XML 37 R27.htm IDEA: XBRL DOCUMENT
v3.22.2.2

INVESTMENTS (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
Schedule of Investments | As of September 30, 2022 and December 31, 2021, investments consisted of the following:
| As of
| September 30, 2022 |  | December 31, 2021
| Amortized Cost(1) |  | Fair Value |  | Amortized Cost(1) |  | Fair Value
First lien senior secured loans(2) | $ | 9,821 |  |  | $ | 9,509 |  |  | $ | 9,583 |  |  | $ | 9,459 |
Second lien senior secured loans | 4,011 |  |  | 3,797 |  |  | 4,614 |  |  | 4,524 |
Subordinated certificates of the SDLP(3) | 1,121 |  |  | 1,121 |  |  | 987 |  |  | 987 |
Senior subordinated loans | 1,102 |  |  | 1,051 |  |  | 896 |  |  | 890 |
Preferred equity | 2,071 |  |  | 2,052 |  |  | 1,547 |  |  | 1,561 |
Ivy Hill Asset Management, L.P.(4) | 1,809 |  |  | 1,958 |  |  | 781 |  |  | 936 |
Other equity | 1,534 |  |  | 1,851 |  |  | 1,402 |  |  | 1,652 |
Total | $ | 21,469 |  |  | $ | 21,339 |  |  | $ | 19,810 |  |  | $ | 20,009 |
________________________________________ (1)The amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest or dividends. (2)First lien senior secured loans include certain loans that the Company classifies as “unitranche” loans. The total amortized cost and fair value of the loans that the Company classified as “unitranche” loans were $5,127 and $4,998, respectively, as of September 30, 2022, and $5,210 and $5,163, respectively, as of December 31, 2021. (3)The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans to 21 and 19 different borrowers as of September 30, 2022 and December 31, 2021, respectively. (4)Includes the Company’s equity and subordinated loan investments in IHAM, as applicable. The Company uses Global Industry Classification Standards for classifying the industry groupings of its portfolio companies. The industrial and geographic compositions of the Company’s portfolio at fair value as of September 30, 2022 and December 31, 2021 were as follows:
| As of
| September 30, 2022 |  | December 31, 2021
Industry |  |  |
Software & Services | 22.5 | % |  | 21.9 | %
Diversified Financials(1) | 12.3 |  |  | 7.5 |
Health Care Services | 10.1 |  |  | 10.8 |
Commercial & Professional Services | 8.2 |  |  | 9.2 |
Investment Funds and Vehicles(2) | 5.5 |  |  | 5.2 |
Insurance Services | 5.1 |  |  | 5.8 |
Power Generation | 4.7 |  |  | 4.5 |
Consumer Services | 4.0 |  |  | 3.9 |
Capital Goods | 4.0 |  |  | 4.8 |
Consumer Durables & Apparel | 3.9 |  |  | 4.4 |
Automobiles & Components | 3.2 |  |  | 4.6 |
Food & Beverage | 2.4 |  |  | 2.2 |
Pharmaceuticals, Biotechnology & Life Sciences | 2.3 |  |  | 1.9 |
Retailing and Distribution | 2.2 |  |  | 2.8 |
Media & Entertainment | 2.2 |  |  | 2.2 |
Other | 7.4 |  |  | 8.3 |
Total | 100.0 | % |  | 100.0 | %
________________________________________ (1)Includes the Company’s investment in IHAM. (2)Includes the Company’s investment in the SDLP, which had made first lien senior secured loans to 21 and 19 different borrowers as of September 30, 2022 and December 31, 2021, respectively. The portfolio companies in the SDLP are in industries similar to the companies in the Company’s portfolio.
| As of
| September 30, 2022 |  | December 31, 2021
Geographic Region |  |  |
West(1) | 34.5 | % |  | 31.2 | %
Midwest | 25.0 |  |  | 27.9 |
Southeast | 17.8 |  |  | 17.2 |
Mid-Atlantic | 13.1 |  |  | 14.5 |
Northeast | 4.6 |  |  | 4.8 |
International | 5.0 |  |  | 4.4 |
Total | 100.0 | % |  | 100.0 | %
________________________________________ (1)Includes the Company’s investment in the SDLP, which represented 5.3% and 4.9% of the total investment portfolio at fair value as of September 30, 2022 and December 31, 2021, respectively. Below is a summary of the SDLP’s portfolio.
| As of
| September 30, 2022 |  | December 31, 2021
Total first lien senior secured loans(1)(2) | $ | 4,798 |  |  | $ | 4,194 |
Largest loan to a single borrower(1) | $ | 380 |  |  | $ | 342 |
Total of five largest loans to borrowers(1) | $ | 1,616 |  |  | $ | 1,540 |
Number of borrowers in the SDLP | 21 |  |  | 19 |
Commitments to fund delayed draw loans(3) | $ | 311 |  |  | $ | 262 |
___________________________________________________________________________ (1)At principal amount. (2)First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of September 30, 2022 and December 31, 2021, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $3,737 and $2,908, respectively. (3)As discussed above, these commitments have been approved by the investment committee of the SDLP.
Summary of Funded Capital and Unfunded Capital Commitments of the SDLP | Below is a summary of the funded capital and unfunded capital commitments of the SDLP.
| As of
| September 30, 2022 |  | December 31, 2021
Total capital funded to the SDLP(1) | $ | 4,772 |  |  | $ | 4,168 |
Total capital funded to the SDLP by the Company(1) | $ | 1,121 |  |  | $ | 987 |
Total unfunded capital commitments to the SDLP(2) | $ | 311 |  |  | $ | 262 |
Total unfunded capital commitments to the SDLP by the Company(2) | $ | 73 |  |  | $ | 62 |
___________________________________________________________________________ (1)At principal amount. (2)These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met. As of September 30, 2022 and December 31, 2021, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) the Company’s discretion:
| As of
| September 30, 2022 |  | December 31, 2021
Total revolving and delayed draw loan commitments | $ | 3,205 |  |  | $ | 2,733 |
Less: funded commitments | (520) |  |  | (352) |
Total unfunded commitments | 2,685 |  |  | 2,381 |
Less: commitments substantially at discretion of the Company | — |  |  | — |
Less: unavailable commitments due to borrowing base or other covenant restrictions | — |  |  | (4) |
Total net adjusted unfunded revolving and delayed draw loan commitments | $ | 2,685 |  |  | $ | 2,377 |
Summary of Dividend and Interest Income | The interest income from the Company’s investment in the SDLP Certificates and capital structuring service and other fees earned for the three and nine months ended September 30, 2022 and 2021 were as follows:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Interest income | $ | 37 |  |  | $ | 33 |  |  | $ | 105 |  |  | $ | 106 |
Capital structuring service and other fees | $ | 7 |  |  | $ | 7 |  |  | $ | 15 |  |  | $ | 13 |
The dividend income received and interest income earned from IHAM for the three and nine months ended September 30, 2022 and 2021 were as follows:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Dividend income | $ | 55 |  |  | $ | 23 |  |  | $ | 150 |  |  | $ | 65 |
Interest income | $ | 8 |  |  | $ | — |  |  | $ | 11 |  |  | $ | 2 |

X
- Definition Tabular disclosure of interest income and expense, including, but not limited to, interest income and expense from investments, loans, and securities. + References No definition available. + Details
Name: | us-gaap_InterestIncomeAndInterestExpenseDisclosureTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of data and information required in the supplementary schedule applicable to management investment companies listing holdings of unaffiliated investments. + References No definition available. + Details
Name: | us-gaap_InvestmentHoldingsScheduleOfInvestmentsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of information about obligations resulting from other commitments. + References No definition available. + Details
Name: | us-gaap_OtherCommitmentsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration