Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS (Tables)

v3.23.2
INVESTMENTS (Tables)
 9 Months Ended
Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of June 30, 2023 and September 30, 2022, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of June 30, 2023:
Secured first lien debt
 $ 533,237  $ —  $ —  $ 533,237 
Secured second lien debt
 120,036  —  —  120,036 
Unsecured debt
 32  — 

— 

32 
Preferred equity
 27,991  —  — 

27,991 
Common equity/equivalents
 33,835 
(A)
 —  31 
(B)
 33,804 
Total Investments as of June 30, 2023
 $ 715,131  $ —  $ 31  $ 715,100 
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of September 30, 2022:
Secured first lien debt
 $ 463,858  $ —  $ —  $ 463,858 
Secured second lien debt
 115,928  —  —  115,928 
Unsecured debt
 55  —  — 

55 
Preferred equity
 27,046  —  — 

27,046 
Common equity/equivalents
 36,331 
(A)
 — 

58 
(B)
 36,273 
Total Investments as of September 30, 2022
 $ 643,218  $ —  $ 58  $ 643,160 
(A)Excludes our investment in Leeds with fair values of $0.2 million and $6.4 million as of June 30, 2023 and September 30, 2022, respectively. Leeds was valued using NAV as a practical expedient.
(B)Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability as our investment was subject to certain restrictions.
The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of June 30, 2023 and September 30, 2022, by caption on our accompanying Consolidated Statements of Assets and Liabilities and by security type:
Total Recurring Fair Value Measurements Reported in
Consolidated Statements of Assets and Liabilities
Using Significant Unobservable Inputs (Level 3)
June 30, 2023 September 30, 2022
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 481,679  $ 413,631 
Secured second lien debt 112,611  108,263 
Unsecured debt 32  55 
Preferred equity 21,726  17,719 
Common equity/equivalents 26,575 
(A)
 28,688 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 642,623  $ 568,356 
Affiliate Investments
Secured first lien debt $ 35,493  $ 34,804 
Preferred equity 5,124  3,640 
Common equity/equivalents 1,406  647 
Total Affiliate Investments $ 42,023  $ 39,091 
Control Investments
Secured first lien debt $ 16,065  $ 15,423 
Secured second lien debt 7,425  7,665 
Preferred equity 1,141  5,687 
Common equity/equivalents 5,823  6,938 
Total Control Investments
 $ 30,454  $ 35,713 
Total Investments at Fair Value Using Level 3 Inputs $ 715,100  $ 643,160 
(A)Excludes our investments in Leeds and Funko with fair values of $0.2 million and $31 thousand, respectively, as of June 30, 2023. Leeds was valued using NAV as a practical expedient, and Funko was valued using Level 2 inputs.
(B)Excludes our investments in Leeds and Funko with fair values of $6.4 million and $58 thousand, respectively, as of September 30, 2022. Leeds was valued using NAV as a practical expedient, and Funko was valued using Level 2 inputs.
Schedule of Fair Value Measurement Inputs and Valuation Techniques The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements.
The weighted average calculations in the table below are based on the principal balances for all debt related calculations and on the cost basis for all equity related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements

Range / Weighted Average as of

June 30,
2023		 September 30,
2022
Valuation
Techniques/
Methodologies
Unobservable
Input
 June 30,
2023		 September 30,
2022


Secured first lien debt
 $ 492,379  $ 423,912 
Yield Analysis
 Discount Rate
11.7% - 37.0%
/ 14.3%
8.0% - 29.5%
/ 11.8%

40,858  39,946 
TEV
EBITDA multiple
4.7x – 5.9x
/ 5.8x
4.8x – 6.7x
/ 6.2x


EBITDA
$960 - $14,121
/ $13,605
$800 - $10,257
/ $7,605


Revenue multiple
0.3x – 0.8x
/ 0.6x
0.3x – 0.6x
/ 0.5x


Revenue
$15,375 - $16,322
/ $15,922
$11,514 - $16,320
/ $14,656


Secured second lien debt
 102,328  97,472 
Yield Analysis
 Discount Rate
11.7% - 15.5%
/ 14.2%
11.5% - 15.4%
/ 13.8%

10,283  10,791 
Market Quote
 IBP
66.0% - 99.3%
/ 82.4%
82.0% - 95.0%
/ 86.5%

7,425  7,665 
TEV
 EBITDA multiple
5.5x – 5.5x
/ 5.5x
5.6x – 5.6x
/ 5.6x


EBITDA
$3,441 - $3,441
/ $3,441
$3,299 - $3,299
/ $3,299


Unsecured debt
 32  55 
TEV
Revenue multiple
1.3x – 1.3x
/ 1.3x
0.3x – 1.3x
/ 1.0x


Revenue
$5,270 - $5,270
/ $5,270
$764 - $11,514
/ $4,249


Preferred and common equity / equivalents(A)
61,795  63,319 
TEV
 EBITDA multiple
4.3x – 12.9x
/ 6.7x
4.1x – 11.0x
/ 6.5x


EBITDA
$960 -$108,146
/ $10,410
$800 -$74,512
/ $11,742


Revenue multiple
0.3x – 3.0x
/ 1.2x
0.3x– 4.4x
/ 1.4x


Revenue
$3,447 -$16,322
/ $14,798
$764 -$42,926
/ $19,963
Total Level 3 Investments, at Fair Value
 $ 715,100  $ 643,160 
(A)Fair value as of June 30, 2023 excludes our investments in Leeds and Funko with fair values of $0.2 million and $31 thousand, respectively. Fair value as of September 30, 2022 excludes our investments in Leeds and Funko with fair values of $6.4 million and $58 thousand, respectively. Leeds was valued using NAV as a practical expedient and Funko was valued using Level 2 inputs as of both June 30, 2023 and September 30, 2022.
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation The following tables provide the changes in fair value, broken out by security type, during the three and nine months ended June 30, 2023 and 2022 for all investments for which we determine fair value using unobservable (Level 3) inputs.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended June 30, 2023 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of March 31, 2023 $ 498,947  $ 117,438  $ 36  $ 28,298  $ 31,444  $ 676,163 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  (789) 3,700  2,911 
Net unrealized appreciation (depreciation)(B)
(2,195) 601  (4) (1,718) 4,622  1,306 
Reversal of prior period net depreciation (appreciation) on realization(B)
(200) —  —  526  (4,262) (3,936)
New investments, repayments and settlements: (C)
Issuances/originations
 65,707  2,061  —  1,674  2,000  71,442 
Settlements/repayments
 (29,022) (64) —  —  —  (29,086)
Net proceeds from sales
 —  —  —  —  (3,700) (3,700)
Transfers
 —  —  —  —  —  — 
Fair Value as of June 30, 2023
 $ 533,237  $ 120,036  $ 32  $ 27,991  $ 33,804  $ 715,100 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Nine months ended June 30, 2023 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2022
 $ 463,858  $ 115,928  $ 55  $ 27,046  $ 36,273  $ 643,160 
Total gains (losses):
Net realized gain (loss)(A)
(107) —  (95) (279) 8,695  8,214 
Net unrealized appreciation (depreciation)(B)
(4,685) 376  (23) (693) 5,239  214 
Reversal of prior period net depreciation (appreciation) on realization(B)
10  —  95  526  (9,257) (8,626)
New investments, repayments and settlements: (C)
Issuances/originations
 135,567  6,303  —  2,045  4,532  148,447 
Settlements/repayments
 (61,406) (2,571) —  —  —  (63,977)
Net proceeds from sales
 —  —  —  (654) (11,678) (12,332)
Transfers
 —  —  —  —  —  — 
Fair Value as of June 30, 2023
 $ 533,237  $ 120,036  $ 32  $ 27,991  $ 33,804  $ 715,100 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended June 30, 2022 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of March 31, 2022 $ 377,902  $ 85,498  $ 64  $ 27,935  $ 41,264  $ 532,663 
Total gains (losses):
Net realized gain (loss)(A)
(8,471) —  (25) —  —  (8,496)
Net unrealized appreciation (depreciation)(B)
(3,182) (1,006) (5) (5,482) (9,440) (19,115)
Reversal of prior period net depreciation (appreciation) on realization(B)
14,199  —  25  (28) —  14,196 
New investments, repayments and settlements: (C)
Issuances/originations
 64,578  167  —  3,140  —  67,885 
Settlements/repayments
 (6,509) (813) —  (250) —  (7,572)
Net proceeds from sales
 1,339  —  —  —  —  1,339 
Transfers (6,750) —  —  —  6,750  — 
Fair Value as of June 30, 2022
 $ 433,106  $ 83,846  $ 59  $ 25,315  $ 38,574  $ 580,900 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Nine months ended June 30, 2022 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2021
 $ 337,394  $ 135,956  $ 10  $ 29,246  $ 48,441  $ 551,047 
Total gains (losses):
Net realized gain (loss)(A)
(8,471) —  (25) —  13,876  5,380 
Net unrealized appreciation (depreciation)(B)
1,230  (627) 24  (4,691) (9,148) (13,212)
Reversal of prior period net depreciation (appreciation) on realization(B)
13,819  (1,601) 25  (4,309) (9,113) (1,179)
New investments, repayments and settlements: (C)
Issuances/originations
 151,401  30,503  25  6,640  3,500  192,069 
Settlements/repayments
 (56,856) (80,385) —  (250) —  (137,491)
Net proceeds from sales
 1,339  —  —  (1,321) (15,732) (15,714)
Transfers (6,750) —  —  —  6,750  — 
Fair Value as of June 30, 2022
 $ 433,106  $ 83,846  $ 59  $ 25,315  $ 38,574  $ 580,900 
(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(B)Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, accretion of discounts, PIK, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.
Schedule of Investment Holdings
The following table outlines our investments by security type as of June 30, 2023 and September 30, 2022:
June 30, 2023 September 30, 2022
Cost Fair Value Cost Fair Value
Secured first lien debt $ 549,860  74.8  % $ 533,237  74.5  % $ 475,806  72.5  % $ 463,858  71.4  %
Secured second lien debt 122,681  16.7  120,036  16.8  118,949  18.2  115,928  17.8 
Unsecured debt 198  0.0  32  0.0  293  0.0  55  0.0 
Total debt investments 672,739  91.5  653,305  91.3  595,048  90.7  579,841  89.2 
Preferred equity 35,617  4.8  27,991  3.9  34,505  5.3  27,046  4.2 
Common equity/equivalents 26,826  3.7  34,028  4.8  26,500  4.0  42,728  6.6 
Total equity investments
 62,443  8.5  62,019  8.7  61,005  9.3  69,774  10.8 
Total Investments
 $ 735,182  100.0  % $ 715,324  100.0  % $ 656,053  100.0  % $ 649,615  100.0  %
Our investments at fair value consisted of the following industry classifications as of June 30, 2023 and September 30, 2022:
June 30, 2023 September 30, 2022
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Diversified/Conglomerate Service $ 164,261  23.0  % $ 148,907  22.9  %
Diversified/Conglomerate Manufacturing 160,904  22.5  114,105  17.6 
Healthcare, Education, and Childcare 145,011  20.3  136,401  21.0 
Aerospace and Defense 87,932  12.3  88,649  13.6 
Beverage, Food, and Tobacco 74,641  10.4  64,283  9.9 
Oil and Gas 26,887  3.8  25,373  3.9 
Automobile 22,191  3.1  20,144  3.1 
Personal and Non-Durable Consumer Products 14,742  2.1  18,583  2.9 
Machinery 6,676  0.9  9,562  1.5 
Telecommunications 5,976  0.8  10,088  1.6 
Textiles and Leather —  —  7,978  1.2 
Other, < 2.0% 6,103  0.8  5,542  0.8 
Total Investments $ 715,324  100.0  % $ 649,615  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of June 30, 2023 and September 30, 2022:
June 30, 2023 September 30, 2022
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
South $ 290,432  40.6  % $ 326,524  50.3  %
West 220,602  30.8  169,415  26.1 
Midwest 146,324  20.5  118,191  18.2 
Northeast 57,966  8.1  35,485  5.4 
Total Investments $ 715,324  100.0  % $ 649,615  100.0  %
Schedule of Investments Classified by Contractual Maturity Date
The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of June 30, 2023:
Amount
For the remaining three months ending September 30:
2023(A)
$ 4,806 
For the fiscal years ending September 30:
 2024 28,818 

2025 86,790 

2026 160,943 

2027 241,385 

Thereafter 151,330 

Total contractual repayments
 $ 674,072 

Adjustments to cost basis of debt investments (1,333)

Investments in equity securities 62,443 

Investments held as of June 30, 2023 at cost:
 $ 735,182 
(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of June 30, 2023.