May 6, 2021 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________

Form 10-Q

__________________________________________________________

(Mark One)


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

For the quarterly period ended March 31, 2021


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

For the transition period from to

Commission file number 814-00733

______________________________________________________________________

Barings BDC, Inc.

(Exact name of registrant as specified in its charter)

__________________________________________________________


Maryland						06-1798488
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

300 South Tryon Street, Suite 2500 Charlotte, North Carolina						28202
(Address of principal executive offices)						(Zip Code)

Registrant's telephone number, including area code: (704) 805-7200

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	BBDC	The New York Stock Exchange

________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	ý	Smaller reporting company	¨
		Emerging growth company	¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨

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

The number of shares outstanding of the registrant’s common stock on May 6, 2021 was 65,316,085.

BARINGS BDC, INC.

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q


		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheet as of March 31 , 202 1 and Consolidated Balance Sheet as of December 31, 2020	3
	Unaudited Consolidated Statements of Operations for the Three Months Ended March 31 , 202 1 and 2020	4
	Unaudited Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31 , 202 1 and 2020	6
	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31 , 202 1 and 20 20	7
	Unaudited Consolidated Schedule of Investments as of March 31, 2021	8
	Consolidated Schedule of Investments as of December 31 , 2020	20
	Notes to Unaudited Consolidated Financial Statements	32
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	63
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	81
Item 4.	Controls and Procedures	83

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	84
Item 1A.	Risk Factors	84
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	85
Item 3.	Defaults Upon Senior Securities	85
Item 4.	Mine Safety Disclosures	85
Item 5.	Other Information	85
Item 6.	Exhibits	85
Signatures		86

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Barings BDC, Inc.

Consolidated Balance Sheets


	March 31, 2021		December 31, 2020
	(Unaudited)
Assets:
Investments at fair value:
Non-Control / Non-Affiliate investments (cost of $1,389,212,763 and $1,318,614,617 as of March 31, 2021 and December 31, 2020, respectively)	$	1,401,742,025	$	1,325,783,281
Affiliate investments (cost of $95,442,223 and $76,055,873 as of March 31, 2021 and December 31, 2020, respectively)	100,429,674		78,598,633
Control investments (cost of $30,326,428 and $25,826,428 as of March 31, 2021 and December 31, 2020, respectively)	26,386,362		25,855,796
Short-term investments (cost of $73,569,174 and $65,558,227 as of March 31, 2021 and December 31, 2020, respectively)	73,565,676		65,558,227
Total investments at fair value	1,602,123,737		1,495,795,937
Cash (restricted cash of $3,488,403 and $3,488,336 at March 31, 2021 and December 31, 2020, respectively)	21,168,184		62,651,340
Foreign currencies (cost of $19,342,513 and $29,555,465 as of March 31, 2021 and December 31, 2020, respectively)	19,346,907		29,836,121
Interest and fees receivable	19,637,124		21,617,843
Prepaid expenses and other assets	1,123,361		2,014,558
Credit support agreement (cost of $13,600,000 as of both March 31, 2021 and December 31, 2020)	12,000,000		13,600,000
Deferred financing fees	3,802,971		4,110,564
Receivable from unsettled transactions	47,911,907		47,412,382
Total assets	$	1,727,114,191	$	1,677,038,745
Liabilities:
Accounts payable and accrued liabilities	$	2,528,070	$	6,045,443
Interest payable	4,084,372		2,219,274
Administrative fees payable	500,000		675,000
Base management fees payable	3,929,251		3,413,270
Incentive management fees payable	2,721,741		—
Derivative liabilities	142,099		1,336,283
Payable from unsettled transactions	—		1,548,578
Borrowings under credit facilities	611,144,523		719,660,707

Notes payable (net of deferred financing fees)	374,181,388		224,335,666
Total liabilities	999,231,444		959,234,221
Commitments and contingencies (Note 7)
Net Assets:
Common stock, $0.001 par value per share (150,000,000 shares authorized and 65,316,085 shares issued and outstanding as of both March 31, 2021 and December 31, 2020)	65,316		65,316
Additional paid-in capital	1,027,707,047		1,027,707,047
Total distributable earnings (loss)	(299,889,616)		(309,967,839)
Total net assets	727,882,747		717,804,524
Total liabilities and net assets	$	1,727,114,191	$	1,677,038,745
Net asset value per share	$	11.14	$	10.99

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Statements of Operations


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
Investment income:
Interest income:
Non-Control / Non-Affiliate investments	$	25,096,325	$	17,396,411

Control investments	107,237		—
Short-term investments	10,679		277,991
Total interest income	25,214,241		17,674,402
Dividend income:

Affiliate investments	71,500		—

Total dividend income	71,500		—
Fee and other income:
Non-Control / Non-Affiliate investments	1,973,062		960,993

Control investments	160,113		—
Total fee and other income	2,133,175		960,993
Payment-in-kind interest income:
Non-Control / Non-Affiliate investments	3,037,325		43,572
Affiliate investments	136,462		—

Total payment-in-kind interest income	3,173,787		43,572
Interest income from cash	528		631
Total investment income	30,593,231		18,679,598
Operating expenses:
Interest and other financing fees	7,284,709		6,004,133
Base management fee (Note 2)	3,929,251		3,912,373
Incentive management fees (Note 2)	2,721,741		—

Compensation expenses	—		48,410
General and administrative expenses (Note 2)	2,301,434		1,420,613
Total operating expenses	16,237,135		11,385,529


Net investment income	14,356,096		7,294,069
Income taxes, including excise tax benefit	(18,038)		—
Net investment income after taxes	14,374,134		7,294,069


Barings BDC, Inc. Unaudited Consolidated Statements of Operations - (Continued)
	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
Realized and unrealized gains (losses) on investments, credit support agreement and foreign currency transactions:
Net realized gains (losses):
Non-Control / Non-Affiliate investments	2,891,040		(157,978)
Affiliate investments	(76,631)		—

Net realized gains (losses) on investments	2,814,409		(157,978)
Foreign currency transactions	(974,829)		(144,394)
Net realized gains (losses)	1,839,580		(302,372)
Net unrealized appreciation (depreciation):
Non-Control / Non-Affiliate investments	5,357,095		(117,361,056)
Affiliate investments	2,444,697		(3,833,223)
Control investments	(3,969,434)		—
Net unrealized appreciation (depreciation) on investments	3,832,358		(121,194,279)
Credit support agreement	(1,600,000)		—

Foreign currency transactions	4,041,797		1,798,226
Net unrealized appreciation (depreciation)	6,274,155		(119,396,053)
Net realized gains (losses) and unrealized appreciation (depreciation) on investments, credit support agreement and foreign currency transactions	8,113,735		(119,698,425)
Loss on extinguishment of debt	—		(137,390)
Benefit from taxes	410		19,999
Net increase (decrease) in net assets resulting from operations	$	22,488,279	$	(112,521,747)
Net investment income per share—basic and diluted	$	0.22	$	0.15
Net increase (decrease) in net assets resulting from operations per share—basic and diluted	$	0.34	$	(2.30)
Dividends/distributions per share:


Total dividends/distributions per share	$	0.19	$	0.16
Weighted average shares outstanding—basic and diluted	65,316,085		48,887,393

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Statements of Changes in Net Assets


	Common Stock			Additional Paid-In Capital		Total Distributable Earnings (Loss)		Total Net Assets
	Number of Shares	Par Value
Balance, December 31, 2019	48,950,803	$	48,951	$	853,766,370	$	(282,940,612)	$	570,874,709
Net investment income	—	—		—		7,314,068		7,314,068

Net realized loss on investments / foreign currency transactions	—	—		—		(302,372)		(302,372)
Net unrealized depreciation of investments / foreign currency transactions	—	—		—		(119,396,053)		(119,396,053)
Loss on extinguishment of debt	—	—		—		(137,390)		(137,390)

Dividends / distributions	—	—		—		(7,823,964)		(7,823,964)


Purchases of shares in repurchase plan	(661,981)	(662)		(4,783,428)		—		(4,784,090)


Balance, March 31, 2020	48,288,822	$	48,289	$	848,982,942	$	(403,286,323)	$	445,744,908


	Common Stock			Additional Paid-In Capital		Total Distributable Earnings (Loss)		Total Net Assets
	Number of Shares	Par Value
Balance, December 31, 2020	65,316,085	$	65,316	$	1,027,707,047	$	(309,967,839)	$	717,804,524
Net investment income	—	—		—		14,374,134		14,374,134

Net realized gain on investments / foreign currency transactions	—	—		—		1,839,580		1,839,580
Net unrealized appreciation of investments / CSA / foreign currency transactions	—	—		—		6,274,155		6,274,155

Benefit from taxes	—	—		—		410		410
Dividends / distributions	—	—		—		(12,410,056)		(12,410,056)

Deemed contribution - from Adviser	—	—		—		—		—



Balance, March 31, 2021	65,316,085	$	65,316	$	1,027,707,047	$	(299,889,616)	$	727,882,747

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Statements of Cash Flows


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	22,488,279	$	(112,521,747)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of portfolio investments	(276,455,607)		(123,200,667)

Repayments received / sales of portfolio investments	188,160,373		155,852,583

Purchases of short-term investments	(198,550,029)		(221,916,363)
Sales of short-term investments	190,541,780		218,025,496
Loan origination and other fees received	4,578,368		2,704,423
Net realized (gain) loss on investments	(2,814,409)		157,978
Net realized loss on foreign currency transactions	974,829		144,394
Net unrealized (appreciation) depreciation of investments	(3,832,358)		121,194,279
Net unrealized depreciation of CSA	1,600,000		—
Net unrealized appreciation of foreign currency transactions	(4,041,797)		(1,798,226)

Payment-in-kind interest	(3,173,786)		(43,572)
Amortization of deferred financing fees	343,997		375,257
Loss on extinguishment of debt	—		137,390

Accretion of loan origination and other fees	(1,481,038)		(658,005)
Amortization / accretion of purchased loan premium / discount	(1,979,787)		(188,402)



Changes in operating assets and liabilities:
Interest and fees receivables	(2,935,424)		(1,483,011)
Prepaid expenses and other assets	1,264,058		(798,647)
Accounts payable and accrued liabilities	(1,668,440)		452,640
Interest payable	1,868,804		(471,825)


Net cash provided by (used in) operating activities	(85,112,187)		35,963,975




Cash flows from financing activities:


Borrowings under credit facilities	29,823,707		58,085,614
Repayments of credit facilities	(134,083,152)		(69,000,000)

Repayment of debt securitization	—		(26,974,371)
Proceeds from notes	150,000,000		—
Financing fees paid	(190,682)		—

Purchases of shares in repurchase plan	—		(4,784,090)

Cash dividends / distributions paid	(12,410,056)		(7,823,964)
Net cash provided by (used in) financing activities	33,139,817		(50,496,811)
Net decrease in cash and foreign currencies	(51,972,370)		(14,532,836)
Cash and foreign currencies, beginning of period	92,487,461		21,991,565
Cash and foreign currencies, end of period	$	40,515,091	$	7,458,729
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,903,435	$	5,407,506

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Non–Control / Non–Affiliate Investments:

1WorldSync, Inc. (3.8%)*(7) (8) (9)	IT Consulting & Other Services	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 07/19, Due 07/25)	$	27,639,522	$	27,174,789	$	27,405,692
			27,639,522		27,174,789		27,405,692

Accelerate Learning, Inc. (1.0%)*(7) (8) (11)	Education Services	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24)	7,567,965		7,467,329		7,462,014
			7,567,965		7,467,329		7,462,014

Accurus Aerospace Corporation (2.9%)*(7) (8) (11)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.50% PIK, Acquired 10/18, Due 10/24)	24,500,000		24,265,957		20,874,000
			24,500,000		24,265,957		20,874,000

ADE Holdings (d/b/a AD Education) (0.7%)*(3) (7) (8) (16)	Education Services	First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 01/20, Due 01/27)	5,244,442		4,981,803		5,244,442
			5,244,442		4,981,803		5,244,442

Advantage Software Company (The), LLC (2.2%)*(7) (8) (11)	Advertising, Printing & Publishing	First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 01/21, Due 01/27)	15,872,836		15,487,093		15,476,015
		Class A Partnership Units (7,054.59 units, Acquired 01/21)			705,459		712,443
		Class B Partnership Units (3,496.31 units, Acquired 01/21)			—		22,656
			15,872,836		16,192,552		16,211,114

AEP Holdings, Inc. (2.4%)*(7) (8)	Wholesale	First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/25) (15)	7,104,768		7,159,388		6,962,673
		First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/25) (11)	10,752,921		10,546,205		10,537,863
			17,857,689		17,705,593		17,500,536

Aftermath Bidco Corporation (1.3%)* (7) (8) (11)	Professional Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 04/19, Due 04/25)	9,425,284		9,273,369		9,425,284
			9,425,284		9,273,369		9,425,284

Ahead DB Borrower, LLC. (0.3%)*(7) (8) (12)	Technology Distributors	Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 9.5% Cash, Acquired 10/20, Due 10/28)	2,139,295		2,077,504		2,075,117
			2,139,295		2,077,504		2,075,117

Air Canada 2020-2 Class B Pass Through Trust (1.1%)*	Airlines	Structured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25)	7,500,000		7,500,000		8,318,087
			7,500,000		7,500,000		8,318,087

American Dental Partners, Inc. (1.3%)*(7) (8) (11)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 11/18, Due 03/23)	9,775,000		9,763,132		9,452,425
			9,775,000		9,763,132		9,452,425

American Scaffold, Inc. (1.3%)*(7) (8) (11)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/19, Due 09/25)	9,662,226		9,493,555		9,662,226
			9,662,226		9,493,555		9,662,226

Anagram Holdings, LLC (2.2%)*(3)	Chemicals, Plastics, & Rubber	First Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25)	14,044,112		12,975,530		15,940,067
			14,044,112		12,975,530		15,940,067

Anchorage Capital CLO Ltd: Series 2013-1A (0.3%)*(3) (8) (11)	Structured Finance	Structured Secured Note - Class DR (LIBOR + 6.8%, 7.0% Cash, Acquired 03/20, Due 10/30)	2,000,000		1,747,226		1,954,474
			2,000,000		1,747,226		1,954,474

Anju Software, Inc. (1.9%)*(7) (8) (9)	Application Software	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 5.6% Cash, Acquired 02/19, Due 02/25)	13,666,508		13,422,227		13,603,917
			13,666,508		13,422,227		13,603,917

Apex Bidco Limited (0.3%)*(3) (7)	Business Equipment & Services	First Lien Senior Secured Term Loan (GBP LIBOR + 6.25%, 6.8% Cash, Acquired 01/20, Due 01/27) (8) (13)	2,010,615		1,856,499		1,974,143
		Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27)	266,526		247,209		261,692
			2,277,141		2,103,708		2,235,835

Apus Bidco Limited (2.6%)*(3) (7) (8) (14)	Banking, Finance, Insurance & Real Estate	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.5% Cash, Acquired 02/21, Due 03/28)	19,530,223		18,987,653		18,993,142
			19,530,223		18,987,653		18,993,142

AQA Acquisition Holding, Inc. (1.9%)*(7) (8) (11)	High Tech Industries	Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 03/21, Due 03/29)	14,477,878		14,075,714		14,075,393
			14,477,878		14,075,714		14,075,393

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Arch Global Precision LLC (2.4%)*(7) (8) (11)	Industrial Machinery	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 04/19, Due 04/26)	$	17,210,844	$	17,064,183	$	17,210,844
			17,210,844		17,064,183		17,210,844

Archimede (0.7%)*(3) (7) (8) (15)	Consumer Services	First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 10/20, Due 10/27)	4,936,258		4,923,115		4,822,475
			4,936,258		4,923,115		4,822,475

Argus Bidco Limited (0.4%)*(3) (7) (8) (13)	High Tech Industries	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.8% Cash, Acquired 12/20, Due 12/27)	2,732,225		2,541,695		2,658,619
			2,732,225		2,541,695		2,658,619

Armstrong Transport Group (Pele Buyer, LLC ) (1.0%)*(7) (8) (11)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)	5,327,863		5,256,328		5,284,761
		First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 07/20, Due 06/24)	1,990,291		1,956,918		1,990,291
			7,318,154		7,213,246		7,275,052

Ascensus Specialties, LLC (1.0%)*(7) (8) (9)	Specialty Chemicals	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 09/19, Due 09/26)	7,001,675		6,944,619		6,931,658
			7,001,675		6,944,619		6,931,658

ASPEQ Heating Group LLC (1.2%)* (7) (8) (11)	Building Products, Air & Heating	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25)	8,922,910		8,815,883		8,851,526
			8,922,910		8,815,883		8,851,526

Auxi International (0.2%)*(3) (7) (8) (16)	Commercial Finance	First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 12/19, Due 12/26)	1,645,419		1,516,306		1,619,866
			1,645,419		1,516,306		1,619,866

AVSC Holding Corp. (1.5%)*	Advertising	First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, 0.25% PIK, Acquired 08/18, Due 03/25)(8) (11)	4,885,464		4,327,220		4,320,754
		First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.0% PIK, Acquired 08/18, Due 03/25)(8) (11)	746,242		683,375		674,886
		First Lien Senior Secured Term Loan (5.0% Cash, 10.0% PIK, Acquired 11/20, Due 10/26)	4,988,220		4,858,438		5,786,335
			10,619,926		9,869,033		10,781,975

BDP International, Inc. (f/k/a BDP Buyer, LLC) (2.0%)*(7) (8) (9)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/18, Due 12/24)	14,962,427		14,707,774		14,694,617
			14,962,427		14,707,774		14,694,617

Beacon Pointe Advisors, LLC (0.1%)*(7) (8) (11)	Asset Manager & Custody Bank	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 03/20, Due 03/26)	993,636		974,611		993,636
			993,636		974,611		993,636

Benify (Bennevis AB) (0.2%)*(3) (7) (8) (17)	High Tech Industries	First Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26)	1,335,915		1,220,032		1,335,915
			1,335,915		1,220,032		1,335,915

Bidwax (1.8%)*(3) (7) (8) (15)	Non-durable Consumer Goods	First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 02/21, Due 02/28)	13,868,533		13,702,817		13,383,722
			13,868,533		13,702,817		13,383,722

BigHand UK Bidco Limited (0.7%)*(3) (7) (8) (13)	High Tech Industries	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.5% Cash, Acquired 01/21, Due 01/28)	5,531,266		5,248,666		5,310,015
			5,531,266		5,248,666		5,310,015

Black Diamond Equipment Rentals LLC (1.1%)*(7) (20)	Equipment Rental	Second Lien Loan (12.5% Cash, Acquired 12/20, Due 06/22)	7,500,000		7,500,000		7,500,000
		Warrant (3.13 units, Acquired 12/20)			847,000		726,000
			7,500,000		8,347,000		8,226,000

British Airways 2020-1 Class B Pass Through Trust (0.2%)*	Airlines	Structured Secured Note - Class B (8.4% Cash, Acquired 11/20, Due 11/28)	1,474,876		1,474,876		1,684,288
			1,474,876		1,474,876		1,684,288

British Engineering Services Holdco Limited (2.1%)*(3) (7) (8) (14)	Commercial Services & Supplies	First Lien Senior Secured Term Loan (GBP LIBOR + 5.25%, 5.5% Cash, Acquired 12/20, Due 12/27)	15,819,664		15,032,999		15,380,784
			15,819,664		15,032,999		15,380,784

Brown Machine Group Holdings, LLC (0.9%)*(7) (8) (9)	Industrial Equipment	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24)	6,722,144		6,662,673		6,722,144
			6,722,144		6,662,673		6,722,144

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Cadent, LLC (f/k/a Cross MediaWorks) (1.0%)*(7) (8) (11)	Media & Entertainment	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/18, Due 09/23)	$	7,532,846	$	7,494,339	$	7,532,846
			7,532,846		7,494,339		7,532,846

Carlson Travel, Inc (1.0%)*	Business Travel Management	First Lien Senior Secured Note (6.8% Cash, Acquired 09/20, Due 12/25)	3,000,000		2,362,500		2,745,000
		Super Senior Senior Secured Term Loan (10.5% Cash, Acquired 12/20, Due 3/25)	4,239,000		4,153,781		4,408,560
		Common Stock (1,962 units, Acquired 11/20)(7)			88,290		88,290
			7,239,000		6,604,571		7,241,850

Centralis Finco S.a.r.l. (0.1%)*(3) (7) (8) (15)	Diversified Financial Services	First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 05/20, Due 05/27)	833,687		734,407		833,687
			833,687		734,407		833,687

Cineworld Group PLC (1.4%)*(3)	Leisure Products	First Lien Senior Secured Term Loan (LIBOR + 2.50%, 3.5% Cash, Acquired 04/20, Due 02/25)(8) (11)	9,014,914		6,018,763		7,685,394
		Super Senior Secured Term Loan (7.0% Cash, 8.3% PIK, Acquired 11/20, Due 05/24)	1,679,196		1,454,572		2,117,886
		Warrants (553,375 units, Acquired 12/20)			101,602		457,332
			10,694,110		7,574,937		10,260,612

Classic Collision (Summit Buyer, LLC) (1.8%)*(7) (8) (11)	Auto Collision Repair Centers	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 01/20, Due 01/26)	13,191,054		12,969,490		12,918,142
			13,191,054		12,969,490		12,918,142

CM Acquisitions Holdings Inc. (3.3%)*(7) (8) (12)	Internet & Direct Marketing	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 05/19, Due 05/25)	24,001,562		23,662,616		23,899,349
			24,001,562		23,662,616		23,899,349

CMT Opco Holding, LLC (Concept Machine) (0.6%)*(7) (8) (11)	Distributors	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25)	4,155,516		4,089,508		3,877,097
		LLC Units (8,782 units, Acquired 01/20)			351,709		251,973
			4,155,516		4,441,217		4,129,070

Command Alkon (Project Potter Buyer, LLC) (2.8%)*(7) (8) (9)	Software	First Lien Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 04/20, Due 04/27)	20,900,728		20,315,830		20,469,964
		Class A Units (90.384 units, Acquired 04/20)			90,384		97,537
		Class B Units (33,324.69 units, Acquired 04/20)			—		9,897
			20,900,728		20,406,214		20,577,398

Confie Seguros Holding II Co. (0.3%)*(7) (8) (9)	Insurance Brokerage Services	Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.6% Cash, Acquired 10/19, Due 11/25)	2,500,000		2,375,861		2,437,500
			2,500,000		2,375,861		2,437,500

Contabo Finco S.À R.L (0.2%)*(3) (7) (8) (15)	Internet Software & Services	First Lien Senior Secured Term Loan (EURIBOR + 4.75%, 4.8% Cash, Acquired 10/19, Due 10/26)	1,424,880		1,311,897		1,408,439
			1,424,880		1,311,897		1,408,439

CSL DualCom (0.2%)*(3) (7) (8) (14)	Tele-communications	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.5% Cash, Acquired 09/20, Due 09/27)	1,366,458		1,196,365		1,307,335
			1,366,458		1,196,365		1,307,335

Custom Alloy Corporation (5.6%)*(7) (20)	Manufacturer of Pipe Fittings & Forgings	Second Lien Loan (15.0% PIK, Acquired 12/20, Due 04/22)	45,000,185		37,043,142		36,810,151
		Revolver (15.0% PIK, Acquired 12/20, Due 04/21)	4,255,152		3,737,652		3,731,768
			49,255,337		40,780,794		40,541,919

CW Group Holdings, LLC (0.7%)*(7) (8) (11)	High Tech Industries	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/21, Due 01/27)	4,838,710		4,732,394		4,729,839
		LLC Units (161,290.32 units, Acquired 01/21)			161,290		159,355
			4,838,710		4,893,684		4,889,194

Dart Buyer, Inc. (1.7%)*(3) (7) (8) (11)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 04/19, Due 04/25)	12,279,705		12,073,545		12,181,587
			12,279,705		12,073,545		12,181,587

Discovery Education, Inc. (3.3%)*(7) (8) (10)	Publishing	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/20, Due 10/26)	23,940,000		23,546,094		23,940,000
			23,940,000		23,546,094		23,940,000

Distinct Holdings, Inc. (1.0%)*(7) (8) (11)	Systems Software	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 12/23)	7,227,381		7,171,357		7,104,516
			7,227,381		7,171,357		7,104,516

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
DreamStart Bidco SAS (d/b/a SmartTrade) (0.3%)*(3) (7) (8) (16)	Diversified Financial Services	First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 1.25% PIK, Acquired 03/20, Due 03/27)	$	2,151,891	$	1,949,744	$	2,096,657
			2,151,891		1,949,744		2,096,657

Dukane IAS, LLC (0.6%)*(7) (20)	Welding Equipment Manufacturer	Second Lien Note (10.5% Cash, 2.5% PIK, Acquired 12/20, Due 12/24)	4,662,430		4,662,430		4,662,430
			4,662,430		4,662,430		4,662,430

Entact Environmental Services, Inc. (1.6%)*(7) (8) (10)	Environmental Industries	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/21, Due 12/25)	11,733,602		11,619,173		11,616,266
			11,733,602		11,619,173		11,616,266

Exeter Property Group, LLC (2.6%)*(7) (8) (9)	Real Estate	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.6% Cash, Acquired 02/19, Due 08/24)	19,313,644		19,067,722		19,054,572
			19,313,644		19,067,722		19,054,572

F24 (Stairway BidCo Gmbh) (0.2%)*(3) (7) (8) (15)	Software Services	First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 08/20, Due 08/27)	1,674,814		1,636,558		1,674,814
			1,674,814		1,636,558		1,674,814

Ferrellgas L.P. (0.4%)*	Oil & Gas Equipment & Services	OpCo Preferred Units (2,886 units, Acquired 03/21)			2,799,420		2,799,420
					2,799,420		2,799,420

Fineline Technologies, Inc. (0.6%)*(7) (8) (11)	Consumer Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 02/21, Due 02/27)	4,400,000		4,313,818		4,312,500
			4,400,000		4,313,818		4,312,500

FitzMark Buyer, LLC (0.4%)*(7) (8) (10)	Cargo & Transportation	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 12/26)	2,823,530		2,741,157		2,745,849
			2,823,530		2,741,157		2,745,849

Foundation Risk Partners, Corp. (1.5%)*(7) (8) (11)	Financial Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 11/23)	9,035,091		8,838,934		8,932,016
		Second Lien Senior Secured Term Loan (LIBOR + 8.50%, 9.5% Cash, Acquired 09/20, Due 11/24)	1,722,222		1,596,554		1,657,638
			10,757,313		10,435,488		10,589,654

GoldenTree Loan Opportunities IX, Limited: Series 2014-9A (0.2%)*(3) (8) (11)	Structured Finance	Structured Secured Note - Class DR2 (LIBOR + 3.0%, 3.2% Cash, Acquired 03/20, Due 10/29)	1,250,000		923,797		1,222,291
			1,250,000		923,797		1,222,291

GTM Intermediate Holdings, Inc. (0.9%)*(7) (20)	Medical Equipment Manufacturer	Second Lien Loan (11.0% Cash, 1.0% PIK, Acquired 12/20, Due 11/24)	5,128,824		5,077,667		5,103,180
		Common Stock (2 shares, Acquired 12/20)			1,078,778		1,200,288
			5,128,824		6,156,445		6,303,468

Gulf Finance, LLC (0.1%)*(8) (9)	Oil & Gas Exploration & Production	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 08/23)	1,045,438		950,087		863,229
			1,045,438		950,087		863,229

Hawaiian Airlines 2020-1 Class B Pass Through Certificates (1.0%)*	Airlines	Structured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25)	6,796,296		6,796,296		7,591,887
			6,796,296		6,796,296		7,591,887

Heartland, LLC (1.2%)*(7) (8) (11)	Commercial Services & Supplies	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25)	8,808,417		8,653,425		8,691,488
			8,808,417		8,653,425		8,691,488

Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (2.7%)*(3) (7) (8)	Insurance	First Lien Senior Secured Term Loan (EURIBOR + 5.50%, 5.5% Cash, Acquired 09/19, Due 09/26)(15)	8,613,351		7,940,194		8,508,268
		First Lien Senior Secured Term Loan (EURIBOR + 6.50%, 6.5% Cash, Acquired 07/20, Due 09/26) (16)	10,871,521		10,847,615		10,871,521
			19,484,872		18,787,809		19,379,789

Highpoint Global LLC (0.7%)*(7) (20)	Government Services	Second Lien Note (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 09/22)	5,334,928		5,313,697		5,334,928
			5,334,928		5,313,697		5,334,928

Holley Performance Products (Holley Purchaser, Inc.) (2.3%)*(7) (8) (11)	Automotive Parts & Equipment	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.2% Cash, Acquired 10/18, Due 10/25)	16,936,387		16,762,536		16,936,387
			16,936,387		16,762,536		16,936,387

Home Care Assistance, LLC (0.9%)*(7) (8) (11)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 03/21, Due 03/27)	6,805,814		6,609,104		6,608,932
			6,805,814		6,609,104		6,608,932

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
HTI Technology & Industries (1.70%)* (7) (20)	Electronic Component Manufacturing	Second Lien Note (12.0% Cash, 4.8% PIK, Acquired 12/20, Due 09/24)	$	12,773,156	$	12,268,357	$	12,262,230
			12,773,156		12,268,357		12,262,230

HW Holdco, LLC (Hanley Wood LLC) (1.0%)*(7) (8) (11)	Advertising	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/18, Due 12/24)	7,488,911		7,366,059		7,458,956
			7,488,911		7,366,059		7,458,956

Hyperion Materials & Technologies, Inc. (1.9%)*(7) (8) (11)	Industrial Machinery	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/19, Due 08/26)	13,820,806		13,616,971		13,737,881
			13,820,806		13,616,971		13,737,881

IGL Holdings III Corp. (1.7%)*(7) (8) (11)	Commercial Printing	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/26)	12,618,367		12,269,889		12,618,367
			12,618,367		12,269,889		12,618,367

IM Analytics Holding, LLC (d/b/a NVT) (0.9%)*(7) (8) (11)	Electronic Instruments & Components	First Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.0% Cash, Acquired 11/19, Due 11/23)	8,188,461		8,132,009		6,788,234
		Warrant (68,950 units, Acquired 11/19)			—		—
			8,188,461		8,132,009		6,788,234

INOS 19-090 GmbH (0.7%)*(3) (7) (8) (15)	Aerospace & Defense	First Lien Senior Secured Term Loan (EURIBOR + 6.1%, 6.1% Cash, Acquired 12/20, Due 12/27)	5,447,702		5,460,878		5,269,155
			5,447,702		5,460,878		5,269,155

International Precision Components (0.9%)*(7) (20)	Plastic Injection Molding	Second Lien Loan (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 10/24)	6,825,092		6,723,232		6,756,841
			6,825,092		6,723,232		6,756,841

ISS#2, LLC (d/b/a Industrial Services Solutions) (0.8%)*(7) (8) (11)	Commercial Services & Supplies	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/20, Due 02/26)	6,802,373		6,688,583		6,074,519
			6,802,373		6,688,583		6,074,519

Jade Bidco Limited (Jane's) (1.2%)*(3) (7) (8)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.8% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)(12)	7,188,226		7,027,268		7,116,344
		First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)(16)	1,347,749		1,239,285		1,334,272
			8,535,975		8,266,553		8,450,616

Jedson Engineering, Inc. (0.4%)*(7) (20)	Engineering & Construction Management	First Lien Loan (12.0% Cash, 3.0% PIK, Acquired 12/20, Due 06/22)	3,000,000		3,000,000		3,000,000
			3,000,000		3,000,000		3,000,000

JetBlue 2019-1 Class B Pass Through Trust (0.7%)*	Airlines	Structured Secured Note - Class B (8.0% Cash, Acquired 08/20, Due 11/27)	4,721,693		4,721,693		5,382,580
			4,721,693		4,721,693		5,382,580

Kano Laboratories LLC (1.2%)*(7) (8) (11)	Chemicals, Plastics & Rubber	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 11/20, Due 09/26)	8,845,864		8,592,780		8,845,864
		Partnership Equity (203.2 units, Acquired 11/20)			203,198		200,281
			8,845,864		8,795,978		9,046,145

Kene Acquisition, Inc. (En Engineering) (1.0%)*(7) (8) (11)	Oil & Gas Equipment & Services	First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26)	7,280,199		7,165,384		7,214,531
			7,280,199		7,165,384		7,214,531

Kona Buyer, LLC (3.4%)*(7) (8) (11)	High Tech Industries	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/20, Due 12/27)	25,000,000		24,401,937		24,551,000
			25,000,000		24,401,937		24,551,000

LAC Intermediate, LLC (f/k/a Lighthouse Autism Center) (4.7%)*(7) (8) (11)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/18, Due 10/24)	34,387,034		33,717,144		33,613,326
		Class A LLC Units (154,320 units, Acquired 10/18)			154,320		323,300
			34,387,034		33,871,464		33,936,626

LAF International (1.2%)*(3) (7) (8) (15)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28)	8,567,933		8,646,286		8,423,077
			8,567,933		8,646,286		8,423,077

Learfield Communications, LLC (1.0%)*	Broadcasting	First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/20, Due 12/23)(8) (9)	136,446		96,195		125,315
		First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.0% Cash, 10.2% PIK, Acquired 08/20, Due 12/23)(11)	7,365,032		7,305,433		7,352,732
			7,501,478		7,401,628		7,478,047

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Legal Solutions Holdings (1.4%)*(7) (20)	Business Services	Senior Subordinated Loan (6.0% Cash, 10.0% PIK, Acquired 12/20, Due 03/22)	$	10,663,569	$	9,862,913	$	9,863,801
			10,663,569		9,862,913		9,863,801

LivTech Purchaser, Inc. (0.1%)*(7) (8) (11)	Business Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 01/21, Due 12/25)	552,248		540,237		539,748
			552,248		540,237		539,748

Media Recovery, Inc. (SpotSee) (1.0%)*(7) (8)	Containers, Packaging & Glass	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 11/25) (11)	2,955,281		2,906,802		2,903,564
		First Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 12/26) (14)	4,584,486		4,347,360		4,504,258
			7,539,767		7,254,162		7,407,822

Modern Star Holdings Bidco Pty Limited. (0.6%)*(3) (7) (8) (18)	Non-durable Consumer Goods	First Lien Senior Secured Term Loan (BBSY + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/26)	4,672,838		4,440,698		4,488,221
			4,672,838		4,440,698		4,488,221

MSG National Properties (0.3%)*(3) (7) (8) (11)	Hotel, Gaming, & Leisure	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.0% Cash, Acquired 11/20, Due 11/25)	2,461,759		2,392,506		2,523,303
			2,461,759		2,392,506		2,523,303

Murphy Midco Limited (0.6%)*(3) (7) (8) (13)	Media, Diversified & Production	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.5% Cash, Acquired 11/20, Due 11/27)	4,683,649		4,262,242		4,472,750
			4,683,649		4,262,242		4,472,750

Music Reports, Inc. (0.8%)*(7) (8) (9)	Media & Entertainment	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 08/20, Due 08/26)	5,578,990		5,450,971		5,523,200
			5,578,990		5,450,971		5,523,200

Navia Benefit Solutions, Inc. (0.8%)* (7) (8) (11)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 02/21, Due 02/27)	6,000,000		5,829,009		5,825,000
			6,000,000		5,829,009		5,825,000

NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (1.6%)*(7) (8) (9)	Energy Equipment & Services	First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25)	11,825,516		11,785,078		11,683,609
			11,825,516		11,785,078		11,683,609

Odeon Cinemas Group Limited (0.5%)*(3) (7)	Hotel, Gaming, & Leisure	First Lien Senior Secured Term Loan (10.75% Cash, Acquired 02/21, Due 08/23)	1,376,251		1,332,439		1,390,014
		First Lien Senior Secured Term Loan (10.75% Cash, Acquired 02/21, Due 08/23)	2,478,707		2,472,983		2,503,494
			3,854,958		3,805,422		3,893,508

Omni Intermediate Holdings, LLC (1.2%)*(7) (8) (9)	Transportation	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)	9,000,000		8,739,450		8,752,500
			9,000,000		8,739,450		8,752,500

Options Technology Ltd. (1.3%)*(3) (7) (8) (11)	Computer Services	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/19, Due 12/25)	9,771,813		9,569,224		9,628,377
			9,771,813		9,569,224		9,628,377

Pacific Health Supplies Bidco Pty Limited (1.2%)*(3) (7) (8) (18)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (BBSY + 6.0%, 6.5% Cash, Acquired 12/20, Due 12/25)	9,196,755		8,642,055		8,914,484
			9,196,755		8,642,055		8,914,484

Pare SAS (SAS Maurice MARLE) (0.7%)*(3) (7) (8) (16)	Health Care Equipment	First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, 1.5% PIK, Acquired 12/19, Due 12/26)	4,848,650		4,529,605		4,800,164
			4,848,650		4,529,605		4,800,164

Patriot New Midco 1 Limited (Forensic Risk Alliance) (1.1%)*(3) (7) (8)	Diversified Financial Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/20, Due 02/27)(11)	4,489,471		4,377,523		4,426,619
		First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 02/20, Due 02/27) (15)	3,964,194		3,584,353		3,908,695
			8,453,665		7,961,876		8,335,314

PerTronix, LLC (1.0%)*(7) (8) (12)	Automotive	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/20, Due 10/26)	7,287,692		7,184,750		7,287,692
			7,287,692		7,184,750		7,287,692

Premier Technical Services Group (Project Graphite) (0.4%)*(3) (7) (8) (13)	Construction & Engineering	First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 7.3% Cash, Acquired 08/19, Due 06/26)	3,137,901		2,686,018		3,085,003
			3,137,901		2,686,018		3,085,003

Premium Franchise Brands, LLC (3.0%)*(7) (8) (11)	Research & Consulting Services	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 12/26)	21,945,000		21,522,183		21,545,820
			21,945,000		21,522,183		21,545,820

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value

Process Equipment, Inc. (ProcessBarron) (0.8%)*(7) (8) (11)	Industrial Air & Material Handling Equipment	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 03/19, Due 03/25)	$	6,173,594	$	6,096,724	$	5,543,887
			6,173,594		6,096,724		5,543,887

Professional Datasolutions, Inc. (PDI) (2.3%)*(7) (8) (19)	Application Software	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 03/19, Due 10/24)	16,881,613		16,863,369		16,785,556
			16,881,613		16,863,369		16,785,556

Protego Bidco B.V. (1.2%)*(3) (7) (8) (15)	Aerospace & Defense	First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28)	9,208,487		8,955,994		8,771,084
			9,208,487		8,955,994		8,771,084

PSC UK Pty Ltd. (0.4%)*(3) (7) (8) (13)	Insurance Services	First Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 6.5% Cash, Acquired 11/19, Due 10/24)	2,709,861		2,444,000		2,648,176
			2,709,861		2,444,000		2,648,176

Questel Unite (2.8%)*(3) (7) (8) (15)	Business Services	First Lien Senior Secured Term Loan (EURIBOR + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/27)	20,703,270		20,684,768		20,334,237
			20,703,270		20,684,768		20,334,237

Radwell International, LLC (1.9%)*(7) (8) (11)	Wholesale	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 12/26)	14,220,264		13,917,380		13,935,809
			14,220,264		13,917,380		13,935,809

Recovery Point Systems, Inc. (1.6%)*(7) (8) (11)	Technology	First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 03/20, Due 07/26)	11,736,797		11,522,211		11,736,797
		Partnership Equity (187,235 units, Acquired 03/21)			187,235		187,235
			11,736,797		11,709,446		11,924,032

REP SEKO MERGER SUB LLC (1.1%)* (7) (8) (11)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)	7,671,682		7,447,161		7,660,913
			7,671,682		7,447,161		7,660,913

RPX Corporation (2.3%)*(7) (8) (11)	Research & Consulting Services	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/20, Due 10/25)	16,712,500		16,358,646		16,612,225
			16,712,500		16,358,646		16,612,225

Ruffalo Noel Levitz, LLC (1.3%)*(7) (8) (11)	Media Services	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/22)	9,592,266		9,539,242		9,555,336
			9,592,266		9,539,242		9,555,336

Safety Products Holdings, LLC (2.1%)* (7) (8) (9)	Non-durable Consumer Goods	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 12/26)	15,574,673		15,099,325		15,127,000
		Preferred Stock (372.1 shares, Acquired 12/20)			372,088		372,090
			15,574,673		15,471,413		15,499,090

Scaled Agile, Inc. (0.7%)*(7) (8) (11)	Research & Consulting Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)	4,847,151		4,811,132		4,847,151
			4,847,151		4,811,132		4,847,151

Serta Simmons Bedding LLC (1.5%)*(8) (9)	Home Furnishings	Super Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)	7,405,891		7,232,172		7,475,950
		Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)	3,634,684		3,378,205		3,463,163
			11,040,575		10,610,377		10,939,113

Sigmatek Systems, LLC (1.3%)*(7) (8) (11)	High Tech Industries	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/21, Due 01/27)	9,975,000		9,782,539		9,787,825
			9,975,000		9,782,539		9,787,825

SISU ACQUISITIONCO., INC. (1.9%)*(7) (8) (11)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/20, Due 12/26)	14,097,503		13,826,164		13,841,069
			14,097,503		13,826,164		13,841,069

SMA Holdings, Inc. (1.0%)*(7) (20)	Consulting	First Lien Loan (11.0% Cash, Acquired 12/20, Due 06/24)	7,000,000		6,720,000		6,720,000
		Warrants (2.0 units, Acquired 12/20)			286,781		250,978
			7,000,000		7,006,781		6,970,978

Smile Brands Group Inc. (2.0%)*(7) (8)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 5.17%, 5.4% Cash, Acquired 10/18, Due 10/24)(9)	5,861,902		5,825,907		5,768,111
		First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 10/24)(11)	9,287,715		9,024,221		9,033,598
			15,149,617		14,850,128		14,801,709

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
SN BUYER, LLC (3.4%)*(7) (8) (11)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 11/26)	$	25,000,000	$	24,519,748	$	24,650,000
			25,000,000		24,519,748		24,650,000

Springbrook Software (SBRK Intermediate, Inc.) (1.3%)*(7) (8) (11)	Enterprise Software & Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)	9,303,664		9,114,611		9,265,286
			9,303,664		9,114,611		9,265,286

SPT Acquico Limited (0.4%)*(3) (7) (8) (11)	High Tech Industries	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 01/21, Due 12/27)	2,658,312		2,593,530		2,591,854
			2,658,312		2,593,530		2,591,854

SSCP Pegasus Midco Limited (1.6%)*(3) (7) (8) (14)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 12/20, Due 11/27)	12,072,963		11,049,371		11,399,247
			12,072,963		11,049,371		11,399,247

Syniverse Holdings, Inc. (2.4%)*(8) (11)	Technology Distributors	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/18, Due 03/23)	17,435,517		16,149,215		17,175,903
			17,435,517		16,149,215		17,175,903

The Hilb Group, LLC (2.0%)*(7) (8) (11)	Insurance Brokerage	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)	11,636,693		11,391,659		11,229,409
		First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26)	3,646,217		3,435,906		3,448,894
			15,282,910		14,827,565		14,678,303

Total Safety U.S. Inc. (0.9%)*(8) (11)	Diversified Support Services	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 08/25)	6,766,049		6,534,648		6,759,283
			6,766,049		6,534,648		6,759,283

Transit Technologies LLC (0.7%)*(7) (8) (11)	Software	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 02/20, Due 02/25)	6,035,305		5,869,127		5,443,845
			6,035,305		5,869,127		5,443,845

Transportation Insight, LLC (3.2%)*(7) (8) (9)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.6% Cash, Acquired 08/18, Due 12/24)	24,444,375		24,293,447		23,637,711
			24,444,375		24,293,447		23,637,711

Trident Maritime Systems, Inc. (3.4%)*(7) (8) (9)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/21, Due 02/27)	25,000,000		24,570,501		24,562,500
			25,000,000		24,570,501		24,562,500

Truck-Lite Co., LLC (3.1%)*(7) (8) (11)	Automotive Parts & Equipment	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26)	22,296,635		21,918,311		22,252,041
			22,296,635		21,918,311		22,252,041

Trystar, LLC (2.3%)*(7) (8) (11)	Power Distribution Solutions	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/18, Due 09/23)	16,185,659		16,004,667		16,120,916
		Class A LLC Units (384.5 units, Acquired 09/18)			395,995		369,443
			16,185,659		16,400,662		16,490,359

Tuf-Tug, Inc. (0.0%)*(7) (20)	Safety Equipment Manufacturer	Common Stock (24.6 shares, Acquired 12/20)			385,047		—
					385,047		—

Turf Products, LLC (1.2%)*(7) (20)	Landscaping & Irrigation Equipment Distributor	Senior Subordinated Debt (10.0% Cash, Acquired 12/20, Due 10/23)	8,697,056		8,383,962		8,436,144
			8,697,056		8,383,962		8,436,144

U.S. Gas & Electric, Inc. (0.2%)*(7) (20)	Energy Services	Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)	2,285,250		1,785,250		1,785,250
		Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)(21)	2,485,469		—		—
			4,770,719		1,785,250		1,785,250

U.S. Silica Company (0.2%)*(3) (8) (9)	Metal & Glass Containers	First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25)	1,483,670		1,486,303		1,429,887
			1,483,670		1,486,303		1,429,887

UKFast Leaders Limited (1.7%)*(3) (7) (8) (13)	Technology	First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 09/20, Due 9/27)	12,541,181		11,365,814		12,453,392
			12,541,181		11,365,814		12,453,392

USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.1%)*(7) (8) (11)	Legal Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24)	16,305,092		16,096,032		15,408,312
			16,305,092		16,096,032		15,408,312

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Utac Ceram (1.4%)*(3) (7) (8)	Business Services	First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 09/20, Due 09/27)(15)	$	1,762,949	$	1,701,654	$	1,714,468
		First Lien Senior Secured Term Loan (LIBOR + 5.75%, 5.8% Cash, Acquired 02/21, Due 09/27)(10)	8,491,000		8,288,343		8,257,498
			10,253,949		9,989,997		9,971,966

Validity, Inc. (0.7%)*(7) (8) (9)	IT Consulting & Other Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 07/19, Due 05/25)	5,013,118		4,891,028		4,767,474
			5,013,118		4,891,028		4,767,474

W2O Holdings, Inc. (0.0%)* (7) (8)	Healthcare Technology	Undrawn Delayed Draw Term Loan (LIBOR + 5.0%, 5.0% Cash, Acquired 10/20, Due 06/25)	—		(111,213)		—
			—		(111,213)		—

Winebow Group, LLC, (The) (2.3%)*(8) (9)	Consumer Goods	First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 11/19, Due 07/21)	10,599,445		10,355,135		10,472,252
		Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 10/19, Due 01/22)	7,141,980		6,125,843		6,427,782
			17,741,425		16,480,978		16,900,034

World 50, Inc. (1.7%)*(7) (8) (9)	Professional Services	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26)	3,304,887		3,214,069		3,304,887
		First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 01/26)	9,077,684		8,890,933		8,896,130
			12,382,571		12,105,002		12,201,017

Subtotal Non–Control / Non–Affiliate Investments (192.6%)			1,430,510,004		1,389,212,763		1,401,742,025

Affiliate Investments: (4)
Jocassee Partners LLC (4.0%)*(3)	Investment Funds & Vehicles	9.1% Member Interest, Acquired 06/19			25,158,270		28,950,050
					25,158,270		28,950,050

JSC Tekers Holdings (0.7%)*(3) (7) (20)	Real Estate Management	Preferred Stock (9,159,085 shares, Acquired 12/20)			4,753,000		4,945,906
		Common Stock (3,201 shares, Acquired 12/20)			—		—
					4,753,000		4,945,906

Security Holdings B.V. (4.8%)*(3) (7) (20)	Electrical Engineering	Bridge Loan (5.0% PIK, Acquired 12/20, Due 05/22)	5,451,205		5,451,207		5,451,205
		Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22)	8,815,745		8,815,746		8,815,745
		Common Stock (1,099.5 shares, Acquired 12/20)			21,264,000		20,955,588
			14,266,950		35,530,953		35,222,538

Thompson Rivers LLC (4.3%)*(3)	Investment Funds & Vehicles	24.7% Member Interest, Acquired 06/20			30,000,000		31,311,180
					30,000,000		31,311,180

Subtotal Affiliate Investments (13.8%)			14,266,950		95,442,223		100,429,674

Control Investments:(5)
MVC Automotive Group Gmbh (1.9%)*(3) (7) (20)	Other Diversified Financial Services	Bridge Loan (6.0% Cash, Acquired 12/20, Due 12/21)	7,149,166		7,149,166		7,149,166
		Common Equity Interest (18,000 shares, Acquired 12/20)			9,553,000		6,922,044
			7,149,166		16,702,166		14,071,210

MVC Private Equity Fund LP (1.1%)*(3) (20)	Investment Funds & Vehicles	General Partnership Interest			224,978		194,174
		Limited Partnership Interest			8,899,284		7,646,750
					9,124,262		7,840,924

Waccamaw River LLC (0.6%)*(3)	Investment Funds & Vehicles	50% Member Interest, Acquired 02/21			4,500,000		4,474,228
					4,500,000		4,474,228

Subtotal Control Investments (3.6%)			7,149,166		30,326,428		26,386,362

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Short-Term Investments:

BlackRock, Inc. (4.8%)*	Money Market Fund	BlackRock Liquidity Temporary Fund (0.05% yield)			$	35,001,688	$	34,998,190
					35,001,688		34,998,190

JPMorgan Chase & Co. (5.3%)*	Money Market Fund	JPMorgan Prime Money Market Fund (0.09% yield)			38,567,486		38,567,486
					38,567,486		38,567,486

Subtotal Short-Term Investments (10.1%)					73,569,174		73,565,676

Total Investments, March 31, 2021 (220.1%)*			$	1,451,926,120	$	1,588,550,588	$	1,602,123,737

Derivative Instruments


Credit Support Agreement(a)(b)(d)
Description	Counter Party	Settlement Date(c)	Notional Amount		Value		Unrealized Appreciation (Depreciation)
Credit Support Agreement	Barings LLC	01/01/31	$	23,000,000	$	12,000,000	$	(1,600,000)

Total Credit Support Agreement, March 31, 2021							$	(1,600,000)

(a) The Credit Support Agreement covers all of the investments acquired by the Company from MVC Capital, Inc. ("MVC") in connection with the MVC Acquisition (as defined in “Note 1 – Organization, Business and Basis of Presentation”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the investments acquired by the Company from MVC in connection with the MVC Acquisition (collectively, the “Reference Portfolio”). Each investment that is included in the Reference Portfolio is denoted in the above Schedule of Investments with footnote (20).

(b) The Company and Barings LLC entered into a Credit Support Agreement pursuant to which Barings LLC agreed to provide credit support to the Company in the amount of up to $23.0 million.

(c) Settlement Date means the earlier of (1) January 1, 2031 and (2) the date on which the entire Reference Portfolio has been realized or written off.

(d) See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the Credit Support Agreement.


Foreign Currency Forward Contracts:
Description	Notional Amount to be Purchased	Notional Amount to be Sold	Settlement Date	Unrealized Appreciation (Depreciation)
Foreign currency forward contract (AUD)	$785,238	A$1,013,380	04/06/21	$	13,397
Foreign currency forward contract (AUD)	A$1,013,380	$773,688	04/06/21	(1,847)
Foreign currency forward contract (AUD)	$545,678	A$714,511	07/07/21	1,269

Foreign currency forward contract (EUR)	€5,800,000	$6,809,925	04/01/21	6,812
Foreign currency forward contract (EUR)	$16,496,839	€13,762,578	04/06/21	321,689
Foreign currency forward contract (EUR)	€13,762,578	$16,201,506	04/06/21	(26,356)
Foreign currency forward contract (EUR)	$24,184,783	€20,518,045	07/07/21	22,423

Foreign currency forward contract (GBP)	$33,170,791	£24,072,758	04/06/21	(42,405)
Foreign currency forward contract (GBP)	£24,072,758	$33,277,695	04/06/21	(64,500)
Foreign currency forward contract (GBP)	$3,289,859	£2,388,498	07/07/21	(6,517)

Foreign currency forward contract (SEK)	$164,325	1,356,628kr	04/06/21	8,682
Foreign currency forward contract (SEK)	1,356,628kr	$156,117	04/06/21	(475)
Foreign currency forward contract (SEK)	$176,315	1,530,825kr	07/07/21	533
Total Foreign Currency Forward Contracts, March 31, 2021				$	232,705

_______________________________________________________________

* Fair value as a percentage of net assets.

(1)All debt investments are income producing, unless otherwise noted. Equity and any equity-linked investments are non-income producing, unless otherwise noted. The Company's Board of Directors (the "Board") determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the Investment Company Act of 1940, as amended, (the "1940 Act") based on, among other things, the input of the Company's external investment adviser, Barings LLC ("Barings"), the Company’s Audit Committee and independent valuation firms that have been engaged to assist in the valuation of the Company's middle-market investments. In addition, 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 the Company's investment portfolio bear interest at a rate that may be determined by reference to LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR 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 the Company’s portfolio company investments (including joint venture and short-term investments), which as of March 31, 2021 represented 220.1% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company.

(3)Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 25.5% of total investments at fair value as of March 31, 2021. 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 the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021

(4)As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns between 5% or more, up to 25% (inclusive), of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled "Affiliate Investments" for the three months ended March 31, 2021 were as follows:


		Amount of Realized Gain (Loss)		Amount of Unrealized Gain (Loss)		Amount of Interest or Dividends Credited to Income(b)		December 31, 2020 Value		Gross Additions (c)		Gross Reductions (d)		March 31, 2021 Value
Portfolio Company	Type of Investment(a)
Advantage Insurance, Inc.(e)	Preferred Stock (587,001 shares)	$	(76,631)	$	—	$	71,500	$	5,946,641	$	—	$	5,946,641	$	—
		(76,631)		—		71,500		5,946,641		—		5,946,641		—

Jocassee Partners LLC	9.1% Member Interest	—		1,326,230		—		22,623,820		6,326,230		—		28,950,050
		—		1,326,230		—		22,623,820		6,326,230		—		28,950,050

JSC Tekers Holdings(e)	Common Stock (3,201 shares)	—		192,909		—		4,753,000		192,909		3		4,945,906
	Preferred Stock (9,159,085 shares)	—		—		—		—		—		—		—
		—		192,909		—		4,753,000		192,909		3		4,945,906

Security Holdings B.V(e)	Bridge Loan (5.0% PIK 5/31/2021)	—		—		68,140		5,187,508		263,697		—		5,451,205
	Senior Subordinated Loan (3.1% PIK)	—		—		68,322		8,746,454		69,291		—		8,815,745
	Common Equity Interest	—		(373,782)		—		21,329,370		—		373,782		20,955,588
		—		(373,782)		136,462		35,263,332		332,988		373,782		35,222,538

Thompson Rivers LLC	24.7% Member Interest	—		1,299,340		—		10,011,840		21,299,340		—		31,311,180
		—		1,299,340		—		10,011,840		21,299,340		—		31,311,180

Total Affiliate Investments		$	(76,631)	$	2,444,697	$	207,962	$	78,598,633	$	28,151,467	$	6,320,426	$	100,429,674

(a) Equity and equity-linked investments are non-income producing, unless otherwise noted.

(b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category.

(c) Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation.

(d) Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation.

(e) The fair value of the investment was determined using significant unobservable inputs.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2021

(5) As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” the portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions as of and during the three months ended March 31, 2021 in which the portfolio company is deemed to be a "Control Investment" of the Company are as follows:


		Amount of Realized Gain (Loss)		Amount of Unrealized Gain (Loss)		Amount of Interest or Dividends Credited to Income(b)		December 31, 2020 Value		Gross Additions (c)		Gross Reductions (d)		March 31, 2021 Value
Portfolio Company	Type of Investment(a)
MVC Automotive Group GmbH(e)	Common Equity Interest	$	—	$	(2,660,324)	$	—	$	9,582,368	$	—	$	2,660,324	$	6,922,044
	Bridge Loan (6.0% PIK 12/31/2021)	—		—		107,237		7,149,166		—		—		7,149,166
		—		(2,660,324)		107,237		16,731,534		—		2,660,324		14,071,210

MVC Private Equity Fund LP(e)	Limited Partnership Interest	—		(1,252,534)		—		8,899,284		—		1,252,534		7,646,750
	General Partnership Interest	—		(30,804)		160,113		224,978		—		30,804		194,174
		—		(1,283,338)		160,113		9,124,262		—		1,283,338		7,840,924
Waccamaw River LLC	50% Member Interest	—		(25,772)		—		—		4,500,000		25,772		4,474,228
		—		(25,772)		—		—		4,500,000		25,772		4,474,228

Total Control Investments		$	—	$	(3,969,434)	$	267,350	$	25,855,796	$	4,500,000	$	3,969,434	$	26,386,362

(a) Equity and equity-linked investments are non-income producing, unless otherwise noted.

(b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.

(e) The fair value of the investment was determined using significant unobservable inputs.

(6)Some or all of the investment is or will be encumbered as security for the Company's $800.0 million senior secured credit facility with ING Capital LLC initially entered into in February 2019 (as amended, restated and otherwise modified from time to time, the "February 2019 Credit Facility").

(7)The fair value of the investment was determined using significant unobservable inputs.

(8)Debt investment includes interest rate floor feature.

(9)The interest rate on these loans is subject to 1 Month LIBOR, which as of March 31, 2021 was 0.11113%.

(10)The interest rate on these loans is subject to 2 Month LIBOR, which as of March 31, 2021 was 0.13363%.

(11)The interest rate on these loans is subject to 3 Month LIBOR, which as of March 31, 2021 was 0.19425%.

(12)The interest rate on these loans is subject to 6 Month LIBOR, which as of March 31, 2021 was 0.20525%.

(13)The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of March 31, 2021 was 0.08788%.

(14)The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of March 31, 2021 was 0.11275%.

(15)The interest rate on these loans is subject to 3 Month EURIBOR, which as of March 31, 2021 was -0.53800%.

(16)The interest rate on these loans is subject to 6 Month EURIBOR, which as of March 31, 2021 was -0.50900%.

(17)The interest rate on these loans is subject to 3 Month STIBOR, which as of March 31, 2021 was -0.01100%.

(18)The interest rate on these loans is subject to 1 Month BBSY, which as of March 31, 2021 was 0.01470%.

(19)The interest rate on these loans is subject to 12 Month LIBOR, which as of March 31, 2021 was 0.28313%.

(20)Investment was purchased as part of the MVC Acquisition and is part of the Reference Portfolio for purposes of the Credit Support Agreement.

(21)In 2017, MVC received $5.7 million of 9.5% second lien callable notes due in 2025, in lieu of an escrow to satisfy any indemnification claims associated with MVC’s sale of its equity investment in U.S. Gas & Electric. Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment. This loan is still subject to indemnification adjustments.

See accompanying notes.

Barings BDC, Inc.

Consolidated Schedule of Investments

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Non–Control / Non–Affiliate Investments:

1WorldSync, Inc. (4.0%)*(7) (9) (12)	IT Consulting & Other Services	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 07/19, Due 07/25)	$	29,000,000	$	28,490,102	$	28,420,000
			29,000,000		28,490,102		28,420,000

Accelerate Learning, Inc. (1.0%)*(7) (9) (12)	Education Services	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24)	7,567,965		7,461,410		7,258,435
			7,567,965		7,461,410		7,258,435

Accurus Aerospace Corporation (2.9%)*(7) (9) (12)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 10/18, Due 10/24)	24,500,000		24,251,575		20,506,500
			24,500,000		24,251,575		20,506,500

ADE Holding (d/b/a AD Education) (0.8%)*(3) (7) (9) (19)	Education Services	First Lien Senior Secured Term Loan (EURIBOR + 5.0%, 5.0% Cash, Acquired 01/20, Due 01/27)	5,459,746		4,977,557		5,459,746
			5,459,746		4,977,557		5,459,746

AEP Holdings, Inc. (1.8%)*(7) (9)	Wholesale	First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/25) (18)	4,362,794		4,143,810		4,275,538
		First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/25) (12)	8,902,516		8,727,725		8,724,466
			13,265,310		12,871,535		13,000,004

Aftermath Bidco Corporation (1.3%)* (7) (9) (12)	Professional Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 04/19, Due 04/25)	9,425,284		9,265,301		9,335,155
			9,425,284		9,265,301		9,335,155

Ahead DB Borrower, LLC. (0.3%)*(7) (9) (12)	Technology Distributors	Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 9.5% Cash, Acquired 10/20, Due 10/28)	2,139,295		2,076,161		2,075,117
			2,139,295		2,076,161		2,075,117

Air Canada 2020-2 Class B Pass Through Trust (1.1%)*	Airlines	Structured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25)	7,500,000		7,500,000		8,077,169
			7,500,000		7,500,000		8,077,169

American Dental Partners, Inc. (1.3%)*(7) (9) (12)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 11/18, Due 03/23)	9,800,000		9,786,672		9,396,240
			9,800,000		9,786,672		9,396,240

American Scaffold, Inc. (1.3%)*(7) (9) (12)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/19, Due 09/25)	9,686,750		9,509,443		9,686,750
			9,686,750		9,509,443		9,686,750

Anagram Holdings, LLC (2.2%)*(3)	Chemicals, Plastics, & Rubber	First Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25)	13,673,780		12,565,289		15,588,108
			13,673,780		12,565,289		15,588,108

Anchorage Capital CLO Ltd: Series 2013-1A (0.3%)*(3) (9) (12)	Structured Finance	Structured Secured Note - Class DR (LIBOR + 6.8%, 7.0% Cash, Acquired 03/20, Due 10/30)	2,000,000		1,743,066		2,000,156
			2,000,000		1,743,066		2,000,156

Anju Software, Inc. (1.9%)*(7) (12)	Application Software	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.4% Cash, Acquired 02/19, Due 02/25)	13,701,182		13,442,543		13,385,963
			13,701,182		13,442,543		13,385,963

Apex Bidco Limited (0.3%)*(3) (7)	Business Equipment & Services	First Lien Senior Secured Term Loan (GBP LIBOR + 6.50%, 7.0% Cash, Acquired 01/20, Due 01/27) (9) (15)	1,992,033		1,851,359		1,950,974
		Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27)	258,955		241,837		253,618
			2,250,988		2,093,196		2,204,592

AQA Acquisition Holding, Inc. (f/k/a SmartBear) (0.7%)*(7) (9) (12)	High Tech Industries	Second Lien Senior Secured Term Loan (LIBOR + 8.0%, 9.0% Cash, Acquired 10/18, Due 05/24)	4,959,088		4,877,581		4,959,088
			4,959,088		4,877,581		4,959,088

Arch Global Precision LLC (2.3%)*(7) (12)	Industrial Machinery	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 04/19, Due 04/26)	16,649,218		16,496,045		16,557,510
			16,649,218		16,496,045		16,557,510

Archimede (0.4%)*(3) (7) (9) (17)	Consumer Services	First Lien Senior Secured Term Loan (EURIBOR + 6.0%, 6.0% Cash, Acquired 10/20, Due 10/27)	2,677,354		2,510,391		2,610,420
			2,677,354		2,510,391		2,610,420

Argus Bidco Limited (0.8%)*(3) (7) (9) (15)	High Tech Industries	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.8% Cash, Acquired 12/20, Due 12/27)	5,715,005		5,383,300		5,543,555
			5,715,005		5,383,300		5,543,555

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Armstrong Transport Group (Pele Buyer, LLC ) (1.0%)*(7) (9) (12)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)	$	5,354,941	$	5,277,976	$	5,302,778
		First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 07/20, Due 06/24)	2,000,318		1,964,493		2,000,318
			7,355,259		7,242,469		7,303,096

Ascensus Specialties, LLC (1.0%)*(7) (9) (10)	Specialty Chemicals	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 09/19, Due 09/26)	7,019,401		6,959,939		6,978,909
			7,019,401		6,959,939		6,978,909

ASPEQ Heating Group LLC (1.2%)* (7) (9) (12)	Building Products, Air & Heating	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25)	8,945,499		8,833,249		8,862,629
			8,945,499		8,833,249		8,862,629

Auxi International (0.2%)*(3) (7) (9) (19)	Commercial Finance	First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 12/19, Due 12/26)	1,712,970		1,514,901		1,682,438
			1,712,970		1,514,901		1,682,438

AVSC Holding Corp. (1.4%)*(9) (12)	Advertising	First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, 0.25% PIK, Acquired 08/18, Due 03/25)	4,904,496		4,313,104		4,165,780
		First Lien Senior Secured Term Loan (LIBOR + 4.50%, 5.5% Cash, 1.0% PIK, Acquired 08/18, Due 03/25)	748,116		682,722		665,823
		First Lien Senior Secured Term Loan (5.0% Cash, 10.0% PIK, Acquired 11/20, Due 10/26)	4,951,086		4,816,560		5,668,994
			10,603,698		9,812,386		10,500,597

Bass Pro Group, LLC (0.3%)*(9) (12)	General Merchandise Stores	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.8% Cash, Acquired 03/20, Due 09/24)	1,979,540		1,793,950		1,983,083
			1,979,540		1,793,950		1,983,083

BDP International, Inc. (f/k/a BDP Buyer, LLC) (4.8%)*(7) (9) (12)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/18, Due 12/24)	34,937,500		34,387,459		34,238,750
			34,937,500		34,387,459		34,238,750

Beacon Pointe Advisors, LLC (0.1%)*(7) (9) (12)	Asset Manager & Custody Bank	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 03/20, Due 03/26)	631,591		611,703		631,591
			631,591		611,703		631,591

Benify (Bennevis AB) (0.2%)*(3) (7) (9) (20)	High Tech Industries	First Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26)	1,588,980		1,366,586		1,576,555
			1,588,980		1,366,586		1,576,555

Black Diamond Equipment Rentals LLC (1.2%)*(7) (23)	Equipment Rental	Second Lien Loan (12.5% Cash, Acquired 12/20, Due 06/22)	7,500,000		7,500,000		7,500,000
		Warrant (1.0 unit, Acquired 12/20)			847,000		847,000
			7,500,000		8,347,000		8,347,000

British Airways 2020-1 Class B Pass Through Trust (0.2%)*	Airlines	Structured Secured Note - Class B (8.4% Cash, Acquired 11/20, Due 11/28)	1,500,000		1,500,000		1,661,827
			1,500,000		1,500,000		1,661,827

British Engineering Services Holdco Limited (1.1%)*(3) (7) (9) (15)	Commercial Services & Supplies	First Lien Senior Secured Term Loan (GBP LIBOR + 5.25%, 5.5% Cash, Acquired 12/20, Due 12/27)	8,667,451		7,989,566		8,191,066
			8,667,451		7,989,566		8,191,066

Brown Machine Group Holdings, LLC (0.7%)*(7) (9) (12)	Industrial Equipment	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24)	5,286,022		5,241,933		5,286,022
			5,286,022		5,241,933		5,286,022

Cadent, LLC (f/k/a Cross MediaWorks) (1.0%)*(7) (9) (12)	Media & Entertainment	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 09/18, Due 09/23)	7,532,846		7,490,785		7,361,851
			7,532,846		7,490,785		7,361,851

Carlson Travel, Inc (1.0%)*	Business Travel Management	First Lien Senior Secured Note (6.8% Cash, Acquired 09/20, Due 12/25)	3,000,000		2,362,500		2,471,250
		Super Senior Senior Secured Term Loan (10.5% Cash, Acquired 12/20, Due 3/25)	4,239,000		4,149,608		4,376,768
		Common Stock (1,962 units, Acquired 11/20)(7)			88,290		68,670
			7,239,000		6,600,398		6,916,688

Carlyle Aviation Partners Ltd. (0.2%)*	Structured Finance	Structured Secured Note, Series 2019-2 - Class A (3.4% Cash, Acquired 3/20, Due 11/39)	912,844		826,343		863,003
		Structured Secured Note, Series 2018-2 - Class A (4.5% Cash, Acquired 3/20, Due 11/38)	432,194		391,920		408,302
			1,345,038		1,218,263		1,271,305

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Centralis Finco S.a.r.l. (0.1%)*(3) (7) (9) (18)	Diversified Financial Services	First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 05/20, Due 05/27)	$	867,913	$	732,995	$	867,913
			867,913		732,995		867,913

Cineworld Group PLC (1.1%)*(3) (9) (13)	Leisure Products	First Lien Senior Secured Term Loan (LIBOR + 2.50%, 2.8% Cash, Acquired 04/20, Due 02/25)	9,070,729		5,915,501		6,121,290
		Super Senior Secured Term Loan (7.0% Cash, 8.3% PIK, Acquired 11/20, Due 05/24)	1,618,242		1,446,976		1,920,318
		Warrants (553,375 units, Acquired 12/20)			101,602		166,416
			10,688,971		7,464,079		8,208,024

Classic Collision (Summit Buyer, LLC) (1.6%)*(7) (9) (12)	Auto Collision Repair Centers	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 01/20, Due 01/26)	12,006,341		11,774,075		11,820,664
			12,006,341		11,774,075		11,820,664

CM Acquisitions Holdings Inc. (3.4%)*(7) (9) (13)	Internet & Direct Marketing	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 05/19, Due 05/25)	24,655,278		24,287,477		24,196,657
			24,655,278		24,287,477		24,196,657

CMT Opco Holding, LLC (Concept Machine) (0.6%)*(7) (9) (12)	Distributors	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25)	4,425,935		4,351,646		4,097,088
		LLC Units (8,309 units, Acquired 01/20)			332,904		230,492
			4,425,935		4,684,550		4,327,580

Command Alkon (Project Potter Buyer, LLC) (3.0%)*(7) (9) (10)	Software	First Lien Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 04/20, Due 04/27)	22,166,804		21,527,201		21,501,800
		Class A Units (90.384 units, Acquired 04/20)			90,384		93,510
		Class B Units (33,324.69 units, Acquired 04/20)			—		8,165
			22,166,804		21,617,585		21,603,475

Confie Seguros Holding II Co. (0.3%)*(9) (12)	Insurance Brokerage Services	Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 10/19, Due 11/25)	2,500,000		2,370,563		2,233,600
			2,500,000		2,370,563		2,233,600

Contabo Finco S.À R.L (0.2%)*(3) (7) (9) (18)	Internet Software & Services	First Lien Senior Secured Term Loan (EURIBOR + 4.75%, 4.8% Cash, Acquired 10/19, Due 10/26)	1,483,377		1,310,386		1,454,918
			1,483,377		1,310,386		1,454,918

CSL DualCom (0.5%)*(3) (7) (9) (15)	Tele-communications	First Lien Senior Secured Term Loan (GBP LIBOR + 5.5%, 5.6% Cash, Acquired 09/20, Due 09/27)	3,776,936		3,339,563		3,646,170
			3,776,936		3,339,563		3,646,170

Custom Alloy Corporation (4.8%)*(7) (23)	Manufacturer of Pipe Fittings & Forgings	Second Lien Loan (15.0% PIK, Acquired 12/20, Due 04/22)	39,391,300		31,434,257		31,434,257
		Revolver (15.0% PIK, Acquired 12/20, Due 04/21)	3,745,808		3,228,308		3,228,308
			43,137,108		34,662,565		34,662,565

Dart Buyer, Inc. (1.7%)*(3) (7) (9) (12)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 04/25)	12,310,907		12,092,929		12,188,061
			12,310,907		12,092,929		12,188,061

Diamond Sports Group, LLC (0.1%)*(9) (10)	Broadcasting	First Lien Senior Secured Term Loan (LIBOR + 3.25%, 3.4% Cash, Acquired 03/20, Due 08/26)	989,975		790,536		872,208
			989,975		790,536		872,208

Discovery Education, Inc. (3.7%)*(7) (9) (10)	Publishing	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/20, Due 10/26)	27,000,000		26,538,991		26,527,500
			27,000,000		26,538,991		26,527,500

Distinct Holdings, Inc. (1.0%)*(7) (9) (10)	Systems Software	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 04/19, Due 12/23)	7,516,792		7,453,665		7,475,638
			7,516,792		7,453,665		7,475,638

DreamStart Bidco SAS (d/b/a SmartTrade) (0.3%)*(3) (7) (9) (19)	Diversified Financial Services	First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 1.8% PIK, Acquired 03/20, Due 03/27)	2,232,173		1,939,189		2,176,655
			2,232,173		1,939,189		2,176,655

Dukane IAS, LLC (0.6%)*(7) (23)	Welding Equipment Manufacturer	Second Lien Note (10.5% Cash, 2.5% PIK, Acquired 12/20, Due 12/24)	4,604,374		4,604,374		4,604,374
			4,604,374		4,604,374		4,604,374

Envision Healthcare Corp. (0.4%)*(9) (10)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 3.75%, 3.9% Cash, Acquired 03/20, Due 10/25)	3,156,772		2,259,339		2,623,688
			3,156,772		2,259,339		2,623,688

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Exeter Property Group, LLC (2.6%)*(7) (9) (10)	Real Estate	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.7% Cash, Acquired 02/19, Due 08/24)	$	19,363,647	$	19,100,177	$	18,976,374
			19,363,647		19,100,177		18,976,374

F24 (Stairway BidCo Gmbh) (0.3%)*(3) (7) (9) (18)	Software Services	First Lien Senior Secured Term Loan (EURIBOR + 6.5%, 6.5% Cash, Acquired 08/20, Due 08/27)	1,855,625		1,734,062		1,805,715
			1,855,625		1,734,062		1,805,715

FitzMark Buyer, LLC (0.5%)*(7) (9) (10)	Cargo & Transportation	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 12/26)	3,529,412		3,429,854		3,429,412
			3,529,412		3,429,854		3,429,412

Foundation Risk Partners, Corp. (1.4%)*(7) (9) (12)	Financial Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 11/23)	8,789,777		8,575,855		8,576,718
		Second Lien Senior Secured Term Loan (LIBOR + 8.50%, 9.5% Cash, Acquired 09/20, Due 11/24)	1,722,222		1,588,593		1,602,355
			10,511,999		10,164,448		10,179,073

GoldenTree Loan Opportunities IX, Limited: Series 2014-9A (0.2%)*(3) (9) (12)	Structured Finance	Structured Secured Note - Class DR2 (LIBOR + 3.0%, 3.2% Cash, Acquired 03/20, Due 10/29)	1,250,000		916,935		1,231,963
			1,250,000		916,935		1,231,963

GTM Intermediate Holdings, Inc. (0.9%)*(7) (23)	Medical Equipment Manufacturer	Second Lien Loan (11.0% Cash, 1.0% PIK, Acquired 12/20, Due 11/24)	5,115,750		5,064,593		5,064,593
		Common Stock (2 shares, Acquired 12/20)			1,078,778		1,078,778
			5,115,750		6,143,371		6,143,371

Gulf Finance, LLC (0.1%)*(9) (10)	Oil & Gas Exploration & Production	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 08/23)	1,048,305		944,246		788,105
			1,048,305		944,246		788,105

Hawaiian Airlines 2020-1 Class B Pass Through Certificates (1.1%)*	Airlines	Structured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25)	7,500,000		7,500,000		7,738,286
			7,500,000		7,500,000		7,738,286

Heartland, LLC (1.2%)*(7) (9) (12)	Commercial Services & Supplies	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25)	8,831,018		8,667,194		8,582,892
			8,831,018		8,667,194		8,582,892

Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (1.6%)*(3) (7) (9)	Insurance	First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, Acquired 09/19, Due 09/26)(19)	10,413,655		9,216,174		10,266,128
		First Lien Senior Secured Term Loan (EURIBOR + 6.25%, 6.3% Cash, Acquired 07/20, Due 09/26) (18)	1,092,757		820,169		1,092,757
			11,506,412		10,036,343		11,358,885

Highbridge Loan Management Ltd: Series 2014A-19 (0.1%)*(3) (9) (12)	Structured Finance	Structured Secured Note - Class E (LIBOR + 6.75%, 7.0% Cash, Acquired 03/20, Due 07/30)	1,000,000		833,749		978,180
			1,000,000		833,749		978,180

Highpoint Global LLC (0.7%)*(7) (23)	Government Services	Second Lien Note (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 09/22)	5,307,799		5,286,568		5,286,568
			5,307,799		5,286,568		5,286,568

Holley Performance Products (Holley Purchaser, Inc.) (2.4%)*(7) (9) (12)	Automotive Parts & Equipment	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 5.2% Cash, Acquired 10/18, Due 10/25)	16,936,387		16,754,221		16,936,387
			16,936,387		16,754,221		16,936,387

HTI Technology & Industries (1.70%)* (7) (23)	Electronic Component Manufacturing	Second Lien Note (12.0% Cash, 4.8% PIK, Acquired 12/20, Due 09/24)	12,619,964		12,115,165		12,115,165
			12,619,964		12,115,165		12,115,165

HW Holdco, LLC (Hanley Wood LLC) (1.0%)*(7) (9) (12)	Advertising	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/18, Due 12/24)	7,527,218		7,396,115		7,527,218
			7,527,218		7,396,115		7,527,218

Hyperion Materials & Technologies, Inc. (1.9%)*(7) (9) (12)	Industrial Machinery	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/19, Due 08/26)	13,855,795		13,643,767		13,700,560
			13,855,795		13,643,767		13,700,560

IGL Holdings III Corp. (1.9%)*(7) (9) (12)	Commercial Printing	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/26)	14,025,147		13,635,887		13,626,360
			14,025,147		13,635,887		13,626,360

IM Analytics Holding, LLC (d/b/a NVT) (1.0%)*(7) (9) (12)	Electronic Instruments & Components	First Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.0% Cash, Acquired 11/19, Due 11/23)	8,209,191		8,147,872		6,982,738
		Warrant (68,950 units, Acquired 11/19)			—		—
			8,209,191		8,147,872		6,982,738

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
INOS 19-090 GmbH (1.7%)*(3) (7) (9) (18)	Aerospace & Defense	First Lien Senior Secured Term Loan (EURIBOR + 6.1%, 6.1% Cash, Acquired 12/20, Due 10/27)	$	12,275,911	$	11,888,699	$	11,934,913
			12,275,911		11,888,699		11,934,913

Institutional Shareholder Services, Inc. (0.7%)*(7) (9) (12)	Diversified Support Services	Second Lien Senior Secured Term Loan (LIBOR + 8.5%, 8.7% Cash, Acquired 03/19, Due 03/27)	4,951,685		4,830,132		4,951,685
			4,951,685		4,830,132		4,951,685

International Precision Components (1.0%)*(7) (23)	Plastic Injection Molding	Second Lien Loan (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 10/24)	7,000,000		6,895,000		6,895,000
			7,000,000		6,895,000		6,895,000

ISS#2, LLC (d/b/a Industrial Services Solutions) (0.9%)*(7) (9) (12)	Commercial Services & Supplies	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/20, Due 02/26)	6,819,551		6,700,432		6,300,583
			6,819,551		6,700,432		6,300,583

Jade Bidco Limited (Jane's) (1.7%)*(3) (7) (9)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.8% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)(13)	10,538,414		10,291,098		10,353,797
		First Lien Senior Secured Term Loan (EURIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26)(19)	2,057,007		1,813,166		2,020,971
			12,595,421		12,104,264		12,374,768

Jedson Engineering, Inc. (0.4%)*(7) (8) (23)	Engineering & Construction Management	First Lien Loan (12.0% Cash, 3.0% PIK, Acquired 12/20, Due 06/22)	9,560,423		3,000,000		3,000,000
			9,560,423		3,000,000		3,000,000

JetBlue 2019-1 Class B Pass Through Trust (0.7%)*	Airlines	Structured Secured Note - Class B (8.0% Cash, Acquired 08/20, Due 11/27)	4,721,693		4,721,693		5,048,044
			4,721,693		4,721,693		5,048,044

Kano Laboratories LLC (1.4%)*(7) (9) (12)	Chemicals, Plastics & Rubber	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 11/20, Due 09/26)	9,873,095		9,589,856		9,584,754
		Partnership Equity (227.2 units, Acquired 11/20)			227,198		227,200
			9,873,095		9,817,054		9,811,954

Kenan Advantage Group Inc. (0.6%)* (9) (10)	Trucking	First Lien Senior Secured Term Loan (LIBOR + 3.0%, 4.0% Cash, Acquired 08/18, Due 07/22)	4,265,453		4,263,951		4,217,125
			4,265,453		4,263,951		4,217,125

Kene Acquisition, Inc. (En Engineering) (1.0%)*(7) (9) (12)	Oil & Gas Equipment & Services	First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26)	7,298,712		7,173,784		7,202,679
			7,298,712		7,173,784		7,202,679

Kona Buyer, LLC (4.8%)*(7) (9) (12)	High Tech Industries	First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/20, Due 12/27)	35,000,000		34,132,135		34,125,000
			35,000,000		34,132,135		34,125,000

LAC Intermediate, LLC (f/k/a Lighthouse Autism Center) (1.3%)*(7) (9) (12)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/18, Due 10/24)	9,218,032		9,083,136		8,987,581
		Class A LLC Units (154,320 units, Acquired 10/18)			154,320		184,312
			9,218,032		9,237,456		9,171,893

Learfield Communications, LLC (1.0%)*	Broadcasting	First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, Acquired 08/20, Due 12/23)(9)(10)	136,803		96,446		123,073
		First Lien Senior Secured Term Loan (LIBOR + 3.00%, 3.2% Cash, 10.0% PIK, Acquired 08/20, Due 12/23)(12)	7,181,368		7,117,163		7,133,468
			7,318,171		7,213,609		7,256,541

Legal Solutions Holdings (1.3%)*(7) (23)	Business Services	Senior Subordinated Loan (6.0% Cash, 10.0% PIK, Acquired 12/20, Due 03/22)	10,398,126		9,597,471		9,597,471
			10,398,126		9,597,471		9,597,471

MB2 Dental Solutions, LLC (1.0%)*(7) (9) (12)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 6.5%, 6.7% Cash, Acquired 09/19, Due 09/23)	7,443,622		7,381,819		7,443,622
			7,443,622		7,381,819		7,443,622

Media Recovery, Inc. (SpotSee) (1.3%)*(7) (9) (12)	Containers, Packaging & Glass	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 11/25)	9,179,626		8,873,020		9,018,983
			9,179,626		8,873,020		9,018,983

Modern Star Holdings Bidco Pty Limited. (1.4%)*(3) (7) (9) (22)	Non-durable Consumer Goods	First Lien Senior Secured Term Loan (BBSY + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/26)	10,482,797		9,973,821		10,101,881
			10,482,797		9,973,821		10,101,881

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
MSG National Properties (0.3%)*(3) (7) (9) (12)	Hotel, Gaming, & Leisure	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.0% Cash, Acquired 11/20, Due 11/25)	$	2,461,759	$	2,389,417	$	2,474,068
			2,461,759		2,389,417		2,474,068

Murphy Midco Limited (1.3%)*(3) (7) (9) (16)	Media, Diversified & Production	First Lien Senior Secured Term Loan (GBP LIBOR + 5.50%, 5.5% Cash, Acquired 11/20, Due 11/27)	9,904,416		9,228,222		9,508,239
			9,904,416		9,228,222		9,508,239

Music Reports, Inc. (0.8%)*(7) (9) (10)	Media & Entertainment	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 08/20, Due 08/26)	5,592,972		5,459,912		5,469,461
			5,592,972		5,459,912		5,469,461

Neuberger Berman CLO Ltd: Series 2020-36A (0.3%)*(3) (9) (12)	Structured Finance	Structured Secured Note - Class E (LIBOR + 7.81%, 8.0% Cash, Acquired 03/20, Due 04/33)	2,500,000		2,476,562		2,501,790
			2,500,000		2,476,562		2,501,790

NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (1.6%)*(7) (9) (10)	Energy Equipment & Services	First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25)	11,855,804		11,813,315		11,645,956
			11,855,804		11,813,315		11,645,956

Omni Intermediate Holdings, LLC (1.4%)*(7) (9) (10)	Transportation	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)	10,000,000		9,700,263		9,700,000
			10,000,000		9,700,263		9,700,000

Options Technology Ltd. (1.3%)*(3) (7) (9) (12)	Computer Services	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/19, Due 12/25)	9,796,552		9,583,342		9,633,049
			9,796,552		9,583,342		9,633,049

Pacific Health Supplies Bidco Pty Limited (2.5%)*(3) (7) (9) (21)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (BBSY + 6.0%, 6.5% Cash, Acquired 12/20, Due 12/25)	18,489,367		17,237,355		17,919,335
			18,489,367		17,237,355		17,919,335

Pare SAS (SAS Maurice MARLE) (0.7%)*(3) (7) (9) (19)	Health Care Equipment	First Lien Senior Secured Term Loan (EURIBOR + 5.25%, 5.3% Cash, 1.5% PIK, Acquired 12/19, Due 12/26)	4,817,430		4,305,403		4,683,024
			4,817,430		4,305,403		4,683,024

Patriot New Midco 1 Limited (Forensic Risk Alliance) (1.2%)*(3) (7) (9)	Diversified Financial Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/20, Due 02/27)(12)	4,489,471		4,372,581		4,388,907
		First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 02/20, Due 02/27) (18)	4,126,940		3,579,755		4,034,496
			8,616,411		7,952,336		8,423,403

PerTronix, LLC (1.1%)*(7) (9) (13)	Automotive	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/20, Due 10/26)	8,308,515		8,186,879		8,183,887
			8,308,515		8,186,879		8,183,887

Playtika Holding Corp. (0.5%)*(9) (12)	Leisure, Amusement & Entertainment	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 03/20, Due 12/24)	3,800,000		3,536,230		3,818,582
			3,800,000		3,536,230		3,818,582

Premier Technical Services Group (Project Graphite) (0.4%)*(3) (7) (9) (15)	Construction & Engineering	First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 7.3% Cash, Acquired 08/19, Due 06/26)	3,108,900		2,681,906		3,039,998
			3,108,900		2,681,906		3,039,998

Premium Franchise Brands, LLC (3.4%)*(7) (9) (12)	Research & Consulting Services	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 12/26)	25,000,000		24,501,666		24,500,000
			25,000,000		24,501,666		24,500,000

Process Equipment, Inc. (ProcessBarron) (0.8%)*(7) (9) (12)	Industrial Air & Material Handling Equipment	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 03/19, Due 03/25)	6,173,594		6,090,812		5,612,414
			6,173,594		6,090,812		5,612,414

Professional Datasolutions, Inc. (PDI) (2.3%)*(7) (9) (12)	Application Software	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 03/19, Due 10/24)	16,924,678		16,905,254		16,628,496
			16,924,678		16,905,254		16,628,496

PSC UK Pty Ltd. (0.4%)*(3) (7) (9) (15)	Insurance Services	First Lien Senior Secured Term Loan (GBP LIBOR + 6.0%, 6.5% Cash, Acquired 11/19, Due 10/24)	2,684,817		2,439,292		2,614,299
			2,684,817		2,439,292		2,614,299

Questel Unite (3.1%)*(3) (7) (9) (18)	Business Services	First Lien Senior Secured Term Loan (EURIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 12/27)	22,451,369		21,728,443		21,905,058
			22,451,369		21,728,443		21,905,058

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
Radwell International, LLC (1.9%)*(7) (9) (12)	Wholesale	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 12/26)	$	14,264,053	$	13,916,962	$	13,914,053
			14,264,053		13,916,962		13,914,053

Recovery Point Systems, Inc. (1.6%)*(7) (9) (10)	Technology	First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 03/20, Due 07/26)	11,795,776		11,572,084		11,766,287
			11,795,776		11,572,084		11,766,287

REP SEKO MERGER SUB LLC (1.2%)* (7) (9) (10)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26)	8,545,455		8,290,487		8,345,456
			8,545,455		8,290,487		8,345,456

RPX Corporation (2.4%)*(7) (9) (12)	Research & Consulting Services	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/20, Due 10/25)	17,500,000		17,110,715		17,106,250
			17,500,000		17,110,715		17,106,250

RR Ltd: Series 2019-6A (0.3%)*(3) (12)	Structured Finance	Structured Secured Note - Class D (LIBOR + 6.75%, 7.0% Cash, Acquired 03/20, Due 04/30)	2,000,000		1,661,539		2,000,124
			2,000,000		1,661,539		2,000,124

Ruffalo Noel Levitz, LLC (1.3%)*(7) (9) (12)	Media Services	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/22)	9,616,736		9,552,719		9,567,718
			9,616,736		9,552,719		9,567,718

Safety Products Holdings, LLC (2.5%)* (9) (12)	Non-durable Consumer Goods	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 12/26)(7)	18,108,567		17,559,056		17,555,609
		Common Stock (424.1 units, Acquired 12/20)			424,088		424,090
			18,108,567		17,983,144		17,979,699

Scaled Agile, Inc. (0.7%)*(7) (9) (10)	Research & Consulting Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24)	4,845,720		4,807,839		4,797,263
			4,845,720		4,807,839		4,797,263

Serta Simmons Bedding LLC (1.5%)*(9) (10)	Home Furnishings	Super Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)	7,424,499		7,234,063		7,498,744
		Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23)	3,643,817		3,379,870		3,272,913
			11,068,316		10,613,933		10,771,657

SISU ACQUISITIONCO., INC. (2.2%)*(7) (9) (12)	Aerospace & Defense	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/20, Due 12/26)	16,132,835		15,811,282		15,810,178
			16,132,835		15,811,282		15,810,178

SMA Holdings, Inc. (1.0%)*(7) (23)	Consulting	First Lien Loan (11.0% Cash, Acquired 12/20, Due 06/24)	7,000,000		6,720,000		6,720,000
		Warrants (2.0 units, Acquired 12/20)			286,781		286,781
			7,000,000		7,006,781		7,006,781

Smile Brands Group Inc. (2.1%)*(7) (9) (12)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 5.17%, 5.4% Cash, Acquired 10/18, Due 10/24)	5,880,607		5,842,184		5,824,154
		First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/20, Due 10/24)	9,310,993		9,030,258		9,024,500
			15,191,600		14,872,442		14,848,654

SN BUYER, LLC (4.8%)*(7) (9) (12)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/20, Due 11/26)	35,000,000		34,304,393		34,300,000
			35,000,000		34,304,393		34,300,000

Springbrook Software (SBRK Intermediate, Inc.) (1.3%)*(7) (9) (12)	Enterprise Software & Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)	9,349,719		9,152,983		9,201,599
			9,349,719		9,152,983		9,201,599

SSCP Pegasus Midco Limited (2.3%)*(3) (7) (9) (16)	Healthcare & Pharmaceuticals	First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 12/20, Due 11/27)	17,664,989		16,498,614		16,733,353
			17,664,989		16,498,614		16,733,353

Syniverse Holdings, Inc. (2.2%)*(9) (12)	Technology Distributors	First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/18, Due 03/23)	17,480,454		16,048,735		15,749,365
			17,480,454		16,048,735		15,749,365

Team Health Holdings, Inc. (0.8%)*(9) (10)	Health Care Services	First Lien Senior Secured Term Loan (LIBOR + 2.75%, 3.8% Cash, Acquired 09/18, Due 02/24)	6,822,785		6,659,174		6,058,906
			6,822,785		6,659,174		6,058,906

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
The Hilb Group, LLC (2.1%)*(7) (9)	Insurance Brokerage	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/19, Due 12/26)(11)	$	11,667,719	$	11,413,365	$	11,541,707
		First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/19, Due 12/26)(12)	3,602,001		3,374,934		3,373,303
			15,269,720		14,788,299		14,915,010

Total Safety U.S. Inc. (0.9%)* (12)	Diversified Support Services	First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/19, Due 08/25)	6,857,482		6,611,003		6,576,325
			6,857,482		6,611,003		6,576,325

Transit Technologies LLC (0.7%)*(7) (9) (12)	Software	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 02/20, Due 02/25)	6,035,305		5,859,123		5,221,746
			6,035,305		5,859,123		5,221,746

Transportation Insight, LLC (3.3%)*(7) (9) (12)	Air Freight & Logistics	First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.6% Cash, Acquired 08/18, Due 12/24)	24,506,875		24,346,335		23,899,105
			24,506,875		24,346,335		23,899,105

Truck-Lite Co., LLC (3.0%)*(7) (9) (12)	Automotive Parts & Equipment	First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26)	22,352,885		21,960,470		21,791,827
			22,352,885		21,960,470		21,791,827

Trystar, LLC (2.5%)*(7) (9) (12)	Power Distribution Solutions	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/18, Due 09/23)	17,596,398		17,384,658		17,288,461
		Class A LLC Units (384.5 units, Acquired 09/18)			395,995		339,474
			17,596,398		17,780,653		17,627,935

Tuf-Tug, Inc. (0.1%)*(7) (23)	Safety Equipment Manufacturer	Common Stock (24.6 shares, Acquired 12/20)			385,047		$	385,047
					385,047		385,047

Turf Products, LLC (1.2%)*(7) (23)	Landscaping & Irrigation Equipment Distributor	Senior Subordinated Debt (10.0% Cash, Acquired 12/20, Due 10/23)	8,697,056		8,383,962		8,383,962
			8,697,056		8,383,962		8,383,962

U.S. Gas & Electric, Inc. (0.2%)*(7) (23)	Energy Services	Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)	2,285,250		1,785,250		1,785,250
		Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)(24)	2,485,469		—		—
			4,770,719		1,785,250		1,785,250

U.S. Silica Company (0.2%)*(3) (9) (10)	Metal & Glass Containers	First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25)	1,487,525		1,490,312		1,299,724
			1,487,525		1,490,312		1,299,724

UKFast Leaders Limited (3.3%)*(3) (7) (9) (14)	Technology	First Lien Senior Secured Term Loan (GBP LIBOR + 6.75%, 6.8% Cash, Acquired 09/20, Due 9/27)	24,226,278		22,140,865		23,625,466
			24,226,278		22,140,865		23,625,466

USF Holdings LLC (U.S. Farathane, LLC) (0.4%)*(9) (12)	Auto Parts & Equipment	First Lien Senior Secured Term Loan (LIBOR + 3.5%, 4.5% Cash, Acquired 08/18, Due 12/21)	3,088,580		3,092,541		2,849,214
			3,088,580		3,092,541		2,849,214

USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.1%)*(7) (9) (12)	Legal Services	First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24)	16,388,428		16,165,710		15,226,488
			16,388,428		16,165,710		15,226,488

Utac Ceram (0.2%)*(3) (7) (9) (18)	Business Services	First Lien Senior Secured Term Loan (EURIBOR + 5.75%, 5.8% Cash, Acquired 09/20, Due 09/27)	1,713,064		1,524,242		1,651,143
			1,713,064		1,524,242		1,651,143

Validity, Inc. (0.6%)*(7) (9) (10)	IT Consulting & Other Services	First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.9% Cash, Acquired 07/19, Due 05/25)	5,025,862		4,896,882		4,586,098
			5,025,862		4,896,882		4,586,098

W2O Holdings, Inc. (0.0%)* (7) (9)	Healthcare Technology	Undrawn Delayed Draw Term Loan (LIBOR + 5.0%, 5.0% Cash, Acquired 10/20, Due 06/25)	—		(115,981)		(104,214)
			—		(115,981)		(104,214)

Winebow Group, LLC, (The) (2.1%)*(9) (10)	Consumer Goods	First Lien Senior Secured Term Loan (LIBOR + 3.75%, 4.8% Cash, Acquired 11/19, Due 07/21)	10,599,445		10,113,510		9,690,543
		Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 10/19, Due 01/22)	7,141,980		4,813,864		5,713,584
			17,741,425		14,927,374		15,404,127

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


Portfolio Company(6)	Industry	Type of Investment(1) (2)	Principal Amount		Cost		Fair Value
World 50, Inc. (1.7%)*(7) (9) (10)	Professional Services	First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26)	$	3,313,191	$	3,218,141	$	3,313,191
		First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 09/20, Due 01/26)	9,100,607		8,905,025		8,940,436
			12,413,798		12,123,166		12,253,627

Subtotal Non–Control / Non–Affiliate Investments (184.7%)			1,378,776,392		1,318,614,617		1,325,783,281

Affiliate Investment: (4)
Advantage Insurance, Inc. (0.8%)*(7) (23)	Banking, Finance, Insurance, & Real Estate	Preferred Stock (587,001 shares, Acquired 12/20)			5,946,641		5,946,641
					5,946,641		5,946,641

Jocassee Partners LLC (3.2%)*(3)	Investment Funds & Vehicles	9.1% Member Interest, Acquired 06/19			20,158,270		22,623,820
					20,158,270		22,623,820

JSC Tekers Holdings (0.7%)*(3) (7) (23)	Real Estate Management	Preferred Stock (9,159,085 shares, Acquired 12/20)			4,753,000		4,753,000
		Common Stock (3,201 shares, Acquired 12/20)			—		—
					4,753,000		4,753,000

Security Holdings B.V. (4.9%)*(3) (7) (23)	Electrical Engineering	Bridge Loan (5.0% PIK, Acquired 12/20, Due 05/22)	5,187,506		5,187,508		5,187,508
		Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22)	8,746,454		8,746,454		8,746,454
		Common Stock (1,099.5 shares, Acquired 12/20)			21,264,000		21,329,370
			13,933,960		35,197,962		35,263,332

Thompson Rivers LLC (1.4%)*(3)	Investment Funds & Vehicles	10% Member Interest, Acquired 06/20			10,000,000		10,011,840
					10,000,000		10,011,840

Subtotal Affiliate Investments (11.0%)			13,933,960		76,055,873		78,598,633

Control Investments:(5)
MVC Automotive Group Gmbh (2.3%)*(3) (7) (23)	Other Diversified Financial Services	Bridge Loan (6.0% Cash, Acquired 12/20, Due 12/21)	7,149,166		7,149,166		7,149,166
		Common Equity Interest (18,000 shares, Acquired 12/20)			9,553,000		9,582,368
			7,149,166		16,702,166		16,731,534

MVC Private Equity Fund LP (1.3%)*(3) (23)	Investment Funds & Vehicles	General Partnership Interest			224,978		224,978
		Limited Partnership Interest			8,899,284		8,899,284
					9,124,262		9,124,262

Subtotal Control Investments (3.6%)			7,149,166		25,826,428		25,855,796

Short-Term Investments:

BlackRock, Inc. (4.2%)*	Money Market Fund	BlackRock Liquidity Temporary Fund (0.08% yield)			30,000,000		30,000,000
					30,000,000		30,000,000

JPMorgan Chase & Co. (5.0%)*	Money Market Fund	JPMorgan Prime Money Market Fund (0.09% yield)			35,558,227		35,558,227
					35,558,227		35,558,227

Subtotal Short-Term Investments (9.1%)					65,558,227		65,558,227

Total Investments, December 31, 2020 (208.4%)*			$	1,399,859,518	$	1,486,055,145	$	1,495,795,937

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020

Derivative Instruments


Credit Support Agreement(a)(b)(d)
Description	Counter Party	Settlement Date(c)	Notional Amount		Value		Unrealized Appreciation (Depreciation)
Credit Support Agreement	Barings LLC	01/01/31	$	23,000,000	$	13,600,000	$	—

Total Credit Support Agreement, December 31, 2020							$	—

(a) The Credit Support Agreement covers all of the investments acquired by the Company from MVC in connection with the MVC Acquisition (as defined in “Note 1 – Organization, Business and Basis of Presentation”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the investments acquired by the Company from MVC in connection with the MVC Acquisition (collectively, the “Reference Portfolio”). Each investment that is included in the Reference Portfolio is denoted in the above Schedule of Investments with footnote (23).

(b) The Company and Barings LLC entered into a Credit Support Agreement pursuant to which Barings LLC agreed to provide credit support to the Company in the amount of up to $23.0 million.

(c) Settlement Date means the earlier of (1) January 1, 2031 and (2) the date on which the entire Reference Portfolio has been realized or written off.

(d) See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the Credit Support Agreement.


Foreign Currency Forward Contracts:
Description	Notional Amount to be Purchased	Notional Amount to be Sold	Settlement Date	Unrealized Appreciation (Depreciation)
Foreign currency forward contract (AUD)	$8,471,304	A$11,378,670	01/05/21	$	(309,049)
Foreign currency forward contract (AUD)	A$11,378,670	$8,610,504	01/05/21	169,849
Foreign currency forward contract (AUD)	$148,019	A$193,882	04/06/21	(1,698)

Foreign currency forward contract (EUR)	$13,472,749	€11,406,604	01/05/21	(483,801)
Foreign currency forward contract (EUR)	€11,406,604	$13,518,023	01/05/21	438,526
Foreign currency forward contract (EUR)	$561,754	€456,604	04/06/21	1,944

Foreign currency forward contract (GBP)	$13,554,607	£10,215,299	01/05/21	(409,190)
Foreign currency forward contract (GBP)	£10,215,299	$13,717,678	01/05/21	246,118
Foreign currency forward contract (GBP)	$13,109,849	£9,672,758	04/06/21	(119,769)

Foreign currency forward contract (SEK)	$141,603	1,259,406kr	01/05/21	(11,748)
Foreign currency forward contract (SEK)	1,259,406kr	$152,396	01/05/21	955
Foreign currency forward contract (SEK)	$164,325	1,356,628kr	04/06/21	(1,028)

Total Foreign Currency Forward Contracts, December 31, 2020				$	(478,891)

_______________________________________________________________

* Fair value as a percentage of net assets.

(1)All debt investments are income producing, unless otherwise noted. Equity and any equity-linked investments are non-income producing, unless otherwise noted. The Board determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the 1940 Act based on, among other things, the input of the Company's external investment adviser, Barings, the Company’s Audit Committee and independent valuation firms that have been engaged to assist in the valuation of the Company's middle-market investments. In addition, 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 the Company's investment portfolio bear interest at a rate that may be determined by reference to LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR 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 the Company’s portfolio company investments (including joint venture and short-term investments), which as of December 31, 2020 represented 208.4% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company.

(3)Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 23.4% of total investments at fair value as of December 31, 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 the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020


		Amount of Realized Gain (Loss)		Amount of Unrealized Gain (Loss)		Amount of Interest or Dividends Credited to Income(b)		December 31, 2019 Value		Gross Additions (c)		Gross Reductions (d)		December 31, 2020 Value
Portfolio Company	Type of Investment(a)
Advantage Insurance, Inc.(e)	Preferred Stock (587,001 shares)	$	—	$	—	$	—	$	—	$	5,946,641	$	—	$	5,946,641
		—		—		—		—		5,946,641		—		5,946,641

Jocassee Partners LLC	9.1% Member Interest	—		2,394,007		—		10,229,813		12,394,007		—		22,623,820
		—		2,394,007		—		10,229,813		12,394,007		—		22,623,820

JSC Tekers Holdings(e)	Common Stock (3,201 shares)	—		—		—		—		—		—		—
	Preferred Stock (9,159,085 shares)	—		—		—		—		4,753,000		—		4,753,000
		—		—		—		—		4,753,000		—		4,753,000

Security Holdings B.V(e)	Bridge Loan (5.0% PIK)	—		—		—		—		5,187,508		—		5,187,508
	Senior Subordinated Loan (3.1% PIK)	—		—		—		—		8,746,454		—		8,746,454
	Common Stock (1,099.5 shares)	—		65,370		—		—		21,329,370		—		21,329,370
		—		65,370		—		—		35,263,332		—		35,263,332

Thompson Rivers LLC	10% Member Interest	—		11,840		—		—		10,011,840		—		10,011,840
		—		11,840		—		—		10,011,840		—		10,011,840

Total Affiliate Investments		$	—	$	2,471,217	$	—	$	10,229,813	$	68,368,820	$	—	$	78,598,633

(a) Equity and equity-linked investments are non-income producing, unless otherwise noted.

(b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category.

(e) The fair value of the investment was determined using significant unobservable inputs.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2020

(5) As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” the portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions as of and during the year ended December 31, 2020 in which the portfolio company is deemed to be a "Control Investment" of the Company are as follows:


		Amount of Realized Gain (Loss)		Amount of Unrealized Gain (Loss)		Amount of Interest or Dividends Credited to Income(b)		December 31, 2019 Value		Gross Additions (c)		Gross Reductions (d)		December 31, 2020 Value
Portfolio Company	Type of Investment(a)
MVC Automotive Group GmbH(e)	Common Equity Interest (18,000 shares)	$	—	$	29,368	$	—	$	—	$	9,582,368	$	—	$	9,582,368
	Bridge Loan (6.0% PIK)	—		—		9,532		—		7,149,166		—		7,149,166
		—		29,368		9,532		—		16,731,534		—		16,731,534

MVC Private Equity Fund LP(e)	Limited Partnership Interest	—		—		—		—		8,899,284		—		8,899,284
	General Partnership Interest	—		—		5,292		—		224,978		—		224,978
		—		—		5,292		—		9,124,262		—		9,124,262

Total Control Investments		$	—	$	29,368	$	14,824	$	—	$	25,855,796	$	—	$	25,855,796

(a) Equity and equity-linked investments are non-income producing, unless otherwise noted.

(b) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.

(e) The fair value of the investment was determined using significant unobservable inputs.

(6)Some or all of the investment is or will be encumbered as security for the February 2019 Credit Facility.

(7)The fair value of the investment was determined using significant unobservable inputs.

(8)Non-accrual investment.

(9)Debt investment includes interest rate floor feature.

(10)The interest rate on these loans is subject to 1 Month LIBOR, which as of December 31, 2020 was 0.14388%.

(11)The interest rate on these loans is subject to 2 Month LIBOR, which as of December 31, 2020 was 0.19038%.

(12)The interest rate on these loans is subject to 3 Month LIBOR, which as of December 31, 2020 was 0.23838%.

(13)The interest rate on these loans is subject to 6 Month LIBOR, which as of December 31, 2020 was 0.25763%.

(14)The interest rate on these loans is subject to 2 month GBP LIBOR, which as of December 31, 2020 was 0.06088%.

(15)The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of December 31, 2020 was 0.02550%.

(16)The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of December 31, 2020 was 0.02988%.

(17)The interest rate on these loans is subject to 1 Month EURIBOR, which as of December 31, 2020 was -0.55400%.

(18)The interest rate on these loans is subject to 3 Month EURIBOR, which as of December 31, 2020 was -0.54500%.

(19)The interest rate on these loans is subject to 6 Month EURIBOR, which as of December 31, 2020 was -0.526%.

(20)The interest rate on these loans is subject to 3 Month STIBOR, which as of December 31, 2020 was -0.08500%.

(21)The interest rate on these loans is subject to 1 Month BBSY, which as of December 31, 2020 was 0.01000%.

(22)The interest rate on these loans is subject to 3 Month BBSY, which as of December 31, 2020 was 0.01000%.

(23)Investment was purchased as part of the MVC Acquisition and is part of the Reference Portfolio for purposes of the Credit Support Agreement.

(24)In 2017, MVC Capital, Inc. received $5.7 million of 9.5% second lien callable notes due in 2025, in lieu of an escrow to satisfy any indemnification claims associated with MVC Capital, Inc's sale of its equity investment in U.S. Gas & Electric. Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment. This loan is still subject to indemnification adjustments.

See accompanying notes.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements

1. ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION

Barings BDC, Inc. (the “Company”) and its wholly-owned subsidiaries are specialty finance companies. The Company currently operates as a closed-end, non-diversified investment company and has elected to be treated as a business development company (“BDC”) under the 1940 Act. The Company has elected for federal income tax purposes to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”).

Organization

The Company is a Maryland corporation incorporated on October 10, 2006. On August 2, 2018, the Company entered into an investment advisory agreement (the “Original Advisory Agreement”) and an administration agreement (the “Administration Agreement”) and became an externally-managed BDC managed by Barings LLC (“Barings” or the “Adviser”). An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an investment advisory agreement and administration agreement. Instead of the Company directly compensating employees, the Company pays the Adviser for investment and management services pursuant to the terms of the Amended and Restated Advisory Agreement (as defined in “Note 2 - Agreements and Related Party Transactions”) (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement) and the Administration Agreement. See “Note 2 - Agreements and Related Party Transactions” for additional information regarding the Company’s investment advisory agreement and administration agreement.

Basis of Presentation

The financial statements of the Company include the accounts of Barings BDC, Inc. and its wholly-owned subsidiaries. The effects of all intercompany transactions between the Company and its wholly-owned subsidiaries have been eliminated in consolidation. The Company is an investment company and, therefore, applies the specialized accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. ASC Topic 946 states that consolidation by the Company of an investee that is not an investment company is not appropriate, except when the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company's investment portfolio is carried on the Unaudited and Audited Consolidated Balance Sheets at fair value, as discussed further in Note 3, with any adjustments to fair value recognized as “Net unrealized appreciation (depreciation)” on the Unaudited Consolidated Statements of Operations.

The accompanying unaudited consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the full fiscal year. Additionally, the unaudited consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the unaudited consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Recently Issued Accounting Standards

In March 2020, the FASB issued Accounting Standards Update, 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements.

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Notes to Unaudited Consolidated Financial Statements — (Continued)

Share Purchase Programs

On February 27, 2020, the Board approved an open-market share repurchase program for the 2020 fiscal year (the “2020 Share Repurchase Program”). Under the 2020 Share Repurchase Program, the Company was authorized during fiscal year 2020 to repurchase up to a maximum of 5.0% of the amount of shares outstanding as of February 27, 2020 if shares traded below net asset value (“NAV”) per share, subject to liquidity and regulatory constraints.

Purchases under the 2020 Share Repurchase Program were made in open-market transactions and included transactions being executed by a broker selected by the Company that had been delegated the authority to repurchase shares on the Company's behalf in the open market in accordance with applicable rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including Rules 10b5-1 and 10b-18 thereunder, and pursuant to, and under the terms and limitations of, the 2020 Share Repurchase Program. During the three months ended March 31, 2020, the Company repurchased a total of 661,981 shares of its common stock in the open market under the 2020 Share Repurchase Program at an average price of $7.23 per share, including broker commissions.

In connection with the completion of the Company’s acquisition of MVC Capital, Inc. (“MVC”), a Delaware corporation, on December 23, 2020 (the “MVC Acquisition”), the Company committed to make open-market purchases of shares of its common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of the Company’s then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing upon the filing of this quarterly report on Form 10-Q for the quarter ended March 31, 2021 and will be made in accordance with applicable legal, contractual and regulatory requirements.

2. AGREEMENTS AND RELATED PARTY TRANSACTIONS

On August 2, 2018, the Company entered into the Original Advisory Agreement and the Administration Agreement with the Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. In connection with the MVC Acquisition, on December 23, 2020, the Company entered into an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with the Adviser, following approval of the Amended and Restated Advisory Agreement by the Company’s stockholders at its December 23, 2020 special meeting of stockholders. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021.

The Amended and Restated Advisory Agreement amended the Original Advisory Agreement to, among other things, (i) reduce the annual base management fee payable to the Adviser from 1.375% to 1.250% of the Company’s gross assets, (ii) 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 (iii) describe the fact that the Company 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.

Investment Advisory Agreement

Pursuant to the Amended and Restated Advisory Agreement, the Adviser manages the Company's day-to-day operations and provides the Company with investment advisory services. Among other things, the Adviser (i) determines the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by the Company; (iii) executes, closes, services and monitors the investments that the Company makes; (iv) determines the securities and other assets that the Company will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.

The Amended and Restated Advisory Agreement provides that, absent fraud, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Adviser, and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser (collectively, the "IA Indemnified Parties"), are entitled to indemnification from the Company for any damages, liabilities, costs, demands, charges, claims and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the IA Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of any actions or omissions or otherwise based upon the performance of any of the Adviser’s duties or obligations under the Amended and Restated Advisory Agreement or otherwise as an investment adviser of the Company. The Adviser’s services under the Amended and Restated Advisory Agreement are not exclusive, and the Adviser is generally free to furnish similar

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Notes to Unaudited Consolidated Financial Statements — (Continued)

services to other entities so long as its performance under the Amended and Restated Advisory Agreement is not adversely affected.

The Adviser has entered into a personnel-sharing arrangement with its affiliate, Barings International Investment Limited (“BIIL”). BIIL is a wholly-owned subsidiary of Baring Asset Management Limited, which in turn is an indirect, wholly-owned subsidiary of the Adviser. Pursuant to this arrangement, certain employees of BIIL may serve as “associated persons” of the Adviser and, in this capacity, subject to the oversight and supervision of the Adviser, may provide research and related services, and discretionary investment management and trading services (including acting as portfolio managers) to the Company on behalf of the Adviser. This arrangement is based on no-action letters of the staff of the Securities and Exchange Commission (the “SEC”) that permit SEC-registered investment advisers to rely on and use the resources of advisory affiliates or "participating affiliates," subject to the supervision of that SEC-registered investment adviser. BIIL is a “participating affiliate” of the Adviser, and the BIIL employees are “associated persons” of the Adviser.

Under the Amended and Restated Advisory Agreement, the Company pays the Adviser (i) a base management fee (the “Base Management Fee”) and (ii) an incentive fee (the “Incentive Fee”) as compensation for the investment advisory and management services it provides the Company thereunder.

Pre-January 1, 2021 Base Management Fee

For the period from January 1, 2020 through December 31, 2020, the Base Management Fee was calculated based on the Company's gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.375%.

The Base Management Fee was payable quarterly in arrears on a calendar quarter basis. The Base Management Fee was calculated based on the average value of the Company’s 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. Base Management Fees for any partial month or quarter were appropriately pro-rated.

Post-December 31, 2020 Base Management Fee

Beginning January 1, 2021, the Base Management Fee is calculated based on the Company’s gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.25%. The Base Management Fee is payable quarterly in arrears on a calendar quarter basis. The Base Management Fee will be calculated based on the average value of the Company’s 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. Base Management Fees for any partial month or quarter will be appropriately pro-rated.

For the three months ended March 31, 2021, the Base Management Fee determined in accordance with the terms of the Amended and Restated Advisory Agreement was approximately $3.9 million. For the three months ended, March 31, 2020, the Base Management Fee determined in accordance with the terms of the Original Advisory Agreement was approximately $3.9 million. As of March 31, 2021, the Base Management Fee of $3.9 million for the three months ended March 31, 2021 was unpaid and included in “Base management fees payable” in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2020, the Base Management Fee of $3.4 million for the three months ended December 31, 2020 was unpaid and included in “Base management fees payable” in the accompanying Consolidated Balance Sheet.

Pre-January 1, 2021 Incentive Fee

For the period from August 2, 2018 through December 31, 2020, under the Original Advisory Agreement, the Incentive Fee was comprised of two parts: (1) a portion based on the Company’s pre-incentive fee net investment income (the "Pre-2021 Income-Based Fee") and (2) a portion based on the net capital gains received on the Company’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 "Pre-2021 Capital Gains Fee").

The Pre-2021 Income-Based Fee was calculated as follows:

(i)For each quarter from and after August 2, 2018 through December 31, 2019 (the "Pre-2020 Period"), the Pre-2021 Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter for which such fees were being calculated. In respect of the Pre-2020 Period, "Pre-Incentive Fee Net Investment Income" meant interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that the Company receives from portfolio companies) accrued during the relevant

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Notes to Unaudited Consolidated Financial Statements — (Continued)

calendar quarter, minus the Company’s operating expenses for such quarter (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income included, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

(ii)For each quarter beginning on and after January 1, 2020 (the "Post-2019 Period"), the Pre-2021 Income-Based Fee was calculated and payable quarterly in arrears based on the Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter and the eleven preceding calendar quarters (or such fewer number of preceding calendar quarters counting each calendar quarter beginning on or after January 1, 2020) (each such period referred to as the "Pre-2021 Trailing Twelve Quarters") for which such fees were being calculated and was payable promptly following the filing of the Company’s financial statements for such quarter. In respect of the Post-2019 Period, "Pre-Incentive Fee Net Investment Income" meant interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that the Company receives from portfolio companies) accrued during the relevant Pre-2021 Trailing Twelve Quarters, minus the Company’s operating expenses for such Pre-2021 Trailing Twelve Quarters (including the Base Management Fee, expenses payable under the Administration Agreement, any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee) divided by the number of quarters that comprise the relevant Pre-2021 Trailing Twelve Quarters. Pre-Incentive Fee Net Investment Income included, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income did not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

(iii)Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less senior securities constituting indebtedness and preferred stock) at the end of the calendar quarter for which such fees were being calculated, was compared to a "hurdle rate", expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed calendar quarter, of 2% per quarter (8% annualized). The Company paid the Adviser the Pre-2021 Income-Based Fee with respect to the Company’s Pre-Incentive Fee Net Investment Income in each calendar quarter as follows:

(1)(a) With respect to the Pre-2020 Period, no Pre-2021 Income-Based Fee for any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) did not exceed the hurdle rate;

(b) With respect to the Post-2019 Period, no Pre-2021 Income-Based Fee for any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) did not exceed the hurdle rate;

(2)(a) With respect to the Pre-2020 Period, 100% of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income for such quarter, if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Pre-2020 Catch-Up Amount"). The Pre-2020 Catch-Up Amount was intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) when the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) reached 2% per quarter (8% annualized);

(b) With respect to the Post-2019 Period, 100% of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeded the hurdle rate but was less than 2.5% (10% annualized) (the "Post-2019 Catch-Up Amount"). The Post-2019 Catch-Up Amount was intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) when the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) reached 2% per quarter (8% annualized);

(3)(a) With respect to the Pre-2020 Period, 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (i) above) for any calendar quarter with respect to that portion of the Pre-

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Notes to Unaudited Consolidated Financial Statements — (Continued)

Incentive Fee Net Investment Income (as defined in paragraph (i) above) for such quarter, if any, that exceeded the Pre-2020 Catch-Up Amount; and

(b) With respect to the Post-2019 Period, 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above) for any calendar quarter with respect to that portion of the Pre-Incentive Fee Net Investment Income (as defined in paragraph (ii) above), if any, that exceeded the Post-2019 Catch-Up Amount.

However, with respect to the Post-2019 Period, the Pre-2021 Income-Based Fee paid to the Adviser would in no event be in excess of the Pre-2021 Incentive Fee Cap. With respect to the Post-2019 Period, the "Pre-2021 Incentive Fee Cap" for any quarter was an amount equal to (a) 20% of the Cumulative Net Return (as defined below) during the relevant Pre-2021 Trailing Twelve Quarters minus (b) the aggregate Pre-2021 Income-Based Fee that was paid in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Pre-2021 Trailing Twelve Quarters.

Cumulative Net Return meant (x) the aggregate net investment income in respect of the relevant Pre-2021 Trailing Twelve Quarters minus (y) any Net Capital Loss (as defined below), if any, in respect of the relevant Pre-2021 Trailing Twelve Quarters. If, in any quarter, the Pre-2021 Incentive Fee Cap was zero or a negative value, the Company paid no Pre-2021 Income-Based Fee to the Adviser for such quarter. If, in any quarter, the Pre-2021 Incentive Fee Cap for such quarter was a positive value but was less than the Pre-2021 Income-Based Fee that was payable to the Adviser for such quarter (before giving effect to the Pre-2021 Incentive Fee Cap) calculated as described above, the Company paid a Pre-2021 Income-Based Fee to the Adviser equal to the Pre-2021 Incentive Fee Cap for such quarter. If, in any quarter, the Pre-2021 Incentive Fee Cap for such quarter was equal to or greater than the Pre-2021 Income-Based Fee that was payable to the Adviser for such quarter (before giving effect to the Pre-2021 Incentive Fee Cap) calculated as described above, the Company paid an Pre-2021 Income-Based Fee to the Adviser equal to the Pre-2021 Income-Based Fee calculated as described above for such quarter without regard to the Pre-2021 Incentive Fee Cap.

Net Capital Loss in respect of a particular period meant the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.

The Pre-2021 Capital Gains Fee was determined and payable in arrears as of the end of each calendar year, commencing with the calendar year ended on December 31, 2018, and was calculated at the end of each applicable year by subtracting (1) the sum of the Company’s cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Company’s cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount was positive at the end of such year, then the Pre-2021 Capital Gains Fee payable for such year was equal to 20% of such amount, less the cumulative aggregate amount of Pre-2021 Capital Gains Fees paid in all prior years. If such amount was negative, then there was no Pre-2021 Capital Gains Fee payable for such year.

Post-December 31, 2020 Incentive Fee

Beginning January 1, 2021, the Incentive Fee continues to consist of two components that are independent of each other, with the result that one component may be payable even if the other is not. Under the Amended and Restated Advisory Agreement, a portion of the Incentive Fee is based on the Company's income (the “Income-Based Fee”) and a portion is based on the Company's capital gains (the “Capital Gains Fee”), each as described below:

(i) The Income-Based Fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate “Pre-Incentive Fee Net Investment Income” (as defined below) in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of the Company's first eleven calendar quarters that commences on or after January 1, 2021) (in either case, the “Trailing Twelve Quarters”) exceeds (y) the Hurdle Amount (as defined below) in respect of the Trailing Twelve Quarters. The Hurdle Amount will be determined on a quarterly basis, and will be calculated by multiplying 2.0% (8% annualized) by the aggregate of the Company's NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. For this purpose, under the Amended and Restated Advisory Agreement, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including, without limitation, any accrued income that we have not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus the Company's operating expenses accrued during the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Income-Based Fee and the Capital Gains Fee). For the

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Notes to Unaudited Consolidated Financial Statements — (Continued)

avoidance of doubt, Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation:

The calculation of the Income-Based Fee for each quarter is as follows:

(A) No Income-Based Fee will 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 NAV 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.

Subject to the Incentive Fee Cap described below, the amount of the Income-Based Fee that will be paid to the Adviser for a particular quarter will equal the excess of the aggregate Income-Based Fee so calculated less the aggregate Income-Based Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.

(ii) The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fee that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, we will pay no Income-Based Fee to the Adviser in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Income-Based Fee calculated in accordance with paragraph (i) above, we will pay the Adviser the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Income-Based Fee calculated in accordance with paragraph (i) above, we will pay the Adviser the Income-Based Fee for such quarter.

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses on the Company's assets, whether realized or unrealized, in such period and (ii) aggregate capital gains or other gains on the Company's assets (including, for the avoidance of doubt, the value ascribed to any credit support arrangement in the Company's financial statements even if such value is not categorized as a gain therein), whether realized or unrealized, in such period.

(iii) The second part of the Incentive Fee (the “Capital Gains Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Amended and Restated Advisory Agreement), commencing with the calendar year ended on December 31, 2018, and is calculated at the end of each applicable year by subtracting (1) the sum of the Company's cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Company's cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount is positive at the end of such year, then the Capital Gains Fee payable for such year is equal to 20% of such amount, less the cumulative aggregate amount of Capital Gains Fees paid in all prior years commencing with the calendar year ended on December 31, 2018. If such amount is negative, then there is no Capital Gains Fee payable for such year. If this Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.

Under the Amended and Restated Advisory Agreement, the "cumulative aggregate realized capital gains" are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.

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Notes to Unaudited Consolidated Financial Statements — (Continued)

The cumulative aggregate realized capital losses are calculated as the sum of the differences, if negative, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.

The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company's portfolio as of the applicable Capital Gains Fee calculation date and (b) the accreted or amortized cost basis of such investment.

Under the Amended and Restated Advisory Agreement, the “accreted or amortized cost basis of an investment” shall mean the accreted or amortized cost basis of such investment as reflected in the Company’s financial statements.

For the three months ended March 31, 2021, the Income-Based Fee determined in accordance with the terms of the Amended and Restated Advisory Agreement was $2.7 million. As of March 31, 2021, the Income-Based Fee of $2.7 million was unpaid and included in “Incentive management fees payable” in the accompanying Unaudited Consolidated Balance Sheet. The Company did not pay any Pre-2021 Income-Based Fee for the three months ended March 31, 2020.

The Company did not pay any capital gains fees for either of the three months ended March 31, 2021 or 2020.

Payment of Company Expenses

Under the Amended and Restated Advisory Agreement, all investment professionals of the Adviser and its staff, when and to the extent engaged in providing services required to be provided by the Adviser under the Amended and Restated Advisory Agreement, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser and not by the Company, except that all costs and expenses relating to the Company's operations and transactions, including, without limitation, those items listed in the Amended and Restated Advisory Agreement, will be borne by the Company.

Administration Agreement

Under the terms of the Administration Agreement, the Adviser performs (or oversees, or arranges for, the performance of) the administrative services necessary for the operation of the Company, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record-keeping services at such office facilities and such other services as the Adviser, subject to review by the Board, from time to time, determines to be necessary or useful to perform its obligations under the Administration Agreement. The Adviser also, on behalf of the Company and subject to oversight by the Board, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, valuation experts, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable.

The Company will reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by the Company and Barings quarterly in arrears. In no event will the agreed-upon quarterly expense amount exceed the amount of expenses that would otherwise be reimbursable by the Company under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. The costs and expenses incurred by the Adviser on behalf of the Company under the Administration Agreement include, but are not limited to:

•the allocable portion of the Adviser’s rent for the Company’s Chief Financial Officer and the Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the usage thereof by such personnel in connection with their performance of administrative services under the Administration Agreement;

•the allocable portion of the salaries, bonuses, benefits and expenses of the Company’s Chief Financial Officer and Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the time spent by such personnel in connection with performing administrative services for the Company under the Administration Agreement;

•the actual cost of goods and services used for the Company and obtained by the Adviser from entities not affiliated with the Company, which is reasonably allocated to the Company on the basis of assets, revenues, time records or other methods conforming with generally accepted accounting principles;

•all fees, costs and expenses associated with the engagement of a sub-administrator, if any; and

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Notes to Unaudited Consolidated Financial Statements — (Continued)

•costs associated with (a) the monitoring and preparation of regulatory reporting, including registration statements and amendments thereto, prospectus supplements, and tax reporting, (b) the coordination and oversight of service provider activities and the direct cost of such contractual matters related thereto and (c) the preparation of all financial statements and the coordination and oversight of audits, regulatory inquiries, certifications and sub-certifications.

For the three months ended March 31, 2021 and March 31, 2020, the Company incurred and was invoiced by the Adviser for expenses of approximately $0.5 million and $0.4 million, respectively, under the terms of the Administration Agreement, which amounts are included in “General and administrative expenses” in the accompanying Unaudited Consolidated Statements of Operations. As of March 31, 2021, the administrative expenses of $0.5 million for the three months ended March 31, 2021 were unpaid and included in “Administrative fees payable” in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2020, the administrative expenses of $0.7 million incurred for the three months ended December 31, 2020 were unpaid and included in “Administrative fees payable” in the accompanying Consolidated Balance Sheet.

Credit Support Agreement

In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the Company’s merger with MVC, the Company entered into a Credit Support Agreement (the “Credit Support Agreement”) with the Adviser, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. A summary of the material terms of the Credit Support Agreement are as follows:

•The Credit Support Agreement covers all of the investments in the Reference Portfolio.

•The Adviser has an obligation to provide credit support to the Company in an amount equal to the excess of (1) the aggregate realized and unrealized losses on the Reference Portfolio over (2) the aggregate realized and unrealized gains on the Reference Portfolio, in each case from the date of the closing of the Company’s merger with MVC through the Designated Settlement Date (up to a $23.0 million cap) (such amount, the “Covered Losses”). For purposes of the Credit Support Agreement, “Designated Settlement Date” means the earlier of (1) January 1, 2031 and (2) the date on which the entire Reference Portfolio has been realized or written off. No credit support is required to be made by the Adviser to the Company under the Credit Support Agreement if the aggregate realized and unrealized gains on the Reference Portfolio exceed realized and unrealized losses of the Reference Portfolio on the Designated Settlement Date.

•The Adviser will settle any credit support obligation under the Credit Support Agreement as follows. If the Covered Losses are greater than $0.00, then, in satisfaction of the Adviser’s obligation set forth in the Credit Support Agreement, the Adviser will irrevocably waive during the Waiver Period (as defined below) (1) the incentive fees payable under the Amended and Restated Advisory Agreement (including any incentive fee calculated on an annual basis during the Waiver Period), and (2) in the event that Covered Losses exceed such incentive fee, the base management fees payable under the Amended and Restated Advisory Agreement. The “Waiver Period” means the four quarterly measurement periods immediately following the quarter in which the Designated Settlement Date occurs. If the Covered Losses exceed the aggregate amount of incentive fees and base management fees waived by the Adviser during the Waiver Period, then, on the date on which the last incentive fee or base management fee payment would otherwise be due during the Waiver Period, the Adviser shall make a cash payment to the Company equal to the positive difference between the Covered Losses and the aggregate amount of incentive fees and base management fees previously waived by the Adviser during the Waiver Period.

•The Credit Support Agreement and the rights of the Company thereunder shall automatically terminate if the Adviser (or an affiliate of the Adviser) ceases to serve as the investment adviser to the Company or any successor thereto, other than as a result of the voluntary termination by the Adviser of its investment advisory agreement with the Company. In the event of such a voluntary termination by the Adviser of the then-current investment advisory agreement with the Company, the Adviser will remain obligated to provide the credit support contemplated by the Credit Support Agreement. In the event of a non-voluntary termination of the advisory agreement or its expiration (due to non-renewal by the Board, the Adviser will have no obligations under the Credit Support Agreement.

The Credit Support Agreement is intended to give stockholders of the combined company following the MVC Acquisition downside protection from net cumulative realized and unrealized losses on the acquired MVC portfolio and insulate the combined company’s stockholders from potential value volatility and losses in MVC’s portfolio following the closing of the Company’s merger with MVC. There is no fee or other payment by the Company to the Adviser or any of its affiliates in connection with the Credit Support Agreement. Any cash payment from the Adviser to the Company under the Credit Support

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Agreement will be excluded from the Company’s incentive fee calculations under the Amended and Restated Advisory Agreement.

When the Company and the Adviser entered into the Credit Support Agreement, it was accounted for as a deemed contribution from the Adviser and is included in "Additional paid-in capital" in the accompanying Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet. In addition, the Credit Support Agreement will be accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging, and is included in "Credit support agreement" in the accompanying Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet.

3. INVESTMENTS

Portfolio Composition

The Company invests predominately in senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries, as well as syndicated senior secured loans, structured product investments, bonds and other fixed income securities. Structured product investments include collateralized loan obligations and asset-backed securities. The Adviser's existing SEC co-investment exemptive relief under the 1940 Act, permits the Company and the Adviser's affiliated private funds and SEC-registered funds to co-invest in loans originated by the Adviser, which allows the Adviser to efficiently implement its senior secured private debt investment strategy for the Company.

The cost basis of the Company's debt investments includes any unamortized purchased premium or discount, unamortized loan origination fees and PIK interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments, are shown in the following tables:


	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio		Percentage of Total Net Assets
March 31, 2021:
Senior debt and 1st lien notes	$	1,228,983,292	77	%	$	1,238,178,055	77	%	170	%
Subordinated debt and 2nd lien notes	150,273,105		10		150,597,961		9		21
Structured products	23,163,888		1		26,153,607		2		4
Equity shares	42,543,214		3		39,617,746		2		5
Equity warrants	1,235,383		—		1,434,309		—		—
Investment in joint ventures / PE fund	68,782,532		4		72,576,383		5		10
Short-term investments	73,569,174		5		73,565,676		5		10
	$	1,588,550,588	100	%	$	1,602,123,737	100	%	220	%
December 31, 2020:
Senior debt and 1st lien notes	$	1,167,436,742	79	%	$	1,171,250,512	79	%	163	%
Subordinated debt and 2nd lien notes	137,776,808		9		138,767,120		9		19
Structured products	30,071,808		2		32,508,845		2		5
Equity shares	44,693,645		3		44,651,114		3		6
Equity warrants	1,235,383		—		1,300,197		—		—
Investment in joint ventures / PE fund	39,282,532		3		41,759,922		3		6
Short-term investments	65,558,227		4		65,558,227		4		9
	$	1,486,055,145	100	%	$	1,495,795,937	100	%	208	%

During the three months ended March 31, 2021, the Company made 18 new investments totaling $172.2 million, made investments in existing portfolio companies totaling $73.2 million, made a new joint venture equity investment totaling $4.5 million and additional investments in joint venture equity portfolio companies totaling $25.0 million. During the three months ended March 31, 2020, the Company made 30 new investments totaling $111.2 million and made investments in existing portfolio companies totaling $20.9 million.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The industry composition of investments at fair value at March 31, 2021 and December 31, 2020, excluding short-term investments, was as follows:


	March 31, 2021				December 31, 2020
Aerospace and Defense	$	103,612,237	6.8	%	$	82,501,170	5.8	%
Automotive	59,394,262		3.9		61,581,980		4.3
Banking, Finance, Insurance and Real Estate	118,580,033		7.8		99,099,552		6.9
Beverage, Food and Tobacco	16,900,033		1.1		15,404,126		1.1
Capital Equipment	32,078,431		2.1		30,899,579		2.2
Chemicals, Plastics, and Rubber	31,917,870		2.1		32,378,972		2.3
Construction and Building	65,281,876		4.3		59,861,616		4.2
Consumer goods: Durable	38,394,329		2.5		38,165,784		2.7
Consumer goods: Non-durable	33,371,033		2.2		28,081,580		2.0
Containers, Packaging and Glass	7,407,821		0.5		9,018,983		0.6
Energy: Electricity	16,490,359		1.1		17,627,935		1.2
Energy: Oil and Gas	3,662,649		0.2		788,105		0.1
Environmental Services	11,616,266		0.8		—		—
Healthcare and Pharmaceuticals	148,719,048		9.7		142,708,050		10.0
High Tech Industries	165,576,202		10.8		152,413,985		10.6
Hotel, Gaming and Leisure	16,677,421		1.1		10,682,093		0.7
Investment Funds and Vehicles	72,576,383		4.7		41,759,922		2.9
Media: Advertising, Printing and Publishing	67,947,381		4.4		54,123,033		3.8
Media: Broadcasting and Subscription	5,648,515		0.4		6,464,741		0.4
Media: Diversified and Production	43,257,677		2.8		48,200,216		3.4
Metals and Mining	18,640,733		1.2		17,857,236		1.2
Retail	—		—		1,983,083		0.1
Services: Business	218,683,424		14.3		209,974,914		14.7
Services: Consumer	58,147,463		3.8		54,450,324		3.8
Structured Products	26,153,607		1.7		32,508,845		2.3
Telecommunications	30,936,630		2.0		43,021,001		3.0
Transportation: Cargo	64,766,643		4.2		91,132,943		6.4

Utilities: Electric	8,999,781		0.6		8,987,929		0.6
Utilities: Oil and Gas	11,683,609		0.8		11,645,956		0.8
Wholesale	31,436,345		2.1		26,914,057		1.9
Total	$	1,528,558,061	100.0	%	$	1,430,237,710	100.0	%

Jocassee Partners LLC

On May 8, 2019, the Company entered into an agreement with South Carolina Retirement Systems Group Trust ("SCRS") to create and co-manage Jocassee Partners LLC ("Jocassee"), a joint venture, which invests in a highly diversified asset mix including senior secured, middle-market, private debt investments, syndicated senior secured loans and structured product investments. The Company and SCRS committed to initially provide $50.0 million and $500.0 million, respectively, of equity capital to Jocassee. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments. As of March 31, 2021, Jocassee had $272.1 million in senior secured private middle-market debt investments, $0.7 million in second lien and subordinated private middle-market debt investments, $384.5 million in U.S. syndicated senior secured loans, $9.1 million in U.S. syndicated second lien and subordinated loans, $146.8 million in European syndicated senior secured loans, $5.7 million in structured product investments, $5.4 million in equity investments, $100.0 million in joint venture investments and $21.5 million in short-term investments. As of December 31, 2020, Jocassee had $180.6 million in senior secured private middle-market debt investments, $382.9 million in U.S. syndicated senior secured loans, $161.5 million in European syndicated senior secured loans, $25.6 million in structured product investments, $5.8 million in an equity investment, $90.1 million in a joint venture investment and $23.1 million in short-term investments.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The Company may sell portions of its investments via assignment to Jocassee. Since inception, as of March 31, 2021 and December 31, 2020, the Company had sold $256.9 million and $162.2 million, respectively, of its investments to Jocassee. As of each of March 31, 2021 and December 31, 2020, the Company had $44.2 million in unsettled receivables due from Jocassee that were included in "Receivable from unsettled transactions" in the accompanying Unaudited and Audited Consolidated Balance Sheets. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale and satisfies the following conditions:

•Assigned investments have been isolated from the Company, and put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership;

•each participant has the right to pledge or exchange the assigned investments it received, and no condition both constrains the participant from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the Company; and

•the Company, its consolidated affiliates or its agents do not maintain effective control over the assigned investments through either: (i) an agreement that entitles and/or obligates the Company to repurchase or redeem the assets before maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call.

The Company has determined that Jocassee is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Jocassee as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Jocassee due to the allocation of voting rights among Jocassee members.

As of March 31, 2021 and December 31, 2020, Jocassee had the following commitments, contributions and unfunded commitments from its members:


	As of March 31, 2021
Member	Total Commitments		Contributed Capital		Return of Capital (not recallable)		Unfunded Commitments
Barings BDC, Inc.	$	50,000,000	$	25,000,000	$	—	$	25,000,000
South Carolina Retirement Systems Group Trust	500,000,000		250,000,000		—		250,000,000
Total	$	550,000,000	$	275,000,000	$	—	$	275,000,000

	As of December 31, 2020
Member	Total Commitments		Contributed Capital		Return of Capital (not recallable)		Unfunded Commitments
Barings BDC, Inc.	$	50,000,000	$	20,000,000	$	—	$	30,000,000
South Carolina Retirement Systems Group Trust	500,000,000		200,000,000		—		300,000,000
Total	$	550,000,000	$	220,000,000	$	—	$	330,000,000

Thompson Rivers LLC

On April 28, 2020, Thompson Rivers LLC (“Thompson Rivers”) was formed as a Delaware limited liability company. On May 13, 2020, the Company entered into a limited liability company agreement with Jocassee. The Company and Jocassee committed to initially provide $10.0 million and $90.0 million, respectively, of equity capital to Thompson Rivers. Equity contributions (and equity ownership) are on a pro-rata basis, based on their equity commitments (10% for the Company and 90% for Jocassee). On January 29, 2021, the Company and Jocassee entered into a Second Amended and Restated Limited Liability Company Agreement (“Amended LLC Agreement”). The Amended LLC Agreement increased the Company's commitment to $30.0 million. As of March 31, 2021, Thompson Rivers had $938.8 million in Ginnie Mae early buyout loans and $62.1 million in cash. As of December 31, 2020, Thompson Rivers had $715.2 million in Ginnie Mae early buyout loans.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The Company has determined that Thompson Rivers is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Thompson Rivers as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Thompson Rivers due to the allocation of voting rights among Thompson Rivers members.

As of March 31, 2021 and December 31, 2020, Thompson Rivers had the following commitments, contributions and unfunded commitments from its members:


	As of March 31, 2021
Member	Total Commitments		Contributed Capital		Return of Capital (not recallable)		Unfunded Commitments
Barings BDC, Inc.	$	30,000,000	$	30,000,000	$	—	$	—
Jocassee Partners LLC	90,000,000		90,000,000		—		—
Total	$	120,000,000	$	120,000,000	$	—	$	—

	As of December 31, 2020
Member	Total Commitments		Contributed Capital		Return of Capital (not recallable)		Unfunded Commitments
Barings BDC, Inc.	$	10,000,000	$	10,000,000	$	—	$	—
Jocassee Partners LLC	90,000,000		90,000,000		—		—
Total	$	100,000,000	$	100,000,000	$	—	$	—

Waccamaw River LLC

On January 4, 2021, Waccamaw River LLC (“Waccamaw River”) was formed as a Delaware limited liability company. On February 8, 2021, the Company entered into a limited liability company agreement (“Waccamaw LLC Agreement”) with Jocassee. The Company and Jocassee have committed to initially each provide $25.0 million, of equity capital to Waccamaw River. Equity contributions (and equity ownership) are on a pro-rata basis, based on their equity commitments (50% for the Company and 50% for Jocassee). As of March 31, 2021, Waccamaw River had $7.8 million in unsecured consumer loans and $0.6 million in cash.

The Company has determined that Waccamaw River is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Waccamaw River as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control Waccamaw River due to the allocation of voting rights among Waccamaw River members.

As of March 31, 2021, Waccamaw River had the following commitments, contributions and unfunded commitments from its members:


	As of March 31, 2021
Member	Total Commitments		Contributed Capital		Return of Capital (not recallable)		Unfunded Commitments
Barings BDC, Inc.	$	25,000,000	$	4,500,000	$	—	$	20,500,000
Jocassee Partners LLC	25,000,000		4,500,000		—		20,500,000
Total	$	50,000,000	$	9,000,000	$	—	$	41,000,000

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Valuation of Investments

The Company conducts the valuation of its investments, upon which its net asset value is primarily based, in accordance with its valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"). The Company's current valuation policy and processes were established by the Adviser and have been approved by the Board.

Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.

Under ASC Topic 820, there are three levels of valuation inputs, as follows:

Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

The Company’s investment portfolio includes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. In such cases, the Company determines the fair value of its investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs exist, and if so, the Company assesses the appropriateness of the use of these third-party quotes in determining fair value based on (i) its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with the underlying performance of the portfolio company.

There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Investment Valuation Process

The Adviser has established a pricing committee that is, subject to the oversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets held by the Company. The Adviser uses independent third-party providers to price the portfolio, but in the event an acceptable price cannot be obtained from an approved external source, the Adviser will utilize alternative methods in accordance with internal pricing procedures established by the Adviser's pricing committee.

At least annually, the Adviser conducts reviews of the primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While the Adviser is not provided access to proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process the Adviser continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. The Adviser believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e., exit prices).

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The Company's money market fund investments are generally valued using Level 1 inputs and its equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. The Company’s syndicated senior secured loans and structured product investments are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by an independent pricing service. The Company's middle-market, private debt and equity investments are generally valued using Level 3 inputs.

Independent Valuation

The fair value of loans and equity investments that are not syndicated or for which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. Such loans and equity investments are initially held at cost, as that is a reasonable approximation of fair value on the acquisition date, and monitored for material changes that could affect the valuation (for example, changes in interest rates or the credit quality of the borrower). At the quarter end following the initial acquisition, such loans and equity investments are generally sent to a valuation provider which will determine the fair value of each investment. The independent valuation providers apply various methods (synthetic rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require (the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates in the discounted cash flow analysis. A range of values will be provided by the valuation provider and the Adviser will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination. The Adviser uses its internal valuation model as a comparison point to validate the price range provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board. If the Adviser’s pricing committee disagrees with the price range provided, it may make a fair value recommendation to the Board that is outside of the range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the stockholders' best interests, to request an independent valuation firm to perform an independent valuation on certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. Pursuant to these procedures, the Board determines in good faith whether the Company's investments were valued at fair value in accordance with the Company's valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, the Company’s Audit Committee and the independent valuation firm.

Valuation Techniques

The Company's valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, the Company will utilize alternative approaches such as broker quotes or manual prices. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security.

Valuation of Investment in Jocassee

The Company estimates the fair value of its investment in Jocassee using the NAV of Jocassee and its ownership percentage. The NAV of Jocassee is determined in accordance with the specialized accounting guidance for investment companies.

Valuation of Investment in Thompson Rivers

The Company estimates the fair value of its investment in Thompson Rivers using the NAV of Thompson Rivers and its ownership percentage. The NAV of Thompson Rivers is determined in accordance with the specialized accounting guidance for investment companies.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Valuation of Investment in Waccamaw River

The Company estimates the fair value of its investment in Waccamaw River using the NAV of Waccamaw River and its ownership percentage. The NAV of Waccamaw River is determined in accordance with the specialized accounting guidance for investment companies.

Valuation of Investments in MVC Private Equity Fund LP

The Company estimates the fair value of its investment in MVC Private Equity Fund LP (the "MVC PE Fund") using the NAV of the MVC PE Fund and its ownership percentage. The NAV of the MVC PE Fund is determined in accordance with the specialized accounting guidance for investment companies.

Level 3 Unobservable Inputs

The following tables summarize the significant unobservable inputs the Company used in the valuation of its Level 3 debt and equity securities as of March 31, 2021 and December 31, 2020. The weighted average range of unobservable inputs is based on fair value of investments.

March 31, 2021:

Fair Value

Valuation
Model

Level 3
Input

Range of
Inputs

Weighted
Average

Senior debt and 1st lien notes(1)(2)

886,013,699

Yield Analysis

Market Yield

5.4% – 18.2%

7.8%

3,000,000

Liquidation Analysis

Adjusted EBITDA Multiple

0.1x – 0.1x

0.10x

231,246,561

Recent Transaction

Transaction Price

97.0% – 99.0%

98.0%

Subordinated debt and 2nd lien notes(3)

102,508,414

Yield Analysis

Market Yield

8.5% – 28.0%

18.6%

21,416,118

Market Approach

Adjusted EBITDA Multiple

3.5x – 7.5x

4.8x

15,733,031

Recent Transaction

Transaction Price

97.2% – 98.8%

97.4%

Equity shares(4)

31,596,895

Market Approach

Adjusted EBITDA Multiple

3.5x – 16.3x

5.3x

4,945,906

Real Estate - Cost Approach

Replacement Cost (CZK/m2)

1,237 to 1,892

1,892

Real Estate - Cost Approach

Depreciation Factor

0.50 to 1.00

0.81

Real Estate - Income Approach

Market Rent
CZK/Year

CZK5,011,718 to CZK8,700,000

CZK5,011,718

Real Estate - Income Approach

Cap Rate

6.0% to 7.0%

6.5%

Real Estate - Income Approach

Adj. Factor for
Development Zone

n/a

1.15

187,235

Recent Transaction

Transaction Price

Equity warrants

976,978

Market Approach

Adjusted EBITDA Multiple

5.5x-13.4x

6.1x

(1)Excludes investments with an aggregate fair value amounting to $6,416,810, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(2)Senior debt investments with a total fair value of $12,704,389, were valued using unobservable market transactions.

(3)Excludes investments with an aggregate fair value amounting to $4,512,617, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(4)Excludes investments with an aggregate fair value amounting to $88,290, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

December 31, 2020:

Fair Value

Valuation
Model

Level 3
Input

Range of
Inputs

Weighted
Average

Senior debt and 1st lien notes(1)

650,550,710

Yield Analysis

Market Yield

4.7% – 16.2%

7.4%

3,000,000

Liquidation Analysis

Adjusted EBITDA Multiple

0.05x – 0.15x

0.10x

399,692,333

Recent Transaction

Transaction Price

96.0% – 100.0%

97.8%

Subordinated debt and 2nd lien notes(2)

109,851,771

Yield Analysis

Market Yield

6.0% – 26.0%

16.7%

13,933,960

Market Approach

Adjusted EBITDA Multiple

5.0x – 6.0x

5.5x

4,959,088

Recent Transaction

Transaction Price

100%

Equity shares(3)

39,178,157

Market Approach

Adjusted EBITDA Multiple

0.8x – 11.8x

4.8x

4,752,997

Real Estate - Cost Approach

Replacement Cost (CZK/m2)

1,237 to 1,892

1,892

Real Estate - Cost Approach

Depreciation Factor

0.50 to 1.00

0.81

Real Estate - Income Approach

Market Rent
CZK/Year

CZK5,011,718 to CZK8,700,000

CZK5,011,718

Real Estate - Income Approach

Cap Rate

6.0% to 7.0%

6.5%

Real Estate - Income Approach

Adj. Factor for
Development Zone

n/a

1.15

227,200

Recent Transaction

Transaction Price

$1,000

Equity warrants

1,133,781

Market Approach

Adjusted EBITDA Multiple

4.8x-9.0x

6.0x

(1)Excludes investments with an aggregate fair value amounting to $2,474,068, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(2)Excludes investments with an aggregate fair value amounting to $2,075,117, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(3)Excludes investments with an aggregate fair value amounting to $68,670, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

Significant increases or decreases in any of the above unobservable inputs in isolation, including changes in market yields, discount rates or EBITDA multiples, may change the fair value of certain of the Company’s investments. Generally, an increase in market yields or decrease in EBITDA multiples may result in a decrease in the fair value of certain of the Company's investments.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The following tables present the Company’s investment portfolio at fair value as of March 31, 2021 and December 31, 2020, categorized by the ASC Topic 820 valuation hierarchy, as previously described:


	Fair Value as of March 31, 2021
	Level 1		Level 2		Level 3		Total
Senior debt and 1st lien notes	$	—	$	98,796,596	$	1,139,381,459	$	1,238,178,055
Subordinated debt and 2nd lien notes	—		6,427,781		144,170,180		150,597,961
Structured products	—		26,153,607		—		26,153,607
Equity shares	—		2,799,420		36,818,326		39,617,746
Equity warrants	—		457,331		976,978		1,434,309
Short-term investments	73,565,676		—		—		73,565,676
Investments subject to leveling	$	73,565,676	$	134,634,735	$	1,321,346,943	$	1,529,547,354
Investment in joint ventures / PE fund(1)							72,576,383
							$	1,602,123,737

	Fair Value as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Senior debt and 1st lien notes	$	—	$	115,533,401	$	1,055,717,111	$	1,171,250,512
Subordinated debt and 2nd lien notes	—		7,947,184		130,819,936		138,767,120
Structured products	—		32,508,845		—		32,508,845
Equity shares	—		424,090		44,227,024		44,651,114
Equity warrants	—		166,416		1,133,781		1,300,197
Short-term investments	65,558,227		—		—		65,558,227
Investments subject to leveling	$	65,558,227	$	156,579,936	$	1,231,897,852	$	1,454,036,015
Investment in joint ventures / PE fund(1)							41,759,922
							$	1,495,795,937

(1)The Company's investments in Jocassee, Thompson Rivers, Waccamaw River and the MVC PE Fund are measured at fair value using NAV and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021 and 2020:


Three Months Ended March 31, 2021:	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Equity Shares		Equity Warrants		Total
Fair value, beginning of period	$	1,055,717,111	$	130,819,936	$	44,227,024	$	1,133,781	$	1,231,897,852
New investments	227,056,942		14,477,878		1,072,790		—		242,607,610
Transfers into Level 3	—		2,233,600		424,090		—		2,657,690
Proceeds from sales of investments	(130,763,019)		—		(5,946,010)		—		(136,709,029)
Loan origination fees received	(4,176,205)		(402,163)		—		—		(4,578,368)
Principal repayments received	(12,259,911)		(10,120,108)		—		—		(22,380,019)
Payment-in-kind interest earned	228,937		7,007,695		—		—		7,236,632

Accretion of loan premium	3,089		6,640		—		—		9,729
Accretion of deferred loan origination revenue	1,213,446		211,236		—		—		1,424,682
Realized gain (loss)	1,605,025		3,140		(76,631)		—		1,531,534
Unrealized appreciation (depreciation)	756,044		(67,674)		(2,882,937)		(156,803)		(2,351,370)
Fair value, end of period	$	1,139,381,459	$	144,170,180	$	36,818,326	$	976,978	$	1,321,346,943


Three Months Ended March 31, 2020:	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Equity Shares		Total
Fair value, beginning of period	$	555,500,307	$	12,011,965	$	760,716	$	568,272,988
New investments	97,129,668		660,263		403,774		98,193,705
Transfers in (out) of Level 3	57,635,811		(2,312,500)		—		55,323,311
Proceeds from sales of investments	(37,037,339)		—		—		(37,037,339)
Loan origination fees received	(2,662,115)		(19,808)		—		(2,681,923)
Principal repayments received	(10,114,829)		—		—		(10,114,829)
Accretion of loan premium	(6,389)		—		—		(6,389)
Accretion of deferred loan origination revenue	649,657		8,351		—		658,008
Realized loss	(145,784)		—		—		(145,784)
Unrealized depreciation	(42,233,042)		(370,142)		(121,316)		(42,724,500)
Fair value, end of period	$	618,715,945	$	9,978,129	$	1,043,174	$	629,737,248

All realized gains and losses and unrealized appreciation and depreciation are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Unaudited Consolidated Statements of Operations. Pre-tax net unrealized depreciation on Level 3 investments of $0.4 million during the three months ended March 31, 2021 was related to portfolio company investments that were still held by the Company as of March 31, 2021. Pre-tax net unrealized depreciation on Level 3 investments of $42.6 million during the three months ended March 31, 2020 was related to portfolio company investments that were still held by the Company as of March 31, 2020.

Exclusive of short-term investments, during the three months ended March 31, 2021, the Company made investments of approximately $247.6 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2021, the Company made investments of $27.3 million in portfolio companies to which it was previously committed to provide such financing.

Exclusive of short-term investments, during the three months ended March 31, 2020, the Company made investments of approximately $123.1 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2020, the Company made investments of $5.8 million in portfolio companies to which it was previously committed to provide such financing.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Unsettled Purchases and Sales of Investments

Investment transactions are recorded based on the trade date of the transaction. As a result, unsettled purchases and sales are recorded as payables and receivables from unsettled transactions, respectively. While purchases and sales of the Company's syndicated senior secured loans generally settle on a T+7 basis, the settlement period will sometimes extend past the scheduled settlement. In such cases, the Company generally is contractually owed and recognizes interest income equal to the applicable margin ("spread") beginning on the T+7 date. Such income is accrued as interest receivable and is collected upon settlement of the investment transaction.

Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments

Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments.

Investment Classification

In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, "Control Investments" are investments in those companies that the Company is deemed to "Control." "Affiliate Investments" are investments in those companies that are "Affiliated Persons" of the Company, as defined in the 1940 Act, other than Control Investments. "Non-Control / Non-Affiliate Investments" are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities (i.e., securities with the right to elect directors) and/or has the power to exercise control over the management or policies of such portfolio company. Generally, under the 1940 Act, “Affiliate Investments” that are not otherwise “Control Investments” are defined as investments in which the Company owns at least 5.0%, up to 25.0% (inclusive), of the voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

Investment Income

Interest income, including amortization of premium and accretion of discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.

Payment-in-Kind Interest

The Company currently holds, and expects to hold in the future, some loans in its portfolio that contain payment-in-kind ("PIK") interest provisions. PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.

PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company’s taxable income and therefore affects the amount the Company is required to distribute to its stockholders to maintain its tax treatment as a RIC for federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Fee Income

Origination, facility, commitment, consent and other advance fees received in connection with loan agreements ("Loan Origination Fees") are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.

Fee income for the three months ended March 31, 2021 and 2020 was as follows:


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
Recurring Fee Income:
Amortization of loan origination fees	$	1,078,090	$	429,549
Management, valuation and other fees	581,395		175,755
Total Recurring Fee Income	1,659,485		605,304
Non-Recurring Fee Income:
Prepayment fees	49,517		84,151
Acceleration of unamortized loan origination fees	402,948		228,456
Advisory, loan amendment and other fees	21,225		43,082
Total Non-Recurring Fee Income	473,690		355,689
Total Fee Income	$	2,133,175	$	960,993

Concentration of Credit Risk

As of both March 31, 2021 and December 31, 2020, there were no individual investments representing greater than 10% of the fair value of the Company’s portfolio. As of March 31, 2021 and December 31, 2020, the Company’s largest single portfolio company investment, excluding short-term investments, represented approximately 2.7% and 2.5%, respectively, of the fair value of the Company’s portfolio, exclusive of short-term investments. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses on equity interests, can fluctuate dramatically upon repayment of an investment or sale of an equity interest and in any given year can be highly concentrated among several portfolio companies.

The Company places its cash with financial institutions and, at times, cash may exceed insured limits under applicable law.

As of March 31, 2021, all of the Company's assets were or will be pledged as collateral for the February 2019 Credit Facility.

Investments Denominated in Foreign Currencies

As of March 31, 2021 the Company held two investments that were denominated in Australian dollars, one investment that was denominated in Swedish kronas, 21 investments that were denominated in Euros and 14 investments that were denominated in British pounds sterling. As of December 31, 2020, the Company held two investments that were denominated in Australian dollars, one investment that was denominated in Swedish kronas, 17 investments that were denominated in Euros and 11 investments that were denominated in British pounds sterling.

At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into United States dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into United States dollars using the rates of exchange prevailing on the respective dates of such transactions.

Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into United States dollars using the applicable foreign exchange rates described above, the Company does not separately report that portion of the change in fair values resulting from foreign currency exchange rates fluctuations from the change in fair values of the underlying investment. All fluctuations in fair value are included in net unrealized appreciation (depreciation) of investments in the Company's Unaudited Consolidated Statements of Operations.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

In addition, during both the three months ended March 31, 2021 and March 31, 2020, the Company entered into forward currency contracts primarily to help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations.

Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar.

4. INCOME TAXES

The Company has elected for federal income tax purposes to be treated, and intends to qualify annually, as a RIC under the Code and intends to make the required distributions to its stockholders as specified therein. In order to maintain its tax treatment as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains. The Company has historically met its minimum distribution requirements and continually monitors its distribution requirements with the goal of ensuring compliance with the Code.

Depending on the level of investment company taxable income (“ICTI”) and net capital gains, if any, or taxable income, the Company may choose to carry forward undistributed taxable income and pay a 4% nondeductible U.S. federal excise tax on certain undistributed income unless the Company distributes, in a timely manner, an amount at least equal to the sum of (i) 98% of net ordinary income for each calendar year, (ii) 98.2% of the amount by which capital gains exceed capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year and (iii) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax. Any such carryover of taxable income must be distributed before the end of that next tax year through a dividend declared prior to filing of the tax return related to the year which generated such taxable income not to be subject to U.S. federal income tax.

Taxable income generally differs from increase in net assets resulting from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized. The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, or total distributable earnings (loss), as appropriate.

For federal income tax purposes, the cost of investments owned as of March 31, 2021 and December 31, 2020 was approximately $1,588.4 million and $1,486.0 million, respectively. As of March 31, 2021, net unrealized appreciation on the Company's investments (tax basis) was approximately $5.0 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $30.0 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $25.1 million. As of December 31, 2020, net unrealized depreciation on the Company's investments (tax basis) was approximately $1.3 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $23.4 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $24.7 million.

In addition, the Company has wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), which hold certain portfolio investments that are listed on the Unaudited and Audited Consolidated Schedules of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold certain portfolio companies that are organized as LLCs (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross revenue for income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of qualifying investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, their income is taxed to the Taxable Subsidiaries and does not flow through to the RIC, thereby helping the Company preserve its RIC tax treatment and resultant tax advantages. The Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expense as a result of their ownership of the portfolio

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

companies. This income tax expense or benefit, if any, is reflected in the Company’s Unaudited Consolidated Statements of Operations. Additionally, any unrealized appreciation related to portfolio investments held by the Taxable Subsidiaries (net of unrealized depreciation related to portfolio investments held by the Taxable Subsidiaries) is reflected net of applicable federal and state income taxes, if any, in the Company's Consolidated Statements of Operations, with the related deferred tax assets or liabilities, if any, included in "Accounts payable and accrued liabilities" in the Company's Unaudited and Audited Consolidated Balance Sheets.

5. BORROWINGS

The Company had the following borrowings outstanding as of March 31, 2021 and December 31, 2020:


Issuance Date	Maturity Date	Interest Rate as of March 31, 2021	March 31, 2021		December 31, 2020
Credit Facilities:
February 21, 2019	February 21, 2024	2.096%	$	611,144,523	$	719,660,707
Total Credit Facilities			$	611,144,523	$	719,660,707
Notes:
September 24, 2020 - August 2025 Notes	August 4, 2025	4.660%	$	25,000,000	$	25,000,000
September 29, 2020 - August 2025 Notes	August 4, 2025	4.660%	25,000,000		25,000,000
November 5, 2020 - Series B Notes	November 4, 2025	4.250%	62,500,000		62,500,000
November 5, 2020 - Series C Notes	November 4, 2027	4.750%	112,500,000		112,500,000
February 25, 2021 Series D Notes	February 26, 2026	3.410%	80,000,000		—
February 25, 2021 Series E Notes	February 26, 2028	4.060%	70,000,000		—
(Less: Deferred financing fees)			(818,612)		(664,334)
Total Notes			$	374,181,388	$	224,335,666

February 2019 Credit Facility

On February 21, 2019, the Company entered into the February 2019 Credit Facility (as subsequently amended in December 2019) with ING Capital LLC ("ING"), as administrative agent, and the lenders party thereto. The initial commitments under the February 2019 Credit Facility total $800.0 million. The February 2019 Credit Facility has an accordion feature that allows for an increase in the total commitments by up to $400.0 million, subject to certain conditions and the satisfaction of specified financial covenants. The Company can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of the Company's assets and guaranteed by certain subsidiaries of the Company. Following the termination on June 30, 2020 of Barings BDC Senior Funding I, LLC’s (“BSF”) credit facility entered into in August 2018 with Bank of America, N.A. (the “August 2018 Credit Facility”), BSF became a subsidiary guarantor and its assets will secure the February 2019 Credit Facility. The revolving period of the February 2019 Credit Facility ends on February 21, 2023, followed by a one-year repayment period with a final maturity date of February 21, 2024.

Borrowings under the February 2019 Credit Facility bear interest, subject to the Company's election, on a per annum basis equal to (i) the applicable base rate plus 1.00% (or 1.25% if the Company no longer maintains an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.00% (or 2.25% if the Company no longer maintains an investment grade credit rating), (iii) for borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if the Company no longer maintains an investment grade credit rating) or (iv) for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.20% (or 2.45% if the Company no longer maintains an investment grade credit rating). The applicable base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.5%, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) the adjusted three-month applicable currency rate plus 1.0% and (v) 1.0%. The applicable LIBOR and currency rates depend on the currency and term of the draw under the February 2019 Credit Facility, and cannot be less than zero.

In addition, the Company pays a commitment fee of (i) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (ii) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments. In connection with entering into the February 2019 Credit Facility, the Company incurred financing fees of approximately $6.4 million, which will be amortized over the remaining life of the February 2019 Credit Facility.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The February 2019 Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining minimum stockholders' equity, (ii) maintaining minimum obligors' net worth, (iii) maintaining a minimum asset coverage ratio, (iv) meeting a minimum liquidity test and (v) maintaining the Company's status as a regulated investment company and as a business development company. The February 2019 Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The February 2019 Credit Facility also permits the administrative agent to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. In connection with the February 2019 Credit Facility, the Company also entered into new collateral documents. As of March 31, 2021, the Company was in compliance with all covenants under the February 2019 Credit Facility.

As of March 31, 2021, the Company had U.S. dollar borrowings of $357.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 2.125% (weighted average one month LIBOR of 0.125%), borrowings denominated in Swedish kronas of 12.8kr million ($1.5 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £85.3 million ($117.7 million U.S. dollars) with an interest rate of 2.063% (one month GBP LIBOR of 0.063%), borrowings denominated in Australian dollars of A$36.6 million ($27.9 million U.S. dollars) with an interest rate of 2.250% (one month AUD Screen Rate of 0.050%) and borrowings denominated in Euros of €91.1 million ($107.1 million U.S. dollars) with an interest rate of 2.000% (one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations.

As of December 31, 2020, the Company had U.S. dollar borrowings of $472.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 2.188% (weighted average one month LIBOR of 0.188%), borrowings denominated in Swedish kronas of 12.8kr million ($1.6 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £69.3 million ($94.8 million U.S. dollars) with a weighted average interest rate of 2.063% (weighted average one month GBP LIBOR of 0.063%), borrowings denominated in Australian dollars of A$36.6 million ($28.2 million U.S. dollars) with a weighted average interest rate of 2.250% (weighted average one month AUD Screen Rate of 0.050%) and borrowings denominated in Euros of €100.6 million ($123.1 million U.S. dollars) with a weighted average interest rate of 2.00% (weighted average one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations.

As of March 31, 2021 and December 31, 2020, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $611.1 million and $719.7 million, respectively. The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

August 2025 Notes

On August 3, 2020, the Company entered into a Note Purchase Agreement (the "August 2020 NPA") with Massachusetts Mutual Life Insurance Company governing the issuance of (1) $50.0 million in aggregate principal amount of Series A senior unsecured notes due August 2025 (the "Series A Notes due 2025") with a fixed interest rate of 4.66% per year, and (2) up to $50.0 million in aggregate principal amount of additional senior unsecured notes due August 2025 with a fixed interest rate per year to be determined (the "Additional Notes" and, collectively with the Series A Notes due 2025, the "August 2025 Notes"), in each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 24, 2020 and an aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. Interest on the August 2025 Notes will be due semiannually in March and September, beginning in March 2021. In addition, the Company is obligated to offer to repay the August 2025 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the August 2020 NPA, the Company may redeem the August 2025 Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before November 3, 2024, a make-whole premium. The August 2025 Notes are guaranteed by certain of the

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Company's subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

On November 4, 2020, the Company amended the August 2020 NPA to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million.

The August 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The August 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes at the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and payable. As of March 31, 2021, the Company was in compliance with all covenants under the August 2020 NPA.

The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The August 2025 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of both March 31, 2021 and December 31, 2020, the fair value of the outstanding August 2025 Notes was $50.0 million. The fair value determination of the August 2025 Notes was based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

November Notes

On November 4, 2020, the Company entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due November 2025 (the “Series B Notes”) with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior unsecured notes due November 2027 (the “Series C Notes” and, collectively with the Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of the Company’s secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The November Notes were delivered and paid for on November 5, 2020. The Series B Notes will mature on November 4, 2025, and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. Interest on the November Notes will be due semiannually in May and November, beginning in May 2021. In addition, the Company is obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the November 2020 NPA, the Company may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium. The November Notes are guaranteed by certain of the Company’s subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The November 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The November 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable. As of March 31, 2021, the Company was in compliance with all covenants under the November 2020 NPA.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The November Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The November Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of both March 31, 2021 and December 31, 2020, the fair value of the outstanding Series B Notes and the Series C Notes was $62.5 million and $112.5 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

February Notes

On February 25, 2021, the Company entered into a Note Purchase Agreement (the “February 2021 NPA”) governing the issuance of (1) $80.0 million in aggregate principal amount of Series D senior unsecured notes due February 26, 2026 (the “Series D Notes”) with a fixed interest rate of 3.41% per year and (2) $70.0 million in aggregate principal amount of Series E senior unsecured notes due February 26, 2028 (the “Series E Notes” and, collectively with the Series D Notes, the “February Notes”) with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of the Company’s secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes were delivered and paid for on February 26, 2021.

The Series D Notes will mature on February 26, 2026, and the Series E Notes will mature on February 26, 2028 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the February 2021 NPA. Interest on the February Notes will be due semiannually in February and August of each year, beginning in August 2021. In addition, the Company is obligated to offer to repay the February Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2021 NPA, the Company may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. The February Notes are guaranteed by certain of the Company’s subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The February 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement , including, without limitation, information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, the February 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter end; (b) not permitting the Company’s asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to the Company under the 1940 Act; and (c) not permitting the Company’s net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.

The February 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of the Company’s subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. As of March 31, 2021, the Company was in compliance with all covenants under the February 2021 NPA.

The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The February Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2021, the fair value of the outstanding Series D Notes and the Series E Notes was $80.0 million and $70.0 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

6. DERIVATIVE INSTRUMENTS

Credit Support Agreement

In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the Company’s merger with MVC, the Company and the Adviser entered into the Credit Support Agreement, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. See “Note 2 - Agreements and Related Party Transactions” for additional information regarding the Credit Support Agreement. Net unrealized depreciation on the Credit Support Agreement is included in "Net unrealized appreciation (depreciation) - credit support agreement" in the Company’s Unaudited Consolidated Statements of Operations.

The following tables presents the fair value and aggregate unrealized depreciation of the Company's Credit Support Agreement as of March 31, 2021 and December 31, 2020:


As of March 31, 2021: Description	Counter Party	Settlement Date	Notional Amount		Value		Unrealized Appreciation (Depreciation)
Credit Support Agreement	Barings LLC	01/01/31	$	23,000,000	$	12,000,000	$	(1,600,000)

Total Credit Support Agreement							$	(1,600,000)


As of December 31, 2020: Description	Counter Party	Settlement Date	Notional Amount		Value		Unrealized Appreciation (Depreciation)
Credit Support Agreement	Barings LLC	01/01/31	$	23,000,000	$	13,600,000	$	—

Total Credit Support Agreement							$	—

As of March 31, 2021 and December 31, 2020, the fair value of the Credit Support Agreement was $12.0 million and $13.6 million, respectively, and is included in "Credit support agreement" in the accompanying Unaudited and Audited Consolidated Balance Sheets. The fair value of the Credit Support Agreement was determined based on an income approach, with the primary inputs being the enterprise value, the continuously annual risk-free interest rate, a measure of expected asset volatility, and the expected time until an exit event for each portfolio company in the Reference Portfolio, which are all Level 3 inputs.

Foreign Currency Forward Contracts

The Company enters into forward currency contracts from time to time to primarily help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Company’s Unaudited Consolidated Statements of Operations. Forward currency contracts are considered undesignated derivative instruments.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The following tables presents the Company's foreign currency forward contracts as of March 31, 2021 and December 31, 2020:


As of March 31, 2021: Description	Notional Amount to be Purchased	Notional Amount to be Sold	Maturity Date	Gross Amount of Recognized Assets (Liabilities)		Balance Sheet Location of Net Amounts
Foreign currency forward contract (AUD)	$785,238	A$1,013,380	04/06/21	$	13,397	Prepaid expenses and other assets
Foreign currency forward contract (AUD)	A$1,013,380	$773,688	04/06/21	(1,847)		Derivative liability
Foreign currency forward contract (AUD)	$545,678	A$714,511	07/07/21	1,269		Prepaid expenses and other assets

Foreign currency forward contract (EUR)	€5,800,000	$6,809,925	04/01/21	6,812		Prepaid expenses and other assets
Foreign currency forward contract (EUR)	$16,496,839	€13,762,578	04/06/21	321,689		Prepaid expenses and other assets
Foreign currency forward contract (EUR)	€13,762,578	$16,201,506	04/06/21	(26,356)		Derivative liability
Foreign currency forward contract (EUR)	$24,184,783	€20,518,045	07/07/21	22,423		Prepaid expenses and other assets

Foreign currency forward contract (GBP)	$33,170,791	£24,072,758	04/06/21	(42,405)		Derivative liability
Foreign currency forward contract (GBP)	£24,072,758	$33,277,695	04/06/21	(64,500)		Derivative liability
Foreign currency forward contract (GBP)	$3,289,859	£2,388,498	07/07/21	(6,517)		Derivative liability

Foreign currency forward contract (SEK)	$164,325	1,356,628kr	04/06/21	8,682		Prepaid expenses and other assets
Foreign currency forward contract (SEK)	1,356,628kr	$156,117	04/06/21	(474)		Derivative liability
Foreign currency forward contract (SEK)	$176,315	1,530,825kr	07/07/21	532		Prepaid expenses and other assets
Total				$	232,705


As of December 31, 2020: Description	Notional Amount to be Purchased	Notional Amount to be Sold	Maturity Date	Gross Amount of Recognized Assets (Liabilities)		Balance Sheet Location of Net Amounts
Foreign currency forward contract (AUD)	$8,471,304	A$11,378,670	01/05/21	$	(309,049)	Derivative liability
Foreign currency forward contract (AUD)	A$11,378,670	$8,610,504	01/05/21	169,849		Prepaid expenses and other assets
Foreign currency forward contract (AUD)	$148,019	A$193,882	04/06/21	(1,698)		Derivative liability

Foreign currency forward contract (EUR)	$13,472,749	€11,406,604	01/05/21	(483,801)		Derivative liability
Foreign currency forward contract (EUR)	€11,406,604	$13,518,023	01/05/21	438,526		Prepaid expenses and other assets
Foreign currency forward contract (EUR)	$561,754	€456,604	04/06/21	1,944		Derivative liability

Foreign currency forward contract (GBP)	$13,554,607	£10,215,299	01/05/21	(409,190)		Derivative liability
Foreign currency forward contract (GBP)	£10,215,299	$13,717,678	01/05/21	246,118		Prepaid expenses and other assets
Foreign currency forward contract (GBP)	$13,109,849	£9,672,758	04/06/21	(119,769)		Derivative liability

Foreign currency forward contract (SEK)	$141,603	1,259,406kr	01/05/21	(11,748)		Derivative liability
Foreign currency forward contract (SEK)	1,259,406kr	$152,396	01/05/21	955		Prepaid expenses and other assets
Foreign currency forward contract (SEK)	$164,325	1,356,628kr	04/06/21	(1,028)		Derivative liability
Total				$	(478,891)

As of March 31, 2021 and December 31, 2020, the total fair value of the Company's foreign currency forward contracts was $232,705 and $(478,891), respectively. The fair values of the Company's foreign currency forward contracts are based on unadjusted prices from independent pricing services and independent indicative broker quotes, which are Level 2 inputs.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

7. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company's portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of March 31, 2021 and December 31, 2020, the Company believed that it had adequate financial resources to satisfy its unfunded commitments. The balances of unused commitments to extend financing as of March 31, 2021 and December 31, 2020 were as follows:


Portfolio Company(1)	Investment Type	March 31, 2021		December 31, 2020
ADE Holding(3)	Committed Capex Line	$	88,194	$	91,814
Anju Software, Inc.	Delayed Draw Term Loan	1,981,371		1,981,371
Arch Global Precision, LLC	Delayed Draw Term Loan	3,631,849		4,193,475
Beacon Pointe Advisors, LLC	Delayed Draw Term Loan	—		363,636
Bidwax(2)(3)	Acquisition Capex Facility	3,760,958		—
BigHand UK Bidco Limited(4)	Acquisition Capex Facility	1,843,756		—
British Engineering Services Holdco Limited(4)	Acquisition Facility	—		7,006,008
British Engineering Services Holdco Limited(4)	Bridge Revolver	623,944		618,177
Centralis Finco S.a.r.l.(3)	Acquisition Facility	476,392		495,950
Classic Collision (Summit Buyer, LLC)(2)	Delayed Draw Term Loan	454,562		1,672,446
CM Acquisitions Holdings Inc.	Delayed Draw Term Loan	1,551,602		1,551,602
Contabo Finco S.À R.L(3)	Delayed Draw Term Loan	219,212		228,211
CSL Dualcom(4)	Delayed Draw Term Loan	1,016,577		1,007,182
Dart Buyer, Inc.	Delayed Draw Term Loan	2,430,569		2,430,569
DreamStart Bidco SAS(3)	Acquisition Facility	956,378		995,640
F24 (Stairway BidCo GmbH)(3)	Acquisition Facility	418,703		323,840
Fineline Technologies, Inc.(2)	Delayed Draw Term Loan	600,000		—
FitzMark Buyer, Inc.	Delayed Draw Term Loan	1,470,588		1,470,588
Foundation Risk Partners, Corp.	Delayed Draw Term Loan	4,716,805		4,984,771
Heartland, LLC	Delayed Draw Term Loan	5,347,666		5,347,666
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.))(3)	Accordion Facility	—		10,225,081
Home Care Assistance, LLC(2)	Delayed Draw Term Loan	3,038,310		—
IGL Holdings III Corp.	Delayed Draw Term Loan	5,914,219		5,914,219
INOS 19-090 GmbH(2)(3)	Acquisition Facility	2,620,403		2,727,980
Jocassee Partners LLC	Joint Venture	25,000,000		30,000,000
Kano Laboratories LLC(2)	Delayed Draw Term Loan	4,543,950		4,543,950
Kene Acquisition, Inc.	Delayed Draw Term Loan	—		322,928
LAF International(2)(3)	Acquisition Facility	364,343		—
LivTech Purchaser, Inc.(2)	Delayed Draw Term Loan	447,752		—
Modern Star Holdings Bidco Pty Limited(5)	Capex Term Loan	2,285,953		2,315,967
Murphy Midco Limited(4)	Delayed Draw Term Loan	3,332,269		3,301,472
Navia Benefit Solutions, Inc.(2)	Delayed Draw Term Loan	4,000,000		—
Options Technology Ltd.	Delayed Draw Term Loan	2,604,080		2,604,080
Pacific Health Supplies Bidco Pty Limited(5)	CapEx Term Loan	1,343,603		1,535,025
Premier Technical Services Group(4)	Acquisition Facility	1,208,676		1,197,505
Protego Bidco B.V.(2)(3)	Delayed Draw Term Loan	3,836,870		—
Protego Bidco B.V.(2)(3)	Revolver	2,302,121		—
PSC UK Pty Ltd.(4)	Acquisition Facility	540,149		535,157
Questel Unite(2)(3)	Cap Acquisition Facility	4,747,241		10,300,913
Radwell International, LLC	Delayed Draw Term Loan	1,617,973		3,235,947

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)


Portfolio Company(1)	Investment Type	March 31, 2021		December 31, 2020
Rep Seko Merger Sub LLC	Delayed Draw Term Loan	1,454,545		1,454,546
Safety Products Holdings, LLC	Delayed Draw Term Loan	6,467,345		6,467,345
Smile Brands Group, Inc.(2)	Delayed Draw Term Loan	2,148,691		2,148,691
Springbrook Software (SBRK Intermediate, Inc.)	Delayed Draw Term Loan	3,489,026		3,489,026
SSCP Pegasus Midco Limited(4)	Delayed Draw Term Loan	13,514,446		13,389,546
The Hilb Group, LLC(2)	Delayed Draw Term Loan	5,105,694		5,545,939
Transit Technologies LLC(2)	Delayed Draw Term Loan	6,035,305		6,035,305
USLS Acquisition, Inc.(2)	Delayed Draw Term Loan	450,466		450,466
Utac Ceram(2)(3)	Delayed Draw Term Loan	—		743,327
Waccamaw River	Joint Venture	20,500,000		—
W2O Holdings, Inc.	Delayed Draw Term Loan	5,989,298		5,989,298
Total unused commitments to extend financing		$	166,491,854	$	159,236,659

(1)The Company's estimate of the fair value of the current investments in these portfolio companies includes an analysis of the fair value of any unfunded commitments.

(2)Represents a commitment to extend financing to a portfolio company where one or more of the Company's current investments in the portfolio company are carried at less than cost.

(3)Actual commitment amount is denominated in Euros. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(4)Actual commitment amount is denominated in British pounds sterling. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(5)Actual commitment amount is denominated in Australian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

In the normal course of business, the Company guarantees certain obligations in connection with its portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. As of March 31, 2021 and December 31, 2020, the Company had guaranteed €9.9 million ($11.6 million U.S. dollars and $12.1 million U.S. dollars, respectively) relating to credit facilities among Erste Bank and MVC Automotive Group Gmbh ("MVC Auto"). The Company would be required to make payments to Erste Bank if MVC Auto were to default on their related payment obligations. None of the credit facility guarantees are recorded as a liability on the Company's Unaudited and Audited Consolidated Balance Sheets, as such the credit facility liabilities are considered in the valuation of the investments in MVC Auto. The guarantees denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

In addition, the Company agreed to cash collateralize a $3.5 million letter of credit for Security Holdings B.V. The $3.5 million cash collateralization is reflected as "Restricted cash" on the accompanying Unaudited and Audited Consolidated Balance Sheets.

The Company and certain of its former executive officers have been named as defendants in two putative securities class action lawsuits, each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and was captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00015-FL (the “Dagher Action”). The second lawsuit was filed on November 28, 2017, and was captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00010-FL (the “Holden Action”). The Dagher Action and the Holden Action were consolidated and are currently captioned In re Triangle Capital Corp. Securities Litigation, Master File No. 5:18-cv-00010-FL.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

filed its opening brief with the United States Court of Appeals for the Fourth Circuit on January 6, 2020. The defendants filed their response brief on February 28, 2020, and the plaintiff filed its reply brief on March 27, 2020. The United States Court of Appeals for the Fourth Circuit heard oral argument on the appeal on December 9, 2020. On February 22, 2021, the United States Court of Appeals for the Fourth Circuit affirmed the court’s September 20, 2019 order dismissing the action with prejudice.

Other than as set forth above, neither the Company, the Adviser, nor the Company’s subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to their respective businesses. The Company, the Adviser, and the Company’s subsidiaries may from time to time, however, be involved in litigation arising out of operations in the normal course of business or otherwise, including in connection with strategic transactions. Furthermore, third parties may seek to impose liability on the Company in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, the Company does not expect any current matters will materially affect its financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on the Company’s financial condition or results of operations in any future reporting period.

COVID-19 Developments

During the three months ended March 31, 2021, the spread of the Coronavirus and the COVID-19 pandemic continued to have a significant impact on the U.S and global economies. To the extent the Company's portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on the Company's future net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company's portfolio companies.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

8. FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
	2021			2020
Per share data:
Net asset value at beginning of period	$	10.99		$	11.66
Net investment income(1)	0.22			0.15
Net realized gain (loss) on investments / foreign currency transactions(1)	0.03			(0.01)
Net unrealized appreciation (depreciation) on investments/ CSA / foreign currency transactions(1)	0.10			(2.44)
Total increase (decrease) from investment operations(1)	0.35			(2.30)
Dividends/distributions paid to stockholders from net investment income	(0.19)			(0.16)





Purchases of shares in share repurchase plan	—			0.03



Other	(0.01)			—
Net asset value at end of period	$	11.14		$	9.23
Market value at end of period(2)	$	9.98		$	7.48
Shares outstanding at end of period	65,316,085			48,288,822
Net assets at end of period	$	727,882,747		$	445,744,908
Average net assets	$	727,272,534		$	569,862,251
Ratio of total expenses, including loss on extinguishment of debt and provision for taxes, to average net assets (annualized)(3)	8.92		%	8.07		%

Ratio of net investment income to average net assets (annualized)	7.91		%	5.13		%
Portfolio turnover ratio (annualized)	16.82		%	10.37		%
Total return(4)	10.54		%	(25.02)		%

(1)Weighted average per share data—basic and diluted; per share data was derived by using the weighted average shares outstanding during the applicable period.

(2)Represents the closing price of the Company’s common stock on the last day of the period.

(3)Does not include expenses of underlying investment companies, including joint ventures and short-term investments.

(4)Total return is based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by the Company's dividend reinvestment plan during the period. Total return is not annualized.

9. SUBSEQUENT EVENTS

Subsequent to March 31, 2021, the Company made approximately $156.3 million of new commitments, of which $106.4 million closed and funded. The $106.4 million of investments consist of $82.6 million of first lien senior secured debt investments, $20.9 million of second lien senior secured and subordinated debt investments and a $2.9 million equity investments with a combined weighted average yield on debt investments of 6.7%. In addition, the Company funded $5.1 million of previously committed delayed draw term loans.

On May 6, 2021, the Board declared a quarterly distribution of $0.20 per share payable on June 16, 2021 to holders of record as of June 9, 2021.

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

The following discussion is designed to provide a better understanding of our unaudited consolidated financial statements for the three months ended March 31, 2021, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2020. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Forward-Looking Statements

Some of the statements in this Quarterly Report constitute forward-looking statements because they relate to future events or our future performance or financial condition. Forward-looking statements may include, among other things, statements as to our future operating results, our business prospects and the prospects of our portfolio companies, the impact of the investments that we expect to make, the ability of our portfolio companies to achieve their objectives, our expected financings and investments, the adequacy of our cash resources and working capital, and the timing of cash flows, if any, from the operations of our portfolio companies. Words such as "expect," "anticipate," "target," "goals," "project," "intend," "plan," "believe," "seek," "estimate," "continue," "forecast," "may," "should," "potential," variations of such words, and similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. Readers are cautioned that the forward-looking statements contained in this Quarterly Report are only predictions, are not guarantees of future performance, and are subject to risks, events, uncertainties and assumptions that are difficult to predict. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the items discussed herein, in Item 1A entitled "Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2020 and in Item 1A entitled "Risk Factors" in Part II of our subsequently filed Quarterly Reports on Form 10-Q. Other factors that could cause our actual results and financial condition to differ materially include, but are not limited to, changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including with respect to changes from the impact of the COVID-19 pandemic; the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak; the effect of the COVID-19 pandemic on our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives; the effect of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business and on the availability of equity and debt capital and our use of borrowed money to finance a portion of our investments; risks associated with possible disruption due to terrorism in our operations or the economy generally; and future changes in laws or regulations and conditions in our operating areas. These statements are based on our current expectations, estimates, forecasts, information and projections about the industry in which we operate and the beliefs and assumptions of our management as of the date of filing of this Quarterly Report. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless we are required to do so by law. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview of Our Business

We are a Maryland corporation incorporated on October 10, 2006. In August 2018, in connection with the closing of an externalization transaction through which Barings LLC (“Barings”) agreed to become our external investment adviser, we entered into an investment advisory agreement (the “Original Advisory Agreement”) and an administration agreement (the “Administration Agreement”) with Barings. In connection with the completion of our acquisition of MVC Capital, Inc., a Delaware corporation, on December 23, 2020 (the “MVC Acquisition”), we entered into an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with Barings on December 23, 2020, following approval of the Amended and Restated Advisory Agreement by our stockholders at our December 23, 2020 special meeting of stockholders. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021. Under the terms of the Amended and Restated Advisory Agreement and the Administration Agreement, Barings serves as our investment adviser and administrator and manages our investment portfolio and performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation.

An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an advisory agreement and administration agreement.

Instead of directly compensating employees, we pay Barings for investment and management services pursuant to the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, pursuant to the terms of the Original Advisory Agreement) and the Administration Agreement. Under the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement), the fees paid to Barings for managing our affairs are determined based upon an objective and fixed formula, as compared with the subjective and variable nature of the costs associated with employing management and employees in an internally-managed BDC structure, which include bonuses that cannot be directly tied to Company performance because of restrictions on incentive compensation under the 1940 Act.

Beginning in August 2018, Barings shifted our investment focus to invest in syndicated senior secured loans, bonds and other fixed income securities. Since that time, Barings has transitioned our portfolio to primarily senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries. Barings’ existing SEC co-investment exemptive relief under the 1940 Act (the “Exemptive Relief”) permits us and Barings’ affiliated private and SEC-registered funds to co-invest in Barings-originated loans, which allows Barings to efficiently implement its senior secured private debt investment strategy for us.

Barings employs fundamental credit analysis, and targets investments in businesses with relatively low levels of cyclicality and operating risk. The holding size of each position will generally be dependent upon a number of factors including total facility size, pricing and structure, and the number of other lenders in the facility. Barings has experience managing levered vehicles, both public and private, and will seek to enhance our returns through the use of leverage with a prudent approach that prioritizes capital preservation. Barings believes this strategy and approach offers attractive risk/return with lower volatility given the potential for fewer defaults and greater resilience through market cycles.

We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the loan using the effective interest method or, in some cases, recognized as earned. Our syndicated senior secured loans generally bear interest between LIBOR plus 300 basis points and LIBOR plus 400 points. Our senior secured, middle-market, private debt investments generally have terms of between five and seven years. Our senior secured, middle-market, first lien private debt investments generally bear interest between LIBOR (or the applicable currency rate for investments in foreign currencies) plus 450 basis points and LIBOR plus 650 basis points per annum. Our subordinated middle-market, private debt investments generally bear interest between LIBOR (or the applicable currency rate for investments in foreign currencies) plus 700 basis points and LIBOR plus 900 basis points per annum if floating rate, and between 8% and 15% if fixed rate. From time to time, certain of our investments may have a form of interest, referred to as payment-in-kind, or PIK, interest, which is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term.

As of March 31, 2021 and December 31, 2020, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 7.2% and 7.1%, respectively. The weighted average yield on the principal amount all of our outstanding investments (including equity and equity-linked investments and short-term investments but excluding non-accrual debt investments) was approximately 6.4% as of both March 31, 2021 and December 31, 2020. The weighted average yield on the principal amount all of our outstanding investments (including equity and equity-linked investments and short-term investments) was approximately 6.4% and 6.5% as of March 31, 2021 and December 31, 2020, respectively.

COVID-19 Developments

The spread of the Coronavirus and the COVID-19 pandemic, and the related effect on the U.S. and global economies, has had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of Barings, including with respect to us. Barings has taken proactive steps around COVID-19 to address the potential impacts on their people, clients, communities and everyone they come in contact with, directly or through their premises. Protecting their employees and supporting the communities in which they live and work is a priority. Barings continues to operate with the majority of employees globally working remotely while maintaining service levels to our partners and clients. In the United States, the firm’s global headquarters in Charlotte and the office in Hartford, Connecticut are currently the only offices that are open. In Europe the regional headquarters in London is open while the majority of other offices in Europe are currently closed. In Asia, all offices remain open. Barings return-to-office taskforce continues to plan for the safe return of employees to all office locations with a target date for a widespread return of associates to all office locations globally planned for September 2021. This date is subject to the continued success of the global vaccination program and reduction in COVID-19 case numbers. Barings’ cybersecurity policies are applied consistently when working remotely or in the office.

While we have been carefully monitoring the COVID-19 pandemic and its impact on our business and the business of our portfolio companies, we have continued to fund our existing debt commitments. In addition, we have continued to make and originate, and expect to continue to make and originate, new loans.

We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide and the magnitude of the economic impact of the outbreak, including with respect to the travel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S. governmental authorities. We are unable to predict the duration of any business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. Depending on the duration and extent of the disruption to the operations of our portfolio companies, certain portfolio companies could experience financial distress and possibly default on their financial obligations to us and their other capital providers. Some of our portfolio companies may significantly curtail business operations, furlough or lay off employees and terminate service providers, and defer capital expenditures if subjected to prolonged and severe financial distress, which would likely impair their business on a permanent basis. These developments would likely result in a decrease in the value of our investment in any such portfolio company.

We will continue to monitor the situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future. However, to the extent our portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on our future net investment income, the fair value of our portfolio investments, our financial condition and the results of operations and financial condition of our portfolio companies.

Relationship with Our Adviser, Barings

Our investment adviser, Barings, a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, is a leading global asset management firm and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. Barings’ primary investment capabilities include fixed income, private credit, real estate, equity, and alternative investments. Subject to the overall supervision of our board of directors (the “Board”), Barings’ Global Private Finance Group (“BGPF”) manages our day-to-day operations, and provides investment advisory and management services to us. BGPF is part of Barings’ $244.2 billion Global Fixed Income Platform that invests in liquid, private and structured credit. BGPF manages private funds and separately managed accounts, along with multiple public vehicles.

Among other things, Barings (i) determines the composition of our portfolio, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by us; (iii) executes, closes, services and monitors the investments that we make; (iv) determines the securities and other assets that we will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds.

Under the terms of the Administration Agreement, Barings has agreed to perform (or oversee, or arrange for, the performance of) the administrative services necessary for our operation, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record keeping services at such office facilities and such other services as Barings, subject to review by the Board, will from time to time determine to be necessary or useful to perform its obligations under the Administration Agreement. Barings will also, on our behalf and subject to the Board’s oversight, arrange for the services of, and oversee, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Barings is responsible for the financial and other records that we are required to maintain and will prepare all reports and other materials required to be filed with the SEC or any other regulatory authority.

Stockholder Approval of Reduced Asset Coverage Ratio

On July 24, 2018, our stockholders voted at a special meeting of stockholders (the “2018 Special Meeting”) to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the 2018 Special Meeting, effective July 25, 2018, our applicable asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. As a result, we are permitted under the 1940 Act to incur indebtedness at a level which is more consistent with a portfolio of senior secured debt. As of March 31, 2021, our asset coverage ratio was 173.8%.

Portfolio Investment Composition

The total value of our investment portfolio was $1,602.1 million as of March 31, 2021, as compared to $1,495.8 million as of December 31, 2020. As of March 31, 2021, we had investments in 150 portfolio companies and two money market funds with an aggregate cost of $1,588.6 million. As of December 31, 2020, we had investments in 146 portfolio companies and two money market funds with an aggregate cost of $1,486.1 million. As of both March 31, 2021 and December 31, 2020, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

As of March 31, 2021 and December 31, 2020, our investment portfolio consisted of the following investments:


	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
March 31, 2021:
Senior debt and 1st lien notes	$	1,228,983,292	77	%	$	1,238,178,055	77	%
Subordinated debt and 2nd lien notes	150,273,105		10		150,597,961		9
Structured products	23,163,888		1		26,153,607		2
Equity shares	42,543,214		3		39,617,746		2
Equity warrants	1,235,383		—		1,434,309		—
Investment in joint ventures / PE fund	68,782,532		4		72,576,383		5
Short-term investments	73,569,174		5		73,565,676		5
	$	1,588,550,588	100	%	$	1,602,123,737	100	%
December 31, 2020:
Senior debt and 1st lien notes	$	1,167,436,742	79	%	$	1,171,250,512	79	%
Subordinated debt and 2nd lien notes	137,776,808		9		138,767,120		9
Structured products	30,071,808		2		32,508,845		2
Equity shares	44,693,645		3		44,651,114		3
Equity warrants	1,235,383		—		1,300,197		—
Investment in joint ventures / PE fund	39,282,532		3		41,759,922		3
Short-term investments	65,558,227		4		65,558,227		4
	$	1,486,055,145	100	%	$	1,495,795,937	100	%

Investment Activity

During the three months ended March 31, 2021, we made 18 new investments totaling $172.2 million, made investments in existing portfolio companies totaling $73.2 million, made one new investment in a joint venture equity portfolio company totaling $4.5 million and made additional investments in existing joint venture equity portfolio companies totaling $25.0 million. We had six loans repaid at par totaling $26.2 million and received $6.0 million of portfolio company principal payments. In addition, we sold $57.1 million of loans, recognizing a net realized gain on these transactions of $2.4 million, and sold $94.7 million of middle-market portfolio company debt investments to one of our joint ventures and realized a gain on these transactions of $0.5 million. Lastly, we received proceeds related to the sale of an equity investment totaling $5.9 million and recognized a net realized loss on such sale totaling $0.1 million.

During the three months ended March 31, 2020, we made 30 new investments totaling $111.2 million and made investments in existing portfolio companies totaling $20.9 million. We had nine loans repaid at par totaling total $41.1 million, received $3.0 million of portfolio company principal payments. In addition, we sold $39.6 million of syndicated senior secured loans, recognizing a net realized loss on these transactions of $0.2 million and sold $30.8 million of middle-market portfolio company debt investments to our joint venture. Lastly, we received $0.2 million in escrow distributions from two legacy portfolio companies, which were recognized as realized gains.

Total portfolio investment activity for the three months ended March 31, 2021 and 2020 was as follows:


Three Months Ended March 31, 2021:	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Structured Products		Equity Shares		Equity Warrants		Investments in Joint Ventures / PE Fund		Short-term Investments		Total
Fair value, beginning of period	$	1,171,250,512	$	138,767,120	$	32,508,845	$	44,651,114	$	1,300,197	$	41,759,922	$	65,558,227	$	1,495,795,937
New investments	227,056,942		14,477,877		—		3,872,210		—		29,500,000		198,550,029		473,457,058
Proceeds from sales of investments	(144,892,665)		—		(6,823,471)		(5,971,996)		—		—		(190,541,780)		(348,229,912)
Loan origination fees received	(4,176,205)		(402,163)		—		—		—		—		—		(4,578,368)
Principal repayments received	(21,392,290)		(10,120,108)		(752,526)		—		—		—		—		(32,264,924)
Payment-in-kind interest earned	828,659		7,007,695		—		—		—		—		—		7,836,354
Accretion of loan discounts	645,409		1,318,620		15,758		—		—		—		—		1,979,787
Accretion of deferred loan origination revenue	1,269,802		211,236		—		—		—		—		—		1,481,038
Realized gain (loss)	2,206,896		3,140		652,320		(50,645)		—		—		2,698		2,814,409
Unrealized appreciation (depreciation)	5,380,995		(665,456)		552,681		(2,882,937)		134,112		1,316,461		(3,498)		3,832,358
Fair value, end of period	$	1,238,178,055	$	150,597,961	$	26,153,607	$	39,617,746	$	1,434,309	$	72,576,383	$	73,565,676	$	1,602,123,737


Three Months Ended March 31, 2020:	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Structured Products		Equity Shares		Investment in Joint Venture		Short-term Investments		Total
Fair value, beginning of period	$	1,050,863,370	$	15,220,969	$	—	$	760,716	$	10,229,813	$	96,568,939	$	1,173,643,807
New investments	118,056,710		2,160,082		11,518,233		403,774		—		221,916,363		$	354,055,162
Proceeds from sales of investments	(70,448,795)		—		—		(152,467)		—		(218,025,496)		$	(288,626,758)
Loan origination fees received	(2,684,615)		(19,808)		—		—		—		—		$	(2,704,423)
Principal repayments received	(44,108,598)		—		—		—		—		—		$	(44,108,598)
Accretion of loan discounts	180,698		4,465		3,239		—		—		—		$	188,402
Accretion of deferred loan origination revenue	649,654		8,351		—		—		—		—		$	658,005
Realized gain (loss)	(310,445)		—		—		152,467		—		—		$	(157,978)
Unrealized depreciation	(113,033,296)		(1,389,918)		(2,816,526)		(121,316)		(3,833,223)		—		$	(121,194,279)
Fair value, end of period	$	939,164,683	$	15,984,141	$	8,704,946	$	1,043,174	$	6,396,590	$	100,459,806	$	1,071,753,340

Non-Accrual Assets

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2021, we had no non-accrual assets. As of December 31, 2020, the fair value of our non-accrual asset was $3.0 million, which comprised 0.2% of the total fair value of our portfolio, and the cost of our non-accrual asset was $3.0 million, which comprised 0.2% of the total cost of our portfolio.

Results of Operations

Comparison of the three months ended March 31, 2021 and March 31, 2020

Operating results for the three months ended March 31, 2021 and 2020 were as follows:


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020























Total investment income	$	30,593,231	$	18,679,598









Total operating expenses	16,237,135		11,385,529
Net investment income	14,356,096		7,294,069
Income taxes, including excise tax benefit	(18,038)		—
Net investment income after taxes	14,374,134		7,294,069







Net realized gains (losses)	1,839,580		(302,372)







Net unrealized appreciation (depreciation)	6,274,155		(119,396,053)

Loss on extinguishment of debt	—		(137,390)
Benefit from taxes	410		19,999
Net increase (decrease) in net assets resulting from operations	$	22,488,279	$	(112,521,747)

Net increases or decreases in net assets resulting from operations can vary substantially from period to period due to various factors, including recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net changes in net assets resulting from operations may not be meaningful.

Investment Income


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
Investment income:





Interest income	$	25,214,241	$	17,674,402




Dividend income	71,500		—




Fee and other income	2,133,175		960,993




Payment-in-kind interest income	3,173,787		43,572
Interest income from cash	528		631
Total investment income	$	30,593,231	$	18,679,598

The change in investment income for the three months ended March 31, 2021, as compared to the three months ended March 31, 2020, was primarily due to an increase in the average size of our portfolio. The amount of our outstanding debt investments was $1,451.9 million as of March 31, 2021, as compared to $1,119.9 million as of March 31, 2020, which increase is in part due to the acquisition of investment assets in the MVC Acquisition. The weighted average yield on the principal amount of our outstanding debt investments was 7.2% as of March 31, 2021, as compared to 5.8% as of March 31, 2020.

Operating Expenses


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
























Operating expenses:
Interest and other financing fees	$	7,284,709	$	6,004,133
Base management fees	3,929,251		3,912,373
Incentive management fees	2,721,741		—

Compensation expenses	—		48,410
General and administrative expenses	2,301,434		1,420,613
Total operating expenses	$	16,237,135	$	11,385,529

Interest and Other Financing Fees

Interest and other financing fees during the three months ended March 31, 2021 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes and the February Notes (each as defined below under “Liquidity and Capital Resources”). Interest and other financing fees during the three months ended March 31, 2020 were attributable to borrowings under Barings BDC Senior Funding I, LLC’s credit facility entered into in August 2018 with Bank of America, N.A. (the “August 2018 Credit Facility”), the February 2019 Credit Facility and our May 2019 $449.3 million term debt securitization (the “Debt Securitization”). The increase in interest and other financing fees for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, was primarily attributable to the issuance of the August 2025 Notes, the November Notes and the February Notes and increased borrowings under the February 2019 Credit Facility, partially offset by the repayment of the Debt Securitization and the repayment of the borrowings under the August 2018 Credit Facility.

Base Management Fees

Under the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement), we pay Barings a base management fee (the “Base Management Fee”), quarterly in arrears on a calendar quarter basis. The Base Management Fee is calculated based on the average value of our 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. Base Management Fees for any partial month or quarter are appropriately pro-rated. See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, the terms of the Original Advisory Agreement) and the fee arrangements thereunder. For both the three months ended March 31, 2021 and March 31, 2020, the amount of Base Management Fee incurred was approximately $3.9 million. For the three months ended March 31, 2021 and March 31, 2020, the Base Management Fee rate was 1.250% and 1.375%, respectively. Although the Base Management Fee rate decreased for the three months ended March 31, 2021 versus March 31, 2020, the average value of gross assets increased from $1,138.1 million as of the end of the two most recently completed calendar quarters prior to March 31, 2020 to $1,257.4 million as of the end of the two most recently completed calendar quarters prior to March 31, 2021, which resulted in a slight increase in fees between periods.

Incentive Fee (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement)

Under the Amended and Restated Advisory Agreement (and, prior to January 1, 2021, under the terms of the Original Advisory Agreement), we pay Barings an incentive fee. A portion of the incentive fee is based on our income and a portion is based on our capital gains. The income-based fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate pre-incentive fee net investment income in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of our first eleven calendar quarters that commences on or after January 1, 2021) exceeds (y) the hurdle amount as calculated for the same period. See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Amended and Restated Advisory Agreement and the fee arrangements thereunder. For the three months ended March 31, 2021, the amount of income-based fee incurred was $2.7 million.

General and Administrative Expenses

We entered into the Administration Agreement with Barings in August 2018. Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operations. We will reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by us and Barings quarterly in arrears; provided that the agreed-upon quarterly expense amount will not exceed the amount of expenses that would otherwise be reimbursable by us under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the Administration Agreement. For the three months ended March 31, 2021, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $0.5 million. For the three months ended March 31, 2020, the amount of administration expense incurred and invoiced by the Adviser for expenses was approximately $0.4 million. In addition to expenses incurred under the Administration Agreement, general and administrative expenses include Board fees, D&O insurance costs, as well as legal and accounting expenses.

Net Realized Gains (Losses)

Net realized gains (losses) during the three months ended March 31, 2021 and 2020 were as follows:


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020




































Net realized gain (losses):
Non-Control / Non-Affiliate investments	$	2,891,040	$	(157,978)
Affiliate investments	(76,631)		—

Net realized gains (losses) on investments	2,814,409		(157,978)
Foreign currency transactions	(974,829)		(144,394)
Net realized gains (losses)	$	1,839,580	$	(302,372)

In the three months ended March 31, 2021, we recognized net realized gains totaling $1.8 million, which consisted primarily of a net gain on our loan portfolio of $2.8 million partially offset by a net loss on foreign currency transactions of $1.0 million. In the three months ended March 31, 2020, we recognized net realized losses totaling $0.3 million, which consisted primarily of a net loss on our loan portfolio of $0.3 million and a net loss on foreign currency transactions of $0.1 million, partially offset by $0.2 million in escrow distributions we received from two legacy portfolio companies, which were recognized as realized gains.

Net Unrealized Appreciation (Depreciation)

Net unrealized appreciation (depreciation) during the three months ended March 31, 2021 and 2020 was as follows:


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020











































Net unrealized appreciation (depreciation):
Non-Control / Non-Affiliate investments	$	5,357,095	$	(117,361,056)
Affiliate investments	2,444,697		(3,833,223)
Control investments	(3,969,434)		—
Net unrealized appreciation (depreciation) on investments	3,832,358		(121,194,279)
Credit support agreement	(1,600,000)		—
Foreign currency transactions	4,041,797		1,798,226
Net unrealized appreciation (depreciation)	$	6,274,155	$	(119,396,053)

During the three months ended March 31, 2021, we recorded net unrealized appreciation totaling $6.3 million, consisting of net unrealized appreciation on our current portfolio of $6.4 million and unrealized appreciation related to foreign currency transactions of $4.0 million, net of unrealized depreciation of $1.6 million on the credit support agreement with Barings and net of unrealized depreciation reclassification adjustments of $2.6 million related to the net realized gains on the sales / repayments of certain investments. The net unrealized appreciation on our current portfolio of $6.4 million was driven primarily by broad market moves for investments of $13.8 million, partially offset by depreciation from the credit or fundamental performance of investments of $3.0 million and the impact of foreign currency exchange rates on investments of $4.4 million.

During the three months ended March 31, 2020, we recorded net unrealized depreciation totaling $119.4 million, consisting of net unrealized depreciation on our current portfolio of $121.6 million, and partially offset by net unrealized

appreciation related to foreign currency transactions of $1.8 million and net unrealized appreciation reclassification adjustments of $0.4 million related to the net realized losses on the sales / repayments of certain syndicated secured loans. The net unrealized depreciation on the Company’s current portfolio of $121.6 million was driven by broad market moves for liquid syndicated secured loans and structured product investments totaling $82.6 million, broad market moves for middle-market debt investments of $25.5 million, the credit or fundamental performance of middle-market debt investments totaling $8.2 million, the impact of foreign currency exchange rates on middle-market debt investments of $1.3 million, and net unrealized depreciation on the Company’s total equity and joint venture investments of $4.0 million.

Liquidity and Capital Resources

We believe that our current cash and cash equivalents on hand, our short-term investments, our available borrowing capacity under our $800 million senior secured revolving credit facility with ING Capital LLC (as amended, restated and otherwise modified from time to time, (the "February 2019 Credit Facility") and the August 2020 NPA (as defined below under "Financing Transactions") and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months. This “Liquidity and Capital Resources” section should be read in conjunction with “COVID-19 Developments” above, as well as with the notes to our Unaudited Consolidated Financial Statements.

Cash Flows

For the three months ended March 31, 2021, we experienced a net decrease in cash in the amount of $52.0 million. During that period, our operating activities used $85.1 million in cash, consisting primarily of purchases of portfolio investments of $276.5 million and purchases of short-term investments of $198.6 million, partially offset by proceeds from sales of portfolio investments totaling $188.2 million and sales of short-term investments of $190.5 million. In addition, our financing activities provided $33.1 million of cash, consisting of net proceeds of $149.8 million from the issuance of the February Notes (as defined below under “Financing Transactions”), partially offset by net repayments under the February 2019 Credit Facility of $104.3 million and dividends paid in the amount of $12.4 million. As of March 31, 2021, we had $40.5 million of cash and foreign currencies on hand.

For the three months ended March 31, 2020, we experienced a net decrease in cash in the amount of $14.5 million. During that period, our operating activities provided $36.0 million in cash, consisting primarily of proceeds from sales of portfolio investments totaling $155.9 million and sales of short-term investments of $218.0 million, partially offset by purchases of portfolio investments of $123.2 million and purchases of short-term investments of $221.9 million. In addition, our financing activities used $50.5 million of cash, consisting primarily of net repayments under the August 2018 Credit Facility and the February 2019 Credit Facility of $10.9 million, repayments of the Debt Securitization of $27.0 million, share repurchases of $4.8 million and dividends paid in the amount of $7.8 million. As of March 31, 2020, we had $7.5 million of cash and foreign currencies on hand.

Financing Transactions

February 2019 Credit Facility

On February 21, 2019, we entered into the February 2019 Credit Facility (as subsequently amended in December 2019), with ING Capital LLC (“ING”), as administrative agent, and the lenders party thereto. The initial commitments under the February 2019 Credit Facility total $800.0 million. The February 2019 Credit Facility has an accordion feature that allows for an increase in the total commitments by up to $400.0 million, subject to certain conditions and the satisfaction of specified financial covenants. We can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of our assets and guaranteed by certain of our subsidiaries. Following the termination of the August 2018 Credit Facility on June 30, 2020, Barings BDC Senior Funding I, LLC became a subsidiary guarantor and its assets will secure the February 2019 Credit Facility. The revolving period of the February 2019 Credit Facility ends on February 21, 2023, followed by a one-year repayment period with a final maturity date of February 21, 2024.

plus 1.0% and (v) 1.0%. The applicable LIBOR and currency rates depend on the currency and term of the draw under the February 2019 Credit Facility, and cannot be less than zero.

In addition, we pay a commitment fee of (i) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (ii) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments. In connection with entering into the February 2019 Credit Facility, we incurred financing fees of approximately $6.4 million, which will be amortized over the life of the February 2019 Credit Facility.

As of March 31, 2021, we were in compliance with all covenants under the February 2019 Credit Facility and had U.S. dollar borrowings of $357.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 2.125% (weighted average one month LIBOR of 0.125%), borrowings denominated in Swedish kronas of 12.8kr million ($1.5 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £85.3 million ($117.7 million U.S. dollars) with an interest rate of 2.063% (one month GBP LIBOR of 0.063%), borrowings denominated in Australian dollars of A$36.6 million ($27.9 million U.S. dollars) with an interest rate of 2.250% (one month AUD Screen Rate of 0.050%) and borrowings denominated in Euros of €91.1 million ($107.1 million U.S. dollars) with an interest rate of 2.000% (one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the our Unaudited Consolidated Statements of Operations.

The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2021, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $611.1 million. See Note 5 to our Unaudited Consolidated Financial Statements for additional information regarding the February 2019 Credit Facility.

August 2025 Notes

On August 3, 2020, we entered into a Note Purchase Agreement (the “August 2020 NPA”) with Massachusetts Mutual Life Insurance Company governing the issuance of (1) $50.0 million in aggregate principal amount of Series A senior unsecured notes due August 2025 (the “Series A Notes due 2025”) with a fixed interest rate of 4.66% per year, and (2) up to $50.0 million in aggregate principal amount of additional senior unsecured notes due August 2025 with a fixed interest rate per year to be determined (the “Additional Notes” and, collectively with the Series A Notes due 2025, the “August 2025 Notes”), in each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 24, 2020 and an aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. Interest on the August 2025 Notes will be due semiannually in March and September, beginning in March 2021. In addition, we are obligated to offer to repay the August 2025 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the August 2020 NPA, we may redeem the August 2025 Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before November 3, 2024, a make-whole premium. The August 2025 Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

On November 4, 2020, we amended the August 2020 NPA to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million.

The August 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The August 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes at the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and payable. As of March 31, 2021, we were in compliance with all covenants under the August 2020 NPA.

As of March 31, 2021, the fair value of the outstanding August 2025 Notes was $50.0 million. The fair value determination of the August 2025 Notes was based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

November Notes

On November 4, 2020, we entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due November 2025 (the “Series B Notes”) with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior unsecured notes due November 2027 (the “Series C Notes,” and, collectively with the Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The November Notes were delivered and paid for on November 5, 2020.

The Series B Notes will mature on November 4, 2025, and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. Interest on the November Notes will be due semiannually in May and November, beginning in May 2021. In addition, we are obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the November 2020 NPA, we may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium. The November Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

The November 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The November 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable. As of March 31, 2021, we were in compliance with all covenants under the November 2020 NPA.

As of March 31, 2021, the fair value of the outstanding Series B Notes and the Series C Notes was $62.5 million and $112.5 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

February Notes

On February 25, 2021, we entered into a Note Purchase Agreement (the “February 2021 NPA”) governing the issuance of (1) $80.0 million in aggregate principal amount of Series D senior unsecured notes due February 26, 2026 (the “Series D Notes”) with a fixed interest rate of 3.41% per year and (2) $70.0 million in aggregate principal amount of Series E senior unsecured notes due February 26, 2028 (the “Series E Notes” and, collectively with the Series D Notes, the “February Notes”) with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain

investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes were delivered and paid for on February 26, 2021.

The Series D Notes will mature on February 26, 2026, and the Series E Notes will mature on February 26, 2028 unless redeemed, purchased or prepaid prior to such date by us in accordance with the terms of the February 2021 NPA. Interest on the February Notes will be due semiannually in February and August of each year, beginning in August 2021. In addition, we are obligated to offer to repay the February Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2021 NPA, we may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. The February Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

The February 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, the February 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter end; (b) not permitting our asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to us under the 1940 Act; and (c) not permitting our net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.

The February 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. As of March 31, 2021, we were in compliance with all covenants under the February 2021 NPA.

Share Repurchases

On February 27, 2020, the Board approved an open-market share repurchase program for the 2020 fiscal year (the “2020 Share Repurchase Program”). Under the 2020 Share Repurchase Program, we were authorized during fiscal year 2020 to repurchase up to a maximum of 5.0% of the amount of shares outstanding as of February 27, 2020 if shares traded below NAV per share, subject to liquidity and regulatory constraints.

Purchases under the 2020 Share Repurchase Program were made in open-market transactions and included transactions being executed by a broker selected us that had been delegated the authority to repurchase shares on our behalf in the open market in accordance with applicable rules under the Exchange Act, including Rules 10b5-1 and 10b-18 thereunder, and pursuant to, and under the terms and limitations of, the 2020 Share Repurchase Program. During the three months ended March 31, 2020, we repurchased a total of 661.981 shares of our common stock in the open market under the 2020 Share Repurchase Program at an average price of $7.23 per share, including broker commissions.

In addition, in connection with the closing of the MVC Acquisition on December 23, 2020, we committed to make open-market purchases of shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing upon the filing of this quarterly report on Form 10-Q for the quarter ended March 31, 2021 and will be made in accordance with applicable legal, contractual and regulatory requirements.

Distributions to Stockholders

We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. We have adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, when we declare a dividend, stockholders who have not opted out of the DRIP will have their dividends automatically reinvested in shares of our common stock, rather than receiving cash dividends.

We have elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, and intend to make the required distributions to our stockholders as specified therein. In order to maintain our tax treatment as a RIC and to obtain RIC tax benefits, we must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then we are generally required to pay income taxes only on the portion of our taxable income and gains we do not distribute (actually or constructively) and certain built-in gains. We have historically met our minimum distribution requirements and continually monitor our distribution requirements with the goal of ensuring compliance with the Code. We can offer no assurance that we will achieve results that will permit the payment of any level of cash distributions and our ability to make distributions will be limited by the asset coverage requirement and related provisions under the 1940 Act and contained in any applicable indenture and related supplements. In addition, in order to satisfy the annual distribution requirement applicable to RICs, we may declare a significant portion of our dividends in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash (which portion may be as low as 20% of such dividend under published guidance from the Internal Revenue Service) and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock.

The minimum distribution requirements applicable to RICs require us to distribute to our stockholders each year at least 90% of our investment company taxable income, or ICTI, as defined by the Code. Depending on the level of ICTI and net capital gain, if any, earned in a tax year, we may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of the next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. We may be required to recognize ICTI in certain circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), we must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in ICTI other amounts that we have not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in our ICTI for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Recent Developments

Subsequent to March 31, 2021, we made approximately $156.3 million of new commitments, of which $106.4 million closed and funded. The $106.4 million of investments consist of $82.6 million of first lien senior secured debt investments, $20.9 million of second lien senior secured and subordinated debt investments and a $2.9 million equity investments with a combined weighted average yield on debt investments of 6.7%. In addition, we funded $5.1 million of previously committed delayed draw term loans.

On May 6, 2021, the Board declared a quarterly distribution of $0.20 per share payable on June 16, 2021 to holders of record as of June 9, 2021.

Critical Accounting Policies and Use of Estimates

The preparation of our unaudited financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods covered by such financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. On an ongoing basis, we evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.

Investment Valuation

The most significant estimate inherent in the preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We have a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC Topic 820. Our current valuation policy and processes were established by Barings and have been approved by the Board.

Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. The fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. If no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.

Under ASC Topic 820, there are three levels of valuation inputs, as follows:

Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables in the notes to our consolidated financial statements may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

Our investment portfolio includes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. In such cases, we determine the fair value of our investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs exist, and if so, we assess the appropriateness of the use of these third-party quotes in determining fair value based on (i) our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company.

There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of our Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Investment Valuation Process

Barings has established a pricing committee that is, subject to the oversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets we hold. Barings uses independent third-party providers to price the portfolio, but in the event an acceptable price cannot be obtained

from an approved external source, Barings will utilize alternative methods in accordance with internal pricing procedures established by Barings' pricing committee.

At least annually, Barings conducts reviews of the primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While Barings is not provided access to proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process Barings continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. Barings believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e., exit prices).

Our money market fund investments are generally valued using Level 1 inputs and our equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. Our syndicated senior secured loans and structured product investments are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by an independent pricing service. Our middle-market, private debt and equity investments are generally valued using Level 3 inputs.

Independent Valuation

The fair value of loans and equity investments that are not syndicated or for which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. Such loans and equity investments are initially held at cost, as that is a reasonable approximation of fair value on the acquisition date, and monitored for material changes that could affect the valuation (for example, changes in interest rates or the credit quality of the borrower). At the quarter end following the initial acquisition, such loans and equity investments are generally sent to a valuation provider which will determine the fair value of each investment. The independent valuation providers apply various methods (synthetic rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require (the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates in the discounted cash flow analysis. A range of values will be provided by the valuation provider and Barings will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination. Barings continues to use its internal valuation model as a comparison point to validate the price range provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board. If Barings’ pricing committee disagrees with the price range provided, it may make a fair value recommendation to the Board that is outside of the range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore. In certain instances, we may determine that it is not cost-effective, and as a result is not in the stockholders' best interests, to request an independent valuation firm to perform an independent valuation on certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. Pursuant to these procedures, the Board determines in good faith whether our investments were valued at fair value in accordance with our valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, our Audit Committee and the independent valuation firm.

The SEC recently adopted new Rule 2a-5 under the 1940 Act. This rule establishes requirements for determining fair value in good faith for purposes of the 1940 Act. We will comply with the new rule’s valuation requirements on or before the SEC’s compliance date in 2022.

Valuation Techniques

Our valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, we will utilize alternative approaches such as broker quotes or manual prices. We attempt to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide

variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security.

Valuation of Investment in Jocassee

We estimate the fair value of our investment in Jocassee Partners LLC, or Jocassee, using the NAV of Jocassee and our ownership percentage. The NAV of Jocassee is determined in accordance with the specialized accounting guidance for investment companies.

Valuation of Investment in Thompson Rivers

We estimate the fair value of our investment in Thompson Rivers LLC, or Thompson Rivers, using the NAV of Thompson Rivers and our ownership percentage. The NAV of Thompson Rivers is determined in accordance with the specialized accounting guidance for investment companies.

Valuation of Investments in MVC Private Equity Fund LP

We estimate the fair value of our investment in MVC Private Equity Fund LP, or MVC PE Fund, using the NAV of the MVC PE Fund and our ownership percentage. The NAV of the MVC PE Fund is determined in accordance with the specialized accounting guidance for investment companies.

Valuation of Investment in Waccamaw River

We estimate the fair value of our investment in Waccamaw River LLC, or Waccamaw River, using the NAV of Waccamaw River and our ownership percentage. The NAV of Waccamaw River is determined in accordance with the specialized accounting guidance for investment companies.

Revenue Recognition

Interest and Dividend Income

Interest income, including amortization of premium and accretion of discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The cessation of recognition of such interest will negatively impact the reported fair value of the investment. We write off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.

We may have to include interest income in our ICTI, including original issue discount income, from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements to maintain our RIC tax treatment, even though we will not have received and may not ever receive any corresponding cash amount. Additionally, any loss recognized by us for U.S. federal income tax purposes on previously accrued interest income will be treated as a capital loss.

Fee Income

Origination, facility, commitment, consent and other advance fees received in connection with the origination of a loan, or Loan Origination Fees, are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of our business, we receive certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, advisory, loan amendment and other fees, and are recorded as investment income when earned.

Fee income for the three months ended March 31, 2021 and 2020 was as follows:


	Three Months Ended		Three Months Ended
	March 31, 2021		March 31, 2020
Recurring Fee Income:
Amortization of loan origination fees	$	1,078,090	$	429,549
Management, valuation and other fees	581,395		175,755
Total Recurring Fee Income	1,659,485		605,304
Non-Recurring Fee Income:
Prepayment fees	49,517		84,151
Acceleration of unamortized loan origination fees	402,948		228,456
Advisory, loan amendment and other fees	21,225		43,082
Total Non-Recurring Fee Income	473,690		355,689
Total Fee Income	$	2,133,175	$	960,993

Payment-in-Kind (PIK) Interest Income

We currently hold, and expect to hold in the future, some loans in our portfolio that contain PIK interest provisions. PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to us in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.

PIK interest, which is a non-cash source of income at the time of recognition, is included in our taxable income and therefore affects the amount we are required to distribute to our stockholders to maintain our tax treatment as a RIC for U.S. federal income tax purposes, even though we have not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. We write off any previously accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.

We may have to include in our ICTI, PIK interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount.

Off-Balance Sheet Arrangements

In the normal course of business, we are party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to our portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of March 31, 2021 and December 31, 2020, the Company believed that it had adequate financial resources to satisfy its unfunded commitments. The balances of unused commitments to extend financing as of March 31, 2021 and December 31, 2020 were as follows:


Portfolio Company(1)	Investment Type	March 31, 2021		December 31, 2020
ADE Holding(3)	Committed Capex Line	$	88,194	$	91,814
Anju Software, Inc.	Delayed Draw Term Loan	1,981,371		1,981,371
Arch Global Precision, LLC	Delayed Draw Term Loan	3,631,849		4,193,475
Beacon Pointe Advisors, LLC	Delayed Draw Term Loan	—		363,636
Bidwax(2)(3)	Acquisition Capex Facility	3,760,958		—
BigHand UK Bidco Limited(4)	Acquisition Capex Facility	1,843,756		—
British Engineering Services Holdco Limited(4)	Acquisition Facility	—		7,006,008
British Engineering Services Holdco Limited(4)	Bridge Revolver	623,944		618,177
Centralis Finco S.a.r.l.(3)	Acquisition Facility	476,392		495,950
Classic Collision (Summit Buyer, LLC)(2)	Delayed Draw Term Loan	454,562		1,672,446
CM Acquisitions Holdings Inc.	Delayed Draw Term Loan	1,551,602		1,551,602
Contabo Finco S.À R.L(3)	Delayed Draw Term Loan	219,212		228,211
CSL Dualcom(4)	Delayed Draw Term Loan	1,016,577		1,007,182
Dart Buyer, Inc.	Delayed Draw Term Loan	2,430,569		2,430,569
DreamStart Bidco SAS(3)	Acquisition Facility	956,378		995,640
F24 (Stairway BidCo GmbH)(3)	Acquisition Facility	418,703		323,840
Fineline Technologies, Inc.(2)	Delayed Draw Term Loan	600,000		—
FitzMark Buyer, Inc.	Delayed Draw Term Loan	1,470,588		1,470,588
Foundation Risk Partners, Corp.	Delayed Draw Term Loan	4,716,805		4,984,771
Heartland, LLC	Delayed Draw Term Loan	5,347,666		5,347,666
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.))(3)	Accordion Facility	—		10,225,081
Home Care Assistance, LLC(2)	Delayed Draw Term Loan	3,038,310		—
IGL Holdings III Corp.	Delayed Draw Term Loan	5,914,219		5,914,219
INOS 19-090 GmbH(2)(3)	Acquisition Facility	2,620,403		2,727,980
Jocassee Partners LLC	Joint Venture	25,000,000		30,000,000
Kano Laboratories LLC(2)	Delayed Draw Term Loan	4,543,950		4,543,950
Kene Acquisition, Inc.	Delayed Draw Term Loan	—		322,928
LAF International(2)(3)	Acquisition Facility	364,343		—
LivTech Purchaser, Inc.(2)	Delayed Draw Term Loan	447,752		—
Modern Star Holdings Bidco Pty Limited(5)	Capex Term Loan	2,285,953		2,315,967
Murphy Midco Limited(4)	Delayed Draw Term Loan	3,332,269		3,301,472
Navia Benefit Solutions, Inc.(2)	Delayed Draw Term Loan	4,000,000		—
Options Technology Ltd.	Delayed Draw Term Loan	2,604,080		2,604,080
Pacific Health Supplies Bidco Pty Limited(5)	CapEx Term Loan	1,343,603		1,535,025
Premier Technical Services Group(4)	Acquisition Facility	1,208,676		1,197,505
Protego Bidco B.V.(2)(3)	Delayed Draw Term Loan	3,836,870		—
Protego Bidco B.V.(2)(3)	Revolver	2,302,121		—
PSC UK Pty Ltd.(4)	Acquisition Facility	540,149		535,157
Questel Unite(2)(3)	Cap Acquisition Facility	4,747,241		10,300,913
Radwell International, LLC	Delayed Draw Term Loan	1,617,973		3,235,947


Portfolio Company(1)	Investment Type	March 31, 2021		December 31, 2020
Rep Seko Merger Sub LLC	Delayed Draw Term Loan	1,454,545		1,454,546
Safety Products Holdings, LLC	Delayed Draw Term Loan	6,467,345		6,467,345
Smile Brands Group, Inc.(2)	Delayed Draw Term Loan	2,148,691		2,148,691
Springbrook Software (SBRK Intermediate, Inc.)	Delayed Draw Term Loan	3,489,026		3,489,026
SSCP Pegasus Midco Limited(4)	Delayed Draw Term Loan	13,514,446		13,389,546
The Hilb Group, LLC(2)	Delayed Draw Term Loan	5,105,694		5,545,939
Transit Technologies LLC(2)	Delayed Draw Term Loan	6,035,305		6,035,305
USLS Acquisition, Inc.(2)	Delayed Draw Term Loan	450,466		450,466
Utac Ceram(2)(3)	Delayed Draw Term Loan	—		743,327
Waccamaw River	Joint Venture	20,500,000		—
W2O Holdings, Inc.	Delayed Draw Term Loan	5,989,298		5,989,298
Total unused commitments to extend financing		$	166,491,854	$	159,236,659

(1)Our estimate of the fair value of the current investments in these portfolio companies includes an analysis of the fair value of any unfunded commitments.

(2)Represents a commitment to extend financing to a portfolio company where one or more of our current investments in the portfolio company are carried at less than cost.

(3)Actual commitment amount is denominated in Euros. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(4)Actual commitment amount is denominated in British pounds sterling. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(5)Actual commitment amount is denominated in Australian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

In the normal course of business, we guarantee certain obligations in connection with our portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. As of March 31, 2021 and December 31, 2020, we had guaranteed €9.9 million ($11.6 million U.S. dollars and $12.1 million U.S. dollars, respectively) relating to credit facilities among Erste Bank and MVC Automotive Group Gmbh, or MVC Auto. We would be required to make payments to Erste Bank if MVC Auto were to default on their related payment obligations. None of the credit facility guarantees are recorded as a liability on our Unaudited and Audited Consolidated Balance Sheets. As such, the credit facility liabilities are considered in the valuation of our investments in MVC Auto. The guarantees denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

In addition, we agreed to cash collateralize a $3.5 million letter of credit for Security Holdings B.V. The $3.5 million cash collateralization is reflected as "Restricted cash" on the accompanying Unaudited and Audited Consolidated Balance Sheets.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to market risk. Market risk includes risks that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies we invest in; conditions affecting the general economy; overall market changes; global pandemics; legislative reform; local, regional, national or global political, social or economic instability; and interest rate fluctuations.

In addition, we are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio. Our net investment income is affected by fluctuations in various interest rates, including LIBOR, AUD Screen Rate, CDOR, GBP LIBOR, EURIBOR and STIBOR. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. We regularly measure exposure to interest rate risk and determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. As of March 31, 2021, we were not a party to any interest rate hedging arrangements.

In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on any portfolio investments, a decrease in in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR.

As of March 31, 2021, approximately $1,252.3 million (principal amount) of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based (or based on an equivalent applicable currency rate), and many of which are subject to certain floors. A hypothetical 200 basis point increase or decrease in the interest rates on our variable-rate debt investments could increase or decrease, as applicable, our investment income by a maximum of $25.0 million on an annual basis.

Borrowings under the February 2019 Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.00% (or 1.25% if we no longer maintain an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.00% (or 2.25% if we no longer maintain an investment grade credit rating), (iii) for borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if we no longer maintain an investment grade credit rating) or (iv) for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.20% (or 2.45% if we no longer maintain an investment grade credit rating). The applicable base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.5%, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) the adjusted three-month applicable currency rate plus 1.0% and (v) 1.0%. The applicable LIBOR and currency rates depend on the currency and term of the draw under the February 2019 Credit Facility, and cannot be less than zero. A hypothetical 200 basis point increase or decrease in the interest rates on the February 2019 Credit Facility could increase or decrease, as applicable, our interest expense by a maximum of $12.2 million on an annual basis (based on the amount of outstanding borrowings under the February 2019 Credit Facility as of March 31, 2021). We pay a commitment fee of (x) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (y) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments.

In July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the end of 2021. There is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. As such, the potential effect of any such event on our cost of capital and net investment income cannot yet be determined. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.

Because we have previously borrowed, and plan to borrow in the future, money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio.

We may also have exposure to foreign currencies related to certain investments. Such investments are translated into U.S. dollars based on the spot rate at the relevant balance sheet date, exposing us to movements in the exchange rate. In order to reduce our exposure to fluctuations in exchange rates, we generally borrow in local foreign currencies under the February 2019 Credit Facility to finance such investments. As of March 31, 2021, we had borrowings denominated in Swedish kronas of 12.8kr million ($1.5 million U.S. dollars) with an interest rate of 2.000%, borrowings denominated in British pounds sterling of £85.3 million ($117.7 million U.S. dollars) with an interest rate of 2.063%, borrowings denominated in Australian dollars of A$36.6 million ($27.9 million U.S. dollars) with an interest rate of 2.250% and borrowings denominated in Euros of €91.1 million ($107.1 million U.S. dollars) with an interest rate of 2.000%.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2021. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the first quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We and certain of our former executive officers have been named as defendants in two putative securities class action lawsuits, each filed in the United States District Court for the Southern District of New York (and then transferred to the United States District Court for the Eastern District of North Carolina) on behalf of all persons who purchased or otherwise acquired our common stock between May 7, 2014 and November 1, 2017. The first lawsuit was filed on November 21, 2017, and was captioned Elias Dagher, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00015-FL (the “Dagher Action”). The second lawsuit was filed on November 28, 2017, and was captioned Gary W. Holden, et al., v. Triangle Capital Corporation, et al., Case No. 5:18-cv-00010-FL (the “Holden Action”). The Dagher Action and the Holden Action were consolidated and are currently captioned In re Triangle Capital Corp. Securities Litigation, Master File No. 5:18-cv-00010-FL.

On April 10, 2018, the plaintiff filed its First Consolidated Amended Complaint. The complaint alleged certain violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding our business, operations and prospects between May 7, 2014 and November 1, 2017. The plaintiff seeks compensatory damages and attorneys’ fees and costs, among other relief, but did not specify the amount of damages being sought. On May 25, 2018, the defendants filed a motion to dismiss the complaint. On March 7, 2019, the court entered an order granting the defendants’ motion to dismiss. On March 28, 2019, the plaintiff filed a motion seeking leave to file a Second Consolidated Amended Complaint. On September 20, 2019, the court entered an order denying the plaintiff’s motion for leave to file a Second Consolidated Amended Complaint and dismissing the action with prejudice. On October 17, 2019, the plaintiff filed a notice of appeal seeking review of the court’s September 20, 2019 order. The plaintiff filed its opening brief with the United States Court of Appeals for the Fourth Circuit on January 6, 2020. The defendants filed their response brief on February 28, 2020, and the plaintiff filed its reply brief on March 27, 2020. The United States Court of Appeals for the Fourth Circuit heard oral argument on the appeal on December 9, 2020. On February 22, 2021, the United States Court of Appeals for the Fourth Circuit affirmed the court’s September 20, 2019 order dismissing the action with prejudice.

Other than as set forth above, neither we, the Adviser, nor our subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to our respective businesses. We, the Adviser, and our subsidiaries may from time to time, however, be involved in litigation arising out of operations in the normal course of business or otherwise, including in connection with strategic transactions. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.

Item 1A. Risk Factors.

You should carefully consider the risks described in Item 1A entitled "Risk Factors" in Part 1 of our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 23, 2021, and all information contained in this Quarterly Report on Form 10-Q, including our interim financial statements and the related notes thereto, before making a decision to purchase our securities. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results, as well as the market price of our securities.

There have been no material changes during the three months ended March 31, 2021 to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020. If any of such risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens, the market price of our securities could decline, and you may lose all or part of your investment.

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

Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

During the three months ended March 31, 2021, in connection with our DRIP for our common stockholders, we directed the plan administrator to purchase 45,120 shares of our common stock for an aggregate of $451,326 in the open market in order to satisfy our obligations to deliver shares of common stock to our stockholders with respect to our dividend declared on February 7, 2021.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not Applicable

Item 6. Exhibits.


Number			Exhibit

3.1			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).

3.2			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).

3.3			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).

3.4			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).

10.1			Note Purchase Agreement by and between the Company and the purchasers party thereto, dated February 25, 2021 (Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2021 and incorporated herein by reference).

31.1			Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2			Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1			Chief Executive Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

32.2			Chief Financial Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

* Filed Herewith.

** Furnished Herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		BARINGS BDC, INC.

Date:	May 6, 2021	/s/ Eric Lloyd
		Eric Lloyd
		Chief Executive Officer
		(Principal Executive Officer)

Date:	May 6, 2021	/s/ Jonathan Bock
		Jonathan Bock
		Chief Financial Officer
		(Principal Financial Officer)

Date:	May 6, 2021	/s/ Elizabeth A. Murray
		Elizabeth A. Murray
		Principal Accounting Officer

Form: 10-Q

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