Annual report pursuant to Section 13 and 15(d)

INVESTMENTS (Tables)

v3.24.3
INVESTMENTS (Tables)
 12 Months Ended
Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of September 30, 2024 and 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 September 30, 2024:
Secured first lien debt
 $ 554,937  $ —  $ —  $ 554,937 
Secured second lien debt
113,716  —  —  113,716 
Unsecured debt
 32  —  —  32 
Preferred equity
31,346  —  —  31,346 
Common equity/equivalents
 96,191 
(A)
 —  —  96,191 
Total Investments as of September 30, 2024: $ 796,222  $ —  $ —  $ 796,222 
Fair Value Fair Value Measurements
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 $38 thousand and $0.2 million as of September 30, 2024 and 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 September 30, 2024 and 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)
September 30,
2024		 September 30,
2023
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 540,661  $ 491,686 
Secured second lien debt 105,169  120,429 
Unsecured debt 32  24 
Preferred equity 27,247  21,733 
Common equity/equivalents 77,757 
(A)
 29,419 
(B)
Total Non-Control/Non-Affiliate Investments $ 750,866  $ 663,291 
Affiliate Investments
Secured first lien debt $ 380  $ 2,895 
Preferred equity 4,099  5,122 
Common equity/equivalents 2,959  2,404 
Total Affiliate Investments $ 7,438  $ 10,421 
Control Investments
Secured first lien debt $ 13,896  $ 16,120 
Secured second lien debt 8,547  7,425 
Preferred equity —  — 
Common equity/equivalents 15,475  7,305 
Total Control Investments $ 37,918  $ 30,850 
Total Investments at Fair Value Using Level 3 Inputs $ 796,222  $ 704,562 
(A)Excludes our investment in Leeds with fair value of $38 thousand as of September 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
September 30,
2024		 September 30,
2023		 Valuation
Techniques/
Methodologies		 Unobservable
Input		 September 30,
2024		 September 30,
2023
Secured first lien debt $ 464,090  $ 461,638  Yield Analysis Discount Rate
10.8%–17.3% / 12.6%
11.8%–29.9% / 14.8%
90,847  49,063  TEV EBITDA multiple
4.1x–13.9x / 10.0x
4.7x–6.8x / 6.7x
EBITDA
$3,020–$16,211 / $10,309
$995–$14,002 / $13,624
Revenue multiple
0.2x–4.6x / 2.1x
0.3x–0.8x / 0.6x
Revenue
$6,336–$21,118 / $13,981
$14,934–$16,283 / $15,361
Secured second lien debt 101,928  110,820  Yield Analysis Discount Rate
12.2%–16.0% / 14.1%
12.5%—15.6% / 14.5%
3,241  9,609  Market Quote IBP
88.0%–88.0% / 88.0%
67.8%–94.0% / 82.2%
8,547  7,425  TEV EBITDA multiple
5.4x–5.4x / 5.4x
5.6x–5.6x / 5.6x
EBITDA
$3,343–$3,343 / $3,343
$3,690–$3,690 / $3,690
Unsecured debt 32  24  TEV Revenue multiple
1.0x–1.0x / 1.0x
1.0x–1.0x / 1.0x
Revenue
$7,834–$7,834 / $7,834
$5,044–$5,044 / $5,044
Preferred and common equity / equivalents(A)
127,537  65,983  TEV EBITDA multiple
4.1x–13.9x / 8.0x
4.7x–13.0x / 6.9x
EBITDA
$1,182–$144,458 / $10,847
$995–$112,841 / $10,570
Revenue multiple
0.2x–4.6x / 2.0x
0.3x–3.0x / 1.2x
Revenue
$4,672–$21,118 / $12,587
$4,213–$16,283 / $14,959
Total Level 3 Investments, at Fair Value $ 796,222  $ 704,562 
(A)Fair value as of September 30, 2024 excludes our investment in Leeds with fair value of $38 thousand. 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 September 30, 2024 and 2023, and 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 years ended September 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)
Year Ended September 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) —  —  332  1,724  2,006 
Net unrealized appreciation (depreciation)(B)
(7,071) 2,445  8  (5,039) 52,781  43,124 
Reversal of prior period net depreciation (appreciation) on realization(B)
(53) (22) —  130  (283) (228)
New investments, repayments and settlements:(C)
Issuances/originations 131,462  36,978  —  10,150  4,585  183,175 
Settlements/repayments (80,102) (53,539) —  —  —  (133,641)
Net proceeds from sales 50  —  —  (1,082) (1,744) (2,776)
Transfers —  —  —  —  —  — 
Fair Value as of September 30, 2024 $ 554,937  $ 113,716  $ 32  $ 31,346  $ 96,191  $ 796,222 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Year Ended September 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)
(7,577) 617  (31) (1,829) 10,563  1,743 
Reversal of prior period net depreciation (appreciation) on realization(B)
850  6  95  526  (9,257) (7,780)
New investments, repayments and settlements:(C)
Issuances/originations 154,762  15,421  —  2,045  4,532  176,760 
Settlements/repayments (101,085) (4,118) —  —  —  (105,203)
Net proceeds from sales —  —  —  (654) (11,678) (12,332)
Transfers —  —  —  —  —  — 
Fair Value as of September 30, 2023 $ 510,701  $ 127,854  $ 24  $ 26,855  $ 39,128  $ 704,562 
(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 September 30, 2024 and 2023:
September 30, 2024 September 30, 2023
Cost Fair Value Cost Fair Value
Secured first lien debt $ 580,736  75.3  % $ 554,937  69.7  % $ 529,376  73.3  % $ 510,701  72.5  %
Secured second lien debt 113,691  14.8  113,716  14.3  130,252  18.1  127,854  18.1 
Unsecured debt 198  0.0  32  0.0  198  0.0  24  0.0 
Total debt investments 694,625  90.1  668,685  84.0  659,826  91.4  638,579  90.6 
Preferred equity 45,017  5.8  31,346  3.9  35,617  4.9  26,855  3.8 
Common equity/equivalents 31,369  4.1  96,229  12.1  26,826  3.7  39,381  5.6 
Total equity investments 76,386  9.9  127,575  16.0  62,443  8.6  66,236  9.4 
Total Investments $ 771,011  100.0  % $ 796,260  100.0  % $ 722,269  100.0  % $ 704,815  100.0  %
Our investments at fair value consisted of the following industry classifications as of September 30, 2024 and 2023:
Industry Classification September 30, 2024 September 30, 2023
Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Diversified/Conglomerate Service $ 179,032  22.5  % $ 135,060  19.2  %
Diversified/Conglomerate Manufacturing 160,264  20.1  158,061  22.4 
Aerospace and Defense 153,096  19.2  97,836  13.9 
Healthcare, Education, and Childcare 101,707  12.8  146,438  20.8 
Beverage, Food, and Tobacco 88,327  11.1  78,788  11.2 
Automobile 28,286  3.6  27,571  3.9 
Machinery 21,816  2.7  6,411  0.9 
Oil and Gas 20,554  2.6  27,830  3.9 
Cargo Transportation 20,200  2.5  —  — 
Personal and Non-Durable Consumer Products 13,586  1.7  14,576  2.1 
Other, < 2.0% 9,392  1.2  12,244  1.7 
Total Investments $ 796,260  100.0  % $ 704,815  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of September 30, 2024 and 2023:
Location September 30, 2024 September 30, 2023
Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
South $ 314,010  39.4  % $ 273,181  38.8  %
West 249,082  31.3  224,235  31.8 
Midwest 192,897  24.2  145,122  20.6 
Northeast 40,271  5.1  62,277  8.8 
Total Investments $ 796,260  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 September 30, 2024:
Year Ending September 30, Amount
2025(A)
$ 16,322 
2026 160,366 
2027 227,287 
2028 193,374 
2029 78,697 
Thereafter 20,000 
Total contractual repayments $ 696,046 
Adjustments to cost basis of debt investments (1,421)
Investments in equity securities 76,386 
Investments held as of September 30, 2024 at cost: $ 771,011 
(A)Includes debt investments with contractual principal amounts totaling $0.2 million for which the maturity date has passed as of September 30, 2024.