Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS (Tables)

v3.24.1.u1
INVESTMENTS (Tables)
 6 Months Ended
Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of March 31, 2024 and September 30, 2023, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of March 31, 2024:
Secured first lien debt
 $ 563,849  $ —  $ —  $ 563,849 
Secured second lien debt
 140,409  —  —  140,409 
Unsecured debt
 33  —  — 

33 
Preferred equity
 32,598  —  — 

32,598 
Common equity/equivalents
 54,453 
(A)
 —  18 
(B)
 54,435 
Total Investments as of March 31, 2024
 $ 791,342  $ —  $ 18  $ 791,324 
Fair Value Measurements
Fair Value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
As of September 30, 2023:
Secured first lien debt
 $ 510,701  $ —  $ —  $ 510,701 
Secured second lien debt
 127,854  —  —  127,854 
Unsecured debt
 24  —  — 

24 
Preferred equity
 26,855  —  — 

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

22 
(B)
 39,128 
Total Investments as of September 30, 2023
 $ 704,584  $ —  $ 22  $ 704,562 
(A)Excludes our investment in Leeds with a fair value of $0.2 million and $0.2 million as of March 31, 2024 and September 30, 2023, respectively. Leeds was valued using NAV as a practical expedient.
(B)Fair value was determined based on the closing market price of shares of Funko, Inc. (our units in Funko can be converted into common shares of Funko, Inc.) at the reporting date less a discount for lack of marketability as our investment was subject to certain restrictions.
The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of March 31, 2024 and September 30, 2023, by caption on our accompanying Consolidated Statements of Assets and Liabilities and by security type:
Total Recurring Fair Value Measurements Reported in
Consolidated Statements of Assets and Liabilities
Using Significant Unobservable Inputs (Level 3)
March 31, 2024 September 30, 2023
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 546,810  $ 491,686 
Secured second lien debt 133,064  120,429 
Unsecured debt 33  24 
Preferred equity 26,971  21,733 
Common equity/equivalents 37,038 
(A)
 29,419 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 743,916  $ 663,291 
Affiliate Investments
Secured first lien debt $ 1,937  $ 2,895 
Preferred equity 5,627  5,122 
Common equity/equivalents 2,818  2,404 
Total Affiliate Investments $ 10,382  $ 10,421 
Control Investments
Secured first lien debt $ 15,102  $ 16,120 
Secured second lien debt 7,345  7,425 
Common equity/equivalents 14,579  7,305 
Total Control Investments
 $ 37,026  $ 30,850 
Total Investments at Fair Value Using Level 3 Inputs $ 791,324  $ 704,562 

(A)Excludes our investments in Leeds and Funko with fair values of $0.2 million and $18 thousand, respectively, as of March 31, 2024. Leeds was valued using NAV as a practical expedient, and Funko was valued using Level 2 inputs.
(B)Excludes our investments in Leeds and Funko with fair values of $0.2 million and $22 thousand, respectively, as of September 30, 2023. Leeds was valued using NAV as a practical expedient, and Funko was valued using Level 2 inputs.
Schedule of Fair Value Measurement Inputs and Valuation Techniques The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements.
The weighted average calculations in the table below are based on the principal balances for all debt related calculations and on the cost basis for all equity related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements

Range / Weighted Average as of

March 31,
2024		 September 30,
2023
Valuation
Techniques/
Methodologies
Unobservable
Input
 March 31,
2024		 September 30,
2023


Secured first lien debt
 $ 508,803  $ 461,638 
Yield Analysis
 Discount Rate
11.6% - 18.1%
/ 13.4%
11.8% - 29.9%
/ 14.8%

54,758  49,063 
TEV
EBITDA multiple
4.0x – 8.0x
/ 7.3x
4.7x – 6.8x
/ 6.7x


EBITDA
$1,091 - $15,145
/ $11,772
$995 - $14,002
/ $13,624


Revenue multiple
0.4x – 0.8x
/ 0.6x
0.3x – 0.8x
/ 0.6x


Revenue
$9,160 - $31,586
/ $17,957
$14,934 - $16,283
/ $15,361

288  — 

Other
Secured second lien debt
 125,549  110,820 
Yield Analysis
 Discount Rate
12.5% - 15.4%
/ 13.9%
12.5% - 15.6%
/ 14.5%

7,515  9,609 
Market Quote
 IBP
84.0% - 90.0%
/ 86.5%
67.8% - 94.0%
/ 82.2%

7,345  7,425 
TEV
 EBITDA multiple
5.2x – 5.2x
/ 5.2x
5.6x – 5.6x
/ 5.6x


EBITDA
$3,778 - $3,778
/ $3,778
$3,690 - $3,690
/ $3,690


Unsecured debt
 33  24 
TEV
Revenue multiple
1.0x – 1.0x
/ 1.0x
1.0x – 1.0x
/ 1.0x


Revenue
$6,980 - $6,980
/ $6,980
$5,044 - $5,044
/ $5,044


Preferred and common equity / equivalents(A)
87,033  65,983 
TEV
 EBITDA multiple
4.0x – 13.2x
/ 6.8x
4.7x – 13.0x
/ 6.9x


EBITDA
$1,091 -$140,548
/ $9,630
$995 -$112,841
/ $10,570


Revenue multiple
0.6x – 3.3x
/ 2.0x
0.3x– 3.0x
/ 1.2x


Revenue
$4,102 -$31,586
/ $16,716
$4,213 -$16,283
/ $14,959
Total Level 3 Investments, at Fair Value
 $ 791,324  $ 704,562 
(A)Fair value as of March 31, 2024 excludes our investments in Leeds and Funko with fair values of $0.2 million and $18 thousand, respectively. Fair value as of September 30, 2023 excludes our investments in Leeds and Funko with fair values of $0.2 million and $22 thousand, respectively. Leeds was valued using NAV as a practical expedient and Funko was valued using Level 2 inputs as of both March 31, 2024 and September 30, 2023.
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables provide the changes in fair value, broken out by security type, during the three and six months ended March 31, 2024 and 2023 for all investments for which we determine fair value using unobservable (Level 3) inputs.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended March 31, 2024 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of December 31, 2023 $ 546,602  $ 126,571  $ 23  $ 29,722  $ 46,799  $ 749,717 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  219  —  219 
Net unrealized appreciation (depreciation)(B)
(1,998) 2,287  10  2,496  7,636  10,431 
Reversal of prior period net depreciation (appreciation) on realization(B)
(19) 157  —  130  —  268 
New investments, repayments and settlements: (C)
Issuances/originations
 29,951  15,177  —  1,000  —  46,128 
Settlements/repayments
 (10,687) (3,783) —  —  —  (14,470)
Net proceeds from sales
 —  —  —  (969) —  (969)
Transfers
 —  —  —  —  —  — 
Fair Value as of March 31, 2024
 $ 563,849  $ 140,409  $ 33  $ 32,598  $ 54,435  $ 791,324 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Six months ended March 31, 2024 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2023
 $ 510,701  $ 127,854  $ 24  $ 26,855  $ 39,128  $ 704,562 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  219  259  478 
Net unrealized appreciation (depreciation)(B)
4,998  1,543  9  (3,637) 15,591  18,504 
Reversal of prior period net depreciation (appreciation) on realization(B)
(19) 157  —  130  (283) (15)
New investments, repayments and settlements: (C)
Issuances/originations
 79,975  15,362  —  10,000  —  105,337 
Settlements/repayments
 (31,806) (4,507) —  —  —  (36,313)
Net proceeds from sales
 —  —  —  (969) (260) (1,229)
Transfers
 —  —  —  —  —  — 
Fair Value as of March 31, 2024
 $ 563,849  $ 140,409  $ 33  $ 32,598  $ 54,435  $ 791,324 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended March 31, 2023 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of December 31, 2022 $ 450,243  $ 114,755  $ 45  $ 26,140  $ 28,011  $ 619,194 
Total gains (losses):
Net realized gain (loss)(A)
(107) —  —  510  —  403 
Net unrealized appreciation (depreciation)(B)
(2,035) 319  (9) 1,931  1,401  1,607 
Reversal of prior period net depreciation (appreciation) on realization(B)
107  —  —  —  —  107 
New investments, repayments and settlements: (C)
Issuances/originations
 58,385  4,060  —  371  2,032  64,848 
Settlements/repayments
 (7,646) (1,696) —  —  —  (9,342)
Net proceeds from sales
 —  —  —  (654) —  (654)
Transfers —  —  —  —  —  — 
Fair Value as of March 31, 2023
 $ 498,947  $ 117,438  $ 36  $ 28,298  $ 31,444  $ 676,163 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Six months ended March 31, 2023 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2022
 $ 463,858  $ 115,928  $ 55  $ 27,046  $ 36,273  $ 643,160 
Total gains (losses):
Net realized gain (loss)(A)
(107) —  (95) 510  4,995  5,303 
Net unrealized appreciation (depreciation)(B)
(2,490) (225) (19) 1,025  617  (1,092)
Reversal of prior period net depreciation (appreciation) on realization(B)
210  —  95  —  (4,995) (4,690)
New investments, repayments and settlements: (C)
Issuances/originations
 69,860  4,242  —  371  2,532  77,005 
Settlements/repayments
 (32,384) (2,507) —  —  —  (34,891)
Net proceeds from sales
 —  —  —  (654) (7,978) (8,632)
Transfers —  —  —  —  —  — 
Fair Value as of March 31, 2023
 $ 498,947  $ 117,438  $ 36  $ 28,298  $ 31,444  $ 676,163 
(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(B)Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, accretion of discounts, PIK, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.
Schedule of Investment Holdings
The following table outlines our investments by security type as of March 31, 2024 and September 30, 2023:
March 31, 2024 September 30, 2023
Cost Fair Value Cost Fair Value
Secured first lien debt $ 577,545  73.1  % $ 563,849  71.2  % $ 529,376  73.3  % $ 510,701  72.5  %
Secured second lien debt 141,107  17.8  140,409  17.8  130,252  18.1  127,854  18.1 
Unsecured debt 198  0.0  33  0.0  198  0.0  24  0.0 
Total debt investments 718,850  90.9  704,291  89.0  659,826  91.4  638,579  90.6 
Preferred equity 44,867  5.7  32,598  4.1  35,617  4.9  26,855  3.8 
Common equity/equivalents 26,825  3.4  54,699  6.9  26,826  3.7  39,381  5.6 
Total equity investments
 71,692  9.1  87,297  11.0  62,443  8.6  66,236  9.4 
Total Investments
 $ 790,542  100.0  % $ 791,588  100.0  % $ 722,269  100.0  % $ 704,815  100.0  %
Our investments at fair value consisted of the following industry classifications as of March 31, 2024 and September 30, 2023:
March 31, 2024 September 30, 2023
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Diversified/Conglomerate Service $ 179,228  22.6  % $ 135,060  19.2  %
Diversified/Conglomerate Manufacturing 165,273  20.9  158,061  22.4 
Healthcare, Education, and Childcare 160,081  20.2  146,438  20.8 
Aerospace and Defense 120,437  15.2  97,836  13.9 
Beverage, Food, and Tobacco 85,389  10.8  78,788  11.2 
Automobile 27,595  3.5  27,571  3.9 
Oil and Gas 22,343  2.8  27,830  3.9 
Personal and Non-Durable Consumer Products 14,647  1.9  14,576  2.1 
Machinery 6,473  0.8  6,411  0.9 
Other, < 2.0% 10,122  1.3  12,244  1.7 
Total Investments $ 791,588  100.0  % $ 704,815  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of March 31, 2024 and September 30, 2023:
March 31, 2024 September 30, 2023
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
South $ 311,428  39.3  % $ 273,181  38.8  %
West 265,286  33.5  224,235  31.8 
Midwest 153,901  19.5  145,122  20.6 
Northeast 60,973  7.7  62,277  8.8 
Total Investments $ 791,588  100.0  % $ 704,815  100.0  %
Schedule of Investments Classified by Contractual Maturity Date
The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of March 31, 2024:
Amount
For the remaining six months ending September 30:
2024(A)
$ 19,827 
For the fiscal years ending September 30:
 2025 15,947 

2026 151,927 

2027 266,530 

2028 209,465 

Thereafter 56,737 

Total contractual repayments
 $ 720,433 

Adjustments to cost basis of debt investments (1,583)

Investments in equity securities 71,692 

Investments held as of March 31, 2024 at cost:
 $ 790,542 
(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of March 31, 2024.