Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS (Tables)

v3.24.2.u1
INVESTMENTS (Tables)
 9 Months Ended
Jun. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of June 30, 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 June 30, 2024:
Secured first lien debt
 $ 542,283  $ —  $ —  $ 542,283 
Secured second lien debt
 117,875  —  —  117,875 
Unsecured debt
 33  —  — 

33 
Preferred equity
 32,965  —  — 

32,965 
Common equity/equivalents
 64,379 
(A)
 —  —  64,379 
Total Investments as of June 30, 2024
 $ 757,535  $ —  $ —  $ 757,535 
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 June 30, 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 June 30, 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)
June 30, 2024 September 30, 2023
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 527,215  $ 491,686 
Secured second lien debt 110,610  120,429 
Unsecured debt 33  24 
Preferred equity 26,931  21,733 
Common equity/equivalents 45,262 
(A)
 29,419 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 710,051  $ 663,291 
Affiliate Investments
Secured first lien debt $ 975  $ 2,895 
Preferred equity 6,034  5,122 
Common equity/equivalents 2,883  2,404 
Total Affiliate Investments $ 9,892  $ 10,421 
Control Investments
Secured first lien debt $ 14,093  $ 16,120 
Secured second lien debt 7,265  7,425 
Common equity/equivalents 16,234  7,305 
Total Control Investments
 $ 37,592  $ 30,850 
Total Investments at Fair Value Using Level 3 Inputs $ 757,535  $ 704,562 
(A)Excludes our investment in Leeds with fair value of $0.2 million as of June 30, 2024. Leeds was valued using NAV as a practical expedient.
(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

June 30,
2024		 September 30,
2023
Valuation
Techniques/
Methodologies
Unobservable
Input
 June 30,
2024		 September 30,
2023


Secured first lien debt
 $ 450,678  $ 461,638 
Yield Analysis
 Discount Rate
11.1% - 18.2%
/ 13.2%
11.8% - 29.9%
/ 14.8%

91,605  49,063 
TEV
EBITDA multiple
4.0x – 9.5x
/ 7.4x
4.7x – 6.8x
/ 6.7x


EBITDA
$215 - $16,609
/ $9,505
$995 - $14,002
/ $13,624


Revenue multiple
0.4x – 4.5x
/ 2.2x
0.3x – 0.8x
/ 0.6x


Revenue
$6,741 - $30,240
/ $16,292
$14,934 - $16,283
/ $15,361
Secured second lien debt
 102,315  110,820 
Yield Analysis
 Discount Rate
13.0% - 15.4%
/ 14.3%
12.5% - 15.6%
/ 14.5%

8,295  9,609 
Market Quote
 IBP
89.5% - 100.0%
/ 95.5%
67.8% - 94.0%
/ 82.2%

7,265  7,425 
TEV
 EBITDA multiple
5.2x – 5.2x
/ 5.2x
5.6x – 5.6x
/ 5.6x


EBITDA
$3,811 - $3,811
/ $3,811
$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
$7,551 - $7,551
/ $7,551
$5,044 - $5,044
/ $5,044


Preferred and common equity / equivalents(A)
97,344  65,983 
TEV
 EBITDA multiple
4.0x – 13.0x
/ 7.2x
4.7x – 13.0x
/ 6.9x


EBITDA
$215 -$144,874
/ $10,157
$995 -$112,841
/ $10,570


Revenue multiple
0.6x – 4.5x
/ 2.7x
0.3x– 3.0x
/ 1.2x


Revenue
$5,394 -$30,240
/ $16,489
$4,213 -$16,283
/ $14,959
Total Level 3 Investments, at Fair Value
 $ 757,535  $ 704,562 
(A)Fair value as of June 30, 2024 excludes our investment in Leeds with fair value of $0.2 million. 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 as of both June 30, 2024 and September 30, 2023. Funko was valued using Level 2 inputs as of 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 nine months ended June 30, 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 June 30, 2024 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of March 31, 2024 $ 563,849  $ 140,409  $ 33  $ 32,598  $ 54,435  $ 791,324 
Total gains (losses):
Net realized gain (loss)(A)
(50) —  —  —  1,465  1,415 
Net unrealized appreciation (depreciation)(B)
(6,748) 727  —  367  9,213  3,559 
Reversal of prior period net depreciation (appreciation) on realization(B)
(33) (58) —  —  —  (91)
New investments, repayments and settlements: (C)
Issuances/originations
 26,964  20,132  —  —  750  47,846 
Settlements/repayments
 (41,749) (43,335) —  —  —  (85,084)
Net proceeds from sales
 50  —  —  —  (1,484) (1,434)
Transfers
 —  —  —  —  —  — 
Fair Value as of June 30, 2024
 $ 542,283  $ 117,875  $ 33  $ 32,965  $ 64,379  $ 757,535 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Nine months ended June 30, 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)
(50) —  —  219  1,724  1,893 
Net unrealized appreciation (depreciation)(B)
(1,750) 2,270  9  (3,270) 24,804  22,063 
Reversal of prior period net depreciation (appreciation) on realization(B)
(52) 99  —  130  (283) (106)
New investments, repayments and settlements: (C)
Issuances/originations
 106,939  35,494  —  10,000  750  153,183 
Settlements/repayments
 (73,555) (47,842) —  —  —  (121,397)
Net proceeds from sales
 50  —  —  (969) (1,744) (2,663)
Transfers
 —  —  —  —  —  — 
Fair Value as of June 30, 2024
 $ 542,283  $ 117,875  $ 33  $ 32,965  $ 64,379  $ 757,535 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended June 30, 2023 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of March 31, 2023 $ 498,947  $ 117,438  $ 36  $ 28,298  $ 31,444  $ 676,163 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  (789) 3,700  2,911 
Net unrealized appreciation (depreciation)(B)
(2,195) 601  (4) (1,718) 4,622  1,306 
Reversal of prior period net depreciation (appreciation) on realization(B)
(200) —  —  526  (4,262) (3,936)
New investments, repayments and settlements: (C)
Issuances/originations
 65,707  2,061  —  1,674  2,000  71,442 
Settlements/repayments
 (29,022) (64) —  —  —  (29,086)
Net proceeds from sales
 —  —  —  —  (3,700) (3,700)
Transfers —  —  —  —  —  — 
Fair Value as of June 30, 2023
 $ 533,237  $ 120,036  $ 32  $ 27,991  $ 33,804  $ 715,100 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Nine months ended June 30, 2023 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2022
 $ 463,858  $ 115,928  $ 55  $ 27,046  $ 36,273  $ 643,160 
Total gains (losses):
Net realized gain (loss)(A)
(107) —  (95) (279) 8,695  8,214 
Net unrealized appreciation (depreciation)(B)
(4,685) 376  (23) (693) 5,239  214 
Reversal of prior period net depreciation (appreciation) on realization(B)
10  —  95  526  (9,257) (8,626)
New investments, repayments and settlements: (C)
Issuances/originations
 135,567  6,303  —  2,045  4,532  148,447 
Settlements/repayments
 (61,406) (2,571) —  —  —  (63,977)
Net proceeds from sales
 —  —  —  (654) (11,678) (12,332)
Transfers —  —  —  —  —  — 
Fair Value as of June 30, 2023
 $ 533,237  $ 120,036  $ 32  $ 27,991  $ 33,804  $ 715,100 
(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(B)Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, accretion of discounts, PIK, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.
Schedule of Investment Holdings
The following table outlines our investments by security type as of June 30, 2024 and September 30, 2023:
June 30, 2024 September 30, 2023
Cost Fair Value Cost Fair Value
Secured first lien debt $ 562,760  74.7  % $ 542,283  71.6  % $ 529,376  73.3  % $ 510,701  72.5  %
Secured second lien debt 117,904  15.7  117,875  15.5  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 680,862  90.4  660,191  87.1  659,826  91.4  638,579  90.6 
Preferred equity 44,867  6.0  32,965  4.4  35,617  4.9  26,855  3.8 
Common equity/equivalents 27,534  3.6  64,589  8.5  26,826  3.7  39,381  5.6 
Total equity investments
 72,401  9.6  97,554  12.9  62,443  8.6  66,236  9.4 
Total Investments
 $ 753,263  100.0  % $ 757,745  100.0  % $ 722,269  100.0  % $ 704,815  100.0  %
Our investments at fair value consisted of the following industry classifications as of June 30, 2024 and September 30, 2023:
June 30, 2024 September 30, 2023
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Diversified/Conglomerate Service $ 180,136  23.8  % $ 135,060  19.2  %
Diversified/Conglomerate Manufacturing 164,251  21.7  158,061  22.4 
Aerospace and Defense 128,782  17.0  97,836  13.9 
Healthcare, Education, and Childcare 93,853  12.4  146,438  20.8 
Beverage, Food, and Tobacco 90,843  12.0  78,788  11.2 
Automobile 28,040  3.7  27,571  3.9 
Oil and Gas 21,600  2.9  27,830  3.9 
Cargo Transportation 20,000  2.6  —  0.0 
Personal and Non-Durable Consumer Products 13,617  1.8  14,576  2.1 
Machinery 6,389  0.8  6,411  0.9 
Other, < 2.0% 10,234  1.3  12,244  1.7 
Total Investments $ 757,745  100.0  % $ 704,815  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of June 30, 2024 and September 30, 2023:
June 30, 2024 September 30, 2023
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
South $ 289,191  38.2  % $ 273,181  38.8  %
West 248,443  32.8  224,235  31.8 
Midwest 175,923  23.2  145,122  20.6 
Northeast 44,188  5.8  62,277  8.8 
Total Investments $ 757,745  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 June 30, 2024:
Amount
For the remaining three months ending September 30:
2024(A)
$ 16,950 
For the fiscal years ending September 30:
 2025 16,478 

2026 146,728 

2027 227,661 

2028 191,635 

Thereafter 83,114 

Total contractual repayments
 $ 682,566 

Adjustments to cost basis of debt investments (1,704)

Investments in equity securities 72,401 

Investments held as of June 30, 2024 at cost:
 $ 753,263 
(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of June 30, 2024.