<SEC-DOCUMENT>0001193125-24-240441.txt : 20241119
<SEC-HEADER>0001193125-24-240441.hdr.sgml : 20241119
<ACCEPTANCE-DATETIME>20241021163057
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-24-240441
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20241021

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Portman Ridge Finance Corp
		CENTRAL INDEX KEY:			0001372807
		ORGANIZATION NAME:           	
		IRS NUMBER:				205951150
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		650 MADISON AVNUE
		STREET 2:		3RD FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022
		BUSINESS PHONE:		212.891.2880

	MAIL ADDRESS:	
		STREET 1:		650 MADISON AVNUE
		STREET 2:		3RD FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KCAP Financial, Inc.
		DATE OF NAME CHANGE:	20120710

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Kohlberg Capital CORP
		DATE OF NAME CHANGE:	20061211

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Kohlberg Capital, LLC
		DATE OF NAME CHANGE:	20060815
</SEC-HEADER>
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<TYPE>CORRESP
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">1900 K Street, NW</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, DC 20006-1110</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">+1&#8194;202&#8194;261&#8194;3300 Main</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">+1&#8194;202&#8194;261&#8194;3333 Fax</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">www.dechert.com</P>
<P STYLE="margin-top:0pt;margin-bottom:1pt;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>ALEXANDER C. KARAMPATSOS</B></P> <P STYLE="font-size:6pt; margin-top:0pt; margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">alexander.karampatsos@dechert.com</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">+1 202 261 3402
Direct</P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21, 2024 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Mr.&nbsp;David Manion </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Investment Management </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549-0504 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">Re:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Portman Ridge Finance Corporation (File <FONT STYLE="white-space:nowrap">No.&nbsp;814-00735)</FONT>
</P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Mr.&nbsp;Manion: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:9%; font-size:10pt; font-family:Times New Roman">We
are writing in response to your comments with respect to your review, pursuant to the Sarbanes-Oxley Act of 2002, of the Annual Report on Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2023 (the
&#147;Annual Report&#148;) of Portman Ridge Finance Corporation (the &#147;Company&#148;). Unless explicitly provided, we understand that your comments are intended to apply to disclosure in the Company&#146;s future filings. The Company has
considered your comments and has authorized us, on its behalf, to make the responses discussed below. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:9%; font-size:10pt; font-family:Times New Roman">Set forth below are the SEC
staff&#146;s comments along with our responses to, or any supplemental explanations of, such comments, as requested. To the extent not otherwise defined herein, capitalized terms have the meanings attributed to such terms in the Annual Report. </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>The Staff notes that the Company held unitranche loans during the reporting period. In future
filings, please provide disclosure that explains the risks associated with investments in unitranche loans. </P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> The Company will include risk disclosure relating to unitranche loans in future annual report filings on Form <FONT
STYLE="white-space:nowrap">10-K.</FONT><B></B><B>&nbsp;</B> </P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21,&nbsp;2024</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"> Page
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>The Staff notes that the Company had unfunded commitments during the reporting period. In the
response letter, please discuss the accounting for unfunded commitments. </P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> The Company recognizes
unfunded loan commitments on the effective date of such commitments, which will remain on the Company&#146;s Consolidated Balance Sheet and Consolidated Schedule of Investments until such unfunded loan commitment expires or is drawn by the borrower.
Specifically, unfunded loan commitments are reported on the Schedule of Investments and specifically identified as such in footnote 20 to the Schedule of Investments as well as in Note 8 to the Consolidated Financial Statements titled Commitments
and Contingencies. Further, the Company&#146;s unfunded loan commitments are carried at fair value in accordance with ASC 820, which is included in the Company&#146;s Consolidate Balance Sheet in the financial statement line item &#147;Investments
at fair value&#148;, with changes in fair value reflected in the Company&#146;s Consolidated Statement of Operations in the financial statement line items &#147;Net changes in unrealized appreciation (depreciation) on investments&#148;. As disclosed
in Note 8 to the Consolidated Financial Statements and footnoted on the Consolidated Schedule of Investments, the Company had unfunded loan commitments of $28.6&nbsp;million as of December&nbsp;31, 2023 with net unrealized depreciation as of
December&nbsp;31, 2023 of $0.4&nbsp;million recognized on such unfunded loan commitments in the Company&#146;s Consolidated Balance Sheet, with changes in fair value reflected in the Company&#146;s Consolidated Statement of Operations. </P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>3.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>Please discuss whether the Company has considered the provisions of Accounting Standards Update
<FONT STYLE="white-space:nowrap">No.&nbsp;2022-03</FONT> (&#147;ASU <FONT STYLE="white-space:nowrap">2022-03&#148;)</FONT> and its impact on the Company&#146;s financial statements. Further, please consider including references to SAB 74 or ASU <FONT
STYLE="white-space:nowrap">2022-03</FONT> in future financial statements. </P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> The Company has considered
the provisions of the Accounting Standards Update <FONT STYLE="white-space:nowrap">No.&nbsp;2022-03</FONT> and its impact on the Company&#146;s financial statements and determined that it would not have a material impact on the Company&#146;s
financial statements. As stated in Note 1 of the Company&#146;s Consolidated Financial Statements, the Company&#146;s primary investment objective is to generate current income and capital appreciation by lending directly to privately-held middle
market companies. The amendments in ASU <FONT STYLE="white-space:nowrap">2022-03</FONT> are limited and specific to measuring the fair value of an equity security subject to a separate contractual sale restriction, such as an underwriter&#146;s <FONT
STYLE="white-space:nowrap">lock-up.</FONT> The ASU <FONT STYLE="white-space:nowrap">2022-03</FONT> does not impact the Company&#146;s investments in loans or other debt securities. The Company held no such equity securities since ASU <FONT
STYLE="white-space:nowrap">2022-03</FONT> was adopted, given its primary investment objective is affected through make loans to portfolio companies. </P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21,&nbsp;2024</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The Company confirms that it will include references to recent accounting pronouncements that
will or could reasonably have a material impact on the Company&#146;s financial statements as required by Staff Accounting Bulletin No.&nbsp;74. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>Please confirm if the Company continues to maintain its
<FONT STYLE="white-space:nowrap">non-diversified</FONT> status. </P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response: </B>The Company confirms that it has been
operating as a diversified company, as defined by the Investment Company Act of 1940, as amended (the &#147;1940 Act&#148;), for an uninterrupted three-year period. The Company confirms that it will undertake to operate as a diversified company,
unless and until it becomes a <FONT STYLE="white-space:nowrap">non-diversified</FONT> company, as defined by the 1940 Act. The Company plans to seek approval to become a <FONT STYLE="white-space:nowrap">non-diversified</FONT> company in the near
future. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>5.</B><B></B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B></B><B>Comment: </B>Under the &#147;Derivatives&#148; rows in the Consolidated Statements of Operations,
please include additional rows reflecting the net realized or unrealized gain (loss) on investments by instrument type. </P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response: </B>The Company will include the requested rows in future filings. </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>6.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>In the Notes to Consolidated Financial Statements, the Company has a description of a
reimbursement from the Adviser to the Company of approximately $5.3&nbsp;million for expenses relating to certain administrative transition services. The disclosure states that &#147;[t]he Adviser reimbursed the Company approximately
$1.1&nbsp;million, $2.1&nbsp;million, $1.6&nbsp;million, and $0.5&nbsp;million for such expenses paid by the Company during the years ended 2023, 2022, 2021 and 2020, respectively, inclusive of interest.<B> </B>Beginning on October&nbsp;1, 2023, the
Adviser bore and will continue to bear on a <FONT STYLE="white-space:nowrap">go-forward</FONT> basis the expenses associated with these administrative transition services.&#148;<B> </B>The Staff would like a<B> </B>better understanding of the
reimbursement. Please discuss the circumstances surrounding this reimbursement. Was this considered a correction of an error? Please include whether there was any analysis on prior year net processes and shareholder impact and any shares issued or
redeemed. </P></TD></TR></TABLE>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21,&nbsp;2024</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> Please see below for a description of the circumstances surrounding this
reimbursement, which was provided by the Adviser to the Company in an abundance of conservatism following further internal review by the Adviser, and which the Company has determined was not in connection with an error. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In December 2019, December 2020 and June 2021, the Company completed acquisitions of OHAI, GARS and HCAP (the &#147;Acquired BDCs&#148;).
Pursuant to the terms of each acquisition, the Adviser entered into a Transition Services Agreement (&#147;TSA&#148;) with the former investment adviser of each such Acquired BDC. Based on the Adviser&#146;s review of the services to be provided by
each such former investment adviser under the TSAs, the Adviser determined that a portion of such services constituted administrative services in respect of the portfolios of the Acquired BDCs, and were therefore consistent with the services to be
provided to the Company under its Administration Agreement with BC Partners Management, LLC (the &#147;Administrator&#148;). Accordingly, the Adviser charged a portion of the cost of the TSAs back to the Administrator, which in turn invoiced the
Company for reimbursement consistent with the terms of the Administration Agreement (&#147;TSA Expenses&#148;). </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In connection with a
review of the TSA Expenses, the Adviser affirmatively determined to reimburse the Company for the TSA Expenses paid by it to the Administrator under the Administration Agreement. Specifically, the Adviser reimbursed the Company approximately
$1.1&nbsp;million, $2.1&nbsp;million, $1.6&nbsp;million, and $0.5&nbsp;million for the TSA Expenses paid by the Company during the years ended 2023, 2022, 2021 and 2020, respectively, inclusive of interest. Beginning on October&nbsp;1, 2023, the
Adviser bore and will continue to bear on a <FONT STYLE="white-space:nowrap">go-forward</FONT> basis the expenses associated with the provision of administrative support under the TSAs. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The TSA Expenses charged to the Company during the relevant period were appropriately incorporated in the Company&#146;s financial statements
issued during this period and thus the Company&#146;s financial statements are not determined to be in error. As a result, the Company did not recalculate its net asset value or reprocess any prior transactions and no adjustment to any of the
Company&#146;s previously reported financial statements is considered necessary in connection with such reimbursement. </P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21,&nbsp;2024</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"> Page
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>The<B> </B>total annual expense ratio in the Financial Highlights, after adjusting for the
expense reimbursement discussed in Comment #6 and applicable acquired fund fees and expenses, differs by approximately 1.0% of the Company&#146;s average net assets from the total annual expense ratio disclosed in the Fee Table (the
&#147;Difference&#148;). Please supplementally explain the reasons for this Difference. </P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> The Difference
is primarily a result of the Company calculating its expenses in the Fee Table based on the then-current net assets of the Company, consistent with Instructions 6 and 7 to Item 3.1 of Form <FONT STYLE="white-space:nowrap">N-2.</FONT> Specifically,
the Company used its net assets as of December&nbsp;31, 2023 in the calculation of Annual Expenses included in the Fees Table whereas the Company&#146;s expense ratio reported in the Consolidated Financial Highlights based on the Company&#146;s
average net assets for year ended December&nbsp;31, 2023. This caused the expense ratio in the Fee Table to be higher than if it used the Company&#146;s average net asset for the year ended December&nbsp;31, 2023. In addition, the Company&#146;s
total expense ratio in footnote 8 to the Financial Highlights excludes the impact of the $5.3&nbsp;million expense reimbursement. The expense reimbursement also had the effect of increasing the amount of the incentive fee paid by the Company. As
such, the exclusion of the expense reimbursement resulted in a reduction in the incentive fees paid by the Company as reflected in that footnote. Out of an abundance of conservatism, the Company did not reduce the amount of the incentive fees in the
Fee Table. This decision accounts for the remainder of the Difference. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>8.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>The Staff notes that disclosure in the Company&#146;s Annual Report appears to indicate that
the Company&#146;s investment in Great Lakes Funding II LLC (the &#147;Great Lakes II Joint Venture&#148;) is not being consolidated because an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. Please
explain in correspondence why Great Lakes II Joint Venture is not consolidated with the Company&#146;s financial statements. Please cite specifically to the provisions of the 1940 Act and/or US&nbsp;GAAP that were utilized to reach this conclusion.
</P></TD></TR></TABLE>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21,&nbsp;2024</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"> Page
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</P></TD></TR></TABLE> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> Like other BDC joint ventures, the Great Lakes II Joint Venture&#146;s
governing documents require that the <FONT STYLE="white-space:nowrap">non-affiliated</FONT> third-party financial institution joint venture equity partner approve all investment and other substantive decisions made by the Great Lakes II Joint
Venture. With this fact in mind, the Company first determined that Great Lakes II Joint Venture is an investment company under&nbsp;Accounting Standards Codification Topic 946,<I>&nbsp;Financial Services-Investment Companies</I>&nbsp;(&#147;ASC
946&#148;). It then determined that in accordance with ASC 946, the Company will generally not&nbsp;consolidate&nbsp;its investment in a company other than a wholly owned investment company subsidiary. Furthermore,&nbsp;Accounting Standards
Codification Topic 810, <I>Consolidation</I> (&#147;ASC 810&#148;)&nbsp;concludes that in a&nbsp;joint&nbsp;venture&nbsp;where both members have equal decision-making authority, it is not appropriate for one member
to&nbsp;consolidate&nbsp;the&nbsp;joint&nbsp;venture&nbsp;since neither has control. Accordingly, the Company does not&nbsp;consolidate&nbsp;Great Lakes Funding II LLC. </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>9.</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Comment: </B>The Staff notes that the KCAP Freedom 3 LLC joint venture appears to be a three-tier structure.
Please advise the Staff how this structure complies with Section&nbsp;12(d)(1) and Section&nbsp;57(a) of the 1940 Act. Please include a discussion of why this joint venture should not be consolidated with the Company&#146;s financial statements
given the holdings of KCAP and the affiliated relationships noted in the disclosure. Please cite specifically to the provisions of the 1940 Act and/or US&nbsp;GAAP that were utilized to reach this conclusion. </P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Response:</B> The Company respectfully notes that KCAP Freedom 3 LLC is not a registered investment company or a business development
company and, as a result, the Company&#146;s investment in KCAP Freedom 3 LLC is not subject to Section&nbsp;12(d)(1) of the 1940 Act. The Company also respectfully notes that KCAP Freedom 3 LLC is a downstream affiliate of the Company pursuant to
Rule <FONT STYLE="white-space:nowrap">57b-1</FONT> under the 1940 Act and, as result, the prohibitions contained in Section&nbsp;57(a) of the 1940 Act do not apply to the Company&#146;s investment in, or transactions with, KCAP Freedom 3 LLC. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Similar to the analysis in the response to Comment 8 above, the Company confirms that it is not able to make decisions on behalf of KCAP
Freedom 3 LLC without unanimous consent from the <FONT STYLE="white-space:nowrap">non-affiliated</FONT> third-party joint venture equity partner. As such and for the same reasons noted in the response to Comment 8 above, the Company does not
consolidate KCAP Freedom 3 LLC for financial reporting purposes. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&#8195;&#8195;&#8195;&#8195;*&#8195;&#8195;&#8195;&#8195;*&#8195;&#8195;&#8195;&#8195;*&#8195;&#8195;&#8195;&#8195;* </P>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;21,&nbsp;2024</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"> Page
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</P></TD></TR></TABLE> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Should you have any questions regarding this letter, please contact me at (202) <FONT
STYLE="white-space:nowrap">261-3402.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top">Sincerely,</TD></TR>
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<TD HEIGHT="16"></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Alexander C. Karampatsos</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Alexander C. Karampatsos</TD></TR>
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