NPORT-EX 2 fp0083659-1_nportex.htm

US

 

Blackstone Senior Floating Rate 2027 Term Fund  
   
Portfolio of Investments  
March 31, 2023 (Unaudited)  

 

   Principal   
   Amount  Value
    
FLOATING RATE LOAN INTERESTS - 135.73%(a)          
Aerospace & Defense - 5.10%          
Amentum Government Services Holdings LLC, First Lien Term Loan,  3M US SOFR + 4.00%, 02/15/2029  $1,371,648   $1,344,215 
Atlas CC Acquisition Corp., First Lien B Term Loan,  3M US SOFR + 4.25%, 0.75% Floor, 05/25/2028   2,003,510    1,733,036 
Atlas CC Acquisition Corp., First Lien C Term Loan,  3M US SOFR + 4.25%, 0.75% Floor, 05/25/2028   407,494    352,482 
Nordam Group LLC, First Lien Initial Term Loan,  1M US SOFR + 5.50%, 04/09/2026   1,689,599    1,330,559 
Peraton Corp., First Lien B Term Loan,  1M US L + 3.75%, 0.75% Floor, 02/01/2028   2,306,281    2,282,261 
TransDigm Inc., TLI, First Lien Term Loan,  3M US SOFR + 3.25%, 08/24/2028   1,520,576    1,518,295 
Vertex Aerospace Corp., First Lien Term Loan,  1M US L + 3.50%, 12/06/2028   859,231    856,241 
         9,417,089 
           
Air Freight & Logistics - 2.33%          
Kenan Advantage Group, Inc., The, First Lien U.S. B-1 Term Loan,  1M US L + 3.75%, 0.75% Floor, 03/24/2026   1,097,194    1,091,253 
WWEX UNI TopCo Holdings LLC, First Lien Initial Term Loan,  3M US SOFR + 4.00%, 0.75% Floor, 07/26/2028   1,668,521    1,620,551 
XPO Logistics Inc, First Lien Refinancing Term Loan, First Lien Term Loan,  1M US L + 1.75%, 02/24/2025   1,600,000    1,598,800 
         4,310,604 
           
Automobile Components - 1.16%          
Burgess Point Purchaser Corp., First Lien Term Loan,  1M US SOFR + 5.25%, 07/25/2029   1,468,320    1,404,448 
Mavis Tire Express Services Topco Corp., First Lien Term Loan,  1M US SOFR + 4.00%, 0.75% Floor, 05/04/2028   750,807    738,017 
         2,142,465 
           
Banks - 0.39%          
EnergySolutions LLC, First Lien Initial Term Loan,  3M US L + 3.75%, 1.00% Floor, 05/09/2025   753,273    728,479 
           
Beverages - 0.90%          
Triton Water Holdings, Inc., First Lien Initial Term Loan,  3M US L + 3.50%, 0.50% Floor, 03/31/2028   1,843,005    1,661,589 
           
Biotechnology - 0.74%          
Grifols Worldwide Operations, TLB, First Lien Term Loan,  1M US L + 2.00%, 11/15/2027   1,400,861    1,374,889 
           
Broadline Retail - 0.91%          
Pilot Travel Centers LLC, First Lien Term Loan,  1M US L + 2.00%, 08/04/2028   1,691,392    1,687,866 
           
Building Products - 2.83%          
Chariot Buyer LLC, First Lien Term Loan,  1M US L + 3.25%, 0.50% Floor, 11/03/2028   1,058,945    1,019,764 
CP Atlas Buyer, Inc., First Lien B Term Loan,  3M US SOFR + 3.50%, 0.50% Floor, 11/23/2027   1,687,460    1,505,156 
Kodiak Building Partners Inc. TLB, First Lien Term Loan,  3M US SOFR + 3.25%, 0.75% Floor, 03/12/2028   2,038,139    1,961,708 
Oscar Acquisitionco LLC, First Lien Term Loan,  3M US SOFR + 4.50%, 0.50% Floor, 04/29/2029   765,073    739,359 
         5,225,987 
           
Capital Markets - 1.17%          
Apex Group Treasury, Ltd., First Lien USD Term Loan,  3M US L + 3.75%, 0.50% Floor, 07/27/2028   749,078    733,471 
Focus Financial Partners LLC, First Lien Term Loan,  3M US L + 2.50%, 06/30/2028   1,444,684    1,425,339 
         2,158,810 

 
 

   Principal   
   Amount  Value
    
Chemicals - 2.27%
Eco Services Operations Corp., First Lien Term Loan,  3M US L + 2.50%, 0.50% Floor, 06/09/2028  $997,462   $991,228 
Geon Performance Solutions LLC, First Lien Term Loan,  3M US L + 4.50%, 0.75% Floor, 08/18/2028   1,148,016    1,133,189 
Hyperion Materials & Technologies, Inc., First Lien Initial Term Loan,  1M US L + 4.50%, 0.50% Floor, 08/30/2028   744,521    738,379 
Messer Industries Llc Tl, First Lien Term Loan,  3M US L + 2.50%, 03/02/2026   911,113    910,306 
Nouryon Finance B.V., TLB, First Lien Term Loan,  3M US L + 0.00%, 03/02/2028   425,532    425,000 
         4,198,102 
           
Commercial Services & Supplies - 4.38%          
Access CIG LLC, Second Lien Initial Term Loan,  3M US L + 7.75%, 02/27/2026   1,074,290    991,924 
Covanta 11/21 TLB, First Lien Term Loan,  3M US L + 2.50%, 11/30/2028   1,589,107    1,584,467 
Covanta 11/21 TLC, First Lien Term Loan,  1M US SOFR + 2.50%, 11/30/2028   119,934    119,584 
DG Investment Intermediate Holdings 2, Inc., Second Lien Initial Term Loan,  1M US L + 6.75%, 0.75% Floor, 03/30/2029   601,071    531,825 
Garda World Security Corp., First Lien B-2 Term Loan,  1M US L + 4.25%, 10/30/2026   1,101,356    1,092,413 
Output Services Group, Inc. TLA 1L, First Lien Term Loan,  3M US SOFR + 5.25, 1.50 PIK, 06/29/2026(b)   589,725    317,714 
Revspring, Inc., First Lien Initial Term Loan,  3M US L + 4.00%, 10/11/2025   1,263,900    1,225,452 
TRC Companies, First Lien Term Loan,  1M US L + 3.75%, 12/08/2028   573,613    556,884 
TRC Companies, Second Lien Term Loan,  1M US L + 6.75%, 12/07/2029   713,846    658,523 
United Site Cov-Lite, First Lien Term Loan,  1M US L + 4.25%, 12/15/2028   1,082,192    916,892 
Wand NewCo 3, Inc., First Lien Tranche B-1 Term Loan,  1M US L + 2.75%, 02/05/2026   90,208    88,723 
         8,084,401 
           
Communications Equipment - 0.44%          
Commscope, Inc., First Lien Initial Term Loan,  1M US L + 3.25%, 04/06/2026   597,028    575,852 
MLN US HoldCo LLC, First Lien B Term Loan,  3M US SOFR + 4.50%, 11/30/2025   854,492    241,394 
         817,246 
           
Construction & Engineering - 2.63%          
Aegion Corp., First Lien Initial Term Loan,  1M US L + 4.75%, 0.75% Floor, 05/17/2028   1,434,335    1,402,063 
APi Group DE, Inc., First Lien Term Loan,  1M US L + 2.75%, 01/03/2029   907,832    908,967 
Brookfield WEC Holdings, Inc., First Lien Initial (2021) Term Loan,  1M US L + 2.75%, 0.50% Floor, 08/01/2025   1,073,434    1,069,527 
Tutor Perini Corp., First Lien B Term Loan,  1M US L + 4.75%, 1.00% Floor, 08/18/2027   1,581,402    1,478,121 
         4,858,678 
           
Construction Materials - 2.25%          
Quickrete Holdings, Inc., First Lien Initial Term Loan,  1M US L +  2.50%, 02/01/2027   1,496,134    1,476,265 
White Cap Buyer LLC, First Lien Initial Closing Date Term Loan,  1M US SOFR + 3.75%, 0.50% Floor, 10/19/2027   2,708,150    2,684,670 
         4,160,935 
           
Containers & Packaging - 1.52%          
Berry Global, Inc., First Lien Term Loan,  1M US L + 1.75%, 07/01/2026   271,003    270,411 
LABL, Inc., First Lien Term Loan,  1M US L + 5.00%, 10/29/2028   565,714    549,275 
Reynolds Consumer Products LLC, First Lien Initial Term Loan,  1M US L + 1.75%, 02/04/2027   1,690,044    1,679,862 
Strategic Materials Holding Corp., Second Lien Initial Term Loan,  3M US L + 7.75%, 1.00% Floor, 10/31/2025   800,000    76,000 
Tekni-Plex, Inc., First Lien Tranche B-3 Initial Term Loan,  3M US L + 4.00%, 0.50% Floor, 09/15/2028   234,745    227,519 
         2,803,067 
           
Distributors - 0.75%          
LBM Acquisition LLC, First Lien Initial Term Loan,  1M US L + 3.75%, 0.75% Floor, 12/17/2027   1,455,154    1,375,346 
           
Diversified Consumer Services - 4.60%          
Element Materials Technology Group Holdings DTL, First Lien Term Loan,  3M US SOFR + 4.25%, 06/22/2029   571,298    565,942 
Element Materials Technology Group Holdings TL, First Lien Term Loan,  3M US SOFR + 4.25%, 06/22/2029   1,237,812    1,226,207 

 
 

   Principal   
   Amount  Value
    
Diversified Consumer Services (continued)
Loyalty Ventures, Inc., First Lien Term Loan,  3M US L + 4.50%, 11/03/2027(c)  $490,359   $56,798 
McKissock Investment Holdings, LLC, First Lien Term Loan,  3M US SOFR + 5.00%, 03/12/2029   230,265    222,015 
Prime Security Services Borrower LLC, First Lien 2021 Refinancing B-1 Term Loan,  3M US L + 2.75%, 0.75% Floor, 09/23/2026   1,393,646    1,391,110 
Rinchem Company, Inc., First Lien Term Loan,  3M US SOFR + 4.50%, 03/02/2029(d)   511,022    486,748 
St. George's University Scholastic Services LLC, First Lien Term Loan B Term Loan,  1M US SOFR + 3.25%, 0.50% Floor, 02/10/2029   1,769,622    1,746,175 
TruGreen LP, First Lien Term Loan,  1M US L + 4.00%, 0.75% Floor, 11/02/2027   1,346,565    1,246,838 
Weld North Education LLC, First Lien Term Loan,  1M US L + 3.75%, 0.50% Floor, 12/21/2027   1,561,431    1,557,855 
         8,499,688 
           
Diversified Telecommunication Services - 4.54%          
Level 3 Financing, Inc., First Lien Term Loan,  1M US SOFR + 1.75%, 03/01/2027   2,919,606    2,473,140 
Lumen Technologies, Inc., First Lien Term Loan,  1M US SOFR + 2.25%, 03/15/2027   1,445,400    960,288 
Telenet Financing USD LLC, First Lien Term Loan,  1M US L + 2.00%, 04/30/2028   2,492,903    2,450,836 
Telesat Canada, First Lien B-5 Term Loan,  3M US L + 2.75%, 12/07/2026   1,254,928    660,406 
Zacapa S.A.R.L., First Lien Term Loan,  3M US SOFR + 4.00%, 03/22/2029   1,866,705    1,831,041 
         8,375,711 
           
Electric Utilities - 0.46%          
Miron Technologies, Inc., TLB, First Lien Term Loan,  3M US L + 2.75%, 10/20/2028   845,741    841,115 
           
Electrical Equipment - 0.76%          
Madison IAQ LLC, First Lien Initial Term Loan,  3M US L + 3.25%, 0.50% Floor, 06/21/2028   1,461,150    1,394,120 
           
Electronic Equipment, Instruments & Components - 1.33%          
Ingram Micro, Inc., First Lien Initial Term Loan,  3M US L + 3.50%, 0.50% Floor, 06/30/2028   1,642,143    1,633,678 
LTI Holdings, Inc., First Lien Term Loan,  1M US L + 4.75%, 07/24/2026   417,311    406,182 
LTI Holdings, Inc., Second Lien Initial Term Loan,  1M US L + 6.75%, 09/06/2026   468,085    415,425 
         2,455,285 
           
Entertainment - 2.00%          
AMC Entertainment Holdings, Inc., First Lien B-1 Term Loan,  1M US L + 3.00%, 04/22/2026   786,787    575,830 
Amplify Finco Pty, Ltd., First Lien U.S. Dollar Term Loan,  3M US L + 4.00%, 0.75% Floor, 11/26/2026   1,367,822    1,320,803 
CE Intermediate I LLC, First Lien Term Loan,  3M US L + 4.00%, 0.50% Floor, 11/10/2028(d)   864,578    834,317 
Crown Finance US, Inc., First Lien Initial Dollar Tranche Term Loan,  3M US L + 4.50%, 1.00% Floor, 02/28/2025(c)   1,435,625    226,563 
Crown Finance US, Inc., First Lien Second Amendment Dollar Tranche Term Loan,  3M US L + 4.75%, 09/30/2026(c)   226,131    35,678 
NASCAR Holdings, Inc., TLB, First Lien Term Loan,  1M US L + 2.50%, 10/19/2026   702,996    704,096 
         3,697,287 
           
Financial Services - 4.03%          
FleetCor Technologies Operating Co. LLC, First Lien Term Loan,  1M US L + 1.75%, 04/28/2028   1,196,965    1,192,177 
Lereta, LLC, First Lien Term Loan,  1M US L + 5.25%, 07/30/2028   485,971    448,765 
Mitchell International, Inc., First Lien Term Loan,  1M US L + 3.75%, 10/15/2028   2,511,032    2,380,484 
Mitchell International, Inc., Second Lien Term Loan,  1M US L + 6.50%, 10/15/2029   412,371    360,309 
Polaris Newco LLC, First Lien Dollar Term Loan,  3M US L + 4.00%, 0.50% Floor, 06/02/2028   1,727,808    1,580,461 
The Citco Group Limited, TLB, First Lien Term Loan,  3M US SOFR + 3.50%, 04/27/2028(d)   1,467,749    1,469,584 
         7,431,780 
           
Food Products - 2.06%          
Froneri International, Ltd., First Lien Facility B2 Term Loan,  3M US L + 2.25%, 01/29/2027   2,682,074    2,650,345 
Snacking Investments BidCo Pty, Ltd., First Lien Initial US Term Loan,  3M US SOFR + 4.00%, 1.00% Floor, 12/18/2026   1,162,993    1,156,690 
         3,807,035 
           
Ground Transportation - 1.56%          
Avis Budget Car Rental LLC, First Lien Term Loan,  1M US L + 1.75%, 08/06/2027   1,343,059    1,322,913 

 
 

   Principal   
   Amount  Value
    
Ground Transportation (continued)
Uber Technologies, Inc., TLB, First Lien Term Loan 03/03/2030   1,566,585   $1,565,238 
         2,888,151 
           
Health Care Equipment & Supplies - 3.98%          
Auris Luxembourg III SARL, First Lien Facility B2 Term Loan,  6M US L + 3.75%, 02/27/2026   2,278,799    2,070,289 
Bausch + Lomb Corp., First Lien Term Loan,  3M US SOFR + 3.25%, 0.50% Floor, 05/10/2027   747,786    728,052 
Carestream Health, Inc. TL 1L, First Lien Term Loan,  3M US L + 7.50%, 09/30/2027   155,679    92,901 
Femur Buyer, Inc., First Lien Initial Term Loan,  3M US L + 4.50%, 03/05/2026   576,079    519,911 
Tecostar Holdings, Inc., First Lien 2017 Term Loan,  3M US L + 3.50%, 1.00% Floor, 05/01/2024   2,011,129    1,852,471 
Viant Medical Holdings, Inc., First Lien Initial Term Loan,  1M US L + 3.75%, 07/02/2025   833,310    779,274 
YI LLC, First Lien Initial Term Loan,  1M US L + 4.00%, 1.00% Floor, 11/07/2024   1,345,026    1,300,189 
         7,343,087 
           
Health Care Providers & Services - 11.93%          
Covenant Surgical Partners, Inc., First Lien Delayed Draw Term Loan,  6M US L + 4.00%, 07/01/2026   269,360    228,733 
Covenant Surgical Partners, Inc., First Lien Initial Term Loan,  3M US L + 4.00%, 07/01/2026   1,302,967    1,106,441 
DaVita, Inc., First Lien B Term Loan,  1M US L + 1.75%, 08/12/2026   963,656    951,210 
Electron Bidco, Inc., First Lien Term Loan,  1M US L + 3.00%, 11/01/2028   850,000    839,060 
Envision Healthcare Corp., First Lien Term Loan:          
3M US SOFR + 4.25%, 03/31/2027   1,441,298    367,531 
3M US SOFR + 7.88%, 03/31/2027   222,825    188,658 
Genesis Care Finance Pty, Ltd., First Lien Facility B5 Term Loan,  3M US L + 5.00%, 1.00% Floor, 05/14/2027   1,965,526    535,606 
Global Medical Response, Inc., First Lien 2018 New Term Loan,  3M US L + 4.25%, 1.00% Floor, 03/14/2025   2,324,867    1,644,844 
Heartland Dental Care, Inc., First Lien Term Loan,  1M US L + 5.00%, 04/30/2025(d)   964,931    921,509 
Heartland Dental LLC, First Lien 2021 Incremental Term Loan,  1M US L + 4.00%, 04/30/2025   1,091,050    1,029,226 
LifePoint Health, Inc., First Lien B Term Loan,  3M US L + 3.75%, 11/16/2025   1,392,207    1,329,558 
Loire UK Midco 3, Ltd., First Lien Facility B2 Term Loan,  1M US L + 3.50%, 0.75% Floor, 04/21/2027   932,550    892,917 
Medical Solutions LLC, First Lien Term Loan,  3M US SOFR + 3.50%, 11/01/2028   66,562    64,856 
NAPA Management Services Corp., First Lien Term Loan,  3M US SOFR + 5.25%, 0.75% Floor, 02/23/2029   925,785    674,666 
National Mentor Holdings, Inc., TL, First Lien Term Loan,  1M US L + 3.75%, 03/02/2028   2,230,213    1,716,650 
National Mentor Holdings, Inc., TLC, First Lien Term Loan,  3M US L + 3.75%, 03/02/2028   63,269    48,700 
Onex TSG Intermediate Corp., First Lien Initial Term Loan,  3M US SOFR + 4.75%, 0.75% Floor, 02/28/2028   1,391,819    1,239,415 
Pathway Vet Alliance LLC, First Lien 2021 Replacement Term Loan,  1M US L + 3.75%, 03/31/2027   1,519,123    1,338,089 
Pediatric Associates Holding Co. LLC, First Lien Term Loan:          
3M US L + 1.88%, 12/29/2028(e)   186,114    182,449 
3M US L + 3.25%, 0.50% Floor, 12/29/2028   1,241,991    1,217,536 
PetVet Care Centers LLC, First Lien 2021 Replacement Term Loan,  1M US L + 3.50%, 0.75% Floor, 02/14/2025   1,598,132    1,546,992 
PetVet Care Centers LLC, Second Lien Initial Term Loan,  1M US L + 6.25%, 02/13/2026   1,120,000    1,004,640 
Phoenix Guarantor, Inc., First Lien Tranche B-3 Term Loan,  1M US L + 3.50%, 03/05/2026   1,284,438    1,256,430 
Radiology Partners, Inc., First Lien Term Loan,  3M US L + 4.25%, 07/09/2025   913,380    740,692 
Radnet Management, Inc., First Lien Initial Term Loan,  1M US L + 3.00%, 0.75% Floor, 04/23/2028   1,150,000    1,143,296 
Team Health Holdings, Inc., First Lien Initial Term Loan,  1M US L + 2.75%, 1.00% Floor, 02/06/2024   1,121,597    964,573 
         23,174,277 
           
Health Care Technology - 2.34%          
AthenaHealth Group, Inc. Delayed Draw, First Lien Term Loan,  3M US L + 3.50%, 02/15/2029(e)   43,570    40,901 
AthenaHealth Group, Inc., First Lien Term Loan,  1M US L + 5.80%, 02/15/2029   1,780,695    1,671,628 
Project Ruby Ultimate Parent Corp., First Lien Closing Date Term Loan,  1M US L + 3.25%, 0.75% Floor, 03/10/2028   737,842    711,951 
Verscend Holding Corp., First Lien B-1 Term Loan,  1M US L + 4.00%, 08/27/2025   1,887,610    1,888,205 
         4,312,685 

 
 

   Principal   
   Amount  Value
    
Hotels, Restaurants & Leisure - 6.79%      
1011778 B.C. Unlimited Liability Company, First Lien B-4 Term Loan,  1M US L + 1.75%, 11/19/2026  $1,346,530   $1,335,872 
Aramark Services, Inc., First Lien Term Loan,  1M US L + 2.50%, 04/06/2028   1,690,790    1,688,414 
Bally's Corp., First Lien Term Loan,  1M US L + 3.25%, 0.50% Floor, 10/02/2028   1,382,445    1,322,958 
Caesars Entertainment, Inc., First Lien Term Loan,  1M US SOFR + 3.25%, 0.50% Floor, 02/06/2030   1,330,581    1,326,143 
Carnival Corp., First Lien Term Loan,  1M US L + 3.25%, 0.75% Floor, 10/18/2028   683,305    669,212 
Chariot Buyer LLC, First Lien Term Loan,  3M US L + 7.51%, 0.50% Floor, 10/31/2029   1,307,329    1,310,394 
Delta 2 (Lux) Sarl, TLB, First Lien Term Loan,  1M US SOFR + 3.25%, 01/15/2030   288,485    288,967 
Fertitta Entertainment, LLC, First Lien Term Loan,  1M US SOFR + 4.00%, 01/27/2029   1,147,103    1,131,985 
Flutter Financing B.V., First Lien Term Loan,  3M US SOFR + 3.25%, 0.50% Floor, 07/22/2028   1,236,188    1,237,857 
IRB Holding Corp., First Lien Term Loan,  3M US SOFR + 3.00%, 0.75% Floor, 12/15/2027   998,000    982,960 
Whatabrands LLC, First Lien Initial B Term Loan,  1M US L + 3.25%, 0.50% Floor, 08/03/2028   1,258,788    1,247,427 
         12,542,189 
           
Independent Power and Renewable Electricity Producers - 0.80%          
Calpine Corp., First Lien Term Loan,  1M US L + 2.00%, 04/05/2026   1,343,023    1,336,819 
Eastern Power LLC, First Lien Term Loan,  3M US L + 3.75%, 1.00% Floor, 10/02/2025   156,027    143,898 
         1,480,717 
           
Industrial Conglomerates - 4.44%          
Bettcher Industries, Inc., First Lien Term Loan,  1M US SOFR + 4.00%, 12/14/2028   836,463    805,619 
Engineered Machinery Holdings, Inc., First Lien Term Loan,  3M US L + 3.50%, 0.75% Floor, 05/19/2028   1,735,985    1,715,370 
Justrite Safety Group, First Lien Delayed Draw Term Loan,  1M US SOFR + 4.50%, 06/28/2026   74,853    68,256 
Justrite Safety Group, First Lien Initial Term Loan,  1M US SOFR + 4.50%, 06/28/2026   1,384,648    1,262,626 
Redwood Star Merger Sub, Inc., First Lien Term Loan,  1M US SOFR + 4.50%, 04/05/2029   1,462,310    1,399,255 
Tailwind Smith Cooper Intermediate Corp., First Lien Initial Term Loan,  3M US L + 5.00%, 05/28/2026   1,481,594    1,369,549 
TK Elevator Midco GmbH, First Lien Facility B1 Term Loan,  6M US L + 3.50%, 0.50% Floor, 07/30/2027   1,614,742    1,577,449 
         8,198,124 
           
Insurance - 2.55%          
AmWINS Group, Inc., First Lien Term Loan:          
1M US L + 2.25%, 0.75% Floor, 02/19/2028   1,751,117    1,733,002 
1M US SOFR + 2.75%, 0.75% Floor, 02/19/2028   227,228    226,589 
HIG Finance 2, Ltd., First Lien 2021 Dollar Refinancing Term Loan,  1M US L + 3.25%, 0.75% Floor, 11/12/2027   380,000    376,540 
Hyperion Refinance S.a r.l. TL, First Lien Term Loan,  3M US SOFR + 0.00%, 03/24/2030(d)   651,163    648,721 
NFP Corp., First Lien Closing Date Term Loan,  1M US L + 3.25%, 02/15/2027   1,762,812    1,723,519 
         4,708,371 
           
Interactive Media & Services - 1.50%          
Adevinta ASA, First Lien Facility B2 Term Loan,  3M US L + 2.75%, 0.75% Floor, 06/26/2028   498,734    496,343 
MH Sub I LLC, Second Lien 2021 Replacement Term Loan,  1M US SOFR + 6.25%, 02/23/2029   705,038    650,690 
Momentive, Inc., First Lien Term Loan,  3M US L + 3.75%, 10/10/2025   1,624,056    1,619,996 
         2,767,029 
           
IT Services - 4.01%          
AG Group Holdings, Inc., First Lien Term Loan,  3M US SOFR + 4.00%, 12/29/2028(d)   1,354,978    1,341,428 
DCert Buyer, Inc., Second Lien First Amendment Refinancing Term Loan,  6M US SOFR + 7.00%, 02/19/2029   1,581,655    1,470,496 
Endurance International Group Holdings, Inc., First Lien Initial Term Loan,  1M US L + 3.50%, 0.75% Floor, 02/10/2028   2,362,609    2,214,946 
Park Place Technologies LLC, First Lien Closing Date Term Loan,  1M US SOFR + 5.00%, 1.00% Floor, 11/10/2027   887,889    854,118 
Vaco Holdings, LLC, First Lien Term Loan,  3M US SOFR + 5.00%, 01/21/2029   1,136,551    1,120,924 
World Wide Technology Holding Co., LLC, TL, First Lien Term Loan,  1M US SOFR + 3.25%, 03/01/2030(d)   411,432    410,918 
         7,412,830 

 
 

   Principal   
   Amount  Value
    
Leisure Products - 1.03%
Recess Holdings, Inc., First Lien Initial Term Loan,  3M US L + 3.75%, 1.00% Floor, 09/30/2024  $1,892,859   $1,892,859 
           
Life Sciences Tools & Services - 2.69%          
Catalent Pharma Solutions, Inc., First Lien Term Loan,  1M US L + 2.00%, 0.50% Floor, 02/22/2028   1,397,462    1,389,252 
Curia Global, Inc., First Lien 2021 Term Loan,  3M US SOFR + 3.75%, 0.75% Floor, 08/30/2026   1,526,925    1,308,865 
Maravai Intermediate Holdings LLC, First Lien Term Loan,  1M US L + 3.25%, 0.50% Floor, 10/19/2027   898,741    895,932 
Parexel International Corporation, First Lien Term Loan,  3M US L + 3.25%, 0.50% Floor, 11/15/2028   1,392,654    1,378,992 
         4,973,041 
           
Machinery - 0.98%          
PRO MACH Group, Inc., First Lien Closing Date Initial Term Loan,  1M US L + 4.00%, 1.00% Floor, 08/31/2028   1,717,190    1,711,463 
Titan Acquisition, Ltd., First Lien Initial Term Loan,  3M US L + 3.00%, 03/28/2025   99,476    94,607 
         1,806,070 
           
Media - 8.96%          
Champ Acquisition Corp., First Lien Initial Term Loan,  6M US L + 5.50%, 12/19/2025   1,343,904    1,343,400 
Charter Communications Operating LLC, First Lien Term Loan,  1M US SOFR + 1.75%, 02/01/2027   1,044,588    1,036,591 
Clear Channel Outdoor Holdings, Inc., First Lien B Term Loan,  3M US L + 3.50%, 08/21/2026   1,570,079    1,466,721 
Cogeco Communications USA II LP, First Lien Term Loan,  1M US L + 2.00%, 01/03/2025   1,440,069    1,440,328 
iHeartCommunications, Inc., First Lien New Term Loan,  1M US L + 3.00%, 05/01/2026   1,400,000    1,245,230 
Radiate Holdco, LLC,, First Lien Term Loan,  1M US L + 3.25%, 09/25/2026   1,293,451    1,063,689 
Univision Communications, Inc., First Lien Term Loan:          
1M US L + 3.25%, 0.75% Floor, 03/15/2026   1,462,199    1,457,220 
3M US SOFR + 4.25%, 06/24/2029   216,545    215,409 
UPC Financing Partnership, First Lien Facility AT Term Loan,  1M US L + 2.25%, 04/30/2028   2,182,983    2,136,594 
UPC Financing Partnership, First Lien Term Loan,  1M US L + 2.93%, 01/31/2029   500,000    491,148 
Virgin Media Bristol LLC, First Lien Term Loan:          
1M US L + 2.50%, 01/31/2028   1,694,655    1,670,930 
1M US L + 3.25%, 01/31/2029   550,000    545,396 
Ziggo Financing Partnership, First Lien I Facility Term Loan,  1M US L + 2.50%, 04/30/2028   2,450,861    2,425,336 
         16,537,992 
           
Mortgage Real Estate Investment Trusts (REITs) - 0.30%          
Blackstone Mortgage Trust, Inc., First Lien Term Loan:          
1M US L + 2.25%, 04/23/2026   298,454    275,323 
1M US L + 2.75%, 0.50% Floor, 04/23/2026   298,477    280,569 
         555,892 
           
Oil, Gas & Consumable Fuels - 1.49%          
Buckeye Partners LP, First Lien Term Loan,  1M US L + 2.25%, 11/01/2026   756,132    755,293 
Freeport LNG, First Lien Term Loan,  3M US L + 3.50%, 12/21/2028   1,625,470    1,578,445 
WHITEWATER WHISTLER HOLDINGS, LLC TLB 1L, First Lien Term Loan,  3M US SOFR + 3.25%, 02/15/2030   410,495    409,468 
         2,743,206 
           
Passenger Airlines - 3.33%          
Air Canada, First Lien B Term Loan,  3M US L + 3.50%, 0.75% Floor, 08/11/2028   897,744    897,466 
American Airlines, Inc., First Lien 2020 Term Loan,  6M US L + 3.00%, 01/29/2027   1,380,522    1,350,689 
American Airlines, Inc., First Lien Term Loan,  6M US SOFR + 2.75%, 02/15/2028   608,917    596,358 
Brown Group Holding LLC, First Lien Term Loan,  1M US SOFR + 2.50%, 0.50% Floor, 06/07/2028   2,141,337    2,125,727 
United AirLines, Inc., First Lien Class B Term Loan,  3M US L + 3.75%, 0.75% Floor, 04/21/2028   1,178,203    1,172,460 
         6,142,700 
           
Pharmaceuticals - 1.26%          
Elanco Animal Health, Inc., First Lien B Term Loan,  1M US SOFR + 1.75%, 08/01/2027   1,396,125    1,368,083 

 
 

  Principal   
   Amount  Value
    
Pharmaceuticals (continued)
Padagis LLC, First Lien Initial Term Loan,  3M US L + 4.75%, 0.50% Floor, 07/06/2028  $1,040,524   $954,681 
         2,322,764 
           
Professional Services - 8.30%          
AlixPartners, LLP, First Lien USD B Term Loan,  1M US L + 2.75%, 0.50% Floor, 02/04/2028   795,939    794,260 
AqGen Island Holdings, Inc., First Lien Term Loan,  3M US L + 6.50%, 08/02/2029   1,865,513    1,688,289 
CoreLogic, Inc., First Lien Initial Term Loan,  1M US L + 3.50%, 0.50% Floor, 06/02/2028   1,840,207    1,575,355 
CoreLogic, Inc., Second Lien Initial Term Loan,  1M US L + 6.50%, 0.50% Floor, 06/04/2029   567,442    423,811 
Deerfield Dakota Holding LLC, Second Lien 2021 Replacement Term Loan,  3M US L + 6.75%, 0.75% Floor, 04/07/2028   304,000    281,326 
Dun & Bradstreet Corp., First Lien Initial Borrowing Term Loan,  1M US L + 3.25%, 02/06/2026   1,336,947    1,336,667 
Equiniti Group PLC, First Lien Term Loan,  6M US L + 4.75%, 12/11/2028   1,144,706    1,143,275 
Galaxy US Opco Inc. TL, First Lien Term Loan,  1M US SOFR + 4.75%, 04/29/2029   656,071    583,084 
Inmar, Inc., First Lien Initial Term Loan,  1M US L + 4.00%, 1.00% Floor, 05/01/2024   595,276    572,304 
Inmar, Inc., Second Lien Initial Term Loan,  1M US L + 8.00%, 1.00% Floor, 05/01/2025   1,002,931    960,306 
Minotaur Acquisition, Inc., First Lien B Term Loan,  1M US SOFR + 4.75%, 03/27/2026   1,312,362    1,279,087 
National Intergovernmental Purchasing Alliance Company, Second Lien Initial Term Loan,  3M US SOFR + 7.50%, 05/26/2026   1,500,094    1,481,343 
Outcomes Group Holdings, Inc., Second Lien Initial Term Loan,  1M US L + 7.50%, 10/26/2026   162,722    159,062 
Trans Union LLC, First Lien Term Loan,  1M US L + 1.75%, 11/16/2026   1,789,452    1,779,870 
TransUnion 11/21 B6 TLB, First Lien Term Loan,  1M US L + 2.25%, 12/01/2028   356,589    354,508 
VT Topco, Inc., First Lien 2021 Term Loan,  1M US L + 3.75%, 0.75% Floor, 08/01/2025   917,081    906,076 
         15,318,623 
           
Semiconductors & Semiconductor Equipment - 0.61%          
Coherent Corp., First Lien Term Loan,  1M US SOFR + 2.75%, 0.50% Floor, 07/02/2029   1,131,727    1,123,239 
           
Software - 11.92%          
Apttus Corp., First Lien Initial Term Loan,  3M US L + 4.25%, 0.75% Floor, 05/08/2028   578,387    562,964 
CDK Global, Inc., First Lien Term Loan,  3M US SOFR + 4.50%, 07/06/2029   1,701,265    1,698,654 
Connectwise, LLC, First Lien Term Loan,  1M US L + 3.50%, 0.50% Floor, 09/29/2028   1,624,073    1,573,321 
Cornerstone OnDemand, Inc., First Lien Initial Term Loan,  1M US L + 3.75%, 0.50% Floor, 10/16/2028   1,793,548    1,661,274 
DTI Holdco, Inc. TL, First Lien Term Loan,  3M US SOFR + 4.75%, 04/26/2029   757,315    705,344 
Fiserv Investment Solutions, Inc., First Lien Initial Term Loan,  1M US L + 4.00%, 02/18/2027   904,944    871,009 
Greeneden U.S. Holdings I LLC, First Lien Initial Dollar (2020) Term Loan,  1M US L + 4.00%, 0.75% Floor, 12/01/2027   1,343,468    1,326,359 
Help/Systems Holdings, Inc., First Lien Seventh Amendment Refinancing Term Loan,  3M US SOFR + 4.00%, 0.75% Floor, 11/19/2026   2,074,472    1,856,133 
Hyland Software, Inc., Second Lien 2021 Refinancing Term Loan,  1M US L + 6.25%, 0.75% Floor, 07/07/2025   765,110    734,506 
Imperva, Inc., First Lien Term Loan,  3M US L + 4.00%, 1.00% Floor, 01/12/2026   1,552,645    1,367,103 
Ivanti Software, Inc., First Lien First Amendment Term Loan,  3M US L + 4.00%, 0.75% Floor, 12/01/2027   249,736    201,662 
Ivanti Software, Inc., Second Lien Term Loan,  3M US L + 7.25%, 12/01/2028   537,313    326,686 
LI Group Holdings, Inc., First Lien 2021 Term Loan,  1M US L + 3.75%, 0.75% Floor, 03/11/2028   1,572,568    1,567,654 
Magenta Buyer LLC, First Lien Initial Term Loan,  3M US L + 4.75%, 0.75% Floor, 07/27/2028   1,698,602    1,406,808 
Mitnick Corporate Purchaser Inc., First Lien Term Loan,  3M US SOFR + 4.75%, 05/02/2029   404,932    382,660 
Perforce Software, Inc., First Lien New Term Loan,  1M US L + 3.75%, 07/01/2026   324,423    302,748 
Proofpoint, Inc., TL, First Lien Term Loan,  1M US L + 3.25%, 08/31/2028   1,147,096    1,123,833 
Quest Borrower Ltd., First Lien Term Loan,  3M US SOFR + 4.25%, 02/01/2029   1,397,854    1,148,183 
Skopima Merger Sub Inc., First Lien Initial Term Loan,  1M US L + 4.00%, 05/12/2028   814,435    762,955 
SS&C Technologies, Inc., First Lien Term Loan:          
1M US L + 2.25%, 0.50% Floor, 03/22/2029   199,460    198,179 
1M US L + 2.25%, 0.50% Floor, 03/22/2029   300,540    298,611 
Vision Solutions, Inc., First Lien Term Loan,  3M US L + 4.00%, 0.75% Floor, 04/24/2028   2,154,769    1,923,132 
         21,999,778 

 

 

 

   Principal   
   Amount  Value
    
Specialty Retail - 0.90%
EG Group, Ltd., First Lien Additional Facility Term Loan:          
1M US L + 4.00%, 02/07/2025  $1,311,730   $1,258,749 
1M US L + 4.25%, 0.50% Floor, 03/31/2026   220,714    211,830 
EG Group, Ltd., First Lien Facility B Term Loan,  3M US L + 4.00%, 02/07/2025   198,438    190,423 
         1,661,002 
           
Technology Hardware, Storage & Peripherals - 0.70%          
Project Castle, Inc., First Lien Term Loan,  3M US SOFR + 5.50%, 06/01/2029   1,516,200    1,298,246 
           
Textiles, Apparel & Luxury Goods - 0.48%          
S&S Holdings LLC, First Lien Initial Term Loan,  3M US L + 5.00%, 0.50% Floor, 03/11/2028   934,937    884,100 
           
Trading Companies & Distributors - 1.81%          
Foundation Building Materials, Inc., First Lien Initial Term Loan,  3M US L + 3.25%, 0.50% Floor, 01/31/2028   1,791,184    1,745,115 
Park River Holdings, Inc., First Lien Initial Term Loan,  6M US L + 3.25%, 0.75% Floor, 12/28/2027   1,735,887    1,602,987 
         3,348,102 
           
Wireless Telecommunication Services - 0.90%          
CCI Buyer, Inc., First Lien Initial Term Loan,  3M US SOFR + 4.00%, 0.75% Floor, 12/17/2027   1,687,864    1,668,875 
           
TOTAL FLOATING RATE LOAN INTERESTS          
(Cost $264,390,672)        250,611,523 
           
COLLATERALIZED LOAN OBLIGATION SECURITIES - 6.57%(a)          
Financial Services - 6.57%          
522 Funding CLO 2021-7, Ltd.,  3M US L + 6.22%, 04/23/2034(d)(f)   500,000    439,777 
Allegro CLO XII, Ltd.,  3M US L + 7.10%, 01/21/2032(d)(f)   1,000,000    921,148 
AMMC CLO 24, Ltd.,  3M US L + 3.40%, 01/20/2035(d)(f)   800,000    731,449 
Apidos CLO XXXV,  3M US L + 2.65%, 04/20/2034(d)(f)   800,000    726,896 
Eaton Vance CLO 2013-1, Ltd.,  3M US L + 6.80%, 01/15/2034(d)(f)   500,000    453,312 
Galaxy 30 Clo, Ltd.,  3M US SOFR + 6.95%, 04/15/2035(d)(f)   1,000,000    915,073 
Galaxy XXVII CLO, Ltd.,  3M US L + 5.78%, 05/16/2031(d)(f)   625,000    537,423 
HPS Loan Management CLO 6-2015, Ltd.,  3M US L + 5.10%, 02/05/2031(d)(f)   834,000    675,014 
Neuberger Berman CLO XVII, Ltd.,  3M US L + 7.20%, 04/22/2029(d)(f)   500,000    447,701 
Octagon Investment Partners 43, Ltd.,  3M US L + 6.60%, 10/25/2032(d)(f)   500,000    435,881 
Park Avenue Institutional Advisers CLO, Ltd. 2022-1,  3M US SOFR + 7.29%, 04/20/2035(d)(f)   1,000,000    908,059 
PPM CLO 3, Ltd.,  3M US L + 6.61%, 04/17/2034(d)(f)   500,000    405,608 
Rad CLO 2, Ltd.,  3M US L + 6.00%, 10/15/2031(d)(f)   750,000    658,972 
Rad CLO 5, Ltd.,  3M US L + 6.70%, 07/24/2032(d)(f)   500,000    440,494 
Romark CLO IV, Ltd.,  3M US L + 6.95%, 07/10/2034(d)(f)   1,000,000    869,756 
Signal Peak CLO 10, Ltd.,  3M US L + 3.20%, 01/24/2035(d)(f)   1,500,000    1,378,020 
Sound Point CLO XXXII, Ltd.,  3M US L + 6.70%, 10/25/2034(d)(f)   1,000,000    750,752 
Wellfleet CLO 2020-1, Ltd.,  3M US L + 7.24%, 04/15/2033(d)(f)   500,000    436,707 
         12,132,042 
           
TOTAL COLLATERALIZED LOAN OBLIGATION SECURITIES          
(Cost $13,372,792)        12,132,042 
           
CORPORATE BONDS - 3.06%          
Aerospace & Defense - 0.20%          
Bombardier, Inc.,  7.500%, 02/01/2029(f)   109,000    111,452 
Rolls-Royce PLC,  3.630%, 10/14/2025(f)   60,000    57,150 
Spirit AeroSystems, Inc.,  4.600%, 06/15/2028   65,000    55,164 
TransDigm, Inc.,  4.880%, 05/01/2029   110,000    97,480 
Triumph Group, Inc.,  7.750%, 08/15/2025   54,000    49,618 
         370,864 
           
Automobile Components - 0.02%          
Patrick Industries, Inc.,  4.750%, 05/01/2029(f)   35,000    30,408 

 
 

   Principal   
   Amount  Value
    
Banks - 0.01%
LD Holdings Group LLC,  6.500%, 11/01/2025(f)  $43,000   $27,144 
           
Broadline Retail - 0.03%          
Macy's Retail Holdings LLC,  4.500%, 12/15/2034   7,000    5,101 
Rakuten Group, Inc.,  10.250%, 11/30/2024(f)   50,000    47,562 
         52,663 
           
Building Products - 0.05%          
Builders FirstSource, Inc.,  4.250%, 02/01/2032(f)   80,000    69,783 
JELD-WEN, Inc.,  4.880%, 12/15/2027(f)   25,000    21,299 
         91,082 
           
Chemicals - 0.11%          
Ashland LLC,  3.375%, 09/01/2031(f)   50,000    40,950 
Chemours Co.,  4.630%, 11/15/2029(f)   38,000    31,384 
Methanex Corp.,  5.250%, 12/15/2029   48,000    44,930 
Rayonier AM Products, Inc.,  7.625%, 01/15/2026(f)   50,000    47,080 
Valvoline, Inc.,  3.630%, 06/15/2031(f)   45,000    38,263 
         202,607 
           
Commercial Services & Supplies - 0.03%          
GFL Environmental, Inc.,  4.250%, 06/01/2025(f)   30,000    29,302 
Stericycle, Inc.,  3.880%, 01/15/2029(f)   35,000    30,597 
         59,899 
           
Communications Equipment - 0.02%          
Viasat, Inc.,  6.500%, 07/15/2028(f)   50,000    37,000 
           
Consumer Finance - 0.18%          
Enova International, Inc.,  8.500%, 09/15/2025(f)   15,000    14,236 
FirstCash, Inc.:          
4.630%, 09/01/2028(f)   55,000    48,850 
5.625%, 01/01/2030(f)   10,000    9,239 
Goeasy, Ltd.,  5.375%, 12/01/2024(f)   55,000    51,937 
Navient Corp.:          
4.880%, 03/15/2028   50,000    42,112 
5.625%, 08/01/2033   55,000    40,872 
OneMain Finance Corp.:          
3.500%, 01/15/2027   10,000    8,404 
3.880%, 09/15/2028   60,000    47,632 
PRA Group, Inc.,  8.375%, 02/01/2028(f)   55,000    55,040 
World Acceptance Corp.,  7.000%, 11/01/2026(f)   10,000    7,462 
         325,784 
           
Consumer Staples Distribution & Retail - 0.03%          
Albertsons Cos. Inc / Safeway, Inc. / New Albertsons LP / Albertsons LLC,  6.500%, 02/15/2028(f)   50,000    50,178 
           
Containers & Packaging - 0.06%          
Cascades, Inc./Cascades USA, Inc.,  5.380%, 01/15/2028(f)   10,000    9,508 
OI European Group BV,  4.750%, 02/15/2030(f)   105,000    96,210 
         105,718 
           
Diversified Consumer Services - 0.02%          
Adtalem Global Education, Inc.,  5.500%, 03/01/2028(f)   20,000    18,998 
Service Corp. International,  4.000%, 05/15/2031   15,000    13,186 
         32,184 

 
 

   Principal   
   Amount  Value
    
Diversified REITs - 0.06%      
Service Properties Trust:      
4.750%, 10/01/2026  $55,000   $45,979 
4.950%, 02/15/2027   75,000    63,567 
         109,546 
           
Diversified Telecommunication Services - 0.10%          
Cogent Communications Group, Inc.:          
3.500%, 05/01/2026(f)   30,000    28,002 
7.000%, 06/15/2027(f)   30,000    29,772 
Frontier Communications Holdings LLC:          
6.750%, 05/01/2029(f)   55,000    43,641 
5.875%, 11/01/2029   13,000    9,926 
Hughes Satellite Systems Corp.,  6.625%, 08/01/2026   75,000    71,085 
         182,426 
           
Electric Utilities - 0.03%          
PG&E Corp.,  5.250%, 07/01/2030   60,000    55,775 
           
Energy Equipment & Services - 0.09%          
Archrock Partners LP / Archrock Partners Finance Corp.,  6.250%, 04/01/2028(f)   75,000    72,072 
Oceaneering International, Inc.,  6.000%, 02/01/2028   44,000    41,396 
Transocean, Inc.,  7.500%, 04/15/2031   70,000    53,272 
         166,740 
           
Entertainment - 0.02%          
Lions Gate Capital Holdings LLC,  5.500%, 04/15/2029(f)   58,000    38,198 
           
Equity Real Estate Investment Trusts (REITs) - 0.05%          
Iron Mountain, Inc.,  5.625%, 07/15/2032(f)   110,000    100,595 
           
Financial Services - 0.11%          
MGIC Investment Corp.,  5.250%, 08/15/2028   5,000    4,758 
Nationstar Mortgage Holdings, Inc.:          
6.000%, 01/15/2027(f)   50,000    45,423 
5.500%, 08/15/2028(f)   70,000    60,096 
PennyMac Financial Services, Inc.:          
4.250%, 02/15/2029(f)   95,000    75,740 
5.750%, 09/15/2031(f)   15,000    11,895 
PHH Mortgage Corp.,  7.875%, 03/15/2026(f)   5,000    4,355 
         202,267 
           
Food Products - 0.09%          
B&G Foods, Inc.,  5.250%, 04/01/2025   80,000    74,586 
Post Holdings, Inc.,  5.625%, 01/15/2028(f)   95,000    93,188 
         167,774 
           
Gas Utilities - 0.06%          
AmeriGas Partners LP / AmeriGas Finance Corp.:          
5.500%, 05/20/2025   70,000    67,225 
5.875%, 08/20/2026   42,000    40,231 
         107,456 
           
Health Care Providers & Services - 0.09%          
Acadia Healthcare Co., Inc.,  5.500%, 07/01/2028(f)   60,000    58,179 
CHS/Community Health Systems, Inc.:          
8.000%, 12/15/2027(f)   40,000    38,792 
6.875%, 04/01/2028(f)   5,000    3,106 
6.875%, 04/15/2029(f)   19,000    11,786 
6.125%, 04/01/2030(f)   25,000    15,088 
Encompass Health Corp.,  4.750%, 02/01/2030   35,000    31,860 
         158,811 

 
 

   Principal   
   Amount  Value
    
Hotels, Restaurants & Leisure - 0.35%      
1011778 BC ULC / New Red Finance, Inc.:      
4.380%, 01/15/2028(f)  $35,000   $32,346 
3.500%, 02/15/2029(f)   50,000    44,814 
Carnival Corp.:          
7.625%, 03/01/2026(f)   117,000    106,877 
5.750%, 03/01/2027(f)   5,000    4,107 
Carrols Restaurant Group, Inc.,  5.875%, 07/01/2029   10,000    8,062 
CDI Escrow Issuer, Inc.,  5.750%, 04/01/2030(f)   110,000    106,342 
Las Vegas Sands Corp.,  3.900%, 08/08/2029   15,000    13,554 
Life Time, Inc.,  8.000%, 04/15/2026(f)   85,000    81,159 
NCL Corp., Ltd.,  5.875%, 03/15/2026(f)   38,000    32,382 
Royal Caribbean Cruises, Ltd.:          
4.250%, 07/01/2026(f)   35,000    31,451 
5.375%, 07/15/2027(f)   10,000    8,919 
7.500%, 10/15/2027   15,000    14,043 
3.700%, 03/15/2028   60,000    49,148 
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp.,  5.250%, 05/15/2027(f)   75,000    70,964 
Wynn Resorts Finance LLC / Wynn Resorts Capital Corp.,  5.130%, 10/01/2029(f)   41,000    37,289 
         641,457 
           
Household Durables - 0.15%          
Beazer Homes USA, Inc.,  5.875%, 10/15/2027   55,000    50,177 
Century Communities, Inc.,  3.880%, 08/15/2029(f)   15,000    12,882 
M/I Homes, Inc.,  3.950%, 02/15/2030   36,000    30,570 
Taylor Morrison Communities, Inc.:          
5.750%, 01/15/2028(f)   20,000    19,693 
5.130%, 08/01/2030(f)   15,000    13,860 
Tempur Sealy International, Inc.:          
4.000%, 04/15/2029(f)   50,000    44,057 
3.880%, 10/15/2031(f)   30,000    25,081 
TopBuild Corp.,  3.630%, 03/15/2029(f)   30,000    25,702 
Tri Pointe Homes, Inc.,  5.700%, 06/15/2028   50,000    48,179 
         270,201 
           
Household Products - 0.06%          
Central Garden & Pet Co.,  4.120%, 10/15/2030   70,000    61,915 
Energizer Holdings, Inc.,  4.750%, 06/15/2028(f)   60,000    54,075 
         115,990 
           
Industrial Conglomerates - 0.06%          
Icahn Enterprises LP / Icahn Enterprises Finance Corp.:          
6.250%, 05/15/2026   10,000    9,850 
5.250%, 05/15/2027   10,000    9,395 
4.380%, 02/01/2029   105,000    90,444 
         109,689 
           
Interactive Media & Services - 0.05%          
Cinemark USA, Inc.:          
5.875%, 03/15/2026(f)   70,000    66,103 
5.250%, 07/15/2028(f)   20,000    17,323 
ZipRecruiter, Inc.,  5.000%, 01/15/2030(f)   17,000    14,556 
         97,982 
           
IT Services - 0.03%          
Gartner, Inc.,  4.500%, 07/01/2028(f)   40,000    38,007 
Science Applications International Corp.,  4.880%, 04/01/2028(f)   20,000    18,648 
         56,655 
           
Leisure Products - 0.01%          
Vista Outdoor, Inc.,  4.500%, 03/15/2029   19,000    15,359 

 
 

   Principal   
   Amount  Value
    
Machinery - 0.02%
Allison Transmission, Inc.:          
5.875%, 06/01/2029(f)  $30,000   $29,244 
3.750%, 01/30/2031(f)   20,000    17,085 
         46,329 
           
Media - 0.06%          
CCO Holdings LLC / CCO Holdings Capital Corp.:          
5.000%, 02/01/2028(f)   30,000    27,711 
5.375%, 06/01/2029(f)   12,000    11,032 
4.750%, 03/01/2030(f)   5,000    4,338 
Century Communities, Inc.,  6.750%, 06/01/2027   30,000    29,959 
Nexstar Media, Inc.,  5.625%, 07/15/2027(f)   15,000    13,877 
Townsquare Media, Inc.,  6.875%, 02/01/2026(f)   13,000    12,310 
Urban One, Inc.,  7.375%, 02/01/2028(f)   12,000    10,913 
         110,140 
           
Metals & Mining - 0.13%          
Coeur Mining, Inc.,  5.130%, 02/15/2029   10,000    8,488 
FMG Resources August 2006 Pty, Ltd.,  6.125%, 04/15/2032(f)   54,000    52,050 
IAMGOLD Corp.,  5.750%, 10/15/2028(f)   30,000    23,212 
Mineral Resources, Ltd.,  8.500%, 05/01/2030(f)   100,000    102,730 
SunCoke Energy, Inc.,  4.880%, 06/30/2029(f)   28,000    24,411 
Taseko Mines, Ltd.,  7.000%, 02/15/2026(f)   23,000    20,893 
         231,784 
           
Mortgage Real Estate Investment Trusts (REITs) - 0.05%          
Starwood Property Trust, Inc.:          
3.630%, 07/15/2026(f)   10,000    8,319 
4.380%, 01/15/2027(f)   100,000    82,760 
         91,079 
           
Multiline Retail - 0.01%          
Macy's Retail Holdings LLC,  5.875%, 04/01/2029(f)   15,000    13,892 
           
Oil, Gas & Consumable Fuels - 0.32%          
Antero Midstream Partners LP / Antero Midstream Finance Corp.:          
7.875%, 05/15/2026(f)   20,000    20,385 
5.750%, 03/01/2027(f)   30,000    29,349 
5.750%, 01/15/2028(f)   50,000    47,460 
Calumet Specialty Products Partners LP / Calumet Finance Corp.,  8.125%, 01/15/2027(f)   27,000    25,729 
Civitas Resources, Inc.,  5.000%, 10/15/2026(f)   50,000    47,063 
Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp.,  5.750%, 04/01/2025   20,000    19,556 
CVR Energy, Inc.,  5.750%, 02/15/2028(f)   55,000    50,532 
Delek Logistics Partners LP / Delek Logistics Finance Corp.,  7.125%, 06/01/2028(f)   25,000    22,913 
Hess Midstream Operations LP:          
5.130%, 06/15/2028(f)   75,000    71,277 
4.250%, 02/15/2030(f)   20,000    17,886 
NuStar Logistics LP,  6.000%, 06/01/2026   50,000    49,074 
Occidental Petroleum Corp.,  8.875%, 07/15/2030   46,000    53,547 
Parkland Corp.:          
5.875%, 07/15/2027(f)   40,000    38,855 
4.630%, 05/01/2030(f)   35,000    31,167 
Sunoco LP / Sunoco Finance Corp.,  4.500%, 05/15/2029   70,000    64,342 
         589,135 
           
Passenger Airlines - 0.01%          
American Airlines Group, Inc.,  3.750%, 03/01/2025(f)   20,000    18,372 
           
Personal Care Products - 0.01%          
Herbalife Nutrition, Ltd. / HLF Financing, Inc.,  7.875%, 09/01/2025(f)   25,000    23,603 

 
 

   Principal   
   Amount  Value
    
Personal Products - 0.03%
Edgewell Personal Care Co.,  5.500%, 06/01/2028(f)  $50,000   $47,970 
           
Professional Services - 0.01%          
TriNet Group, Inc.,  3.500%, 03/01/2029(f)   25,000    21,408 
           
Real Estate Management & Development - 0.05%          
Forestar Group, Inc.,  3.850%, 05/15/2026(f)   30,000    27,027 
Howard Hughes Corp.,  4.380%, 02/01/2031(f)   74,000    59,665 
Kennedy-Wilson, Inc.:          
4.750%, 03/01/2029   10,000    7,962 
5.000%, 03/01/2031   10,000    7,347 
         102,001 
           
Software - 0.08%          
Fair Isaac Corp.,  4.000%, 06/15/2028(f)   35,000    32,495 
MicroStrategy, Inc.,  6.125%, 06/15/2028(f)   30,000    26,664 
Open Text Corp.:          
3.880%, 02/15/2028(f)   95,000    84,906 
3.880%, 12/01/2029(f)   10,000    8,429 
         152,494 
           
Specialty Retail - 0.04%          
Asbury Automotive Group, Inc.,  5.000%, 02/15/2032(f)   60,000    52,644 
Foot Locker, Inc.,  4.000%, 10/01/2029(f)   15,000    12,531 
Sonic Automotive, Inc.,  4.880%, 11/15/2031(f)   20,000    16,147 
         81,322 
           
Technology Hardware, Storage & Peripherals - 0.07%          
Seagate HDD Cayman,  4.120%, 01/15/2031   30,000    25,152 
Xerox Holdings Corp.:          
5.000%, 08/15/2025(f)   55,000    51,953 
5.500%, 08/15/2028(f)   55,000    47,659 
         124,764 
           
Textiles, Apparel & Luxury Goods - 0.00%          
Wolverine World Wide, Inc.,  4.000%, 08/15/2029   4,000    3,255 
           
Thrifts & Mortgage Finance - 0.00%          
PennyMac Financial Services, Inc.,  5.375%, 10/15/2025(f)   10,000    9,351 
           
TOTAL CORPORATE BONDS          
(Cost $5,632,245)        5,649,351 

 
 

   Shares  Value
COMMON STOCK - 0.22%             
Health Care Equipment & Supplies - 0.22%             
Carestream Health Holdings Inc(d)(g)   55,510    416,325 
           
TOTAL COMMON STOCK          
(Cost $1,051,360)        416,325 
           
Total Investments- 145.58%          
(Cost $284,447,069)       $268,809,241 
           
Liabilities in Excess of Other Assets - (7.67)%        (14,165,993)
           
Leverage Facility - (37.91)%        (70,000,000)
           
Net Assets - 100.00%       $184,643,248 
           
Amounts above are shown as a percentage of net assets as of March 31, 2023.          

 

 

Investment Abbreviations:
LIBOR - London Interbank Offered Rate
PIK - Payment in-kind
SOFR - Secured Overnight Financing Rate
 
Reference Rates:
1M US L - 1 Month LIBOR as of March 31, 2023 was 4.85%
3M US L - 3 Month LIBOR as of March 31, 2023 was 5.19%
6M US L - 6 Month LIBOR as of March 31, 2023 was 5.31%
1M US SOFR - 1 Month US SOFR as of March 31, 2023 was 4.63%
3M US SOFR - 3 Month US SOFR as of March 31, 2023 was 4.51%
6M US SOFR - 6 Month US SOFR as of March 31, 2023 was 4.09%

 

 

(a) Floating or variable rate security.  The reference rate is described above.  The rate in effect as of March 31, 2023 is based on the reference rate plus the displayed spread as of the security's last reset date. Where applicable, the reference rate is subject to a floor rate.
(b) Represents a payment-in-kind (“PIK”) security which may pay interest/dividend in additional par/shares.
(c) Security is in default as of period end and is therefore non-income producing.
(d) Level 3 assets valued using significant unobservable inputs as a result of unavailable quoted prices from an active market or the unavailability of other significant observable inputs.
(e) A portion of this position was not funded as of March 31, 2023. The Portfolio of Investments records only the funded portion of each position. As of March 31, 2023, the Fund has unfunded delayed draw loans in the amount of $179,502. Fair value of these unfunded delayed draws was $168,707.
(f) Security exempt from registration under Rule 144A of the Securities Act of 1933. Total market value of Rule 144A securities amounts to $16,147,855, which represented approximately 8.75% of net assets as of March 31, 2023. Such securities may normally be sold to qualified institutional buyers in transactions exempt from registration.
(g) Non-income producing security.

 
 

NOTE 1. ORGANIZATION

 

Blackstone Senior Floating Rate 2027 Term Fund (formerly known as Blackstone Senior Floating Rate Term Fund) (“BSL”, the “Fund”, “we”, “us” or “our”), is a diversified, closed-end management investment company. BSL was organized as a Delaware statutory trust on March 4, 2010. BSL was registered under the Investment Company Act of 1940, as amended (the “1940 Act”), on March 5, 2010. BSL commenced operations on May 26, 2010. Prior to that date, BSL had no operations other than matters relating to its organization and the sale and issuance of 5,236 common shares of beneficial interest in BSL to Blackstone Liquid Credit Strategies LLC (the “Adviser”) at a price of $19.10 per share. The Adviser serves as BSL’s investment adviser. BSL’s common shares are listed on the New York Stock Exchange (the “Exchange”) and trade under the ticker symbol “BSL.”

 

Absent shareholder approval to extend the term of BSL, BSL was initially scheduled to dissolve on or about May 31, 2020. Upon dissolution, BSL will distribute substantially all of its net assets to shareholders, after making appropriate provision for any liabilities. Pursuant to BSL’s Amended and Restated Agreement and Declaration of Trust, prior to the date of dissolution a majority of BSL’s Board of Trustees (the “BSL Board”), with the approval of a majority of the shareholders entitled to vote (as defined in the 1940 Act), may extend the life of BSL by a period of two years or such shorter time as may be determined. The dissolution date of BSL may be extended an unlimited number of times. On March 31, 2017, BSL announced an extension of BSL’s reinvestment period. The extension allows BSL to continue to reinvest proceeds generated by maturities, prepayments and sales of investments until one year prior to BSL’s scheduled dissolution date. On November 17, 2017, BSL’s shareholders approved extending the term of BSL by two years by changing BSL’s scheduled dissolution date from May 31, 2020 to May 31, 2022. On November 18, 2019, the BSL Board approved a proposal to amend BSL's charter to allow an extension of up to five years in length (the “Charter Amendment”). The BSL Board also approved a proposal to extend the term of BSL by five years by changing BSL's scheduled dissolution date from May 31, 2022 to May 31, 2027 (the “Term Extension”). The Charter Amendment and the Term Extension were subject to shareholder approval, which was obtained at a special shareholder meeting held on February 19, 2020.

 

On January 26, 2022, the Securities and Exchange Commission (the “SEC”) declared effective a registration statement filed under the “shelf” registration process for BSL. Pursuant to the shelf registration, BSL may offer, from time to time, in one or more offerings, up to $100,000,000 of common shares. These shares may be offered and sold to or through underwriters, through dealers or agents that BSL designates from time to time, directly to purchasers, through at-the-market (“ATM”) offerings or through a combination of these methods. On February 1, 2022, BSL launched an ATM offering to sell up to $50,000,000 aggregate amount of its common shares. For the period ended March 31, 2023, BSL has not sold any shares pursuant to this shelf registration.

 

The Fund was previously classified as a non‐diversified investment company for purposes of the 1940 Act. As a result of ongoing operations, the Fund as of April 1, 2014 is now classified as a diversified company. This means that with respect to 75% of the Fund’s total assets, no more than 5% of such Fund’s total assets may be invested in any one issuer, excepting cash and cash items, U.S. government securities, and securities of other investment companies. The Fund may not resume operating in a non‐diversified manner without first obtaining shareholder approval in accordance with the 1940 Act.

 

Investment Objectives: BSL’s primary investment objective is to seek high current income, with a secondary objective to seek preservation of capital, consistent with its primary goal of high current income. Under normal market conditions, at least 80% of BSL’s Managed Assets (defined in Note 3) will be invested in senior secured, floating rate loans (“Senior Loans”).

 

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation: The Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are stated in U.S. dollars. The Fund is considered an Investment Company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946.

 

The preparation of financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement. Actual results could differ from these estimates.

 

Portfolio Valuation: BSL’s net asset value (“NAV”) is determined daily on each day that the Exchange is open for business, as of the close of the regular trading session on the Exchange. The Fund calculates NAV per share by subtracting liabilities (including accrued expenses or dividends) from the total assets of the Fund (the value of the securities plus cash or other assets, including interest accrued but not yet received) and dividing the result by the total number of outstanding common shares of the Fund.

 

Loans are primarily valued by using a composite loan price from a nationally recognized loan pricing service. The methodology used by the Fund’s nationally recognized loan pricing provider for composite loan prices is to value loans at the mean of the bid and ask prices from one or more brokers or dealers. Collateralized Loan Obligation securities (“CLOs”) are valued at the price provided by a nationally recognized pricing service. The prices provided by the nationally recognized pricing service are typically based on the evaluated mid-price of each of the CLOs. Corporate bonds and convertible bonds, other than short-term investments, are valued at the price provided by a nationally recognized pricing service. The prices provided by the nationally recognized pricing service are typically based on the mean of bid and ask prices for each corporate bond security. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures based on valuation technology commonly employed in the market for such investments. Equity securities for which market quotations are available are generally valued at the last sale price or official closing price on the primary market or exchange on which they trade. Futures contracts are ordinarily valued at the last sales price on the securities or commodities exchange on which they are traded. Written and purchased options are ordinarily valued at the closing price on the securities or commodities exchange on which they are traded. Short-term debt investments, if any, having a remaining maturity of 60 days or less when purchased would be valued at cost adjusted for amortization of premiums and accretion of discounts.

 
 

On December 3, 2020, the SEC adopted a new rule under the 1940 Act regarding fair value determinations that permits a fund’s board to delegate such determinations to the fund’s adviser, subject to certain conditions (“Rule 2a-5”). Rule 2a-5 became effective as of March 8, 2021, and the mandatory compliance date was September 8, 2022. In accordance with Rule 2a-5, the Board has designated the Adviser as the valuation designee to perform fair value determinations related to the Fund’s investments, subject to the Board’s oversight and periodic reporting requirements.

 

Any investments and other assets for which such current market quotations are not readily available are valued at fair value (“Fair Valued Assets”) as determined in good faith by a committee of the Adviser (the “Fair Valued Asset Committee”) under procedures established by, and under the general supervision and responsibility of, the Fund’s Board of Trustees (collectively, the “Board”). Such methods may include, but are not limited to, the use of a market comparable and/or income approach methodologies. A Fair Valued Asset Committee meeting may be called at any time by any member of the Fair Valued Asset Committee. The pricing of all Fair Valued Assets and determinations thereof shall be reported by the Adviser as valuation designee to the Board at each regularly scheduled quarterly meeting. The Fund has procedures to identify and investigate potentially stale or missing prices for investments which are valued using a nationally recognized pricing service, exchange price or broker-dealer quotations. After performing such procedures, any prices which are deemed to be stale are reviewed by the Fair Valued Asset Committee and an alternative pricing source is determined.

 

Various inputs are used to determine the value of BSL’s investments. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

 

Level 1 — Unadjusted quoted prices in active markets for identical investments at the measurement date.

 

Level 2 — Significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

 

Level 3 — Significant unobservable inputs (including the Fund’s own assumption in determining the fair value of investments).

 

The categorization of a value determined for investments and other financial instruments is based on the pricing transparency of the investment and other financial instrument and does not necessarily correspond to the Fund’s perceived risk of investing in those securities. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

 
 

The following table summarizes the valuation of BSL’s investments under the fair value hierarchy levels as of March 31, 2023:

 

Blackstone Senior Floating Rate 2027 Term Fund
Investments in Securities at Value*  Level 1 - Quoted Prices  Level 2 - Significant Observable Inputs  Level 3 - Significant Unobservable Inputs  Total
Floating Rate Loan Interests                    
Diversified Consumer Services  $–   $8,012,940   $486,748   $8,499,688 
Entertainment   –    2,862,970    834,317    3,697,287 
Financial Services   –    5,962,196    1,469,584    7,431,780 
Health Care Providers & Services   –    22,252,768    921,509    23,174,277 
Insurance   –    4,059,650    648,721    4,708,371 
IT Services   –    5,660,484    1,752,346    7,412,830 
Other   –    195,687,290    –    195,687,290 
Collateralized Loan Obligation Securities                    
Financial Services   –    –    12,132,042    12,132,042 
Corporate Bonds   –    5,649,351    –    5,649,351 
Common Stock                    
Health Care Equipment & Supplies   –    –    416,325    416,325 
Total  $–   $250,147,649   $18,661,592   $268,809,241 
                     
Other Financial Instruments                    
Liabilities                    
Net Unrealized Depreciation on Unfunded Loan Commitments   –    (6,472)   –    (6,472)
Total   –    (6,472)   –    (6,472)

 

* Refer to the Fund's Portfolio of Investments for a listing of securities by type.

 

The changes of the fair value of investments for which BSL has used significant unobservable (Level 3) inputs to determine the fair value are as follows:

 

   Floating Rate
Loan Interests		   Collateralized Loan
Obligation Securities		   Common
Stock		   Total 
Balance as of December 31, 2022  $7,789,140   $13,629,173   $-   $21,418,313 
Accrued Discount/premium   5,912    5,218    -    11,130 
Return of Capital   -    -    -    - 
Realized Gain/(Loss)   129    (41,587)   -    (41,458)
Change in Unrealized Appreciation/(Depreciation)   100,458    (7,154)   -    93,304 
Purchases(1)   2,668,184    -    -    2,668,184 
Sales Proceeds(2)   (8,469)   (1,453,608)   -    (1,462,077)
Transfer into Level 3   1,469,584    -    416,325    1,885,909 
Transfer Out of Level 3   (5,911,713)   -    -    (5,911,713)
Balance as of March 31, 2023  $6,113,225   $12,132,042   $416,325   $18,661,592 
Net change in unrealized appreciation/(depreciation) attributable to Level 3 investments held at March 31, 2023  $44,444   $(133,111)  $(416,326)  $(504,993)

 

(1)Purchases include all purchases of securities and securities received in corporate actions.
(2)Sales Proceeds include all sales of securities, maturities, paydowns and securities tendered in corporate actions.

 

Information about Level 3 fair value measurements as of March 31, 2023:

 

Blackstone Senior Floating Rate 2027 Term Fund  Fair Value  Valuation Technique(s)  Unobservable Input(s) 

Value/Range

(Weighted Average)

Assets            
Floating Rate Loan Interests  $6,113,225   Third-party vendor pricing service  Broker quotes   N/A 
Collateralized Loan Obligation Securities   12,132,042   Third-party vendor pricing service  Broker quotes   N/A 
Common Stock   416,325   Third-party vendor pricing service  Broker quotes   N/A 

 

 
 

Securities were transferred from Level 2 to Level 3 because of a lack of observable market data due to decrease in market activity and information for these securities. Other securities were transferred from Level 3 to Level 2 as observable inputs were available for purposes of valuing those assets.

 

Securities Transactions and Investment Income: Securities transactions are recorded on trade date for financial reporting purposes and amounts payable or receivable for trades not settled at the time of period end are reflected as liabilities and assets, respectively. Interest Income is recognized on an accrual basis from the date of settlement. Accretion of discount and amortization of premium, which are included in interest income, are accreted or amortized daily using the accrual basis interest method. Dividend income is recorded on the ex-dividend date. Realized gains and losses from securities transactions and foreign currency transactions, if any, are recorded on the basis of identified cost.

 

When the Fund sells a floating rate loan interest, it may pay an agency fee. The Fund earns facility and other fees on floating rate loan interests, and facility fees are typically amortized to income over the term of the loan. Consent and amendment fees are also recorded to income as earned.

 

NOTE 3. SENIOR AND SECURED FLOATING RATE LOANS

 

BSL defines “Senior Loans” as first lien senior secured, floating rate loans that are made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities (“Borrowers”), which operate in various industries and geographical regions. Under normal market conditions, at least 80% of BSL’s Managed Assets (defined below) will be invested in Senior Loans. BSL defines "Managed Assets" as total assets (including any assets attributable to any leverage used) minus the sum of BSL's accrued liabilities (other than liabilities related to the principal amount of leverage). At March 31, 2023, 94.31% of BSL’s Managed Assets were held in Senior Loans.

 

Senior secured loans hold a senior position in the capital structure of a business entity, are secured with specific collateral and have a claim on the assets and/or stock of the Borrower that is senior to that held by unsecured creditors, subordinated debt holders and stockholders of the Borrower.

 

Loans often require prepayments from Borrowers’ excess cash flows or permit the Borrowers to repay at their election. The degree to which Borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, floating rate loans typically have an expected average life of two to four years. Floating rate loans typically have rates of interest which are re-determined periodically, either daily, monthly, quarterly or semi-annually by reference to a floating base lending rate, primarily the London Interbank Offered Rate (“LIBOR”) and the Secured Overnight Financing Rate (“SOFR”) (subject to the LIBOR transition as described below), plus a premium or credit spread.

 
 

Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect the Fund’s credit arrangements and the Fund’s CLO transactions. Instruments in which the Fund invests may pay interest at floating rates based on LIBOR or may be subject to interest caps or floors based on LIBOR. The Fund and issuers of instruments in which the Fund invests may also obtain financing at floating rates based on LIBOR. The underlying collateral of CLOs in which the Fund invests may pay interest at floating rates based on LIBOR. Derivative instruments utilized by the Fund and/or issuers of instruments in which the Fund may invest may also reference LIBOR.

 

The United Kingdom’s Financial Conduct Authority announced a phase out of the LIBOR. Although many LIBOR rates ceased to be published or no longer are representative of the underlying market they seek to measure after December 31, 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. On July 29, 2021, the U.S. Federal Reserve System (“FRS”), in conjunction with the Alternative Reference Rates Committee (“ARRC”), a steering committee comprised of large U.S. financial institutions, formally recommended replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”), a new index calculated by short-term repurchase agreements, backed by Treasury securities. Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that may be established, there remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. In many cases, the nominated replacements, as well as other potential replacements, are not complete or ready to implement and require margin adjustments. There is currently no final consensus as to which benchmark rate(s) (along with any adjustment and/or permutation thereof) will replace all or any LIBOR tenors after the discontinuation thereof and there can be no assurance that any such replacement benchmark rate(s) will attain market acceptance. Before LIBOR ceases to exist, we and our portfolio companies may need to amend or restructure our existing LIBOR-based debt instruments and any related hedging arrangements that extend beyond June 30, 2023, depending on the applicable LIBOR tenor. Such amendments and restructurings may be difficult, costly and time consuming. In addition, from time to time we invest in floating rate loans and investment securities whose interest rates are indexed to LIBOR. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR, or any changes announced with respect to such reforms, may result in a sudden or prolonged increase or decrease in the reported LIBOR rates and the value of LIBOR-based loans and securities, including those of other issuers we or our funds currently own or may in the future own. It remains uncertain how such changes would be implemented and the effects such changes would have on us, issuers of instruments in which we invest and financial markets generally.

 

The expected discontinuation of LIBOR could have a significant impact on our business. There could be significant operational challenges for the transition away from LIBOR including, but not limited to, amending loan agreements with borrowers on investments that may have not been modified with fallback language and adding effective fallback language to new agreements in the event that LIBOR is discontinued before maturity. Beyond these challenges, we anticipate there may be additional risks to our current processes and information systems that will need to be identified and evaluated by us. Due to the uncertainty of the replacement for LIBOR, the potential effect of any such event on our cost of capital and net investment income cannot yet be determined. In addition, the cessation of LIBOR could:

 

  • Adversely impact the pricing, liquidity, value of, return on and trading for a broad array of financial products, including any LIBOR-linked securities, loans and derivatives that may be included in our assets and liabilities;

  • Require extensive changes to documentation that governs or references LIBOR or LIBOR-based products, including, for example, pursuant to time-consuming renegotiations of documentation to modify the terms of investments;

  • Result in inquiries or other actions from regulators in respect of our preparation and readiness for the replacement of LIBOR with one or more alternative reference rates;

  • Result in disputes, litigation or other actions with portfolio companies, or other counterparties, regarding the interpretation and enforceability of provisions in our LIBOR-based investments, such as fallback language or other related provisions, including, in the case of fallbacks to the alternative reference rates, any economic, legal, operational or other impact resulting from the fundamental differences between LIBOR and the various alternative reference rates;

  • Require the transition and/or development of appropriate systems and analytics to effectively transition our risk management processes from LIBOR-based products to those based on one or more alternative reference rates, which may prove challenging given the limited history of the proposed alternative reference rates; and

  • Cause us to incur additional costs in relation to any of the above factors.

 

There is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have a material adverse effect on our business, result of operations, financial condition, and unit price. In addition, the transition to a successor rate could potentially cause (i) increased volatility or illiquidity in markets for instruments that currently rely on LIBOR, (ii) a reduction in the value of certain instruments held by the Fund, or (iii) reduced effectiveness of related Fund transactions, such as hedging. It remains uncertain how such changes would be implemented and the effects such changes would have on the Fund, issuers of instruments in which the Fund invests and financial markets generally.

 
 

Loans are subject to the risk of payment defaults of scheduled interest or principal. Such non-payment could result in a reduction of income, a reduction in the value of the investment and a potential decrease in the NAV of any of the Fund. Risk of loss of income is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. There can be no assurance that the liquidation of any collateral securing a Loan would satisfy the Borrower’s obligation to the Fund in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated.

 

Second lien loans generally are subject to similar risks as those associated with investments in first lien loans except that such loans are subordinated in payment and/or lower in lien priority to first lien holders. In the event of default on a second lien loan, the first priority lien holder has first claim to the underlying collateral of the loan. Second lien loans are subject to the additional risk that the cash flow of the Borrower and property securing the loan or debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior obligations of the Borrower. At March 31, 2023, BSL had invested $10,526,872 in second lien secured loans. Second lien secured loans are not considered Senior Loans for BSL.

 

Loans can be rated below investment grade or may also be unrated. As a result, the risks associated with Loans may be similar to the risks of other below investment grade securities, although they are senior and secured in contrast to other below investment grade securities, which are often subordinated or unsecured. The Fund typically invests in Loans rated below investment grade, which are considered speculative because of the credit risk of the Borrowers. Such companies are more likely than investment grade issuers to default on their payments of interest and principal owed to the Fund, and such defaults could reduce NAV and income distributions. The amount of public information available with respect to below investment grade loans will generally be less extensive than that available for registered or exchange-listed securities. In evaluating the creditworthiness of Borrowers, the Adviser will consider, and may rely in part on, analyses performed by others. The Adviser’s established best execution procedures and guidelines require trades to be placed for execution only with broker-dealer counterparties approved by the Counterparty Committee of the Adviser. The factors considered by the Counterparty Committee when selecting and approving brokers and dealers include, but are not limited to: (i) quality, accuracy, and timeliness of execution, (ii) review of the reputation, financial strength and stability of the financial institution, (iii) willingness and ability of the counterparty to commit capital, (iv) ongoing reliability and (v) access to underwritten offerings and secondary markets. The Counterparty Committee regularly reviews each broker-dealer counterparty based on the foregoing factors.

 

BSL may acquire Loans through assignments or participations. BSL typically acquires these Loans through assignment, and if BSL acquires a Loan through participation, it will seek to elevate a participation interest into an assignment as soon as practicably possible. The purchaser of an assignment typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with respect to the debt obligation. A participation typically results in a contractual relationship only with the institution participating out the interest, not with the Borrower. Sellers of participations typically include banks, broker-dealers, other financial institutions and lending institutions. The Adviser has adopted best execution procedures and guidelines which seek to mitigate credit and counterparty risk in the atypical situation when BSL must acquire a Loan through a participation.

 

BSL has invested in CLO securities. A CLO is a financing company (generally called a Special Purpose Vehicle (“SPV”)), created to reapportion the risk and return characteristics of a pool of assets. While the assets underlying a CLO are typically Secured Loans, the assets may also include (i) unsecured loans, (ii) debt securities that are rated below investment grade, and (iii) equity securities incidental to investments in Secured Loans. When investing in CLOs, each fund will not invest in equity tranches, which are the lowest tranche. However, the Fund may invest in lower tranches of CLO debt securities, which typically experience a lower recovery, greater risk of loss or deferral or non-payment of interest than more senior debt tranches of the CLO. In addition, the Fund intends to invest in CLOs consisting primarily of individual Secured Loans of Borrowers and not repackaged CLO obligations from other high risk pools. The underlying Secured Loans purchased by CLOs are generally performing at the time of purchase but may become non-performing, distressed or defaulted. CLOs with underlying assets of non-performing, distressed or defaulted loans are not contemplated to comprise a significant portion of each fund’s investments in CLOs. The key feature of the CLO structure is the prioritization of the cash flows from a pool of debt securities among the several classes of the CLO. The SPV is a company founded solely for the purpose of securitizing payment claims arising out of this diversified asset pool. On this basis, marketable securities are issued by the SPV which, due to the diversification of the underlying risk, generally represent a lower level of risk than the original assets. The redemption of the securities issued by the SPV typically takes place on a date earlier than legal maturity from refinancing of the senior debt tranches.

 
 

NOTE 4. GENERAL COMMITMENTS AND CONTINGENCIES

 

As of March 31, 2023, BSL had unfunded loan commitments outstanding, which could be extended at the option of the borrower, as detailed below:

 

 

Borrower  Par Value  Fair Value Unrealized
Appreciation/
(Depreciation)
VT Topco, Inc., First Lien 2021, Delayed Draw Term Loan  $1,939   $1,916  $ (24 )
AthenaHealth Group, Inc., Delayed Draw, First Lien Term Loan   175,073    164,350    (6,449 )
Pediatric Associates Holding Co. LLC, First Lien Term Loan   2,490    2,441    1  
   $179,502   $168,707  $ (6,472 )

 

Unfunded loan commitments are marked to market on the relevant day of the valuation in accordance with BSL’s valuation policies. For the period ended March 31, 2023, BSL recorded a net increase in unrealized depreciation on unfunded loan commitments totaling $31,446.

 

NOTE 5. LEVERAGE

 

The Fund has entered into a Credit Agreement (the “Agreement”) with a bank to borrow money pursuant to a two-year revolving line of credit (“Leverage Facility”). BSL entered into an agreement dated October 8, 2014, as amended on October 7, 2015, October 5, 2016, and October 4, 2017, and as further amended and restated on June 20, 2018 and as further amended and restated on October 4, 2019 and as amended on October 2, 2020, October 1, 2021, November 29, 2021 and September 30, 2022, to borrow up to a limit of $142 million, with $48 million for tranche A loans ("BSL Tranche A Loans") and $94 million for tranche B loans ("BSL Tranche B Loans"). Borrowings under the Agreement are secured by the assets of the Fund.

 

Interest on the Fund's Leverage Facility is charged at a rate of 0.90% above adjusted term SOFR with respect to BSL Tranche A Loans, 1.20% above adjusted term SOFR for one (1) month interest period BSL Tranche B Loans and 1.05% above adjusted term SOFR for three (3) month interest period BSL Tranche B Loans, with adjusted term SOFR measured for the period commencing on the date of the making of such Loan at adjusted term SOFR (or the last date upon which any other Loan was converted to, or continued as, such Loan at adjusted term SOFR) and ending on the numerically corresponding day in the calendar month that is one (1), or three (3) months thereafter, as the Fund may elect, or such other periods as the lender may agree in its sole and absolute discretion.

 

Under the terms of the Agreement, the Fund must pay a commitment fee on any undrawn amounts. The commitment fee payable for each of BSL Tranche A Loans and BSL Tranche B Loans is 0.15% on the undrawn amounts when drawn amounts exceed 75% of the borrowing limit and 0.25% on the undrawn amounts at any other time. Interest and fees are generally payable at the end of the respective interest period. The Fund may elect to extend the Agreement for a further period with the consent of the lending bank. At March 31, 2023, BSL had borrowings outstanding under its Leverage Facility of $70,000,000, at an interest rate of 5.61%. Due to the short term nature of the Agreement, face value approximates fair value at March 31, 2023. This fair value is based on Level 2 inputs under the three-tier fair valuation hierarchy (see Note 2). For the period ended March 31, 2023, the average borrowings under BSL’s Leverage Facility and the weighted average interest rate were $74,100,000 and 5.49%, respectively. During the period ended March 31, 2023, the Fund incurred $43,219 for commitment fees on undrawn amounts.

 

Under the Agreement, the Fund has agreed to certain covenants and additional investment limitations while the leverage is outstanding. The Fund has agreed to maintain asset coverage of three times over borrowings. Compliance with the investment restrictions and calculations are performed by the Fund’s custodian, The Bank of New York Mellon. As of March 31, 2023, the Fund was in compliance with all required investment limitations and asset coverage requirements related to its leverage.

 

The use of borrowings to leverage the common shares of the Fund can create risks. Changes in the value of the Fund’s portfolio, including securities bought with the proceeds of leverage, are borne entirely by the holders of common shares of the Fund. All costs and expenses related to any form of leverage used by the Fund are borne entirely by common shareholders. If there is a net decrease or increase in the value of the Fund’s investment portfolio, the leverage may decrease or increase, as the case may be, the NAV per common share to a greater extent than if the Fund did not utilize leverage. During periods when the Fund is using leverage, the fees paid to the Adviser for advisory services and to ALPS for administrative services are higher than if the Fund did not use leverage because the fees paid are calculated on the basis of the Fund’s Managed Assets, which include the assets purchased through leverage. As of March 31, 2023, BSL’s leverage represented 27.49% of the Fund’s Managed Assets.