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Borrowings | 12 Months Ended
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Jun. 30, 2023
Debt Disclosure [Abstract] |
Borrowings | Note 5. Borrowings The Company, through SPV, was previously party to a $122.0 million financing transaction (as amended, the “Term Financing”) due December 5, 2021 with UBS AG, London Branch (together with its affiliates “UBS”). The Term Financing was collateralized by the portion of the Company’s assets held by SPV (the “SPV Assets”). The Company subsequently repaid $20.0 million of the Term Financing on April 15, 2020. Borrowings under the Term Financing, as amended, bore interest with respect to the $102.0 million (i) at a rate per annum equal to one-month London Interbank Offered Rate (“LIBOR”) plus 3.55% from December 5, 2019 through December 4, 2020, and (ii) at a rate per annum equal to one-month LIBOR plus 3.15% from December 5, 2020 through December 4, 2021. On November 19, 2021, the Company repaid the Term Financing in full in accordance with the terms of the Term Financing and the agreement was terminated. As of June 30, 2023, and June 30, 2022, there were no borrowings outstanding under the Term Financing. On November 20, 2017, as subsequently amended, the Company entered into a $50 million revolving financing facility with UBS, which was subsequently amended on June 21, 2019 to reduce the size of the facility to $30.0 million and extend the maturity date (as amended, the “Revolving Financing”). On September 30, 2020, the Company amended the Revolving Financing to reduce the size of the Revolving Financing to $20.0 million and extend the maturity date to December 5, 2021. Borrowings under the Revolving Financing generally bore interest at a rate per annum equal to one-month LIBOR plus 3.15%. The Company paid a fee on any undrawn amounts of 0.75% per annum. Any amounts borrowed under the Revolving Financing would mature, and all accrued and unpaid interest was due and payable, on the same day as the Term Financing, which was December 5, 2021. On November 19, 2021, the Company satisfied all obligations under the Revolving Financing and the agreement was terminated. As of June 30, 2023 and June 30, 2022, there were no borrowings outstanding under the Revolving Financing. On August 23, 2021, the Company, through SPV LLC entered into a five-year, $115 million senior secured revolving credit facility (the “Capital One Revolving Financing”) with Capital One, N.A. (“Capital One”), which is secured by collateral consisting primarily of loans in the Company’s investment portfolio. On June 14, 2023, we amended the Capital One Revolving Financing to decrease the facility size from $115 million to $100 million. The Capital One Revolving Financing, which will expire on August 22, 2026 (the “Maturity Date”), features a three-year reinvestment period and a two-year amortization period. Effective November 18, 2022, borrowings under the Capital One Revolving Financing generally bear interest at a rate per annum equal to the Secured Overnight Financing Rate (”SOFR”) plus 2.50%. The default interest rate will be equal to the interest rate then in effect plus 2.00%. The Capital One Revolving Financing required the payment of an upfront fee of 1.125% ($1.3 million) of the available borrowings under the Capital One Revolving Financing at the closing, and requires the payment of an unused fee of (i) 0.75% annually for any undrawn amounts below 50% of the Capital One Revolving Financing, (ii) 0.50% annually for any undrawn amounts between 50% and 75% of the Capital One Revolving Financing, and (iii) 0.25% annually for any undrawn amounts above 75% of the Capital One Revolving Financing. Borrowings under the Capital One Revolving Financing are based on a borrowing base. The Capital One Revolving Financing generally requires payment of interest and fees on a quarterly basis. All outstanding principal is due on the Maturity Date. The Capital One Revolving Financing also requires mandatory prepayment of interest and principal upon certain events. As of June 30, 2023 and June 30, 2022, there were $71.9 million and $84.0 million borrowings outstanding under the Capital One Revolving Financing. Restricted cash (as shown on the Consolidated Statements of Assets and Liabilities) is held by the trustee of the Capital One Revolving Financing and is restricted to purchases of investments by SPV LLC that must meet certain eligibility criteria identified by the loan, security and investment management agreement governing the Capital One Revolving Financing. As of June 30, 2023, SPV LLC had a notional amount of $194.0 million, which included $181.5 million of the Company’s portfolio investments at fair value, no accrued interest receivable and $8.1 million in cash held by the trustees of the Capital One Revolving Financing. As of June 30, 2022, SPV LLC had a notional amount of $188.6 million, which included $183.5 million of the Company’s portfolio investments at fair value, no accrued interest receivable and $6.6 million in cash held by the trustees of the Capital One Revolving Financing. For the year ended June 30, 2023, the weighted average outstanding debt balance and the weighted average stated interest rate under the Capital One Revolving Financing, in aggregate was $80.4 million and 5.95%, respectively. For the year ended June 30, 2022, the weighted average outstanding debt balance and the weighted average stated interest rate under the Term Financing, the Revolving Financing, and the Capital One Revolving Financing, in aggregate was $101.4 million and 3.03%, respectively. The fair value of the Company’s borrowing is estimated based on the rate at which similar facilities would be priced. At June 30, 2023 and June 30, 2022, the fair value of the Company’s total borrowings was estimated at $71.9 million and $84.0 million, respectively under the Capital One Revolving Financing, which the Company concluded was a Level 3 fair value. In July 2018, the Company issued an aggregate of $34.5 million in aggregate principal amount of 6.125% notes due 2023 (the “2023 Notes”) for total net proceeds after deducting underwriting discounts and commissions and offering expenses of approximately $33.2 million. In October 2019 and November 2019, the Company issued an additional $16.875 million in aggregate principal amount of the 2023 Notes, which constituted a further issuance of, ranked equally in right of payment with, and formed a single series with the $34.5 million in aggregate principal amount of 2023 Notes that the Company initially issued in July 2018. The total net proceeds received by the Company from the sale of the 2023 Notes in October 2019 and November 2019 was approximately $16.4 million, based on the purchase price paid by the underwriters and after deducting underwriting discounts and commissions and estimated offering expenses. The 2023 Notes were scheduled to mature on July 1, 2023 and bore interest at a rate of 6.125%. The 2023 Notes were the direct unsecured obligations and ranked pari passu, which means equal in right of payment, with all outstanding and future unsecured indebtedness issued by the Company. Because the 2023 Notes were not secured by any of the Company’s assets, they were effectively subordinated to all of the Company’s existing and future secured unsubordinated indebtedness (or any indebtedness that is initially unsecured as to which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness. The 2023 Notes were structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries and financing vehicles, including, without limitation, borrowings under the Term Financing and the Revolving Financing. The 2023 Notes were the obligation exclusively of the Company and not of any of the Company’s subsidiaries. None of the Company’s subsidiaries was a guarantor of the 2023 Notes and the 2023 Notes could not be required to be guaranteed by any subsidiary the Company may acquire or create in the future. The 2023 Notes could be redeemed in whole or in part at any time or from time to time at the Company’s option on or after July 1, 2020. On March 26, 2021, the Company caused notice to be issued to the holders of the 2023 Notes regarding its exercise of the option to redeem in full all $51,375,000 in aggregate principal amount of the 2023 Notes at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from April 1, 2021, through, but excluding, the redemption date, April 25, 2021. The 2023 Notes were redeemed in full on April 25, 2021. On March 31, 2021, the Company closed the public offering of $65 million in aggregate principal amount of 4.875% notes due 2026 (the “2026 Notes”). The total net proceeds received by the Company from the sale of the 2026 Notes, after deducting the underwriting discount and commissions of $1.3 million and estimated offering expenses of approximately $215,000 payable by the Company, were approximately $63.1 million. The 2026 Notes will mature on April 1, 2026, unless previously redeemed or repurchased in accordance with their terms, and bear interest at a rate of 4.875%. The 2026 Notes are direct unsecured obligations and rank pari passu, which means equal in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company. Because the 2026 Notes are not secured by any of the Company’s assets, they are effectively subordinated to all of the Company’s existing and future secured unsubordinated indebtedness (or any indebtedness that is initially unsecured as to which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness. The 2026 Notes are structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries and financing vehicles, including, without limitation, borrowings under the Capital One Revolving Financing. The 2026 Notes are obligations exclusively of the Company and not of any of the Company’s subsidiaries. None of the Company’s subsidiaries is a guarantor of the 2026 Notes and the 2026 Notes will not be required to be guaranteed by any subsidiary the Company may acquire or create in the future. The 2026 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price (as determined by the Company) equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest to, but excluding, the redemption date: (1) 100% of the principal amount of the 2026 Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the 2026 Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate plus 50 basis points; provided, however, that if the Company redeems any 2026 Notes on or after January 1, 2026 (the date falling three months prior to the maturity date of the 2026 Notes), the redemption price for the 2026 Notes will be equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption; provided, further, that no such partial redemption shall reduce the portion of the principal amount of a 2026 Note not redeemed to less than $2,000. Interest on the 2026 Notes is payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2021. The Company may from time to time repurchase 2026 Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of June 30, 2023, the carrying amount of the 2026 Notes was $64.8 million on an aggregate principal balance of $65.0 million at a weighted average effective yield of 5.21%. As of June 30, 2023, the fair value of the 2026 Notes was $58.2 million. The Company concluded that this was Level 3 fair value under ASC 820. Long-Term Debt Maturities Set forth below is the aggregate principal amount of our long-term debt as of June 30, 2023 (excluding unamortized premiums, net, unamortized debt issuance costs and note payable) maturing during the following years:
2024 |  | $ | —
2025 |  |  | —
2026 |  |  | 136,900,000
Total long-term debt |  | $ | 136,900,000

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