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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Investment Commitments The Company has various commitments to fund investments in its portfolio as described below. As of December 31, 2022 and 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 December 31,
| 2022 |  | 2021
Total revolving and delayed draw loan commitments | $ | 2,916 |  |  | $ | 2,733 |
Less: funded commitments | (526) |  |  | (352) |
Total unfunded commitments | 2,390 |  |  | 2,381 |
Less: commitments substantially at discretion of the Company | — |  |  | — |
Less: unavailable commitments due to borrowing base or other covenant restrictions | (13) |  |  | (4) |
Total net adjusted unfunded revolving and delayed draw loan commitments | $ | 2,377 |  |  | $ | 2,377 |
Included within the total revolving and delayed draw loan commitments as of December 31, 2022 and 2021 were delayed draw loan commitments totaling $1,229 and $1,273, respectively. The Company’s commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels). Also included within the total revolving loan commitments as of December 31, 2022 were commitments to issue up to $366 in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of December 31, 2022, the Company had $46 in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. All of the $46 in letters of credit are due to expire in 2023. The Company also has commitments to co-invest in the SDLP for the Company’s portion of the SDLP’s commitments to fund delayed draw loans to certain portfolio companies of the SDLP. See Note 4 for more information. As of December 31, 2022 and 2021, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:
| As of December 31, |  |
| 2022 |  | 2021 |  |
Total private equity commitments | $ | 120 |  |  | $ | 111 |  |  |
Less: funded private equity commitments | (69) |  |  | (68) |  |  |
Total unfunded private equity commitments | 51 |  |  | 43 |  |  |
Less: private equity commitments substantially at discretion of the Company | (51) |  |  | (43) |  |  |
Total net adjusted unfunded private equity commitments | $ | — |  |  | $ | — |  |  |
In the ordinary course of business, the Company may sell certain of its investments to third party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales) the Company has, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future. In addition, in the ordinary course of business, the Company may guarantee 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. Lease Commitments The Company is obligated under a number of operating leases pursuant to which it is leasing office facilities from third parties with remaining terms ranging from approximately one to four years. For certain of its operating leases, the Company had previously entered into subleases. The components of operating lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows:
|  |  | For the Years Ended December 31,
|  |  |  |  | 2022 |  | 2021 |  | 2020
Operating lease costs |  |  |  |  | $ | 9 |  |  | $ | 10 |  |  | $ | 17 |
Less: sublease income |  |  |  |  | (9) |  |  | (9) |  |  | (16) |
Total operating lease costs (1) |  |  |  |  | $ | — |  |  | $ | 1 |  |  | $ | 1 |
________________________________________ (1)Total operating lease costs are incurred from office leases assumed as part of the Company’s acquisition of American Capital, Ltd. Supplemental cash flow information related to operating leases for the years ended December 31, 2022 and 2021 were as follows:
|  |  | For the Years Ended December 31,
|  |  |  |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of operating lease liabilities |  |  |  |  | $ | 16 |  |  | $ | 16 |
Operating ROU assets obtained in exchange for operating lease liabilities |  |  |  |  | $ | 9 |  |  | $ | 11 |
Supplemental balance sheet information as of December 31, 2022 and 2021 related to operating leases were as follows:
| As of December 31,
| 2022 |  | 2021
Operating lease ROU assets | $ | 20 |  |  | $ | 27 |
Operating lease liabilities | $ | 31 |  |  | $ | 43 |
Weighted average remaining lease term | 3.1 years |  | 3.7 years
Weighted average discount rate | 4.2 | % |  | 3.1%
The following table shows future minimum lease payments under the Company’s operating leases and a reconciliation to the operating lease liability as of December 31, 2022:
|  | Amount
2023 |  | $ | 16 |
2024 |  | 6 |
2025 |  | 6 |
2026 |  | 6 |
Total lease payments |  | 34 |
Less imputed interest |  | (3) |
Total operating lease liabilities |  | $ | 31 |
The following table shows future expected rental payments to be received under the Company’s subleases where the Company is the sublessor as of December 31, 2022:
|  | Amount
2023 |  | $ | 9 |
2024 |  | 4 |
2025 |  | 4 |
2026 |  | 4 |
Total |  | $ | 21 |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Investment Commitments The Company has various commitments to fund investments in its portfolio as described below. As of December 31, 2022 and 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 December 31,
| 2022 |  | 2021
Total revolving and delayed draw loan commitments | $ | 2,916 |  |  | $ | 2,733 |
Less: funded commitments | (526) |  |  | (352) |
Total unfunded commitments | 2,390 |  |  | 2,381 |
Less: commitments substantially at discretion of the Company | — |  |  | — |
Less: unavailable commitments due to borrowing base or other covenant restrictions | (13) |  |  | (4) |
Total net adjusted unfunded revolving and delayed draw loan commitments | $ | 2,377 |  |  | $ | 2,377 |
Included within the total revolving and delayed draw loan commitments as of December 31, 2022 and 2021 were delayed draw loan commitments totaling $1,229 and $1,273, respectively. The Company’s commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels). Also included within the total revolving loan commitments as of December 31, 2022 were commitments to issue up to $366 in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of December 31, 2022, the Company had $46 in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. All of the $46 in letters of credit are due to expire in 2023. The Company also has commitments to co-invest in the SDLP for the Company’s portion of the SDLP’s commitments to fund delayed draw loans to certain portfolio companies of the SDLP. See Note 4 for more information. As of December 31, 2022 and 2021, the Company was party to subscription agreements to fund equity investments in private equity investment partnerships as follows:
| As of December 31, |  |
| 2022 |  | 2021 |  |
Total private equity commitments | $ | 120 |  |  | $ | 111 |  |  |
Less: funded private equity commitments | (69) |  |  | (68) |  |  |
Total unfunded private equity commitments | 51 |  |  | 43 |  |  |
Less: private equity commitments substantially at discretion of the Company | (51) |  |  | (43) |  |  |
Total net adjusted unfunded private equity commitments | $ | — |  |  | $ | — |  |  |
In the ordinary course of business, the Company may sell certain of its investments to third party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales) the Company has, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future. In addition, in the ordinary course of business, the Company may guarantee 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. Lease Commitments The Company is obligated under a number of operating leases pursuant to which it is leasing office facilities from third parties with remaining terms ranging from approximately one to four years. For certain of its operating leases, the Company had previously entered into subleases. The components of operating lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows:
|  |  | For the Years Ended December 31,
|  |  |  |  | 2022 |  | 2021 |  | 2020
Operating lease costs |  |  |  |  | $ | 9 |  |  | $ | 10 |  |  | $ | 17 |
Less: sublease income |  |  |  |  | (9) |  |  | (9) |  |  | (16) |
Total operating lease costs (1) |  |  |  |  | $ | — |  |  | $ | 1 |  |  | $ | 1 |
________________________________________ (1)Total operating lease costs are incurred from office leases assumed as part of the Company’s acquisition of American Capital, Ltd. Supplemental cash flow information related to operating leases for the years ended December 31, 2022 and 2021 were as follows:
|  |  | For the Years Ended December 31,
|  |  |  |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of operating lease liabilities |  |  |  |  | $ | 16 |  |  | $ | 16 |
Operating ROU assets obtained in exchange for operating lease liabilities |  |  |  |  | $ | 9 |  |  | $ | 11 |
Supplemental balance sheet information as of December 31, 2022 and 2021 related to operating leases were as follows:
| As of December 31,
| 2022 |  | 2021
Operating lease ROU assets | $ | 20 |  |  | $ | 27 |
Operating lease liabilities | $ | 31 |  |  | $ | 43 |
Weighted average remaining lease term | 3.1 years |  | 3.7 years
Weighted average discount rate | 4.2 | % |  | 3.1%
The following table shows future minimum lease payments under the Company’s operating leases and a reconciliation to the operating lease liability as of December 31, 2022:
|  | Amount
2023 |  | $ | 16 |
2024 |  | 6 |
2025 |  | 6 |
2026 |  | 6 |
Total lease payments |  | 34 |
Less imputed interest |  | (3) |
Total operating lease liabilities |  | $ | 31 |
The following table shows future expected rental payments to be received under the Company’s subleases where the Company is the sublessor as of December 31, 2022:
|  | Amount
2023 |  | $ | 9 |
2024 |  | 4 |
2025 |  | 4 |
2026 |  | 4 |
Total |  | $ | 21 |

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