Harry Pangas, Esq. Gregory A. Schernecke, Esq. Dechert LLP 1900 K Street, N.W. Washington, DC 20006 Telephone: (202) 261-3300 Fax: (202) 261-3333 | | | George M. Silfen, Esq. Terrence Shen, Esq. Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036 Telephone: (212) 715-9100 Fax: (212) 715-8422 |
Title of Securities Being Registered | | | Amount Being Registered(1) | | | Proposed Maximum Offering Price per Share of Common Stock | | | Proposed Maximum Aggregate Offering Price(2) | | | Amount of Registration Fee(3) |
Common Stock, par value $0.001 per share | | | 17,157,300 shares | | | N/A | | | $141,623,692.82 | | | $18,382.76 |
(1) | The number of shares to be registered represents the maximum number of shares of the registrant’s common stock estimated to be issuable in connection with the merger agreement described in the enclosed document. Pursuant to Rule 416, this registration statement also covers additional securities that may be issued as a result of stock splits, stock dividends or similar transactions. |
(2) | Estimated solely for the purpose of calculating the registration fee and calculated pursuant to Rule 457(c) and Rule 457(f)(1) under the Securities Act of 1933, as amended. |
(3) | Based on a rate of $129.80 per $1,000,000 of the proposed maximum aggregate offering price. |
(1) | approve the issuance of shares of Barings BDC common stock, $0.001 par value per share (“Barings BDC Common Stock”), to be issued pursuant to the Agreement and Plan of Merger, dated as of August 10, 2020 (as may be amended from time to time, the “Merger Agreement”), by and among Barings BDC, Mustang Acquisition Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Barings BDC (“Acquisition Sub”), MVC Capital, Inc., a Delaware corporation (“MVC”), and Barings LLC, a Delaware limited liability company and the external investment adviser to Barings BDC (“Barings”) (such proposal, the “Merger Stock Issuance Proposal”); |
(2) | approve the issuance of shares of Barings BDC Common Stock to be issued pursuant to the Merger Agreement at a price below its then-current net asset value (“NAV”) per share, if applicable (such proposal, the “Barings BDC Below NAV Issuance Proposal”); |
(3) | approve an amended and restated investment advisory agreement between Barings BDC and Barings (the “New Barings BDC Investment Advisory Agreement”), to among other things, (a) reduce the annual base management fee payable to Barings from 1.375% to 1.250% of Barings BDC’s gross assets, (b) reset the commencement date for the rolling 12-quarter “look-back” provision used to calculate the income incentive fee and incentive fee cap to January 1, 2021 from January 1, 2020 and (c) describe the fact that Barings BDC may enter into guarantees, sureties and other credit support arrangements with respect to one or more of its investments, including the impact of these arrangements on the income incentive fee cap (such proposal, the “Barings BDC Advisory Agreement Amendment Proposal”); and |
(4) | approve the adjournment of the Barings BDC Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the Barings BDC Special Meeting to approve the Merger Stock Issuance Proposal, the Barings BDC Below NAV Issuance Proposal or the Barings BDC Advisory Agreement Amendment Proposal (such proposal, the “Barings BDC Adjournment Proposal” and together with the Merger Stock Issuance Proposal, the Barings BDC Below NAV Issuance Proposal, and the Barings BDC Advisory Agreement Amendment, the “Barings BDC Proposals”). |
| | Barings BDC Common Stock | |
Closing Sales Price at August 7, 2020 | | | $8.24 |
Closing Sales Price at [•], 2020 | | | $[•] |
Barings BDC, Inc. 300 South Tryon Street, Suite 2500 Charlotte, North Carolina 28202 (704) 805-7200 | | | MVC Capital, Inc. 287 Bowman Avenue, 2nd Floor Purchase, New York 10577 (914) 701-0310 |
(1) | to consider and vote upon a proposal to approve the issuance of shares of Barings BDC common stock, $0.001 par value per share (“Barings BDC Common Stock”), to be issued pursuant to the Agreement and Plan of Merger, dated as of August 10, 2020 (as may be amended from time to time, the “Merger Agreement”), by and among Barings BDC, Mustang Acquisition Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Barings BDC (“Acquisition Sub”), MVC Capital, Inc., a Delaware corporation (“MVC”), and Barings LLC, a Delaware limited liability company and the external investment adviser to Barings BDC (“Barings”) (such proposal, the “Merger Stock Issuance Proposal”); |
(2) | to consider and vote upon a proposal to approve the issuance of shares of Barings BDC Common Stock to be issued pursuant to the Merger Agreement at a price below its then-current net asset value (“NAV”) per share, if applicable (such proposal, the “Barings BDC Below NAV Issuance Proposal”); |
(3) | to consider and vote upon a proposal to approve an amended and restated investment advisory agreement between Barings BDC and Barings (the “New Barings BDC Investment Advisory Agreement”) to, among other things, (a) reduce the annual base management fee payable to Barings from 1.375% to 1.250% of Barings BDC’s gross assets, (b) reset the commencement date for the rolling 12-quarter “look-back” provision used to calculate the income incentive fee and incentive fee cap to January 1, 2021 from January 1, 2020 and (c) describe the fact that Barings BDC may enter into guarantees, sureties and other credit support arrangements with respect to one or more of its investments, including the impact of these arrangements on the income incentive fee cap (such proposal, the “Barings BDC Advisory Agreement Amendment Proposal”); and |
(4) | to consider and vote upon a proposal to approve the adjournment of the Barings BDC Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the Barings BDC Special Meeting to approve the Merger Stock Issuance Proposal, the Barings BDC Below NAV Issuance Proposal and the Barings BDC Advisory Agreement Amendment Proposal (such proposal, the “Barings BDC Adjournment Proposal” and together with the Merger Stock Issuance Proposal, the Barings BDC Below NAV Issuance Proposal, or the Barings BDC Advisory Agreement Amendment, the “Barings BDC Proposals”). |
| | By Order of the Board of Directors, | |
| | ||
| | Ashlee Steinnerd | |
| | Secretary of Barings BDC, Inc. |
(1) | adopt the Agreement and Plan of Merger, dated as of August 10, 2020 (as may be amended from time to time, the “Merger Agreement”), by and among Barings BDC, Inc., a Maryland corporation (“Barings BDC”), Mustang Acquisition Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Barings BDC (“Acquisition Sub”), MVC, and Barings LLC, a Delaware limited liability company and the external investment adviser to Barings BDC (“Barings”) (such proposal, the “Merger Proposal”); and |
(2) | approve the adjournment of the MVC Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the MVC Special Meeting to approve the Merger Proposal (such proposal, the “MVC Adjournment Proposal” and together with the Merger, the “MVC Proposals”). |
| | Barings BDC Common Stock | |
Closing Sales Price at August 7, 2020 | | | $8.24 |
Closing Sales Price at [•], 2020 | | | $[•] |
MVC Capital, Inc. 287 Bowman Avenue, 2nd Floor Purchase, New York 10577 (914) 701-0310 | | | Barings BDC, Inc. 300 South Tryon Street, Suite 2500 Charlotte, North Carolina 28202 (704) 805-7200 |
(1) | to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of August 10, 2020 (as may be amended from time to time, the “Merger Agreement”), by and among Barings BDC, Inc., a Delaware corporation (“Barings BDC”), Mustang Acquisition Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Barings BDC (“Acquisition Sub”), MVC, and Barings LLC, a Delaware limited liability company and the external investment adviser to Barings BDC (“Barings”) (such proposal, the “Merger Proposal”); and |
(2) | to consider and vote upon a proposal to approve the adjournment of the MVC Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the MVC Special Meeting to approve the Merger Proposal (such proposal, the “MVC Adjournment Proposal” and together with the Merger Proposal, the “MVC Proposals”). |
| | By Order of the Board of Directors, | |
| | ||
| | Michael Tokarz | |
| | ||
| | Chairman of MVC Capital, Inc. |
Q: | Why am I receiving these materials? |
A: | Barings BDC is furnishing these materials to Barings BDC stockholders in connection with the solicitation of proxies by the board of directors of Barings BDC (the “Barings BDC Board”) for use at the Barings BDC Special Meeting to be held virtually at [•] [p.m.][a.m.], Eastern Time, on [•], 2020 at the following website: www.virtualshareholdermeeting.com/BBDC2020SM, and any adjournments or postponements thereof. |
Q: | What items will be considered and voted on at the Barings BDC Special Meeting? |
A: | At the Barings BDC Special Meeting, Barings BDC stockholders will be asked to approve: (1) the issuance of shares of Barings BDC Common Stock to be issued pursuant to the Merger Agreement (such proposal, the “Merger Stock Issuance Proposal”), (2) the issuance of shares of Barings BDC Common Stock to be issued pursuant to the Merger Agreement at a price below its then-current NAV per share, if applicable (such proposal, the “Barings BDC Below NAV Issuance Proposal”), and (3) an amended and restated investment advisory agreement between Barings BDC and Barings (the “New Barings BDC Investment Advisory Agreement) to, among other things, (a) reduce the annual base management fee payable to Barings from 1.375% to 1.250% of Barings BDC’s gross assets, (b) reset the commencement date for the rolling 12-quarter “look-back” provision used to calculate the income incentive fee and incentive fee cap to January 1, 2021 from January 1, 2020 and (c) describe the fact that Barings BDC may enter into guarantees, sureties and other credit support arrangements with respect to one or more of its investments, including the impact of these arrangements on the income incentive fee cap (such proposal, the “Barings BDC Advisory Agreement Amendment Proposal”), and (4) if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the Barings BDC Special Meeting to approve the Merger Stock Issuance Proposal, the Barings BDC Below NAV Issuance Proposal or the Barings BDC Advisory Agreement Amendment Proposal (such proposal, the “Barings BDC Adjournment Proposal” and together with the Merger Stock Issuance Proposal, the Barings BDC Below NAV Issuance Proposal, and the Barings BDC Advisory Agreement Amendment Proposal, the “Barings BDC Proposals”). No other matters will be acted upon at the Barings BDC Special Meeting without further notice. |
Q: | What items will be considered and voted on at the MVC Special Meeting? |
A: | At the MVC Special Meeting, MVC stockholders will be asked to: (1) adopt the Merger Agreement (such proposal, the “Merger Proposal”), and (2) approve the adjournment of the MVC Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the MVC Special Meeting to approve the Merger Proposal (such proposal, the “MVC Adjournment Proposal” and together with the Merger Proposal, the “MVC Proposals”). No other matters will be acted upon at the MVC Special Meeting without further notice. |
Q: | How does the Barings BDC Board recommend voting on the Barings BDC Proposals at the Barings BDC Special Meeting? |
A: | The Barings BDC Board unanimously approved the Merger Agreement and the transactions contemplated thereby, and unanimously recommends that Barings BDC stockholders vote “FOR” the Merger Stock Issuance Proposal, “FOR” the Barings Below NAV Issuance Proposal, “FOR” the Barings BDC Advisory Agreement Amendment Proposal, and, if necessary or appropriate, “FOR” the Barings BDC Adjournment Proposal. |
Q: | How does the MVC Board recommend voting on the MVC Proposals at the MVC Special Meeting? |
A: | The MVC Board, acting on the recommendation of a special committee (the “MVC Strategic Review Committee”) of the MVC Board, consisting of Michael Tokarz, Robert Knapp and Scott Krase, unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that MVC stockholders vote “FOR” the Merger Proposal and, if necessary or appropriate, “FOR” the MVC Adjournment Proposal. |
Q: | If I am a Barings BDC stockholder, what is the “Record Date” and what does it mean? |
A: | The record date for the Barings BDC Special Meeting is [•], 2020 (the “Barings BDC Record Date”). The Barings BDC Record Date was established by the Barings BDC Board, and only holders of record of shares of Barings BDC Common Stock at the close of business on the Barings BDC Record Date are entitled to receive notice of the Barings BDC Special Meeting and vote at the Barings BDC Special Meeting. As of the Barings BDC Record Date, there were [•] shares of Barings BDC Common Stock outstanding. |
Q: | If I am an MVC stockholder, what is the “Record Date” and what does it mean? |
A: | The record date for the MVC Special Meeting is [•], 2020 (the “MVC Record Date”). The MVC Record Date was established by the MVC Board, and only holders of record of shares of MVC Common Stock at the close of business on the MVC Record Date are entitled to receive notice of the MVC Special Meeting and vote at the MVC Special Meeting. As of the MVC Record Date, there were [•] shares of MVC Common Stock outstanding. |
Q: | If I am a Barings BDC stockholder, how many votes do I have? |
A: | Each share of Barings BDC Common Stock held by a holder of record as of the Barings BDC Record Date has one vote on each matter to be considered at the Barings BDC Special Meeting. |
Q: | If I am an MVC stockholder, how many votes do I have? |
A: | Each share of MVC Common Stock held by a holder of record as of the MVC Record Date has one vote on each matter to be considered at the MVC Special Meeting. |
Q: | If I am a Barings BDC stockholder, how do I vote? |
A: | The Barings BDC Special Meeting will be hosted live via Internet audio webcast. Any Barings BDC stockholder can attend the Barings BDC Special Meeting live at www.virtualshareholdermeeting.com/BBDC2020SM. A Barings BDC stockholder should follow the instructions on the accompanying proxy card and authorize a proxy via the Internet or telephone to vote in accordance with the instructions provided below. Authorizing a proxy by telephone or through the Internet requires you to input the control number located on your proxy card. After inputting the control number, you will be prompted to direct your proxy to vote on each proposal. You will have an opportunity to review your directions and make any necessary changes before submitting your directions and terminating the telephone call or Internet link. If you are the beneficial owner of your shares, you will need to follow the instructions provided by your broker, bank, trustee or nominee regarding how to instruct your broker, bank, trustee or nominee to vote your shares at the Barings BDC Special Meeting. |
• | By Internet: www.proxyvote.com |
• | By telephone: (800) 690-6903 to reach a toll-free, automated touchtone voting line[, or [•] Monday through Friday 9:00 a.m. until 10:00 p.m. Eastern Time to reach a toll-free, live operator line]. |
• | By mail: You may vote by proxy, after you request the hard copy materials, by following the directions and indicating your instructions on the enclosed proxy card, dating and signing the proxy card, and promptly returning the proxy card in the envelope provided, which requires no postage if mailed in the United States. Please allow sufficient time for your proxy card to be received on or prior to [•], Eastern Time, on [•], 2020. |
Q: | If I am an MVC stockholder, how do I vote? |
A: | The MVC Special Meeting will be hosted live via Internet audio webcast. Any MVC stockholder can attend the MVC Special Meeting live at www.virtualshareholdermeeting.com/MVC2020SM. An MVC stockholder should follow the instructions on the accompanying proxy card and authorize a proxy via the Internet or telephone to vote in accordance with the instructions provided below. Authorizing a proxy by telephone or through the Internet requires you to input the control number located on your proxy card. After inputting the control number, you will be prompted to direct your proxy to vote on each proposal. You will have an opportunity to review your directions and make any necessary changes before submitting your directions and terminating the telephone call or Internet link. If you are the beneficial owner of your shares, you will need to follow the instructions provided by your broker, bank, trustee or nominee regarding how to instruct your broker, bank, trustee or nominee to vote your shares at the MVC Special Meeting. |
• | By Internet: www.proxyvote.com |
• | By telephone: (800) 690-6903 |
• | By mail: You may vote by proxy, after you request the hard copy materials, by following the directions and indicating your instructions on the enclosed proxy card, dating and signing the proxy card, and promptly returning the proxy card in the envelope provided, which requires no postage if mailed in the United States. Please allow sufficient time for your proxy card to be received on or prior to [•], Eastern Time, on [•], 2020. |
Q: | What if a Barings BDC stockholder does not specify a choice for a matter when authorizing a proxy? |
A: | All properly executed proxies representing shares of Barings BDC Common Stock at the Barings BDC Special Meeting will be voted in accordance with the directions given. If the enclosed proxy card is signed and returned without any directions given, the shares of Barings BDC Common Stock will be voted “FOR” the Barings BDC Proposals. |
Q: | What if an MVC stockholder does not specify a choice for a matter when authorizing a proxy? |
A: | All properly executed proxies representing shares of MVC Common Stock at the MVC Special Meeting will be voted in accordance with the directions given. If the enclosed proxy card is signed and returned without any directions given, the shares of MVC Common Stock will be voted “FOR” the MVC Proposals. |
Q: | If I am a Barings BDC stockholder, how can I change my vote or revoke a proxy? |
A: | You may revoke your proxy and change your vote by giving notice at any time before your proxy is exercised. A revocation may be effected by submitting new voting instructions via the Internet voting site, by telephone, by obtaining and properly completing another proxy card that is dated later than the original proxy card and returning it, by mail, in time to be received before the Barings BDC Special Meeting, by attending the Barings BDC Special Meeting and voting virtually or by a notice, provided in writing and signed by you, delivered to Barings BDC’s Secretary on any business day before the date of the Barings BDC Special Meeting. |
Q: | If I am an MVC stockholder, how can I change my vote or revoke a proxy? |
A: | You may revoke your proxy and change your vote by giving notice at any time before your proxy is exercised. A revocation may be effected by submitting new voting instructions via the Internet voting site, |
Q: | If my shares of Barings BDC Common Stock or MVC Common Stock, as applicable, are held in a broker-controlled account or in “street name,” will my broker vote my shares for me? |
A: | No. You should follow the instructions provided by your broker on your voting instruction form. It is important to note that your broker will vote your shares only if you provide instructions on how you would like your shares to be voted at the applicable special meeting. |
Q: | What constitutes a “quorum” for the Barings BDC Special Meeting? |
A: | The presence at the Barings BDC Special Meeting, virtually or represented by proxy, of the holders of a majority of the shares of Barings BDC Common Stock, issued and outstanding and entitled to vote at the Barings BDC Special Meeting, will constitute a quorum. Shares held by a broker, bank, trustee or nominee for which the broker, bank, trustee or nominee has not received voting instructions from the record holder as to how to vote such shares and does not have discretionary authority to vote the shares on non-routine proposals (which are considered “broker non-votes” with respect to such proposals) will not be treated as shares present for quorum purposes. |
Q: | What constitutes a “quorum” for the MVC Special Meeting? |
A: | The presence at the MVC Special Meeting, virtually or represented by proxy, of the holders of a majority of the shares of MVC Common Stock, issued and outstanding and entitled to vote at the MVC Special Meeting, will constitute a quorum. Shares held by a broker, bank, trustee or nominee for which the broker, bank, trustee or nominee has not received voting instructions from the record holder as to how to vote such shares and does not have discretionary authority to vote the shares on non-routine proposals (which are considered “broker non-votes” with respect to such proposals) will not be treated as shares present for quorum purposes. |
Q: | What vote is required to approve each of the proposals being considered at the Barings BDC Special Meeting? |
A: | The Merger Stock Issuance Proposal requires the affirmative vote of the holders of at least a majority of the votes cast by holders of shares of Barings BDC Common Stock present at the Barings BDC Special Meeting, virtually or represented by proxy, entitled to vote thereat. Abstentions and broker non-votes (if any) will not be counted as votes cast and will have no effect on the result of the vote of the Merger Stock Issuance Proposal. |
Q: | What vote is required to approve each of the proposals being considered at the MVC Special Meeting? |
A: | The affirmative vote of the holders of at least a majority of the outstanding voting securities of MVC Common Stock entitled to vote at the MVC Special Meeting is required to approve the Merger Proposal. The affirmative vote of the holders of at least a majority of the votes cast by holders of the shares of MVC Common Stock present at the MVC Special Meeting, virtually or represented by proxy, and entitled to vote thereat is required to approve the MVC Adjournment Proposal. |
Q: | What will happen if the Barings BDC Proposals being considered at the Barings BDC Special Meeting and/or the MVC Proposals being considered at the MVC Special Meeting is not approved by the required vote? |
A: | The Merger Stock Issuance Proposal and the Barings BDC Below NAV Proposals with respect to Barings BDC, and the Merger Proposal with respect to MVC, are conditions precedent to the closing of the Merger. If the Merger does not close because Barings BDC stockholders do not approve the Merger Stock Issuance Proposal or the Barings BDC Below NAV Proposal (the “Barings BDC Stockholder Approval”) and MVC stockholders do not approve the Merger Proposal (the “MVC Stockholder Approval”) or any of the other conditions to closing of the Merger are not satisfied or, if legally permissible, waived, Barings BDC and MVC will continue to operate independently under the management of their respective investment advisers, and Barings BDC’s and MVC’s respective directors and officers will continue to serve in such roles until their respective successors are duly elected and qualify or their resignation. In addition, neither Barings BDC nor MVC will benefit from the expenses incurred in their pursuit of the Merger and, under certain circumstances, MVC may be required to pay Barings BDC’s and Barings’ expenses incurred in connection with the Merger, subject to a cap of $1,175,175. See “Description of the Merger Agreement—Termination of the Merger Agreement” below for a more detailed discussion. |
Q: | How will the final voting results be announced? |
A: | Preliminary voting results may be announced at each special meeting. Final voting results will be published by Barings BDC and MVC in a current report on Form 8-K within four business days after the date of the Barings BDC Special Meeting and the MVC Special Meeting, respectively. |
Q: | Are the proxy materials available electronically? |
A: | Barings BDC and MVC have made the registration statement (of which this joint proxy statement/prospectus forms a part), the applicable notice of special meeting of stockholders and the applicable proxy card available to stockholders of Barings BDC and MVC on the Internet. stockholders may (i) access and review the proxy materials of Barings BDC and MVC, as applicable,(ii) authorize their proxies, as described in “The Barings BDC Special Meeting—Voting of Proxies” and “The MVC Special Meeting—Voting of Proxies” and/or (iii) elect to receive future proxy materials by electronic delivery via the Internet address provided below. |
Q: | Will my vote make a difference? |
A: | Yes. Your vote is needed to ensure that the proposals can be acted upon. Your vote is very important. Your immediate response will help avoid potential delays and may save significant additional expenses associated with soliciting stockholder votes, and potentially adjourning the Special Meetings. |
Q: | Whom can I contact with any additional questions? |
A: | If you are a Barings BDC stockholder, you can contact Barings BDC by calling Barings BDC collect at (888) 401-1088, by sending an e-mail to Barings BDC at BDCinvestorrelations@barings.com, or by writing to Barings BDC at 300 South Tryon Street, Suite 2500, Charlotte, North Carolina 28202, Attention: Investor Relations, or by visiting Barings BDC’s website at www.baringsbdc.com or you may contact Broadridge Inc., Barings BDC’s proxy solicitor, toll-free at 1-877-777-4652. |
Q: | Where can I find more information about Barings BDC and MVC? |
A: | You can find more information about Barings BDC and MVC in the documents described under the section entitled “Where You Can Find More Information.” |
Q: | What do I need to do now? |
A: | Barings BDC and MVC urge you to carefully read this entire document, including its annexes. You should also review the documents referenced under “Where You Can Find More Information” and consult with your accounting, legal and tax advisors. |
Q: | What will happen in the Merger? |
A: | As of the Effective Time (as defined below), the separate corporate existence of Acquisition Sub will cease. MVC will be the surviving corporation of the First Step and will continue its existence as a corporation under the laws of the State of Delaware until the Second Step. Immediately after the Effective Time, MVC, as the surviving corporation in the First Step, will merge with and into Barings BDC, with Barings BDC as the surviving corporation in the Second Step (the “Second Step” and together with the First Step, the “Merger”). |
Q: | What will MVC stockholders receive in the Merger? |
A: | Subject to the terms and conditions of the Merger Agreement, at the Effective Time, each share of MVC Common Stock issued and outstanding immediately prior to the Effective Time (excluding Canceled Shares) will be converted into the right to receive (1) $0.39492 per share in cash, without interest, from Barings (such amount of cash, the “Cash Consideration”) and (2) 0.94024 (as may be adjusted pursuant to the Merger Agreement) of a validly issued, fully paid and non-assessable share of Barings BDC Common Stock (and, if applicable, cash in lieu of fractional shares of Barings BDC Common Stock payable in accordance the Merger Agreement) (the “Share Consideration,” together with the Cash Consideration, the “Merger |
Q: | How will the Exchange Ratio be determined? |
A: | The Exchange Ratio was fixed at the signing of the Merger Agreement at 0.94024. As described below, the Exchange Ratio is subject to adjustment based on changes in the number of outstanding shares of Barings BDC Common Stock and MVC Common Stock, the payment of MVC Tax Dividends (as defined under “Description of the Merger Agreement — Additional Covenants — Tax Dividends; Coordination of Dividends”) by MVC, any undistributed “investment company taxable income” (“ICTI”) within the meaning of Section 852(b) of the Internal Revenue Code of 1986, as amended (the “Code”) of MVC, and undistributed “net capital gain” within the meaning of Section 1222(11) of the Code (“Net Capital Gain”) of MVC, the RIC Tax Liability (as defined under “Description of the Merger Agreement — Additional Covenants — RIC Tax Issues”) of MVC and changes of the Euro-to-U.S. dollar exchange rate between April 30, 2020 and the closing date of the Merger (the “Closing Date”) relating to certain of MVC’s investments (the “Euro-Dollar Exchange Rate Adjustment”). |
Q: | Who is responsible for paying the expenses relating to completing the Merger? |
A: | In general, all fees and expenses incurred in connection with the Merger will be paid by the party incurring such fees and expenses, whether or not the Merger or any of the transactions contemplated in the Merger Agreement are consummated. However, MVC will be required to pay Barings BDC’s expenses incurred in connection with the Merger, subject to a maximum reimbursement payment of $1,175,175, if MVC terminates the Merger Agreement, prior to receiving the required MVC Stockholder Approval, to enter into an Alternative Acquisition Agreement providing for a Superior Proposal (each as is defined under “Description of the Merger Agreement — Additional Covenants — No Solicitation.” It is expected that Barings BDC will incur approximately $[•] million, or $[•] per share of Barings BDC Common Stock, and MVC will incur approximately $[•] million, or $[•] per share of MVC Common Stock, of fees and expenses in connection with completing the Merger. |
Q: | Will I receive distributions after the Merger? |
A: | Each MVC stockholder will become a stockholder of Barings BDC in the Merger. MVC stockholders who participate in MVC’s dividend reinvestment plan will receive any future distributions paid to Barings BDC stockholders with respect to shares of Barings BDC Common Stock received in the Merger. MVC stockholders who do not participate in MVC’s dividend reinvestment plan will receive such future distributions with respect to shares of Barings BDC Common Stock received in the Merger in cash (unless such distributions are made in shares of stock). |
Q: | Is the Merger subject to any third-party consents? |
A: | Under the Merger Agreement, MVC and Barings BDC have agreed to cooperate with each other and use their reasonable best efforts to take promptly, or cause to be taken promptly, all actions to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement, including the Merger, in the most expeditious manner practicable. There can be no assurance that any permits, consents, approvals, confirmations or authorizations will be obtained or that such permits, consents, approvals, confirmations or authorizations will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have a material adverse effect on the financial condition, results of operations, assets or business of the combined company following the Merger. |
Q: | How does Barings BDC’s investment objective and strategy differ from MVC’s? |
A: | Barings BDC’s primary investment objective is to generate income by investing directly in privately-held middle-market companies to help these companies fund acquisitions, growth or refinancing. Barings BDC seeks to achieve its investment objective by investing in senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries. MVC’s investment objective is to seek to maximize total return from capital appreciation and/or income, though MVC’s current focus is on yield generating investments. MVC seeks to achieve its investment objective by providing debt and equity financing to companies that are, for the most part, privately owned. MVC’s current investments in portfolio companies consist principally of senior and subordinated loans, venture capital, mezzanine and preferred instruments and private equity investments. |
Q: | How will the combined company be managed following the Merger? |
A: | The directors of Barings BDC immediately prior to the Merger will remain the directors of Barings BDC and will hold office until their respective successors are duly elected and qualify, or their earlier death, resignation or removal. In addition, pursuant to the Merger Agreement, one current MVC director mutually selected by Barings BDC and MVC will be added to the Barings BDC Board effective as of the closing. Barings BDC and MVC have not yet determined which MVC director will be appointed. The officers of Barings BDC immediately prior to the Merger will remain the officers of Barings BDC and will hold office until their respective successors are duly appointed and qualify, or their earlier death, resignation or removal. Following the Merger, Barings BDC will continue to be managed by Barings, and there are not expected to be any material changes in Barings BDC’s investment objective or strategy. Over time, it is anticipated that Barings BDC will transition the investments acquired through the Merger into senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries, consistent with Barings BDC’s current investment strategy. |
Q: | Are Barings BDC stockholders able to exercise appraisal rights in connection with the Merger? |
A: | No. Barings BDC stockholders will not be entitled to exercise appraisal rights with respect to any matter to be voted upon at the Barings BDC Special Meeting. |
Q: | Are MVC stockholders able to exercise appraisal rights in connection with the Merger? |
A: | Yes. MVC stockholders will be entitled to exercise appraisal rights with respect to the Merger in accordance with Section 262 of the Delaware General Corporation Law (the “DGCL”). For more information, see “Appraisal Rights of MVC stockholders” and “Description of the Merger Agreement—Appraisal Rights.” |
Q: | When do the parties expect to complete the Merger? |
A: | While there can be no assurance as to the exact timing, or that the Merger will be completed at all, Barings BDC and MVC are working to complete the Merger in the fourth quarter of 2020. It is currently expected |
Q: | Is the Merger expected to be taxable to MVC stockholders? |
A: | The Merger is intended to qualify as a “reorganization,” within the meaning of Section 368(a) of the Code. If the Merger qualifies as a reorganization, then generally, for U.S. federal income tax purposes, U.S. stockholders (as defined herein under the heading “Certain Material U.S. Federal Income Tax Consequences of the Merger”) of MVC Common Stock who receive a combination of shares of Barings BDC Common Stock and cash, other than cash in lieu of a fractional share of Barings BDC Common Stock, in exchange for their MVC Common Stock, will recognize gains, but will not recognize any losses, equal to the lesser of (1) the amount of cash received in exchange for MVC Common Stock (including any cash paid to U.S. stockholders as the result of fluctuations in the Euro-to-U.S. dollar exchange rate), and excluding cash received in lieu of a fractional share of Barings BDC Common Stock) and (2) the excess, if any, of (a) the sum of the amount of cash received in exchange for MVC Common Stock (including cash received in lieu of a fractional share of Barings BDC Common Stock) and the fair market value of the Barings BDC Common Stock received in the Merger (determined at the Effective Time) over (b) the U.S. stockholder’s tax basis in the shares of MVC Common Stock surrendered in the Merger. If a U.S. stockholder recognizes gains equal to the amount described in clause (1) rather than clause (2) of the preceding sentence, such U.S. stockholder will also recognize gains attributable to cash received in lieu of a fractional share of Barings BDC Common Stock in an amount equal to the difference between the amount of cash received and the portion of the basis of the MVC Common Stock surrendered that is allocable to the fractional share. Any gains recognized generally will be capital gains, and any such capital gains generally will be long-term capital gains, provided certain holding period and other requirements are met. MVC Tax Dividends paid by MVC should not be treated for U.S. federal income tax purposes as part of the consideration paid for shares of MVC Common Stock in the Merger but instead should be treated for U.S. federal income tax purposes as a distribution with respect to the MVC Common Stock. The U.S. federal income tax treatment of the Cash Consideration is uncertain in many respects. Although not free from doubt, MVC, Barings and Barings BDC intend that the Cash Consideration be treated by holders of MVC Common Stock as the receipt of ordinary income (as opposed to additional consideration received in exchange for MVC Common Stock) and have agreed to report the payment of the Cash Consideration in a manner consistent with its treatment as ordinary income to the holders of MVC Common Stock. |
Q: | What happens if the Merger is not consummated? |
A: | If the Merger is not completed for any reason, MVC stockholders will not receive any payment for their shares of MVC Common Stock in connection with the Merger. Instead, MVC will remain an independent company. In addition, MVC may, under certain circumstances specified in the Merger Agreement, be required to pay Barings BDC a termination fee of $2,937,938 and, under certain circumstances, reimburse Barings BDC for its out-of-pocket expenses incurred in connection with the transactions, subject to a maximum reimbursement amount of $1,175,175, or Barings BDC may be required to pay or cause to be paid to MVC a termination fee of $4,700,701. See “Description of the Merger Agreement—Termination of the Merger Agreement.” |
Q: | Is the approval of the New Barings BDC Advisory Agreement a condition precedent to the closing of the Merger and vice versa? |
A: | No. The closing of the Merger is not a condition to the adoption of the New Barings BDC Advisory Agreement. Similarly, the approval of the New Barings BDC Advisory Agreement is not a condition to the closing of the Merger. If the New Barings BDC Advisory Agreement is approved by Barings BDC stockholders, it will become effective as of January 1, 2021. If the New Barings BDC Advisory Agreement is not approved by Barings BDC stockholders, the existing investment advisory agreement, dated as of August 2, 2018, by and between Barings BDC and Barings (the “Existing Barings BDC Advisory Agreement”) will continue in effect and the Barings BDC Board will consider various alternatives, including seeking subsequent approval of a new investment advisory agreement by Barings BDC stockholders. |
| | Barings BDC Common Stock | | | MVC Common Stock | |
Closing Sales Price at August 7, 2020 | | | $8.24 | | | $6.63 |
Closing Sales Price at [•], 2020 | | | $[•] | | | $[•] |
• | Because the market price of Barings BDC Common Stock will fluctuate, MVC stockholders cannot be sure of the market value of the Merger Consideration they will receive until the Closing Date. |
• | The total value of consideration to be received by MVC stockholders cannot be determined until the Closing Date. |
• | Sales of shares of Barings BDC Common Stock after the completion of the Merger may cause the market price of Barings BDC Common Stock to decline. |
• | MVC stockholders and Barings BDC stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Merger. |
• | Barings BDC may be unable to realize the benefits anticipated by the Merger, including estimated cost savings, or it may take longer than anticipated to realize such benefits. |
• | The announcement and pendency of the proposed Merger could adversely affect both Barings BDC’s and MVC’s business, financial results and operations. |
• | If the Merger does not close, neither Barings BDC nor MVC will benefit from the expenses incurred in their pursuit of the Merger. |
• | The termination of the Merger Agreement could negatively impact MVC and Barings BDC. |
• | Under certain circumstances, MVC or Barings BDC may be obligated to pay a termination fee upon termination of the Merger Agreement. |
• | Except in specified circumstances, if the Merger is not completed by February 10, 2021, either MVC or Barings BDC may choose not to proceed with the Merger. |
• | The Merger is subject to closing conditions, including stockholder approvals, that, if not satisfied or waived, will result in the Merger not being completed, which may result in material adverse consequences to MVC’s and Barings BDC’s business and operations. |
• | MVC and Barings BDC will be subject to contractual restrictions while the Merger is pending, including restrictions on pursuing alternatives to the Merger. |
• | The Merger Agreement contains provisions that could discourage or make it difficult for a third party to acquire MVC prior to the completion of the proposed Merger. |
• | If the Merger is not completed or MVC is not otherwise acquired, MVC may consider other strategic alternatives, which are subject to risks and uncertainties. |
• | Subject to applicable law, each party may waive one or more conditions to the Merger without resoliciting approval from its respective stockholders. |
• | The shares of Barings BDC Common Stock to be received by MVC stockholders as a result of the Merger will have different rights associated with them than shares of MVC Common Stock currently held by them. |
• | The market price of Barings BDC Common Stock after the Merger may be affected by factors different from those affecting Barings BDC Common Stock or MVC Common Stock currently. |
• | The Merger may trigger certain “change of control” provisions and other restrictions in certain of Barings BDC’s and MVC’s contracts and the failure to obtain any required consents or waivers could adversely impact the combined company. |
• | The opinion delivered to the by Barings BDC Board by its financial advisor and the opinion delivered to the MVC Board and the MVC Strategic Review Committee by MVC’s financial advisor will not reflect any changes in circumstances that may occur since the opinions were delivered prior to signing the Merger Agreement. |
• | Certain persons related to MVC and Barings BDC have interests in the Merger that differ from the interests of MVC and Barings BDC stockholders. |
• | The combined company may not be able to obtain financing for additional capital requirements. |
• | MVC and Barings BDC have incurred and expect to incur substantial transaction fees and costs in connection with the Merger, whether or not the Merger is completed. |
• | Any litigation which may be filed against MVC and Barings BDC in connection with the Merger, regardless of its merits, could result in substantial costs and could delay or prevent the Merger from being completed. |
• | The Merger may not be treated as a tax-free reorganization under Section 368(a) of the Code. |
• | The U.S. federal income tax treatment of the Cash Consideration is not entirely clear, and the position taken that the Cash Consideration is treated as ordinary income to the holders of MVC Common Stock might be challenged by the IRS. |
• | the combined company’s increased scale and liquidity; |
• | the expected accretion to Barings BDC stockholders; |
• | the alignment of Barings and Barings BDC stockholders; |
• | the combined company’s economies of scale; |
• | the combined company’s quality of holdings and diversification of assets and liabilities; |
• | the combined company’s increased market capitalization and commensurate increased trading volume; |
• | the structure and tax consequences of the Merger; |
• | the opinion of Barings BDC’s financial advisor; |
• | the terms of the Merger Agreement, including (1) provisions relating to the adjustment of the Exchange Ratio in respect of (a) any MVC Tax Dividends paid by MVC, (b) any contributed ICTI and/or undistributed Net Capital Gain of MVC or (c) any RIC Tax Liability of MVC, (2) the interim operating covenants applicable to MVC's portfolio, (3) the non-solicitation covenants and (4) the provisions relating to MVC termination fee and MVC's reimbursement of Barings BDC’s and Barings’ expenses up to a cap under certain circumstances; and |
• | the fact that the Voting Agreements were executed with four of MVC's largest stockholders in connection with the signing of the Merger Agreement, representing approximately 31% of the outstanding shares of MVC Common Stock. |
• | Barings BDC’s more diverse credit portfolio with less non-accruing loans; |
• | the fact that Barings BDC is managed by a large global asset manager, whereas MVC has key-man risk; |
• | Barings BDC’s greater scale and thus the potential to be better able to successfully compete for investment opportunities and have access to lower cost financing sources than MVC; |
• | the combined portfolio’s greater potential to grow cash net investment income with a larger portion consisting cash interest payments as opposed to payment in kind interest; |
• | the combined company having more than four (4) times the market capitalization of MVC, which is expected to improve liquidity for MVC stockholders; |
• | the proposed Merger Consideration market value representing a substantial implied premium over the market value of MVC Common Stock based on the closing share prices of MVC Common Stock and Barings BDC Common Stock on August 7, 2020; |
• | the Credit Support Agreement is expected to give stockholders of the combined company downside protection on the MVC portfolio and insulate the combined company’s stockholders from certain losses in MVC’s portfolio for the ten (10) years following the completion of the Merger; |
• | inherent uncertainties and a protracted timeline associated with liquidations, an alternative to a business combination, as well as risks that per share liquidation values would be below the implied per share Merger Consideration value; |
• | consideration of estimates of the then-current value of MVC’s net assets and Barings BDC’s net assets and the historical trading prices of MVC Common Stock and Barings BDC Common Stock compared to such estimates of NAV in determining the exchange ratio; |
• | the terms of the Merger Agreement, including (1) a provision that permits MVC, under specified circumstances, to respond to and engage in discussions with third parties regarding unsolicited proposals to acquire MVC ; (2) a provision that permits the MVC Board and the MVC Strategic Review Committee, under specified circumstances in connection with an intervening event, to change their recommendation that MVC stockholders vote in favor of the adoption of the Merger Agreement; (3) a provision whereby an additional director, who is currently a director on the MVC Board and mutually selected by MVC and Barings BDC, would be appointed to the Barings BDC Board following the closing of the Merger; and (4) that Barings BDC’s obligation to complete the Merger is not conditioned on Barings BDC receiving any third-party financing; and |
• | the opinion of MVC’s financial advisor. |
• | changes in the business, operations or prospects of Barings BDC; |
• | the financial condition of current or prospective portfolio companies of Barings BDC; |
• | interest rates or general market or economic conditions; |
• | market assessments of the likelihood that the Merger will be completed and the timing of completion of the Merger; |
• | market perception of the future profitability of the combined company; |
• | the duration and effects of the COVID-19 pandemic on Barings BDC’s portfolio companies; and |
• | the duration and effects of the COVID-19 pandemic on equity trading prices generally, and specifically on the trading price of Barings BDC Common Stock and the common stock of the surviving corporation following the Merger. |
• | MVC’s and Barings BDC’s businesses may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger; |
• | the market prices of MVC Common Stock and Barings BDC Common Stock might decline to the extent that the market price prior to termination reflects a market assumption that the Merger will be completed; |
• | MVC may not be able to find a party willing to pay an equivalent or more attractive price than the price Barings BDC agreed to pay in the Merger; and |
• | the payment of any termination fee or reimbursement of expenses, if required under the circumstances, could adversely affect the financial condition and liquidity of MVC. |
• | a larger stockholder base; |
• | a different portfolio composition; and |
• | a different capital structure. |
| | Actual | | | Pro Forma | ||||
Stockholder transaction expenses | | | Barings BDC (acquiring fund) | | | MVC (target fund) | | | |
Sales load (as a percentage of offering price) | | | None(1) | | | None(1) | | | None(1) |
Offering expenses (as a percentage of offering price) | | | None(1) | | | None(1) | | | None(1) |
Dividend reinvestment plan expenses | | | None(2) | | | None(2) | | | None(1) |
Total stockholder transaction expenses (as a percentage of offering price) | | | None | | | None | | | None |
| | Actual | | | Pro Forma | ||||
Estimated annual expenses (as a percentage of net assets attributable to common stock):(3) | | | Barings BDC (acquiring fund) | | | MVC (target fund) | | | |
Base management fees(4) | | | 2.9% | | | 1.4% | | | 2.5% |
Incentive fees(5) | | | 0.0% | | | 0.7% | | | 0.0% |
Interest payments on borrowed funds(6) | | | 3.8% | | | 4.2% | | | 2.9%(9) |
Other expenses(7) | | | 1.1% | | | 3.2% | | | 1.4% |
Acquired fund fees and expenses | | | 0.0% | | | 0.3% | | | 0.0% |
Total annual expenses(8) | | | 7.8% | | | 9.8% | | | 6.8% |
* | Represents an amount less than 0.1%. |
(1) | Purchases of shares of common stock of Barings BDC or MVC on the secondary market are not subject to sales charges, but may be subject to brokerage commissions or other charges. The table does not include any sales load (underwriting discount or commission) that stockholders may have paid in connection with their purchase of shares of Barings BDC Common Stock or MVC Common Stock in a prior underwritten offering or otherwise. |
(2) | The estimated expenses associated with the respective distribution reinvestment plans are included in “Other expenses.” |
(3) | “Consolidated net assets attributable to common stock” equals Barings BDC net assets at June 30, 2020 and the average of MVC’s consolidated net assets over the last four quarters (i.e., total consolidated assets less total consolidated liabilities) estimated at July 31, 2020. For the pro forma columns, the combined net assets of Barings BDC at June 30, 2020 and MVC at July 31, 2020 on a pro forma basis were used. “Estimate annual expenses” are derived by Barings BDC by annualizing the most recent quarterly percentage and by MVC by annualizing the percentage for its three most recent fiscal quarters. |
(4) | For Barings BDC, pursuant to the Existing Barings BDC Advisory Agreement, the base management fee is 1.375% of Barings BDC’s average gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. The fee table above shows the base management fee as a percentage of net assets as required by the SEC. |
(5) | Barings BDC’s incentive fee consists of two parts: (1) a portion based on Barings BDC’s pre-incentive fee net investment income (the “Income-Based Fee”) and (2) a portion based on the net capital gains received on Barings BDC’s portfolio of securities on a cumulative basis for each calendar year, net of all realized capital losses and all unrealized capital depreciation for that same calendar year (the “Capital Gains Fee”). Pursuant to the Existing Barings BDC Advisory Agreement, Barings BDC pays an Income-Based Fee to Barings which is 100% of Barings BDC’s pre-incentive fee net investment income, if any, that exceeds the hurdle rate of 2.00% per |
(6) | The figure in the table for Barings BDC is derived by annualizing the actual three months ended June 30, 2020 borrowing costs of Barings BDC under all of its financing facilities, including amortized costs and expenses. |
(7) | In the case of Barings BDC, other expenses include expenses incurred under the administration agreement, by and between Barings BDC and Barings, as the administrator, Barings BDC Board fees, directors and officers insurance costs, as well as legal and accounting expenses. The percentage presented in the table reflects actual amounts incurred during the three months ended June 30, 2020 on an annualized basis. |
(8) | “Total annual expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. Barings BDC and MVC borrow money to leverage and increase total assets. The SEC requires that the “Total annual expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period), rather than the total assets, including assets that have been funded with borrowed monies. |
(9) | This is based on the assumption that Barings BDC’s interest costs (expressed at a percentage rate on the principal amount of debt) after the Merger will remain the same as its costs prior to the Merger. Barings BDC expects over time that as a result of additional investment purchases, and in turn, additional borrowings on the financing facilities after the Merger, the combined company’s interest payments on borrowed funds may be more than the principal amounts reflected in the section entitled “Capitalization” below and, accordingly, that estimated total expenses may be different than as reflected in the table above. However, the actual amount of leverage employed at any given time cannot be predicted. |
| | 1 year | | | 3 years | | | 5 years | | | 10 years | |
You would pay the following expenses on a $1,000 investment: | | | | | | | | | ||||
Barings BDC, assuming a 5% annual return (assumes no return from net realized capital gains or net unrealized capital appreciation) | | | $78 | | | $229 | | | $372 | | | $703 |
MVC, assuming a 5% annual return (assumes no return from net realized capital gains or net unrealized capital appreciation) | | | $98 | | | $280 | | | $445 | | | $793 |
| | | | | | | | |||||
Barings BDC, assuming a 5% annual return (assumes return entirely from realized capital gains and thus subject to the capital gains incentive fee) | | | $88 | | | $255 | | | $409 | | | $746 |
MVC, assuming a 5% annual return (assumes return entirely from realized capital gains and thus subject to the capital gains incentive fee) | | | $108 | | | $305 | | | $480 | | | $837 |
| | | | | | | | |||||
Pro forma combined company following the Merger | | | | | | | | | ||||
You would pay the following expenses on a $1,000 investment: | | | | | | | | | ||||
Assuming a 5% annual return (assumes no return from net realized capital gains or net unrealized capital appreciation) | | | $68 | | | $200 | | | $328 | | | $627 |
Assuming a 5% annual return (assumes return entirely from realized capital gains and thus subject to the capital gains incentive fee) | | | $78 | | | $227 | | | $369 | | | $689 |
• | the timing or likelihood of the transaction closing; |
• | the combined company’s plans, expectations, objectives and intentions; |
• | the ability to realize the anticipated benefits for the proposed Merger; |
• | the expected synergies and savings associated with the transaction; |
• | the expected elimination of certain expenses and costs due to the transaction; |
• | the percentage of MVC stockholders voting in favor of the transaction; |
• | the percentage of Barings BDC stockholders voting in favor of the relevant proposals; |
• | the possibility that competing offers or acquisition proposals for MVC will be made; |
• | the possibility that any or all of the various conditions to the consummation of the Merger may not be satisfied or waived; |
• | risks related to diverting the attention of Barings BDC’s management or MVC’s management from ongoing business operations; |
• | the risk that stockholder litigation in connection with the transactions contemplated by the Merger Agreement may result in significant costs of defense and liability; |
• | the future operating results of the combined company or Barings BDC’s, MVC’s or the combined company’s portfolio companies; |
• | regulatory approvals and other factors; |
• | changes in regional or national economic conditions, including but not limited to the impact of the COVID-19 pandemic, and their impact on the industries in which Barings BDC and MVC invest; |
• | general economic and political trends and other external factors; |
• | the effect that the announcement or consummation of the Merger may have on the trading price of MVC Common Stock and Barings BDC Common Stock; |
• | changes to the form and amounts of MVC’s tax obligations; |
• | changes in the Euro-to-U.S. dollar exchange rate; |
• | fluctuations in the market price of Barings BDC Common Stock and MVC Common Stock; |
• | changes in MVC’s and/or Barings BDC’s NAV; |
• | potential litigation arising from the Merger Agreement and/or the Merger; |
• | the transaction’s effect on the relationships of Barings BDC or MVC with their respective investors, portfolio companies, lenders and service providers, whether or not the transaction is completed; |
• | the reduction in Barings BDC stockholders’ and MVC stockholders’ percentage ownership and voting power in the combined company; |
• | the challenges and costs presented by the integration of Barings BDC and MVC; |
• | the uncertainty of third-party approvals; |
• | the significant transaction costs; |
• | the effect of changes to tax legislation and MVC’s and Barings BDC’s respective tax positions; |
• | any potential termination of the Merger Agreement and the actions of MVC and Barings BDC stockholders with respect to any proposed transactions; |
• | the restrictions on Barings BDC’s and MVC’s conduct of business set forth in the Merger Agreement; |
• | MVC’s and/or Barings BDC’s ability to qualify and maintain their respective qualifications as a RIC and as a BDC; and |
• | other changes in the conditions of the industries in which Barings BDC and MVC invest and other factors enumerated in Barings BDC’s and MVC’s filings with the SEC. |
• | By Internet: www.proxyvote.com |
• | By telephone: (800) 690-6903 to reach a toll-free, automated touchtone voting line[, or [•] Monday through Friday 9:00 a.m. until 10:00 p.m. Eastern Time to reach a toll-free, live operator line]. |
• | By mail: You may vote by proxy, after you request the hard copy materials, by following the directions and indicating your instructions on the enclosed proxy card, dating and signing the proxy card, and promptly returning the proxy card in the envelope provided, which requires no postage if mailed in the United States. Please allow sufficient time for your proxy card to be received on or prior to [5:00 p.m.], Eastern Time, on [•], 2020. |
• | By Internet: www.proxyvote.com |
• | By telephone: (800) 690-6903 to reach a toll-free, automated touchtone voting line[, or [•] Monday through Friday 9:00 a.m. until 10:00 p.m. Eastern Time to reach a toll-free, live operator line]. |
• | By mail: You may vote by proxy, after you request the hard copy materials, by following the directions and indicating your instructions on the enclosed proxy card, dating and signing the proxy card, and promptly returning the proxy card in the envelope provided, which requires no postage if mailed in the United States. Please allow sufficient time for your proxy card to be received on or prior to [5:00 p.m.], Eastern Time, on [•], 2020. |
| | As of June 30, 2020 & July 31, 2020 (unaudited, dollar amounts in thousands, except share and per share data) | ||||||||||
| | Actual | | | Actual | | | Pro forma Adjustments | | | Pro Forma | |
| | Barings BDC | | | MVC | | | Barings BDC | ||||
Cash, cash equivalents and restricted cash | | | $76,500(1) | | | $51,873 | | | $(59,611) | | | $68,762 |
Debt less unamortized debt issuance costs | | | 563,611 | | | 93,182 | | | (50,839)(2) | | | 605,954 |
Net Assets | | | 490,473 | | | 180,466 | | | (9,900)(3) | | | 661,039 |
Total Capitalization | | | $1,130,584 | | | $325,521 | | | $(120,350) | | | $1,335,755 |
Number of common shares outstanding | | | 47,961,753 | | | 17,725,118 | | | (1,059,253) | | | 64,627,618 |
NAV per common share | | | $10.23 | | | $10.18 | | | | | $10.23 |
(1) | Includes $18.5 million of cash and $58.0 million of money market investments. |
(2) | Assumes the redemption of the MVC $95.0 million of the Existing MVC Notes (as defined under “Description of the Merger Agreement—Additional Covenants—Repayment of MVC Credit Facilities and Existing MVC Notes”) and additional borrowings on Barings BDC’s credit facility of approximately $43.0 million. |
(3) | Includes transaction expenses of Barings BDC of approximately $5.0 million; transaction expenses of MVC of approximately $1.8 million; write-off of prepaid expenses, write-off of MVC deferred financing costs, credit facility termination fee and interest on senior notes of approximately $3.2 million; decrease in estimate portfolio fair value of $10.1 million; and estimated initial value of the Credit Support Agreement (as defined under “The Merger—Reasons for the Merger—Barings BDC”) of $10.1 million. |
• | The Merger Agreement includes an adjustment to the Exchange Ratio to provide for a dollar-to-dollar reduction to the value of Barings BDC Common Stock issued in the Barings BDC Stock Issuance for (1) any MVC Tax Dividends paid by MVC, (2) any undistributed ICTI and/or remaining undistributed Net Capital Gain of MVC, (3) any RIC Tax Liability of MVC or (4) the impact of the Euro-Dollar Exchange Rate Adjustment. |
• | The Merger Agreement imposes customary restrictions on MVC’s ability to operate outside the ordinary course of business between the date of the Merger Agreement and the Effective Time (or until the earlier termination of the Merger Agreement), including regarding MVC’s ability to transact with existing and future portfolio companies, issue equity securities, incur indebtedness and pay dividends. |
• | The Merger Agreement contains customary non-solicitation covenants. In particular, the Merger Agreement: |
• | requires MVC to immediately cease and cause to be terminated immediately any existing solicitation of, or discussions with, any third party relating to any Competing Proposal or any inquiry, discussion, offer or request that could reasonably be expected to lead to a Competing Proposal; |
• | prohibits MVC from directly or indirectly initiating, soliciting or knowingly encouraging or facilitating (including by way of furnishing or disclosing information) any inquiries or the making, submission or implementation of any Competing Proposal, or entering into any agreement, arrangement, discussions or understanding with respect to any Competing Proposal or enter into any contract or understanding requiring it to abandon, terminate or fail to consummate the Merger, or initiating or engaging in negotiations or discussions with, or furnish any information to, any third party relating to a Competing Proposal. |
• | The Merger Agreement provides that MVC will be required to pay a customary termination fee to Barings BDC under certain circumstances if the transactions contemplated by the Merger Agreement are not consummated, along with Barings’ and Barings BDC’s expenses, subject to a cap of $1,175,175, in specific circumstances. |
• | that it would be possible that the Merger may not be completed or may be delayed; |
• | shares issued by Barings BDC in connection with the Merger may be issued below the then-current Barings BDC NAV and thus may result in a dilution of NAV to existing Barings BDC stockholders; |
• | certain restrictions may be imposed on the conduct of Barings BDC’s business prior to completion of the Merger, requiring Barings BDC to conduct its business only in the ordinary course of business in accordance with the Merger Agreement, subject to specific limitations, which could delay or prevent Barings BDC from taking advantage of business opportunities that may arise pending completion of the Merger; |
• | under most circumstances, Barings BDC will be responsible for the expenses incurred by Barings BDC in connection with the Merger and the completion of the transactions contemplated by the Merger Agreement, whether or not the Merger is consummated, including the costs and expenses of any filing and other fees payable by Barings BDC to the SEC in connection with the Merger; |
• | it is possible that the attention of management may be diverted during the period prior to completion of the Merger, which may adversely affect Barings BDC’s business; |
• | Barings BDC will be required to pay a termination fee to MVC upon the occurrence of certain events; and |
• |
• | MVC faces significant challenges as a standalone company managing concentrated, highly illiquid private equity investments within a publicly traded vehicle with quarterly net investment income and dividend targets and fair valuation requirements. |
• | Barings BDC is a more diversified BDC with a more diverse credit portfolio with less non-accruing loans. |
• | The Credit Support Agreement is expected to give stockholders of the combined company downside protection on the MVC portfolio and insulate the combined company’s stockholders from certain losses in MVC’s portfolio for the ten (10) years following the completion of the Merger. |
• | Barings BDC is managed by a large global asset manager, whereas MVC has key-man risk, given reliance on Michael Tokarz, the chairman of the MVC Board and TTG Advisers’ portfolio manager, for substantial decision-making. |
• | With over $1.2 billion in assets (on a pro forma basis as of June 30, 2020), Barings BDC has greater scale and thus is expected to be better able to successfully compete for investment opportunities and have access to lower cost financing sources than MVC. |
• | Like MVC, Barings BDC has strong institutional ownership relative to other BDCs, but has much broader analyst coverage and greater share liquidity than MVC. |
• | Barings BDC has greater management ownership of its shares, reflecting potentially greater alignment of management’s and stockholders’ interests. |
• | The combined portfolio has a greater potential to grow cash net investment income with a larger portion consisting of cash interest payments as opposed to payment in kind interest. |
• | The combined company would be more than four (4) times the market capitalization of MVC, which is expected to improve liquidity for MVC stockholders. |
• | The combined company is expected to have a lower operating expense ratio than MVC’s current ratio. |
• | The amount of the termination fee that may be paid by MVC to Barings BDC under certain circumstances should not foreclose higher bids should any emerge following the public announcement of the Merger Agreement. |
• | The proposed Merger Consideration market value represented a material implied premium over the market value of MVC Common Stock based on the closing share prices of MVC Common Stock and Barings BDC Common Stock on August 7, 2020. |
• | A portion of the Merger Consideration will be paid in cash, which reduces the risk of a decline in the share price of Barings BDC Common Stock relative to the price of shares of MVC Common Stock prior to the consummation of the Merger. |
• | The Merger Agreement provides for up to $15 million in secondary market support from Barings BDC, which will be available over a twelve-(12)-month period commencing upon the filing of the first quarterly report on Form 10-Q after the closing of the Merger, subject to Barings BDC’s compliance with certain contractual covenants and regulatory requirements. |
• | The MVC Board and MVC Strategic Review Committee believe that the Merger is more favorable to MVC stockholders than remaining an independent company or other alternative strategic transactions available. |
• | JMP rendered its opinion, dated August 10, 2020, to the MVC Board and the MVC Strategic Review Committee as to the fairness, from a financial point of view and as of the date opinion, to holders of MVC Common Stock (other than Barings BDC, Acquisition Sub, Barings and their respective affiliates) of the Merger Consideration to be received by such holders; see “Opinion of the Financial Advisor to MVC” for more information. |
• | COVID-19 has resulted in discounted valuations across the BDC sector, which could negatively affect any sale process, although buyer currencies may similarly be depressed. |
• | There is a possibility that a broader auction process could have uncovered other highly motivated bidders, although the amount of the termination fee is not expected to preclude other potential bidders. |
• | Selected comparable BDC mergers and acquisition transactions are being achieved at substantial discounts to NAV. |
• | Although a liquidation of MVC could have been an alternative to a business combination, there are inherent uncertainties and a protracted timeline associated with liquidations as well as risks that per share liquidation values would be below the implied per share Merger Consideration value. |
• | The potential for upside in equity investments would be diluted post-Merger (for those MVC stockholders who remain Barings BDC stockholders). |
• | The Merger is expected to be dilutive to MVC stockholders, and market value consideration to be paid to MVC is expected (based on market prices as of August 7, 2020) to amount to a significant discount to the current MVC NAV, although this discount is lower than the discount at which shares of MVC Common Stock have traded since March 2020. |
• | The per share dividend payments to MVC stockholders is expected to decline, though net investment income per share is expected to increase over the short term. |
• | Euro currency value adjustment to the Merger Consideration (the “Euro-Dollar Exchange Rate Adjustment”) could be significant in either direction. |
• | The Cash Consideration MVC stockholders would receive in the Merger will generally be taxable to them. |
• | Estimates of the then-current value of MVC’s net assets and Barings BDC’s net assets and the historical trading prices of MVC Common Stock and Barings BDC Common Stock compared to such estimates of NAV were considered in determining the exchange ratio. |
• | As a result of the proposed Merger, MVC stockholders will own approximately 26% of Barings BDC Common Stock, when considered relative to the respective companies’ NAVs. |
• | The Merger Consideration is based on a fixed exchange ratio, subject to adjustment only for changes in foreign currency exchange rates and certain distributions, and therefore MVC stockholders will benefit in the event that the market price of Barings BDC Common Stock increases relative to the price of MVC Common Stock prior to the consummation of the Merger. |
• | The MVC Strategic Review Committee successfully negotiated, among other things, an increased Credit Support Agreement commitment, the Euro-Dollar Exchange Rate Adjustment and a reduced termination fee obligation of MVC. |
• | The financial and other terms and conditions of the Merger Agreement and the Merger were the product of arm’s length negotiations between the parties. |
• | The Merger Agreement is required to be adopted by the affirmative vote of a majority of the outstanding shares of MVC Common Stock at a special meeting of MVC stockholders. |
• | There is a closing condition that a material adverse effect with respect to Barings BDC must not have occurred prior to the closing date of the Merger, and that certain other representations and warranties regarding Barings BDC’s conduct of business be true and correct in all material respects at the closing of the Merger. |
• | There is a provision that permits MVC, under specified circumstances, to respond to and engage in discussions with, and provide information to, third parties regarding unsolicited proposals to acquire MVC. |
• | There is a provision that permits the MVC Board and the MVC Strategic Review Committee, under specified circumstances in connection with an intervening event, to change their recommendation that MVC stockholders vote in favor of the adoption of the Merger Agreement. |
• | An additional director, who is currently a director on the MVC Board and mutually selected by MVC and Barings BDC, would be appointed to the Barings BDC Board following the closing of the Merger. |
• | Barings BDC’s obligation to complete the Merger is not conditioned on Barings BDC receiving any third-party financing. |
• | After consulting financial and legal advisors, the MVC Board and the MVC Strategic Review Committee considered the other terms and conditions of the Merger Agreement to be reasonable and consistent with precedents they deemed relevant. |
• | There are risks and costs to MVC if the Merger is not completed, including uncertainty about the effect of the Merger on MVC’s portfolio investments, investors, service providers and other parties, which could cause portfolio companies, investors, service providers and other parties to seek to change or not enter into business relationships with MVC. |
• | The Merger Agreement contains a fixed exchange ratio and therefore MVC stockholders will not be compensated in the event of a decline in the price of Barings BDC Common Stock relative to the price of MVC Common Stock prior to the consummation of the Merger. |
• | Due to the Euro-Dollar Exchange Rate Adjustment, the total consideration received by MVC stockholders may decline in the event the U.S. dollar strengthens relative to the Euro prior to the consummation of the Merger. |
• | The Merger Agreement contains provisions restricting the conduct of MVC’s business prior to the completion of the Merger (including suspension of issuance of regular dividends), generally requiring MVC not to take certain actions with respect to the conduct of its business without the prior consent of Barings BDC, and that such restrictions may delay or prevent MVC from undertaking business opportunities that may arise pending completion of the Merger. |
• | Certain provisions of the Merger Agreement could have the effect of discouraging third-party offers for MVC, including the restriction on MVC’s ability to solicit third-party proposals for alternative transactions and the requirement to hold a vote of MVC stockholders even if the MVC Strategic Review Committee or the MVC Board changes its recommendation. |
• | As a result of their smaller percentage of equity ownership in the combined company, MVC stockholders may have reduced influence over the board of directors, management and policies of the combined company as compared to the influence MVC stockholders presently have over the MVC Board, management and policies of MVC. |
• | There is the possibility that, under specified circumstances under the Merger Agreement, MVC may be required to pay a termination fee and certain Barings BDC’s and Barings’ expenses incurred in connection with the Merger. |
• | There is the risk of incurring expenses in connection with the Merger, including in connection with any litigation that may result from the announcement or pendency of the Merger. |
• | There is the risk of diverting management attention and resources from the operation of MVC’s business and toward completion of the Merger. |
• | Barings BDC’s obligation to complete the Merger is conditioned on obtaining Barings BDC stockholders’ approval. |
• | There are uncertainties regarding the potential impacts of the COVID-19 pandemic and related economic disruptions on Barings BDC’s and the combined company’s stock price, portfolio investments and the financial markets in general. |
• | There are other risks associated with the Merger, Barings BDC Common Stock and the business of Barings BDC and the combined company, as described in “Risk Factors — Risks Relating to the Merger” and “Risk Factors” in Part I, Item 1A of Barings BDC’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as applicable. |
• | reviewed the Merger Agreement; |
• | reviewed certain publicly available business and financial information concerning Barings BDC and MVC and the industries in which they operate; |
• | compared the proposed financial terms of the Merger with the publicly available financial terms of certain transactions involving companies J.P. Morgan deemed relevant and the consideration received for such companies; |
• | compared the financial and operating performance of Barings BDC and MVC with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of Barings BDC Common Stock and MVC Common Stock and certain publicly traded securities of such other companies; |
• | reviewed certain internal financial analyses and forecasts prepared by or at the direction of the managements of Barings BDC, Barings, MVC and TTG Advisers relating to their respective businesses, and, in the case of Barings BDC and Barings, relating to the business of MVC, as well as the estimated amount and timing of the cost savings and related expenses and synergies expected to result from the Merger (the “Synergies”); and |
• | performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion. |
• | In addition, J.P. Morgan held discussions with certain members of the management of Barings BDC, Barings, MVC and TTG Advisers with respect to certain aspects of the Merger, and the past and current business operations of Barings BDC and MVC, the financial condition and future prospects and operations of Barings BDC and MVC, the effects of the Merger on the financial condition and future prospects of Barings BDC, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry. |
Company | | | Price/NAV | | | 2021E Dividend Yield |
Fidus Investment Corporation | | | 0.67x | | | 11.7% |
Gladstone Capital Corporation | | | 1.05x | | | 10.2% |
Saratoga Investment Corp. | | | 0.69x | | | 10.2% |
Stellus Capital Investment Corp. | | | 0.63x | | | 11.9% |
Acquiring Company | | | Target Company | | | Announcement Date | | | Transaction P/NAV (x) |
Portman Ridge Financial Corporation | | | Garrison Capital Inc. | | | June 24, 2020 | | | 0.56x(1) |
Crescent Capital BDC, Inc. | | | Alcentra Capital Corporation | | | August 13, 2019 | | | 1.00x |
FS Investment Corporation | | | Corporate Capital Trust | | | July 23, 2018 | | | 0.85x |
Barings LLC Benefit Street Partners L.L.C. | | | Triangle Capital Corporation | | | April 4, 2018 | | | 0.95x(2) |
Ares Capital Corporation | | | American Capital, Ltd. | | | May 23, 2016 | | | 0.88x |
PennantPark Floating Rate Ltd. | | | MCG Capital Corporation | | | April 29, 2015 | | | 0.99x |
(1) | P/NAV of 0.56x excludes $5mm cash payment from acquiror external manager. |
(2) | P/NAV of 0.95x represents asset sale and does not take into account manager consideration. |
• | a December 31, 2020 valuation date; |
• | a range for cost of equity of 11.5% to 12.5%; |
• | a range of terminal values based on 2024 estimated NAV per share and calculated by applying a Price/NAV multiple range of 0.50x to 0.75x; and |
• | including distributions after December 31, 2020. |
Company | | | Price/NAV | | | 2021E Dividend Yield |
Solar Capital Ltd. | | | 0.85x | | | 9.5% |
Bain Capital Specialty Finance, Inc. | | | 0.67x | | | 12.9% |
Goldman Sachs BDC, Inc. | | | 1.11x | | | 11.5% |
Apollo Investment Corporation | | | 0.61x | | | 13.5% |
Blackrock TCP Capital Corp. | | | 0.82x | | | 11.9% |
TCG BDC, Inc. | | | 0.62x | | | 14.7% |
Crescent Capital BDC, Inc. | | | 0.73x | | | 13.6% |
PennantPark Floating Rate Ltd. | | | 0.68x | | | 13.7% |
• | a December 31, 2020 valuation date; |
• | a range for cost of equity of 11.5% to 12.5%; |
• | a range of terminal values based on 2024 estimated NAV per share and calculated by applying a Price/NAV multiple range of 0.60x to 0.85x; |
• | 4.0% tax rate applied to undistributed net investment income; and |
• | including distributions after December 31, 2020. |
• | reviewed the financial terms and conditions of a draft dated August 9, 2020 of the Merger Agreement; |
• | reviewed certain publicly available business and financial information relating to MVC and Barings BDC; |
• | reviewed certain financial projections provided to JMP by MVC relating to MVC and certain other historical and current financial and business information relating to MVC provided to JMP by MVC, including estimates of the senior management of MVC as to the liquidation value of MVC and its assets; |
• | reviewed certain financial projections provided to JMP by Barings BDC relating to Barings BDC and certain other historical and current financial and business information relating to Barings BDC provided to JMP by Barings BDC; |
• | held discussions regarding the operations, financial condition and prospects of MVC and Barings BDC, respectively, with the senior management of MVC and the senior management of Barings BDC (which consists solely of employees of Barings); |
• | reviewed the financial and stock market performance of MVC and Barings BDC and compared them with one another and with those of certain other publicly traded companies that JMP deemed to be relevant; |
• | compared certain financial terms of the Merger to financial terms, to the extent publicly available, of other transactions that JMP deemed relevant; |
• | reviewed the premiums paid in certain publicly-announced specialty finance mergers and acquisitions transactions; |
• | reviewed the current and historical trading prices and volume for MVC Common Stock and Barings BDC Common Stock; |
• | reviewed certain publicly available research analyst price targets for Barings BDC; |
• | considered the results of MVC’s efforts to solicit indications of interest and definitive proposals from certain third parties with respect to a possible acquisition of MVC; and |
• | performed such other studies, analyses and inquiries and considered such other factors as JMP deemed appropriate. |
• | Barings BDC, Inc. |
• | BlackRock Capital Investment Corporation |
• | Capital Southwest Corporation |
• | Capitala Finance Corp. |
• | Crescent Capital BDC, Inc. |
• | Fidus Investment Corporation |
• | First Eagle Alternative Capital BDC, Inc. |
• | Gladstone Capital Corporation |
• | Gladstone Investment Corporation |
• | Investcorp Credit Management BDC, Inc. |
• | Medley Capital Corporation |
• | Monroe Capital Corporation |
• | OFS Capital Corporation |
• | Portman Ridge Finance Corporation |
• | Saratoga Investment Corp. |
• | Stellus Capital Investment Corporation |
• | WhiteHorse Finance, Inc. |
| | Price-to-Net Asset Value | | | Dividend Yield | |
Top Quartile | | | 0.73x | | | 14.1% |
Median | | | 0.67x | | | 11.7% |
Bottom Quartile | | | 0.48x | | | 9.7% |
Target | | | Acquiror |
Garrison Capital Inc. | | | Portman Ridge Finance Corporation |
Alcentra Capital Corporation | | | Crescent Capital BDC, Inc. |
OHA Investment Corp. | | | Portman Ridge Finance Corporation |
Golub Capital Investment Corporation | | | Golub Capital BDC, Inc. |
Corporate Capital Trust, Inc. | | | FS Investment Corp. |
Barings BDC (f/k/a Triangle Capital Corp) | | | Barings |
NF Investment Corp. | | | TCG BDC, Inc. |
Credit Suisse Park View BDC, Inc. | | | CION |
Full Circle Capital Corp | | | MAST Funds / Great Elm Capital Corporation |
American Capital, Ltd. | | | Ares Capital Corporation |
MCG Capital Corp | | | PennantPark Floating Rate Capital Ltd. |
Allied Capital Corp | | | Ares Capital Corporation |
Patriot Capital Funding, Inc. | | | Prospect Capital Corporation |
| | Equity Value/ NAV | |
Top Quartile | | | 1.00x |
Median | | | 0.92x |
Bottom Quartile | | | 0.68x |
| | Based on Closing Stock Price at | |||||||
| | 1-Day | | | 1-Week | | | 1-Month | |
Top Quartile of Premiums Paid | | | 34.5% | | | 30.9% | | | 39.4% |
Median of Premiums Paid | | | 19.0% | | | 16.4% | | | 19.7% |
Bottom Quartile of Premiums Paid | | | 11.2% | | | 11.2% | | | 13.7% |
• | BlackRock Capital Investment Corporation |
• | BlackRock TCP Capital Corp. |
• | Capital Southwest Corporation |
• | Crescent Capital BDC, Inc. |
• | Fidus Investment Corporation |
• | Gladstone Capital Corporation |
• | Gladstone Investment Corporation |
• | Goldman Sachs BDC, Inc. |
• | Monroe Capital Corporation |
• | Newtek Business Services Corp. |
• | PennantPark Investment Corporation |
• | Saratoga Investment Corp. |
• | Stellus Capital Investment Corporation |
• | WhiteHorse Finance, Inc. |
| | Dividend Yield | | | Price-to-Net Asset Value | |
Top Quartile | | | 13.7% | | | 0.95x |
Median | | | 11.8% | | | 0.73x |
Bottom Quartile | | | 11.0% | | | 0.67x |
Barings BDC | | | 7.8% | | | 0.81x |
• | historical closing stock price-to-NAV per share multiples of MVC during the five-period ended August 7, 2020, as compared to an implied transaction multiple for the proposed Merger (based on the implied value of the Merger Consideration of $8.14 per outstanding share of MVC Common Stock) of 0.78x MVC’s NAV per share as of April 30, 2020; and |
• | historical closing stock price-to-NAV per share multiples of Barings BDC during the period from August 2, 2018 to August 7, 2020, which had an average of 0.82x, as compared to the closing stock price-to-NAV per share value multiple of Barings BDC on August 7, 2020 of 0.81x Barings BDC’s NAV per share as of June 30, 2020. |
• | the performance of investment assets; |
• | the amount and timing of share repurchases and dividend payments; |
• | the degree and methods of portfolio leverage; |
• | industry performance and competition; |
• | general business, economic, market and financial conditions; and |
• | additional specific matters to MVC’s business. |
| | As of | ||||||||||||||||||||||
| | 10/31/2020 | | | 01/31/2021 | | | 04/30/2021 | | | 07/31/2021 | | | 10/31/2021 | | | 01/31/2022 | | | 04/30/2022 | | | 07/31/2022 | |
Total Assets | | | $285.5 | | | $283.5 | | | $282.4 | | | $281.4 | | | $280.0 | | | $294.4 | | | $320.0 | | | $345.4 |
Total Liabilities | | | $99.7 | | | $99.7 | | | $99.7 | | | $99.7 | | | $99.7 | | | $115.7 | | | $143.1 | | | $170.5 |
Net Assets | | | $185.8 | | | $183.8 | | | $182.7 | | | $181.7 | | | $180.3 | | | $178.7 | | | $176.9 | | | $174.8 |
| | For the Fiscal Quarter Ended | ||||||||||||||||||||||
| | 10/31/2020 | | | 01/31/2021 | | | 04/30/2021 | | | 07/31/2021 | | | 10/31/2021 | | | 01/31/2022 | | | 04/30/2022 | | | 07/31/2022 | |
Total Income | | | $5.7 | | | $6.0 | | | $6.6 | | | $7.0 | | | $7.5 | | | $7.9 | | | $8.5 | | | $9.1 |
Total Expenses | | | $3.7 | | | $4.2 | | | $3.7 | | | $3.7 | | | $3.8 | | | $4.2 | | | $4.2 | | | $4.6 |
Net Operating Income | | | $2.0 | | | $1.8 | | | $2.9 | | | $3.3 | | | $3.7 | | | $3.7 | | | $4.3 | | | $4.5 |
| | For the Fiscal Quarter Ended | ||||||||||||||||||||||
| | 10/31/2020 | | | 01/31/2021 | | | 04/30/2021 | | | 07/31/2021 | | | 10/31/2021 | | | 01/31/2022 | | | 04/30/2022 | | | 07/31/2022 | |
Shares Outstanding | | | 17.7 | | | 17.7 | | | 17.7 | | | 17.7 | | | 17.7 | | | 17.7 | | | 17.7 | | | 17.7 |
NAV per Share | | | $10.48 | | | $10.37 | | | $10.31 | | | $10.25 | | | $10.17 | | | $10.08 | | | $9.98 | | | $9.86 |
Net Operating Income per Share | | | $0.11 | | | $0.10 | | | $0.16 | | | $0.19 | | | $0.21 | | | $0.21 | | | $0.24 | | | $0.25 |
Dividends per Share | | | $0.17 | | | $0.17 | | | $0.17 | | | $0.19 | | | $0.21 | | | $0.21 | | | $0.24 | | | $0.25 |
• | Management fee, net of waivers, assumptions including (i) a base management fee projected at 1.25% throughout the projections, (ii) net operating income incentive compensation low hurdle rate set at 8% with a 50% catch up between 8% and 8.75%, and 20% above 8.75% (consistent with MVC’s current net operating income incentive fee formula). |
• | Operating assumptions including, but not limited to: |
• | MVC is projected to maintain a $0.17 per share per quarter dividend. It is assumed in the projection that MVC will pay the greater of $0.17 per share per quarter or taxable income earned during that quarter. |
• | No additional outside equity raised and no share repurchases by MVC through the projection period. |
• | the performance of investment assets; |
• | the amount of income; |
• | the amount of dividend payments; |
• | the degree and methods of portfolio leverage; |
• | industry performance and competition; |
• | general business, economic, market and financial conditions; and |
• | additional matters specific to Barings BDC’s or MVC’s business, as applicable. |
| | As of: | ||||||||||||||||||||||||||||
| | 9/30/20 | | | 12/31/20 | | | 3/31/21 | | | 6/30/21 | | | 9/30/21 | | | 12/31/21 | | | 3/31/22 | | | 6/30/22 | | | 9/30/22 | | | 12/31/22 | |
Total Assets | | | $981.0 | | | $1,030.1 | | | $1,056.2 | | | $1,081.6 | | | $1,107.4 | | | $1,109.3 | | | $1,111.1 | | | $1,113.0 | | | $1,114.2 | | | $1,115.4 |
Total Liabilities | | | $490.7 | | | $539.8 | | | $565.1 | | | $590.2 | | | $615.4 | | | $616.4 | | | $617.4 | | | $618.5 | | | $619.1 | | | $619.8 |
Total Equity | | | $490.2 | | | $490.3 | | | $491.0 | | | $491.4 | | | $492.0 | | | $492.9 | | | $493.7 | | | $494.6 | | | $495.1 | | | $495.7 |
| | For the Fiscal Quarter Ended: | ||||||||||||||||||||||||||||
| | 9/30/20 | | | 12/31/20 | | | 3/31/21 | | | 6/30/21 | | | 9/30/21 | | | 12/31/21 | | | 3/31/22 | | | 6/30/22 | | | 9/30/22 | | | 12/31/22 | |
Total Revenue | | | $15.5 | | | $16.0 | | | $17.0 | | | $17.7 | | | $18.5 | | | $19.1 | | | $19.9 | | | $20.3 | | | $20.5 | | | $20.5 |
Total Expenses | | | $8.0 | | | $8.2 | | | $8.6 | | | $9.2 | | | $9.7 | | | $10.1 | | | $10.4 | | | $10.8 | | | $10.8 | | | $10.8 |
Net Investment Income | | | $7.4 | | | $7.7 | | | $8.4 | | | $8.6 | | | $8.7 | | | $9.0 | | | $9.5 | | | $9.5 | | | $9.6 | | | $9.6 |
| | For the Fiscal Quarter Ended: | ||||||||||||||||||||||||||||
| | 9/30/20 | | | 12/31/20 | | | 3/31/21 | | | 6/30/21 | | | 9/30/21 | | | 12/31/21 | | | 3/31/22 | | | 6/30/22 | | | 9/30/22 | | | 12/31/22 | |
Weighted-Average Shares Outstanding | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 | | | 48.0 |
Book Value per Share | | | $10.22 | | | $10.22 | | | $10.24 | | | $10.25 | | | $10.26 | | | $10.28 | | | $10.29 | | | $10.31 | | | $10.32 | | | $10.33 |
Net Operating Income per Share | | | $0.16 | | | $0.16 | | | $0.18 | | | $0.18 | | | $0.18 | | | $0.19 | | | $0.20 | | | $0.20 | | | $0.20 | | | $0.20 |
Dividends per Share | | | $0.16 | | | $0.16 | | | $0.16 | | | $0.17 | | | $0.17 | | | $0.17 | | | $0.18 | | | $0.18 | | | $0.19 | | | $0.19 |
• | Management fee assumptions including (1) a base management fee projected at 1.375% throughout the projections, (2) net operating income incentive compensation low hurdle rate set at 8% with a 100% catch up between 8% and 10%, and 20% above 10% (consistent with Barings BDC’s current net operating income incentive fee formula). |
• | Operating assumptions including, but not limited to: |
• | Dividend assumptions including a maximum dividend equal to the greater of (1) the dividend per share paid in the prior quarter and (2) 90.00% of the quarterly net investment income. |
• | Barings BDC sometimes obtains equity co-investments, warrants, or other similar forms of investments with debt originations. Although it is generally expected that these provide a positive return to offset potential loan losses, such potential upside is not factored into the projections. |
• | No additional outside equity raised and no share repurchases by Barings BDC through the projection period. |
| | For the Three Month Periods Ended: | |||||||||||||||||||||||||
| | 12/31/20 | | | 3/31/21 | | | 6/30/21 | | | 9/30/21 | | | 12/31/21 | | | 3/31/22 | | | 6/30/22 | | | 9/30/22 | | | 12/31/22 | |
MVC Total Revenue | | | $4.0 | | | $4.2 | | | $4.5 | | | $4.7 | | | $5.0 | | | $5.2 | | | $5.5 | | | $5.7 | | | $5.7 |
MVC Net Investment Income | | | $1.1 | | | $1.3 | | | $1.6 | | | $1.8 | | | $2.1 | | | $2.3 | | | $2.6 | | | $2.9 | | | $3.2 |
MVC Dividend | | | $1.1 | | | $1.3 | | | $1.6 | | | $1.8 | | | $2.1 | | | $2.3 | | | $2.6 | | | $2.9 | | | $3.2 |
MVC Dividend per Share | | | $0.06 | | | $0.10 | | | $0.10 | | | $0.10 | | | $0.10 | | | $0.16 | | | $0.16 | | | $0.16 | | | $0.16 |
| | 03/31/23 | | | 06/30/23 | | | 09/30/23 | | | 12/31/23 | | | 03/31/24 | | | 06/30/24 | | | 09/30/24 | | | 12/31/24 | |
MVC Total Revenue | | | $5.7 | | | $5.7 | | | $5.7 | | | $5.7 | | | $5.7 | | | $5.7 | | | $5.7 | | | $5.7 |
MVC Net Investment Income | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 |
MVC Dividend | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 | | | $3.2 |
MVC Dividend per Share | | | $0.18 | | | $0.18 | | | $0.18 | | | $0.18 | | | $0.18 | | | $0.18 | | | $0.18 | | | $0.18 |
• | The assumption that (1) MVC portfolio revenue is expected to be $4 million for the three months ended December 31, 2020, and will increase by $250,000 quarterly thereafter through the three months ended September 30, 2022 and (2) quarterly portfolio revenue thereafter will remain flat at $5.75 million quarterly for the remainder of the forecast period. |
• | The assumption that the ratio of MVC’s net investment income-to-MVC’s NAV will increase from 4.0% for the year ended December 31, 2021 to 7.4% for the year ended December 31, 2023 (and will remain flat for the year ended December 31, 2024). |
• | The assumption that the MVC portfolio maintains leverage of 0.55x debt/equity throughout the forecast period. |
• | The assumption that there remains approximately $93 million in outstanding MVC debt with a weighted average cost of 4.5% throughout the forecast period. |
• | The assumption that MVC continues to distribute to its stockholders 100% of net investment income annually the forecast period. |
• | Dividend and Dividend per Share forecasts were prepared on an annual basis. |
• | The Barings BDC-Prepared MVC Forecasts do not include any synergy assumptions. |
• | There will be no fee or other payment by Barings BDC to Barings or any of its affiliates in connection with the Credit Support Agreement. |
• | The effective date of the Credit Support Agreement will be the Closing Date. |
• | The Credit Support Agreement will cover all of the investments acquired by Barings BDC from MVC in the Merger and any investments received by Barings BDC in connection with the restructuring, amendment, extension or other modification (including the issuance of new investments) of any of the investments acquired by Barings BDC from MVC in the Merger (collectively, the “Reference Portfolio”). |
• | Barings or one of its affiliates will have an obligation to make a cash payment to Barings BDC in an amount equal to the excess of (i) realized and unrealized losses on the Reference Portfolio over (ii) realized and unrealized gains on the Reference Portfolio (subject to a $23.0 million cap) on the earlier of [ ], 2031 and the date that the entire Reference Portfolio has been sold or written off (such date is referred to herein as the “Obligation Calculation Date”). No payment will be required to be made under the Credit Support Agreement if realized and unrealized gains exceed realized and unrealized losses on the Obligation Calculation Date. |
• | It is expected that the Credit Support Agreement will initially be recorded as an asset on Barings BDC’s financial statements in an amount equal to the value thereof and thereafter such value will fluctuate each quarter based on the change in the payment obligation owed under the Credit Support Agreement. |
• | corporate organization, including incorporation, qualification and subsidiaries; |
• | capitalization and subsidiaries; |
• | power and authority to execute, deliver and perform obligations under the Merger Agreement; |
• | absence of conflicts, and required government filings and consents; |
• | compliance with applicable law and permits; |
• | SEC reports, financial statements and enforcement actions; |
• | the accuracy and completeness of information supplied for inclusion in this joint proxy statement/prospectus; |
• | disclosure controls and procedures; |
• | absence of certain changes and actions since November 1, 2019 (in the case of MVC) and January 1, 2020 (in the case of Barings BDC); |
• | absence of undisclosed liabilities; |
• | absence of certain litigation, orders or investigations; |
• | employee matters; |
• | intellectual property matters; |
• | tax matters; |
• | material contracts; |
• | real property matters; |
• | environmental matters; |
• | state takeover laws; |
• | the applicable stockholder votes required to effect, with respect to MVC, the First Step, and with respect to Barings BDC, the Barings BDC Stock Issuance including, if applicable, at a price below NAV; |
• | brokers’ fees; |
• | opinion of financial advisor; |
• | insurance coverage; |
• | investment assets; |
• | in the case of MVC, the MVC Investment Advisory Agreement; |
• | in the case of MVC, its investment documents for debt and equity investments; |
• | in the case of MVC, its investments; and |
• | in the case of MVC, tax matters relating to its investments. |
• | organization and qualification; |
• | power and authority to execute, deliver and perform obligations under the Merger Agreement; |
• | absence of conflicts, and required government filings and consents; |
• | compliance with applicable law and permits; |
• | the accuracy and completeness of information supplied for inclusion in this joint proxy statement/prospectus; |
• | absence of certain litigation, orders or investigations; and |
• | sufficiency of funds to make the payment of the Cash Consideration. |
• | changes in general economic, financial market, business or geopolitical conditions; |
• | general changes or developments in any of the industries or markets in which such party, any of its subsidiaries, or any of the portfolio companies operate (or applicable portions or segments of such industries or markets); |
• | changes in any applicable law or applicable accounting regulations or principles or interpretations thereof; |
• | any change in the fair value, price or trading volume of such party’s securities (or, with respect to MVC’s, any of MVC’s portfolio companies’ securities), in and of itself (provided that the facts or occurrences giving rise to or contributing to such change that are not otherwise excluded from the definition of “material adverse effect” shall be taken into account in determining whether there has been a material adverse effect); |
• | any failure by such party (or, with respect to MVC any of its portfolio companies) to meet published analyst estimates or expectations of such party’s (or, with respect to MVC, any of its portfolio companies’) revenue, earnings or other financial performance or results of operations for any period, in and of itself (provided that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of “material adverse effect” shall be taken into account in determining whether there has been a material adverse effect); |
• | any failure by such party (or, with respect to MVC, any of its portfolio companies) to meet its internal or published projections, budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (provided that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of “material adverse effect” shall be taken into account in determining whether there has been a material adverse effect); |
• | any outbreak or escalation of hostilities or war or any act of terrorism, or any acts of God, natural disasters, epidemic, pandemic or disease outbreak (including the COVID-19 virus); |
• | the negotiation, existence, announcement of the Merger Agreement or the performance of the transactions contemplated by the Merger Agreement, including the initiation of any stockholder litigation with respect to the Merger Agreement or the transactions contemplated thereby or any termination of, reduction in or similar negative impact on relationships, contractual or otherwise, with any portfolio companies, customers, suppliers, distributors, partners or employees of MVC or Barings BDC, as applicable; |
• | any action taken by such party or any of its subsidiaries (or, with respect to MVC, any of its portfolio companies), in each case which is required or expressly permitted by the Merger Agreement; and |
• | any actions taken (or omitted to be taken) at the written request of MVC or Barings, as applicable; |
• | amend or otherwise change MVC’s charter or bylaws (or such equivalent organizational or governing documents of any of its subsidiaries); |
• | except for transactions solely among MVC and its subsidiaries or transactions pursuant to a stock repurchase plan that was publicly announced prior to the date of the Merger Agreement, split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; |
• | except for transactions solely among MVC and its subsidiaries or in connection with MVC’s dividend reinvestment plan, issue, sell, pledge, dispose, encumber or grant any (1) shares of its or its subsidiaries’ capital stock, (2) options, warrants, convertible securities or other rights of any kind to acquire any shares of MVC’s or its subsidiaries’ capital stock or (3) appreciation rights, phantom equity or similar rights with respect to, or valued in whole or in part in reference to, MVC or any of its subsidiaries; |
• | (1) declare, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to MVC’s or any of its subsidiaries’ capital stock or other equity interests, other than (x) dividends and distributions paid by any subsidiary of MVC to MVC or any of its subsidiaries, (y) the authorization and payment of any dividend or distribution necessary for MVC to maintain its qualification as a RIC, as reasonably determined by MVC and approved by the MVC Strategic Review Committee and Barings BDC (provided that Barings BDC shall not unreasonably withhold, delay or condition its approval with respect to any such dividend or distribution) and (z) an MVC Tax Dividend in an amount approved by the MVC Strategic Review Committee and Barings BDC (provided that Barings BDC shall not unreasonably withhold, delay or condition its approval with respect to any such dividend or distribution), or (2) purchase, redeem or otherwise acquire shares of capital stock or other equity interests of MVC or its subsidiaries (other than wholly-owned subsidiaries) or any options, warrants, or rights to acquire any such shares or other equity interests; |
• | acquire (including by merger, consolidation or acquisition of stock or assets), or lease or license or otherwise sell, transfer or encumber, any material assets, except (1) in respect of any merger, consolidation, business combination among MVC and its wholly-owned subsidiaries or (2) with respect to acquisitions, dispositions, sales or transfers with collective purchase prices not exceeding $1,000,000 in the aggregate (excluding transactions involving portfolio investments); |
• | other than with respect to any unfunded commitment disclosed in MVC’s disclosure letter, make any investment (including a loan, guarantee, equity investment, cash contribution or otherwise) that (1) with respect to an existing portfolio company, is, individually or in the aggregate, greater than the lesser of (x) 10% of the fair market value of such existing investment in such portfolio company as of April 30, 2020 as reflected in the schedule of investments included in MVC’s Quarterly Report on Form 10-Q filed with the SEC on June 9, 2020 and (y) $500,000 and (2) with respect to any portfolio company in which MVC has not yet made any investment, is, individually or in the aggregate, greater than $500,000 with respect to MVC; |
• | dispose of (including by merger, consolidation or acquisition or disposition of stock or assets), forgive any amount under or lease or license or otherwise sell, transfer or encumber, all of or any portion of an acquired investment; |
• | incur any indebtedness or guarantee any indebtedness of any person, except as set forth in MVC’s disclosure letter; |
• | amend in any respect any “company material contract” (other than any company material contract relating to (x) any acquired investment with a fair market value less than $6,000,000 as of April 30, 2020, (y) that is not a control investment of MVC as of the date of the Merger Agreement or (z) any acquired investment in a portfolio that is in default under the applicable investment documents) that cannot be terminated without penalty upon notice of thirty (30) days or less; |
• | make any material change to its methods of accounting, except (1) as required by United States generally accepted accounting principles, consistently applied in accordance with past practice (“GAAP”) (or any interpretation thereof), Regulation S-X of the Exchange Act or a governmental authority or quasi-governmental authority (including the Financial Accounting Standards Board or any similar organization), (2) to permit the audit of MVC’s financial statements in compliance with GAAP, (3) as required by a change in applicable law or (4) as disclosed in MVC’s public filings with the SEC prior to the date of the Merger Agreement; |
• | unless required by applicable law, (i) make, change or revoke any material tax election (it being understood and agreed, for the avoidance of doubt, that nothing in the Merger Agreement shall preclude MVC from making the election under Section 852(b)(3)(D) of the Code pursuant to the Merger Agreement), (ii) change any material method of tax accounting other than in the ordinary course of business, (iii) file any material amended tax return other than in the ordinary course of business, (iv) settle or compromise any audit or proceeding relating to a material amount of taxes, (v) agree to an extension or waiver of the statute of limitations with respect to a material amount of taxes; (vi) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign law) with respect to any material tax or (vii) surrender any right to claim a material tax refund; |
• | change MVC’s investment objective as described in MVC’s SEC reports; |
• | (1) except as expressly provided by the Merger Agreement with respect to Security Holdings B.V., modify, amend or waive any of the terms, covenants or conditions of any investment document relating to (w) any acquired investment with a fair market value equal to or greater than $6,000,000 as of April 30, 2020, (x) any acquired investment that was a control investment of MVC as of the date of the Merger Agreement, (y) any acquired investment in a portfolio company that is in default under the applicable investment documents or (z) any of those portfolio companies set forth in MVC’s disclosure letter, or (2) authorize the acceleration or prepayment (partial or in full) of (w) any acquired investment with a fair market value equal to or greater than $6,000,000 as of the April 30, 2020 as reported in the schedule of investments included in MVC’s Quarterly Report on Form 10-Q filed with the SEC on June 9, 2020, (x) any acquired investment that was a control investment of MVC as of the date of the Merger Agreement, (y) any acquired investment in a portfolio company that is in default under the applicable investment documents or (z) any acquired investment in a portfolio company set forth in the MVC disclosure letter; |
• | (1) increase the compensation or benefits payable or that may become payable to any of its directors, (2) enter into, adopt, or establish any employee benefit plan, program, agreement, arrangement or policy, including without limitation any employment, severance, change of control or retention agreement or “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or (3) hire any employee or individual consultant; |
• | modify any provision of the acquired loan document that alters (i) the order of application of proceeds or the pro rata sharing of payments required thereby, (ii) alters the provisions relating to maturity, lender commitments, mandatory prepayments, scheduled amortization, interest rates (including the composition thereof), subordination and/or intercreditor arrangements, lender consent requirements or amendments or (iii) releases any security or collateral for any acquired loan (other than releases required under the applicable investment documents or the ordinary course release of funds from escrow or reserve accounts required by the applicable investment documents); or |
• | enter into any agreement to do any of the foregoing. |
• | amend or otherwise change, in any material respect, the organizational documents of Barings BDC (or such equivalent organizational or governing documents of any of its subsidiaries); |
• | except for transactions solely among Barings and its subsidiaries, split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the terms of any capital stock or other equity interests or rights; |
• | (1) make or change any material tax election other than in the ordinary course of business, (2) change any material method of tax accounting other than in the ordinary course of business or (3) agree to any extension or waiver of the statute of limitations with respect to a material amount of tax; |
• | change Barings BDC’s investment objectives as describe in Barings BDC’s SEC reports; or |
• | enter into any agreement to do any of the foregoing. |
• | directly or indirectly initiate, solicit or knowingly encourage or facilitate (including by way of furnishing or disclosing information) any Inquiries or the making, submission or implementation of any Competing Proposal; |
• | enter into any agreement, arrangement, discussions or understanding with respect to any Competing Proposal or enter into any contract or understanding requiring it to abandon, terminate or fail to consummate the Merger; or |
• | initiate or engage in negotiations or discussions with, or furnish any information to, any third party relating to a Competing Proposal. |
• | such Inquiry or Competing Proposal either constitutes a Superior Proposal or would reasonably be expected to lead to a Superior Proposal; and |
• | the failure to take such action would reasonably be expected to be inconsistent with the fiduciary duties or obligations of the MVC Board under applicable law. |
• | such Inquiry or Competing Proposal either constitutes a Superior Proposal or would reasonably be expected to lead to a Superior Proposal and a failure to do so would reasonably be expected to be inconsistent with its fiduciary duties or obligations under applicable law; |
• | such Inquiry or Competing Proposal did not result from any material breach of the no solicitation provisions in the Merger Agreement; |
• | prior to furnishing any non-public information concerning MVC and its subsidiaries, MVC receives from such person, to the extent such person is not already subject to a confidentiality agreement with MVC, a confidentiality agreement containing confidentiality terms that are not less favorable in the aggregate to MVC than those contained in the confidentiality agreement by and between MVC and Barings BDC (an “Acceptable Confidentiality Agreement”); and |
• | MVC shall (subject to the terms of any confidentiality agreement existing prior to the date of the Merger Agreement) promptly (and in any event within 24 hours) provide or make available to Barings BDC any written non-public information concerning it or its subsidiaries that it provides to any third party given such access was not previously made available to Barings BDC and its representatives. |
• | MVC shall have provided prior written notice to Barings BDC, at least three (3) business days in advance, that it intends to effect an MVC Adverse Recommendation Change and/or terminate the Merger Agreement, which notice shall specify in reasonable detail the basis for the MVC Adverse Recommendation Change and/or termination and in the case of a Superior Proposal, the identity of the person or group of persons making such Superior Proposal accompanied by a copy of the written Competing Proposal and any related transaction or financing documents, or (B) in the case of an Intervening Event, reasonable detail regarding the Intervening Event; |
• | after providing such notice and prior to effecting such MVC Adverse Recommendation Change and/or terminating the Merger Agreement, MVC shall have negotiated, and shall have caused its representatives to be available to negotiate, with Barings BDC and Acquisition Sub in good faith (to the extent Barings BDC and Acquisition Sub desire to negotiate) during such three (3) business day period to make such adjustments to the terms and conditions of the Merger Agreement as would obviate the need for MVC to effect the MVC Adverse Recommendation Change and/or terminate the Merger Agreement; and |
• | following the end of such three (3) business day period, the MVC Board shall have determined in good faith, after consultation with its outside legal counsel and, with respect to clause (1) below, its financial advisor, taking into account any changes to the Merger Agreement proposed in writing by Barings BDC in response to the notice of the MVC Adverse Recommendation and/or notice of a Superior Proposal, that (A) the Superior Proposal giving rise to the notice of Superior Proposal continues to be a Superior Proposal or (B) in the case of an Intervening Event, the failure of the MVC Board to effect an MVC Adverse Recommendation Change would continue to reasonably be expected to be inconsistent with MVC’s directors’ fiduciary duties or obligations under applicable law. |
• | “Competing Proposal” means any inquiry, proposal, discussions, negotiations or offer from any third party (1) with respect to a merger, consolidation, tender offer, exchange offer, stock acquisition, asset acquisition, share exchange, business combination, recapitalization, liquidation, dissolution, joint venture or similar transaction involving MVC or any of its subsidiaries, or (2) relating to any direct or indirect acquisition, in one transaction or a series of transactions, of (a) assets or businesses (including any mortgage, pledge or similar disposition thereof but excluding any bona fide financing transaction) that constitute or represent, or would constitute or represent if such transaction is consummated, twenty percent (20%) or more of the total assets, net revenue or net income of MVC and its subsidiaries, taken as a whole, for the 12-month period ending on the last day of MVC’s then most recently completed fiscal quarter, or (b) twenty percent (20%) or more of the outstanding shares of capital stock of, or other equity or voting interests in, MVC or in any of its subsidiaries, in each case other than the Merger. |
• | “Superior Proposal” means an unsolicited Competing Proposal (with all percentages in the definition of Competing Proposal increased to fifty percent (50%)) made by a third party that did not result from a breach of the no solicitation provisions of the Merger Agreement that the MVC Board determines in good faith, after consultation with its financial advisor and outside legal advisor, and considering such factors as the MVC Board considers to be appropriate, (1) is more favorable from a financial point of view to MVC stockholders than the transactions contemplated by the Merger Agreement (including any revisions to the terms of the Merger Agreement committed to by Barings BDC to MVC in writing in response to such Competing Proposal made to MVC under the Merger Agreement), (2) is reasonably likely to be consummated (taking into account, among other things, legal, financial, regulatory and other aspects of such proposal, including any conditions and the identity of the offeror) on a timely basis, and (3) in respect of which any financing required has been determined by the MVC Board to be reasonably likely to be obtained as evidenced by a written commitment of a reputable financing source. |
• | “Intervening Event” means a material event, occurrence, development or change in circumstances with respect to MVC and its subsidiaries, taken as a whole, that occurred or arose after the date of the Merger Agreement, which was unknown to, nor reasonably foreseeable by, the MVC Board as of the date of the Merger Agreement and becomes known to or by the MVC Board prior to the time the MVC Stockholder Approval is obtained; provided, however, that none of the following will constitute, or be considered in determining whether there has been, an Intervening Event: (1) the receipt, existence of or terms of an Inquiry or Competing Proposal or any matter relating thereto or consequence thereof; and (2) changes in the market price or trading volume of MVC Common Stock or meeting or exceeding any forecasts (provided, however, that the underlying causes of such change or fact shall not be excluded by this clause (2)). |
• | indemnify and hold harmless each D&O Indemnified Party against and from any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, proceeding or investigation, whether civil, criminal, administrative or investigative, to the extent such claim, proceeding or investigation arises out of or pertains to: (1) any alleged action or omission in such D&O Indemnified Party’s capacity as a director, officer or employee of MVC, its investment adviser or any of its subsidiaries prior to the closing of the Merger, or (2) the Merger Agreement or the transactions contemplated thereby; and |
• | pay in advance of the final disposition of any such claim, proceeding or investigation the expenses (including attorneys’ fees) of such D&O Indemnified Party upon receipt of an undertaking by or on behalf of such D&O Indemnified Party to repay such amount if it shall ultimately be determined that such D&O Indemnified Party is not entitled to be indemnified by applicable law. |
• | MVC shall have obtained the MVC Stockholder Approval and Barings BDC shall have obtained the Barings BDC Stockholder Approval; |
• | the issuance of Barings BDC Common Stock in connection with the First Step and the issuance of shares of Barings BDC Common Stock upon the conversion of any instruments exchangeable therefor or convertible thereto shall have been approved for listing on the NYSE, subject to official notice of issuance; |
• | the Form N-14 (of which this joint proxy statement/prospectus is a part) shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order; |
• | any applicable waiting period (and any extension thereof) under the HSR Act, the EU Merger Regulation or any other antitrust laws relating to the consummation of the First Step shall have expired or early termination thereof shall have been granted; and |
• | no governmental authority of competent jurisdiction shall have issued or entered any law or order which is then in effect and has the effect of restraining, enjoining or otherwise prohibiting the consummation of the Merger. |
• | the representations and warranties of MVC shall be true and correct in all respects (subject to the materiality thresholds set forth in the Merger Agreement) as of the date of the Merger Agreement and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only); |
• | MVC shall have performed or complied in all material respects with its obligations required under the Merger Agreement to be performed or complied with on or prior to the Closing Date; |
• | Barings BDC shall have received a certificate signed by an executive officer of MVC certifying as to the satisfaction of certain of the conditions to the obligations of Barings BDC and Acquisition Sub to effect the Merger; |
• | since the date of the Merger Agreement, there shall not have occurred and be continuing any material adverse effect with respect to MVC; |
• | MVC shall have unrestricted cash in an aggregate amount of at least $49,000,000 plus the amount of net cash proceeds received by MVC from the sale of FOLIOfn, Inc. less the amount of any MVC Tax Dividend or RIC Tax Liability actually paid by MVC prior to the closing of the Merger, which amount shall be immediately available to repay the Existing MVC Notes; |
• | the administration agreement by and between MVC and its administrator, as amended from time to time, and the MVC Investment Advisory Agreement shall have been terminated; and |
• | MVC and its subsidiaries shall have delivered to Barings BDC or the applicable controlled Affiliates of Barings BDC the documents required by the Merger Agreement in connection with the assumption or payoff of the Existing MVC Notes. |
• | the representations and warranties of Barings BDC, Acquisition Sub and Barings shall be true and correct in all respects (subject to the materiality thresholds set forth in the Merger Agreement) as of the date of the Merger Agreement and as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only); |
• | Barings BDC, Acquisition Sub and Barings shall have performed or complied in all material respects with their respective obligations required under the Merger Agreement to be performed or complied with on or prior to the Closing Date; |
• | MVC shall have received a certificate signed by an executive officer of Barings BDC certifying as to the satisfaction of each of certain conditions to the obligations of MVC to effect the Merger; |
• | since the date of the Merger Agreement, there shall not have occurred and be continuing any material adverse effect with respect to Barings BDC; and |
• | since the date of the Merger Agreement, there shall not have occurred and be continuing any material adverse effect with respect to Barings. |
(1) | by mutual written consent of Barings BDC and MVC; |
(2) | by either Barings BDC or MVC, if: |
(a) | the First Step shall not have been consummated on or before 5:00 p.m. (New York time) on February 10, 2021 (the “Termination Date”); |
(b) | prior to the closing of the Merger, any governmental authority of competent jurisdiction shall have issued or entered any law or order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Merger Agreement, and such law or order or other action shall have become final and non-appealable; provided, that the party seeking to terminate the Merger Agreement shall have used its reasonable best efforts to remove such law or order or other action; or |
(c) | (i) the MVC Special Meeting (including any adjournments or postponements thereof) shall have been duly held and completed and the MVC Stockholder Approval shall not have been obtained at such special meeting (or at any adjournment or postponement thereof) at which a vote on the adoption of the Merger Agreement is taken and (ii) the Barings BDC Special Meeting (including any adjournments or postponements thereof) shall have been duly held and completed and the Barings BDC Stockholder Approval shall not have been obtained at such special meeting (or at any adjournment or postponement thereof) at which a vote on the Merger Stock Issuance Proposal and the Barings BDC Below NAV Issuance Proposal is taken. |
(3) | by MVC, if: |
(a) | Barings BDC, Acquisition Sub or Barings breaches or fails to perform any of their respective representations, warranties and covenants under the Merger Agreement, which breach would result in the failure to be satisfied of a condition of each party to the Merger Agreement or a condition to the obligations of MVC, and such breach is not curable prior to the Termination Date or if curable on or before the earlier of (x) the Termination Date and (y) the date that is thirty (30) calendar days following MVC’s delivery of written notice to Barings BDC of such breach or failure to perform; provided, however, that the right to terminate the Merger Agreement pursuant this clause will not be available to MVC if it is then in material breach of any of its representations, warranties, covenants or obligations under the Merger Agreement so as to cause any of the conditions of each party or conditions of the obligations of Barings BDC and Acquisition Sub to effect the Merger to be satisfied or if Barings BDC’s breach of the Merger Agreement has been primarily cause by a breach of the Merger Agreement by MVC; |
(b) | prior to obtaining the MVC Stockholder Approval, in order to simultaneously enter into a binding definitive agreement providing for the consummation of a Superior Proposal to the extent permitted by, and subject to the applicable terms and conditions of the Merger Agreement (provided that such proposal did not arise from MVC’s breach of any of the provisions of the Merger Agreement related to such proposals) and MVC pays Barings BDC a termination fee of $2,937,938 (the “MVC Termination Fee”), plus the expenses of Barings BDC and Barings in an amount not to exceed $1,175,175; or |
(c) | at any time prior to effectiveness of the First Step, (w) all of the conditions to the obligations of each party and the conditions to the obligations of Barings BDC and Acquisition Sub have been, and continue to be, satisfied or waived (other than those conditions that by their nature are to be satisfied at the of the Merger, each of which shall be capable of being satisfied if the Closing Date were the date of such termination, and, solely with respect to the conditions of each party, if the failure of such conditions to be satisfied is primarily caused by a material breach by Barings BDC, Acquisition Sub or Barings of any of their respective covenants or agreements contained in specified provision of the Merger Agreement, (x) Barings BDC and Acquisition Sub do not consummate the First Step on or prior to the date the closing of the Merger is required to occur pursuant to the Merger Agreement, (y) MVC shall have irrevocably confirmed to Barings BDC that it is ready, willing and able to complete the closing on the date of such confirmation and throughout the three (3) business day period following delivery of such confirmation, and intends to terminate the Merger Agreement if such closing does not occur, and (z) Barings BDC and Acquisition Sub fail to effect the closing of the Merger. |
(4) | by Barings BDC, if: |
(a) | MVC breaches or fails to perform its representations, warranties and covenants under the Merger Agreement, which breach would result in the failure to be satisfied of a condition of each party to the Merger Agreement or a condition to the obligations of Barings BDC and Acquisition Sub, and such breach is not curable prior to the Termination Date or if curable on or before the earlier of (x) the Termination Date and (y) the date that is thirty (30) calendar days following the Barings BDC’s delivery of written notice to MVC of such breach or failure to perform; provided, however, that the right to terminate the Merger Agreement pursuant this clause will not be available to Barings BDC if Barings BDC, Acquisition Sub or Barings is then in material breach of any of its respective representations, warranties, covenants or obligations under the Merger Agreement so as to cause any of the conditions of each party or conditions of the obligations of MVC to effect the Merger to be satisfied or if Barings BDC’s breach of the Merger Agreement has been primarily cause by a breach of the Merger Agreement by MVC; or |
(b) | at any time prior to the receipt of MVC Stockholder Approval, if (x) the MVC Board (or any committee thereof) shall have made an MVC Adverse Recommendation Change, (y) MVC shall have willfully breached its obligations under no solicitation covenants of the Merger Agreement, and such breach remains uncured for five (5) business days following the written notice thereof by Barings BDC to MVC or (z) in the event a Competing Proposal structured as a tender offer for MVC Common Stock is commenced and, within ten (10) business days after the public announcement thereof, MVC has not issued a public statement (and filed a Schedule 14D-9) reaffirming the MVC Board Recommendation and recommending that the stockholders of MVC reject such Competing Proposal. |
• | Barings BDC terminates the Merger Agreement because of MVC’s willful breach of the Merger Agreement (but only if the breach giving rise to such termination was an intentional breach) or Baring BDC or MVC because the MVC Stockholder Vote was not obtained, and, in either case, (x) prior to such termination (or of the MVC Special Meeting in the case of termination due to a failure to achieve the MVC Stockholder Vote), a Competing Proposal that has been made after the date of the Merger Agreement shall have been publicly disclosed or otherwise communicated to MVC’s and not withdrawn prior to such date and (y) within twelve (12) months after such termination, MVC enters into an Alternative Acquisition Agreement with respect to any Competing Proposal with a Third Party, and such Competing Proposal is subsequently consummated (regardless of whether such consummation happens prior to or following such twelve (12)-month period) (provided, however, that for this purpose only, the references to “twenty percent (20%)” in the definition of Competing Proposal shall be deemed to be references to “fifty percent (50%)”); |
• | MVC terminates the Merger Agreement to enter into an Alternative Acquisition Agreement in respect of a Superior Proposal; or |
• | Barings BDC terminates because (1) the MVC Board (or any committee thereof) shall have made an MVC Adverse Recommendation Change, (2) MVC shall have willfully breached its obligations under no solicitation provision of the Merger Agreement, and such breach remains uncured for five (5) business days following the written notice thereof by Barings BDC to MVC or (3) in the event a Competing Proposal structured as a tender offer for MVC Common Stock is commenced and, within ten (10) business days after the public announcement thereof, MVC shall not have issued a public statement (and filed a Schedule 14D-9) reaffirming the MVC Board Recommendation and recommending that the stockholders of MVC reject such Competing Proposal. |
• | U.S. expatriates and former citizens or long-term residents of the United States; |
• | persons subject to the alternative minimum tax; |
• | persons holding MVC Common Stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
• | banks, insurance companies, and other financial institutions; |
• | brokers, dealers or traders in securities; |
• | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | persons subject to the three-year holding period rule in Section 1061 of the Code; |
• | persons deemed to sell MVC Common Stock under the constructive sale provisions of the Code; |
• | persons who hold or receive MVC Common Stock pursuant to the exercise of any employee stock option or otherwise as compensation; and |
• | tax-qualified retirement plans. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
• | Each U.S. stockholder will recognize gains, but not losses, in the Merger, equal to the lesser of (1) the amount of cash received in exchange for MVC Common Stock (including any cash paid to U.S. stockholders as the result of fluctuations in the exchange rate between the Euro and the U.S. dollar , and excluding cash received in lieu of a fractional share of Barings BDC Common Stock) and (2) the excess, if any, of (a) the sum of the amount of cash received in exchange for MVC Common Stock (including cash received in lieu of a fractional share of Barings BDC Common Stock ) and the fair market value of the Barings BDC Common Stock received in the Merger (determined at the Effective Time) over (b) the U.S. stockholder’s tax basis in the shares of MVC Common Stock surrendered in the Merger. If a U.S. stockholder recognizes gains equal to the amount described in clause (1) rather than clause (2) of the preceding sentence, such U.S. stockholder will also recognize gain or loss attributable to cash received in lieu of a fractional share of Barings BDC Common Stock in an amount equal to the difference between the amount of cash received and the portion of the basis of the MVC Common Stock surrendered that is allocable to the fractional share. An MVC Tax Dividend should not be treated for U.S. federal income tax purposes as part of the consideration paid for shares of MVC Common Stock in the Merger but instead should be treated for U.S. federal income tax purposes as a distribution with respect to the MVC Common Stock. See the discussion below under the heading “—MVC’s Pre-Merger Income and Gains and MVC Tax Dividends”; |
• | A U.S. stockholder’s aggregate tax basis in the shares of Barings BDC Common Stock received in the Merger (including any fractional share of Barings BDC Common Stock for which cash is received) will be the same as his, her or its aggregate tax basis in the MVC Common Stock surrendered in the Merger, increased by the amount of gains recognized (excluding any gains attributable to the receipt of cash in lieu of a fractional share of Barings BDC Common Stock) and decreased by the amount of cash received in exchange for MVC Common Stock (other than cash received in lieu of a fractional share of Barings BDC Common Stock); and |
• | The holding period of the shares of Barings BDC Common Stock received in the Merger (including any fractional share of Barings BDC Common Stock for which cash is received) by a U.S. stockholder will include the holding period of the shares of MVC Common Stock that he, she or it surrendered. |
• | the gains are effectively connected with a U.S. trade or business of such non-U.S. stockholder (and, if required by an applicable income tax treaty, the non-U.S. stockholder maintains a permanent establishment in the United States to which such gains are attributable), in which case the non-U.S. stockholder generally should be subject to tax on such gains in the same manner as a U.S. stockholder and, if the non-U.S. stockholder is a foreign corporation, such corporation may be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty); |
• | the non-U.S. stockholder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the Merger and certain other requirements are met, in which case the non-U.S. stockholder generally should be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the non-U.S. stockholder, if any, provided the non-U.S. stockholder has timely filed U.S. federal income tax returns with respect to such losses; or |
• | MVC is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of (1) the five-year period ending on the date of the Merger and (2) the non-U.S. stockholder’s holding period in the MVC Common Stock, and the non-U.S. stockholder owned (directly, indirectly or constructively) more than 5% of MVC’s outstanding common stock at any time during the applicable period. |
• | qualifies as a RIC; and |
• | satisfies the Annual Distribution Requirement; |
• | qualify to be treated as a BDC at all times during each taxable year; |
• | derive in each taxable year at least 90% of its gross income from (a) dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities or other income derived with respect to its business of investing in such stock or securities or (b) net income derived from an interest in a “qualified publicly traded partnership,” or “QPTP” (collectively, the “90% Income Test”); and |
• | diversify its holdings so that at the end of each quarter of the taxable year: |
• | at least 50% of the value of its assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs and other securities that, with respect to any issuer, do not represent more than 5% of the value of its assets or more than 10% of the outstanding voting securities of that issuer; and |
• | no more than 25% of the value of its assets is invested in the securities, other than U.S. Government securities or securities of other RICs, of (i) one issuer, (ii) two or more issuers that are controlled, as determined under applicable tax rules, by Barings BDC and that are engaged in the same or similar or related trades or businesses or (iii) securities of one or more QPTPs (collectively, the “Diversification Tests”). |
• | lower the base management fee payable to Barings from 1.375% to 1.250% of Barings BDC’s average gross assets given certain economies of scale expected to be realized by Barings as a result of the larger size of Barings BDC’s portfolio post-closing of the Merger; |
• | with respect to the calculation of the income incentive fee and related incentive fee cap, |
○ | reset the rolling 12-quarter “look-back” period to commence on January 1, 2021 instead of January 1, 2020 to better compare Barings BDC’s performance of its larger investment portfolio to the hurdle amount; |
○ | align the time periods of various calculations relating to the income incentive fee, as well as adjust these time periods and the nomenclature used in connection with the calculation of the income incentive fee and incentive fee cap to be consistent with market convention; |
• | provide for the fact that Barings BDC may enter into guarantees, sureties or other credit enhancement or credit support such as the Credit Support Agreement with respect to one or more of its investments, as well describe as the impact of these arrangements on the “incentive fee cap”; and |
• | remove certain transitional provisions that are no longer applicable and improve the clarity of certain provisions of the Existing Barings BDC Advisory Agreement. |
1. | Base Management Fee: |
• | The Existing Barings BDC Advisory Agreement provides that the base management fee is calculated based on Barings BDC’s average gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of: |
○ | 1.000% for the period from August 2, 2018 through December 31, 2018; |
○ | 1.125% for the period commencing on January 1, 2019 through December 31, 2019; and |
○ | 1.375% for all periods thereafter. |
• | The New Barings BDC Advisory Agreement would reduce the base management fee payable to Barings from an annual rate of 1.375% (i.e., the currently effective annual rate) to 1.25% of Barings BDC’s average gross assets, including assets are purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents. The reduction of the base management fee is being made given certain economies of scale expected to be realized by Barings as a result of the larger size of Barings BDC’s portfolio post-closing of the Merger. |
2. | Income Incentive Fee: |
• | The Existing Barings BDC Advisory Agreement provides that the income incentive fee payable to Barings is subject a rolling 12-quarter “look-back” period commencing on January 1, 2020. The “look-back” provision requires that Barings BDC exceed its applicable hurdle rate across a rolling 12-quarter period before Barings may receive an income incentive fee. |
• | The New Barings BDC Advisory Agreement provides that the income incentive fee payable to Barings is subject to a rolling 12-quarter “look-back” provision commencing on January 1, 2021. The Barings BDC Board determined that it is appropriate to reset the commencement date of the “look-back” period to better compare the pre-incentive fee net investment income generated by Barings BDC’s larger investment portfolio post-closing of the Merger to the hurdle amount post-closing of the Merger. |
• | The Existing Barings BDC Advisory Agreement provides that the income incentive fee payable to Barings is calculated by comparing average earnings over a rolling 12-quarter period to a hurdle rate that is a percentage of assets at the end of the quarter for which the fee is being calculated. |
• | The New Barings BDC Advisory Agreement provides that the income incentive fee payable to Barings is calculated by comparing cumulative earnings over a rolling 12-quarter period to a cumulative hurdle amount over the same period. Comparing cumulative earnings to the cumulative hurdle amount over the same period is a more accurate measure of Barings performance, is fairer to both Barings and Barings BDC stockholders and consistent with market practice. |
• | The Existing Barings BDC Advisory Agreement provides that the hurdle amount for each quarter is calculated as 2% (8% annualized) of Barings BDC’s total assets less senior securities constituting indebtedness and preferred stock at the end of the quarter for which the fee is being calculated. |
• | The New Barings BDC Advisory Agreement provides that the hurdle amount for each quarter is calculated as 2% (8% annualized) of Barings BDC’s net asset value (as opposed to total assets less senior securities) for that quarter, which is consistent with market practice. This change corrects the inadvertent omission of “liabilities” from the measure used to calculate the hurdle rate in the Existing Barings BDC Advisory Agreement (i.e., total assets less senior securities under the Existing Barings BDC Advisory Agreement to net assets (or total assets less the sum of liabilities and senior securities representing indebtedness and preferred stock) under the New Barings BDC Advisory Agreement). |
• | The Existing Barings BDC Advisory Agreement contains references to certain provisions that have lapsed under the time schedule included in the Existing Barings BDC Advisory Agreement, including with respect to the step-up provisions described above for the annual rate used to calculate the base management fee and a transitional quarter-by-quarter “look-back” provision that was in effect from August 2, 2018 through December 31, 2019. |
• | The New Barings BDC Advisory Agreement deletes these no longer applicable provisions, including with respect to the step-up provisions described above for the annual rate used to calculate the base management fee and the transitional quarter-by-quarter “look-back” provision that was in effect from August 2, 2018 through December 31, 2019. |
• | Under the Existing Barings BDC Advisory Agreement, in determining whether Barings has produced performance sufficient to earn an income incentive fee, the amount of Barings BDC’s assets that Barings is deemed to have at its disposal to generate such performance is measured at the end of the applicable quarter. |
• | The New Barings BDC Advisory Agreement provides that the amount of Barings BDC’s assets that Barings is deemed to have at its disposal to generate performance sufficient to earn an income incentive fee is measured at the beginning of each applicable quarter in order to ensure that capital raises that occur late in a quarter do not unfairly inflate the amount of Barings BDC’s assets that Barings had available to it to generate investment income during the quarter. |
• | The Existing Barings BDC Advisory Agreement contains an “incentive fee cap” which functions by effectively reducing the income incentive fee by as much as the amount by which capital losses, whether realized or unrealized, exceed capital gains, whether realized or unrealized, over the 12-quarter look-back period (such calculation is referred to herein as “Net Capital Loss”). The Existing Barings BDC Advisory Agreement does not contemplate or otherwise address the impact of Barings BDC’s use of guarantees, sureties or other credit enhancement or credit support such as the Credit Support Agreement on the “incentive fee cap.” |
• | The New Barings BDC Advisory Agreement provides that the value of any credit support arrangement will be taken into account (i.e., as part of the capital gains component) when calculating if capital losses, realized and unrealized, exceed capital gains, realized and unrealized, for purposes of determining the impact of the “incentive fee cap” on the income incentive fee. |
• | Under the Existing Barings BDC Advisory Agreement, the “incentive fee cap” for any quarter is an amount equal to (1) 20% of the Cumulative Net Return (as defined below) during the relevant rolling 12-quarter period minus (2) the aggregate income incentive fee that was paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant rolling 12-quarter period. For this purpose, “Cumulative Net Return” means (x) the aggregate net investment income in respect of the relevant rolling 12-quarter period minus (y) any Net Capital Loss in respect of the relevant 12-quarter period. |
• | The New Barings BDC Advisory Agreement provides that the “incentive fee cap” for any quarter is an amount equal to (1) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant rolling 12-quarter period minus (2) the aggregate income incentive fee that was paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant rolling 12-quarter period. For this purpose, “Cumulative Pre-Incentive Fee Net Return” means (x) the aggregate pre-incentive fee net investment income in respect of the relevant rolling 12-quarter period minus (y) any Net Capital Loss in respect of the relevant 12-quarter period. This change is intended to sync up the measures (i.e., pre-incentive fee net investment income) used to calculate the income incentive fee with that used to calculate the related incentive fee cap (i.e., pre-incentive net investment income as opposed to net investment income). |
| | Fees paid under the New Barings BDC Advisory Agreement | | | Fees paid under the Existing Barings BDC Advisory Agreement | | | Decrease/ (Increase) | | | Per Share Decrease/ (Increase) | | | Percentage Decrease/ (Increase) | |
Year Ended December 31, 2019: | | | | | | | | | | | |||||
Base management fee | | | $13,458,307 | | | $14,804,137 | | | $1,345,830 | | | $0.03 | | | 9.1% |
Income incentive fee | | | — | | | — | | | — | | | — | | | — |
Capital gains incentive fee | | | — | | | — | | | — | | | — | | | — |
Total | | | $13,458,307 | | | $14,804,137 | | | $1,345,831 | | | $0.03 | | | 9.1% |
| | Fees paid under the New Barings BDC Advisory Agreement | | | Fees paid under the Existing Barings BDC Advisory Agreement | | | Decrease/ (Increase) | | | Per Share Decrease/ (Increase) | | | Percentage Decrease/ (Increase) | |
Six Months Ended June 30, 2020: | | | | | | | | | | | |||||
Base management fee | | | $6,844,691 | | | $7,529,160 | | | $684,469 | | | $0.01 | | | 9.1% |
Income incentive fee | | | — | | | — | | | — | | | — | | | — |
Capital gains incentive fee | | | — | | | — | | | — | | | — | | | — |
Total | | | $6,844,691 | | | $7,529,160 | | | $684,469 | | | $0.01 | | | 9.1% |
• | the nature, quality and extent of the advisory and other services provided to Barings BDC by Barings under the terms of the Existing Barings BDC Advisory Agreement and to be provided under the terms of the New Barings BDC Advisory Agreement; |
• | investment performance of Barings BDC and Barings; |
• | comparative data with respect to advisory fees or similar expenses paid by other BDCs with similar investment objectives; |
• | information about the services being performed and the personnel performing such services under the Existing Barings BDC Advisory Agreement; |
• | Barings BDC’s projected operating expenses and expense ratio compared to BDCs with similar investment objectives, including expenses related to investment due diligence, travel and investigating and monitoring investments; |
• | any existing and potential sources of indirect income to Barings from its relationship with Barings BDC and Barings’ profitability; and |
• | the extent to which economies of scale would be realized as Barings BDC grows and whether fee levels reflect these economies of scale for the benefit of its stockholders. |
| | | | Closing Sales Price | | | Premium/ (Discount) of High Sales Price to NAV(2) | | | Premium/ (Discount) of Low Sales Price to NAV(2) | | | Dividends and Distributions Declared | |||||
Period | | | NAV per share(1) | | | High | | | Low | | ||||||||
Fiscal Year Ending December 31, 2020 | | | | | | | | | | | | | ||||||
Second quarter | | | $10.23 | | | $8.41 | | | $6.22 | | | (17.8)% | | | (39.2)% | | | $0.16 |
First quarter | | | $9.23 | | | $10.54 | | | $5.34 | | | 14.2% | | | (42.1)% | | | $0.16 |
Fiscal Year Ended December 31, 2019 | | | | | | | | | | | | | ||||||
Fourth quarter | | | $11.66 | | | $10.49 | | | $9.94 | | | (10.0)% | | | (14.8)% | | | $0.54 |
Third quarter | | | $11.58 | | | $10.24 | | | $9.65 | | | (11.6)% | | | (16.7)% | | | $0.14 |
Second quarter | | | $11.59 | | | $10.33 | | | $9.81 | | | (10.9)% | | | (15.4)% | | | $0.13 |
First quarter | | | $11.52 | | | $10.00 | | | $9.28 | | | (13.2)% | | | (19.4)% | | | $0.12 |
Fiscal Year Ended December 31, 2018 | | | | | | | | | | | | | ||||||
Fourth quarter | | | $10.98 | | | $10.20 | | | $8.83 | | | (7.1)% | | | (19.6)% | | | $0.43 |
Third quarter | | | $11.91 | | | $12.34 | | | $9.99 | | | 3.6% | | | (16.1)% | | | $0.03 |
Second quarter | | | $13.70 | | | $12.05 | | | $10.98 | | | (12.0)% | | | (19.9)% | | | — |
First quarter | | | $13.36 | | | $12.08 | | | $9.41 | | | (9.6)% | | | (29.6)% | | | $0.30 |
(1) | NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low closing sales prices. The NAVs shown are based on outstanding shares at the end of each period. |
(2) | Calculated as of the respective high or low closing sales price divided by the quarter-end NAV. |
| | NAV per share(1) | | | High | | | Low | | | Premium/(Discount) of High Sales Price to NAV(2) | | | Premium/ (Discount) of Low Sales Price to NAV(2) | | | Dividends and Distributions Declared | |
Fiscal Year ending October 31, 2016 | | | | | | | | | | | | | ||||||
First Quarter | | | $12.43 | | | $8.49 | | | $6.82 | | | (31.7)% | | | (45.1)% | | | $0.305 |
Second Quarter | | | $12.56 | | | $7.72 | | | $6.85 | | | (38.5)% | | | (45.5)% | | | $0.135 |
Third Quarter | | | $12.27 | | | $8.37 | | | $7.14 | | | (31.8)% | | | (41.8)% | | | $0.135 |
Fourth Quarter | | | $12.39 | | | $8.71 | | | $7.95 | | | (29.7)% | | | (35.8)% | | | $0.135 |
Fiscal Year ending October 31, 2017 | | | | | | | | | | | | | ||||||
First Quarter | | | $12.45 | | | $8.80 | | | $8.24 | | | (29.3)% | | | (33.8)% | | | $0.135 |
Second Quarter | | | $12.45 | | | $9.06 | | | $8.47 | | | (27.2)% | | | (32.0)% | | | $0.135 |
Third Quarter | | | $13.38 | | | $10.40 | | | $8.65 | | | (22.3)% | | | (35.4)% | | | $0.135 |
Fourth Quarter | | | $13.24 | | | $10.80 | | | $9.82 | | | (18.4)% | | | (25.8)% | | | $0.15 |
Fiscal Year ending October 31, 2018 | | | | | | | | | | | | | ||||||
First Quarter | | | $13.42 | | | $10.96 | | | $10.50 | | | (18.3)% | | | (21.8)% | | | $0.15 |
Second Quarter | | | $13.09 | | | $10.57 | | | $9.89 | | | (19.3)% | | | (24.4)% | | | $0.15 |
Third Quarter | | | $12.62 | | | $10.11 | | | $9.25 | | | (19.9)% | | | (26.7)% | | | $0.15 |
Fourth Quarter | | | $12.46 | | | $9.87 | | | $9.05 | | | (20.8)% | | | (27.4)% | | | $0.15 |
Fiscal Year ending October 31, 2019 | | | | | | | | | | | | | ||||||
First Quarter | | | $12.24 | | | $9.18 | | | $7.96 | | | (25.0)% | | | (35.0)% | | | $0.15 |
Second Quarter | | | $12.99 | | | $9.51 | | | $8.94 | | | (26.8)% | | | (31.2)% | | | $0.15 |
Third Quarter | | | $12.86 | | | $9.60 | | | $8.90 | | | (25.3)% | | | (30.8)% | | | $0.15 |
Fourth Quarter | | | $12.86 | | | $9.47 | | | $8.64 | | | (26.4)% | | | (32.8)% | | | $0.17 |
Fiscal Year ending October 31, 2020 | | | | | | | | | | | | | ||||||
First Quarter | | | $12.94 | | | $9.65 | | | $8.84 | | | (25.4)% | | | (31.7)% | | | $0.17 |
Second Quarter | | | $10.49 | | | $10.23 | | | $3.03 | | | (2.5)% | | | (71.1)% | | | $0.17 |
Third Quarter | | | $10.18 | | | $7.23 | | | $6.05 | | | (29.0)% | | | (40.6)% | | | $0.17 |
(1) | NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low closing sales prices. The NAVs shown are based on outstanding shares at the end of each period. |
(2) | Calculated as of the respective high or low closing sales price divided by the quarter-end NAV, minus 1. |
Class and Year | | | Total Amount Outstanding Exclusive of Treasury Securities(1) | | | Asset Coverage per Unit(2) | | | Involuntary Liquidating Preference per Unit(3) | | | Average Market Value per Unit(4) |
| | ($'s in thousands) | | | | | | | ||||
2019 Notes | | | | | | | | | ||||
2012 | | | $69,000 | | | $11,311 | | | — | | | $25.92 |
2013 | | | 69,000 | | | 11,591 | | | — | | | 25.99 |
2014 | | | 69,000 | | | 14,025 | | | — | | | 25.74 |
December 2022 Notes | | | | | | | | | ||||
2012 | | | 80,500 | | | 9,695 | | | — | | | 25.03 |
2013 | | | 80,500 | | | 9,935 | | | — | | | 24.94 |
2014 | | | 80,500 | | | 12,021 | | | — | | | 25.05 |
2015 | | | 80,500 | | | 12,812 | | | — | | | 25.23 |
2016 | | | 80,500 | | | 14,347 | | | — | | | 25.15 |
2017 | | | 80,500 | | | 15,082 | | | — | | | 25.44 |
March 2022 Notes | | | | | | | | | ||||
2015 | | | 86,250 | | | 11,958 | | | — | | | 25.46 |
2016 | | | 86,250 | | | 13,390 | | | — | | | 25.58 |
2017 | | | 86,250 | | | 14,076 | | | — | | | 25.66 |
SBA-guaranteed debentures payable(e) | | | | | | | | | ||||
2010 | | | 202,465 | | | 1,891 | | | — | | | N/A |
2011 | | | 224,238 | | | 2,558 | | | — | | | N/A |
2012 | | | 213,605 | | | 3,654 | | | — | | | N/A |
2013 | | | 193,285 | | | 4,138 | | | — | | | N/A |
2014 | | | 224,780 | | | 4,305 | | | — | | | N/A |
2015 | | | 224,968 | | | 4,584 | | | — | | | N/A |
2016 | | | 250,000 | | | 4,620 | | | — | | | N/A |
2017 | | | 250,000 | | | 4,856 | | | — | | | N/A |
May 2011 Credit Facility | | | | | | | | | ||||
2011 | | | 15,000 | | | 38,235 | | | — | | | N/A |
2012 | | | — | | | — | | | — | | | N/A |
2013 | | | 11,221 | | | 71,275 | | | — | | | N/A |
2014 | | | 62,620 | | | 15,454 | | | — | | | N/A |
2015 | | | 131,257 | | | 7,857 | | | — | | | N/A |
2016 | | | 127,011 | | | 9,093 | | | — | | | N/A |
2017 | | | 156,070 | | | 7,779 | | | — | | | N/A |
August 2018 Credit Facility | | | | | | | | | ||||
2018 | | | 570,000 | | | 1,988 | | | — | | | N/A |
2019 | | | 107,200 | | | 11,582 | | | — | | | N/A |
February 2019 Credit Facility | | | | | | | | | ||||
2019 | | | 245,288 | | | 5,062 | | | — | | | N/A |
June 30, 2020 (unaudited)(f) | | | 342,922 | | | 3,091 | | | — | | | N/A |
Debt Securitization | | | | | | | | | ||||
2019 | | | 318,210 | | | 3,902 | | | — | | | N/A |
June 30, 2020 (unaudited)(f) | | | 226,420 | | | 4,681 | | | — | | | N/A |
Class and Year | | | Total Amount Outstanding Exclusive of Treasury Securities(1) | | | Asset Coverage per Unit(2) | | | Involuntary Liquidating Preference per Unit(3) | | | Average Market Value per Unit(4) |
| | ($'s in thousands) | | | | | | | ||||
Total Senior Securities | | | | | | | | | ||||
2010 | | | 202,465 | | | 1,891 | | | — | | | N/A |
2011 | | | 239,238 | | | 2,397 | | | — | | | N/A |
2012 | | | 363,105 | | | 1,580 | | | — | | | N/A |
2013 | | | 354,006 | | | 2,259 | | | — | | | N/A |
2014 | | | 436,900 | | | 2,215 | | | — | | | N/A |
2015 | | | 522,975 | | | 1,972 | | | — | | | N/A |
2016 | | | 543,761 | | | 2,124 | | | — | | | N/A |
2017 | | | 572,820 | | | 2,120 | | | — | | | N/A |
2018 | | | 570,000 | | | 1,988 | | | — | | | N/A |
2019 | | | 670,698 | | | 1,851 | | | — | | | N/A |
June 30, 2020 (unaudited)(f) | | | 569,342 | | | 1,861 | | | — | | | N/A |
(1) | Total amount of each class of senior securities outstanding at the end of the period presented. |
(2) | Asset coverage per unit is the ratio of the carrying value of Barings BDC’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. |
(3) | The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “—” indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities. |
(4) | Average market value per unit for Barings BDC’s notes offered in the Debt Securitization, Barings BDC’s unsecured notes issued in October 2012 and November 2012 due 2022 and Barings BDC’s unsecured notes issued in February 2015 due 2022 represent the average of the daily closing prices as reported on the NYSE for each security during 2012, 2013, 2014, 2015, 2016 and 2017, as applicable. Average market value per unit for Barings BDC’s SBA-guaranteed debentures payable, Barings BDC’s credit facility entered into in May 2011, Barings BDC’s credit facility entered into in August 2018, the February 2019 Credit Facility and the Debt Securitization are not applicable because these senior securities are not registered for public trading. |
(5) | We have obtained exemptive relief from the SEC to permit us to exclude the SBA-guaranteed debentures payable from the 200% asset coverage test under the Investment Company Act. |
(6) | Subsequent to June 30, 2020, Barings BDC borrowed an additional $20.0 million USD under the February 2019 Credit Facility, €7.0 million EUR under the February 2019 Credit Facility and repaid $48.1 million under the Debt Securitization. |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Non–Control / Non–Affiliate Investments: | |||||||||||||||
1WorldSync, Inc.(5)(7)(8) 300 South Riverside Plaza, Suite 1400, Chicago, IL 60606 | | | IT Consulting & Other Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 07/19, Due 07/25) | | | $858,894 | | | $844,035 | | | $816,626 |
| | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.0% Cash, Acquired 07/19, Due 07/25) | | | 21,472,356 | | | 21,099,121 | | | 20,415,644 | ||
| 22,331,250 | | | 21,943,156 | | | 21,232,270 | ||||||||
| | | | | | | | | | ||||||
Accelerate Learning, Inc.(5)(7)(8) 5177 Richmond Avenue, Suite 1025 Houston, TX 77056 | | | Education Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.6% Cash, Acquired 12/18, Due 12/24) | | | 7,567,965 | | | 7,449,704 | | | 6,933,342 |
| 7,567,965 | | | 7,449,704 | | | 6,933,342 | ||||||||
| | | | | | | | | | ||||||
Accurus Aerospace Corporation(5)(7)(8) 12716 East Pine Street Tulsa, OK 74116 | | | Aerospace & Defense | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.4% Cash, Acquired 10/18, Due 10/24) | | | 24,625,000 | | | 24,346,233 | | | 21,198,156 |
| 24,625,000 | | | 24,346,233 | | | 21,198,156 | ||||||||
| | | | | | | | | | ||||||
Acrisure, LLC(5)(8) 5664 Prairie Creek Dr Caledonia, MI 49316 | | | Property & Casualty Insurance | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.7% Cash, Acquired 03/20, Due 02/27) | | | 1,995,000 | | | 1,709,898 | | | 1,880,288 |
| 1,995,000 | | | 1,709,898 | | | 1,880,288 | ||||||||
| | | | | | | | | | ||||||
ADE Holding (d/b/a AD Education)(3)(5)(7)(8) 1 Rue Payenne 75003 Paris, France | | | Education Services | | | First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 01/20, Due 01/27) | | | 9,581,593 | | | 9,163,988 | | | 8,755,838 |
| 9,581,593 | | | 9,163,988 | | | 8,755,838 | ||||||||
| | | | | | | | | | ||||||
ADMI Corp.(6)(8) 281 Sanders Creek Parkway East Syracuse, NY 13057 | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 08/18, Due 04/25) | | | 3,430,482 | | | 3,440,286 | | | 3,180,709 |
| 3,430,482 | | | 3,440,286 | | | 3,180,709 | ||||||||
| | | | | | | | | | ||||||
Aftermath Bidco Corporation(5)(7)(8) 75 Executive Dr #200 Aurora, IL 60504 | | | Professional Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 7.1% Cash, Acquired 04/19, Due 04/25) | | | 12,197,427 | | | 11,969,619 | | | 11,603,465 |
| 12,197,427 | | | 11,969,619 | | | 11,603,465 | ||||||||
| | | | | | | | | | ||||||
Alliant Holdings LP(6)(8) 1301 Dove Street, Suite 200 Newport Beach, CA 92660 | | | Property & Casualty Insurance | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 09/18, Due 05/25) | | | 4,910,038 | | | 4,916,270 | | | 4,643,373 |
| 4,910,038 | | | 4,916,270 | | | 4,643,373 | ||||||||
| | | | | | | | | | ||||||
Altice USA, Inc.(3)(5)(8) 1111 Stewart Avenue Bethpage, NY 11714 | | | Cable & Satellite | | | First Lien Senior Secured Term Loan (LIBOR + 2.25%, 2.4% Cash, Acquired 09/18, Due 01/26) | | | 2,493,687 | | | 2,206,701 | | | 2,354,315 |
| 2,493,687 | | | 2,206,701 | | | 2,354,315 | ||||||||
| | | | | | | | | | ||||||
American Dental Partners, Inc.(5)(7)(8) 401 Edgewater Place, Suite 430 Wakefield, MA 01880 | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 11/18, Due 03/23) | | | 9,850,000 | | | 9,833,760 | | | 8,983,941 |
| 9,850,000 | | | 9,833,760 | | | 8,983,941 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
American Scaffold, Inc.(5)(7)(8) 3210 Commercial Street San Diego, CA 92113 | | | Aerospace & Defense | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/19, Due 09/25) | | | 9,735,797 | | | 9,541,502 | | | 9,245,360 |
| 9,735,797 | | | 9,541,502 | | | 9,245,360 | ||||||||
| | | | | | | | | | ||||||
Anchorage Capital CLO Ltd: Series 2013-1A(3)(5)(8) 610610 Broadway, 6th floor, New York, NY 10012 | | | Structured Finance | | | Structured Secured Note - Class DR (LIBOR + 6.8%, 8.1% Cash, Acquired 03/20, Due 10/30) | | | 2,000,000 | | | 1,734,878 | | | 1,861,922 |
| 2,000,000 | | | 1,734,878 | | | 1,861,922 | ||||||||
| | | | | | | | | | ||||||
Anju Software, Inc.(5)(7)(8) 4500 S Lakeshore Drive #620 Tempe, AZ 85282 | | | Application Software | | | First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.6% Cash, Acquired 02/19, Due 02/25) | | | 13,735,856 | | | 13,449,096 | | | 12,947,157 |
| 13,735,856 | | | 13,449,096 | | | 12,947,157 | ||||||||
| | | | | | | | | | ||||||
Apex Bidco Limited(3)(5)(7) 75 Executive Dr #200 Aurora, IL 60504 | | | Business Equipment & Services | | | First Lien Senior Secured Term Loan (GBP LIBOR + 6.50%, 7.2% Cash, Acquired 01/20, Due 01/27)(8) | | | 5,181,990 | | | 5,344,752 | | | 4,868,108 |
| | | | Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27) | | | 621,838 | | | 641,273 | | | 584,714 | ||
| 5,803,828 | | | 5,986,025 | | | 5,452,822 | ||||||||
| | | | | | | | | | ||||||
Apex Tool Group, LLC(5)(6)(8) 14600 York Road Sparks, MD 21152 | | | Industrial Machinery | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.5% Cash, Acquired 08/18, Due 08/24) | | | 7,054,987 | | | 6,937,646 | | | 6,292,625 |
| 7,054,987 | | | 6,937,646 | | | 6,292,625 | ||||||||
| | | | | | | | | | ||||||
Applied Systems Inc.(6)(8) 200 Applied Parkway University Park, IL 60484 | | | Application Software | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 09/19, Due 09/24) | | | 4,937,940 | | | 4,965,194 | | | 4,791,481 |
| 4,937,940 | | | 4,965,194 | | | 4,791,481 | ||||||||
| | | | | | | | | | ||||||
AQA Acquisition Holding, Inc. (f/k/a SmartBear)(5)(7)(8) 450 Artisan Way 4th floor Somerville, MA 02145 | | | High Tech Industries | | | Second Lien Senior Secured Term Loan (LIBOR + 8.0%, 9.5% Cash, Acquired 10/18, Due 05/24) | | | 4,959,088 | | | 4,867,502 | | | 4,766,877 |
| 4,959,088 | | | 4,867,502 | | | 4,766,877 | ||||||||
| | | | | | | | | | ||||||
Arch Global Precision LLC(5)(7)(8) 2600 S Telegraph Rd Suite 180 Bloomfield Twp, MI 48302 | | | Industrial Machinery | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 04/26) | | | 11,558,622 | | | 11,342,687 | | | 10,684,104 |
| 11,558,622 | | | 11,342,687 | | | 10,684,104 | ||||||||
| | | | | | | | | | ||||||
Armstrong Transport Group (Pele Buyer, LLC )(5)(7)(8) 8615 Cliff Cameron Dr #200 Charlotte, NC 28269 | | | Air Freight & Logistics | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24) | | | 4,667,670 | | | 4,580,193 | | | 4,405,835 |
| 4,667,670 | | | 4,580,193 | | | 4,405,835 | ||||||||
| | | | | | | | | | ||||||
Ascend Learning, LLC(6)(8) 11161 Overbrook Road Leawood, KS 66211 | | | IT Consulting & Other Services | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 09/18, Due 07/24) | | | 4,936,548 | | | 4,944,790 | | | 4,686,660 |
| 4,936,548 | | | 4,944,790 | | | 4,686,660 | ||||||||
| | | | | | | | | | ||||||
Ascensus Specialties, LLC(5)(7)(8) 2821 Northup Way, Suite 275 Bellevue, WA 98004 | | | Specialty Chemicals | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 09/19, Due 09/26) | | | 7,054,852 | | | 6,990,567 | | | 6,625,013 |
| 7,054,852 | | | 6,990,567 | | | 6,625,013 | ||||||||
| | | | | | | | | | ||||||
ASPEQ Heating Group LLC(5)(7)(8) 425 Hanley Industrial Ct. St. Louis, MO 63144 | | | Building Products, Air and Heating | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25) | | | 8,990,679 | | | 8,868,005 | | | 8,613,002 |
| 8,990,679 | | | 8,868,005 | | | 8,613,002 | ||||||||
| | | | | | | | | | ||||||
Auxi International(3)(5)(7)(8) 738 rue Yves Kermen 92100 Boulogne Billancourt, France | | | Commercial Finance | | | First Lien Senior Secured Term Loan (EURIBOR + 5.5%, 5.5% Cash, Acquired 12/19, Due 12/26) | | | 1,572,410 | | | 1,512,116 | | | 1,481,336 |
| 1,572,410 | | | 1,512,116 | | | 1,481,336 | ||||||||
| | | | | | | | | | ||||||
Aveanna Healthcare Holdings, Inc.(6)(8) 5520 Spring Valley Road, ste.400 Dallas, TX 75254 | | | Health Care Facilities | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 03/24) | | | 1,465,984 | | | 1,451,877 | | | 1,292,514 |
| | | | First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 10/18, Due 03/24) | | | 3,511,966 | | | 3,512,767 | | | 3,109,565 | ||
| 4,977,950 | | | 4,964,644 | | | 4,402,079 | ||||||||
| | | | | | | | | | ||||||
AVSC Holding Corp.(6)(8) 5100 North River Road, Suite 300 Schiller Park, IL 60176 | | | Advertising | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.25% Cash, Acquired 08/18, Due 03/25) | | | 4,917,072 | | | 4,894,839 | | | 3,515,706 |
| 4,917,072 | | | 4,894,839 | | | 3,515,706 | ||||||||
| | | | | | | | | | ||||||
Bass Pro Group, LLC(5)(8) 2500 E. Kearney Springfield, MO 65803 | | | General Merchandise Stores | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.1% Cash, Acquired 03/20, Due 09/24) | | | 1,989,770 | | | 1,782,295 | | | 1,909,463 |
| 1,989,770 | | | 1,782,295 | | | 1,909,463 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
BDP International, Inc. (f/k/a BDP Buyer, LLC)(5)(7)(8) 510 Walnut St. Philadelphia, PA 19106 | | | Air Freight & Logistics | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/18, Due 12/24) | | | 24,625,000 | | | 24,239,939 | | | 23,504,409 |
| 24,625,000 | | | 24,239,939 | | | 23,504,409 | ||||||||
| | | | | | | | | | ||||||
Beacon Pointe Advisors, LLC(5)(7)(8) 24 Corporate Plaza Dr, Suite 150 Newport Beach, CA 92660 | | | Asset Manager & Custody Bank | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.4% Cash, Acquired 03/20, Due 03/26) | | | 634,773 | | | 613,132 | | | 612,386 |
| 634,773 | | | 613,132 | | | 612,386 | ||||||||
| | | | | | | | | | ||||||
Benify (Bennevis AB)(3)(5)(7)(8) Banérgatan 16 Box 24101 104 51 Stockholm, Sweden | | | High Tech Industries | | | First Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26) | | | 1,400,672 | | | 1,365,178 | | | 1,335,227 |
| 1,400,672 | | | 1,365,178 | | | 1,335,227 | ||||||||
| | | | | | | | | | ||||||
Berlin Packaging LLC(6)(8) 525 West Monroe, 14th floor Chicago, IL 60661 | | | Forest Products /Containers | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.2% Cash, Acquired 08/18, Due 11/25) | | | 4,937,028 | | | 4,946,645 | | | 4,665,491 |
| 4,937,028 | | | 4,946,645 | | | 4,665,491 | ||||||||
| | | | | | | | | | ||||||
Blackhawk Network Holdings Inc.(6)(8) 6220 Stoneridge Mall Road Pleasanton, CA 94588 | | | Data Processing & Outsourced Services | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.2% Cash, Acquired 11/18, Due 06/25) | | | 4,937,028 | | | 4,937,028 | | | 4,533,821 |
| 4,937,028 | | | 4,937,028 | | | 4,533,821 | ||||||||
| | | | | | | | | | ||||||
Boxer Parent Company Inc.(5)(8) 200 Calrendon Street Boston, MA 02116 | | | Software/Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 4.4% Cash, Acquired 03/20, Due 10/25) | | | 1,989,899 | | | 1,797,528 | | | 1,877,967 |
| 1,989,899 | | | 1,797,528 | | | 1,877,967 | ||||||||
| | | | | | | | | | ||||||
Brown Machine Group Holdings, LLC (5)(7)(8) 330 North Ross Street Beaverton, MI 48612 | | | Industrial Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24) | | | 5,286,022 | | | 5,236,738 | | | 4,867,702 |
| 5,286,022 | | | 5,236,738 | | | 4,867,702 | ||||||||
| | | | | | | | | | ||||||
Cadent, LLC (f/k/a Cross MediaWorks)(5)(7)(8) 1675 Broadway, 22nd Floor New York, NY 10019 | | | Media & Entertainment | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/18, Due 09/23) | | | 7,798,384 | | | 7,747,419 | | | 7,454,420 |
| 7,798,384 | | | 7,747,419 | | | 7,454,420 | ||||||||
| | | | | | | | | | ||||||
Carlyle Aviation Partners Ltd.(5) 848 Brickell Ave Miami, FL 33131 | | | Structured Finance | | | Structured Secured Note, Series 2019-2 - Class A (3.4% Cash, Acquired 3/20, Due 10/39) | | | 948,595 | | | 858,707 | | | 855,977 |
| | | | Structured Secured Note, Series 2018-2 - Class A (4.5% Cash, Acquired 03/20, Due 11/38) | | | 434,772 | | | 393,648 | | | 387,701 | ||
| 1,383,367 | | | 1,252,355 | | | 1,243,678 | ||||||||
| | | | | | | | | | ||||||
Centralis Finco S.a.r.l.(3)(5)(7)(8) 8-10 Avenue de la Gare, 1610 Luxembourg | | | Diversified Financial Services | | | First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 5/20, Due 5/27) | | | 2,006,413 | | | 1,838,968 | | | 1,961,000 |
| 2,006,413 | | | 1,838,968 | | | 1,961,000 | ||||||||
| | | | | | | | | | ||||||
Cineworld Group PLC(3)(5)(8) 770 Township Line Road Yardly, PA 19067 | | | Leisure Products | | | First Lien Senior Secured Term Loan (LIBOR + 2.25%, 3.3% Cash, Acquired 4/20, Due 2/25) | | | 2,990,793 | | | 1,954,589 | | | 2,238,878 |
| 2,990,793 | | | 1,954,589 | | | 2,238,878 | ||||||||
| | | | | | | | | | ||||||
Classic Collision (Summit Buyer, LLC)(5)(7)(8) 2329 John Glenn Dr Chamblee, Georgia, 30341 | | | Auto Collision Repair Centers | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 01/20, Due 01/26) | | | 3,921,456 | | | 3,630,038 | | | 3,145,392 |
| 3,921,456 | | | 3,630,038 | | | 3,145,392 | ||||||||
| | | | | | | | | | ||||||
CM Acquisitions Holdings Inc.(5)(7)(8) 9 Lea Ave Nashville, TN 37210 | | | Internet & Direct Marketing | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 05/19, Due 05/25) | | | 20,434,481 | | | 20,115,062 | | | 19,398,331 |
| 20,434,481 | | | 20,115,062 | | | 19,398,331 | ||||||||
| | | | | | | | | | ||||||
CMT Opco Holding, LLC (Concept Machine)(5)(7)(8) 15625 Medina Rd Minneapolis, MN 55447 | | | Distributors | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25) | | | 5,450,744 | | | 5,349,552 | | | 5,007,434 |
| | | | LLC Units (10,185 units, Acquired 01/20)(10) | | | | | 407,915 | | | 299,118 | |||
| 5,450,744 | | | 5,757,467 | | | 5,306,552 | ||||||||
| | | | | | | | | | ||||||
Confie Seguros Holding II Co.(5)(8) 7711 Center Avenue Huntingdon Beach, CA 92647 | | | Insurance Brokerage Services | | | Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 10/19, Due 11/25) | | | 2,500,000 | | | 2,360,112 | | | 1,677,075 |
| 2,500,000 | | | 2,360,112 | | | 1,677,075 | ||||||||
| | | | | | | | | | ||||||
Contabo Finco S.À R.L(3)(5)(7)(8) Aschauer Straße 32a 81549 Munich Germany | | | Internet Software and Services | | | First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 10/19, Due 10/26) | | | 1,361,657 | | | 1,307,535 | | | 1,269,399 |
| 1,361,657 | | | 1,307,535 | | | 1,269,399 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Container Store Group, Inc., (The)(6)(8) 500 Freeport Parkway Coppell, TX 75019 | | | Retail | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/18, Due 09/23) | | | 2,889,648 | | | 2,891,578 | | | 2,326,166 |
| 2,889,648 | | | 2,891,578 | | | 2,326,166 | ||||||||
| | | | | | | | | | ||||||
Core & Main LP(6)(8) 1830 Craig Park Court St. Louis, MO 63146 | | | Building Products | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 08/24) | | | 3,959,391 | | | 3,973,700 | | | 3,762,649 |
| 3,959,391 | | | 3,973,700 | | | 3,762,649 | ||||||||
| | | | | | | | | | ||||||
CPI International Inc.(6)(8) 811 Hansen Way Palo Alto, CA 94304 | | | Electronic Components | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 07/24) | | | 4,722,788 | | | 4,728,810 | | | 4,431,534 |
| 4,722,788 | | | 4,728,810 | | | 4,431,534 | ||||||||
| | | | | | | | | | ||||||
Dart Buyer, Inc.(3)(5)(7)(8) 9900 Cavendish, Suite 310 Saint-Laurent, QC H4M 2V2 | | | Aerospace & Defense | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 04/19, Due 04/25) | | | 12,373,311 | | | 12,131,607 | | | 11,685,480 |
| 12,373,311 | | | 12,131,607 | | | 11,685,480 | ||||||||
| | | | | | | | | | ||||||
Davis Vision Incorporation(6)(8) 175 East Houston Street San Antonio, TX 78205 | | | Managed Health Care | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 12/24) | | | 3,949,367 | | | 3,947,664 | | | 3,774,134 |
| 3,949,367 | | | 3,947,664 | | | 3,774,134 | ||||||||
| | | | | | | | | | ||||||
Diamond Sports Group, LLC(5)(8) 10706 Beaver Dam Road Hunt Valley, MD 21030 | | | Broadcasting | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 03/20, Due 08/26) | | | 994,987 | | | 780,476 | | | 807,184 |
| 994,987 | | | 780,476 | | | 807,184 | ||||||||
| | | | | | | | | | ||||||
Dimora Brands, Inc.(6)(8) PO Box 779 Belle Mead, NJ 08502 | | | Building Products | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.6% Cash, Acquired 08/18, Due 08/24) | | | 2,938,760 | | | 2,941,402 | | | 2,812,040 |
| 2,938,760 | | | 2,941,402 | | | 2,812,040 | ||||||||
| | | | | | | | | | ||||||
Distinct Holdings, Inc.(5)(7)(8) 37 Market St Kenilworth, NJ 07033 | | | Systems Software | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 12/23) | | | 7,554,756 | | | 7,481,644 | | | 7,256,971 |
| 7,554,756 | | | 7,481,644 | | | 7,256,971 | ||||||||
| | | | | | | | | | ||||||
DreamStart Bidco SAS (d/b/a SmartTrade)(3)(5)(7)(8) Immeuble Apogée, 13530, 500 Avenue Galilée 13290 Aix-en-Provence, France | | | Diversified Financial Services | | | First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 1.8% PIK, Acquired 03/20, Due 03/27) | | | 9,870,524 | | | 9,344,248 | | | 9,620,125 |
| 9,870,524 | | | 9,344,248 | | | 9,620,125 | ||||||||
| | | | | | | | | | ||||||
Edelman Financial Center, LLC, The(6)(8) 4000 Legato Road Fairfax, VA 22033 | | | Investment Banking & Brokerage | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.2% Cash, Acquired 09/18, Due 07/25) | | | 4,937,343 | | | 4,970,893 | | | 4,702,820 |
| 4,937,343 | | | 4,970,893 | | | 4,702,820 | ||||||||
| | | | | | | | | | ||||||
Elmwood CLO: Series 2019-1A(3)(5)(8) 40 West 57th Street, Suite 1800 New York, NY 10019 | | | Structured Finance | | | Structured Secured Note - Class E (LIBOR + 7.10%, 8.2% Cash, Acquired 03/20, Due 04/30) | | | 3,000,000 | | | 2,673,958 | | | 2,825,565 |
| 3,000,000 | | | 2,673,958 | | | 2,825,565 | ||||||||
| | | | | | | | | | ||||||
Endo International PLC(3)(5)(6)(8) 1400 Atwater Drive Malvern, PA 19355 | | | Pharmaceuticals | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.0% Cash, Acquired 09/18, Due 04/24) | | | 7,838,384 | | | 7,892,372 | | | 7,387,677 |
| 7,838,384 | | | 7,892,372 | | | 7,387,677 | ||||||||
| | | | | | | | | | ||||||
Envision Healthcare Corp.(5)(8) 1A Burton Hills Boulevard Nashville, TN 37215 | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 3.75%, 3.9% Cash, Acquired 03/20, Due 10/25) | | | 3,172,878 | | | 2,205,049 | | | 2,070,303 |
| 3,172,878 | | | 2,205,049 | | | 2,070,303 | ||||||||
| | | | | | | | | | ||||||
Exeter Property Group, LLC(5)(7)(8) 101 West Elm Street, Suite 600 Conshohocken, PA 19428 | | | Real Estate | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.7% Cash, Acquired 02/19, Due 08/24) | | | 12,375,000 | | | 12,230,925 | | | 12,169,662 |
| 12,375,000 | | | 12,230,925 | | | 12,169,662 | ||||||||
| | | | | | | | | | ||||||
ExGen Renewables IV, LLC(3)(6)(8) 10 South Dearborn Street, 49th floor Chicago, IL 60603 | | | Electric Utilities | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 09/18, Due 11/24) | | | 2,787,424 | | | 2,808,008 | | | 2,696,833 |
| 2,787,424 | | | 2,808,008 | | | 2,696,833 | ||||||||
| | | | | | | | | | ||||||
Eyemart Express LLC(6)(8) 13800 Senlac Drive Farmers Branch, TX 75234 | | | Retail | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 08/24) | | | 3,425,797 | | | 3,434,625 | | | 3,108,910 |
| 3,425,797 | | | 3,434,625 | | | 3,108,910 | ||||||||
| | | | | | | | | | ||||||
Fieldwood Energy LLC(4)(5)(6)(8) 1675 South Street, ste. B Dover, DE 19901 | | | Oil & Gas Equipment & Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 7.0% Cash, Acquired 08/18, Due 04/22) | | | 10,000,000 | | | 10,063,022 | | | 1,816,700 |
| 10,000,000 | | | 10,063,022 | | | 1,816,700 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Filtration Group Corporation(6)(7)(8) 600 West 22nd Street, ste. 300 Oak Brook, IL 60523 | | | Industrial Machinery | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.2% Cash, Acquired 09/18, Due 03/25) | | | 4,748,978 | | | 4,776,205 | | | 4,511,529 |
| 4,748,978 | | | 4,776,205 | | | 4,511,529 | ||||||||
| | | | | | | | | | ||||||
Flex Acquisition Holdings, Inc(5)(6)(8) 3436 Toringdon Way, ste. 160 Charlotte, NC 28277 | | | Paper Packaging | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.7% Cash, Acquired 08/18, Due 06/25) | | | 5,418,688 | | | 5,429,097 | | | 5,093,566 |
| 5,418,688 | | | 5,429,097 | | | 5,093,566 | ||||||||
| | | | | | | | | | ||||||
Frazer Consultants, LLC (d/b/a Tribute Technology)(5)(7)(8) 501 Parmenter St Middleton, WI 53562 | | | Software Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.6% Cash, Acquired 11/19, Due 08/23) | | | 6,688,791 | | | 6,629,982 | | | 6,438,403 |
| 6,688,791 | | | 6,629,982 | | | 6,438,403 | ||||||||
| | | | | | | | | | ||||||
GoldenTree Loan Opportunities IX, Limited: Series 2014-9A(3)(5)(8) 300 Park Ave., 21st Floor New York, NY 10022 | | | Structured Finance | | | Structured Secured Note - Class DR2 (LIBOR + 3.0%, 3.8% Cash, Acquired 03/20, Due 10/29) | | | 1,250,000 | | | 900,520 | | | 1,159,651 |
| 1,250,000 | | | 900,520 | | | 1,159,651 | ||||||||
| | | | | | | | | | ||||||
Graftech International Ltd.(3)(6)(8) 982 Keynote Circle Brooklyn Heights, OH 44131 | | | Specialty Chemicals | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 02/25) | | | 5,169,225 | | | 5,204,360 | | | 5,022,780 |
| 5,169,225 | | | 5,204,360 | | | 5,022,780 | ||||||||
| | | | | | | | | | ||||||
Gulf Finance, LLC(5)(8) 200 Clarendon Street, 55th floor Boston, MA 02117 | | | Oil & Gas Exploration & Production | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 08/23) | | | 1,053,642 | | | 932,202 | | | 674,331 |
| 1,053,642 | | | 932,202 | | | 674,331 | ||||||||
| | | | | | | | | | ||||||
Harbor Freight Tools USA Inc.(6)(8) 26541 Agoura Road Calabasas, CA 91302 | | | Specialty Stores | | | First Lien Senior Secured Term Loan (LIBOR + 2.5%, 3.3% Cash, Acquired 08/18, Due 08/23) | | | 5,949,142 | | | 5,907,173 | | | 5,714,924 |
| 5,949,142 | | | 5,907,173 | | | 5,714,924 | ||||||||
| | | | | | | | | | ||||||
Hayward Industries, Inc.(5)(6)(8) 620 Division Street Elizabeth, NJ 07201 | | | Leisure Products | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.7% Cash, Acquired 08/18, Due 08/24) | | | 6,991,992 | | | 7,011,721 | | | 6,712,312 |
| 6,991,992 | | | 7,011,721 | | | 6,712,312 | ||||||||
| | | | | | | | | | ||||||
Heartland, LLC(5)(7)(8) 1200 Main St, 42nd Floor Kansas City, MO 64105 | | | Commercial Services & Supplies | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25) | | | 5,476,510 | | | 5,294,535 | | | 4,833,787 |
| 5,476,510 | | | 5,294,535 | | | 4,833,787 | ||||||||
| | | | | | | | | | ||||||
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.))(3)(5)(7)(8) Edisonstraat 92 7006 RE Doetinchem, Netherlands | | | Insurance | | | First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.1% Cash, Acquired 09/19, Due 09/26) | | | 9,559,150 | | | 9,200,293 | | | 9,023,492 |
| 9,559,150 | | | 9,200,293 | | | 9,023,492 | ||||||||
| | | | | | | | | | ||||||
Highbridge Loan Management Ltd: Series 2014A-19(3)(5)(8) 277 Park Ave., 23rd Floor New York, NY 10172 | | | Structured Finance | | | Structured Secured Note - Class E (LIBOR + 6.75%, 7.7% Cash, Acquired 03/20, Due 07/30) | | | 1,000,000 | | | 833,666 | | | 927,421 |
| 1,000,000 | | | 833,666 | | | 927,421 | ||||||||
| | | | | | | | | | ||||||
Holley Performance Products (Holley Purchaser, Inc.)(5)(7)(8) 1801 Russellville Road Bowling Green, KY 42101 | | | Automotive Parts & Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.8% Cash, Acquired 10/18, Due 10/25) | | | 22,196,975 | | | 21,930,245 | | | 20,383,316 |
| 22,196,975 | | | 21,930,245 | | | 20,383,316 | ||||||||
| | | | | | | | | | ||||||
Hub International Limited(6)(8) 300 North Lasalle, 17th floor Chicago, IL 60654 | | | Property & Casualty Insurance | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 04/25) | | | 4,937,028 | | | 4,941,249 | | | 4,686,079 |
| 4,937,028 | | | 4,941,249 | | | 4,686,079 | ||||||||
| | | | | | | | | | ||||||
HW Holdco, LLC (Hanley Wood LLC)(5)(7)(8) 1152 15th St. NW, Suite 750 Washington, DC 20005 | | | Advertising | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/18, Due 12/24) | | | 7,546,371 | | | 7,399,679 | | | 7,308,429 |
| 7,546,371 | | | 7,399,679 | | | 7,308,429 | ||||||||
| | | | | | | | | | ||||||
Hyperion Materials & Technologies, Inc.(5)(7)(8) 6325 Huntley Road Worthington, Ohio 43085 | | | Industrial Machinery | | | First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/19, Due 08/26) | | | 13,960,764 | | | 13,731,609 | | | 13,427,845 |
| 13,960,764 | | | 13,731,609 | | | 13,427,845 | ||||||||
| | | | | | | | | | ||||||
IM Analytics Holding, LLC (d/b/a NVT)(5)(7)(8) 17 Mandeville Court Monterey, CA 93940 | | | Electronic Instruments & Components | | | First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.6% Cash, Acquired 11/19, Due 11/23) | | | 8,250,651 | | | 8,179,608 | | | 7,050,202 |
| | | | Warrant (68,950 units, Acquired 11/19)(10) | | | | | — | | | — | |||
| 8,250,651 | | | 8,179,608 | | | 7,050,202 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Immucor Inc.(5)(8) 3130 Gateway Drive Norcross, GA 30091 | | | Healthcare | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/18, Due 06/21) | | | 2,453,415 | | | 2,466,732 | | | 2,355,278 |
| 2,453,415 | | | 2,466,732 | | | 2,355,278 | ||||||||
| | | | | | | | | | ||||||
Institutional Shareholder Services, Inc.(5)(7)(8) 2099 Gaither Road, Suite 501, Rockville, MD 20850 | | | Diversified Support Services | | | Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.8% Cash, Acquired 03/19, Due 03/27) | | | 4,951,685 | | | 4,822,934 | | | 4,703,299 |
| 4,951,685 | | | 4,822,934 | | | 4,703,299 | ||||||||
| | | | | | | | | | ||||||
Internet Brands, Inc.(6)(8) 909 North Pacific Coast Highway El Segundo, CA 90245 | | | Entertainment | | | First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 08/18, Due 09/24) | | | 3,959,391 | | | 3,979,736 | | | 3,803,272 |
| 3,959,391 | | | 3,979,736 | | | 3,803,272 | ||||||||
| | | | | | | | | | ||||||
ION Trading Technologies Ltd.(3)(6)(8) 63-65, Rue de Merl Luxembourg, 2146 Luxembourg | | | Electrical Components & Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.1% Cash, Acquired 08/18, Due 11/24) | | | 6,942,334 | | | 6,929,967 | | | 6,644,785 |
| 6,942,334 | | | 6,929,967 | | | 6,644,785 | ||||||||
| | | | | | | | | | ||||||
ISS#2, LLC (d/b/a Industrial Services Solutions)(5)(7)(8) 10070 Daniels Interstate Court Suite 140 Fort Myers, FL 33913 | | | Commercial Services & Supplies | | | First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.7% Cash, Acquired 02/20, Due 02/26) | | | 7,876,109 | | | 7,727,293 | | | 7,222,755 |
| 7,876,109 | | | 7,727,293 | | | 7,222,755 | ||||||||
| | | | | | | | | | ||||||
Jade Bidco Limited (Jane's)(3)(5)(7)(8) Sentinel House, 163 Brighton Road Coulsdon, Surrey, CR5 2YH, United Kingdom | | | Aerospace & Defense | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.0% Cash, 2.0% PIK, Acquired 11/19, Due 12/26) | | | 10,432,352 | | | 10,167,268 | | | 9,832,735 |
| | | | First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26) | | | 1,869,213 | | | 1,789,259 | | | 1,761,777 | ||
| 12,301,565 | | | 11,956,527 | | | 11,594,512 | ||||||||
| | | | | | | | | | ||||||
Kenan Advantage Group Inc(5)(6)(8) 4366 Mt. Pleasant Street North West North Canton, OH 44720 | | | Trucking | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 07/22) | | | 4,287,943 | | | 4,285,956 | | | 3,857,348 |
| 4,287,943 | | | 4,285,956 | | | 3,857,348 | ||||||||
| | | | | | | | | | ||||||
Kene Acquisition, Inc. (En Engineering)(5)(7)(8) 28100 Torch Parkway, Suite 400 Warrenville, Illinois 60555 | | | Oil & Gas Equipment & Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26) | | | 7,335,738 | | | 7,200,657 | | | 6,964,172 |
| 7,335,738 | | | 7,200,657 | | | 6,964,172 | ||||||||
| | | | | | | | | | ||||||
LAC Intermediate, LLC (f/k/a Lighthouse Autism Center)(5)(7)(8) 3730 Edison Lakes Pkwy Mishakawa, IN 46545 | | | Healthcare & Pharmaceuticals | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/18, Due 10/24) | | | 9,269,766 | | | 9,073,827 | | | 8,595,760 |
| | | | Class A LLC Units (154,320 units, Acquired 10/18)(10) | | | | | 154,320 | | | 172,964 | |||
| 9,269,766 | | | 9,228,147 | | | 8,768,724 | ||||||||
| | | | | | | | | | ||||||
LTI Holdings, Inc. (Boyd Corporation)(5)(6)(8) 600 S McClure Road Modesto, CA 95357 | | | Industrial Conglomerates | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.7% Cash, Acquired 09/18, Due 09/25) | | | 11,790,000 | | | 11,841,533 | | | 9,987,781 |
| 11,790,000 | | | 11,841,533 | | | 9,987,781 | ||||||||
| | | | | | | | | | ||||||
Mallinckrodt Plc(3)(5)(6)(8) 124, Blvd de la Petrusse Luxembourg, L - 2330 Luxembourg | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.5% Cash, Acquired 08/18, Due 09/24) | | | 3,237,418 | | | 3,228,190 | | | 2,411,876 |
| 3,237,418 | | | 3,228,190 | | | 2,411,876 | ||||||||
| | | | | | | | | | ||||||
MB2 Dental Solutions, LLC(5)(7)(8) 2403 Lacy Lane Carrollton, TX 75006 | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/19, Due 09/23) | | | 8,011,829 | | | 7,935,659 | | | 7,564,956 |
| 8,011,829 | | | 7,935,659 | | | 7,564,956 | ||||||||
| | | | | | | | | | ||||||
Media Recovery, Inc. (SpotSee)(5)(7)(8) 5501 Lyndon B Johnson Freeway, Suite 350 Dallas, TX 75240 | | | Containers, Packaging and Glass | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/19, Due 11/25) | | | 2,227,543 | | | 2,187,202 | | | 2,069,065 |
| 2,227,543 | | | 2,187,202 | | | 2,069,065 | ||||||||
| | | | | | | | | | ||||||
Men’s Wearhouse, Inc. (The)(5)(6)(8) 6380 Rogerdale Road Houston, TX 77072 | | | Apparel Retail | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/18, Due 04/25) | | | 9,794,863 | | | 9,870,619 | | | 1,567,178 |
| 9,794,863 | | | 9,870,619 | | | 1,567,178 | ||||||||
| | | | | | | | | | ||||||
Nautilus Power, LLC(6)(8) 99 Wood Avenue South, ste. 100 Iselin, NJ 08830 | | | Independent Power Producers & Energy Traders | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 09/18, Due 05/24) | | | 3,142,456 | | | 3,154,177 | | | 3,007,927 |
| 3,142,456 | | | 3,154,177 | | | 3,007,927 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Neuberger Berman CLO Ltd: Series 2020-36A(3)(5)(8) 1290 Avenue of the Americas New York, NY 10104 | | | Structured Finance | | | Structured Secured Note - Class E (LIBOR + 7.81%, 8.9% Cash, Acquired 03/20, Due 04/33) | | | 2,500,000 | | | 2,476,054 | | | 2,405,215 |
| 2,500,000 | | | 2,476,054 | | | 2,405,215 | ||||||||
| | | | | | | | | | ||||||
NFP Corp.(5)(6)(8) 340 Madison Avenue New York, NY 10173 | | | Specialized Finance | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 08/18, Due 02/27) | | | $3,959,386 | | | $3,939,591 | | | $3,682,229 |
| 3,959,386 | | | 3,939,591 | | | 3,682,229 | ||||||||
| | | | | | | | | | ||||||
NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions)(5)(7)(8) 16240 Port NW Dr #100 Houston, TX 77041 | | | Energy Equipment & Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25) | | | 11,916,381 | | | 11,869,732 | | | 11,436,622 |
| 11,916,381 | | | 11,869,732 | | | 11,436,622 | ||||||||
| | | | | | | | | | ||||||
Nouryon Finance B.V. (Starfruit US Holdco, LLC)(5)(8) 1001 Pennsylvania Avenue, ste. 220S Washington DC 20004 | | | Specialty Chemicals | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.2% Cash, Acquired 03/20, Due 10/25) | | | 1,994,830 | | | 1,791,079 | | | 1,866,822 |
| 1,994,830 | | | 1,791,079 | | | 1,866,822 | ||||||||
| | | | | | | | | | ||||||
Omaha Holdings LLC (Gates Global LLC)(6)(8) 1144 Fifteenth Street, ste.1400 Denver, CO 80202 | | | Auto Parts & Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 03/24) | | | 4,936,548 | | | 4,962,954 | | | 4,743,184 |
| 4,936,548 | | | 4,962,954 | | | 4,743,184 | ||||||||
| | | | | | | | | | ||||||
Omnitracs, LLC(6)(8) 717 North Harwood Street, ste. 1300 Dallas, TX 75201 | | | Application Software | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.0% Cash, Acquired 08/18, Due 03/25) | | | 4,562,506 | | | 4,551,461 | | | 4,278,490 |
| 4,562,506 | | | 4,551,461 | | | 4,278,490 | ||||||||
| | | | | | | | | | ||||||
Options Technology Ltd.(3)(5)(7)(8) 5th Floor, 50 Pall Mall St. James, London, SW1Y 5JH, United Kingdom | | | Computer Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.6% Cash, Acquired 12/19, Due 12/25) | | | 11,062,374 | | | 10,804,754 | | | 10,397,795 |
| 11,062,374 | | | 10,804,754 | | | 10,397,795 | ||||||||
| | | | | | | | | | ||||||
Ortho-Clinical Diagnostics Bermuda Co. Ltd.(6)(8) Clarendon House, 2 Church Street HAMILTON, Pembroke Bermuda | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 08/18, Due 06/25) | | | 4,859,694 | | | 4,861,752 | | | 4,534,726 |
| 4,859,694 | | | 4,861,752 | | | 4,534,726 | ||||||||
| | | | | | | | | | ||||||
Panther BF Aggregator 2 LP(5)(8) 5757 North Green Bay Road Glendale, WI 53209 | | | Auto Parts & Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 3.7% Cash, Acquired 03/20, Due 04/26) | | | 1,989,974 | | | 1,798,919 | | | 1,890,476 |
| 1,989,974 | | | 1,798,919 | | | 1,890,476 | ||||||||
| | | | | | | | | | ||||||
Pare SAS (SAS Maurice MARLE)(3)(5)(7)(8) BP 46, ZI rue Lavoisier F-52800 Nogent, FRANCE | | | Health Care Equipment | | | First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.25% Cash, 1.0% PIK, Acquired 12/19, Due 12/26) | | | 14,002,111 | | | 13,613,011 | | | 13,294,951 |
| 14,002,111 | | | 13,613,011 | | | 13,294,951 | ||||||||
| | | | | | | | | | ||||||
PAREXEL International Corp.(5)(6)(8) 195 West Street Waltham, MA 02451 | | | Pharmaceuticals | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 09/18, Due 09/24) | | | 3,576,234 | | | 3,563,123 | | | 3,381,794 |
| 3,576,234 | | | 3,563,123 | | | 3,381,794 | ||||||||
| | | | | | | | | | ||||||
Patriot New Midco 1 Limited (Forensic Risk Alliance)(3)(5)(7)(8) Audrey House, 16-20 Ely Pl, Holborn, London EC1N 6SN, United Kingdom | | | Diversified Financial Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/20, Due 02/27) | | | 10,017,544 | | | 9,734,967 | | | 9,391,011 |
| | | First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 02/20, Due 02/27) | | | 8,452,988 | | | 7,967,816 | | | 7,924,308 | |||
| | | | 18,470,532 | | | 17,702,783 | | | 17,315,319 | |||||
| | | | | | | | | | ||||||
Penn Engineering & Manufacturing Corp.(6)(7)(8) 5190 Old Easton Road Danboro, PA 18916 | | | Industrial Conglomerates | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 06/24) | | | 1,635,962 | | | 1,646,255 | | | 1,570,523 |
| | | 1,635,962 | | | 1,646,255 | | | 1,570,523 | ||||||
| | | | | | | | | | ||||||
Phoenix Services International LLC(6)(8) 148 West State Street, ste. 301 Kennett Square, PA 19348 | | | Steel | | | First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 08/18, Due 03/25) | | | 2,947,368 | | | 2,956,566 | | | 2,618,560 |
| 2,947,368 | | | 2,956,566 | | | 2,618,560 | ||||||||
| | | | | | | | | | ||||||
Playtika Holding Corp.(5)(8) 2225 Village Walk Drive, Suite 240 Henderson, NV 89052 | | | Leisure, Amusement & Entertainment | | | First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.1% Cash, Acquired 03/20, Due 12/24) | | | 3,900,000 | | | 3,603,103 | | | 3,890,250 |
| 3,900,000 | | | 3,603,103 | | | 3,890,250 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
PODS Enterprises, Inc.(6)(8) 13535 Feather Sound Drive Clearwater, FL 33762 | | | Packaging | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 12/24) | | | 4,861,313 | | | 4,873,222 | | | 4,639,540 |
| 4,861,313 | | | 4,873,222 | | | 4,639,540 | ||||||||
| | | | | | | | | | ||||||
Premier Technical Services Group (Project Graphite)(3)(5)(7)(8) Flemming Court, 11-14 Whistler Dr, Castleford WF10 5HW United Kingdom | | | Construction & Engineering | | | First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 7.5% Cash, Acquired 08/19, Due 08/26) | | | 2,810,169 | | | 2,674,219 | | | 2,577,238 |
| 2,810,169 | | | 2,674,219 | | | 2,577,238 | ||||||||
| | | | | | | | | | ||||||
Pro Mach Inc.(5)(6)(8) 50 East Rivercenter Boulevard, Ste. 1800 Covington, KY 41011 | | | Industrial Machinery | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 08/18, Due 03/25) | | | 5,894,737 | | | 5,880,032 | | | 5,495,015 |
| 5,894,737 | | | 5,880,032 | | | 5,495,015 | ||||||||
| | | | | | | | | | ||||||
ProAmpac Intermediate Inc.(5)(6)(8) 12025 Tricon Road Cincinnati, OH 45246 | | | Packaged Foods & Meats | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 11/23) | | | 9,821,105 | | | 9,831,133 | | | 9,342,326 |
| 9,821,105 | | | 9,831,133 | | | 9,342,326 | ||||||||
| | | | | | | | | | ||||||
Process Equipment, Inc. (ProcessBarron)(5)(7)(8) 2770 Welborn St Pelham, AL 35124 | | | Industrial Air & Material Handling Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 03/19, Due 03/25) | | | $6,684,916 | | | $6,582,532 | | | $6,192,120 |
| 6,684,916 | | | 6,582,532 | | | 6,192,120 | ||||||||
| | | | | | | | | | ||||||
Professional Datasolutions, Inc. (PDI)(5)(7)(8) 11675 Rainwater Drive, Suite 350, Alpharetta, GA 30009-8693 | | | Application Software | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 03/19, Due 10/24) | | | 23,041,343 | | | 23,011,789 | | | 22,489,313 |
| 23,041,343 | | | 23,011,789 | | | 22,489,313 | ||||||||
| | | | | | | | | | ||||||
Project Potter Buyer, LLC (Command Alkon)(5)(7)(8) 1800 International Park Drive Suite 400 Birmingham, AL 35243 | | | Software | | | First Lien Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 04/20, Due 04/27) | | | 9,895,616 | | | 9,604,477 | | | 9,740,671 |
| Class A Units (104.4 units, Acquired 04/20)(10) | | | | | 104,384 | | | 104,384 | ||||||
| | | | Class B Units (38,426.7 units, Acquired 04/20)(10) | | | | | 0 | | | 0 | |||
| 9,895,616 | | | 9,708,861 | | | 9,845,055 | ||||||||
| | | | | | | | | | ||||||
PSC UK Pty Ltd(3)(5)(7)(8) 96 Wellington Parade, East Melbourne, Victoria 3002, Australia | | | Insurance Services | | | First Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 6.5% Cash, Acquired 11/19, Due 11/24) | | | 1,736,232 | | | 1,729,999 | | | 1,663,716 |
| 1,736,232 | | | 1,729,999 | | | 1,663,716 | ||||||||
| | | | | | | | | | ||||||
Qlik Technologies Inc. (Alpha Intermediate Holding, Inc.)(6)(8) 211 South Gulph Rd, ste. 500 King of Prussia, PA 19406 | | | Application Software | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 5.4% Cash, Acquired 08/18, Due 04/24) | | | 4,936,387 | | | 4,936,541 | | | 4,730,688 |
| 4,936,387 | | | 4,936,541 | | | 4,730,688 | ||||||||
| | | | | | | | | | ||||||
Radiate HoldCo, LLC(5)(8) 650 College Road East, ste. 3100 Princeton, NJ 08540 | | | Cable & Satellite | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.75% Cash, Acquired 03/20, Due 02/24) | | | 1,989,740 | | | 1,775,086 | | | 1,895,227 |
| 1,989,740 | | | 1,775,086 | | | 1,895,227 | ||||||||
| | | | | | | | | | ||||||
Refinitiv US Holdings, Inc.(5) 3 Tines Square New York, NY 10036 | | | Data Processing & Outsourced Services | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 03/20, Due 10/25) | | | 3,020,382 | | | 2,741,337 | | | 2,947,138 |
| 3,020,382 | | | 2,741,337 | | | 2,947,138 | ||||||||
| | | | | | | | | | ||||||
Renaissance Learning, Inc.(6)(8) 2911 Peach St. Wisconsin, WI 54494. | | | Application Software | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.0% Cash, Acquired 08/18, Due 05/25) | | | 5,363,951 | | | 5,360,661 | | | 5,151,163 |
| 5,363,951 | | | 5,360,661 | | | 5,151,163 | ||||||||
| | | | | | | | | | ||||||
Reynolds Group Holdings Ltd.(6)(8) 1900 West Field Court Lake Forest, IL 60045 | | | Packaging | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 09/18, Due 02/23) | | | 4,935,964 | | | 4,951,009 | | | 4,703,480 |
| 4,935,964 | | | 4,951,009 | | | 4,703,480 | ||||||||
| | | | | | | | | | ||||||
RR Ltd: Series 2019-6A(3)(5) 126 East 56th St, 22nd Floor New York, NY 10022 | | | Structured Finance | | | Structured Secured Note - Class D (LIBOR + 6.75%, 8.0% Cash, Acquired 03/20, Due 04/30) | | | 2,000,000 | | | 1,648,042 | | | 1,840,782 |
| 2,000,000 | | | 1,648,042 | | | 1,840,782 | ||||||||
| | | | | | | | | | ||||||
Ruffalo Noel Levitz, LLC(5)(7)(8) 1025 Kirkwood Pkwy SW Cedar Rapids, IA 52404 | | | Media Services | | | First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/22) | | | 9,665,676 | | | 9,579,861 | | | 9,419,977 |
| 9,665,676 | | | 9,579,861 | | | 9,419,977 | ||||||||
| | | | | | | | | | ||||||
Scaled Agile, Inc.(5)(7)(8) 5400 Airport Blvd. Suite 300 Boulder, CO 8030 | | | Research & Consulting Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24) | | | 4,869,777 | | | 4,827,923 | | | 4,680,414 |
| 4,869,777 | | | 4,827,923 | | | 4,680,414 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
SCI Packaging Inc.(6)(8) 8607 Roberts Drive, ste. 250 Atlanta, GA 30350 | | | Metal & Glass Containers | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.6% Cash, Acquired 08/18, Due 04/24) | | | 4,936,387 | | | 4,927,777 | | | 4,420,139 |
| 4,936,387 | | | 4,927,777 | | | 4,420,139 | ||||||||
| | | | | | | | | | ||||||
Seaworld Entertainment, Inc.(3)(6)(8) 9205 South Park Center Loop, Suite 400 Orlando, FL 32819 | | | Leisure Facilities | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.8% Cash, Acquired 08/18, Due 03/24) | | | 5,923,469 | | | 5,915,644 | | | 5,218,576 |
| 5,923,469 | | | 5,915,644 | | | 5,218,576 | ||||||||
| | | | | | | | | | ||||||
Serta Simmons Bedding LLC(5)(8) 1 Concourse Parkway, ste. 800 Atlanta, GA 30328 | | | Home Furnishings | | | Super Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) | | | 7,443,107 | | | 7,219,813 | | | 7,294,245 |
| | | | Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) | | | 3,652,949 | | | 3,374,389 | | | 3,044,112 | ||
| 11,096,056 | | | 10,594,202 | | | 10,338,357 | ||||||||
| | | | | | | | | | ||||||
SIWF Holdings, Inc. (Spring Windows Fashions, LLC)(6)(8) 160 Greentree Drive, ste. 101 Dover, DE 19904 | | | Home Furnishings | | | First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/18, Due 06/25) | | | 5,924,433 | | | 5,956,756 | | | 5,509,723 |
| 5,924,433 | | | 5,956,756 | | | 5,509,723 | ||||||||
| | | | | | | | | | ||||||
SK Blue Holdings, LP (Polar US Borrower LLC)(6)(7)(8) 4 Mountainview Terrace, ste.200 Danbury, CT 06810 | | | Commodity Chemicals | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 09/18, Due 10/25) | | | 4,139,599 | | | 4,137,617 | | | 3,891,223 |
| 4,139,599 | | | 4,137,617 | | | 3,891,223 | ||||||||
| | | | | | | | | | ||||||
Smile Brands Group Inc.(5)(7)(8) 100 Spectrum Center Drive Suite 1500 Irvine, CA 92618 | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.7% Cash, Acquired 10/18, Due 10/24) | | | 5,866,472 | | | 5,820,453 | | | 5,379,837 |
| 5,866,472 | | | 5,820,453 | | | 5,379,837 | ||||||||
| | | | | | | | | | ||||||
Solenis International, LLC (f/k/a Solenis Holdings, L.P.)(5)(6)(8) 2475 Pinnacle Dr Wilmington, DE 19803 | | | Specialty Chemicals | | | First Lien Senior Secured Term Loan (LIBOR + 4.0%, 4.4% Cash, Acquired 08/18, Due 06/25) | | | 5,391,234 | | | 5,418,365 | | | 5,156,500 |
| 5,391,234 | | | 5,418,365 | | | 5,156,500 | ||||||||
| | | | | | | | | | ||||||
Springbrook Software (SBRK Intermediate, Inc.)(5)(7)(8) 1000 SW Broadway Suite 1900 Portland, OR 97205 | | | Enterprise Software and Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26) | | | 10,468,385 | | | 10,232,620 | | | 9,824,721 |
| 10,468,385 | | | 10,232,620 | | | 9,824,721 | ||||||||
| | | | | | | | | | ||||||
SRS Distribution, Inc.(6)(8) 5900 South Lake Forest Drive McKinney, TX 75070 | | | Building Products | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 09/18, Due 05/25) | | | 4,949,622 | | | 4,881,192 | | | 4,666,256 |
| 4,949,622 | | | 4,881,192 | | | 4,666,256 | ||||||||
| | | | | | | | | | ||||||
Syniverse Holdings, Inc.(5)(6)(8) 8125 Highwoods Palm Way Tampa, FL 33647 | | | Technology Distributors | | | First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.9% Cash, Acquired 08/18, Due 03/23) | | | 10,289,474 | | | 10,258,899 | | | 7,281,656 |
| 10,289,474 | | | 10,258,899 | | | 7,281,656 | ||||||||
| | | | | | | | | | ||||||
Tahoe Subco 1 Ltd. (Almonde, Inc.)(3)(5)(6)(8) 2628 Maxwell Street Philadelphia, PA 19152 | | | Internet Software & Services | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 09/18, Due 06/24) | | | 11,860,496 | | | 11,868,675 | | | 10,340,218 |
| 11,860,496 | | | 11,868,675 | | | 10,340,218 | ||||||||
| | | | | | | | | | ||||||
Team Health Holdings, Inc.(5)(6)(8) 265 Brookview Centre Way Knoxville, TN 37919 | | | Health Care Services | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 02/24) | | | 6,858,228 | | | 6,669,076 | | | 5,225,148 |
| 6,858,228 | | | 6,669,076 | | | 5,225,148 | ||||||||
| | | | | | | | | | ||||||
Tempo Acquisition LLC(6)(8) 345 Park Avenue New York, NY 10154 | | | Investment Banking & Brokerage | | | First Lien Senior Secured Term Loan (LIBOR + 2.75%, 2.9% Cash, Acquired 09/18, Due 05/24) | | | 5,561,088 | | | 5,576,381 | | | 5,269,130 |
| 5,561,088 | | | 5,576,381 | | | 5,269,130 | ||||||||
| | | | | | | | | | ||||||
The Hilb Group, LLC(5)(7)(8) 6802 Paragon Place, Suite 200, Richmond, Virginia 23230 | | | Insurance Brokerage | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26) | | | 9,615,728 | | | 9,342,582 | | | 9,005,963 |
| 9,615,728 | | | 9,342,582 | | | 9,005,963 | ||||||||
| | | | | | | | | | ||||||
Total Safety U.S. Inc.(5)(8) 11111 Wilcrest Green Drive, ste. 300 Houston, TX 77042 | | | Diversified Support Services | | | First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 08/25) | | | 7,040,348 | | | 6,762,711 | | | 6,072,300 |
| 7,040,348 | | | 6,762,711 | | | 6,072,300 | ||||||||
| | | | | | | | | | ||||||
Transit Technologies LLC(5)(7)(8) 2035 Lakeside Centre Way Suite 125 Knoxville, TN 37922 | | | Software | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 02/20, Due 02/25) | | | 6,785,305 | | | 6,564,639 | | | 6,117,747 |
| 6,785,305 | | | 6,564,639 | | | 6,117,747 | ||||||||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Transportation Insight, LLC(5)(7)(8) 310 Main Avenue Way SE Hickory, NC 28602 | | | Air Freight & Logistics | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 6.0% Cash, Acquired 08/18, Due 12/24) | | | 24,638,036 | | | 24,458,135 | | | 23,854,549 |
| 24,638,036 | | | 24,458,135 | | | 23,854,549 | ||||||||
| | | | | | | | | | ||||||
Truck-Lite Co., LLC(5)(7)(8) 310 East Elmwood Ave Falconer, NY 14733 | | | Automotive Parts and Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26) | | | 19,517,308 | | | 19,097,372 | | | 18,104,295 |
| 19,517,308 | | | 19,097,372 | | | 18,104,295 | ||||||||
| | | | | | | | | | ||||||
Trystar, LLC(5)(7)(8) 15765 Acorn Trail Faribault, MN 55021 | | | Power Distribution Solutions | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/18, Due 09/23) | | | 15,637,813 | | | 15,451,466 | | | 15,134,083 |
| | | | LLC Units (361.5 units, Acquired 09/18)(10) | | | | | 361,505 | | | 493,944 | |||
| 15,637,813 | | | 15,812,971 | | | 15,628,027 | ||||||||
| | | | | | | | | | ||||||
U.S. Anesthesia Partners, Inc.(5)(6)(8) 450 East Las Olas Boulevard, ste. 850 Fort Lauderdale, FL 33301 | | | Managed Health Care | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 09/18, Due 06/24) | | | 13,515,863 | | | 13,562,587 | | | 11,898,825 |
| 13,515,863 | | | 13,562,587 | | | 11,898,825 | ||||||||
| | | | | | | | | | ||||||
U.S. Silica Company(3)(5)(8) 24275 Katy Freeway Katy, TX 77494 | | | Metal & Glass Containers | | | First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25) | | | 1,495,235 | | | 1,498,332 | | | 1,060,017 |
| 1,495,235 | | | 1,498,332 | | | 1,060,017 | ||||||||
| | | | | | | | | | ||||||
USF Holdings LLC (U.S. Farathane, LLC)(6)(8) 2700 High Meadow Circle Auburn Hills, MI 48326 | | | Auto Parts & Equipment | | | First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 12/21) | | | 3,134,000 | | | 3,140,040 | | | 2,334,830 |
| 3,134,000 | | | 3,140,040 | | | 2,334,830 | ||||||||
| | | | | | | | | | ||||||
USI Holdings Corp.(6)(8) 200 Summit Lake Drive, Suite 350 Valhalla, NY 10595 | | | Property & Casualty Insurance | | | First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.3% Cash, Acquired 08/18, Due 05/24) | | | 4,936,548 | | | 4,932,157 | | | 4,674,911 |
| 4,936,548 | | | 4,932,157 | | | 4,674,911 | ||||||||
| | | | | | | | | | ||||||
USIC Holdings, Inc. (United States Infrastructure Corp.)(6)(8) 9045 North River Road, ste. 300 Indianapolis, IN 46240 | | | Packaged Foods & Meats | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/18, Due 12/23) | | | 3,931,135 | | | 3,946,196 | | | 3,739,493 |
| 3,931,135 | | | 3,946,196 | | | 3,739,493 | ||||||||
| | | | | | | | | | ||||||
USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.)(5)(7)(8) 16825 Northchase Dr Ste 900, Houston, TX 77060 | | | Legal Services | | | First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24) | | | 16,430,096 | | | 16,200,387 | | | 15,043,847 |
| 16,430,096 | | | 16,200,387 | | | 15,043,847 | ||||||||
| | | | | | | | | | ||||||
Validity, Inc.(5)(7)(8) 200 Clarendon Street, 22nd floor, Boston, MA 02116 | | | IT Consulting & Other Services | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 07/19, Due 05/25) | | | 5,051,351 | | | 4,908,648 | | | 4,546,875 |
| 5,051,351 | | | 4,908,648 | | | 4,546,875 | ||||||||
| | | | | | | | | | ||||||
Veritas Bermuda Intermediate Holdings Ltd.(6)(8) 5th Floor; Victoria Place; Victoria Street Hamilton HM 10 Bermuda | | | Technology Distributors | | | First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 09/18, Due 01/23) | | | 4,936,093 | | | 4,786,298 | | | 4,551,077 |
| 4,936,093 | | | 4,786,298 | | | 4,551,077 | ||||||||
| | | | | | | | | | ||||||
VF Holding Corp. (Vertafore, Inc.)(5)(6)(8) 11724 North East 195th Street Bothell, WA 98011 | | | Systems Software | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 08/18, Due 07/25) | | | 2,464,969 | | | 2,464,969 | | | 2,318,623 |
| 2,464,969 | | | 2,464,969 | | | 2,318,623 | ||||||||
| | | | | | | | | | ||||||
Wilsonart, LLC(6)(8) 13413 Galleria Circle, ste. 200 Austin, TX 78738 | | | Building Products | | | First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 11/18, Due 12/23) | | | 4,936,387 | | | 4,936,388 | | | 4,749,742 |
| 4,936,387 | | | 4,936,388 | | | 4,749,742 | ||||||||
| | | | | | | | | | ||||||
Winebow Group, LLC, (The)(5)(8) 75 Chestnut Ridge Road Montvale, NJ 07645 | | | Consumer Goods | | | First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 11/19, Due 07/21) | | | 10,787,719 | | | 9,846,515 | | | 8,077,304 |
| | | | Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 10/19, Due 01/22) | | | 7,141,980 | | | 4,813,864 | | | 4,308,971 | ||
| 17,929,699 | | | 14,660,379 | | | 12,386,275 | ||||||||
| | | | | | | | | | ||||||
World 50, Inc.(5)(7)(8) 3525 Piedmont Rd NE Atlanta, GA 30305 | | | Broadcasting | | | First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 01/20, Due 01/26) | | | 10,650,223 | | | 10,402,176 | | | 10,247,420 |
| 10,650,223 | | | 10,402,176 | | | 10,247,420 | ||||||||
Subtotal Non–Control / Non–Affiliate Investments | | | | | | | 1,053,855,836 | | | 1,033,046,789 | | | 960,061,063 | ||
| | | | | | | | | |
Portfolio Company | | | Industry | | | Type of Investment(1)(2) | | | Principal Amount | | | Cost | | | Fair Value |
Affiliate Investments:(9) | |||||||||||||||
Jocassee Partners LLC(3)(5) 300 South Tryon Street, Suite 2500 Charlotte, NC 28202 | | | Investment Funds & Vehicles | | | 9.1% Member Interest, Acquired 06/19(10) | | | | | 15,158,270 | | | 14,434,410 | |
| | | 15,158,270 | | | 14,434,410 | |||||||||
| | | | | | | | | | ||||||
Thompson Rivers LLC(3)(5) 300 South Tryon Street, Suite 2500 Charlotte, NC 28202 | | | Investment Funds & Vehicles | | | 10% Member Interest, Acquired 06/20(10) | | | | | 1,500,000 | | | 1,499,435 | |
| | | 1,500,000 | | | 1,499,435 | |||||||||
Subtotal Affiliate Investments | | | | | | | | | 16,658,270 | | | 15,933,845 | |||
| | | | | | | | | | ||||||
Short-Term Investments: | |||||||||||||||
| | | | | | | | | | ||||||
BNY Mellon Investment Advisor, Inc.(5) 240 Greenwich Street New York, NY 10286 | | | Money Market Fund | | | Dreyfus Government Cash Management Fund (0.1% yield) | | | | | 66,771 | | | 66,771 | |
| | | 66,771 | | | 66,771 | |||||||||
| | | | | | | | | | ||||||
Federated Investment Management Company(6) 101 Park Ave 0002 #4100 New York, NY 10178 | | | Money Market Fund | | | Federated Government Obligation Fund (0.1% yield) | | | | | 49,454,205 | | | 49,454,205 | |
| | | 49,454,205 | | | 49,454,205 | |||||||||
| | | | | | | | | | ||||||
HSBC Holdings PLC(5) 550 S Tryon St Charlotte, NC 28202 | | | Money Market Fund | | | HSBC Funds U.S. Government Money Market Fund (0.1% yield) | | | | | 2,000,000 | | | 2,000,000 | |
| | | 2,000,000 | | | 2,000,000 | |||||||||
| | | | | | | | | | ||||||
JPMorgan Chase & Co.(5)(6) 270 Park Avenue New York, New York 10017-2070 | | | Money Market Fund | | | JPMorgan Prime Money Market Fund (0.4% yield) | | | | | 6,525,500 | | | 6,525,148 | |
| | | 6,525,500 | | | 6,525,148 | |||||||||
| | | | | | | | | | ||||||
Subtotal Short-Term Investments | | | | | | | | | 58,046,476 | | | 58,046,124 | |||
Total Investments, June 30, 2020 | | | | | | | $1,053,855,836 | | | $1,107,751,535 | | | $1,034,041,032 |
(1) | All debt investments are income producing, unless otherwise noted. Equity and any equity-linked investments are non-income producing, unless otherwise noted. All debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in Barings BDC’s investment portfolio bear interest at a rate that may be determined by reference to either London Interbank Offered Rate (“LIBOR”) or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. |
(2) | All of Barings BDC’s portfolio company investments (including joint venture and short-term investments), which as of June 30, 2020 represented 211% of Barings BDC’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of Barings BDC’s initial investment in the relevant portfolio company. |
(3) | Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act. Non-qualifying assets represent 17.4% of total investments at fair value as of June 30, 2020. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of Barings BDC’s total assets, Barings BDC’s will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a). |
(4) | Non-accrual investment. |
(5) | Some or all of the investment is or will be encumbered as security for Barings BDC’s credit facility entered into in February 2019 (and subsequently amended in December 2019) with ING Capital LLC (the “February 2019 Credit Facility”). |
(6) | Some or all of the investment is encumbered as security for Barings BDC’s $449.3 million term debt securitization entered into in May 2019 (the “Debt Securitization”). |
(7) | The fair value of the investment was determined using significant unobservable inputs. |
(8) | Debt investment includes interest rate floor feature |
(9) | As defined in the Investment Company Act, Barings BDC is deemed to be an “affiliated person” of the portfolio company as Barings BDC owns 5% or more of the portfolio company's voting securities. |
(10) | Percentage of class held for equity investments are as follows: |
a. | CMT Opco Holding, LLC, LLC Units - 1.0% |
b. | IM Analytics Holding, LLC, Warrants – 22.9% |
c. | LAC Intermediate, LLC, Class A LLC Units - 0.4% |
d. | Project Potter Buyer, LLC, LLC Units - 0.1% |
e. | Trystar, LLC, LLC Units – 0.6% |
f. | Jocassee Partners LLC, Member Interest - 9.1% |
g. | Thompson Rivers LLC, Member Interest - 10.0% |
Name | | | Dollar Range of Equity Securities in Barings BDC(1) |
Eric Lloyd | | | Over $100,000 |
Ian Fowler | | | — |
Adam Wheeler | | | — |
Terry Harris | | | — |
Mark Flessner | | | — |
Brian Baldwin | | | Over $100,000 |
(1) | Dollar ranges are as follows: $1—$10,000; $10,001—$50,000; $50,001—$100,000; or over $100,000. |
• | each person known to Barings BDC to beneficially own more than 5% of the outstanding shares of Barings BDC Common Stock; |
• | each of Barings BDC’s directors and each named executive officer; and |
• | all of Barings BDC’s directors and executive officers as a group. |
Name and Address | | | Number of Shares Beneficially Owned(1) | | | Percentage of Class(2) | | | Pro forma percentage of outstanding common stock of Barings BDC |
Directors and Executive Officers: | | | | | | | |||
Independent Directors | | | | | | | |||
Tom Finke | | | 25,517 | | | * | | | * |
Michael Freno | | | 13,823 | | | * | | | * |
Eric Lloyd | | | 29,631 | | | * | | | * |
Non-Independent Directors | | | | | | | |||
Mark F. Mulhern | | | 14,855 | | | * | | | * |
Thomas W. Okel | | | 5,500 | | | * | | | * |
Jill Olmstead | | | 4,000 | | | * | | | * |
John A. Switzer | | | 5,000 | | | * | | | * |
Executive Officers Who are Not Directors | | | | | | | |||
Ian Fowler | | | — | | | — | | | — |
Jonathan Bock | | | 22,075 | | | * | | | * |
Michael Cowart | | | — | | | — | | | — |
Jill Dinerman | | | — | | | — | | | — |
Elizabeth Murray | | | 12,034 | | | * | | | * |
Directors and Executive Officers as a Group (12 persons) | | | 132,435 | | | * | | | * |
Five Percent Stockholders: | | | | | | | |||
Barings LLC | | | 13,639,681 | | | 28.4% | | | 21.1% |
RiverNorth Capital Management, LLC(3) | | | 2,815,252 | | | 5.9% | | | 4.4% |
* | Less than 1%. |
(1) | Beneficial ownership has been determined in accordance with Rule 13d-3 of the Exchange Act. Except as otherwise noted, each beneficial owner of more than five percent of Barings BDC Common Stock and each director and officer has sole voting and/ or investment power over the shares reported. |
(2) | Based on a total of 47,961,753 shares issued and outstanding as of September 11, 2020. |
(3) | Based upon a Schedule 13G filed with the SEC on February 13, 2020 by RiverNorth Capital Management, LLC. RiverNorth Capital Management, LLC has sole voting and investment power over all 2,815,252 shares beneficially owned by it. The address of RiverNorth Capital Management, LLC is 325 N. LaSalle Street, Suite 645, Chicago, IL 60654-7030. |
Directors | | | Dollar Range of Common Stock Beneficially Owned(1) |
Independent Directors | | | |
Mark F. Mulhern | | | Over $100,000 |
Thomas W. Okel | | | $50,001-$100,000 |
Jill Olmstead | | | $10,001-$50,000 |
John A. Switzer | | | $10,001-$50,000 |
Interested Directors | | | |
Tom Finke | | | Over $100,000 |
Michael Freno | | | Over $100,000 |
Eric Lloyd | | | Over $100,000 |
(1) | Dollar ranges are as follows: none, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000, or over $100,000. |
Class and Year | | | Total Amount Outstanding Exclusive of Treasury Securities(1) | | | Asset Coverage per Unit(2) | | | Involuntary Liquidating Preference per Unit(3) | | | Average Market Value per Unit(4) |
Lines of Credit | | | | | | | | | ||||
2000 | | | $— | | | $— | | | $— | | | N/A |
2001 | | | $— | | | $— | | | $— | | | N/A |
2002 | | | $— | | | $— | | | $— | | | N/A |
2003 | | | $— | | | $— | | | $— | | | N/A |
2004 | | | $10,025,000 | | | $12,527.91 | | | $— | | | N/A |
2005 | | | $— | | | $— | | | $— | | | N/A |
2006 | | | $100,000,000 | | | $3,369.93 | | | $— | | | N/A |
2007 | | | $80,000,000 | | | $5,613.71 | | | $— | | | N/A |
2008 | | | $69,000,000 | | | $7,114.07 | | | $— | | | N/A |
2009 | | | $62,300,000 | | | $7,813.09 | | | $— | | | N/A |
2010 | | | $50,000,000 | | | $9,499.89 | | | $— | | | N/A |
2011 | | | $50,000,000 | | | $9,390.19 | | | $— | | | N/A |
2012 | | | $50,000,000 | | | $8,720.32 | | | $— | | | N/A |
2013 | | | $164,408,750 | | | $2,287.50 | | | $— | | | $25,212.30 |
2014 | | | $214,408,750 | | | $1,603.96 | | | $— | | | $25,375.20 |
2015 | | | $212,408,750 | | | $1,384.48 | | | $— | | | $24,932.20 |
2016 | | | $149,408,750 | | | $1,871.09 | | | $— | | | $24,736.70 |
2017 | | | $114,408,750 | | | $2,442.90 | | | $— | | | $25,429.60 |
2018 | | | $115,000,000 | | | $1,971.51 | | | $— | | | $25,531.30 |
2019 | | | $130,100,000 | | | $1,752.18 | | | $— | | | $25,583.10 |
2020 (through July 31, 2020) - unaudited | | | $95,000,000 | | | $1,899.64 | | | $— | | | $24,152.10 |
(1) | Total amount of each class of senior securities outstanding at the end of the period presented. |
(2) | The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the Asset Coverage Per Unit. |
(3) | The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. |
(4) | Not applicable, as senior securities are not registered for public trading. |
Company | | | Industry | | | Investment | | | Acquistion Date | | | Principal | | | Cost | | | Fair Value |
Non-control/Non- affiliated investments- 81.43%(a, c, f, g) | | | | | | | | | | | | | ||||||
Black Diamond Equipment Rentals, LLC | | | Equipment Rental | | | Second Lien Loan 12.5000% Cash,06/27/2022(k,n) | | | 12/28/17 | | | $7,500,000 | | | $7,266,844 | | | $7,500,000 |
| | | | Warrants(d,n) | | | 12/28/17 | | | 1 | | | 400,847 | | | 933,000 | ||
| | | | | | | | | | 7,667,691 | | | 8,433,000 | |||||
Custom Alloy Corporation | | | Manufacturer of Pipe Fittings and Forgings | | | Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022(b, k, n) | | | 10/31/14 | | | 33,137,484 | | | 33,137,484 | | | 26,248,833 |
| | | | Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022(b, k, n) | | | 10/31/14 | | | 6,253,813 | | | 6,253,813 | | | 4,953,764 | ||
| | | | Revolver 12.0000% Cash, 3.0000% PIK, 04/30/2021(b,k,n) | | | 07/01/19 | | | 3,745,808 | | | 3,745,808 | | | 3,381,296 | ||
| | | | | | | | | | 43,137,105 | | | 34,583,893 | |||||
Dukane IAS,LLC | | | Welding Equipment Manufacturer | | | Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020(b, k, n) | | | 02/17/16 | | | 4,575,144 | | | 4,566,420 | | | 4,565,295 |
FOLIOfn, Inc. | | | Technology Investment - Financial Services | | | Preferred Stock (5,802,259 shares)(d, i, n) | | | 06/21/00 | | | | | 15,000,000 | | | 12,750,000 | |
Global Prairie PBC, Inc. | | | Marketing | | | Second Lien Loan 10.0000% Cash, 4.0000% PIK, 04/16/2025(b, k, n) | | | 10/16/19 | | | 3,087,161 | | | 3,035,793 | | | 3,076,527 |
GTM Intermediate Holdings, Inc. | | | Medical Equipment/Manufacturer | | | Second Lien Loan 11.0000% Cash, 1.0000% PIK, 12/7/2024(b, k, n) | | | 12/07/18 | | | 5,102,710 | | | 5,025,420 | | | 5,098,327 |
| | | | Common Stock (2 shares)(d, n, q) | | | 12/07/18 | | | | | 766,122 | | | 1,187,245 | |||
| | | | | | | | | | 5,791,542 | | | 6,285,572 | |||||
Highpoint Global LLC | | | Government Services | | | Second Lien Note 12.0000% Cash, 2.0000% PIK, 09/30/2022(b, k, n) | | | 10/19/17 | | | 5,280,808 | | | 5,237,046 | | | 5,280,808 |
HTI Technologies and Industries, Inc. | | | Electronic Component Manufacturing | | | Second Lien Note 16.7500% PIK, 9/15/2024(b, k, n) | | | 06/01/16 | | | 12,101,934 | | | 12,085,650 | | | 11,574,645 |
Initials, Inc. | | | Consumer Products | | | Senior Subordinated Debt 8.0000% Cash, 7.0000% PIK, 10/1/2020(b, h, k, n) | | | 06/23/15 | | | 5,642,913 | | | 5,642,913 | | | 626,221 |
International Precision Components Corporation | | | Plastic Injection Molding | | | Second Lien Loan 12.0000% Cash, 2.0000% PIK, 10/3/2024(b, k, n,r) | | | 06/27/12 | | | 7,700,000 | | | 7,581,258 | | | 7,700,000 |
Jedson Engineering, Inc. | | | Engineering and Construction Management | | | First Lien Loan 12.0000% Cash, 3.0000% PIK, 06/30/2022(b, k, n) | | | 06/25/19 | | | 9,487,685 | | | 9,311,595 | | | 6,598,351 |
Legal Solutions Holdings, Inc. | | | Business Services | | | Senior Subordinated Debt 6.0000% Cash, 10.0000% PIK, 03/31/2022(b, h, k, n) | | | 12/30/14 | | | 10,141,212 | | | 10,141,212 | | | 9,259,159 |
Powers Equipment Acquisition Company, LLC | | | Equipment Manufacturer | | | First Lien Note 13.5000% PIK, 04/30/2024(b, k, n, s) | | | 05/01/19 | | | 6,724,345 | | | 6,626,953 | | | 5,524,748 |
SMA Holdings, Inc. | | | Consulting | | | First Lien Loan 11.0000% Cash, 06/26/2024(k, n) | | | 06/26/19 | | | 7,000,000 | | | 6,519,104 | | | 7,000,000 |
| | | | Warrants(d, n) | | | 06/26/19 | | | 2 | | | 504,555 | | | 792,120 | ||
| | | | | | | | | | 7,023,659 | | | 7,792,120 |
Company | | | Industry | | | Investment | | | Acquistion Date | | | Principal | | | Cost | | | Fair Value |
Trientis GmbH | | | Environmental Services | | | First Lien Note 5.0000% PIK, 10/26/2024(b, e, h, m, n, o) | | | 10/20/17 | | | 1,248,632 | | | 1,248,632 | | | 221,379 |
| | | | Warrants(d, e, n, o) | | | 03/19/18 | | | 1 | | | 67,715 | | | — | ||
| | | | | | | | | | 1,316,347 | | | 221,379 | |||||
Tuf-Tug Inc. | | | Safety Equipment Manufacturer | | | Second Lien Loan 11.0000% Cash, 2.0000% PIK,02/24/2024(b, k, n) | | | 08/24/18 | | | 5,061,687 | | | 5,030,101 | | | 5,052,984 |
| | | | Common Stock (24.6 shares)(d, n, p) | | | 08/24/18 | | | | | 750,000 | | | 535,924 | |||
| | | | | | | | | | 5,780,101 | | | 5,588,908 | |||||
Turf Products, LLC | | | Distributor - Landscaping and Irrigation Equipment | | | Senior Subordinated Debt 10.0000% Cash, 10/07/2023(k, n) | | | 11/30/05 | | | 8,697,056 | | | 8,697,056 | | | 8,124,954 |
U.S. Gas & Electric, Inc. | | | Energy Services | | | Second Lien Loan, 9.5000% Cash, 07/05/2025(l, n) | | | 07/05/17 | | | 2,285,250 | | | 2,285,250 | | | 2,285,250 |
| | | | Second Lien Loan, 9.5000% Cash, 07/05/2025(h, l, n) | | | 07/05/17 | | | 2,485,469 | | | 2,485,469 | | | — | ||
| | | | | | | | | | 4,770,719 | | | 2,285,250 | |||||
U.S. Spray Drying Holding Company | | | Specialty Chemicals | | | Class B Common Stock (784 shares)(d, n) | | | 03/28/13 | | | | | 5,488,000 | | | 10,000 | |
| | | | Secured Loan 8.0000% Cash, 04/30/2025(k, n) | | | 05/02/14 | | | 1,500,000 | | | 1,500,000 | | | 1,500,000 | ||
| | | | Senior Secured Loan 8.0000% Cash, 04/30/2025(k, n) | | | 11/08/17 | | | 1,500,000 | | | 1,500,000 | | | 1,500,000 | ||
| | | | | | | | | | 8,488,000 | | | 3,010,000 | |||||
United States Technologies, Inc. | | | Electronics Manufacturing and Repair | | | Senior Lien Loan 10.5000% Cash, 07/17/2021(k, n) | | | 07/17/15 | | | 3,666,667 | | | 3,666,667 | | | 3,666,667 |
Sub Total Non-control/Non-affiliated investments | | | | | | | | | | | $175,567,727 | | | $146,947,497 | ||||
Affiliate investments - 23.77%(a, c, f, g) | | | | | | | | | | | | | ||||||
Advantage Insurance, Inc. | | | Insurance | | | Preferred Stock (587,001 shares)(a, d, e, n) | | | 09/23/13 | | | | | 5,870,010 | | | 5,175,776 | |
JSC Tekers Holdings | | | Real Estate Management | | | Common Stock (3,201 shares)(a, d, e, n) | | | 05/04/11 | | | | | 4,500 | | | — | |
| | | | Preferred Stock (9,159,085 shares)(a, d, e, n) | | | 05/01/14 | | | | | 11,810,188 | | | 5,019,000 | |||
| | | | | | | | | | 11,814,688 | | | 5,019,000 | |||||
Security Holdings B.V. | | | Electrical Engineering | | | Common Equity Interest(a, d, e, n) | | | 09/03/08 | | | | | 51,204,270 | | | 18,844,000 | |
| | | | Bridge Loan 5.0000% PIK, 05/31/2022(a, b, e, k, n) | | | 04/03/17 | | | 5,187,508 | | | 5,187,508 | | | 5,187,508 | ||
| | | | Senior Subordinated Loan 3.1000% PIK, 05/31/2022(a, b, e, k, n) | | | 05/30/18 | | | 8,677,707 | | | 8,677,707 | | | 8,677,707 | ||
| | | | | | | | | | 65,069,485 | | | 32,709,215 | |||||
Sub Total Affiliate investments | | | | | | | | | | | $82,754,183 | | | $42,903,991 | ||||
Control investments - 17.18%(a, c, f, g) | | | | | | | | | | | | | ||||||
MVC Automotive Group GmbH | | | Automotive Dealerships | | | Common Equity Interest(d, e, n) | | | 09/20/07 | | | | | $52,185,015 | | | $14,737,000 | |
| | | | Bridge Loan 6.0000% Cash, 12/31/2021(e, k, n) | | | 06/28/16 | | | $7,149,166 | | | 7,149,166 | | | 7,149,166 | ||
| | | | | | | | | | 59,334,181 | | | 21,886,166 | |||||
MVC Private Equity Fund LP | | | Private Equity | | | Limited Partnership Interest(d, j, k, n) | | | 11/21/11 | | | | | 7,179,036 | | | 8,885,662 | |
| | | | General Partnership Interest(d, j, k, n) | | | 11/21/11 | | | | | 183,138 | | | 227,491 | |||
| | | | | | | | | | 7,362,174 | | | 9,113,153 | |||||
RuMe Inc. | | | Consumer Products | | | Common Stock (5,297,548 shares)(d, n) | | | 07/15/11 | | | | | 924,475 | | | — | |
| | | | Series C Preferred Stock (23,896,634 shares)(d, n) | | | 05/07/14 | | | | | 3,410,694 | | | — | |||
| | | | Series B-1 Preferred Stock (4,999,076 shares)(d, n) | | | 07/15/11 | | | | | 999,815 | | | — | |||
| | | | Subordinated Debt 10.0000% PIK, 3/31/2021(b, h, k, n) | | | 10/07/16 | | | 3,793,732 | | | 3,793,732 | | | — | ||
| | | | Revolver 10.0000% PIK, 3/31/2021(b, h, k, n) | | | 08/09/18 | | | 2,231,948 | | | 2,231,948 | | | — |
Company | | | Industry | | | Investment | | | Acquistion Date | | | Principal | | | Cost | | | Fair Value |
| | | | Revolver 10.0000% PIK, 3/31/2021(b, h, k, n) | | | 08/30/19 | | | 726,704 | | | 726,704 | | | — | ||
| | | | Warrants(d, n) | | | 12/31/13 | | | 3 | | | 594,544 | | | — | ||
| | | | | | | | | | 12,681,912 | | | — | |||||
Sub Total Control investments | | | | | | | | | | | $79,378,267 | | | $30,999,319 | ||||
TOTAL PORTFOLIO INVESTMENTS - 122.38%(f) | | | | | | | | | | | $337,700,177 | | | $220,850,807 | ||||
Cash equivalents- 27.82%(f, g) | | | | | | | | | | | | | ||||||
Fidelity Institutional Government Money Market Fund - Class I | | | Money Market Fund | | | Beneficial Shares (50,100,415 shares) | | | | | | | $50,100,415 | | | $50,100,415 | ||
Morgan Stanley Institutional Liquidity Government Portfolio - Class I | | | Money Market Fund | | | Beneficial Shares (99,904 shares) | | | | | | | 99,904 | | | 99,904 | ||
Total Cash equivalents | | | | | | | | | | | 50,200,319 | | | 50,200,319 | ||||
TOTAL INVESTMENT ASSETS - 150.20% | | | | | | | | | | | $387,900,496 | | | $271,051,126 |
(a) | These securities are restricted from public sale without prior registration under the Securities Act of 1933.The Company negotiates certain aspects of the method and timing of the disposition of these investments, including registration rights and related costs. |
(b) | These securities accrue a portion of their interest/dividends in “payment in kind” interest/dividends which is capitalized to the investment. |
(c) | All of the Company's equity and debt investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940, except MVC Automotive Group GmbH, Security Holdings B.V., Trientis GmbH, JSC Tekers Holdings, and MVC Private Equity Fund L.P. |
(d) | Non-income producing assets. |
(e) | The principal operations of these portfolio companies are located in Europe and Puerto Rico which represents approximately 23% of the total assets.The remaining portfolio companies are located in United States which represents approximately 55% of the total assets. |
(f) | Percentages are based on net assets of $180,465,804 as of July 31, 2020. |
(g) | See Note 3 for further information regarding “Investment Classification.” |
(h) | All or a portion of the accrued interest on these securities have been reserved for. |
(i) | Legacy Investments. |
(j) | MVC Private Equity Fund, LP is a private equity fund focused on control equity investments in the lower middle market.The fund currently holds two investments, one located in the United States and one in Gibraltar, the investments are in the energy services and industrial sectors.The Company owns 18.9% of the fund through its limited partnership interest and owns .5% of the fund through its general partnership interest.The Company's proportional share of Gibdock Limited equity interest and loan and Advanced Oil Field Services, LLC common stock, preferred stock, and loan is $6,704,992 and $2,064,571, respectively.The Company's partnership interests in the MVC Private Equity Fund, LP are not redeemable. |
(k) | All or a portion of these securities may serve as collateral for the People's United credit facility. |
(l) | U.S. Gas & Electric, Inc. is an indirect subsidiary of Vistra Energy (NYSE: VST). On October 18, 2019 and July 6, 2020, Vistra Energy notified the Company that it was asserting offsets of Company's loan assets totaling approximately $2.5 million relating to an indemnification claim obligations attributable to U.S. Gas.The offset is reflected in the fair value of the loan asset as the Company is considering its response to the claim. |
(m) | Cash/PIK toggle at borrower's option |
(n) | These securities are valued using unobservable inputs. |
(o) | During the fiscal year ended October 31, 2018, all assets and liabilities of SGDA Europe were transferred to a new Austrian holding company, Trientis GmbH, to achieve operating efficiencies. |
(p) | Shares of Tuf-Tug, Inc. are held via Alitus T-T, LP. |
(q) | Shares of GTM Intermediate Holdings, Inc. are held via GTM Ultimate Holdings, LLC. |
(r) | Variable PIK rate between 2.0000% and 3.5000%. |
(s) | Variable cash rate between 10.5000% and 13.5000%. |
• | each person known to MVC to beneficially own more than 5% of the outstanding shares of MVC Common Stock; |
• | each of MVC’s directors and each named executive officer; and |
• | all of MVC’s directors and executive officers as a group. |
Name and Address | | | Number of Shares Beneficially Owned(1) | | | Percentage of outstanding common stock(2) | | | Pro forma percentage of outstanding common stock of Barings BDC |
Directors and Executive Officers: | | | | | | | |||
Independent Directors | | | | | | | |||
John Chapman | | | — | | | — | | | — |
Phillip Goldstein | | | 13,666 | | | * | | | * |
Gerald Hellerman | | | 68,000 | | | * | | | * |
Douglas Kass | | | — | | | — | | | — |
Robert Knapp | | | 368,746.37 | | | 2.08% | | | 0.57% |
Scott D. Krase | | | — | | | — | | | — |
Arthur Lipson | | | 202,123(3) | | | 1.14% | | | 0.31% |
Non-Independent Director | | | | | | | |||
Michael Tokarz | | | 1,000,099.56 | | | 5.64% | | | 1.55% |
Executive Officers Who are Not Directors | | | | | | | |||
Scott Schuenke | | | 3,826.34 | | | * | | | * |
Jaclyn Shapiro-Rothchild | | | 4,149.40 | | | * | | | * |
Kevin Byrne | | | — | | | — | | | — |
Directors and Executive Officers as a Group (11 persons) | | | 1,660,610.67 | | | 9.37% | | | 2.57% |
Five Percent Stockholders: | | | | | | | |||
Certain funds affiliated with Wynnefield(4) | | | 1,559,270 | | | 8.80% | | | 2.41% |
Leon G. Cooperman(5) | | | 1,714,460 | | | 9.67% | | | 2.65% |
West Family Investments Inc.(6) | | | 1,221,628 | | | 6.89% | | | 1.89% |
* | Less than 1%. |
(1) | Beneficial ownership has been determined in accordance with Rule 13d-3 of the Exchange Act. Except as otherwise noted, each beneficial owner of more than five percent of MVC Common Stock and each director and officer has sole voting and/ or investment power over the shares reported. |
(2) | Based on a total of 17,725,118 shares issued and outstanding as of September 9, 2020. |
(3) | Includes 62,758 shares pledged as collateral on a margin account with a brokerage firm. |
(4) | Based upon a Schedule 13D/A filed with the SEC on August 14, 2020 by Joshua Landes and Nelson Obus, the shares listed consist of 615,649 shares held directly by Wynnefield Partners Small Cap Value, L.P. I (“Wynnefield Partners I”); 619,083 shares held directly by Wynnefield Partners Small Cap Value, L.P.(“Wynnefield Partners”); 289,138 shares held directly by Wynnefield Small Cap Value Offshore Fund, Ltd (“Wynnefield Offshore”); and 35,400 shares held directly by Wynnefield Capital, Inc. Profit Sharing & Money Purchase Plan (the “Plan”). |
(5) | Based on information contained in Schedule 13D/A filed with the SEC on August 14, 2020 by Leon G. Cooperman. Mr. Cooperman has sole voting and investment power over 1,514,160 shares beneficially owned by him and shared voting power over 200,000 shares beneficially owned by him. The address of Mr. Cooperman is St. Andrew’s Country Club, 7118 Melrose Castle Lane, Boca Raton, FL 33496. |
(6) | Based upon a Schedule 13D/A filed with the SEC on August 11, 2020 by West Family Investments Inc. West Family Investments Inc. has shared voting and investment power with Gary West and Mary West over all 1,221,628 shares beneficially owned by it. The address of West Family Investments Inc. is 1603 Orrington Avenue Suite 810, Evanston, Illinois 60201. |
Directors | | | Dollar Range of Common Stock Beneficially Owned(1) |
Independent Directors | | | |
John Chapman | | | None |
Phillip Goldstein | | | $50,000-$100,000 |
Gerald Hellerman | | | Over $100,000 |
Douglas Kass | | | None |
Robert Knapp | | | Over $100,000 |
Scott D. Krase | | | None |
Arthur Lipson | | | Over $100,000 |
Interested Director | | | |
Michael Tokarz | | | Over $100,000 |
(1) | Dollar ranges are as follows: none, $1 – $9,999, $10,000 – $49,999, $50,000 – $100,000, or over $100,000. |
• | one-tenth or more but less than one-third; |
• | one-third or more but less than a majority; or |
• | a majority or more of all voting power. |
• | any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; or |
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding stock of the corporation. |
• | 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and |
• | two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
• | directors may be removed only for cause by the affirmative vote of the holders of at least seventy-five percent of the shares then entitled to vote; and |
• | any vacancy on the MVC Board, however the vacancy occurs, including a vacancy due to an enlargement of the MVC Board, may only be filled by vote of the directors then in office. |
• | any action required or permitted to be taken by the stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting; and |
• | special meetings of the stockholders may only be called by a majority of the MVC Board, Chairman, Vice Chairman, Chief Executive Officer, President, Secretary and any Vice President. |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
Authorized Stock | | | MVC is authorized to issue 150,000,000 shares of common stock, $0.01 par value per share. | | | Barings BDC is authorized to issue 150,000,000 shares of common stock, $0.001 par value per share. |
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| | The number of authorized shares of MVC Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of MVC’s capital stock entitled to vote. | | | Pursuant to the Barings BDC Charter, a majority of the Barings BDC Board, acting without stockholder approval, may amend the Barings BDC Charter from time to time to increase or decrease the aggregate number of shares of capital stock or the number of shares of capital stock of any class or series. | |
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| | On September 9, 2020, there were 17,725,118 shares MVC Common Stock issued and outstanding. | | | The Barings BDC Charter authorizes the Barings BDC Board to classify and reclassify any unissued shares of capital stock into other classes or series of capital stock, including preferred stock. | |
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| | | | On September 11, 2020, there were 47,961,753 shares of Barings BDC Common Stock issued and outstanding. | ||
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Voting Rights | | | Each MVC stockholder is entitled to one vote per share of MVC Common Stock on all matters upon which stockholders are entitled to vote. | | | Each holder of Barings BDC Common Stock is entitled to one vote per share on all matters upon which stockholders are entitled to vote. |
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| | Except as described below with regard to director elections, the MVC Bylaws provide that a majority of votes cast at a meeting of stockholders duly called and at which a quorum is present decides all matters, except as otherwise required by the DGCL or the MVC Charter. | | | The Barings BDC Bylaws generally provide that, unless a greater vote is required by statute or by the Barings BDC Charter, a majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any matter which may properly come before such meeting. | |
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Quorum | | | The MVC Bylaws require that a majority of the holders of the issued and outstanding voting stock entitled to vote thereat shall constitute a quorum, except | | | The Barings BDC Charter and Barings BDC Bylaws require that the presence of the stockholders entitled to cast a majority of the votes entitled to be cast |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | where a greater percentage is required by law or the MVC Charter or MVC Bylaws. | | | (without regard to class) constitutes a quorum at any meeting of the stockholders, except with respect to any such matter that requires approval by a separate vote of one or more classes of stock, in which case the presence, in person or by proxy, of stockholders entitled to cast a majority of the votes entitled to be cast by each such class on such matter will constitute a quorum. | |
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Number of Directors | | | The number of directors may be increased or decreased from time to time by the MVC Board, provided that the number of directors shall not be fewer than three (3) nor greater than ten (10). | | | A majority of the entire Barings BDC Board may establish, increase or decrease the number of directors; provided that the number of directors will never be less than the minimum number required by the MGCL. The Barings BDC Board is currently comprised of seven (7) members. |
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| | The MVC Board is currently comprised of eight (8) members. | | | ||
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Classification of Directors | | | The MVC Bylaws provide for one class of directors, voted upon by plurality vote of the stockholders entitled to vote thereupon. | | | The MGCL provides that a Maryland corporation may divide the directors into classes and may provide for a term of office which may not be more than five (5) years, provided that the term of at least one class of directors must expire each year. Barings BDC’s directors are classified, with respect to the terms for which they severally hold office, into three (3) classes, as nearly equal in number as possible as determined by the Barings BDC Board. At each annual meeting of stockholders, the successors to the class of directors whose term expires at such meeting are elected to hold office for a term expiring at the annual meeting of stockholders held in the third (3rd) year following the year of their election and until their successors are duly elected and qualify. |
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| | | | Barings BDC’s directors are classified, with respect to the terms for which they severally hold office, into three (3) classes, as nearly equal in number as possible as determined by the Barings BDC Board. At each annual meeting of stockholders, the successors to the class |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | | | of directors whose term expires at such meeting are elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election and until their successors are duly elected and qualify. | ||
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Vote Required for Director Election | | | The MVC Bylaws provide that the MVC directors are elected by the affirmative vote of the holders of a plurality of all votes cast at the annual meeting of stockholders. | | | The Barings BDC Charter provide that a nominee for director shall be elected to the Barings BDC Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. |
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Removal of Directors | | | The MVC Charter and MVC Bylaws provide that any director or the entire MVC Board may be removed, but only for cause, and only upon the affirmative vote of the holders of at least seventy-five percent (75%) of shares then entitled to vote at an election of directors. | | | As permitted by the MGCL, the Barings BDC Charter provides that, subject to the rights of holders of one or more classes or series of subsequently established stock to elect or remove directors, any director or the entire board of directors may be removed from office, but only for cause and by the affirmative vote of stockholders entitled to cast not less than two-thirds of the votes entitled to be cast generally in the election of directors. “Cause” is defined in the Barings BDC Charter as, with respect to any particular director, the conviction of a felony or a final judgment of a court of competent jurisdiction holding that such director caused demonstrable, material harm to Barings BDC through bad faith or active and deliberate dishonesty. |
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Vacancies | | | The MVC Bylaws provide that, any vacancies on the MVC Board resulting from any increase in the authorized number of directors may be filled by a majority of the remaining directors in office, even if such remaining directors do not constitute a quorum, or by a sole remaining director, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected | | | Pursuant to Subtitle 8 of Title 3 of the MGCL, Barings BDC has elected to provide that any vacancy on the Barings BDC Board may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the class in which the vacancy occurred and until a successor is duly elected and qualifies. |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | and qualified, subject to any applicable requirements of the Investment Company Act. | | | ||
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Advance Notice of Director Nominations and New Business | | | MVC’s Bylaws require advance written notice for stockholders to nominate a director or bring other business before a meeting of stockholders. For a nomination or other business to be brought before an annual meeting, a stockholder must deliver notice to the secretary of MVC not less than sixty (60) days nor more than ninety (90) days prior to the scheduled date of the meeting (regardless of any postponements, deferrals or adjournments of that meeting to a later date). | | | The Barings BDC Bylaws require advance written notice for stockholders to nominate a director or bring other business before a meeting of stockholders. For an annual meeting, a stockholder must deliver notice to the secretary of Barings BDC not earlier than the one hundred twentieth (120th) day and not later than 5:00 p.m., Eastern Time on the ninetieth (90th) day prior to the first anniversary of the date of mailing of the notice for the previous year’s annual meeting. However, if the date of the annual meeting is advanced or delayed by more than thirty (30) days from the first anniversary of the date on which the proxy statement for the previous year’s annual meeting was mailed to stockholders, notice by the stockholder must be given not earlier than the one hundred twentieth (120th) prior and not later than 5:00 p.m., Eastern Time on the ninetieth (90th) day prior to the date of such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. For a special meeting at which directors are to be elected, a stockholder must deliver notice to the secretary of Barings BDC not earlier than the one hundred twentieth (120th) day prior to the date of such meeting and not later than 5:00 p.m., Eastern Time, on the ninetieth (90th) day prior to the special meeting or the tenth day following the day on which public announcement of the date of the special meeting and of the nominees to be elected is made. |
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| | In the event that less than seventy (70) days’ notice or prior public disclosure of the date of the scheduled meeting is given or made to stockholders, a stockholder must deliver notice not later than the earlier of the close of business on the 10th day following the day on which such notice of the date of the | | | In the event that the number of directors on the Barings BDC Board is increased and there is no public announcement of such action at least one hundred (100) days prior to the first anniversary of the date of mailing of the notice for the preceding year’s annual meeting, a stockholder’s notice shall also be |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | scheduled annual meeting was mailed or such public disclosure was made, whichever first occurs, and two days prior to the date of the scheduled meeting. | | | considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to the secretary of Barings BDC not later than 5:00 p.m., Eastern Time, on the tenth day following the day on which such public announcement is first made by Barings BDC. | |
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Amendment of Charter | | | The DGCL requires the MVC Board to adopt a resolution declaring any proposed amendment to the MVC Charter advisable, and submit the proposed amendment to the stockholders for approval at a special or annual meeting. Except as set forth below, the approval of a majority of the voting capital stock then entitled to vote is required to amend the MVC Charter. Amendments to Articles VI (Board of Directors), VII (Special Meetings of Stockholders), VIII (Amend or Repeal Bylaws), XII (Limitation on Liability; Exculpation) and XIII (Indemnification and Right to Advancement of Expenses) require the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the stockholders entitled to vote. Article IX requires the affirmative vote of at least 75% of the stockholders entitled to vote and 75% of the “continuing directors” (as defined in the MVC Charter) for the conversion of MVC from a closed-end investment company to an open-end investment company. | | | Except for those amendments permitted to be made without stockholder approval under Maryland law or by specific provision in the Barings BDC Charter or as set forth in the following sentence, the Barings BDC Charter may be amended only if the amendment is declared advisable by the Barings BDC Board and approved by the affirmative vote of Barings BDC stockholders entitled to cast a majority of the votes entitled to be cast on the matter at a special or annual meeting. Amendments relating to (1) liquidation or dissolution and any amendment to the Barings BDC charter to effect such liquidation or dissolution, (2) converting Barings BDC, from a “closed-end company” to an “open-end company,” and (3) charter amendments to Sections 4.1 (Number, Classification and Election of Directors), 4.2 (Extraordinary Actions), 4.7 (Appraisal Rights), 6.1 (Amendments Generally) or 6.2 (Approval of Certain Extraordinary Actions and Charter Amendments) of the Barings BDC Charter require the approval of stockholders entitled to cast at least seventy-five percent (75%) of the votes entitled to be cast on the matter, provided, that if the Continuing Directors (as defined in the Barings BDC Charter), by a vote of at least a majority of such Continuing Directors, in addition to approval by the Barings BDC Board, approve such proposal or amendment, the affirmative vote of the holders of a majority of the votes entitled to be cast shall be sufficient to approve such matter. |
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| | | | Additionally, as permitted by the MGCL and set forth above, the Barings BDC |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | | | Charter provides that a majority of the Barings BDC Board may amend the Barings BDC Charter from time to time without stockholder approval to increase or decrease the aggregate number of shares of stock or the number of shares of capital stock of any class or series. | ||
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Amendment of Bylaws | | | The MVC Charter provides that the MVC Bylaws may be amended or repealed by the an affirmative vote of sixty-six and two-thirds percent (66 2/3%) of the members of the MVC Board or by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the shares of MVC Common Stock then outstanding and entitled to vote in the election of directors. | | | As permitted by the MGCL, the Barings BDC Charter and the Barings BDC Bylaws provide that the Barings BDC Board has the exclusive power to adopt, alter or repeal any provision of the Barings BDC Bylaws and to make new bylaws. |
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Mergers, Consolidations and Sale of Assets | | | The DGCL provides that, unless otherwise specified in a corporation’s certificate of incorporation or unless certain provisions of the DGCL are applicable, a sale or other disposition of all or substantially all of the corporation’s assets, a merger or consolidation of the corporation with another corporation or a dissolution of the corporation requires the affirmative vote of a majority of the outstanding stock entitled to vote on the matter. Under the DGCL, a merger may also become effective without the approval of the surviving corporation’s stockholders if certain requirements are met. The MVC Charter does not contain contrary provisions. | | | Subject to certain exceptions, Barings BDC may merge, consolidate, convert, sell, lease, exchange or otherwise transfer all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business only if such transaction is declared advisable by the Barings BDC Board and approved by the affirmative vote of stockholders entitled to cast a majority of the votes entitled to be cast on the matter. Notwithstanding the foregoing, a liquidation requires the approval of stockholders entitled to cast at least seventy-five percent (75%) of the votes entitled to be cast on the matter, unless the liquidation is approved by at least seventy-five percent (75%) of Continuing Directors (in addition to approval by the Barings BDC Board), in which case such liquidation requires only a majority vote. |
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Dissolution | | | The DGCL provides that a dissolution of a company requires that the board of directors adopt a resolution setting forth the board’s determination that a dissolution is advisable and that the stockholders must approve the dissolution by a majority of outstanding shares entitled to vote. The DGCL also | | | Except as set forth in the following sentence, Barings BDC may dissolve only if the dissolution is declared advisable by a majority of the entire Barings BDC Board and approved by the affirmative vote of stockholders entitled to cast at least eighty percent (80%) of the votes entitled to be cast on |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | provides that a dissolution may be authorized without action of the board of directors if all of the stockholders entitled to vote thereon consent in writing to a dissolution of the company. | | | the matter. If the dissolution is approved by at least two-thirds of Continuing Directors (in addition to approval by the Barings BDC Board), the dissolution will require the approval of stockholders entitled to cast only a majority of the votes entitled to be cast on the matter. | |
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Business Combinations with Interested Stockholders | | | Section 203 of the DGCL prohibits a Delaware corporation from engaging in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder unless (1) prior to such time, the board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) upon becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock outstanding at the time the transaction commenced, excluding certain shares; or (3) at or subsequent to that time, the business combination is approved by the board of directors and by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder. For these purposes, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three (3) years did own, 15% or more of MVC’s voting stock. Delaware corporations can opt-out of this provision under certain circumstances. MVC has not “opted out” from the application of Section 203. | | | Under the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange and, in certain circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and any person who beneficially owns, directly or indirectly, ten percent (10%) or more of the voting power of the corporation’s outstanding voting stock or an affiliate or associate of the corporation who beneficially owned, directly or indirectly, , ten percent (10%) or more of the voting power of the corporation’s then outstanding stock at any time within the preceding two years, in each case referred to as an “interested stockholder,” or an affiliate thereof, are prohibited for five (5) years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter, any such business combination must be recommended by the board of directors and approved by the affirmative vote of at least (1) eighty percent (80%) of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder or its affiliates or associates. The super-majority vote requirements do not apply, however, to business combinations that are approved or exempted by the board of directors prior to the time that the interested stockholder becomes an interested stockholder or if the business combination satisfies certain minimum price, form-of-consideration and |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | | | procedural requirements. | ||
| | | | Pursuant to the Business Combination Act, the Barings BDC Board has adopted a resolution exempting any business combination between Barings BDC and any other person from the business combination statute described above, provided that the business combination is first approved by the Barings BDC Board, including a majority of the independent directors. | ||
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Control Share Acquisitions | | | N/A | | | Under the MGCL, control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of stockholders entitled to cast two-thirds of the votes entitled to be cast on the matter. Generally, control shares are issued and outstanding voting shares of stock acquired in a secondary market transaction which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: (1) one-tenth or more but less than one-third; (2) one-third or more but less than a majority; or (3) a majority or more of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions. The Maryland Control Share Acquisition Act does not apply, however, to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or to acquisitions approved or exempted by the charter or bylaws of the corporation. Restoration of the voting rights of control shares requires the approval of the holders of at least two-thirds (2/3s) of the disinterested shares. Shares |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | | | owned by the acquiror, officers or employees who are directors of the corporation are interested shares and excluded from shares entitled to vote on the matter. Pursuant to the Maryland Control Share Acquisition Act, the Barings BDC Bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions by any person of shares of Barings BDC stock. Under Maryland law, this bylaw may be amended or removed at any time with or without notice. | ||
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Unsolicited Takeovers | | | N/A | | | Under Subtitle 8 of Title 3 of the MGCL, or “Subtitle 8,” a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three (3) independent directors may elect to be subject, by provision in its charter or bylaws or by resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five (5) provisions: (1) a classified board; (2) a two-thirds vote requirement for removing a director; (3) a requirement that the number of directors be fixed only by vote of the directors; (4) that any and all vacancies on the board of directors may be filled only by the remaining directors, even if the remaining directors do not constitute a quorum, and for the remainder of the full term of the class of directors in which the vacancy occurred; and (5) a majority requirement for the calling of a stockholder- requested special meeting of stockholders. |
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| | | | Pursuant to Subtitle 8, Barings BDC has elected that vacancies on the Barings BDC Board may be filled only by a majority of the remaining directors and any director elected to fill a vacancy will serve for the remainder of the full term of the class in which the vacancy occurred. Through provisions in the Barings BDC Charter and Barings BDC Bylaws unrelated to Subtitle 8, Barings BDC already has a classified board, |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | | | requires a two-thirds vote for director removal, vests in the Barings BDC Board the exclusive power to fix the number of directorships and requires the written request of stockholders entitled to cast a majority of the votes entitled to be cast on any matter that may properly be considered at a meeting of stockholders to call a special meeting to act on such matter. | ||
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Appraisal Rights | | | Under the DGCL, a stockholder of a Delaware corporation who has not voted in favor of, nor consented in writing to, a merger or consolidation in which the corporation is participating generally has the right to an appraisal of the fair value of the stockholder’s share of stock, subject to certain exceptions and specified procedural requirements. | | | The Barings BDC Charter provides that stockholders will not be entitled to exercise appraisal rights except in connection with the Maryland Control Share Acquisition Act or if a majority of the entire Barings BDC Board determines that appraisal rights will apply, with respect to all or any classes or series of stock, to one or more transactions occurring after the date of such determination in connection with which stockholders would otherwise be entitled to exercise appraisal rights. |
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Call and Notice of Stockholders’ Meetings | | | Annual Meetings. Annual meetings of stockholders shall be held each year at such date and time as shall be designated from time to time by the MVC Board and stated in the notice of the meeting. | | | Annual Meetings. An annual meeting of the stockholders for the election of directors and the transaction of any business within the powers of Barings BDC is held on the date and at the time set by the Barings BDC Board. |
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| | Special Meetings. Special meetings of the stockholders may be called for any purpose or purposes, unless otherwise prescribed by the DGCL or by the MVC Charter, only at the request of the Chairman, Vice Chairman, Chief Executive Officer or President or by a resolution duly adopted by a majority of the MVC Board. | | | Special Meetings. The chairperson of the board, the executive chairperson, the president or the Barings BDC Board may call a special meeting of the stockholders. Subject to certain conditions, a special meeting of stockholders must also be called by the secretary of Barings BDC to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting. Only the business specified in the notice of the meeting may be brought before such meeting. | |
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| | Record Date. The MVC Bylaws provide that the MVC Board may fix, in | | | Record Date. The MGCL and the Barings BDC Bylaws provide that the |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of any such meeting nor more than sixty (60) days before any other action. | | | Barings BDC Board may fix a record date not more than ninety (90) days and not less than ten days before the date of any such meeting. | |
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| | Notice. Written notice of stockholders’ meetings, stating the place, date and time of the meeting and, in the case of a special meeting, the purpose or purposes for which such special meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days prior to the meeting. | | | Notice. Not less than ten (10) nor more than ninety (90) days before each meeting of stockholders, the secretary of Barings BDC will give to each stockholder entitled to vote at such meeting or entitled to notice thereof, notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any law, the purpose for which the meeting is called, by (1) mail, (2) presenting it to such stockholder personally, (3) leaving it at the stockholder’s residence or usual place of business or (4) any other means permitted by Maryland law, including electronic transmission. | |
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Consent in Lieu of Meeting | | | The MVC Bylaws provide that any action which may be taken at any annual or special meeting of the stockholders of MVC may be taken without a meeting if a consent or consents in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. | | | The MGCL provides that, unless the charter authorizes the holders of common stock entitled to vote generally on the election of directors to consent in writing or by electronic transmission by not less than the minimum number of votes that would be necessary to take action at a stockholders meeting, any action required or permitted to be taken at a meeting may be taken without a meeting only if a unanimous consent setting forth the action is given in writing or by electronic transmission by each stockholder entitled to vote on the matter and filed in paper or electronic form with the records of stockholders meetings. The Barings BDC Bylaws provide that any action permitted to be taken at a meeting of stockholders may be taken without a meeting if the stockholders approve such action by unanimous written consent along with a written waiver of any right to dissent by each stockholder. |
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| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
Stockholder Inspection Rights | | | Except as otherwise provided in the Investment Company Act, the DGCL provides that any stockholder of record, in person or by attorney or other agent, will, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the company’s stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. In every instance where an attorney or other agent will be the person who seeks the right of inspection, the demand under oath will be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath will be directed to the company at its registered office in the State of Delaware or at its principal place of business. | | | Any stockholder of a Maryland corporation may make a request during usual business hours to inspect and copy any of the following corporate documents: (1) bylaws; (2) minutes of the proceedings of the stockholders; (3) annual statements of affairs; and (4) voting trust agreements deposited at Barings BDC’s principal office. Any stockholder may also request a statement showing all stock and securities issued during a specified period of not more than twelve (12) months before the date of the request. In addition, one or more persons who together are and for at least six (6) months have been stockholders of record of at least five percent (5%) of the outstanding stock of any class may (1) inspect and copy during usual business hours Barings BDC’s books of account and stock ledger, (2) present to any officer or resident agent of Barings BDC a written request for a statement of Barings BDC’s affairs and (3) if Barings BDC does not maintain the original or a duplicate stock ledger at its principal office, present to any officer or resident agent of Barings BDC a written request for a list of stockholders, setting forth the name and address of each stockholder and the number of shares of each class which the stockholder holds. Within twenty (20) days after such request is made, Barings BDC must prepare such information and have it available on file at its principal office. |
| | | | |||
Dividends and Stock Repurchases | | | Pursuant to the DGCL, MVC may pay dividends only out of the surplus of MVC or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Pursuant to the DGCL, dividends may not be declared out of net profits, however, if MVC’s capital has been diminished to an amount less than the aggregate amount of all capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets until the deficiency | | | Pursuant to the MGCL, no distribution may be made by Barings BDC if, after giving effect to the distribution, (1) Barings BDC would not be able to pay its indebtedness as the indebtedness becomes due in the usual course of business or (2) Barings BDC’s total assets would be less than the sum of its total liabilities plus, unless the Barings BDC Charter permits otherwise, the amount that would be needed, if Barings BDC were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets is eliminated. Furthermore, the DGCL generally provides that a Delaware corporation may redeem or repurchase its shares only if the redemption or repurchase would not impair the capital of such corporation. | | | stockholders whose preferential rights on dissolution are superior to those receiving the distribution. For purposes of determining compliance with the insolvency tests in clauses (1) and (2), the MGCL permits assets to be valued on the basis of a “fair valuation” of the assets or upon any other “reasonable” method rather than limiting application of the tests to the financial statements. | |
| | | | |||
| | The MVC Bylaws provide that the holders of MVC Common Stock shall have the right to receive dividends as and when declared by the MVC Board in its sole discretion at any regular or special meeting, subject to any limitation imposed by the MVC Charter. | | | Pursuant to the Barings BDC Bylaws, dividends and other distributions to Barings BDC stockholders may be authorized by the Barings BDC Board, subject to the provisions of law and the Barings BDC Charter. Dividends and other distributions may be paid in cash, property or stock of Barings BDC, subject to the provisions of applicable law and the Barings BDC Charter. | |
| | | | |||
Exculpation of Officers and Directors | | | The DGCL permits a Delaware corporation to include in its certificate of incorporation a provision eliminating or limiting personal liability of a director (but not an officer) to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability resulting from (1) breach of the director’s duty of loyalty, (2) acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, (3) unlawful payment of dividends or unlawful stock purchase or redemption or (4) any transaction from which the director derived an improper personal benefit. Subject to any limitation in the Investment Company Act, the MVC Charter limits, to the maximum extent permitted by Delaware law in effect from time to time, the liability of directors of MVC. | | | Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of directors and officers to the corporation and its stockholders for money damages, except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active and deliberate dishonesty established by a final judgment and which is material to the cause of action. The Barings BDC Charter contains a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law. |
| | | | |||
Indemnification of Officers and Directors | | | As permitted by the DGCL, the MVC Charter provides that each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, | | | The MGCL requires a Maryland corporation (unless its charter provides otherwise, which the Barings BDC Charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | administrative or investigative (a “proceeding”), by reason of the fact that he or she is or was a director, officer of MVC or is or was serving at the request of MVC as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by MVC to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits MVC to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in the MVC Charter with respect to proceedings to enforce rights to indemnification, MVC shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the MVC Board. | | | proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. Maryland law permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that: (1) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty; (2) the director or officer actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by the corporation or in its right, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses. In addition, Maryland law permits a Maryland corporation to advance reasonable expenses to a director or officer upon receipt of (1) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification and (2) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed if it is ultimately determined that the standard of conduct was not met. | |
| | | |
| | Rights of MVC Stockholders | | | Rights of Barings BDC Stockholders | |
| | The right to indemnification conferred on the MVC Board members shall include the right to be paid by MVC the expenses incurred in defending any proceeding for which such right to indemnification is applicable in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to MVC of an undertaking by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under MVC Charter or otherwise. | | | To the maximum extent permitted by Maryland law and the Investment Company Act, the Barings BDC Charter authorizes Barings BDC to obligate itself to indemnify and pay or reimburse reasonable expenses in advance of final disposition of a proceeding, and the Barings BDC Bylaws require Barings BDC to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding, to (1) any present or former director or officer or (2) any individual who, while a director or officer and at Barings BDC’s request, serves or has served another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, in each case who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity. | |
| | | | The Barings BDC Charter and Barings BDC Bylaws permit Barings BDC, with the approval of the Barings BDC Board, to provide indemnification and advance of expenses to a person who served a predecessor of Barings BDC in any of the capacities described above and to any employee or agent of Barings BDC or such predecessor. | ||
| | | | |||
| | | | Barings BDC has indemnification agreements in place with certain of its directors. |
• | you must not vote in favor of, or consent to, the Merger Proposal (or otherwise waive appraisal rights). Because a proxy that is signed and submitted but does not otherwise contain voting instructions will, unless revoked, be voted in favor of the approval of the Merger Proposal, and it will result in you losing the right of appraisal and will effectively nullify any previously delivered written demand for appraisal of your MVC Common Stock, if you vote by proxy and wish to exercise your appraisal rights you must vote “against” the Merger Proposal or abstain from voting your shares of MVC Common Stock; |
• | you must deliver to MVC (at the address set forth below) a written demand for appraisal of your shares of MVC Common Stock before the vote on the Merger Proposal at the MVC Special Meeting; and |
• | you must continuously hold the shares of MVC Common Stock from the date of making the demand through the Effective Time. |
• | Barings BDC’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 27, 2020; |
• | Barings BDC’s Quarterly Reports on Form 10-Q for the fiscal quarter ended March 31, 2020 and June 30, 2020, filed with the SEC on April 30, 2020 and August 5, 2020, respectively; |
• | Barings BDC’s Current Reports on Form 8-K (other than information furnished rather than filed) filed with the SEC on February 3, 2020, April 30, 2020 (Item 5.07 only), June 3, 2020, and August 11, 2020 (Item 1.01 only); |
• | Barings BDC’s Definitive Proxy Statement on Schedule 14A with respect to the Annual Meeting of Barings BDC Stockholders filed with the SEC on March 10, 2020 (to the extent explicitly incorporated by reference into Barings BDC’s Annual Report on Form 10-K); and |
• | the description of Barings BDC Common Stock referenced in Barings BDC’s Registration Statement on Form 8-A (No. 001-33130), as filed with the SEC on November 3, 2006, including any amendment or report filed for the purpose of updating such description prior to the termination of the offering of the common stock registered hereby. |
• | MVC’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019, filed with the SEC on January 14, 2020; |
• | MVC’s Quarterly Reports on Form 10-Q for the fiscal quarter ended January 31, 2020, April 30, 2020 and July 31, 2020, filed with the SEC on March 9, 2020, June 9, 2020 and September 9, 2020 respectively; |
• | MVC’s Current Reports on Form 8-K (other than information furnished rather than filed) filed with the SEC on February 25, 2020, March 25, 2020, April 16, 2020, June 1, 2020, July 20, 2020, July 31, 2020, August 11, 2020 and September 2, 2020; |
• | MVC’s Definitive Proxy Statement on Schedule 14A with respect to the Annual Meeting of MVC Stockholders filed with the SEC on June 10, 2020) (to the extent explicitly incorporated by reference into MVC’s Annual Report on Form 10-K); and |
• | the description of MVC Common Stock referenced in MVC’s Registration Statement on Form N-2, as filed with the SEC on April 16, 2020, including any subsequent amendments or reports filed for the purpose of updating such description. |
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Appendix A Definitions | | | |
Exhibit A Certificate of Incorporation of the First Step Surviving Corporation | | | |
Exhibit A-1 Calculation of Exchange Rate Adjusted Asset Value | | | |
Exhibit B October 31 Pro Forma NAV Schedule | | | |
Exhibit C October 31 Pro Forma ICTI Schedule | | | |
Exhibit D Closing Pro Forma NAV Schedule | | | |
Exhibit E Closing Pro Forma ICTI | | | |
Exhibit F Terms of Credit Support Agreement | | |
| | if to Parent, Acquisition Sub or the Parent External Adviser: | ||||
| | | | |||
| | Barings BDC, Inc. | ||||
| | 300 South Tryon Street, Suite 2500 | ||||
| | Charlotte, North Carolina | ||||
| | Email: | | | jonathan.bock@barings.com | |
| | | | jonathan.landsberg@barings.com | ||
| | Attention: | | | Jonathan Bock | |
| | | | Jonathan Landsberg | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | Dechert LLP | ||||
| | 1900 K Street NW | ||||
| | Washington, DC 20006 | ||||
| | Phone: | | | (202) 261-3300 | |
| | Email: | | | harry.pangas@dechert.com | |
| | | | gregory.schernecke@dechert.com | ||
| | Attention: | | | Harry Pangas, Esq. | |
| | | | Gregory A. Schernecke, Esq. | ||
| | | |
| | if to the Company: | ||||
| | | | |||
| | MVC Capital, Inc. | ||||
| | 287 Bowman Avenue, 2nd Floor | ||||
| | Phone: | | | (914) 701-0310 | |
| | Purchase, NY 10577 | ||||
| | Email: | | | mtokarz@tokarzgroup.com | |
| | Attention: | | | Michael Tokarz | |
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | Kramer Levin Naftalis & Frankel LLP | ||||
| | 1177 Avenue of the Americas | ||||
| | New York, New York 10036 | ||||
| | Phone: | | | (212) 715-9100 | |
| | Email: | | | gsilfen@kramerlevin.com | |
| | | | tshen@kramerlevin.com | ||
| | Attention: | | | George M. Silfen | |
| | | | Terrence Shen |
| | BARINGS BDC, INC. | ||||||||||
| | | | | | | ||||||
| | By | | | /s/ Jonathan Bock | | ||||||
| | | | Name: | | | Jonathan Bock | | ||||
| | | | Title: | | | Chief Financial Officer | | ||||
| | | | | | | ||||||
| | MUSTANG ACQUISITION SUB, INC. | ||||||||||
| | | | | | | ||||||
| | By | | | /s/ Jonathan Landsberg | | ||||||
| | | | Name: | | | Jonathan Landsberg | | ||||
| | | | Title: | | | President | | ||||
| | | | | | | ||||||
| | BARINGS LLC | ||||||||||
| | | | | | | ||||||
| | By | | | /s/ Eric Lloyd | | ||||||
| | | | Name: | | | Eric Lloyd | | ||||
| | | | Title: | | | Managing Director | | ||||
| | | | | | | ||||||
| | MVC CAPITAL, INC. | ||||||||||
| | | | | | | ||||||
| | By | | | /s/ Michael Tokarz | | ||||||
| | | | Name: | | | Michael Tokarz | | ||||
| | | | Title: | | | Chairman | |
Exhibit A-1 | | | | | |||||||||||
EURO Investment FX Adjustment | | | | | |||||||||||
| | | | | | | | | | € / $ | |||||
| | | | | | | | 7/31/2020 | | | 1.1771 | ||||
Reference Rates | | | | | | | | | 7/30/2020 | | | 1.1847 | |||
| | | | 4/30 | | | 7/31 Average | | | 7/29/2020 | | | 1.1792 | ||
| | € / $ | | | 1.0955 | | | 1.17756 | | | 7/28/2020 | | | 1.1716 | |
| | | | | | | | 7/27/2020 | | | 1.1752 | ||||
| | | | | | | | Average | | | 1.17756 | ||||
| | | | | | | | | | ||||||
MVC Automotive | | | | | | | EURO | | | | | ||||
| | | | 4/30 Valuation @ 1.0955 | | | 7/31 Average Valuation @ 1.17756 | | | | | ||||
Euro Investment Value | | | | | 20,687,786 | | | 20,687,786 | | | | | |||
$ Investment Value | | | | | 22,663,470 | | | 24,361,110 | | | | | |||
$ Debt | | | | | 8,454,470 | | | 8,454,470 | | | | | |||
$ Equity | | | | | 14,209,000 | | | 15,906,640 | | | | | |||
| | | | | | | | | | ||||||
$ Value Adjustment | | | | | | | 1,697,640 | | | | |
Security Holdings | | | | | | | EURO | | | | | ||||
| | | | 4/30 Valuation @ 1.0955 | | | 7/31 Average Valuation @ 1.17756 | | | | | ||||
Euro Investment Value | | | | | 29,065,419 | | | 29,065,419 | | | | | |||
$ Investment Value | | | | | 31,841,166 | | | 34,226,274 | | | | | |||
$ Debt | | | | | 13,907,166 | | | 13,907,166 | | | | | |||
$ Equity | | | | | 17,934,000 | | | 20,319,108 | | | | | |||
$ Letter of Credit | | | | | (184,712) | | | (198,548) | | | | | |||
| | | | | | | | | | ||||||
$ Value Adjustment | | | | | | | 2,371,272 | | | | | ||||
| | | | | | | | | | ||||||
TOTAL FX Linked Adjustment | | | 4,068,912 | | | | |
A) | Net Asset Value based on last formal monthly close: |
B) | Adjustments1: |
1) | Estimated Income accruals from last monthly close through 10/31/2020 |
2) | Estimated expenses from last monthly close through 10/31/2020 (include estimated merger expenses through that date) |
3) | Estimated transactions from last monthly close through 10/31/2020 versus previous mark to estimate realized gain or loss and change in unrealized appreciation (depreciation) |
4) | Update current marks for current F/X rates |
5) | Estimated Dividends Paid, if any |
C) | Proforma 10/31/2020 NAV2: |
A) | Estimated Undistributed ICTI based on the August 31, 2020 tax provision prepared by the Company’s fund administrator and reviewed by Company's tax return preparer: |
B) | Adjustments to the August 31, 2020 provision1: |
1) | Estimated book net operating income through 10/31/2020 (include estimated merger expenses through that date) |
2) | Estimated book to tax differences related to book net operating income through 10/31/2020 |
3) | Estimated taxable ordinary income or losses from portfolio company transactions through 10/31/2020 |
4) | Estimated dividends paid through 10/31/2020, if any |
5) | Estimated GILTI tax inclusion for FY 2020 |
6) | Estimated dividends to be paid, if any |
C) | Estimated proforma undistributed ICTI for 10/31/2020 |
A) | Estimated Undistributed Net Capital Gain based on the August 31, 2020 tax provision prepared by the Company’s fund administrator and reviewed by Company's tax return preparer: |
B) | Adjustments to the August 31, 2020 provision1: |
1) | Estimated taxable net capital gains (losses) from portfolio company transactions through 10/31/2020 |
2) | Estimated capital gains dividends paid, if any |
C) | Estimated proforma undistributed Net Capital Gains (Losses) for 10/31/2020 |
D) | Deemed Distribution Required based on Estimated proforma undistributed Net Capital Gains (Losses) for 10/31/2020 |
E) | Estimated Federal Income payable on the shareholders behalf |
A) | Net Asset Value based on last formal monthly close: |
B) | Adjustments1: |
1) | Estimated Income accruals from last monthly close through Closing Cut-off Time |
2) | Estimated expenses from last monthly close through Closing Cut-off Time (include estimated merger expenses through that date) |
3) | Estimated transactions from last monthly close through Closing Cut-off Time versus previous mark to estimate realized gain or loss and change in unrealized appreciation (depreciation) |
4) | Update current marks for current F/X rates |
5) | Estimated Dividends Paid, if any |
C) | Proforma Closing Cut-off Time NAV2: |
A) | Calculations1: |
1) | Estimated book net operating income from 11/1/2020 through Effective Time (include estimated merger expenses through that date) |
2) | Estimated book to tax differences related to book net operating income from 11/1/2020 through |
3) | Estimated taxable ordinary income or losses from portfolio company transactions from 11/1/2020 through Effective Time |
4) | Estimated dividends paid from 11/1/2020 through Effective Time, if any |
5) | Other estimated potential adjustments (GILTI, MVC PE Fund Schedule K-1, etc.)2 |
B) | Estimated proforma undistributed ICTI from 11/1/2020 through Effective Time |
A) | Calculations1: |
1) | Estimated taxable net capital gains (losses) from portfolio company transactions from 11/1/2020 through Effective Time |
2) | Estimated capital gains dividends paid from 11/1/2020 through Effective Time, if any |
B) | Estimated proforma undistributed Net Capital Gains (Losses) from 11/1/2020 through Effective Time |
C) | RIC Tax Liability based on Estimated proforma undistributed Net Capital Gains (Losses) from 11/1/2020 through Effective Time |
Issuer | | | [Affiliate of Barings LLC] | ||||||
Policy holder | | | [Affiliate of Barings BDC, Inc.] | ||||||
Maximum obligation | | | $23,000,000 | ||||||
Upfront fee | | | None | ||||||
Effective date | | | [Date of transaction close between Barings BDC, Inc. and MVC Capital] | ||||||
Designated settlement / payment date | | | The earlier of [January 1, 2031] or the time at which the entire Reference Portfolio has been realized or written off | ||||||
Reference portfolio | | | • | | | Investments acquired from MVC Capital (“Reference Portfolio”) [held in the [legal entity]] | |||
| | | | ○ | | | [#] of Non-control/Non-affiliated investments | ||
| | | | ○ | | | [#] of Affiliate investments | ||
| | | | ○ | | | [#] of Control investments | ||
| | | | ○ | | | See schedule in [Appendix] [To include a detailed list of the loan/equity details for each portfolio company] | ||
| | • | | | Investments that are restructured, amended, extended or otherwise modified (including to new securities) will continue to be included in the Reference Portfolio until such time as these investments are realized or written off entirely | ||||
Reference portfolio value | | | Aggregate purchase price of Reference Portfolio of $[ ] | ||||||
Obligation basis | | | Change in the market value of the Reference Portfolio | ||||||
Calculation of obligation | | | • | | | Net cumulative unrealized and realized gains/losses of the Reference Portfolio from the Effective Date to the calculation date (“CSA Account Value”) | |||
| | • | | | In the event the CSA Account Value is positive, no obligation will exist | ||||
| | • | | | As defined above, the maximum obligation shall be $23,000,000 | ||||
| | | | ○ | | | For the avoidance of doubt, if the CSA Account Value is less than negative $23,000,000, any losses in excess of this amount shall be borne by the Policy Holder | ||
Reporting | | | • | | | Policy Holder shall submit detailed calculation of CSA Account Value no later than [30] days following each measurement period | |||
| | • | | | In the event of a realization, restructuring, amendment, extension or other modification of an investment in the Reference Portfolio, Policy Holder shall submit [reference documentation] within [30] days following such event | ||||
Settlement mechanics | | | On the Designated Settlement date, following the final calculation of the CSA Account Value, the Issuer will make a cash payment to the Policy Holder |
(A) | No Income-Based Fee shall be payable to the Adviser in any calendar quarter in which the Company’s aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters does not exceed the Hurdle Amount; |
(B) | 100% of the Company’s aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.5% (10% annualized) by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s Pre-Incentive Fee Net Investment Income reaches the Catch-Up Amount for the Trailing Twelve Quarters; and |
(C) | For any quarter in which the Company’s aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income-Based Fee shall equal 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income for such Trailing Twelve Quarters, as the Hurdle Amount and Catch-Up Amount will have been achieved. |
| | ||||||||
| | a Maryland corporation | |||||||
| | | | | | ||||
| | By: | | | |||||
| | Name: | | | |||||
| | Title: | | | Chief Executive Officer |
| | BARINGS LLC, a Delaware limited liability company | |||||||
| | | | | | ||||
| | By: | | | |||||
| | Name: | | | Eric Lloyd | ||||
| | Title: | | | Managing Director |
Issuer | | | [Affiliate of Barings LLC] | ||||||
Policy holder | | | [Affiliate of Barings BDC, Inc.] | ||||||
Maximum obligation | | | $23,000,000 | ||||||
Upfront fee | | | None | ||||||
Effective date | | | [Date of transaction close between Barings BDC, Inc. and MVC Capital] | ||||||
Designated settlement / payment date | | | The earlier of [January 1, 2031] or the time at which the entire Reference Portfolio has been realized or written off | ||||||
Reference portfolio | | | • | | | Investments acquired from MVC Capital (“Reference Portfolio”) [held in the [legal entity]] | |||
| | | | ○ | | | [#] of Non-control/Non-affiliated investments | ||
| | | | ○ | | | [#] of Affiliate investments | ||
| | | | ○ | | | [#] of Control investments | ||
| | | | ○ | | | See schedule in [Appendix] [To include a detailed list of the loan/equity details for each portfolio company] | ||
| | • | | | Investments that are restructured, amended, extended or otherwise modified (including to new securities) will continue to be included in the Reference Portfolio until such time as these investments are realized or written off entirely | ||||
Reference portfolio value | | | Aggregate purchase price of Reference Portfolio of $[ ] | ||||||
Obligation basis | | | Change in the market value of the Reference Portfolio | ||||||
Calculation of obligation | | | • | | | Net cumulative unrealized and realized gains/losses of the Reference Portfolio from the Effective Date to the calculation date (“CSA Account Value”) | |||
| | • | | | In the event the CSA Account Value is positive, no obligation will exist | ||||
| | • | | | As defined above, the maximum obligation shall be $23,000,000 | ||||
| | | | ○ | | | For the avoidance of doubt, if the CSA Account Value is less than negative $23,000,000, any losses in excess of this amount shall be borne by the Policy Holder | ||
Reporting | | | • | | | Policy Holder shall submit detailed calculation of CSA Account Value no later than [30] days following each measurement period | |||
| | • | | | In the event of a realization, restructuring, amendment, extension or other modification of an investment in the Reference Portfolio, Policy Holder shall submit [reference documentation] within [30] days following such event | ||||
Settlement mechanics | | | On the Designated Settlement date, following the final calculation of the CSA Account Value, the Issuer will make a cash payment to the Policy Holder |
1. | reviewed the financial terms and conditions of a draft dated August 9, 2020 of the Agreement and Plan of Merger to be entered into by MVC, Barings BDC, Acquisition Sub and Barings (the “Agreement”); |
2. | reviewed certain publicly-available business and financial information relating to MVC and Barings BDC; |
3. | reviewed certain financial projections provided to us by MVC relating to MVC and certain other historical and current financial and business information relating to MVC provided to us by MVC, including estimates of the senior management of MVC as to the liquidation value of MVC and its assets; |
4. | reviewed certain financial projections provided to us by Barings BDC relating to Barings BDC and certain other historical and current financial and business information relating to Barings BDC provided to us by Barings BDC; |
5. | held discussions regarding the operations, financial condition and prospects of MVC and Barings BDC, respectively, with the senior management of MVC and the senior management of Barings BDC (which consists solely of employees of Barings); |
6. | reviewed the financial and stock market performance of MVC and Barings BDC and compared them with one another and with those of certain other publicly-traded companies that we deemed to be relevant; |
7. | compared certain financial terms of the Transaction to financial terms, to the extent publicly-available, of other transactions that we deemed relevant; |
8. | reviewed the premiums paid in certain publicly-announced specialty finance mergers and acquisitions transactions; |
9. | reviewed the current and historical trading prices and volume for MVC Common Stock and Barings BDC Common Stock; |
10. | reviewed certain publicly-available research analyst price targets for Barings BDC; |
11. | considered the results of MVC’s efforts to solicit indications of interest and definitive proposals from certain third parties with respect to a possible acquisition of MVC; and |
12. | performed such other studies, analyses and inquiries and considered such other factors as we deemed appropriate. |
| | if to Parent: | | | ||
| | | | |||
| | Barings BDC, Inc. | ||||
| | 300 South Tryon Street, Suite 2500 | ||||
| | Charlotte, North Carolina | ||||
| | Email: | | | jonathan.bock@barings.com | |
| | | | jonathan.landsberg@barings.com | ||
| | Attention: | | | Jonathan Bock | |
| | | | Jonathan Landsberg | ||
| | with a copy (which shall not constitute notice) to: | ||||
| | Dechert LLP | ||||
| | 1900 K Street NW | ||||
| | Washington, DC 20006 | ||||
| | Phone: | | | (202) 261-3300 | |
| | Email: | | | harry.pangas@dechert.com | |
| | | | gregory.schernecke@dechert.com | ||
| | Attention: | | | Harry Pangas, Esq. | |
| | | | Gregory A. Schernecke, Esq. |
| | BARINGS BDC, INC. | ||||
| | By | | | ||
| | Name: | ||||
| | Title: | ||||
| | | | |||
| | | | |||
| | [STOCKHOLDER] | ||||
| | By | | | ||
| | Name: | ||||
| | Number of Shares of Company Common Stock Beneficially Owned as of the date of this Agreement: | ||||
| | Street Address: | ||||
| | City/State/Zip Code: | ||||
| | Fax: | ||||
| | Email: |
(a) | Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository. |
(b) | Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title: |
(1) | Provided, however, that, no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation (or, in the case of a merger pursuant to § 251(h), as of immediately prior to the execution of the agreement of merger), were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title. |
(2) | Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except: |
a. | Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; |
b. | Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders; |
c. | Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or |
d. | Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section. |
(3) | In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 or § 267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. |
(4) | [Repealed.] |
(c) | Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of |
(d) | Appraisal rights shall be perfected as follows: |
(1) | If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or |
(2) | If the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of giving such notice or, in the case of a merger approved pursuant to § 251(h) of this title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days after the date of giving such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to |
(e) | Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon request given in writing (or by electronic transmission directed to an information processing system (if any) expressly designated for that purpose in the notice of appraisal), shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation (or, in the case of a merger approved pursuant to § 251(h) of this title, the aggregate number of shares (other than any excluded stock (as defined in § 251(h)(6)d. of this title)) that were the subject of, and were not tendered into, and accepted for purchase or exchange in, the offer referred to in § 251(h)(2)), and, in either case, with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such statement shall be given to the stockholder within 10 days after such stockholder’s request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection. |
(f) | Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation. |
(g) | At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. If immediately before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange, the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds $1 million, or (3) the merger was approved pursuant to § 253 or § 267 of this title. |
(h) | After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section. |
(i) | The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state. |
(j) | The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal. |
(k) | From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section. |
(l) | The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation. |
Item 15. | Indemnification. |
Item 16. | Exhibits. |
| | Form of Articles of Amendment and Restatement of the Registrant (Filed as Exhibit (a)(3) to the Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-138418) filed with the Securities and Exchange Commission on December 29, 2006 and incorporated herein by reference). | |
| | ||
| | Articles of Amendment of the Registrant (Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference). | |
| | ||
| | Seventh Amended and Restated Bylaws of the Registrant (Filed as Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference). | |
| | ||
| | Articles Supplementary (Filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference). | |
| | ||
(3) | | | Not applicable. |
| | ||
| | Asset Purchase Agreement, dated April 3, 2018, by and between the Registrant and BSP Asset Acquisition I, LLC (Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 9, 2018 and incorporated herein by reference). | |
| | ||
| | Stock Purchase and Transaction Agreement, dated April 3, 2018, by and between the Registrant and Barings LLC (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 9, 2018 and incorporated herein by reference). | |
| | ||
| | Agreement and Plan of Merger, by and among Barings BDC, Inc., MVC Capital, Inc., Mustang Acquisition Sub, Inc., and Barings LLC, dated as of August 10, 2020 (Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 11, 2020 and incorporated herein by reference). | |
| | ||
| | Form of Common Stock Certificate (Filed as Exhibit (d) to the Registrant’s Post-Effective Amendment No. 1 on Form N-2/N-5 (File No. 333-138418) filed with the Securities and Exchange Commission on February 15, 2007 and incorporated herein by reference). | |
| | ||
| | Barings BDC, Inc. Dividend Reinvestment Plan (Filed as Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 12, 2008 and incorporated herein by reference). | |
| | ||
| | Agreement to Furnish Certain Instruments (Filed as Exhibit 4.19 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission on February 25, 2009 and incorporated herein by reference). | |
| | ||
| | Description of Registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Filed as Exhibit 4.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 27, 2020 and incorporated herein by reference). | |
| | ||
| | Investment Advisory Agreement, dated August 2, 2018 by and between Triangle Capital Corporation and Barings LLC (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference). | |
| |
| | Administration Agreement, dated August 2, 2018 by and between Triangle Capital Corporation and Barings LLC (Filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference). | |
| | ||
(7) | | | Not applicable. |
| | ||
(8) | | | Not applicable. |
| | ||
| | Master Custodian Agreement, dated August 2, 2018, between the Company and State Street Bank and Trust Company (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 8, 2018 and incorporated herein by reference). | |
| | ||
(10) | | | Not applicable. |
| | ||
| | Opinion and Consent of Miles & Stockbridge P.C. with respect to the legality of shares* | |
| | ||
(12) | | | Opinion and Consent of Dechert LLP** |
| | ||
| | Registration Rights Agreement, dated August 2, 2018 by and between Triangle Capital Corporation and Barings LLC (Filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference). | |
| | ||
| | Amended and Restated Credit Agreement, dated December 13, 2018, among Barings BDC Senior Funding I, LLC, as borrower, the lender parties thereto, Bank of America N.A., as administrative agent, the other lender parties thereto, and Bank of America Merrill Lynch, as sole lead arranger and sole book manager (Filed as Exhibit 10.5 to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2019 and incorporated herein by reference). | |
| | ||
| | Security Agreement, dated August 3, 2018, among Barings BDC Senior Funding I, LLC and Bank of America N.A. (Filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2018 and incorporated herein by reference). | |
| | ||
| | Collateral Administration Agreement, dated August 3, 2018, among Barings Senior Funding I, LLC, Bank of America N.A. and State Street Bank and Trust Company (Filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2018 and incorporated herein by reference). | |
| | ||
| | Investment Management Agreement, dated August 3, 2018, between Barings BDC Senior Funding I, LLC and Barings LLC (Filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2018 and incorporated herein by reference). | |
| | ||
| | Stock Transfer Agency Agreement between the Registrant and Computershare, Inc. (as successor to The Bank of New York) (Filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 12, 2008 and incorporated herein by reference). | |
| | ||
| | Form of Indemnification Agreement (Filed as Exhibit 10.23 to the Registrants Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2018 and incorporated herein by reference). | |
| |
| | Senior Secured Revolving Credit Facility, dated as of February 21, 2019, by and among the Company, as borrower, the lenders party thereto, ING Capital LLC, as administrative agent, and the other parties signatory thereto (Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed with the Securities and Exchange Commission on May 9, 2019 and incorporated herein by reference). | |
| | ||
| | Guarantee, Pledge and Security Agreement, dated as of February 21, 2019, by and among the Company, as borrower, the subsidiary guarantors party thereto, ING Capital LLC, as revolving administrative agent for the revolving lenders and collateral agent, and the other parties signatory thereto (Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed with the Securities and Exchange Commission on May 9, 2019 and incorporated herein by reference). | |
| | ||
| | CLO Indenture, dated as of May 9, 2019, by and among Barings BDC Static CLO LTD. 2019-1, as the issuer, Barings BDC Static CLO 2019-I, LLC as the Co-Issuer and State Street Bank and Trust Company as the Trustee (Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission on July 30, 2019 and incorporated herein by reference). | |
| | ||
| | Master Loan Sale Agreement dated as of May 9, 2019, by and among the Company, as the seller, and Barings BDC Static CLO LTD. 2019-I, as the buyer (Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission on July 30, 2019 and incorporated herein by reference). | |
| | ||
| | Master Participation Agreement, dated as of May 9, 2019, between Barings BDC Senior Funding I, LLC, as the financing subsidiary, and Barings BDC Static CLO Ltd. 2019-I, the issuer (Filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission on July 30, 2019 and incorporated herein by reference). | |
| | ||
| | Collateral Management Agreement, dated as of May 9, 2019, by and between Barings BDC Static CLO LTD. 2019-I, as the issuer and the Company as the collateral manager (Filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission on July 30, 2019 and incorporated herein by reference). | |
| | ||
| | Collateral Administration Agreement, dated as of May 9, 2019, by and among Barings BDC Static CLO LTD. 2019-1 as the Issuer, the Company as the Collateral Manager, and State Street Bank and Trust Company as collateral administrator (Filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission on July 30, 2019 and incorporated herein by reference). | |
| | ||
| | Amendment to the Senior Secured Revolving Credit Agreement dated as of December 3, 2019, by and among the Company, as borrower, the lenders party thereto, ING Capital LLC, as administrative agent, and the other parties signatory thereto (Filed as Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 27, 2020 and incorporated herein by reference). | |
| | ||
| | Second Amendment Agreement, dated as of February 21, 2020, amending the Amended and Restated Credit Agreement, dated December 13, 2018, as amended, by and among Barings BDC Senior Funding I, LLC, as borrower, and Bank of America N.A., as administrative agent (Filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 27, 2020 and incorporated herein by reference). | |
| |
| | Note Purchase Agreement by and between the Company and the purchasers party thereto, dated August 3, 2020 (Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed with the Securities and Exchange Commission on August 5, 2020 and incorporated herein by reference). | |
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| | Consent of Ernst & Young LLP (Barings BDC, Inc.)* | |
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| | Consent of Grant Thornton LLP (MVC Capital, Inc.)* | |
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| | Report of Grant Thornton LLP regarding the senior securities table contained herein (MVC Capital, Inc.)* | |
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(15) | | | Not applicable. |
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(16) | | | Not applicable. |
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(17)(a) | | | Form of Proxy Card of Barings BDC, Inc.** |
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(17)(b) | | | Form of Proxy Card of MVC Capital, Inc.** |
| | ||
| | Consent of J.P. Morgan Securities LLC* | |
| | ||
| | Consent of JMP Securities LLC* |
* | Filed herewith. |
** | To be filed by amendment. |
Item 17. | Undertakings. |
(1) | The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(2) | The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. |
By: | | | /s/ Eric Lloyd | | | |
| | Eric Lloyd | | | ||
| | Chief Executive Officer | | |
SIGNATURE | | | TITLE | | | DATE | |
| | | | | |||
/s/ Eric Lloyd | | | Chief Executive Officer and Director (Principal Executive Officer) | | | September 15, 2020 | |
Eric Lloyd | | | |||||
| | | | | |||
/s/ Jonathan Bock | | | Chief Financial Officer (Principal Financial Officer) | | | September 15, 2020 | |
Jonathan Bock | | | |||||
| | | | | |||
/s/ Elizabeth A. Murray | | | Principal Accounting Officer | | | September 15, 2020 | |
Elizabeth A. Murray | | | |||||
| | | | | |||
/s/ Michael Freno | | | Chairman of the Board of Directors | | | September 15, 2020 | |
Michael Freno | | | |||||
| | | | | |||
/s/ John A. Switzer | | | Director | | | September 15, 2020 | |
John A. Switzer | | | |||||
| | | | | |||
/s/ Mark F. Mullhern | | | Director | | | September 15, 2020 | |
Mark F. Mullhern | | | |||||
| | | | | |||
/s/ Thomas M. Finke | | | Director | | | September 15, 2020 | |
Thomas M. Finke | | | |||||
| | | | | |||
/s/ Thomas W. Okel | | | Director | | | September 15, 2020 | |
Thomas W. Okel | | | |||||
| | | | | |||
/s/ Jill Olmstead | | | Director | | | September 15, 2020 | |
Jill Olmstead | |