Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS (Tables)

v3.24.0.1
INVESTMENTS (Tables)
 3 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of December 31, 2023 and September 30, 2023, 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 December 31, 2023:
Secured first lien debt
 $ 546,602  $ —  $ —  $ 546,602 
Secured second lien debt
 126,571  —  —  126,571 
Unsecured debt
 23  —  — 

23 
Preferred equity
 29,722  —  — 

29,722 
Common equity/equivalents
 46,821 
(A)
 —  22 
(B)
 46,799 
Total Investments as of December 31, 2023
 $ 749,739  $ —  $ 22  $ 749,717 
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, 2023:
Secured first lien debt
 $ 510,701  $ —  $ —  $ 510,701 
Secured second lien debt
 127,854  —  —  127,854 
Unsecured debt
 24  —  — 

24 
Preferred equity
 26,855  —  — 

26,855 
Common equity/equivalents
 39,150 
(A)
 — 

22 
(B)
 39,128 
Total Investments as of September 30, 2023
 $ 704,584  $ —  $ 22  $ 704,562 
(A)Excludes our investment in Leeds with a fair value of $0.2 million and $0.2 million as of December 31, 2023 and September 30, 2023, 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 December 31, 2023 and September 30, 2023, 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)
December 31, 2023 September 30, 2023
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 529,003  $ 491,686 
Secured second lien debt 119,146  120,429 
Unsecured debt 23  24 
Preferred equity 24,589  21,733 
Common equity/equivalents 35,477 
(A)
 29,419 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 708,238  $ 663,291 
Affiliate Investments
Secured first lien debt $ 2,829  $ 2,895 
Preferred equity 5,133  5,122 
Common equity/equivalents 2,754  2,404 
Total Affiliate Investments $ 10,716  $ 10,421 
Control Investments
Secured first lien debt $ 14,770  $ 16,120 
Secured second lien debt 7,425  7,425 
Common equity/equivalents 8,568  7,305 
Total Control Investments
 $ 30,763  $ 30,850 
Total Investments at Fair Value Using Level 3 Inputs $ 749,717  $ 704,562 

(A)Excludes our investments in Leeds and Funko with fair values of $0.2 million and $22 thousand, respectively, as of December 31, 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 $0.2 million and $22 thousand, respectively, as of September 30, 2023. 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

December 31,
2023		 September 30,
2023
Valuation
Techniques/
Methodologies
Unobservable
Input
 December 31,
2023		 September 30,
2023


Secured first lien debt
 $ 491,137  $ 461,638 
Yield Analysis
 Discount Rate
11.4% - 17.6%
/ 13.4%
11.8% - 29.9%
/ 14.8%

55,465  49,063 
TEV
EBITDA multiple
4.5x – 6.4x
/ 6.4x
4.7x – 6.8x
/ 6.7x


EBITDA
$1,068 - $18,154
/ $17,860
$995 - $14,002
/ $13,624


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


Revenue
$9,675 - $33,040
/ $17,731
$14,934 - $16,283
/ $15,361


Secured second lien debt
 109,194  110,820 
Yield Analysis
 Discount Rate
12.3% - 16.4%
/ 14.8%
12.5% - 15.6%
/ 14.5%

9,952  9,609 
Market Quote
 IBP
79.0% - 94.0%
/ 85.2%
67.8% - 94.0%
/ 82.2%

7,425  7,425 
TEV
 EBITDA multiple
5.3x – 5.3x
/ 5.3x
5.6x – 5.6x
/ 5.6x


EBITDA
$3,798 - $3,798
/ $3,798
$3,690 - $3,690
/ $3,690


Unsecured debt
 23  24 
TEV
Revenue multiple
1.0x – 1.0x
/ 1.0x
1.0x – 1.0x
/ 1.0x


Revenue
$4,752 - $4,752
/ $4,752
$5,044 - $5,044
/ $5,044


Preferred and common equity / equivalents(A)
76,521  65,983 
TEV
 EBITDA multiple
4.5x – 13.1x
/ 7.4x
4.7x – 13.0x
/ 6.9x


EBITDA
$1,068 -$127,874
/ $11,049
$995 -$112,841
/ $10,570


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


Revenue
$4,493 -$33,040
/ $16,517
$4,213 -$16,283
/ $14,959
Total Level 3 Investments, at Fair Value
 $ 749,717  $ 704,562 
(A)Fair value as of December 31, 2023 excludes our investments in Leeds and Funko with fair values of $0.2 million and $22 thousand, respectively. Fair value as of September 30, 2023 excludes our investments in Leeds and Funko with fair values of $0.2 million and $22 thousand, respectively. Leeds was valued using NAV as a practical expedient and Funko was valued using Level 2 inputs as of both December 31, 2023 and September 30, 2023.
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 months ended December 31, 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 December 31, 2023 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2023
 $ 510,701  $ 127,854  $ 24  $ 26,855  $ 39,128  $ 704,562 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  —  259  259 
Net unrealized appreciation (depreciation)(B)
6,996  (744) (1) (6,133) 7,955  8,073 
Reversal of prior period net depreciation (appreciation) on realization(B)
—  —  —  —  (283) (283)
New investments, repayments and settlements: (C)
Issuances/originations
 50,024  185  —  9,000  —  59,209 
Settlements/repayments
 (21,119) (724) —  —  —  (21,843)
Net proceeds from sales
 —  —  —  —  (260) (260)
Transfers
 —  —  —  —  —  — 
Fair Value as of December 31, 2023
 $ 546,602  $ 126,571  $ 23  $ 29,722  $ 46,799  $ 749,717 

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three Months Ended December 31, 2022 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)
—  —  (95) —  4,995  4,900 
Net unrealized appreciation (depreciation)(B)
(455) (544) (10) (906) (784) (2,699)
Reversal of prior period net depreciation (appreciation) on realization(B)
103  —  95  —  (4,995) (4,797)
New investments, repayments and settlements: (C)
Issuances/originations
 11,475  182  —  —  500  12,157 
Settlements/repayments
 (24,738) (811) —  —  —  (25,549)
Net proceeds from sales
 —  —  —  —  (7,978) (7,978)
Transfers —  —  —  —  —  — 
Fair Value as of December 31, 2022
 $ 450,243  $ 114,755  $ 45  $ 26,140  $ 28,011  $ 619,194 
(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 December 31, 2023 and September 30, 2023:
December 31, 2023 September 30, 2023
Cost Fair Value Cost Fair Value
Secured first lien debt $ 558,281  73.5  % $ 546,602  72.9  % $ 529,376  73.3  % $ 510,701  72.5  %
Secured second lien debt 129,713  17.1  126,571  16.9  130,252  18.1  127,854  18.1 
Unsecured debt 198  0.0  23  0.0  198  0.0  24  0.0 
Total debt investments 688,192  90.6  673,196  89.8  659,826  91.4  638,579  90.6 
Preferred equity 44,617  5.9  29,722  3.9  35,617  4.9  26,855  3.8 
Common equity/equivalents 26,825  3.5  47,067  6.3  26,826  3.7  39,381  5.6 
Total equity investments
 71,442  9.4  76,789  10.2  62,443  8.6  66,236  9.4 
Total Investments
 $ 759,634  100.0  % $ 749,985  100.0  % $ 722,269  100.0  % $ 704,815  100.0  %
Our investments at fair value consisted of the following industry classifications as of December 31, 2023 and September 30, 2023:
December 31, 2023 September 30, 2023
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Diversified/Conglomerate Service $ 163,817  21.8  % $ 135,060  19.2  %
Healthcare, Education, and Childcare 159,410  21.3  146,438  20.8 
Diversified/Conglomerate Manufacturing 158,612  21.1  158,061  22.4 
Aerospace and Defense 105,806  14.1  97,836  13.9 
Beverage, Food, and Tobacco 80,492  10.7  78,788  11.2 
Automobile 27,793  3.7  27,571  3.9 
Oil and Gas 23,662  3.2  27,830  3.9 
Personal and Non-Durable Consumer Products 14,162  1.9  14,576  2.1 
Machinery 6,216  0.9  6,411  0.9 
Other, < 2.0%
 10,015  1.3  12,244  1.7 
Total Investments $ 749,985  100.0  % $ 704,815  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of December 31, 2023 and September 30, 2023:
December 31, 2023 September 30, 2023
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
South $ 289,458  38.6  % $ 273,181  38.8  %
West 242,651  32.4  224,235  31.8 
Midwest 154,155  20.5  145,122  20.6 
Northeast 63,721  8.5  62,277  8.8 
Total Investments $ 749,985  100.0  % $ 704,815  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 December 31, 2023:
Amount
For the remaining nine months ending September 30:
2024(A)
$ 21,950 
For the fiscal years ending September 30:
 2025 42,960 

2026 140,846 

2027 253,699 

2028 185,178 

Thereafter 44,847 

Total contractual repayments
 $ 689,480 

Adjustments to cost basis of debt investments (1,288)

Investments in equity securities 71,442 

Investments held as of December 31, 2023 at cost:
 $ 759,634 
(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of December 31, 2023.