

(in thousands, except share amounts)

 

 

 

Portfolio Company(a)

  Footnotes  

Industry

  Rate(b)   Floor   Maturity   Principal
Amount(c)
    Amortized
Cost
    Fair
Value(d)
 

VPG Group Holdings LLC

  (f)   Materials   11.0%, 2.0% PIK
(2.0% Max PIK)
    7/15/19   $ 5,142      $ 5,142      $ 5,232   

Warren Resources, Inc.

  (g)   Energy   9.0%     8/1/22     1,000        709        625   
             

 

 

   

 

 

 

Total Subordinated Debt

                467,795        464,454   

Unfunded Debt Commitments

                (150     (150
             

 

 

   

 

 

 

Net Subordinated Debt

                467,645        464,304   
             

 

 

   

 

 

 

Collateralized Securities—5.2%

               

ACASC 2013-2A B

  (g)(i)(k)   Diversified Financials   8.1%     10/15/23     30,500        25,488        25,338   

Dryden CDO 23A Class Subord.

  (i)(k)   Diversified Financials   19.1%     7/17/23     10,000        5,810        7,967   

JPMorgan Chase Bank, N.A. Credit-Linked Notes

  (g)(k)   Diversified Financials   14.3%     12/20/21     16,740        16,594        17,284   

Lightpoint CLO 2006 V Class D

  (g)(k)   Diversified Financials   L+365     8/5/19     6,500        4,087        6,361   

NewStar Clarendon 2014-1A Class D

  (i)(j)(k)   Diversified Financials   L+435     1/25/27     1,560        1,461        1,461   

NewStar Clarendon 2014-1A Sub B

  (i)(j)(k)   Diversified Financials   12.5%     1/25/27     17,900        17,713        17,713   

Rampart CLO 2007 1A Class Subord.

  (i)(k)   Diversified Financials   24.2%     10/25/21 &nbs