x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Commission
File No. 814-00735
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Delaware
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20-5951150
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
Number)
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(Registrant’s
telephone number, including area code)
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Title
of
each class |
Name of exchange on which
registered
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Common
Shares, par value $0.01 per share
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The
NASDAQ Global Select Market
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Securities
registered pursuant to Section 12(g) of the Act: None
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Large accelerated filer ¨
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Accelerated filer x
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Non-accelerated filer ¨
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Smaller Reporting Company ¨
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(Do not check if a
smaller reporting company)
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The
number of outstanding shares of common stock of the registrant as
of March 16, 2009 was
21,570,869.
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•
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our
future operating results;
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•
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our
business prospects and the prospects of our existing and prospective
portfolio companies;
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•
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the
impact of investments that we expect to
make;
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•
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our
informal relationships with third
parties;
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•
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the
dependence of our future success on the general economy and its impact on
the industries in which we invest;
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•
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the
ability of our portfolio companies to achieve their
objectives;
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•
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our
expected financings and
investments;
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•
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our
regulatory structure and tax
treatment;
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•
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our
ability to operate as a BDC and a
RIC;
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•
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the
adequacy of our cash resources and working capital;
and
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•
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the
timing of cash flows, if any, from the operations of our portfolio
companies, including Katonah Debt
Advisors.
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Page
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Part
I
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Item 1.
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Business
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1
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Item 1A.
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Risk Factors
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32
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Item 1B.
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Unresolved Staff Comments
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42
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Item 2.
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Properties
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42
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Item 3.
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Legal Proceedings
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43
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Item 4.
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Submission of Matters to a Vote of Security
Holders
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43
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Part II
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Item 5.
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Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities
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44
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Item 6.
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Selected Financial Data
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48
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Item 7.
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Management’s Discussion and Analysis of Financial
Condition and Results of Operations
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49
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Item 7A.
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Quantitative and Qualitative Disclosures About
Market Risk
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58
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Item 8.
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Financial Statements and Supplementary
Data
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60
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Item 9.
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Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
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60
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Item 9A.
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Controls and Procedures
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60
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Item 9B.
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Other Information
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61
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Part III
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||||
Item 10.
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Directors, Executive Officers and Corporate
Governance
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62
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Item 11.
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Executive Compensation
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62
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Item 12.
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Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters
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62
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Item 13.
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Certain Relationships and Related Transactions,
and Director Independence
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62
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Item 14.
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Principle Accountant Fees and
Services
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62
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Part IV
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Item 15.
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Exhibits and Financial Statement
Schedules
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63
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Signatures
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66
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Financial Statements
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F-1
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Item 1.
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Business
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December 31, 2008
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December 31, 2007
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|||||||||||||||
Fair Value ¹
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per Share ¹
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Fair Value ¹
|
per Share ¹
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|||||||||||||
Investments
at fair value:
|
||||||||||||||||
Time
deposits
|
$ | 12,185,997 | $ | 0.57 | $ | 15,674,489 | $ | 0.87 | ||||||||
Money
market account
|
10 | — | 20,766 | — | ||||||||||||
Debt
securities
|
384,486,111 | 17.94 | 410,954,082 | 22.81 | ||||||||||||
CLO
Fund securities
|
56,635,236 | 2.64 | 31,020,000 | 1.72 | ||||||||||||
Equity
securities
|
4,389,831 | 0.21 | 4,752,250 | 0.27 | ||||||||||||
Asset
manager affiliates
|
56,528,088 | 2.64 | 58,585,360 | 3.25 | ||||||||||||
Cash
|
251,412 | 0.01 | 2,088,770 | 0.12 | ||||||||||||
Other
assets
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8,395,626 | 0.39 | 10,046,242 | 0.56 | ||||||||||||
Total
Assets
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$ | 522,872,311 | $ | 24.40 | $ | 533,141,959 | $ | 29.60 | ||||||||
Borrowings
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$ | 261,691,148 | $ | 12.21 | $ | 255,000,000 | $ | 14.15 | ||||||||
Other
liabilities
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10,899,063 | 0.51 | 19,073,795 | 1.06 | ||||||||||||
Total
Liabilities
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$ | 272,590,211 | $ | 12.72 | $ | 274,073,795 | $ | 15.21 | ||||||||
NET
ASSET VALUE
|
$ | 250,282,100 | $ | 11.68 | $ | 259,068,164 | $ | 14.39 |
1
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Our
balance sheet at fair value and resultant net asset value are calculated
on a basis consistent with accounting principles generally accepted in the
United States of America ("GAAP"). Our per share presentation
of such amounts (other than net asset value per share) is an internally
derived non-GAAP performance measure calculated by dividing the balance
sheet amount per line item by outstanding shares. We believe
that the per share amounts for such balance sheet items are helpful in
analyzing our balance sheet both quantitatively and qualitatively in that
our shares may trade based on a percentage of net asset value and
individual investors may weight certain balance sheet items differently in
performing any analysis of the
Company.
|
|
·
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represent
approximately 75% of total investment
portfolio;
|
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·
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represent
credit instruments issued by corporate
borrowers;
|
|
·
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no
asset-backed securities such as those secured by commercial mortgages or
residential mortgages and no consumer
borrowings;
|
|
·
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primarily
senior secured and junior secured loans (42% and 25%
respectively);
|
|
·
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spread
across 26 different industries and 93 different
entities;
|
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·
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average
balance per entity of approximately $4
million;
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·
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all
but two issuers current on their debt service
obligations;
|
|
·
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weighted
average interest rate of 7.0%.
|
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·
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represent
approximately 11% of total investment portfolio at December 31,
2008;
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·
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represent
investments in subordinated securities or equity securities issued by CLO
Funds;
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·
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all
CLO Funds invest primarily in credit instruments issued by corporate
borrowers;
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·
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no
asset-backed securities such as those secured by commercial mortgages or
residential mortgages and no consumer
borrowings;
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·
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all
CLO Funds have made all required cash payments to all classes of
investors;
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·
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nine
different CLO Fund securities; five of such CLO Funds are managed by
Katonah Debt Advisors;
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·
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seasoned
CLOs (for which at least four quarterly distributions have been made)
currently providing an annualized 29% cash return on investment during the
year ended December 31, 2008.
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·
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represents
approximately 11% of total investment
portfolio;
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·
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represents
our 100% ownership of the equity interest of a CLO Fund manager focused on
corporate credit investing;
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·
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Katonah
Debt Advisors has approximately $2.1 billion of assets under
management;
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·
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receives
contractual and recurring asset management fees based on par value of
managed investments;
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·
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typically
receives a one-time structuring fee upon completion of a new CLO
Fund;
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·
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may
receive an incentive fee upon liquidation of a CLO Fund provided that the
CLO Fund achieves a minimum designated return on
investment;
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·
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dividends
declared by Katonah Debt Advisors are recognized as dividend income from
affiliate asset manager on our statement of operations and are an
additional source of income to pay our
dividend;
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·
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for
the year ended December 31, 2008, Katonah Debt Advisors had an after-tax
net loss of approximately $765,000;
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·
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for
the year ended December 31, 2008, Katonah Debt Advisors made a
distribution of over $1 million in the form of a dividend which is
recognized as current earnings to the
Company.
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·
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time
deposits and money market accounts represent approximately 2% of our total
investment portfolio;
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·
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time
deposits, represented by overnight Eurodollar deposits, are partially
restricted under terms of the secured credit
facility;
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·
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the
money market account contains restricted cash held for employee flexible
spending accounts.
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•
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98%
of our ordinary net taxable income for the calendar
year;
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•
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98%
of our capital gains, if any, in excess of capital losses for the one-year
period ending on October 31 of the calendar year;
and
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•
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any
net ordinary income and net capital gains for the preceding year that were
not distributed during such year.
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Dividend
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Declaration
Date
|
Record
Date
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Pay
Date
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||||||
2008:
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|||||||
Fourth
quarter
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$
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0.27
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12/19/2008
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12/31/2008
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1/29/2009
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||||
Third
quarter
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0.35
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9/19/2008
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10/9/2008
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10/28/2008
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|||||
Second
quarter
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0.41
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6/13/2008
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7/9/2008
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7/28/2008
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||||
First
quarter
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0.41
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3/14/2008
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4/8/2008
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4/28/2008
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|||
Total
declared for 2008
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$
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1.44
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|||||||
2007:
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|||||||
Fourth
quarter
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$
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0.39
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12/14/2007
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12/24/2007
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1/24/2008
|
||
Third
quarter
|
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0.37
|
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9/24/2007
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10/10/2007
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10/26/2007
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|||
Second
quarter
|
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0.35
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6/8/2007
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7/9/2007
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7/23/2007
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|||
First
quarter
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0.29
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3/13/2007
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4/6/2007
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4/17/2007
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|||
|
|
||||||||
Total
declared for 2007
|
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$
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1.40
|
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December 31, 2008
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December 31, 2007
|
|||||||||||||||||||||||
Security Type
|
Cost
|
Fair Value
|
%¹ |
Cost
|
Fair Value
|
%¹
|
||||||||||||||||||
Time
Deposits
|
$ | 12,185,997 | $ | 12,185,997 | 2 | % | $ | 15,674,489 | $ | 15,674,489 | 3 | % | ||||||||||||
Money
Market Account
|
10 | 10 | — | 20,766 | 20,766 | — | ||||||||||||||||||
Senior
Secured Loan
|
235,123,695 | 218,342,528 | 42 | 265,390,844 | 260,138,674 | 50 | ||||||||||||||||||
Junior
Secured Loan
|
143,370,524 | 126,498,918 | 25 | 120,620,715 | 113,259,293 | 22 | ||||||||||||||||||
Mezzanine
Investment
|
37,097,183 | 32,557,165 | 6 | 32,418,975 | 33,066,115 | 6 | ||||||||||||||||||
Senior
Subordinated Bond
|
3,008,197 | 2,287,500 | 1 | 3,009,230 | 2,490,000 | 1 | ||||||||||||||||||
Senior
Unsecured Bond
|
5,259,487 | 4,800,000 | 1 | 2,000,000 | 2,000,000 | - | ||||||||||||||||||
CLO
Fund Securities
|
66,376,595 | 56,635,236 | 11 | 36,061,264 | 31,020,000 | 6 | ||||||||||||||||||
Equity
Securities
|
5,256,660 | 4,389,831 | 1 | 5,043,950 | 4,752,250 | 1 | ||||||||||||||||||
Affiliate
Asset Managers
|
38,948,271 | 56,528,088 | 11 | 33,469,995 | 58,585,360 | 11 | ||||||||||||||||||
Total
|
$ | 546,626,619 | $ | 514,225,273 | 100 | % | $ | 513,710,228 | $ | 521,006,947 | 100 | % |
4Q08
|
3Q08
|
2Q08
|
1Q08
|
|||||||||||||||||||||||||||||
Security Type ($ in millions)
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
||||||||||||||||||||||||
First
Lien
|
$ | 218.3 | 56 | % | $ | 228.8 | 57 | % | $ | 216.2 | 56 | % | $ | 216.1 | 59 | % | ||||||||||||||||
Second
Lien/Mezzanine/Bond
|
166.1 | 43 | 166.9 | 42 | 164.5 | 43 | 147.1 | 40 | ||||||||||||||||||||||||
Equity
|
4.4 | 1 | 4.5 | 1 | 3.6 | 1 | 3.6 | 1 | ||||||||||||||||||||||||
Total
|
$ | 388.9 | 100 | % | $ | 400.2 | 100 | % | $ | 384.3 | 100 | % | $ | 366.8 | 100 | % |
4Q07
|
3Q07
|
2Q07
|
1Q07
|
4Q06
|
||||||||||||||||||||||||||||||||||||
Security Type ($ in millions)
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
||||||||||||||||||||||||||||||
First
Lien
|
$ | 260.1 | 63 | % | $ | 190.2 | 55 | % | $ | 164.3 | 59 | % | $ | 150.4 | 69 | % | $ | 163.3 | 86 | % | ||||||||||||||||||||
Second
Lien/Mezzanine/Bond
|
150.8 | 36 | 148.6 | 43 | 110.8 | 40 | 64.3 | 30 | 27.5 | 14 | ||||||||||||||||||||||||||||||
Equity
|
4.8 | 1 | 5.0 | 2 | 3.0 | 1 | 3.0 | 1 | — | |||||||||||||||||||||||||||||||
Total
|
$ | 415.7 | 100 | % | $ | 343.8 | 100 | % | $ | 278.1 | 100 | % | $ | 217.7 | 100 | % | $ | 190.8 | 100 | % |
December
31, 2008
|
December
31, 2007
|
|||||||||||||||||||||||
Industry
Classification
|
Cost
|
Fair
Value
|
%1
|
Cost
|
Fair
Value
|
|
%1
|
|||||||||||||||||
Aerospace and
Defense
|
$ | 35,545,254 | $ | 34,846,047 | 7 | % | $ | 32,583,716 | $ | 32,481,819 | 6 | % | ||||||||||||
Asset Management
Companies2
|
38,948,271 | 56,528,088 | 11 | 33,469,995 | 58,585,360 | 10 | ||||||||||||||||||
Automobile
|
8,811,625 | 7,750,003 | 2 | 5,286,731 | 5,147,010 | 1 | ||||||||||||||||||
Broadcasting and
Entertainment
|
2,982,607 | 2,850,000 | 1 | 2,978,999 | 2,782,500 | 1 | ||||||||||||||||||
Buildings and Real
Estate3
|
38,404,495 | 19,231,787 | 4 | 37,726,396 | 34,944,226 | 7 | ||||||||||||||||||
Cargo
Transport
|
20,099,157 | 20,071,001 | 4 | 14,967,369 | 14,958,789 | 3 | ||||||||||||||||||
Chemicals, Plastics
and Rubber
|
6,613,081 | 5,840,000 | 1 | 3,956,582 | 3,220,000 | 1 | ||||||||||||||||||
CLO Fund
Securities
|
66,376,595 | 56,635,236 | 11 | 36,061,264 | 31,020,000 | 6 | ||||||||||||||||||
Containers, Packaging
and Glass
|
7,347,292 | 7,316,295 | 1 | 8,895,059 | 8,895,059 | 2 | ||||||||||||||||||
Diversified/Conglomerate
Manufacturing
|
6,282,124 | 6,095,170 | 1 | 8,931,343 | 8,718,855 | 2 | ||||||||||||||||||
Diversified/Conglomerate
Service
|
15,868,152 | 15,139,713 | 3 | 17,962,721 | 17,303,969 | 3 | ||||||||||||||||||
Ecological
|
2,721,193 | 2,727,813 | 1 | 3,937,850 | 3,937,850 | 1 | ||||||||||||||||||
Electronics
|
15,172,568 | 13,686,879 | 3 | 15,830,382 | 15,158,502 | 3 | ||||||||||||||||||
Farming and
Agriculture
|
4,298,336 | 1,538,550 | - | 4,800,651 | 4,058,835 | 1 | ||||||||||||||||||
Finance
|
14,979,849 | 13,830,557 | 3 | 11,590,697 | 11,209,824 | 2 | ||||||||||||||||||
Healthcare, Education
and Childcare
|
49,379,475 | 49,581,920 | 10 | 46,715,870 | 46,637,705 | 9 | ||||||||||||||||||
Home and Office
Furnishings, Housewares, and Durable Consumer
Goods
|
21,331,162 | 20,273,496 | 4 | 24,091,185 | 23,265,816 | 3 | ||||||||||||||||||
Hotels, Motels, Inns
and Gaming
|
6,322,276 | 6,073,739 | 1 | 9,364,165 | 9,091,041 | 2 | ||||||||||||||||||
Insurance
|
10,983,041 | 10,693,769 | 2 | 24,346,884 | 23,941,763 | 5 | ||||||||||||||||||
Leisure, Amusement,
Motion Pictures, Entertainment
|
16,929,910 | 16,903,100 | 3 | 18,402,600 | 18,402,600 | 4 | ||||||||||||||||||
Machinery
(Non-Agriculture, Non-Construction,
Non-Electronic)
|
35,514,554 | 36,263,857 | 7 | 39,573,338 | 39,483,418 | 8 | ||||||||||||||||||
Mining, Steel, Iron
and Non-Precious Metals
|
21,751,631 | 19,589,104 | 4 | 16,338,446 | 16,069,759 | 3 | ||||||||||||||||||
Oil and
Gas
|
5,998,263 | 5,940,000 | 1 | 5,997,874 | 5,960,000 | 1 | ||||||||||||||||||
Personal and Non
Durable Consumer Products (Mfg. Only)
|
15,208,764 | 12,264,708 | 2 | 17,315,776 | 14,750,095 | 3 | ||||||||||||||||||
Personal, Food and
Miscellaneous Services
|
14,722,088 | 11,445,381 | 2 | 13,918,651 | 13,765,201 | 3 | ||||||||||||||||||
Printing and
Publishing
|
29,914,605 | 28,130,061 | 5 | 21,622,999 | 21,236,473 | 4 | ||||||||||||||||||
Retail
Stores
|
3,755,829 | 3,755,829 | 1 | 4,962,500 | 4,813,625 | 1 | ||||||||||||||||||
Time Deposits and
Money Market Account
|
12,186,007 | 12,186,007 | 2 | 15,695,255 | 15,695,255 | 2 | ||||||||||||||||||
Utilities
|
18,178,415 | 17,037,163 | 3 | 16,384,930 | 15,471,598 | 3 | ||||||||||||||||||
Total
|
$ | 546,626,619 | $ | 514,225,273 | 100 | % | $ | 513,710,228 | $ | 521,006,947 | 100 | % |
1
|
Calculated
as a percentage of total portfolio at fair value.
|
2
|
Represents
Katonah Debt Advisors and other asset manager
affiliates.
|
3
|
Buildings
and real estate relate to real estate ownership, builders, managers and
developers and excludes mortgage debt investments and mortgage lenders or
originators. As of December 31, 2008 and December 31, 2007, the Company
had no exposure to mortgage securities (residential mortgage bonds,
commercial mortgage backed securities, or related asset backed securities)
or companies providing mortgage
lending.
|
|
December 31, 2008
|
December 31, 2007
|
||||||||||||||||||||
CLO Fund Securities
|
Investment
|
%1
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
||||||||||||||||
Grant Grove CLO, Ltd.
|
Subordinated Securities
|
22.2 | % | $ | 4,620,951 | $ | 4,665,000 | $ | 4,415,580 | $ | 4,250,000 | |||||||||||
Katonah
III, Ltd.
|
Preferred
Shares
|
23.1 | 4,500,000 | 1,661,000 | 4,500,000 | 2,810,000 | ||||||||||||||||
Katonah
IV, Ltd.
|
Preferred
Shares
|
17.1 | 3,150,000 | 1,601,000 | 3,150,000 | 2,420,000 | ||||||||||||||||
Katonah
V, Ltd.
|
Preferred
Shares
|
26.7 | 3,320,000 | 1,172,000 | 3,320,000 | 420,000 | ||||||||||||||||
Katonah VII CLO Ltd.2
|
Subordinated Securities
|
16.4 | 4,500,000 | 2,629,000 | 4,500,000 | 3,950,000 | ||||||||||||||||
Katonah VIII CLO Ltd.2
|
Subordinated Securities
|
10.3 | 3,400,000 | 2,252,000 | 3,400,000 | 3,290,000 | ||||||||||||||||
Katonah IX CLO Ltd.2
|
Preferred
Shares
|
6.9 | 2,000,000 | 1,921,000 | 2,000,000 | 2,000,000 | ||||||||||||||||
Katonah X CLO Ltd.2
|
Subordinated Securities
|
33.3 | 11,324,758 | 11,875,000 | 10,775,684 | 11,880,000 | ||||||||||||||||
Katonah 2007-1 CLO Ltd.2
|
Preferred
Shares
|
100 | 29,560,886 | 28,859,236 | — | — | ||||||||||||||||
Total
|
$ | 66,376,595 | $ | 56,635,236 | $ | 36,061,264 | $ | 31,020,000 |
CLO Fund Securities1
|
Number of
Securities |
Number of
Issuers |
Number of
Industries |
Average Security
Position Size |
Average Issuer
Position Size |
|||||||||||||||
Grant
Grove CLO, Ltd.
|
233 | 172 | 32 | $ | 1,227,114 | $ | 1,662,311 | |||||||||||||
Katonah
III, Ltd.
|
288 | 199 | 31 | 1,284,316 | 1,858,708 | |||||||||||||||
Katonah
IV, Ltd.
|
297 | 206 | 28 | 1,064,247 | 1,534,375 | |||||||||||||||
Katonah
V, Ltd.
|
337 | 233 | 30 | 697,774 | 1,009,227 | |||||||||||||||
Katonah
VII CLO Ltd.
|
263 | 210 | 33 | 1,350,514 | 1,691,358 | |||||||||||||||
Katonah
VIII CLO Ltd
|
262 | 205 | 33 | 1,508,199 | 1,927,551 | |||||||||||||||
Katonah
IX CLO Ltd
|
260 | 204 | 33 | 1,603,269 | 2,043,383 | |||||||||||||||
Katonah
X CLO Ltd
|
257 | 200 | 33 | 1,855,771 | 2,384,665 | |||||||||||||||
Katonah
2007-1 CLO Ltd
|
202 | 164 | 31 | 1,563,595 | 1,925,891 |
•
|
|
senior
secured term loans from $10 to $20 million maturing in five to seven
years;
|
•
|
second
lien term loans from $5 to $20 million maturing in six to eight
years;
|
•
|
senior
unsecured loans $5 to $10 million maturing in six to eight
years;
|
•
|
mezzanine
loans from $5 to $10 million maturing in seven to ten years;
and
|
•
|
equity
investments from $1 to $5 million.
|
•
|
companies
with EBITDA of $10 to $50 million;
|
•
|
companies
with financing needs of $25 to $150
million;
|
•
|
companies
purchased by top tier equity
sponsors;
|
•
|
non-sponsored
companies with successful management and
systems;
|
•
|
high-yield
bonds and broadly syndicated loans to larger companies on a selective
basis; and
|
•
|
equity
co-investment in companies where we see substantial opportunity for
capital appreciation.
|
•
|
private
equity sponsors;
|
•
|
regional
investment banks for non-sponsored
companies;
|
•
|
other
middle market lenders with whom we can “club”
loans;
|
•
|
Katonah
Debt Advisors with regard to high-yield bonds and syndicated loans;
and
|
•
|
Kohlberg &
Co. with regard to selected private equity investment
opportunities.
|
•
|
Industry
fundamentals;
|
•
|
Competitive
position and market share;
|
•
|
Past
ability to work through historical
down-cycles;
|
•
|
Quality
of financial and technology
infrastructure;
|
•
|
Sourcing
risks and opportunities;
|
•
|
Labor
and union strategy;
|
•
|
Technology
risk;
|
•
|
Diversity
of customer base and product lines;
|
•
|
Quality
and experience of management;
|
•
|
Quality
of financial sponsor (if applicable);
and
|
•
|
Acquisition
and integration history.
|
•
|
Income
statement analysis of growth and margin
trends;
|
•
|
Balance
sheet analysis of working capital
efficiency;
|
•
|
Cash
flow analysis of capital expenditures and free cash
flow;
|
•
|
Financial
ratio and market share standing among comparable
companies;
|
•
|
Financial
projections: underwriting versus stress
case;
|
•
|
Event
specific Maximum Reasonable Adversity credit
modeling;
|
•
|
Future
capital expenditure needs and asset sale
plans;
|
•
|
Downside
protection to limit losses in an event of
default;
|
•
|
Risk
adjusted returns and relative value analysis;
and
|
•
|
Enterprise
and asset valuations.
|
•
|
reviewing
financial statements with comparisons to prior year financial statements,
as well as the current budget including key financial ratios such as
debt/EBITDA, margins and fixed charge
coverage;
|
•
|
independently
computing and verifying compliance with financial
covenants;
|
•
|
reviewing
and analyzing monthly borrowing base, if
any;
|
•
|
a
monthly discussion of MD&A with company management and the private
equity sponsor, if applicable;
|
•
|
determining
if current performance could cause future financial covenant
default;
|
•
|
discussing
prospects with the private equity sponsor, if
applicable;
|
•
|
determining
if a portfolio company should be added to our “watch list” (companies to
be reviewed in more depth);
|
•
|
if
a company is not meeting expectations, reviewing original underwriting
assumptions and determining if either enterprise value or asset value has
deteriorated enough to warrant further action;
and
|
•
|
a
monthly update to be reviewed by both the Chief Executive Officer (“CEO”)
and Chief Investment Officer
(“CIO”).
|
•
|
Internally managed structure
and significant management resources. We are
internally managed by our executive officers under the supervision of our
Board of Directors and do not depend on a third party investment advisor.
As a result, we do not pay investment advisory fees and all of our income
is available to pay our operating costs and to make distributions to our
stockholders.
|
•
|
Multiple sourcing capabilities
for assets. We have multiple sources of
loans, mezzanine investments and equity investments through our industry
relationships, Katonah Debt Advisors and our strategic relationship with
Kohlberg & Co.
|
•
|
Disciplined investment
process. We employ a rigorous credit review
process and due diligence intensive investment strategy which our senior
management has developed over more than 20 years of lending. For each
analyzed company, we develop our own underwriting case and multiple stress
case scenarios and an event-specific financial model reflecting company,
industry and market variables. Generally, both we and the CLO Funds
managed by Katonah Debt Advisors have decided not to invest in highly
leveraged or “covenant light” credit
facilities.
|
•
|
Katonah Debt Advisors’ credit
platform. Katonah Debt Advisors serves as a
source of our direct investment opportunities and cash flow, and certain
credit analysts employed by Katonah Debt Advisors who also serve as
officers of the Company serve as a resource for credit
analysis.
|
•
|
Investments in a wide variety
of portfolio companies in a number of different industries with no direct
exposure to mortgage-backed securities. Our
investment portfolio (excluding our investments in Katonah Debt Advisors
and CLO Fund securities) is spread across 26 different industries and 93
different entities with an average balance per entity of
approximately $4 million. Our investment portfolio as well as the
investment portfolios of the CLO Funds in which we have invested and the
investment portfolios of the CLO Funds managed by Katonah Debt Advisors
consist exclusively of credit instruments and other securities issued by
companies and do not include any asset-backed securities secured by
commercial mortgages, residential mortgages or other consumer
borrowings.
|
•
|
Strategic relationship with
Kohlberg & Co. We believe that
Kohlberg & Co. is one of the oldest and most well-known private
equity firms focused on the middle market, and we expect to continue to
derive substantial benefits from our strategic relationship with
Kohlberg & Co.
|
•
|
Significant equity ownership
and alignment of incentives. Our senior
management team, the senior management team of Katonah Debt Advisors and
affiliates of Kohlberg & Co. together have a significant equity
interest in the Company, ensuring that their incentives are strongly
aligned with those of our
stockholders.
|
·
|
Securities
of an “eligible portfolio company” purchased in transactions not involving
any public offering. An “eligible portfolio company” is defined in the
1940 Act as any issuer which:
|
(a)
|
is
organized under the laws of, and has its principal place of business in,
the United States;
|
(b)
|
is
not an investment company (other than a small business investment company
wholly-owned by the BDC) or a company that would be an investment company
but for certain exclusions under the 1940 Act;
and
|
(c)
|
satisfies
any of the following:
|
(i)
|
does
not have outstanding any class of securities with respect to which a
broker or dealer may extend margin
credit;
|
(ii)
|
is
controlled by a BDC or a group of companies including a BDC and the BDC
has an affiliated person who is a director of the eligible portfolio
company;
|
(iii)
|
is
a small and solvent company having total assets of not more than $4
million and capital and surplus of not less than $2 million;
or
|
(iv)
|
does
not have any class of securities listed on a national securities
exchange.
|
·
|
Securities
of any eligible portfolio company that we
control;
|
·
|
Securities
purchased in a private transaction from a U.S. issuer that is not an
investment company and is in bankruptcy and subject to
reorganization;
|
·
|
Securities
received in exchange for or distributed on or with respect to securities
described above, or pursuant to the conversion of warrants or rights
relating to such securities;
|
·
|
Cash,
cash equivalents, U.S. government securities or high-quality debt
securities maturing in one year or less from the time of investment;
and
|
·
|
Under
certain circumstances, securities of companies that were eligible
portfolio companies at the time of the initial investment but that are not
eligible portfolio companies at the time of the follow-on
investment.
|
·
|
a
citizen or individual resident of the United States including an alien
individual who is a lawful permanent resident of the United States or
meets the “substantial presence” test in Section 7701(b) of the
Code;
|
·
|
a
corporation or other entity taxable as a corporation, for U.S. federal
income tax purposes, created or organized in or under the laws of the
United States or any political subdivision
thereof;
|
·
|
a
trust over the administration of which a court in the U.S. has primary
supervision or over which U.S. persons have control;
or
|
·
|
an
estate, the income of which is subject to U.S. federal income taxation
regardless of its source.
|
·
|
have
in effect at all times during each taxable year an election to be
regulated as a BDC under the 1940
Act;
|
·
|
in
each taxable year, derive at least 90% of our gross income from
(a) dividends, interest, payments with respect to certain securities
loans, gains from the sale of stock or other securities, or other income
derived with respect to our business of investing in such stock or
securities and (b) net income derived from an interest in a
“qualified publicly traded partnership” (as defined by the Code) (all such
income “Qualifying Income”); and
|
·
|
diversify
our holdings so that at the end of each quarter of the taxable year:
(i) at least 50% of the value of our assets consists of cash, cash
equivalents, U.S. government securities, securities of other RICs, and
other securities if such other securities of any one issuer do not
represent more than 5% of the value of our assets or more than 10% of the
outstanding voting securities of such issuer; and (ii) no more than
25% of the value of our assets is invested in the securities, other than
U.S. government securities or securities of other RICs, of (a) one
issuer, (b) two or more issuers that are controlled, as determined
under applicable tax rules, by us and that are engaged in the same or
similar or related trades or businesses or (c) one or more “qualified
publicly traded partnerships” (the “Diversification
Tests”).
|
·
|
that
has not provided a satisfactory statement that the beneficial owner is not
a U.S. person;
|
·
|
to
the extent that the dividend is attributable to certain interest on an
obligation if the non-U.S. stockholder is the issuer or is a 10%
stockholder of the issuer;
|
·
|
that
is within certain foreign countries that have inadequate information
exchange with the United States; or
|
·
|
to
the extent the dividend is attributable to interest paid by a person that
is a related person of the non-U.S. stockholder and the non-U.S.
stockholder is a “controlled foreign corporation” for U.S. federal income
tax purposes.
|
Item 1A.
|
Risk
Factors
|
•
|
a
likelihood of greater volatility of net asset value and market price of
our common stock than a comparable portfolio without
leverage;
|
•
|
exposure
to increased risk of loss if we incur debt or issue senior securities to
finance investments because a decrease in the value of our investments
would have a greater negative impact on our returns and therefore the
value of our common stock than if we did not use
leverage;
|
•
|
that
the covenants contained in the documents governing the Facility or other
debt instruments could restrict our operating flexibility. Such covenants
may impose asset coverage or investment portfolio composition requirements
that are more stringent than those imposed by the 1940 Act and could
require us to liquidate investments at an inopportune time;
and
|
•
|
that
we, and indirectly our stockholders, will bear the cost of leverage,
including issuance and servicing costs ( i.e. ,
interest).
|
•
|
limited
financial resources and inability to meet their obligations, which may be
accompanied by a deterioration in the value of any collateral and a
reduction in the likelihood of our realizing the value of any guarantees
we may have obtained in connection with our
investment;
|
•
|
shorter
operating histories, narrower product lines and smaller market shares than
larger businesses, which tend to render them more vulnerable to
competitors’ actions and market conditions, as well as general economic
downturns;
|
•
|
dependence
on management talents and efforts of a small group of persons; therefore,
the death, disability, resignation or termination of one or more of these
persons could have a material adverse impact on our portfolio company and,
in turn, on us;
|
•
|
less
predictable operating results, being parties to litigation from time to
time, engaging in rapidly changing businesses with products subject to a
substantial risk of obsolescence, and requiring substantial additional
capital to support their operations, finance expansion or maintain their
competitive position;
|
•
|
difficulty
accessing the capital markets to meet future capital needs;
and
|
•
|
generally
less publicly available information about their businesses, operations and
financial condition.
|
•
|
Senior Securities.
As a result of issuing senior securities, we would
also be exposed to typical risks associated with leverage, including an
increased risk of loss. If we issue preferred securities they would rank
“senior” to common stock in our capital structure. Preferred stockholders
would have separate voting rights and may have rights, preferences or
privileges more favorable than those of our common stock. Furthermore, the
issuance of preferred securities could have the effect of delaying,
deferring or preventing a transaction or a change of control that might
involve a premium price for our common stockholders or otherwise be in
your best interest.
|
•
|
Additional Common
Stock. Our Board of Directors may decide to
issue common stock to finance our operations rather than issuing debt or
other senior securities. As a BDC, we are generally not able to issue our
common stock at a price below net asset value without first obtaining
required approvals from our stockholders and our independent directors; we
received the required stockholder approval at a special meeting on July
21, 2008 (this approval is valid for one year from the date of such
approval). In any such case, the price at which our securities are to be
issued and sold may not be less than a price, that in the determination of
our Board of Directors, closely approximates the market value of such
securities (less any commission or discount). We may also make rights
offerings to our stockholders at prices per share less than the net asset
value per share, subject to the 1940 Act. If we raise additional funds by
issuing more common stock or senior securities convertible into, or
exchangeable for, our common stock, the percentage ownership of our
stockholders at that time would decrease, and you may experience
dilution.
|
•
|
Securitization.
In addition to issuing securities to raise capital
as described above, we securitize a portion of our loans to generate cash
for funding new investments through our Facility. To securitize loans, we
have created a wholly-owned subsidiary and contributed a pool of loans to
the subsidiary. An inability to successfully securitize our loan portfolio
could limit our ability to grow our business and fully execute our
business strategy and adversely affect our earnings, if any. Moreover, the
successful securitization of our loan portfolio might expose us to losses,
as the residual loans in which we do not sell interests tend to be those
that are riskier and more apt to generate
losses.
|
Item 1B.
|
Unresolved
Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal
Proceedings
|
Item 4.
|
Submission
of Matters to a Vote of Security
Holders
|
Item 5.
|
Market for
Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity
Securities
|
High
|
Low
|
Close
|
NAV1
|
|||||||||||||
2008:
|
||||||||||||||||
Fourth
quarter
|
$ | 8.41 | $ | 3.14 | $ | 3.64 | $ | 11.68 | ||||||||
Third
quarter
|
$ | 11.01 | $ | 8.07 | $ | 8.59 | $ | 12.97 | ||||||||
Second
quarter
|
$ | 13.35 | $ | 9.41 | $ | 10.00 | $ | 13.14 | ||||||||
First
quarter
|
$ | 12.99 | $ | 9.56 | $ | 10.38 | $ | 13.98 | ||||||||
2007:
|
||||||||||||||||
Fourth
quarter
|
$ | 15.49 | $ | 10.00 | $ | 12.00 | $ | 14.38 | ||||||||
Third
quarter
|
$ | 19.10 | $ | 13.65 | $ | 15.06 | $ | 14.77 | ||||||||
Second
quarter
|
$ | 19.68 | $ | 15.75 | $ | 18.55 | $ | 15.39 | ||||||||
First
quarter
|
$ | 18.00 | $ | 15.05 | $ | 16.00 | $ | 14.78 | ||||||||
2006:
|
||||||||||||||||
Fourth
quarter December 11, 2006—December 31, 2006
|
$ | 17.45 | $ | 15.79 | $ | 17.30 | $ | 14.29 |
¹
|
Net
asset value per share is determined as of the last day in the relevant
quarter and therefore may not reflect the net asset value per share on the
date of the high and low closing sales prices.
|
|
Dividend
|
Declaration
Date
|
Record Date
|
Pay
Date
|
|||||
2008:
|
|||||||||
Fourth
quarter
|
$ | 0.27 |
12/19/2008
|
12/31/2008
|
1/29/2009
|
||||
Third
quarter
|
0.35 |
9/19/2008
|
10/9/2008
|
10/28/2008
|
|||||
Second
quarter
|
0.41 |
6/13/2008
|
7/9/2008
|
7/28/2008
|
|||||
First
quarter
|
0.41 |
3/14/2008
|
4/8/2007
|
4/28/2008
|
|||||
Total
declared for 2008
|
$ | 1.44 | |||||||
|
|||||||||
2007:
|
|||||||||
Fourth
quarter
|
$ | 0.39 |
12/14/2007
|
12/24/2007
|
1/24/2008
|
||||
Third
quarter
|
0.37 |
9/24/2007
|
10/10/2007
|
10/26/2007
|
|||||
Second
quarter
|
0.35 |
6/8/2007
|
7/9/2007
|
7/23/2007
|
|||||
First
quarter
|
0.29 |
3/13/2007
|
4/6/2007
|
4/17/2007
|
|||||
|
|||||||||
Total
declared for 2007
|
$ | 1.40 |
Note:
|
No
dividend was declared for the period from December 11, 2006 (inception) to
December 31, 2006. The distributable income earned during this
period was paid during 2007.
|
1
|
Total
return includes reinvestment of dividends through December 31, 2008. The
IXF is an index of diversified financial sector stocks and, as such, the
Company believes that it is representative of our industry. The Russell
2000 is a broad based equity market index that tracks companies with a
market capitalization that the Company believes are closer to Kohlberg
Capital Corporation’s than the companies represented by the S&P 500,
which the Company used in previous
disclosures.
|
Item 6.
|
Selected
Financial Data
|
KOHLBERG
CAPITAL CORPORATION
|
SELECTED
FINANCIAL DATA
|
Year Ended
December 31, 2008
|
Year Ended
December 31, 2007¹
|
For the Period
December 11, 2006
(inception) through
December 31, 2006¹
|
||||||||||
Income
Statement Data:
|
||||||||||||
Interest
and related portfolio income:
|
||||||||||||
Interest
and Dividends
|
$ | 46,208,978 | $ | 37,219,713 | $ | 1,110,109 | ||||||
Fees
and other income
|
1,653,232 | 759,301 | 41,794 | |||||||||
Dividends
from affiliate asset manager
|
1,350,000 | 500,000 | — | |||||||||
Total
interest and related portfolio income
|
49,212,210 | 38,479,014 | 1,151,903 | |||||||||
Expenses:
|
||||||||||||
Interest
and amortization of debt issuance costs
|
10,925,624 | 7,229,597 | — | |||||||||
Compensation
|
3,940,638 | 4,104,761 | 175,186 | |||||||||
Other
|
3,640,031 | 4,385,707 | 487,254 | |||||||||
Total
operating expenses
|
18,506,293 | 15,720,065 | 662,440 | |||||||||
Net
Investment Income
|
30,705,917 | 22,758,949 | 489,463 | |||||||||
Realized
and unrealized gains (losses) on investments:
|
||||||||||||
Net
realized gains (losses)
|
(575,179 | ) | 266,317 | 1,077 | ||||||||
Net
change in unrealized gains (losses)
|
(39,698,065 | ) | 3,116,719 | 4,180,000 | ||||||||
Total
net gains (losses)
|
(40,273,244 | ) | 3,383,036 | 4,181,077 | ||||||||
Net
increase in net assets resulting from operations
|
$ | (9,567,327 | ) | $ | 26,141,985 | $ | 4,670,540 | |||||
Per
Share:
|
||||||||||||
Earnings
per common share—basic
|
$ | (0.47 | ) | $ | 1.45 | $ | 0.26 | |||||
Net
investment income plus net realized gains per share—basic
|
$ | 1.49 | $ | 1.28 | $ | 0.03 | ||||||
Net
investment income plus net realized gains per
share—diluted
|
$ | 1.47 | $ | 1.28 | $ | 0.03 | ||||||
Dividends
declared per common share
|
$ | 1.44 | $ | 1.40 | $ | — | ||||||
Balance
Sheet Data:
|
||||||||||||
Investment
assets at fair value
|
$ | 514,225,273 | $ | 521,006,947 | $ | 281,087,215 | ||||||
Total
assets
|
$ | 522,872,311 | $ | 533,141,959 | $ | 282,375,847 | ||||||
Total
debt outstanding
|
$ | 261,691,148 | $ | 255,000,000 | $ | — | ||||||
Stockholders'
equity
|
$ | 250,282,100 | $ | 259,068,164 | $ | 256,400,423 | ||||||
Net
asset value per common share
|
$ | 11.68 | $ | 14.38 | $ | 14.29 | ||||||
Common
shares outstanding at end of year
|
21,436,936 | 18,017,699 | 17,946,333 | |||||||||
Other
Data:
|
||||||||||||
Investments
funded 2
|
109,442,643 | 373,852,286 | 191,706,724 | |||||||||
Principal
collections related to investment repayments or sales2
|
72,345,600 | 104,037,559 | 533,315 | |||||||||
Number
of portfolio investments at year end2
|
149 | 145 | 86 | |||||||||
Weighted
average yield of income producing debt investments3
|
7.0 | % | 9.5 | % | 9.0 | % |
¹
|
Certain
prior year amounts have been reclassified to conform to current year
presentation.
|
²
|
Does
not include investments in time deposits or money
markets
|
³
|
Weighted
average yield of income producing debt investments is calculated as the
average yield to par outstanding balances for investments in loans and
mezzanine debt. The yields on CLO equities and investment in
our wholly-owned portfolio manager, Katonah Debt Advisors, are
excluded.
|
Item 7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
•
|
Level
I – Quoted prices are available in active markets for identical
investments as of the reporting date. The type of investments included in
Level I include listed securities. As required by SFAS 157, the Company
does not adjust the quoted price for these investments, even in situations
where we hold a large position and a sale could reasonably affect the
quoted price.
|
•
|
Level
II – Pricing inputs are other than quoted prices in active markets, which
are either directly or indirectly observable as of the reporting date, and
fair value is determined through the use of models or other valuation
methodologies. Investments which are generally included in this category
include illiquid corporate loans and bonds and less liquid, privately held
or restricted equity securities for which some level of recent trading
activity has been observed.
|
•
|
Level
III – Pricing inputs are unobservable for the investment and includes
situations where there is little, if any, market activity for the
investment. The inputs into the determination of fair value may require
significant management judgment or estimation. Even if observable-market
data for comparable performance or valuation measures (earnings multiples,
discount rates, other financial/valuation ratios, etc.) are available,
such investments are grouped as Level III if any significant data point
that is not also market observable (private company earnings, cash flows,
etc.) is used in the valuation
process.
|
Debt Securities
|
CLO Fund
Securities
|
Equity Securities
|
Affiliate Asset
Managers
|
Total Portfolio
|
||||||||||||||||
2007
Activity:
|
||||||||||||||||||||
Purchases
/ originations /draws
|
$
|
336,182,774
|
$
|
14,775,000
|
$
|
5,043,950
|
$
|
75,000
|
$
|
356,076,724
|
||||||||||
Pay-downs
/ pay-offs / sales
|
(104,037,559)
|
—
|
—
|
—
|
(104,037,559)
|
|||||||||||||||
Net
accretion of discount
|
260,848
|
416,264
|
—
|
—
|
677,112
|
|||||||||||||||
Net
realized gains
|
266,317
|
—
|
—
|
—
|
266,317
|
|||||||||||||||
Increase
(decrease) in fair value
|
(12,485,682)
|
(5,041,264)
|
(291,700)
|
20,935,365
|
3,116,719
|
|||||||||||||||
Fair
Value at December 31, 2007
|
$
|
410,954,082
|
$
|
31,020,000
|
$
|
4,752,250
|
$
|
58,585,360
|
$
|
505,311,692
|
||||||||||
2008
Activity:
|
||||||||||||||||||||
Purchases
/ originations /draws
|
$
|
71,949,153
|
$
|
28,859,236
|
$
|
212,710
|
$
|
5,478,276
|
$
|
106,499,376
|
||||||||||
Pay-downs
/ pay-offs / sales
|
(71,671,847)
|
—
|
—
|
—
|
(71,671,847)
|
|||||||||||||||
Net
accretion of discount
|
717,195
|
1,456,095
|
—
|
—
|
2,173,290
|
|||||||||||||||
Net
realized losses
|
(575,179)
|
—
|
—
|
—
|
(575,179)
|
|||||||||||||||
Increase
(decrease) in fair value
|
(26,887,293)
|
(4,700,095)
|
(575,129)
|
(7,535,548)
|
(39,698,065)
|
|||||||||||||||
Fair
Value at December 31, 2008
|
$
|
384,486,111
|
$
|
56,635,236
|
$
|
4,389,831
|
$
|
56,528,088
|
$
|
502,039,266
|
Investments at Fair Value
|
||||||||
Security
Type
|
December
31, 2008
|
December
31, 2007
|
||||||
Cash
|
$ | 251,412 | $ | 2,088,770 | ||||
Time
Deposits
|
12,185,997 | 15,674,489 | ||||||
Money
Market Account
|
10 | 20,766 | ||||||
Senior
Secured Loan
|
218,342,528 | 260,138,674 | ||||||
Junior
Secured Loan
|
126,498,918 | 113,259,293 | ||||||
Mezzanine
Investment
|
32,557,165 | 33,066,115 | ||||||
Senior
Subordinated Bond
|
2,287,500 | 2,490,000 | ||||||
Senior
Unsecured Bond
|
4,800,000 | 2,000,000 | ||||||
CLO
Fund Securities
|
56,635,236 | 31,020,000 | ||||||
Equity
Securities
|
4,389,831 | 4,752,250 | ||||||
Affiliate
Asset Managers
|
56,528,088 | 58,585,360 | ||||||
Total
|
$ | 514,476,685 | $ | 523,095,717 |
Payments
Due by Period
|
||||||||||||||||||||||||||||
Contractual
Obligations
|
Total
|
2009
|
2010
|
2011
|
2012
|
2013
|
More
than
5
years
|
|||||||||||||||||||||
Operating
lease obligations
|
$ | 1,244,357 | $ | 309,691 | $ | 304,649 | $ | 311,504 | $ | 318,513 | $ | — | $ | — | ||||||||||||||
Long-term
debt obligations
|
261,691,148 | — | 261,691,148 | — | — | — | — | |||||||||||||||||||||
Unused
lending commitments¹
|
1,640,000 | 1,640,000 | — | — | — | — | — | |||||||||||||||||||||
Total
|
$ | 264,575,505 | $ | 1,949,691 | $ | 261,995,797 | $ | 311,504 | $ | 318,513 | $ | — | $ | — |
Item 7A.
|
Quantitative
and Qualitative Disclosures about Market
Risk
|
Item 8.
|
Financial
Statements and Supplementary
Data
|
Item 9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
Item 9A.
|
Controls
and Procedures
|
•
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of Kohlberg
Capital Corporation;
|
•
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being
made only in accordance with authorizations of Kohlberg Capital
Corporation’s management and directors;
and
|
•
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial
statements.
|
Item 9B.
|
Other
Information
|
Item 10.
|
Directors,
Executive Officers and Corporate
Governance
|
Item 11.
|
Executive
Compensation
|
Item 12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Item 13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
Item 14.
|
Principal
Accountant Fees and Services
|
Item 15.
|
Exhibits
and Financial Statement
Schedules
|
Balance
Sheets as of December 31, 2008 and December 31, 2007
|
F-4
|
|
|
Statements
of Operations for the years ended December 31, 2008, December
31, 2007 and for the period from December 11, 2006 (inception) through
December 31, 2006
|
F-5
|
|
|
Statements
of Changes in Net Assets for the years ended December 31, 2008, December
31, 2007 and for the period from December 11, 2006 (inception) through
December 31, 2006
|
F-6
|
|
|
Statements
of Cash Flows for the years ended December 31, 2008, December 31, 2007 and
for the period from December 11, 2006 (inception) through December 31,
2006
|
F-7
|
|
|
Schedules
of Investments as of December 31, 2008 and December 31,
2007
|
F-8
|
|
|
Financial
Highlights for the years ended December 31, 2008, December 31, 2007 and
for the period from December 11, 2006 (inception) through December 31,
2006
|
F-32
|
|
|
Notes
to Financial Statements
|
F-33
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Form
of Certificate of Incorporation of Kohlberg Capital Corporation (the
“Company”). (1)
|
3.2
|
|
Form
of Bylaws of the Company. (2)
|
4.1
|
|
Specimen
Certificate of the Company’s common stock, par value $0.01 per share.
(1)
|
4.2
|
|
Form
of Registration Rights Agreement. (3)
|
4.3
|
|
Form
of Dividend Reinvestment Plan. (3)
|
10.1
|
|
Form
of the Amended and Restated 2006 Equity Incentive Plan. (9)
|
10.2
|
|
Form
of Company Non-Qualified Stock Option Certificate. (3)
|
10.3
|
|
Form
of Custodian Agreement by and among Kohlberg Capital Corporation and U.S.
Bank National Association. (3)
|
10.4
|
|
Form
of License and Referral Agreement between the Company and Kohlberg &
Company, LLC. (1
)
|
10.5
|
|
Form
of Overhead Allocation Agreement between the Company and Katonah Debt
Advisors, LLC. (3)
|
10.6
|
|
Form
of Employment Agreement between the Company and Dayl W. Pearson. (3)
|
10.7
|
|
Form
of Employment Agreement between the Company and Michael I. Wirth. (3)
|
10.8
|
|
Form
of Employment Agreement between the Company and R. Jon Corless. (3)
|
10.9
|
|
Form
of Employment Agreement between the Company and E.A. Kratzman.
(3)
|
10.10
|
|
Form
of Employment Agreement between Katonah Debt Advisors and E.A.
Kratzman.
(3)
|
10.11
|
|
Form
of Indemnification Agreement for Officers and Directors of the Company.
(4)
|
Exhibit
Number
|
|
Description
|
10.12
|
|
Execution
Copy of Loan Funding and Servicing Agreement dated as of February 14,
2007, by and among Kohlberg Capital Funding LLC I, Kohlberg Capital
Corporation, each of the conduit lenders and institutional lenders from
time to time party thereto, each of the lender agents from time to time
party thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial
Services, Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup
Services, and U.S. Bank National Association, as Trustee. (5)
|
10.13
|
|
Execution
Copy of First Amendment to Loan Funding and Servicing Agreement, dated as
of May 30, 2007, by and among Kohlberg Capital Funding LLC I, the Company,
each of the conduit lenders and institutional lenders from time to time
party thereto, each of the lender agents from time to time party thereto,
BMO Capital Markets Corp., as the Agent, Lyon Financial Services, Inc.
(d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and U.S.
Bank National Association, as Trustee. (6)
|
10.14
|
|
Execution
Copy of Second Amendment to Loan Funding and Servicing Agreement, dated as
of October 1, 2007, by and among Kohlberg Capital Funding LLC I, the
Company, each of the conduit lenders and institutional lenders from time
to time party thereto, each of the lender agents from time to time party
thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial Services,
Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and
U.S. Bank National Association, as Trustee. (6)
|
10.15
|
|
Execution
Copy of Third Amendment to Loan Funding and Servicing Agreement, dated as
of November 21, 2007, by and among Kohlberg Capital Funding LLC I, the
Company, each of the conduit lenders and institutional lenders from time
to time party thereto, each of the lender agents from time to time party
thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial Services,
Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and
U.S. Bank National Association, as Trustee.
(8)
|
10.16
|
|
Execution
Copy of Purchase and Sale Agreement dated as of February 14, 2007, by and
among Kohlberg Capital Funding LLC I and the Company. (7)
|
10.17
|
|
Form
of 2008 Non-Employee Director Plan. (10)
|
21.1
|
|
List
of Subsidiaries.
|
23.1
|
|
Consent
of Deloitte & Touche LLP, Independent Registered Public Accounting
Firm.
|
31.1
|
|
Chief
Executive Officer Certification Pursuant to Rule 13a-14 of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Chief
Financial Officer Certification Pursuant to Rule 13a-14 of the Securities
Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
32.1
|
|
Chief
Executive Officer Certification pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Chief
Financial Officer Certification pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
(1)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on October 6, 2006 (File
No. 333-136714).
|
(2)
|
Incorporated
by reference to the exhibit included on Form N-2, as filed on
March 16, 2007 (File
No. 333-141382).
|
(3)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 2
on Form N-2, as filed on November 20, 2006 (File
No. 333-136714).
|
(4)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 3
on Form N-2, as filed on November 24, 2006 (File
No. 333-136714).
|
(5)
|
Incorporated
by reference to Exhibit 10.15 of the Annual Report on Form 10-K, as filed
on March 29, 2007 (File
No. 814-00735).
|
(6)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on October 18, 2007 (File
No. 333-146190).
|
(7)
|
Incorporated
by reference to Exhibit 10.2 of the Current Report on Form 8-K, as filed
on February 16, 2007 (File
No. 814-00735).
|
(8)
|
Incorporated
by reference to Exhibit 10.15 of the Annual Report on Form 10-K, as filed
on March 14, 2008 (File
No. 814-00735).
|
(9)
|
Incorporated
by reference to Exhibit 10.1 of the Current Report on Form 8-K, as filed
on June 19, 2008 (File No.
814-00735).
|
(10)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on June 30, 2008 (File
No. 333-151268).
|
K
OHLBERG C APITAL C ORPORATION
|
|||
Date:
March 16, 2009
|
By
|
/s/ Dayl
W. Pearson
|
|
Dayl W.
Pearson
President
and Chief Executive
Officer
|
Signature
|
Title
|
Date
|
||
/ S
/ Dayl W.
Pearson
|
President and Chief Executive Officer
|
March 16,
2009
|
||
Dayl
W. Pearson
|
(principal
executive officer) and Member
of
the Board of Directors
|
|||
/ S
/ Michael
I. Wirth
|
Chief Financial Officer,
|
March 16,
2009
|
||
Michael
I. Wirth
|
Chief Compliance
Officer, Secretary
and
Treasurer (principal financial and
accounting
officer)
|
|||
/ S
/ Christopher
Lacovara
|
Member of the Board of
Directors
|
March 16,
2009
|
||
Christopher
Lacovara
|
||||
/ S
/ Samuel
P. Frieder
|
Member of the Board of
Directors
|
March 16,
2009
|
||
Samuel
P. Frieder
|
||||
/ S
/ Gary
Cademartori
|
Member of the Board of
Directors
|
March 16,
2009
|
||
Gary
Cademartori
|
||||
/ S
/ C.
Michael Jacobi
|
Member of the Board of
Directors
|
March 16,
2009
|
||
C.
Michael Jacobi
|
||||
/ S
/ Albert
G. Pastino
|
Member of the Board of
Directors
|
March 16,
2009
|
||
Albert
G. Pastino
|
||||
/ S
/ C.
Turney Stevens, Jr.
|
Member of the Board of
Directors
|
March 16,
2009
|
||
C.
Turney Stevens, Jr.
|
Reports
of Independent Registered Public Accounting Firm
|
F-2
|
|
Balance
Sheets as of December 31, 2008 and December 31, 2007
|
F-4
|
|
|
||
Statements
of Operations for the years ended December 31, 2008, December
31, 2007 and for the period from December 11, 2006 (inception) through
December 31, 2006
|
F-5
|
|
|
||
Statements
of Changes in Net Assets for the years ended December 31, 2008, December
31, 2007 and for the period from December 11, 2006 (inception) through
December 31, 2006
|
F-6
|
|
|
||
Statements
of Cash Flows for the years ended December 31, 2008, December 31, 2007 and
for the period from December 11, 2006 (inception) through December 31,
2006
|
F-7
|
|
Schedules
of Investments as of December 31, 2008 and December 31,
2007
|
F-8
|
|
|
||
Financial
Highlights for the years ended December 31, 2008, December 31, 2007 and
for the period from December 11, 2006 (inception) through December 31,
2006
|
F-32
|
|
|
||
Notes
to Financial Statements
|
F-33
|
KOHLBERG
CAPITAL CORPORATION
|
BALANCE
SHEETS
|
As
of
December
31, 2008
|
As
of
December
31, 2007
|
|||||||
|
|
|||||||
ASSETS
|
||||||||
Investments
at fair value:
|
||||||||
Time
deposits (cost: 2008 - $12,185,997; 2007 - $15,674,489)
|
$ | 12,185,997 | $ | 15,674,489 | ||||
Money
market account (cost: 2008 - $10; 2007 - $20,766)
|
10 | 20,766 | ||||||
Debt
securities (cost: 2008 - $423,859,086; 2007 -
$423,439,764)
|
384,486,111 | 410,954,082 | ||||||
CLO
fund securities managed by non-affiliates (cost: 2008 - $15,590,951; 2007
- $15,385,580)
|
9,099,000 | 9,900,000 | ||||||
CLO
fund securities managed by affiliate (cost: 2008 - $50,785,644; 2007 -
$20,675,684)
|
47,536,236 | 21,120,000 | ||||||
Equity
securities (cost: 2008 - $5,256,660; 2007 - $5,043,950)
|
4,389,831 | 4,752,250 | ||||||
Asset
manager affiliates (cost: 2008 - $38,948,271; 2007 -
$33,469,995)
|
56,528,088 | 58,585,360 | ||||||
Total
Investments at fair value
|
514,225,273 | 521,006,947 | ||||||
Cash
|
251,412 | 2,088,770 | ||||||
Restricted
cash
|
2,119,991 | 1,418,868 | ||||||
Interest
and dividends receivable
|
4,168,599 | 5,592,637 | ||||||
Due
from affiliates
|
390,590 | 540,773 | ||||||
Other
assets
|
1,716,446 | 2,493,964 | ||||||
Total
assets
|
$ | 522,872,311 | $ | 533,141,959 | ||||
LIABILITIES
|
||||||||
Borrowings
|
$ | 261,691,148 | $ | 255,000,000 | ||||
Payable
for open trades
|
1,955,000 | 5,905,000 | ||||||
Accounts
payable and accrued expenses
|
3,064,403 | 6,141,892 | ||||||
Dividend
payable
|
5,879,660 | 7,026,903 | ||||||
Total
liabilities
|
$ | 272,590,211 | $ | 274,073,795 | ||||
Commitments
and contingencies (note 8)
|
||||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
stock, par value $.01 per share, 100,000,000 common shares authorized;
21,776,519 and 21,436,936 common shares issued and outstanding at December
31, 2008 and 18,017,699 issued and outstanding at December 31,
2007
|
$ | 214,369 | $ | 180,177 | ||||
Capital
in excess of par value
|
282,171,860 | 252,771,715 | ||||||
Accumulated
undistributed (distribution in excess of) net investment
income
|
977,904 | (1,180,447 | ) | |||||
Accumulated
net realized losses
|
(680,687 | ) | - | |||||
Net
unrealized appreciation (depreciation) on investments
|
(32,401,346 | ) | 7,296,719 | |||||
Total
stockholders' equity
|
$ | 250,282,100 | $ | 259,068,164 | ||||
Total
liabilities and stockholders' equity
|
$ | 522,872,311 | $ | 533,141,959 | ||||
NET
ASSET VALUE PER SHARE
|
$ | 11.68 | $ | 14.38 |
KOHLBERG
CAPITAL CORPORATION
|
STATEMENTS
OF OPERATIONS
|
For
the Period
December
11, 2006
|
||||||||||||
For
the Year Ended
|
For
the Year Ended
|
(inception)
through
|
||||||||||
December
31, 2008
|
December
31, 2007
|
December
31, 2006
|
||||||||||
Investment
Income:
|
||||||||||||
Interest
from investments in debt securities
|
$ | 33,386,213 | $ | 29,606,231 | $ | 572,065 | ||||||
Interest
from cash and time deposits
|
251,287 | 552,509 | 132,841 | |||||||||
Dividends
from investments in CLO fund securities managed by
non-affiliates
|
5,946,736 | 4,528,021 | 377,503 | |||||||||
Dividends
from investments in CLO fund securities managed by
affiliate
|
6,624,742 | 2,532,952 | 27,700 | |||||||||
Dividends
from affiliate asset manager
|
1,350,000 | 500,000 | — | |||||||||
Capital
structuring service fees
|
1,653,232 | 759,301 | 41,794 | |||||||||
Total
investment income
|
49,212,210 | 38,479,014 | 1,151,903 | |||||||||
Expenses:
|
||||||||||||
Interest
and amortization of debt issuance costs
|
10,925,624 | 7,229,597 | — | |||||||||
Compensation
|
3,940,638 | 4,104,761 | 175,186 | |||||||||
Professional
fees
|
1,992,142 | 2,887,515 | 371,624 | |||||||||
Insurance
|
286,456 | 174,647 | 12,821 | |||||||||
Organizational
Expenses
|
— | — | 40,000 | |||||||||
Administrative
and other
|
1,361,433 | 1,323,545 | 41,647 | |||||||||
Total
expenses
|
18,506,293 | 15,720,065 | 641,278 | |||||||||
Net
Investment Income before Income Tax Expense
|
30,705,917 | 22,758,949 | 510,625 | |||||||||
Excise
taxes
|
— | — | (21,162 | ) | ||||||||
Net
Investment Income
|
30,705,917 | 22,758,949 | 489,463 | |||||||||
Realized
And Unrealized Gains (Losses) On Investments:
|
||||||||||||
Net
realized gain (loss) from investment transactions
|
(575,179 | ) | 266,317 | 1,077 | ||||||||
Net
change in unrealized appreciation (depreciation) on:
|
||||||||||||
Debt
securities
|
(26,887,293 | ) | (12,485,682 | ) | — | |||||||
Equity
securities
|
(575,129 | ) | (291,700 | ) | — | |||||||
CLO
fund securities managed by affiliate
|
(3,693,724 | ) | 444,316 | — | ||||||||
CLO
fund securities managed by non-affiliates
|
(1,006,371 | ) | (5,485,580 | ) | — | |||||||
Affiliate
asset manager investments
|
(7,535,548 | ) | 20,935,365 | 4,180,000 | ||||||||
Net
realized and unrealized appreciation (depreciation) on
investments
|
(40,273,244 | ) | 3,383,036 | 4,181,077 | ||||||||
Net
Increase (Decrease) In Stockholders’ Equity Resulting From
Operations
|
$ | (9,567,327 | ) | $ | 26,141,985 | $ | 4,670,540 | |||||
Net
Increase (Decrease) in Stockholders' Equity Resulting from Operations per
Common Share—Basic and Diluted
|
$ | (0.47 | ) | $ | 1.45 | $ | 0.26 | |||||
Net
Investment Income Per Common Share—Basic
|
$ | 1.51 | $ | 1.27 | $ | 0.03 | ||||||
Net
Investment Income Per Common Share—Diluted
|
$ | 1.50 | $ | 1.27 | $ | 0.03 | ||||||
Net
Investment Income and Net Realized Gains (Losses) Per Common
Share—Basic
|
$ | 1.49 | $ | 1.28 | $ | 0.03 | ||||||
Net
Investment Income and Net Realized Gains (Losses) Per Common
Share—Diluted
|
$ | 1.47 | $ | 1.28 | $ | 0.03 | ||||||
Weighted
Average Shares of Common Stock Outstanding—Basic
|
20,276,430 | 17,977,348 | 17,946,333 | |||||||||
Weighted
Average Shares of Common Stock Outstanding—Diluted
|
20,455,322 | 17,977,348 | 17,946,333 |
See
accompanying notes to financial statements.
|
KOHLBERG
CAPITAL CORPORATION
|
STATEMENTS
OF CHANGES IN NET ASSETS
|
|
Year
Ended
December
31, 2008
|
Year
Ended
December
31, 2007
|
For
the Period
December
11, 2006
(inception)
through
December
31, 2006
|
|||||||||
Operations:
|
||||||||||||
Net
investment income
|
$ | 30,705,917 | $ | 22,758,949 | $ | 489,463 | ||||||
Net
realized gain (loss) from investment transactions
|
(575,179 | ) | 266,317 | 1,077 | ||||||||
Net
change in unrealized gain (loss) on investments
|
(39,698,065 | ) | 3,116,719 | 4,180,000 | ||||||||
Net
increase (decrease) in net assets resulting from
operations
|
(9,567,327 | ) | 26,141,985 | 4,670,540 | ||||||||
Shareholder
distributions:
|
||||||||||||
Dividends
from net investment income to common stockholders
|
(29,377,019 | ) | (22,758,949 | ) | — | |||||||
Dividends
from net investment income to restricted stockholders
|
(246,626 | ) | — | — | ||||||||
Dividends
in excess of net investment income to common stockholders
|
— | (1,669,909 | ) | — | ||||||||
Distributions
from paid-in capital to common stockholders
|
— | (481,437 | ) | — | ||||||||
Distributions
from realized gains to common stockholders
|
— | (267,394 | ) | — | ||||||||
Net
decrease in net assets resulting from stockholder
distributions
|
(29,623,645 | ) | (25,177,689 | ) | — | |||||||
Capital
share transactions:
|
||||||||||||
Issuance
of common stock for:
|
||||||||||||
Initial
public offering
|
— | — | 199,451,388 | |||||||||
Interest
in affiliate company
|
— | — | 33,394,995 | |||||||||
Interest
in CLO securities managed by affiliate
|
— | — | 18,870,000 | |||||||||
Dividend
reinvestment plan
|
2,591,296 | 1,103,245 | — | |||||||||
Rights
offering
|
26,925,214 | — | — | |||||||||
Vesting
of restricted stock
|
30 | — | — | |||||||||
Stock
based compensation
|
888,368 | 600,200 | 13,500 | |||||||||
Net
increase in net assets resulting from capital share
transactions
|
30,404,908 | 1,703,445 | 251,729,883 | |||||||||
Net
assets at beginning of period
|
259,068,164 | 256,400,423 | — | |||||||||
Net
assets at end of period (including accumulated undistributed net
investment income of $977,904 in 2008, accumulated distribution in excess
of net investment income of $1,180,447 in 2007, and accumulated
undistributed net investment income of $489,463 in 2006)
|
$ | 250,282,100 | $ | 259,068,164 | $ | 256,400,423 | ||||||
Net
asset value per common share
|
$ | 11.68 | $ | 14.38 | $ | 14.29 | ||||||
Common
shares outstanding at end of period
|
21,436,936 | 18,017,699 | 17,946,333 |
See
accompanying notes to financial
statements.
|
KOHLBERG
CAPITAL CORPORATION
|
STATEMENTS
OF CASH FLOWS
|
Year
Ended
|
Year
Ended
|
For
the Period
December
11, 2006
(inception)
through
|
||||||||||
December
31, 2008
|
December
31, 2007
|
December
31, 2006
|
||||||||||
OPERATING
ACTIVITIES:
|
||||||||||||
Net
increase (decrease) in stockholders’ equity resulting from
operations
|
$ | (9,567,327 | ) | $ | 26,141,985 | $ | 4,670,540 | |||||
Adjustments
to reconcile net increase (decrease) in stockholders’ equity resulting
from operations:
|
||||||||||||
Net
realized loss (gain) on investment transactions
|
575,179 | (266,317 | ) | (1,077 | ) | |||||||
Net
unrealized loss (gain) on investments
|
39,698,065 | (3,116,719 | ) | (4,180,000 | ) | |||||||
Net
accretion of discount on securities
|
(2,173,289 | ) | (677,112 | ) | (3,819 | ) | ||||||
Amortization
of debt issuance cost
|
522,015 | 319,093 | — | |||||||||
Purchases
of investments
|
(108,769,127 | ) | (360,579,378 | ) | (200,987,595 | ) | ||||||
Payment-in-kind
interest
|
(1,680,247 | ) | (502,482 | ) | — | |||||||
Proceeds
from sale and redemption of investments
|
75,181,094 | 106,944,232 | 533,315 | |||||||||
Stock
based compensation expense
|
888,368 | 600,200 | 13,500 | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Decrease
(increase) in interest and dividends receivable
|
1,424,038 | (4,990,552 | ) | (602,085 | ) | |||||||
Decrease
(increase) in other assets
|
255,502 | (371,842 | ) | (156,890 | ) | |||||||
Decrease
(increase) in due from affiliates
|
150,183 | (540,773 | ) | — | ||||||||
Increase
(decrease) in due to affiliates
|
— | (87,832 | ) | 87,832 | ||||||||
Increase
(decrease) in accounts payable and accrued expenses
|
(3,077,489 | ) | 4,437,344 | 1,704,548 | ||||||||
Net
cash used in operating activities
|
(6,573,035 | ) | (232,690,153 | ) | (198,921,731 | ) | ||||||
FINANCING
ACTIVITIES:
|
||||||||||||
Issuance
of stock (net of offering costs)
|
26,925,244 | — | 199,451,388 | |||||||||
Dividends
paid in cash
|
(28,179,592 | ) | (17,047,541 | ) | — | |||||||
Proceeds
from issuance of debt (net of offering costs)
|
50,000,000 | 255,000,000 | — | |||||||||
Cash
paid on repayment of debt
|
(43,308,852 | ) | — | — | ||||||||
Debt
issuance costs
|
— | (2,284,325 | ) | — | ||||||||
Increase
in restricted cash
|
(701,123 | ) | (1,418,868 | ) | — | |||||||
Net
cash provided by financing activities
|
4,735,677 | 234,249,266 | 199,451,388 | |||||||||
CHANGE
IN CASH
|
(1,837,358 | ) | 1,559,113 | 529,657 | ||||||||
CASH,
BEGINNING OF PERIOD
|
2,088,770 | 529,657 | — | |||||||||
CASH,
END OF PERIOD
|
$ | 251,412 | $ | 2,088,770 | $ | 529,657 | ||||||
Supplemental
Information:
|
||||||||||||
Interest
paid during the period
|
$ | 10,984,993 | $ | 5,474,198 | $ | — | ||||||
Non-cash
dividends paid during the period under dividend reinvestment
plan
|
$ | 2,591,296 | $ | 1,103,245 | $ | — | ||||||
Issuance
of common stock for affiliate investment
|
$ | — | $ | — | $ | 33,394,995 | ||||||
Issuance
of common stock for CLO equity investments managed by
affiliate
|
$ | — | $ | — | $ | 18,870,000 | ||||||
Non-cash
settlement of warehoused loans
|
$ | — | $ | 13,293,674 | $ | — | ||||||
See
accompanying notes to financial
statements.
|
Portfolio Company / Principal
Business
|
Investment
Interest
Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Advanced
Lighting Technologies, Inc.6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Deferred Draw Term Loan (First Lien)
6.6%,
Due 6/13
|
$ | 356,819 | $ | 356,819 | $ | 356,819 | |||||||
Advanced
Lighting Technologies, Inc.
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Revolving Loan
3.9%,
Due 6/13
|
960,000 | 952,585 | 960,000 | ||||||||||
Advanced
Lighting Technologies, Inc.6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Junior
Secured Loan — Second Lien Term Loan Note
8.5%,
Due 6/14
|
5,000,000 | 5,000,000 | 5,000,000 | ||||||||||
Advanced
Lighting Technologies, Inc.6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Term Loan (First Lien)
4.6%,
Due 6/13
|
1,834,277 | 1,834,277 | 1,834,277 | ||||||||||
Aero
Products International, Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Term Loan
7.0%,
Due 4/12
|
3,118,560 | 3,118,560 | 3,118,560 | ||||||||||
Aerostructures
Acquisition LLC6
Aerospace
and Defense
|
Senior
Secured Loan — Delayed Draw Term Loan
7.5%,
Due 3/13
|
429,397 | 429,397 | 429,397 | ||||||||||
Aerostructures
Acquisition LLC6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
7.5%,
Due 3/13
|
5,436,949 | 5,436,949 | 5,436,949 | ||||||||||
AGA
Medical Corporation6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Tranche B Term Loan
4.2%,
Due 4/13
|
3,832,209 | 3,829,883 | 3,458,569 | ||||||||||
AGS
LLC6
Hotels,
Motels, Inns, and Gaming
|
Senior
Secured Loan — Delayed Draw Term Loan
3.5%,
Due 5/13
|
442,044 | 436,817 | 419,942 | ||||||||||
AGS
LLC6
Hotels,
Motels, Inns, and Gaming
|
Senior
Secured Loan — Initial Term Loan
3.5%,
Due 5/13
|
3,159,324 | 3,121,965 | 3,001,357 | ||||||||||
AmerCable
Incorporated6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Senior
Secured Loan — Initial Term Loan
5.0%,
Due 6/14
|
5,900,113 | 5,900,113 | 5,900,113 | ||||||||||
Astoria
Generating Company Acquisitions, L.L.C.6
Utilities
|
Junior
Secured Loan — Term C
4.2%,
Due 8/13
|
4,000,000 | 4,040,652 | 3,613,340 |
Portfolio Company / Principal
Business
|
Investment
Interest
Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Atlantic
Marine Holding Company6
Cargo
Transport
|
Senior
Secured Loan — Term Loan
6.5%,
Due 3/14
|
$ | 1,721,939 | $ | 1,731,184 | $ | 1,721,939 | |||||||
Aurora
Diagnostics, LLC6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Tranche A Term Loan (First Lien)
6.7%,
Due 12/12
|
4,265,636 | 4,231,984 | 4,265,636 | ||||||||||
Awesome
Acquisition Company (CiCi's Pizza)6
Personal,
Food and Miscellaneous Services
|
Junior
Secured Loan — Term Loan (Second Lien)
6.5%,
Due 6/14
|
4,000,000 | 3,977,593 | 3,820,000 | ||||||||||
AZ
Chem US Inc.
Chemicals,
Plastics and Rubber
|
Junior
Secured Loan — Second Lien Term Loan
6.0%,
Due 2/14
|
3,300,000 | 2,649,436 | 2,640,000 | ||||||||||
AZ
Chem US Inc.6
Chemicals,
Plastics and Rubber
|
Junior
Secured Loan — Second Lien Term Loan
6.0%,
Due 2/14
|
4,000,000 | 3,963,645 | 3,200,000 | ||||||||||
Bankruptcy
Management Solutions, Inc.6
Diversified/Conglomerate
Service
|
Junior
Secured Loan — Loan (Second Lien)
8.1%,
Due 7/13
|
2,443,750 | 2,473,717 | 1,906,125 | ||||||||||
Bankruptcy
Management Solutions, Inc.6
Diversified/Conglomerate
Service
|
Senior
Secured Loan — Term Loan (First Lien)
4.5%,
Due 7/12
|
1,955,000 | 1,964,334 | 1,803,488 | ||||||||||
Bicent
Power LLC6
Utilities
|
Junior
Secured Loan — Advance (Second Lien)
5.5%,
Due 12/14
|
4,000,000 | 4,000,000 | 3,730,000 | ||||||||||
BP
Metals, LLC6
Mining,
Steel, Iron and Non-Precious Metals
|
Senior
Secured Loan — Term Loan
10.1%,
Due 6/13
|
4,937,500 | 4,937,500 | 4,937,500 | ||||||||||
Broadlane,
Inc.6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan
8.5%,
Due 8/13
|
4,987,500 | 4,918,231 | 4,987,500 | ||||||||||
Caribe
Information Investments Incorporated6
Printing
and Publishing
|
Senior
Secured Loan — Term Loan
3.4%,
Due 3/13
|
1,694,554 | 1,688,542 | 1,364,116 | ||||||||||
Cast
& Crew Payroll, LLC (Payroll Acquisition)6
Leisure,
Amusement, Motion Pictures, Entertainment
|
Senior
Secured Loan — Initial Term Loan
4.4%,
Due 9/12
|
9,208,100 | 9,234,910 | 9,208,100 | ||||||||||
CEI
Holdings, Inc. (Cosmetic Essence)6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Term Loan
6.3%,
Due 3/14
|
1,469,323 | 1,403,698 | 1,322,391 | ||||||||||
Centaur,
LLC6
Hotels,
Motels, Inns, and Gaming
|
Senior
Secured Loan — Term Loan (First Lien)
9.3%,
Due 10/12
|
2,792,043 | 2,763,495 | 2,652,440 |
Portfolio Company / Principal
Business
|
Investment
Interest
Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Charlie
Acquisition Corp.
Personal,
Food and Miscellaneous Services
|
Mezzanine
Investment — Senior Subordinated Notes
15.5%,
Due 6/13
|
$ | 10,893,401 | $ | 10,744,496 | $ | 7,625,381 | |||||||
Clarke
American Corp.6
Printing
and Publishing
|
Senior
Secured Loan — Tranche B Term Loan
4.2%,
Due 6/14
|
2,955,000 | 2,955,000 | 2,296,035 | ||||||||||
CoActive
Technologies, Inc.6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Senior
Secured Loan — Term Loan (First Lien)
4.5%,
Due 7/14
|
3,960,000 | 3,944,053 | 3,960,000 | ||||||||||
CoActive
Technologies, Inc.6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Term Loan (Second Lien)
8.2%,
Due 1/15
|
2,000,000 | 1,966,739 | 2,000,000 | ||||||||||
Coastal
Concrete Southeast, LLC
Buildings
and Real Estate4
|
Mezzanine
Investment — Mezzanine Term Loan
10.0%,
Due 3/13
|
8,886,903 | 8,557,108 | 6,931,785 | ||||||||||
Cooper-Standard
Automotive Inc6
Automobile
|
Senior
Unsecured Bond —
8.4%,
Due 12/14
|
4,000,000 | 3,259,487 | 2,800,000 | ||||||||||
DaimlerChrysler
Financial Services Americas LLC6
Finance
|
Senior
Secured Loan — Term Loan (First Lien)
6.0%,
Due 8/12
|
3,959,925 | 3,723,431 | 2,771,947 | ||||||||||
Dealer
Computer Services, Inc. (Reynolds & Reynolds)6
Electronics
|
Junior
Secured Loan — Term Loan (Second Lien)
6.0%,
Due 10/13
|
1,000,000 | 1,007,900 | 990,000 | ||||||||||
Dealer
Computer Services, Inc. (Reynolds & Reynolds)6
Electronics
|
Junior
Secured Loan — Term Loan (Third Lien)
8.0%,
Due 4/14
|
7,700,000 | 7,501,237 | 6,747,125 | ||||||||||
Delta
Educational Systems, Inc.6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan
7.5%,
Due 6/12
|
2,748,162 | 2,748,162 | 2,748,162 | ||||||||||
Dex
Media West LLC
Printing
and Publishing
|
Senior
Secured Loan — Tranche B Term Loan
7.1%,
Due 10/14
|
7,000,000 | 6,309,065 | 6,289,990 | ||||||||||
Dresser,
Inc.6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Term Loan (Second Lien)
8.0%,
Due 5/15
|
3,000,000 | 2,964,626 | 2,830,005 | ||||||||||
DRI
Holdings, Inc.6
Healthcare,
Education and Childcare
|
Junior
Secured Loan — US Term Loan (Second Lien)
10.1%,
Due 7/15
|
6,000,000 | 5,411,785 | 6,000,000 | ||||||||||
Edgestone
CD Acquisition Corp. (Custom Direct)6
Printing
and Publishing
|
Junior
Secured Loan — Loan (Second Lien)
7.5%,
Due 12/14
|
5,000,000 | 5,000,000 | 4,850,000 |
Portfolio Company / Principal
Business
|
Investment
Interest
Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Edgestone
CD Acquisition Corp. (Custom Direct)6
Printing
and Publishing
|
Senior
Secured Loan — Term Loan (First Lien)
4.2%,
Due 12/13
|
$ | 4,455,857 | $ | 4,460,205 | $ | 3,965,713 | |||||||
eInstruction
Corporation6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Initial Term Loan
5.8%,
Due 7/13
|
4,781,365 | 4,781,365 | 4,781,365 | ||||||||||
eInstruction
Corporation6
Healthcare,
Education and Childcare
|
Junior
Secured Loan — Term Loan (Second Lien)
9.3%,
Due 7/14
|
10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Emerson
Reinsurance Ltd.3
Insurance
|
Senior
Secured Loan — Series C Loan
7.3%,
Due 12/11
|
1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Endeavor
Energy Resources, L.P.6
Oil
and Gas
|
Junior
Secured Loan — Initial Loan (Second Lien)
6.3%,
Due 4/12
|
4,000,000 | 4,000,000 | 4,000,000 | ||||||||||
Fasteners
For Retail, Inc.6
Diversified/Conglomerate
Manufacturing
|
Senior
Secured Loan — Term Loan
6.6%,
Due 12/12
|
4,320,878 | 4,327,124 | 4,277,670 | ||||||||||
FD
Alpha Acquisition LLC (Fort Dearborn)6
Printing
and Publishing
|
Senior
Secured Loan — US Term Loan
6.3%,
Due 11/12
|
1,740,026 | 1,624,251 | 1,713,926 | ||||||||||
First
American Payment Systems, L.P.6
Finance
|
Senior
Secured Loan — Term Loan
4.3%,
Due 10/13
|
3,398,000 | 3,398,000 | 3,398,000 | ||||||||||
First
Data Corporation
Finance
|
Senior
Secured Loan — Initial Tranche B-2 Term Loan
3.2%,
Due 9/14
|
4,974,811 | 4,534,131 | 4,520,860 | ||||||||||
Flatiron
Re Ltd.3,
6
Insurance
|
Senior
Secured Loan — Closing Date Term Loan
5.7%,
Due 12/10
|
96,855 | 97,333 | 96,855 | ||||||||||
Flatiron
Re Ltd.3,
6
Insurance
|
Senior
Secured Loan — Delayed Draw Term Loan
5.7%,
Due 12/10
|
46,914 | 47,146 | 46,914 | ||||||||||
Ford
Motor Company6
Automobile
|
Senior
Secured Loan — Term Loan
5.0%,
Due 12/13
|
1,969,849 | 1,967,877 | 1,378,894 | ||||||||||
Freescale
Semiconductor, Inc.
Electronics
|
Senior
Subordinated Bond —
10.3%,
Due 12/16
|
3,000,000 | 3,008,197 | 2,287,500 | ||||||||||
Frontier
Drilling USA, Inc.6
Oil
and Gas
|
Senior
Secured Loan — Term B Advance
9.3%,
Due 6/13
|
2,000,000 | 1,998,263 | 1,940,000 |
Portfolio Company / Principal
Business
|
Investment
Interest
Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Getty
Images, Inc.
Printing
and Publishing
|
Senior
Secured Loan — Initial Term Loan
8.1%,
Due 7/15
|
$ | 2,981,250 | $ | 2,981,250 | $ | 2,712,938 | |||||||
Ginn
LA Conduit Lender, Inc.10
Buildings
and Real Estate4
|
Senior
Secured Loan — First Lien Tranche A Credit-Linked Deposit
7.8%,
Due 6/11
|
1,257,143 | 1,224,101 | 150,857 | ||||||||||
Ginn
LA Conduit Lender, Inc.10
Buildings
and Real Estate4
|
Senior
Secured Loan — First Lien Tranche B Term Loan
7.8%,
Due 6/11
|
2,694,857 | 2,624,028 | 323,383 | ||||||||||
Ginn
LA Conduit Lender, Inc.10
Buildings
and Real Estate4
|
Junior
Secured Loan — Loan (Second Lien)
11.8%,
Due 6/12
|
3,000,000 | 2,715,997 | 90,000 | ||||||||||
Gleason
Works, The6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Senior
Secured Loan — New US Term Loan
4.9%,
Due 6/13
|
2,437,280 | 2,443,443 | 2,205,739 | ||||||||||
Hawkeye
Renewables, LLC6
Farming
and Agriculture
|
Senior
Secured Loan — Term Loan (First Lien)
7.3%,
Due 6/12
|
2,908,544 | 2,856,515 | 1,250,674 | ||||||||||
HMSC
Corporation (aka Swett and Crawford)6
Insurance
|
Junior
Secured Loan — Loan (Second Lien)
6.0%,
Due 10/14
|
5,000,000 | 4,831,923 | 4,550,000 | ||||||||||
Huish
Detergents Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Junior
Secured Loan — Loan (Second Lien)
4.7%,
Due 10/14
|
1,000,000 | 1,000,000 | 765,000 | ||||||||||
Hunter
Fan Company6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Initial Term Loan (First Lien)
4.7%,
Due 4/14
|
3,723,929 | 3,577,920 | 3,165,339 | ||||||||||
Hunter
Fan Company6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Junior
Secured Loan — Loan (Second Lien)
7.6%,
Due 10/14
|
3,000,000 | 3,000,000 | 2,347,500 | ||||||||||
Infiltrator
Systems, Inc.6
Ecological
|
Senior
Secured Loan — Term Loan
7.3%,
Due 9/12
|
2,727,813 | 2,721,193 | 2,727,813 | ||||||||||
Inmar,
Inc.6
Retail
Stores
|
Senior
Secured Loan — Term Loan
2.7%,
Due 4/13
|
3,755,829 | 3,755,829 | 3,755,829 | ||||||||||
International
Aluminum Corporation (IAL Acquisition Co.)6
Mining,
Steel, Iron and Non-Precious Metals
|
Senior
Secured Loan — Term Loan
4.8%,
Due 3/13
|
3,001,367 | 3,001,367 | 3,001,367 | ||||||||||
Intrapac
Corporation/Corona Holdco6
Containers,
Packaging and Glass
|
Senior
Secured Loan — First Lien Term Loan
6.9%,
Due 5/12
|
4,316,295 | 4,329,467 | 4,316,295 |
Portfolio Company / Principal
Business
|
Investment
Interest
Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Intrapac
Corporation/Corona Holdco6
Containers,
Packaging and Glass
|
Junior
Secured Loan — Term Loans (Second Lien)
10.9%,
Due 5/13
|
$ | 3,000,000 | $ | 3,017,825 | $ | 3,000,000 | |||||||
Jones
Stephens Corp.6
Buildings
and Real Estate4
|
Senior
Secured Loan — Term Loan
5.2%,
Due 9/12
|
10,090,295 | 10,068,492 | 10,090,295 | ||||||||||
JW
Aluminum Company6
Mining,
Steel, Iron and Non-Precious Metals
|
Junior
Secured Loan — Term Loan (Second Lien)
7.2%,
Due 12/13
|
5,371,429 | 5,387,168 | 3,222,857 | ||||||||||
Kepler
Holdings Limited3,
6
Insurance
|
Senior
Secured Loan — Loan
7.0%,
Due 6/09
|
5,000,000 | 5,006,639 | 5,000,000 | ||||||||||
KIK
Custom Products Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Junior
Secured Loan — Loan (Second Lien)
8.5%,
Due 12/14
|
5,000,000 | 5,000,000 | 3,400,000 | ||||||||||
La
Paloma Generating Company, LLC6
Utilities
|
Junior
Secured Loan — Loan (Second Lien)
5.0%,
Due 8/13
|
2,000,000 | 2,014,136 | 2,000,000 | ||||||||||
LBREP/L-Suncal
Master I LLC6,
10
Buildings
and Real Estate4
|
Senior
Secured Loan — Term Loan (First Lien)
5.5%,
Due 1/10
|
3,875,156 | 3,835,789 | 290,637 | ||||||||||
LBREP/L-Suncal
Master I LLC6,
10
Buildings
and Real Estate4
|
Junior
Secured Loan — Term Loan (Second Lien)
9.5%,
Due 1/11
|
2,000,000 | 1,920,211 | 7,500 | ||||||||||
LBREP/L-Suncal
Master I LLC10
Buildings
and Real Estate4
|
Junior
Secured Loan — Term Loan (Third Lien)
11.3%,
Due 2/12
|
2,332,868 | 2,332,868 | 1,000 | ||||||||||
Lear
Corporation
Automobile
|
Senior
Secured Loan — Term Loan
3.7%,
Due 4/12
|
1,993,927 | 1,709,640 | 1,694,838 | ||||||||||
Legacy
Cabinets, Inc.6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Term Loan
5.8%,
Due 8/12
|
2,269,824 | 2,269,824 | 2,269,824 | ||||||||||
Levlad,
LLC & Arbonne International, LLC6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Term Loan
4.5%,
Due 3/14
|
2,731,786 | 2,731,786 | 1,693,708 | ||||||||||
LN
Acquisition Corp. (Lincoln Industrial)6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Initial Term Loan (Second Lien)
6.8%,
Due 1/15
|
2,000,000 | 2,000,000 | 1,970,000 | ||||||||||
LPL
Holdings, Inc.6
Finance
|
Senior
Secured Loan — Tranche D Term Loan
2.8%,
Due 6/13
|
3,305,000 | 3,324,288 | 3,139,750 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
|||||||||||
Manitowoc
Company Inc., The
Diversified/Conglomerate
Manufacturing
|
Senior
Secured Loan — Term B Loan
6.5%,
Due 8/14
|
$ | 2,000,000 | $ | 1,955,000 | $ | 1,817,500 | ||||||||
MCCI
Group Holdings, LLC6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan (First Lien)
6.6%,
Due 12/12
|
5,899,925 | 5,884,108 | 5,899,925 | |||||||||||
MCCI
Group Holdings, LLC6
Healthcare,
Education and Childcare
|
Junior
Secured Loan — Term Loan (Second Lien)
9.4%,
Due 6/13
|
1,000,000 | 1,000,000 | 1,000,000 | |||||||||||
Murray
Energy Corporation6
Mining,
Steel, Iron and Non-Precious Metals
|
Senior
Secured Loan — Tranche B Term Loan (First Lien)
6.9%,
Due 1/10
|
1,949,367 | 1,954,403 | 1,910,380 | |||||||||||
Mylan
Inc.
Healthcare,
Education and Childcare
|
Senior
Secured Loan — U.S. Tranche B Term Loan
5.0%,
Due 10/14
|
1,969,849 | 1,912,634 | 1,792,563 | |||||||||||
National
Interest Security Company, L.L.C.
Aerospace
and Defense
|
Mezzanine
Investment — Mezzanine Facility
15.0%,
Due 6/13
|
3,000,000 | 3,000,000 | 3,000,000 | |||||||||||
National
Interest Security Company, L.L.C.
Aerospace
and Defense
|
Junior
Secured Loan — Second Lien Term Loan
15.0%,
Due 6/13
|
1,000,000 | 1,000,000 | 1,000,000 | |||||||||||
National
Interest Security Company, L.L.C.6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan - First Lien
7.8%,
Due 12/12
|
8,075,000 | 8,075,000 | 8,075,000 | |||||||||||
Northeast
Biofuels, LP6
Farming
and Agriculture
|
Senior
Secured Loan — Construction Term Loan
8.3%,
Due 6/13
|
1,382,120 | 1,384,467 | 276,424 | |||||||||||
Northeast
Biofuels, LP6
Farming
and Agriculture
|
Senior
Secured Loan — Synthetic LC Term Loan
8.3%,
Due 6/13
|
57,257 | 57,354 | 11,451 | |||||||||||
PAS
Technologies Inc.
Aerospace
and Defense
|
Senior
Secured Loan — Incremental Term Loan Add On
6.8%,
Due 6/11
|
744,382 | 744,382 | 744,382 | |||||||||||
PAS
Technologies Inc.6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
6.8%,
Due 6/11
|
3,680,556 | 3,665,393 | 3,680,556 | |||||||||||
Pegasus
Solutions, Inc.6
Leisure,
Amusement, Motion Pictures, Entertainment
|
Senior
Secured Loan — Term Loan
7.8%,
Due 4/13
|
5,695,000 | 5,695,000 | 5,695,000 | |||||||||||
Pegasus
Solutions, Inc.13
Leisure,
Amusement, Motion Pictures, Entertainment
|
Senior
Unsecured Bond —
10.5%,
Due 4/15
|
2,000,000 | 2,000,000 | 2,000,000 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
|||||||||||
Primus International Inc.6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
4.3%,
Due 6/12
|
$ | 1,246,565 | $ | 1,248,519 | $ | 1,215,401 | ||||||||
QA
Direct Holdings, LLC6
Printing
and Publishing
|
Senior
Secured Loan — Term Loan
6.8%,
Due 8/14
|
4,937,343 | 4,896,292 | 4,937,343 | |||||||||||
Resco
Products, Inc.6
Mining,
Steel, Iron and Non-Precious Metals
|
Junior
Secured Loan — Term Loan (Second Lien)
10.2%,
Due 6/14
|
6,650,000 | 6,471,193 | 6,517,000 | |||||||||||
Rhodes
Companies, LLC, The6
Buildings
and Real Estate4
|
Senior
Secured Loan — First Lien Term Loan
5.0%,
Due 11/10
|
1,685,674 | 1,629,483 | 842,837 | |||||||||||
Rhodes
Companies, LLC, The6
Buildings
and Real Estate4
|
Junior
Secured Loan — Second Lien Term Loan
9.2%,
Due 11/11
|
2,013,977 | 2,022,278 | 503,494 | |||||||||||
San
Juan Cable, LLC6
Broadcasting
and Entertainment
|
Junior
Secured Loan — Loan (Second Lien)
7.7%,
Due 10/13
|
3,000,000 | 2,982,607 | 2,850,000 | |||||||||||
Schneller
LLC6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
5.1%,
Due 6/13
|
4,694,560 | 4,658,215 | 4,694,560 | |||||||||||
Seismic
Micro-Technology, Inc. (SMT)6
Electronics
|
Senior
Secured Loan — Term Loan
5.8%,
Due 6/12
|
1,430,000 | 1,427,248 | 1,430,000 | |||||||||||
Seismic
Micro-Technology, Inc. (SMT)6
Electronics
|
Senior
Secured Loan — Term Loan
5.8%,
Due 6/12
|
953,333 | 951,498 | 953,333 | |||||||||||
Specialized
Technology Resources, Inc.6
Diversified/Conglomerate
Service
|
Junior
Secured Loan — Loan (Second Lien)
7.5%,
Due 12/14
|
7,500,000 | 7,500,000 | 7,500,000 | |||||||||||
Specialized
Technology Resources, Inc.6
Diversified/Conglomerate
Service
|
Senior
Secured Loan — Term Loan (First Lien)
3.0%,
Due 6/14
|
3,930,101 | 3,930,101 | 3,930,101 | |||||||||||
Standard
Steel, LLC6
Cargo
Transport
|
Senior
Secured Loan — Delayed Draw Term Loan
3.0%,
Due 7/12
|
766,973 | 771,034 | 766,973 | |||||||||||
Standard
Steel, LLC6
Cargo
Transport
|
Senior
Secured Loan — Initial Term Loan
4.0%,
Due 7/12
|
3,805,590 | 3,825,741 | 3,805,590 | |||||||||||
Standard
Steel, LLC6
Cargo
Transport
|
Junior
Secured Loan — Loan (Second Lien)
7.5%,
Due 7/13
|
1,750,000 | 1,758,373 | 1,750,000 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
|||||||||||
Texas Competitive
Electric Holdings Company, LLC (TXU)
Utilities
|
Senior
Secured Loan — Initial Tranche B-2 Term Loan
5.6%,
Due 10/14
|
$ | 1,989,924 | $ | 1,814,330 | $ | 1,810,831 | ||||||||
TPF
Generation Holdings, LLC6
Utilities
|
Junior
Secured Loan — Loan (Second Lien)
5.7%,
Due 12/14
|
2,000,000 | 2,028,327 | 1,900,000 | |||||||||||
TransAxle
LLC
Automobile
|
Senior
Secured Loan — Revolving Loan
6.0%,
Due 8/11
|
400,000 | 397,067 | 398,716 | |||||||||||
TransAxle
LLC
Automobile
|
Senior
Secured Loan — Term Loan
5.8%,
Due 9/12
|
1,477,554 | 1,477,554 | 1,477,554 | |||||||||||
TUI
University, LLC6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan (First Lien)
6.1%,
Due 10/14
|
3,736,736 | 3,581,708 | 3,568,583 | |||||||||||
Twin-Star
International, Inc.6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Term Loan
7.9%,
Due 4/13
|
4,339,736 | 4,339,736 | 4,339,736 | |||||||||||
United
Maritime Group, LLC (fka Teco Transport Corporation)6
Cargo
Transport
|
Junior
Secured Loan — Term Loan (Second Lien)
9.0%,
Due 12/13
|
6,500,000 | 6,486,324 | 6,500,000 | |||||||||||
Walker
Group Holdings LLC
Cargo
Transport
|
Junior
Secured Loan — Term Loan B
12.6%,
Due 12/12
|
526,500 | 526,500 | 526,500 | |||||||||||
Walker
Group Holdings LLC6
Cargo
Transport
|
Junior
Secured Loan — Term Loan B
12.5%,
Due 12/12
|
5,000,000 | 5,000,000 | 5,000,000 | |||||||||||
Water
PIK, Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Loan (First Lien)
4.2%,
Due 6/13
|
1,965,050 | 1,954,720 | 1,965,050 | |||||||||||
Wesco
Aircraft Hardware Corp.
Aerospace
and Defense
|
Junior
Secured Loan — Loan (Second Lien)
6.2%,
Due 3/14
|
2,000,000 | 1,923,443 | 1,845,000 | |||||||||||
Wesco
Aircraft Hardware Corp.6
Aerospace
and Defense
|
Junior
Secured Loan — Loan (Second Lien)
6.2%,
Due 3/14
|
4,132,887 | 4,161,055 | 3,812,589 | |||||||||||
WireCo
WorldGroup Inc. 6,
13
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Mezzanine
Investment —
11.0%,
Due 2/15
|
10,000,000 | 10,000,000 | 10,000,000 | |||||||||||
WireCo
WorldGroup Inc. 13
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Mezzanine
Investment —
11.0%,
Due 2/15
|
5,000,000 | 4,795,580 | 5,000,000 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
|||||||||||
Wolf Hollow I,
LP6
Utilities
|
Senior
Secured Loan — Acquisition Term Loan
3.7%,
Due 6/12
|
$ | 775,624 | $ | 767,066 | $ | 729,087 | ||||||||
Wolf
Hollow I, LP6
Utilities
|
Senior
Secured Loan — Synthetic Letter of Credit
.4%,
Due 6/12
|
668,413 | 661,032 | 628,304 | |||||||||||
Wolf
Hollow I, LP6
Utilities
|
Senior
Secured Loan — Synthetic Revolver Deposit
1.1%,
Due 6/12
|
167,103 | 165,259 | 157,077 | |||||||||||
Wolf
Hollow I, LP6
Utilities
|
Junior
Secured Loan — Term Loan (Second Lien)
6.0%,
Due 12/12
|
2,683,177 | 2,687,607 | 2,468,522 | |||||||||||
X-Rite,
Incorporated6
Electronics
|
Junior
Secured Loan — Loan (Second Lien)
14.4%,
Due 10/13
|
645,361 | 645,361 | 645,361 | |||||||||||
X-Rite,
Incorporated6
Electronics
|
Senior
Secured Loan — Term Loan (First Lien)
7.3%,
Due 10/12
|
633,560 | 631,128 | 633,560 | |||||||||||
Total
Investment in Debt Securities
|
|||||||||||||||
(154%
of net asset value at fair value)
|
$ | 430,366,772 | $ | 423,859,086 | $ | 384,486,111 | |||||||||
Equity
Portfolio
|
Portfolio Company / Principal Business
|
Investment
|
Percentage
Interest/Shares
|
Cost
|
Value2
|
|||||||||||
Aerostructures Holdings L.P.7
Aerospace
and Defense
|
Partnership
Interests
|
1.2 | % | $ | 1,000,000 | $ | 750,000 | ||||||||
Aerostructures
Holdings L.P.7
Aerospace
and Defense
|
Series
A Preferred Interests
|
0.0 | % | 160,361 | 160,361 | ||||||||||
Allen-Vanguard
Corporation3,
7
Aerospace
and Defense
|
Common
Shares
|
10,253 | 42,542 | 1,853 | |||||||||||
Coastal
Concrete Southeast, LLC7,
8
Buildings
and Real Estate4
|
Warrants
|
580 | 474,140 | — | |||||||||||
eInstruction
Acquisition, LLC7
Healthcare,
Education and Childcare
|
Membership
Units
|
1.1 | % | 1,079,617 | 1,079,617 |
Portfolio Company / Principal Business
|
Investment
|
Percentage
Interest/Shares
|
Cost
|
Value2
|
||||||||||
FP
WRCA Coinvestment
Fund
VII, Ltd.3,
7
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Class
A Shares
|
15,000 | $ | 1,500,000 | $ | 2,398,000 | ||||||||
Park
Avenue Coastal Holding, LLC
Buildings
and Real Estate4
|
Common
Interests
|
2.0 | % | 1,000,000 | — | |||||||||
Total
Investment in Equity Securities
|
||||||||||||||
(2%
of net asset value at fair value)
|
$ | 5,256,660 | $ | 4,389,831 | ||||||||||
CLO
Fund Securities
|
Portfolio Company / Principal Business
|
Investment
|
Percentage
Interest
|
Cost
|
Value2
|
||||||||||
Grant
Grove CLO, Ltd.3,
13
|
Subordinated
Securities
|
22.2 | % | $ | 4,620,951 | $ | 4,665,000 | |||||||
Katonah
III, Ltd.3,
13
|
Preferred
Shares
|
23.1 | % | 4,500,000 | 1,661,000 | |||||||||
Katonah
IV, Ltd.3,
13
|
Preferred
Shares
|
17.1 | % | 3,150,000 | 1,601,000 | |||||||||
Katonah
V, Ltd.3,
13
|
Preferred
Shares
|
26.7 | % | 3,320,000 | 1,172,000 | |||||||||
Katonah
VII CLO Ltd.3, 9,
13
|
Subordinated
Securities
|
16.4 | % | 4,500,000 | 2,629,000 | |||||||||
Katonah
VIII CLO Ltd3, 9,
13
|
Subordinated
Securities
|
10.3 | % | 3,400,000 | 2,252,000 | |||||||||
Katonah
IX CLO Ltd3, 9,
13
|
Preferred
Shares
|
6.9 | % | 2,000,000 | 1,921,000 | |||||||||
Katonah
X CLO Ltd 3, 9,
13
|
Subordinated
Securities
|
33.3 | % | 11,324,758 | 11,875,000 | |||||||||
Katonah
2007-I CLO Ltd.3, 9,
13
|
Preferred
Shares
|
100.0 | % | 29,560,886 | 28,859,236 | |||||||||
Total
Investment in CLO Fund Securities
(23%
of net asset value at fair value)
|
$ | 66,376,595 | $ | 56,635,236 | ||||||||||
Asset
Manager Affiliates
|
Portfolio Company / Principal Business
|
Investment
|
Percentage
Interest
|
Cost
|
Value2
|
|||||||||||
Katonah
Debt Advisors, LLC
|
Membership
Interests
|
100 | % | $ | 37,151,495 | $ | 54,731,312 | ||||||||
PKSIL
|
Class
A Shares
|
100 | % | 1,793,276 | 1,793,276 | ||||||||||
PKSIL
|
Class
B Shares
|
35 | % | 3,500 | 3,500 | ||||||||||
Total
Investment in Asset Manager Affiliates
(22%
of net asset value at fair value)
|
$ | 38,948,271 | $ | 56,528,088 |
Time
Deposits and Money Market Account
|
||||||||||||||
Time Deposits and Money Market Account
|
Investment
|
Yield
|
Cost
|
Value2
|
||||||||||
US Bank Eurodollar Sweep
CL2
|
Time
Deposit
|
0.10 | % | $ | 10,462,702 | $ | 10,462,702 | |||||||
JP
Morgan Asset Account
|
Time
Deposit
|
0.20 | % | 1,723,295 | 1,723,295 | |||||||||
JP
Morgan Business Money Market Account
|
Money
Market Account
|
0.19 | % | 10 | 10 | |||||||||
Total
Investment in Time Deposit and Money Market Accounts
(5%
of net asset value at fair value)
|
$ | 12,186,007 | $ | 12,186,007 | ||||||||||
Total
Investments5
(205%
of net asset value at fair value)
|
$ | 546,626,619 | $ | 514,225,273 |
1
|
A
majority of the variable rate loans to our portfolio companies bear
interest at a rate that may be determined by reference to either LIBOR or
an alternate Base Rate (commonly based on the Federal Funds Rate or the
Prime Rate), which typically resets semi-annually, quarterly, or monthly.
For each such loan, we have provided the weighted average annual stated
interest rate in effect at December 31,
2008.
|
2
|
Reflects
the fair market value of all existing investments as of December 31, 2008,
as determined by our Board of
Directors.
|
3
|
Non-U.S.
company or principal place of business outside the
U.S.
|
4
|
Buildings
and real estate relate to real estate ownership, builders, managers and
developers and excludes mortgage debt investments and mortgage lenders or
originators. As of December 31, 2008, we had no exposure to mortgage
securities (residential mortgage bonds, commercial mortgage backed
securities, or related asset backed securities), companies providing
mortgage lending or emerging markets investments either directly or
through our investments in CLO
funds.
|
5
|
The
aggregate cost of investments for federal income tax purposes is
approximately $547 million. The aggregate gross unrealized appreciation is
approximately $20 million and the aggregate gross unrealized depreciation
is approximately $53 million.
|
6
|
Pledged
as collateral for the secured revolving credit facility (see Note 6 to the
financial statements).
|
7
|
Non-income
producing.
|
8
|
Warrants
having a strike price of $0.01 and expiration date of March
2017.
|
9
|
An
affiliate CLO Fund managed by Katonah Debt Advisors or its
affiliate.
|
10
|
Loan
or debt security is on non-accrual status and therefore is considered
non-income producing.
|
11
|
Time
deposit investment partially restricted under terms of the secured credit
facility (see Note 6 to financial statements).
|
12
|
Money
market account holding restricted cash for employee flexible spending
accounts.
|
13
|
These
securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions
that are exempt from registration, normally to qualified institutional
buyers.
|
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Advanced
Lighting Technologies, Inc.
Home and Office Furnishings,
Housewares, and Durable Consumer Products
|
Senior
Secured Loan — Revolving Loan
7.5%,
Due 6/13
|
$ | — | $ | — | $ | — | |||||||
Advanced
Lighting Technologies, Inc.6
Home and Office Furnishings,
Housewares, and Durable Consumer Products
|
Junior
Secured Loan — Second Lien Term Loan Note
11.1%,
Due 6/14
|
5,000,000 | 4,990,905 | 5,000,000 | ||||||||||
Advanced
Lighting Technologies, Inc.6
Home and Office Furnishings,
Housewares, and Durable Consumer Products
|
Senior
Secured Loan — Term Loan (First Lien)
7.9%,
Due 6/13
|
3,573,000 | 3,573,000 | 3,573,000 | ||||||||||
Advanced
Lighting Technologies, Inc.6
Home and Office Furnishings,
Housewares, and Durable Consumer Products
|
Senior
Secured Loan — Deferred Draw Term Loan (First Lien)
7.5%,
Due 6/13
|
650,268 | 650,268 | 650,268 | ||||||||||
Aero
Products International, Inc.6
Personal and Non Durable
Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Term Loan
8.8%,
Due 4/12
|
3,700,000 | 3,700,000 | 3,681,500 | ||||||||||
Aerostructures
Acquisition LLC6
Aerospace and
Defense
|
Senior
Secured Loan — Delayed Draw Term Loan
7.9%,
Due 3/13
|
500,000 | 500,000 | 497,500 | ||||||||||
Aerostructures
Acquisition LLC6
Aerospace and
Defense
|
Senior
Secured Loan — Term Loan
7.8%,
Due 3/13
|
6,378,125 | 6,378,125 | 6,378,125 | ||||||||||
AGA
Medical Corporation6
Healthcare, Education and
Childcare
|
Senior
Secured Loan — Tranche B Term Loan
7.2%,
Due 4/13
|
3,832,209 | 3,829,343 | 3,654,970 | ||||||||||
AGS
LLC6
Hotels, Motels, Inns, and
Gaming
|
Senior
Secured Loan — Delayed Draw Term Loan
7.7%,
Due 5/13
|
579,194 | 562,331 | 550,234 | ||||||||||
AGS
LLC6
Hotels, Motels, Inns, and
Gaming
|
Senior
Secured Loan — Initial Term Loan
7.9%,
Due 5/13
|
4,802,419 | 4,732,592 | 4,562,298 | ||||||||||
Allen-Vanguard
Corporation3
Aerospace and
Defense
|
Senior
Secured Loan — US Term Loan
12.0%,
Due 9/12
|
2,309,736 | 2,277,028 | 2,277,028 | ||||||||||
AmerCable
Incorporated6
Machinery (Non-Agriculture,
Non-Construction, Non-Electronic)
|
Senior
Secured Loan — Initial Term Loan
8.4%,
Due 6/14
|
6,965,000 | 6,965,000 | 6,965,000 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Astoria
Generating Company Acquisitions, LLC6
Utilities
|
Junior
Secured Loan — Second Lien Term Loan C
8.7%,
Due 8/13
|
$ | 4,000,000 | $ | 4,049,430 | $ | 3,900,000 | |||||||
Atlantic
Marine Holding Company6
Cargo
Transport
|
Senior
Secured Loan — Term Loan
7.1%,
Due 3/14
|
1,739,465 | 1,750,599 | 1,730,768 | ||||||||||
Aurora
Diagnostics, LLC6
Healthcare, Education and
Childcare
|
Senior
Secured Loan — Tranche A Term Loan (First Lien)
9.0%,
Due 12/12
|
4,060,000 | 4,010,521 | 4,019,823 | ||||||||||
Awesome
Acquisition Company (CiCi's Pizza)6
Personal,
Food and Miscellaneous Services
|
Junior
Secured Loan — Term Loan (Second Lien)
9.8%,
Due 6/14
|
4,000,000 | 3,973,451 | 3,820,000 | ||||||||||
AZ
Chem US Inc.6
Chemicals,
Plastics and Rubber
|
Junior
Secured Loan — Second Lien Term Loan
10.6%,
Due 2/14
|
4,000,000 | 3,956,582 | 3,220,000 | ||||||||||
Bankruptcy
Management Solutions, Inc.6
Diversified/Conglomerate
Service
|
Senior
Secured Loan — First Lien Term Loan
7.6%,
Due 7/12
|
1,975,000 | 1,987,070 | 1,846,625 | ||||||||||
Bankruptcy
Management Solutions, Inc.6
Diversified/Conglomerate
Service
|
Junior
Secured Loan — Loan (Second Lien)
11.1%,
Due 7/13
|
2,468,750 | 2,505,651 | 1,987,344 | ||||||||||
Bay
Point Re Limited3,
6
Insurance
|
Senior
Secured Loan — Loan
9.6%,
Due 12/10
|
3,000,000 | 3,019,487 | 3,019,487 | ||||||||||
Bicent
Power LLC6
Utilities
|
Junior
Secured Loan — Advance (Second Lien)
8.8%,
Due 12/14
|
4,000,000 | 4,000,000 | 3,730,000 | ||||||||||
Byram
Healthcare Centers, Inc.
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan A
10.1%,
Due 11/11
|
3,733,691 | 3,733,691 | 3,733,691 | ||||||||||
Byram
Healthcare Centers, Inc.
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Revolving Loan
9.7%,
Due 11/10
|
375,000 | 375,000 | 375,000 | ||||||||||
Caribe
Information Investments Incorporated6
Printing
and Publishing
|
Senior
Secured Loan — Term Loan
7.3%,
Due 3/13
|
2,815,534 | 2,803,185 | 2,709,951 | ||||||||||
Cast
& Crew Payroll, LLC (Payroll Acquisition)6
Leisure,
Amusement, Motion Pictures, Entertainment
|
Senior
Secured Loan — Initial Term Loan
7.8%,
Due 9/12
|
10,608,400 | 10,647,600 | 10,647,600 | ||||||||||
CEI
Holdings, Inc. (Cosmetic Essence)6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Term Loan
7.5%,
Due 3/14
|
1,850,051 | 1,751,546 | 1,665,046 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Centaur,
LLC6
Hotels,
Motels, Inns, and Gaming
|
Senior
Secured Loan — Term Loan
(First Lien)
8.8%,
Due 10/12
|
$ | 4,122,807 | $ | 4,069,243 | $ | 3,978,509 | |||||||
Centaur,
LLC6
Hotels,
Motels, Inns, and Gaming
|
Senior
Secured Loan — Delayed Draw Term Loan
8.7%,
Due 10/12
|
— | — | — | ||||||||||
Charlie
Acquisition Corp.
Personal,
Food and Miscellaneous Services
|
Mezzanine
Investment — Senior Subordinated Notes
15.5%,
Due 6/13
|
10,127,500 | 9,945,201 | 9,945,201 | ||||||||||
Clarke
American Corp.6
Printing
and Publishing
|
Senior
Secured Loan — Tranche B Term Loan
7.3%,
Due 6/14
|
2,985,000 | 2,985,000 | 2,693,963 | ||||||||||
Clayton
Holdings, Inc6
Finance
|
Senior
Secured Loan — Term Loan
7.0%,
Due 12/11
|
614,320 | 616,752 | 552,888 | ||||||||||
Coastal
Concrete Southeast, LLC
Buildings
and Real Estate4
|
Mezzanine
Investment — Mezzanine Term Loan
15.0%,
Due 3/13
|
8,120,914 | 7,711,760 | 8,120,914 | ||||||||||
Concord
Re Limited3
Insurance
|
Senior
Secured Loan — Term Loan
9.2%,
Due 2/12
|
3,000,000 | 3,024,013 | 3,000,000 | ||||||||||
CST
Industries, Inc.6
Diversified/Conglomerate
Manufacturing
|
Senior
Secured Loan — Term Loan
7.9%,
Due 8/13
|
987,500 | 990,623 | 990,623 | ||||||||||
DaimlerChrysler
Financial Services Americas LLC6
Finance
|
Senior
Secured Loan — Term Loan (First Lien)
9.0%,
Due 8/12
|
1,995,000 | 1,903,193 | 1,923,519 | ||||||||||
Dealer
Computer Services, Inc. (Reynolds & Reynolds)6
Electronics
|
Junior
Secured Loan — Term Loan (Third Lien)
12.3%,
Due 4/14
|
3,500,000 | 3,537,846 | 3,491,250 | ||||||||||
Dealer
Computer Services, Inc. (Reynolds & Reynolds)6
Electronics
|
Junior
Secured Loan — Term Loan (Second Lien)
10.3%,
Due 10/13
|
1,000,000 | 1,009,544 | 990,000 | ||||||||||
Delta
Educational Systems, Inc.6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan
8.3%,
Due 6/12
|
2,876,053 | 2,876,053 | 2,876,053 | ||||||||||
DeltaTech
Controls, Inc.6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Senior
Secured Loan — Term Loan (First Lien)
8.0%,
Due 7/14
|
4,000,000 | 3,980,991 | 3,980,991 | ||||||||||
DeltaTech
Controls, Inc.6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Term Loan (Second Lien)
11.7%,
Due 1/15
|
2,000,000 | 1,961,246 | 1,961,246 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Dresser,
Inc.6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Term Loan (Second Lien)
11.1%,
Due 5/15
|
$ | 3,000,000 | $ | 2,959,031 | $ | 2,861,250 | |||||||
Edgestone
CD Acquisition Corp. (Custom Direct)6
Printing
and Publishing
|
Junior
Secured Loan — Loan (Second Lien)
10.8%,
Due 12/14
|
5,000,000 | 5,000,000 | 5,000,000 | ||||||||||
Edgestone
CD Acquisition Corp. (Custom Direct)6
Printing
and Publishing
|
Senior
Secured Loan — Term Loan (First Lien)
7.6%,
Due 12/13
|
4,975,000 | 4,980,828 | 4,980,828 | ||||||||||
eInstruction
Corporation6
Healthcare,
Education and Childcare
|
Junior
Secured Loan — Second Lien Term Loan (Dec. 2007)
12.5%,
Due 7/14
|
10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
eInstruction
Corporation6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Initial Term Loan (Dec. 2007)
9.0%,
Due 7/13
|
4,970,013 | 4,970,013 | 4,970,013 | ||||||||||
Emerson
Reinsurance Ltd.3
Insurance
|
Senior
Secured Loan — Series C Loan
10.2%,
Due 12/11
|
3,000,000 | 3,000,000 | 2,985,000 | ||||||||||
Endeavor
Energy Resources, L.P.
Oil
and Gas
|
Junior
Secured Loan — Second Lien Term Loan
9.6%,
Due 3/12
|
4,000,000 | 4,000,000 | 4,000,000 | ||||||||||
Fasteners
For Retail, Inc.6
Diversified/Conglomerate
Manufacturing
|
Senior
Secured Loan — Term Loan
7.9%,
Due 12/12
|
7,926,391 | 7,940,720 | 7,728,231 | ||||||||||
FD
Alpha Acquisition LLC (Fort Dearborn)6
Printing
and Publishing
|
Senior
Secured Loan — US Term Loan
8.3%,
Due 11/12
|
915,400 | 915,400 | 901,669 | ||||||||||
First
American Payment Systems, L.P.6
Finance
|
Senior
Secured Loan — Term Loan
8.2%,
Due 10/13
|
3,694,000 | 3,694,000 | 3,601,650 | ||||||||||
Flatiron
Re Ltd.3
Insurance
|
Senior
Secured Loan — Closing Date Term Loan
9.1%,
Due 12/10
|
3,664,488 | 3,691,697 | 3,646,165 | ||||||||||
Flatiron
Re Ltd.3
Insurance
|
Senior
Secured Loan — Delayed Draw Term Loan
9.1%,
Due 12/10
|
1,774,986 | 1,788,166 | 1,766,111 | ||||||||||
Ford
Motor Company6
Automobile
|
Senior
Secured Loan — Term Loan
8.0%,
Due 12/13
|
1,989,950 | 1,987,554 | 1,845,678 | ||||||||||
Freescale
Semiconductor, Inc.
Electronics
|
Senior
Subordinated Bond —
10.1%,
Due 12/16
|
3,000,000 | 3,009,230 | 2,490,000 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Frontier
Drilling USA, Inc.6
Oil
and Gas
|
Senior
Secured Loan — Term B Advance
8.7%,
Due 6/13
|
$ | 2,000,000 | $ | 1,997,874 | $ | 1,960,000 | |||||||
Ginn
LA Conduit Lender, Inc.
Buildings
and Real Estate4
|
Senior
Secured Loan — First Lien Tranche A Credit-Linked Deposit
8.2%,
Due 6/11
|
1,257,143 | 1,218,578 | 1,026,143 | ||||||||||
Ginn
LA Conduit Lender, Inc.
Buildings
and Real Estate4
|
Senior
Secured Loan — First Lien Tranche B Term Loan
8.3%,
Due 6/11
|
2,701,714 | 2,618,835 | 2,205,274 | ||||||||||
Ginn
LA Conduit Lender, Inc.
Buildings
and Real Estate4
|
Junior
Secured Loan — Second Lien Term Loan
12.3%,
Due 6/12
|
3,000,000 | 2,680,274 | 1,925,010 | ||||||||||
Gleason
Works, The6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Senior
Secured Loan — New US Term Loan
6.8%,
Due 6/13
|
2,437,280 | 2,444,818 | 2,324,556 | ||||||||||
Hawkeye
Renewables, LLC6
Farming
and Agriculture
|
Senior
Secured Loan — Term Loan (First Lien)
9.0%,
Due 6/12
|
2,962,406 | 2,894,213 | 2,346,640 | ||||||||||
HealthSouth
Corporation
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan
7.7%,
Due 3/13
|
1,262,594 | 1,266,540 | 1,208,403 | ||||||||||
HMSC
Corporation (aka Swett and Crawford)6
Insurance
|
Junior
Secured Loan — Loan (Second Lien)
10.7%,
Due 10/14
|
5,000,000 | 4,803,383 | 4,550,000 | ||||||||||
Huish
Detergents Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Junior
Secured Loan — Loan (Second Lien)
9.1%,
Due 10/14
|
1,000,000 | 1,000,000 | 811,660 | ||||||||||
Hunter
Fan Company6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Initial Term Loan (First Lien)
7.4%,
Due 4/14
|
4,161,071 | 3,947,013 | 3,682,548 | ||||||||||
Hunter
Fan Company6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Junior
Secured Loan — Loan (Second Lien)
11.6%,
Due 10/14
|
3,000,000 | 3,000,000 | 2,430,000 | ||||||||||
Hunter
Fan Company6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Delayed Draw Term Loan
7.2%,
Due 4/14
|
— | — | — | ||||||||||
IAL
Acquisition Co. (International Aluminum Corporation)6
Mining,
Steel, Iron and Non-Precious Metals
|
Senior
Secured Loan — Term Loan
7.6%,
Due 3/13
|
4,039,700 | 4,039,700 | 4,039,700 | ||||||||||
Infiltrator
Systems, Inc.6
Ecological
|
Senior
Secured Loan — Term Loan
8.4%,
Due 9/12
|
3,950,000 | 3,937,850 | 3,937,850 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Inmar,
Inc.6
Retail
Stores
|
Senior
Secured Loan — Term Loan
7.3%,
Due 4/13
|
$ | 4,962,500 | $ | 4,962,500 | $ | 4,813,625 | |||||||
Intrapac
Corporation/Corona Holdco6
Containers,
Packaging and Glass
|
Senior
Secured Loan — First Lien Term Loan
8.5%,
Due 5/12
|
5,850,000 | 5,873,152 | 5,873,152 | ||||||||||
Intrapac
Corporation/Corona Holdco6
Containers,
Packaging and Glass
|
Junior
Secured Loan — Term Loans (Second Lien)
12.5%,
Due 5/13
|
3,000,000 | 3,021,907 | 3,021,907 | ||||||||||
Jones
Stephens Corp.6
Buildings
and Real Estate4
|
Senior
Secured Loan — Term Loan
8.8%,
Due 9/12
|
10,245,530 | 10,217,367 | 10,217,367 | ||||||||||
JW
Aluminum Company6
Mining,
Steel, Iron and Non-Precious Metals
|
Junior
Secured Loan — Term Loan (Second Lien)
11.1%,
Due 12/13
|
5,371,429 | 5,390,350 | 5,210,286 | ||||||||||
Kepler
Holdings Limited3
Insurance
|
Senior
Secured Loan — Loan
10.3%,
Due 6/09
|
3,000,000 | 3,000,000 | 2,985,000 | ||||||||||
Kepler
Holdings Limited3,
6
Insurance
|
Senior
Secured Loan — Loan
10.3%,
Due 6/09
|
2,000,000 | 2,020,139 | 1,990,000 | ||||||||||
KIK
Custom Products Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Junior
Secured Loan — Loan (Second Lien)
9.8%,
Due 12/14
|
5,000,000 | 5,000,000 | 3,400,000 | ||||||||||
La
Paloma Generating Company, LLC
Utilities
|
Junior
Secured Loan — Loan (Second Lien)
8.3%,
Due 8/13
|
2,000,000 | 2,017,210 | 1,890,000 | ||||||||||
LBREP/L-Suncal
Master I LLC
Buildings
and Real Estate4
|
Junior
Secured Loan — Term Loan (Third Lien)
13.8%,
Due 2/12
|
2,254,068 | 2,254,068 | 2,006,120 | ||||||||||
LBREP/L-Suncal
Master I LLC6
Buildings
and Real Estate4
|
Senior
Secured Loan — Term Loan (First Lien)
8.2%,
Due 1/10
|
3,920,000 | 3,842,022 | 3,567,200 | ||||||||||
LBREP/L-Suncal
Master I LLC6
Buildings
and Real Estate4
|
Junior
Secured Loan — Term Loan (Second Lien)
12.2%,
Due 1/11
|
2,000,000 | 1,918,000 | 1,780,000 | ||||||||||
Legacy
Cabinets, Inc.
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — First Lien Term Loan
8.6%,
Due 8/12
|
2,955,000 | 2,955,000 | 2,955,000 | ||||||||||
Levlad,
LLC & Arbonne International, LLC6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Term Loan
7.2%,
Due 3/14
|
2,898,451 | 2,898,451 | 2,266,589 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
LN
Acquisition Corp. (Lincoln Industrial)6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Initial Term Loan (Second Lien)
10.9%,
Due 1/15
|
$ | 2,000,000 | $ | 2,000,000 | $ | 1,970,000 | |||||||
LPL
Holdings, Inc.6
Finance
|
Senior
Secured Loan — Tranche D Term Loan
6.8%,
Due 6/13
|
5,338,639 | 5,376,752 | 5,131,767 | ||||||||||
MCCI
Group Holdings, LLC6
Healthcare,
Education and Childcare
|
Junior
Secured Loan — Term Loan (Second Lien)
12.7%,
Due 6/13
|
1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
MCCI
Group Holdings, LLC6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan (First Lien)
9.4%,
Due 12/12
|
5,960,018 | 5,940,018 | 5,960,018 | ||||||||||
Murray
Energy Corporation6
Mining,
Steel, Iron and Non-Precious Metals
|
Senior
Secured Loan — Tranche B Term Loan (First Lien)
7.9%,
Due 1/10
|
1,969,620 | 1,979,459 | 1,890,835 | ||||||||||
National
Interest Security Company, L.L.C.6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
9.7%,
Due 12/12
|
5,000,000 | 5,000,000 | 5,000,000 | ||||||||||
Northeast
Biofuels, LP6
Farming
and Agriculture
|
Senior
Secured Loan — Construction Term Loan
8.5%,
Due 6/13
|
1,365,854 | 1,368,725 | 1,229,268 | ||||||||||
Northeast
Biofuels, LP6
Farming
and Agriculture
|
Senior
Secured Loan — Synthetic LC Term Loan
8.1%,
Due 6/13
|
536,585 | 537,713 | 482,927 | ||||||||||
PAS
Technologies Inc.
Aerospace
and Defense
|
Senior
Secured Loan — Incremental Term Loan Add On
8.5%,
Due 6/11
|
856,741 | 856,741 | 856,741 | ||||||||||
PAS
Technologies Inc.
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
8.4%,
Due 6/11
|
4,236,111 | 4,211,616 | 4,211,616 | ||||||||||
Pegasus
Solutions, Inc.12
Leisure,
Amusement, Motion Pictures, Entertainment
|
Senior
Unsecured Bond —
10.5%,
Due 4/15
|
2,000,000 | 2,000,000 | 2,000,000 | ||||||||||
Pegasus
Solutions, Inc.6
Leisure,
Amusement, Motion Pictures, Entertainment
|
Senior
Secured Loan — Term Loan
8.1%,
Due 4/13
|
5,755,000 | 5,755,000 | 5,755,000 | ||||||||||
Primus
International Inc.6
Aerospace
and Defense
|
Senior
Secured Loan — Term Loan
7.7%,
Due 6/12
|
3,259,279 | 3,265,878 | 3,177,797 | ||||||||||
QA
Direct Holdings, LLC6
Printing
and Publishing
|
Senior
Secured Loan — Term Loan
9.6%,
Due 8/14
|
4,987,469 | 4,938,587 | 4,950,063 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Resco
Products, Inc.6
Mining,
Steel, Iron and Non-Precious Metals
|
Junior
Secured Loan — Second Lien Term Loan
13.1%,
Due 6/14
|
$ | 5,000,000 | $ | 4,928,938 | $ | 4,928,938 | |||||||
Rhodes
Companies, LLC, The6
Buildings
and Real Estate
|
Senior
Secured Loan — First Lien Term Loan
8.3%,
Due 11/10
|
1,878,788 | 1,780,166 | 1,647,077 | ||||||||||
Rhodes
Companies, LLC, The6
Buildings
and Real Estate
|
Junior
Secured Loan — Second Lien Term Loan
12.6%,
Due 11/11
|
2,000,000 | 2,011,185 | 1,266,680 | ||||||||||
San
Juan Cable, LLC6
Broadcasting
and Entertainment
|
Junior
Secured Loan — Second Lien Term Loan
10.7%,
Due 10/13
|
3,000,000 | 2,978,999 | 2,782,500 | ||||||||||
Schneller
LLC6
Aerospace
and Defense
|
Senior
Secured Loan — First Lien Term Loan
8.7%,
Due 6/13
|
4,975,000 | 4,927,882 | 4,950,125 | ||||||||||
Seismic
Micro-Technology, Inc. (SMT)6
Electronics
|
Senior
Secured Loan — Term Loan
7.6%,
Due 6/12
|
995,000 | 992,532 | 992,532 | ||||||||||
Seismic
Micro-Technology, Inc. (SMT)6
Electronics
|
Senior
Secured Loan — Term Loan
7.6%,
Due 6/12
|
1,492,500 | 1,488,798 | 1,488,798 | ||||||||||
Sorenson
Communications, Inc.6
Electronics
|
Senior
Secured Loan — Tranche C Term Loan
7.4%,
Due 8/13
|
2,791,551 | 2,807,105 | 2,720,897 | ||||||||||
Specialized
Technology Resources, Inc.6
Diversified/Conglomerate
Service
|
Senior
Secured Loan — Term Loan (First Lien)
7.3%,
Due 6/14
|
5,970,000 | 5,970,000 | 5,970,000 | ||||||||||
Specialized
Technology Resources, Inc.6
Diversified/Conglomerate
Service
|
Junior
Secured Loan — Loan (Second Lien)
11.8%,
Due 12/14
|
7,500,000 | 7,500,000 | 7,500,000 | ||||||||||
Standard
Steel, LLC6
Cargo
Transport
|
Senior
Secured Loan — Delayed Draw Term Loan
7.4%,
Due 7/12
|
825,699 | 831,324 | 831,324 | ||||||||||
Standard
Steel, LLC6
Cargo
Transport
|
Senior
Secured Loan — Initial Term Loan
7.3%,
Due 7/12
|
4,097,298 | 4,125,208 | 4,125,208 | ||||||||||
Standard
Steel, LLC6
Cargo
Transport
|
Junior
Secured Loan — Loan (Second Lien)
10.8%,
Due 7/13
|
1,750,000 | 1,760,240 | 1,760,240 | ||||||||||
Stolle
Machinery Company6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Junior
Secured Loan — Loan (Second Lien)
11.4%,
Due 9/13
|
1,000,000 | 1,015,115 | 975,000 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Stolle
Machinery Company6
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Senior
Secured Loan — First Lien Term Loan
7.9%,
Due 9/12
|
$ | 1,975,000 | $ | 1,985,124 | $ | 1,945,375 | |||||||
TLC
Funding Corp.6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan (First Lien)
9.9%,
Due 5/12
|
3,930,000 | 3,850,590 | 3,959,475 | ||||||||||
TPF
Generation Holdings, LLC6
Utilities
|
Junior
Secured Loan — Second Lien Term Loan
9.1%,
Due 12/14
|
2,000,000 | 2,033,096 | 1,890,000 | ||||||||||
TransAxle
LLC
Automobile
|
Senior
Secured Loan — Revolver
8.2%,
Due 8/11
|
490,909 | 486,678 | 488,832 | ||||||||||
TransAxle
LLC6
Automobile
|
Senior
Secured Loan — Term Loan
9.2%,
Due 9/12
|
2,812,500 | 2,812,500 | 2,812,500 | ||||||||||
TUI
University, LLC6
Healthcare,
Education and Childcare
|
Senior
Secured Loan — Term Loan (First Lien)
8.1%,
Due 10/14
|
3,990,000 | 3,794,292 | 3,810,450 | ||||||||||
Twin-Star
International, Inc.6
Home
and Office Furnishings, Housewares, and Durable Consumer
Products
|
Senior
Secured Loan — Term Loan
7.8%,
Due 4/13
|
4,975,000 | 4,975,000 | 4,975,000 | ||||||||||
United
Maritime Group, LLC (fka Teco Transport Corporation)6
Cargo
Transport
|
Junior
Secured Loan — Term Loan (Second Lien)
12.8%,
Due 12/13
|
4,500,000 | 4,500,000 | 4,511,250 | ||||||||||
United
Maritime Group, LLC (fka Teco Transport Corporation)6
Cargo
Transport
|
Senior
Secured Loan — 1st Lien Term Loan
9.0%,
Due 12/12
|
2,000,000 | 2,000,000 | 2,000,000 | ||||||||||
Water
PIK, Inc.6
Personal
and Non Durable Consumer Products (Mfg. Only)
|
Senior
Secured Loan — Loan (First Lien)
8.2%,
Due 6/13
|
2,985,000 | 2,965,778 | 2,925,300 | ||||||||||
Wesco
Aircraft Hardware Corp.6
Aerospace
and Defense
|
Junior
Secured Loan — Second Lien Term Loan
10.6%,
Due 3/14
|
4,132,887 | 4,166,447 | 4,132,887 | ||||||||||
WireCo
WorldGroup Inc. 12
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Mezzanine
Investment —
11.0%,
Due 2/15
|
5,000,000 | 4,762,014 | 5,000,000 | ||||||||||
WireCo
WorldGroup Inc. 12
Machinery
(Non-Agriculture, Non-Construction, Non-Electronic)
|
Mezzanine
Investment —
11.0%,
Due 2/15
|
10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Wolf
Hollow I, LP6
Utilities
|
Junior
Secured Loan — Term Loan (Second Lien)
9.3%,
Due 12/12
|
2,683,177 | 2,688,724 | 2,555,726 |
Portfolio Company / Principal Business
|
Investment
Interest Rate¹ / Maturity
|
Principal
|
Cost
|
Value2
|
||||||||||
Wolf
Hollow I, LP6
Utilities
|
Senior
Secured Loan — Acquisition Term Loan
7.1%,
Due 6/12
|
$ | 783,980 | $ | 772,832 | $ | 733,021 | |||||||
Wolf
Hollow I, LP6
Utilities
|
Senior
Secured Loan — Synthetic Letter of Credit
7.1%,
Due 6/12
|
668,412 | 658,900 | 618,280 | ||||||||||
Wolf
Hollow I, LP6
Utilities
|
Senior
Secured Loan — Synthetic Revolver Deposits
7.1%,
Due 6/12
|
167,103 | 164,727 | 154,570 | ||||||||||
X-Rite,
Incorporated6
Electronics
|
Senior
Secured Loan — Term Loan (First Lien)
8.5%,
Due 10/12
|
1,995,000 | 1,985,328 | 1,985,025 | ||||||||||
X-Rite,
Incorporated6
Electronics
|
Junior
Secured Loan — Loan (Second Lien)
12.4%,
Due 10/13
|
1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Total
Investment in Debt Securities
(159% of net
asset value at fair value)
|
$ | 426,014,170 | $ | 423,439,764 | $ | 410,954,082 |
Portfolio Company / Principal
Business
|
Investment
|
Percentage
Interest/Shares
|
Cost
|
Value2
|
||||||||||
Aerostructures
Holdings L.P.7
Aerospace
and Defense
|
Partnership
Interest
|
1.2 | % | $ | 1,000,000 | $ | 1,000,000 | |||||||
eInstruction
Acquisition, LLC7
Healthcare,
Education and Childcare
|
Membership
Units
|
1.1 | % | 1,069,810 | 1,069,810 | |||||||||
FP
WRCA Coinvestment Fund VII, Ltd.3,
7
Machinery
(Non-Agriculture, Non-
Construction,
Non-Electronic)
|
Class
A Shares
|
15,000 | 1,500,000 | 1,500,000 | ||||||||||
Park
Avenue Coastal Holding, LLC7
Buildings and Real
Estate4
|
Common
Interests
|
2.0 | % | 1,000,000 | 803,000 | |||||||||
Coastal
Concrete Southeast, LLC7,
8
Buildings and Real
Estate4
|
Warrants
|
580 | 474,140 | 379,440 | ||||||||||
Total
Investment in Equity Securities
(2%
of net asset value at fair value)
|
$ | 5,043,950 | $ | 4,752,250 |
Portfolio Company / Principal Business
|
Investment
|
Percentage
Interest
|
Cost
|
Value2
|
||||||||||
Grant Grove CLO,
Ltd.3,
12
|
Subordinated
Securities
|
22.2 | % | $ | 4,415,580 | $ | 4,250,000 | |||||||
Katonah III,
Ltd.3,
12
|
Preferred
Shares
|
23.1 | % | 4,500,000 | 2,810,000 | |||||||||
Katonah IV,
Ltd.3,
12
|
Preferred
Shares
|
17.1 | % | 3,150,000 | 2,420,000 | |||||||||
Katonah V, Ltd.3,
12
|
Preferred
Shares
|
26.7 | % | 3,320,000 | 420,000 | |||||||||
Katonah VII CLO
Ltd.3, 9,
12
|
Subordinated
Securities
|
16.4 | % | 4,500,000 | 3,950,000 | |||||||||
Katonah VIII CLO
Ltd3,
9, 12
|
Subordinated
Securities
|
10.3 | % | 3,400,000 | 3,290,000 | |||||||||
Katonah IX CLO
Ltd3,
9, 12
|
Preferred
Shares
|
6.9 | % | 2,000,000 | 2,000,000 | |||||||||
Katonah X CLO Ltd
3, 9,
12
|
Subordinated
Securities
|
33.3 | % | 10,775,684 | 11,880,000 | |||||||||
Total
Investment in CLO Fund
Securities
|
$ | 36,061,264 | $ | 31,020,000 | ||||||||||
(12%
of net asset value at fair
value)
|
Portfolio Company / Principal
Business
|
Investment
|
Percentage
Interest
|
Cost
|
Value2
|
||||||||||
Katonah
Debt Advisors, LLC
|
Membership
Interests
|
100 | % | $ | 33,394,995 | $ | 58,510,360 | |||||||
PKSIL
|
Class
A Shares
|
100 | % | 71,500 | 71,500 | |||||||||
PKSIL
|
Class
B Shares
|
35 | % | 3,500 | 3,500 | |||||||||
Total
Investment in Asset Manager Affiliates
|
$ | 33,469,995 | $ | 58,585,360 | ||||||||||
(23% of net
asset value at fair value)
|
Portfolio Company / Principal
Business
|
Investment
|
Yield
|
Cost
|
Value2
|
||||||||||
US
Bank Eurodollar Sweep CL23,
10
|
Time
Deposit
|
3.50 | % | $ | 12,809,784 | $ | 12,809,784 | |||||||
JP
Morgan Asset Account
|
Time
Deposit
|
3.49 | % | 2,864,705 | 2,864,705 | |||||||||
JP
Morgan Business Money Market Account11
|
Money
Market Account
|
0.43 | % | 20,766 | 20,766 | |||||||||
Total
Investment in Time Deposits and Money Market Account
(6% of net
asset value at fair value)
|
$ | 15,695,255 | $ | 15,695,255 | ||||||||||
Total
Investments5
|
$ | 513,710,228 | $ | 521,006,947 | ||||||||||
(201% of net
asset value at fair value)
|
1
|
A
majority of the variable rate loans to our portfolio companies bear
interest at a rate that may be determined by reference to either LIBOR or
an alternate Base Rate (commonly based on the Federal Funds Rate or the
Prime Rate), which typically resets semi-annually, quarterly, or monthly.
For each such loan, we have provided the weighted average annual stated
interest rate in effect at December 31, 2007.
|
2
|
Reflects
the fair market value of all existing investments as of December 31, 2007,
as determined by our Board of Directors.
|
3
|
Non-U.S.
company or principal place of business outside the U.S.
|
4
|
Buildings
and real estate relate to real estate ownership, builders, managers and
developers and excludes mortgage debt investments and mortgage lenders or
originators. As of December 31, 2007, we had no exposure to mortgage
securities (residential mortgage bonds, commercial mortgage backed
securities, or related asset backed securities), companies providing
mortgage lending or emerging markets investments either directly or
through our investments in CLO funds.
|
5
|
The
aggregate cost of investments for federal income tax purposes is
approximately $500 million. The aggregate gross unrealized appreciation is
approximately $27 million and the aggregate gross unrealized depreciation
is approximately $20 million.
|
6
|
Pledged
as collateral for the secured revolving credit facility (see Note 6 to the
financial statements).
|
7
|
Non-income
producing.
|
8
|
Warrants
having a strike price of $0.01 and expiration date of March
2017.
|
9
|
An
affiliate CLO Fund managed by Katonah Debt Advisors or its
affiliate.
|
10
|
Time
deposit investment partially restricted under terms of the secured credit
facility (see Note 6 to financial statements).
|
11
|
Money
market account holding restricted cash for employee flexible spending
accounts.
|
12
|
These
securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions
that are exempt from registration, normally to qualified institutional
buyers.
|
|
For the Year Ended
December 31, 2008
|
For the Year Ended
December 31, 2007
|
For the Period December
11, 2006 (inception)
through December 31,
2006
|
|||||||||
Per
Share Data:
|
||||||||||||
Net
asset value, at beginning of period
|
$ | 14.38 | $ | 14.29 | $ | 15.00 | ||||||
Underwriting
Costs
|
— | — | (0.97 | ) | ||||||||
Post-IPO
net asset value
|
14.38 | 14.29 | 14.03 | |||||||||
Net
income (loss)
|
||||||||||||
Net investment
income1
|
1.51 | 1.27 | 0.02 | |||||||||
Net realized
gains1
|
(0.03 | ) | 0.01 | — | ||||||||
Net change in
unrealized appreciation on investments1
|
(4.16 | ) | 0.12 | 0.24 | ||||||||
Net
income (loss)
|
(2.68 | ) | 1.40 | 0.26 | ||||||||
Net
decrease in net assets resulting from distributions
|
||||||||||||
From
net investment income
|
(1.44 | ) | (1.36 | ) | — | |||||||
From
capital gains
|
— | (0.01 | ) | — | ||||||||
From
return of capital
|
— | (0.03 | ) | — | ||||||||
Total
distributions to shareholders
|
(1.44 | ) | (1.40 | ) | — | |||||||
Effect
of distributions on restricted stock 1
|
(0.01 | ) | — | — | ||||||||
Net
decrease in net assets resulting from distributions
|
(1.45 | ) | (1.40 | ) | — | |||||||
Net
increase in net assets relating to stock-based
transactions
|
||||||||||||
Issuance
of common stock (not including DRIP)
|
1.27 | — | — | |||||||||
Issuance
of common stock under dividend reinvestment plan
|
0.12 | 0.06 | — | |||||||||
Stock
based compensation expense
|
0.04 | 0.03 | — | |||||||||
Net
increase in net assets relating to stock-based
transactions
|
1.43 | 0.09 | — | |||||||||
Net
asset value, end of period
|
$ | 11.68 | $ | 14.38 | $ | 14.29 | ||||||
Total net asset
value return2
|
(8.7 | ) % | 10.4 | % | 1.9 | % | ||||||
Ratio/Supplemental
Data:
|
||||||||||||
Per
share market value at beginning of period
|
$ | 12.00 | $ | 17.30 | $ | 15.00 | ||||||
Per
share market value at end of period
|
$ | 3.64 | $ | 12.00 | $ | 17.30 | ||||||
Total market
return3
|
(57.6 | ) % | (22.5 | ) % | 15.3 | % | ||||||
Shares
outstanding at end of period
|
21,436,936 | 18,017,699 | 17,946,333 | |||||||||
Net
assets at end of period
|
$ | 250,282,100 | $ | 259,068,164 | $ | 256,000,423 | ||||||
Portfolio
turnover rate
|
14.0 | % | 24.5 | % | 0.3 | %4 | ||||||
Asset
coverage ratio
|
196 | % | 202 | % | N/A | |||||||
Ratio
of net investment income to average net assets
|
11.6 | % | 8.5 | % | 4.4 | %5 | ||||||
Ratio
of total expenses to average net assets
|
7.0 | % | 5.9 | % | 6.3 | %5 | ||||||
Ratio
of interest expense to average net assets
|
4.1 | % | 2.7 | % | — | %5 | ||||||
Ratio
of non-interest expenses to average net assets
|
2.9 | % | 3.2 | % | 6.3 | %5 |
|
1)
|
Each
portfolio company or investment is cross-referenced to an independent
pricing service to determine if a current market quote is
available;
|
|
a)
|
The
nature and quality of such quote is reviewed to determine reliability and
relevance of the quote – factors considered include if the quote is from a
transaction, a broker quote, the date and aging of such quote, if the
transaction is arms-length, a liquidation or distressed sale and other
factors.
|
|
2)
|
If
an investment does not have a market quotation on either a broad market
exchange or from an independent pricing service, the investment is
initially valued by the Company’s investment professionals responsible for
the portfolio investment in conjunction with the portfolio management
team.
|
|
3)
|
Preliminary
valuation conclusions are discussed and documented by
management.
|
|
4)
|
With
respect to the valuations of Katonah Debt Advisors, the CLO Fund
securities and other illiquid junior and mezzanine securities selected on
a rotating quarterly basis such that they are reviewed at least once
during a trailing 12 month period, an independent valuation firm, engaged
by our Board of Directors, conducts independent valuations and reviews
management’s preliminary valuations and makes their own independent
valuation assessment.
|
|
5)
|
The
Valuation Committee of the Board of Directors reviews the portfolio
valuations, as well as the input and report of the independent valuation
firm.
|
|
6)
|
Upon
approval of the investment valuations by the Valuation Committee of the
Board of Directors, the Audit Committee of the Board of Directors reviews
the results for inclusion in the Company’s quarterly and annual financial
statements.
|
|
7)
|
The
Board of Directors discusses the valuations and determines in good faith
that the fair values of each investment in the portfolio is reasonable
based upon the independent pricing service, input of management,
independent valuation firms and the recommendations of the Valuation
Committee of the Board of
Directors.
|
|
For the Year Ended
December 31, 2008
|
For the Year Ended
December 31, 2007
|
For the Period December
11, 2006 (inception) through
December 31, 2006
|
|||||||||
|
||||||||||||
Numerator
for basic and diluted net increase (decrease) in stockholders’ equity
resulting from operations per
share:
|
$ | (9,567,327 | ) | $ | 26,141,985 | $ | 4,670,540 | |||||
Denominator
for basic weighted average
shares:
|
20,276,430 | 17,977,348 | 17,946,333 | |||||||||
Dilutive
effect of restricted
stock:
|
178,892 | — | — | |||||||||
Dilutive
effect of stock
options:
|
— | — | — | |||||||||
Denominator
for diluted weighted average shares:1
|
20,455,322 | 17,977,348 | 17,946,333 | |||||||||
Basic
net increase (decrease) in stockholders’ equity resulting from operations
per share:
|
$ | (0.47 | ) | $ | 1.45 | $ | 0.26 | |||||
Diluted
net increase (decrease) in stockholders’ equity resulting from operations
per share:
|
$ | (0.47 | ) | $ | 1.45 | $ | 0.26 |
December
31, 2008
|
December
31, 2007
|
|||||||||||||||||||||||
Security
Type
|
Cost
|
Fair
Value
|
%¹
|
Cost
|
Fair
Value
|
%¹
|
||||||||||||||||||
Time
Deposits
|
$ | 12,185,997 | $ | 12,185,997 | 5 | % | $ | 15,674,489 | $ | 15,674,489 | 6 | % | ||||||||||||
Money
Market Account
|
10 | 10 | — | 20,766 | 20,766 | — | ||||||||||||||||||
Senior
Secured Loan
|
235,123,695 | 218,342,528 | 87 | 265,390,844 | 260,138,674 | 100 | ||||||||||||||||||
Junior
Secured Loan
|
143,370,524 | 126,498,918 | 51 | 120,620,715 | 113,259,293 | 44 | ||||||||||||||||||
Mezzanine
Investment
|
37,097,183 | 32,557,165 | 12 | 32,418,975 | 33,066,115 | 12 | ||||||||||||||||||
Senior
Subordinated Bond
|
3,008,197 | 2,287,500 | 1 | 3,009,230 | 2,490,000 | 1 | ||||||||||||||||||
Senior
Unsecured Bond
|
5,259,487 | 4,800,000 | 2 | 2,000,000 | 2,000,000 | 1 | ||||||||||||||||||
CLO
Fund Securities
|
66,376,595 | 56,635,236 | 23 | 36,061,264 | 31,020,000 | 12 | ||||||||||||||||||
Equity
Securities
|
5,256,660 | 4,389,831 | 2 | 5,043,950 | 4,752,250 | 2 | ||||||||||||||||||
Affiliate
Asset Managers
|
38,948,271 | 56,528,088 | 22 | 33,469,995 | 58,585,360 | 23 | ||||||||||||||||||
Total
|
$ | 546,626,619 | $ | 514,225,273 | 205 | % | $ | 513,710,228 | $ | 521,006,947 | 201 | % |
December
31, 2008
|
December
31, 2007
|
|||||||||||||||||||||||
Industry
Classification
|
Cost
|
Fair
Value
|
%1
|
Cost
|
Fair
Value
|
%1
|
||||||||||||||||||
Aerospace
and Defense
|
$ | 35,545,254 | $ | 34,846,047 | 14 | % | $ | 32,583,716 | $ | 32,481,819 | 13 | % | ||||||||||||
Asset
Management Companies2
|
38,948,271 | 56,528,088 | 23 | 33,469,995 | 58,585,360 | 23 | ||||||||||||||||||
Automobile
|
8,811,625 | 7,750,003 | 3 | 5,286,731 | 5,147,010 | 2 | ||||||||||||||||||
Broadcasting
and Entertainment
|
2,982,607 | 2,850,000 | 1 | 2,978,999 | 2,782,500 | 1 | ||||||||||||||||||
Buildings
and Real Estate3
|
38,404,495 | 19,231,787 | 8 | 37,726,396 | 34,944,226 | 13 | ||||||||||||||||||
Cargo
Transport
|
20,099,157 | 20,071,001 | 8 | 14,967,369 | 14,958,789 | 6 | ||||||||||||||||||
Chemicals,
Plastics and Rubber
|
6,613,081 | 5,840,000 | 2 | 3,956,582 | 3,220,000 | 1 | ||||||||||||||||||
CLO
Fund Securities
|
66,376,595 | 56,635,236 | 23 | 36,061,264 | 31,020,000 | 12 | ||||||||||||||||||
Containers,
Packaging and Glass
|
7,347,292 | 7,316,295 | 3 | 8,895,059 | 8,895,059 | 3 | ||||||||||||||||||
Diversified/Conglomerate
Manufacturing
|
6,282,124 | 6,095,170 | 2 | 8,931,343 | 8,718,855 | 3 | ||||||||||||||||||
Diversified/Conglomerate
Service
|
15,868,152 | 15,139,713 | 6 | 17,962,721 | 17,303,969 | 7 | ||||||||||||||||||
Ecological
|
2,721,193 | 2,727,813 | 1 | 3,937,850 | 3,937,850 | 2 | ||||||||||||||||||
Electronics
|
15,172,568 | 13,686,879 | 5 | 15,830,382 | 15,158,502 | 6 | ||||||||||||||||||
Farming
and Agriculture
|
4,298,336 | 1,538,550 | 1 | 4,800,651 | 4,058,835 | 2 | ||||||||||||||||||
Finance
|
14,979,849 | 13,830,557 | 6 | 11,590,697 | 11,209,824 | 4 | ||||||||||||||||||
Healthcare,
Education and Childcare
|
49,379,475 | 49,581,920 | 20 | 46,715,870 | 46,637,705 | 18 | ||||||||||||||||||
Home
and Office Furnishings, Housewares, and Durable Consumer
Goods
|
21,331,162 | 20,273,496 | 8 | 24,091,185 | 23,265,816 | 9 | ||||||||||||||||||
Hotels,
Motels, Inns and Gaming
|
6,322,276 | 6,073,739 | 2 | 9,364,165 | 9,091,041 | 4 | ||||||||||||||||||
Insurance
|
10,983,041 | 10,693,769 | 4 | 24,346,884 | 23,941,763 | 9 | ||||||||||||||||||
Leisure,
Amusement, Motion Pictures, Entertainment
|
16,929,910 | 16,903,100 | 6 | 18,402,600 | 18,402,600 | 7 | ||||||||||||||||||
Machinery
(Non-Agriculture, Non-Construction,
Non-Electronic)
|
35,514,554 | 36,263,857 | 14 | 39,573,338 | 39,483,418 | 15 | ||||||||||||||||||
Mining,
Steel, Iron and Non-Precious Metals
|
21,751,631 | 19,589,104 | 8 | 16,338,446 | 16,069,759 | 6 | ||||||||||||||||||
Oil
and Gas
|
5,998,263 | 5,940,000 | 2 | 5,997,874 | 5,960,000 | 2 | ||||||||||||||||||
Personal
and Non Durable Consumer Products (Mfg.
Only)
|
15,208,764 | 12,264,708 | 5 | 17,315,776 | 14,750,095 | 6 | ||||||||||||||||||
Personal,
Food and Miscellaneous Services
|
14,722,088 | 11,445,381 | 5 | 13,918,651 | 13,765,201 | 5 | ||||||||||||||||||
Printing
and Publishing
|
29,914,605 | 28,130,061 | 11 | 21,622,999 | 21,236,473 | 8 | ||||||||||||||||||
Retail
Stores
|
3,755,829 | 3,755,829 | 2 | 4,962,500 | 4,813,625 | 2 | ||||||||||||||||||
Time
Deposits and Money Market Account
|
12,186,007 | 12,186,007 | 5 | 15,695,255 | 15,695,255 | 6 | ||||||||||||||||||
Utilities
|
18,178,415 | 17,037,163 | 7 | 16,384,930 | 15,471,598 | 6 | ||||||||||||||||||
Total
|
$ | 546,626,619 | $ | 514,225,273 | 205 | % | $ | 513,710,228 | $ | 521,006,947 | 201 | % |
1
|
Calculated as a percentage of net
asset value.
|
2
|
Represents Katonah Debt Advisors
and related asset manager
affiliates.
|
3
|
Buildings and real estate relate
to real estate ownership, builders, managers and developers and excludes
mortgage debt investments and mortgage lenders or originators. As of
December 31, 2008 and December 31, 2007, the Company had no exposure to
mortgage securities (residential mortgage bonds, commercial mortgage
backed securities, or related asset backed securities) or companies
providing mortgage
lending.
|
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Time
deposits and money market account
|
$ | - | $ | 12,186,007 | $ | - | $ | 12,186,007 | ||||||||
Debt
securities
|
- | - | 384,486,111 | 384,486,111 | ||||||||||||
CLO
fund securities
|
- | - | 56,635,236 | 56,635,236 | ||||||||||||
Equity
securities
|
1,853 | - | 4,387,978 | 4,389,831 | ||||||||||||
Asset
manager affiliates
|
- | - | 56,528,088 | 56,528,088 |
Fair Value Based on
|
Debt Securities
|
CLO Fund
Securities
|
Equity Securities
|
Asset Manager
Affiliates
|
Total
|
|||||||||||||||
Third party pricing
service
|
— | % | — | % | — | % | — | % | — | % | ||||||||||
Public
/ private company comparables
|
77 | — | — | 11 | 88 | |||||||||||||||
Discounted
cash flow
|
— | 11 | — | — | 11 | |||||||||||||||
Residual
enterprise value
|
— | — | 1 | — | 1 | |||||||||||||||
Total
|
77 | % | 11 | % | 1 | % | 11 | % | 100 | % |
Years Ended December 31, 2008
|
||||||||||||||||||||
Debt Securities
|
CLO Fund
Securities
|
Equity Securities
|
Asset Manager
Affiliates
|
Total
|
||||||||||||||||
Balance,
December 31, 2007
|
$ | 410,954,082 | $ | 31,020,000 | $ | 4,752,250 | $ | 58,585,360 | $ | 505,311,692 | ||||||||||
Transfers
in/out of Level 3
|
|
— | — | — | — | — | ||||||||||||||
Net
amortization/(accretion) of premium/(discount)
|
717,194 | 1,456,095 | — | — | 2,173,289 | |||||||||||||||
Purchases
(sales), net
|
277,308 | 28,859,236 | 170,168 | 5,478,276 | 34,784,988 | |||||||||||||||
Total
gain (loss) realized and unrealized included in earnings
|
(27,462,473 | ) | (4,700,095 | ) | (534,440 | ) | (7,535,548 | ) | (40,232,556 | ) | ||||||||||
Balance,
December 31, 2008
|
$ | 384,486,111 | $ | 56,635,236 | $ | 4,387,978 | $ | 56,528,088 | $ | 502,037,413 | ||||||||||
Changes
in unrealized gains (losses) included in earnings related to investments
still held at reporting date
|
$ | (26,887,293 | ) | $ | (4,700,095 | ) | $ | (534,440 | ) | $ | (7,535,548 | ) | $ | (39,657,376 | ) |
|
As of
|
As of
|
||||||
December 31, 2008
|
December 31, 2007
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Assets:
|
|
|||||||
Current
assets
|
|
$
|
8,153,011
|
$
|
7,035,155
|
|||
Noncurrent
assets
|
|
318,106
|
396,111
|
|||||
|
||||||||
Total
assets
|
|
$
|
8,471,117
|
$
|
7,431,266
|
|||
|
||||||||
Liabilities:
|
|
|||||||
Current
liabilities
|
|
3,652,380
|
4,254,202
|
|||||
|
||||||||
Total
liabilities
|
|
$
|
3,652,380
|
$
|
4,254,202
|
|||
|
Years Ended
|
Years Ended
|
||||||
December 31, 2008
|
December 31, 2007
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Gross
revenue
|
|
$
|
11,206,771
|
$
|
11,262,969
|
|||
Total
expenses
|
|
11,971,596
|
8,505,115
|
|||||
|
||||||||
Net
income (loss)
|
|
$
|
(764,825)
|
$
|
2,757,854
|
|||
|
||||||||
Dividends
declared
|
|
$
|
1,350,000
|
$
|
500,000
|
|||
Cumulative
undistributed net income
|
$
|
70,319
|
$
|
2,185,144
|
As
of
|
As
of
|
|||||||
December
31, 2008
|
December
31, 2007
|
|||||||
Secured
credit facility, $275 million commitment due September 29,
2010
|
$ | 261,691,148 | $ | 255,000,000 |
|
Year
Ended
|
|||
December
31, 2008
|
||||
|
||||
Pre-tax
net decrease in stockholders’ equity resulting from
operations
|
|
$
|
(9,567,327)
|
|
Net
unrealized losses on investments transactions not taxable
|
|
39,698,065
|
||
Income
not currently taxable
|
(1,390,939)
|
|||
Expenses
not currently deductible
|
|
940,864
|
||
|
||||
Taxable
income before deductions for distributions
|
|
$
|
29,680,663
|
|
|
||||
Taxable
income before deductions for distributions per weighted average shares for
the period
|
|
$
|
1.46
|
|
Year
Ended
|
|||
December
31, 2008
|
||||
|
||||
Undistributed
ordinary income
|
|
$
|
977,904
|
|
Capital
loss carryforward
|
|
(680,687)
|
||
Net
unrealized depreciation
|
(32,401,346)
|
|||
|
||||
Total
tax-basis accumulated losses
|
|
$
|
(32,104,129)
|
|
Year
Ended
|
|||
December
31, 2008
|
||||
|
||||
Accumulated
undistributed net investment income
|
|
$
|
1,076,078
|
|
Accumulated
net realized loss
|
|
$
|
(105,508)
|
|
Paid-in-capital
|
$
|
(970,570)
|
Shares
|
Weighted Average
Exercise Price per
Share
|
Weighted Average
Contractual
Remaining Term
(years)
|
Aggregate
Intrinsic Value1
|
|||||||||||||
Options
outstanding at January 1, 2008
|
1,315,000 | $ | 15.52 | |||||||||||||
Granted
|
20,000 | $ | 11.97 | |||||||||||||
Exercised
|
— | |||||||||||||||
Forfeited
|
(1,315,000 | ) | $ | 15.52 | ||||||||||||
Outstanding
at December 31, 2008
|
20,000 | $ | 11.97 | 9.5 | $ | — | ||||||||||
Total
vested at December 31, 2008
|
10,000 | $ | 11.97 | 8.8 |
1
|
Represents
the difference between the market value of the options at December 31,
2008 and the cost for the option holders to exercise the
options.
|
Non-Vested
Restricted
Shares
|
Weighted Average
Exercise Price per
Share
|
Weighted Average
Contractual
Remaining Term
(years)
|
||||||||||||
Non-vested
shares outstanding at January 1, 2008
|
— | $ | — | |||||||||||
Granted
|
359,250 | $ | 10.73 | 2.4 | ||||||||||
Exercised
|
(3,000 | ) | $ | 9.21 | ||||||||||
Forfeited
|
(16,667 | ) | $ | 9.21 | ||||||||||
Outstanding
at December 31, 2008
|
339,583 | $ | 10.83 | 2.4 | ||||||||||
Total
non-vested shares at December 31, 2008
|
334,250 | $ | 10.84 | 2.4 | ||||||||||
Total
vested shares at December 31, 2008
|
5,333 | $ | 10.39 |
Q1 2008 | Q2 2008 | Q3 2008 | Q4 2008 | |||||||||||||
Total
interest and related portfolio income
|
$ | 14,332,842 | $ | 12,265,524 | $ | 11,328,553 | $ | 11,285,291 | ||||||||
Net
investment income and realized gains
|
$ | 8,049,958 | $ | 7,762,979 | $ | 7,467,710 | $ | 6,850,091 | ||||||||
Net
increase (decrease) in net assets resulting from
operations
|
$ | 195,252 | $ | 7,297,285 | $ | 3,988,536 | $ | (21,048,400 | ) | |||||||
Net
increase (decrease) in net assets resulting from operations per
share—basic
|
$ | 0.01 | $ | 0.36 | $ | 0.19 | $ | (0.98 | ) | |||||||
Net
increase (decrease) in net assets resulting from operations per
share—diluted
|
$ | 0.01 | $ | 0.36 | $ | 0.18 | $ | (0.97 | ) | |||||||
Net
investment income and realized gains per share—basic
|
$ | 0.45 | $ | 0.38 | $ | 0.35 | $ | 0.32 | ||||||||
Net
investment income and realized gains per share—diluted
|
$ | 0.45 | $ | 0.38 | $ | 0.34 | $ | 0.31 | ||||||||
Q1 20071
|
Q2 20071
|
Q3 20071
|
Q4
2007
|
|||||||||||||
Total
interest and related portfolio income
|
$ | 6,534,567 | $ | 8,578,364 | $ | 10,483,244 | $ | 12,882,839 | ||||||||
Net
investment income and realized gains
|
$ | 4,892,907 | $ | 5,425,858 | $ | 6,018,176 | $ | 6,688,325 | ||||||||
Net
increase (decrease) in net assets resulting from
operations
|
$ | 13,949,008 | $ | 16,940,501 | $ | (4,683,689 | ) | $ | (63,835 | ) | ||||||
Net
increase (decrease) in net assets resulting from operations per
share—basic and diluted
|
$ | 0.78 | $ | 0.94 | $ | (0.26 | ) | $ | — | |||||||
Net
investment income and realized gains per share—basic and
diluted
|
$ | 0.27 | $ | 0.30 | $ | 0.33 | $ | 0.37 |
Exhibit
Number
|
|
Description
|
3.1
|
|
Form
of Certificate of Incorporation of Kohlberg Capital Corporation (the
“Company”). (1)
|
3.2
|
|
Form
of Bylaws of the Company. (2)
|
4.1
|
|
Specimen
certificate of the Company’s common stock, par value $0.01 per share.
(1)
|
4.2
|
|
Form
of Registration Rights Agreement. (3)
|
4.3
|
|
Form
of Dividend Reinvestment Plan. (3)
|
10.1
|
|
Form
of the Amended and Restated 2006 Equity Incentive Plan. (9)
|
10.2
|
|
Form
of Company Non-Qualified Stock Option Certificate. (3)
|
10.3
|
|
Form
of Custodian Agreement by and among Kohlberg Capital Corporation and U.S.
Bank National Association. (3)
|
10.4
|
|
Form
of License and Referral Agreement between the Company and Kohlberg &
Company, LLC. (1)
|
10.5
|
|
Form
of Overhead Allocation Agreement between the Company and Katonah Debt
Advisors, LLC. (3)
|
10.6
|
|
Form
of Employment Agreement between the Company and Dayl W. Pearson. (3)
|
10.7
|
|
Form
of Employment Agreement between the Company and Michael I. Wirth. (3)
|
10.8
|
|
Form
of Employment Agreement between the Company and R. Jon Corless. (3)
|
10.9
|
|
Form
of Employment Agreement between the Company and E.A. Kratzman. (3)
|
10.10
|
|
Form
of Employment Agreement between Katonah Debt Advisors and E.A. Kratzman.
(3)
|
10.11
|
|
Form
of Indemnification Agreement for Officers and Directors of the Company.
(4)
|
10.12
|
|
Execution
Copy of Loan Funding and Servicing Agreement dated as of February 14,
2007, by and among Kohlberg Capital Funding LLC I, Kohlberg Capital
Corporation, each of the conduit lenders and institutional lenders from
time to time party thereto, each of the lender agents from time to time
party thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial
Services, Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup
Services, and U.S. Bank National Association, as Trustee. (5)
|
10.13
|
|
Execution
Copy of First Amendment to Loan Funding and Servicing Agreement, dated as
of May 30, 2007, by and among Kohlberg Capital Funding LLC I, the Company,
each of the conduit lenders and institutional lenders from time to time
party thereto, each of the lender agents from time to time party thereto,
BMO Capital Markets Corp., as the Agent, Lyon Financial Services, Inc.
(d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and U.S.
Bank National Association, as Trustee. (6)
|
10.14
|
|
Execution
Copy of Second Amendment to Loan Funding and Servicing Agreement, dated as
of October 1, 2007, by and among Kohlberg Capital Funding LLC I, the
Company, each of the conduit lenders and institutional lenders from time
to time party thereto, each of the lender agents from time to time party
thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial Services,
Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and
U.S. Bank National Association, as Trustee. (6)
|
Exhibit
Number
|
|
Description
|
10.15
|
|
Execution
Copy of Third Amendment to Loan Funding and Servicing Agreement, dated as
of November 21, 2007, by and among Kohlberg Capital Funding LLC I, the
Company, each of the conduit lenders and institutional lenders from time
to time party thereto, each of the lender agents from time to time party
thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial Services,
Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and
U.S. Bank National Association, as Trustee. (8)
|
10.16
|
|
Execution
Copy of Purchase and Sale Agreement dated as of February 14, 2007, by and
among Kohlberg Capital Funding LLC I and the Company. (7)
|
10.17
|
|
Form
of 2008 Non-Employee Director Plan. (10)
|
21.1
|
|
List
of Subsidiaries.
|
23.1
|
|
Consent
of Deloitte & Touche LLP, Independent Registered Public Accounting
Firm.
|
31.1
|
|
Chief
Executive Officer Certification Pursuant to Rule 13a-14 of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Chief
Financial Officer Certification Pursuant to Rule 13a-14 of the Securities
Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
32.1
|
|
Chief
Executive Officer Certification pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Chief
Financial Officer Certification pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
(1)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on October 6, 2006 (File
No. 333-136714).
|
(2)
|
Incorporated
by reference to the exhibit included on Form N-2, as filed on
March 16, 2007 (File
No. 333-141382).
|
(3)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 2
on Form N-2, as filed on November 20, 2006 (File
No. 333-136714).
|
(4)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 3
on Form N-2, as filed on November 24, 2006 (File
No. 333-136714).
|
(5)
|
Incorporated
by reference to Exhibit 10.15 of the Annual Report on Form 10-K, as filed
on March 29, 2007 (File
No. 814-00735).
|
(6)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on October 18, 2007 (File
No. 333-146190).
|
(7)
|
Incorporated
by reference to Exhibit 10.2 of the Current Report on Form 8-K, as filed
on February 16, 2007 (File
No. 814-00735).
|
(8)
|
Incorporated
by reference to Exhibit 10.15 of the Annual Report on Form 10-K, as filed
on March 14, 2008 (File
No. 814-00735).
|
(9)
|
Incorporated
by reference to Exhibit 10.1 of the Current Report on Form 8-K, as filed
on June 19, 2008 (File No.
814-00735).
|
(10)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on June 30, 2008 (File
No. 333-151268).
|
Date:
March 16, 2009
|
By:
|
/
S / Dayl W.
Pearson
|
||||||
Dayl
W. Pearson
|
||||||||
President
and Chief Executive Officer
|
||||||||
(Principal
Executive Officer)
|
Date:
March 16, 2009
|
By:
|
/
S / Michael I.
Wirth
|
||||||
Michael
I. Wirth
|
||||||||
Chief
Financial Officer and Chief Compliance Officer
|
||||||||
(Principal
Financial Officer)
|
Date:
March 16, 2009
|
By:
|
/
S / Dayl W.
Pearson
|
||||||
Dayl
W. Pearson
|
||||||||
President
and Chief Executive Officer
|
||||||||
(Principal
Executive Officer)
|
Date:
March 16, 2009
|
By:
|
/
S / Michael I.
Wirth
|
||||||
Michael
I. Wirth
|
||||||||
Chief
Financial Officer and Chief Compliance Officer
|
||||||||
(Principal
Financial
Officer)
|
x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Commission
File No. 814-00735
|
Delaware
|
20-5951150
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
(Registrant’s
telephone number, including area code)
|
Title
of
each
class
|
Name
of exchange on which registered
|
|
Common
Shares, par value $0.01 per share
|
The
NASDAQ Global Select
Market
|
Securities
registered pursuant to Section 12(g) of the Act: None
|
Large accelerated filer o
|
|
Accelerated filer x
|
|
Non-accelerated filer o
|
|
Smaller Reporting Company o
|
|
|
(Do not check if a
smaller reporting company)
|
|
The
number of outstanding shares of common stock of the registrant as
of March 16, 2009 was
21,570,869.
|
Item 15.
|
Exhibits
and Financial Statement Schedules
|
Balance
Sheets as of December 31, 2008 and December 31, 2007
|
Statements
of Operations for the years ended December 31, 2008, December
31, 2007 and for the period from December 11, 2006 (inception) through
December 31, 2006
|
Statements
of Changes in Net Assets for the years ended December 31, 2008, December
31, 2007 and for the period from December 11, 2006 (inception) through
December 31, 2006
|
Statements
of Cash Flows for the years ended December 31, 2008, December 31, 2007 and
for the period from December 11, 2006 (inception) through December 31,
2006
|
Schedules
of Investments as of December 31, 2008 and December 31,
2007
|
Financial
Highlights for the years ended December 31, 2008, December 31, 2007 and
for the period from December 11, 2006 (inception) through December 31,
2006
|
Notes
to Financial Statements
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Form
of Certificate of Incorporation of Kohlberg Capital Corporation (the
“Company”). (1)
|
3.2
|
|
Form
of Bylaws of the Company. (2)
|
4.1
|
|
Specimen
Certificate of the Company’s common stock, par value $0.01 per share.
(1)
|
4.2
|
|
Form
of Registration Rights Agreement. (3)
|
4.3
|
|
Form
of Dividend Reinvestment Plan. (3)
|
10.1
|
|
Form
of the Amended and Restated 2006 Equity Incentive Plan. (9)
|
10.2
|
|
Form
of Company Non-Qualified Stock Option Certificate. (3)
|
10.3
|
|
Form
of Custodian Agreement by and among Kohlberg Capital Corporation and U.S.
Bank National Association. (3)
|
10.4
|
|
Form
of License and Referral Agreement between the Company and Kohlberg &
Company, LLC. (1
)
|
10.5
|
|
Form
of Overhead Allocation Agreement between the Company and Katonah Debt
Advisors, LLC. (3)
|
10.6
|
|
Form
of Employment Agreement between the Company and Dayl W. Pearson. (3)
|
10.7
|
|
Form
of Employment Agreement between the Company and Michael I. Wirth. (3)
|
10.8
|
|
Form
of Employment Agreement between the Company and R. Jon Corless. (3)
|
10.9
|
|
Form
of Employment Agreement between the Company and E.A. Kratzman.
(3)
|
10.10
|
|
Form
of Employment Agreement between Katonah Debt Advisors and E.A.
Kratzman.
(3)
|
10.11
|
|
Form
of Indemnification Agreement for Officers and Directors of the Company.
(4)
|
10.12
|
|
Execution
Copy of Loan Funding and Servicing Agreement dated as of February 14,
2007, by and among Kohlberg Capital Funding LLC I, Kohlberg Capital
Corporation, each of the conduit lenders and institutional lenders from
time to time party thereto, each of the lender agents from time to time
party thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial
Services, Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup
Services, and U.S. Bank National Association, as Trustee. (5)
|
10.13
|
|
Execution
Copy of First Amendment to Loan Funding and Servicing Agreement, dated as
of May 30, 2007, by and among Kohlberg Capital Funding LLC I, the Company,
each of the conduit lenders and institutional lenders from time to time
party thereto, each of the lender agents from time to time party thereto,
BMO Capital Markets Corp., as the Agent, Lyon Financial Services, Inc.
(d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and U.S.
Bank National Association, as Trustee. (6)
|
10.14
|
|
Execution
Copy of Second Amendment to Loan Funding and Servicing Agreement, dated as
of October 1, 2007, by and among Kohlberg Capital Funding LLC I, the
Company, each of the conduit lenders and institutional lenders from time
to time party thereto, each of the lender agents from time to time party
thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial Services,
Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and
U.S. Bank National Association, as Trustee. (6)
|
10.15
|
|
Execution
Copy of Third Amendment to Loan Funding and Servicing Agreement, dated as
of November 21, 2007, by and among Kohlberg Capital Funding LLC I, the
Company, each of the conduit lenders and institutional lenders from time
to time party thereto, each of the lender agents from time to time party
thereto, BMO Capital Markets Corp., as the Agent, Lyon Financial Services,
Inc. (d/b/a U.S. Bank Portfolio Services), as the Backup Servicer, and
U.S. Bank National Association, as Trustee.
(8)
|
10.16
|
|
Execution
Copy of Purchase and Sale Agreement dated as of February 14, 2007, by and
among Kohlberg Capital Funding LLC I and the Company. (7)
|
10.17
|
|
Form
of 2008 Non-Employee Director Plan. (10)
|
21.1
|
|
List
of Subsidiaries. *
|
23.1
|
|
Consent
of Deloitte & Touche LLP, Independent Registered Public Accounting
Firm. (11)
|
31.1
|
|
Chief
Executive Officer Certification Pursuant to Rule 13a-14 of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. *
|
31.2
|
|
Chief
Financial Officer Certification Pursuant to Rule 13a-14 of the Securities
Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002. *
|
32.1
|
|
Chief
Executive Officer Certification pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. *
|
32.2
|
|
Chief
Financial Officer Certification pursuant to Section 1350, Chapter 63 of
Title 18, United States Code, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. *
|
(1)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on October 6, 2006 (File
No. 333-136714).
|
(2)
|
Incorporated
by reference to the exhibit included on Form N-2, as filed on
March 16, 2007 (File
No. 333-141382).
|
(3)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 2
on Form N-2, as filed on November 20, 2006 (File
No. 333-136714).
|
(4)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 3
on Form N-2, as filed on November 24, 2006 (File
No. 333-136714).
|
(5)
|
Incorporated
by reference to Exhibit 10.15 of the Annual Report on Form 10-K, as filed
on March 29, 2007 (File
No. 814-00735).
|
(6)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on October 18, 2007 (File
No. 333-146190).
|
(7)
|
Incorporated
by reference to Exhibit 10.2 of the Current Report on Form 8-K, as filed
on February 16, 2007 (File
No. 814-00735).
|
(8)
|
Incorporated
by reference to Exhibit 10.15 of the Annual Report on Form 10-K, as filed
on March 14, 2008 (File
No. 814-00735).
|
(9)
|
Incorporated
by reference to Exhibit 10.1 of the Current Report on Form 8-K, as filed
on June 19, 2008 (File No.
814-00735).
|
(10)
|
Incorporated
by reference to the exhibit included in Pre-Effective Amendment No. 1
on Form N-2, as filed on June 30, 2008 (File
No. 333-151268).
|
(11)
|
Incorporated
by reference to the Exhibit 23.1 of the Annual Report on Form 10-K, as
filed on March 16, 2009 (File No.
814-00735).
|
KOHLBERG
CAPITAL CORPORATION
|
|||
Date:
March 25, 2009
|
By
|
/s/ Dayl
W. Pearson
|
|
Dayl
W. Pearson
President
and Chief Executive
Officer
|
|
Jurisdiction
|
|
Katonah
Debt Advisors, L.L.C.(2)
|
|
Delaware
|
Kohlberg
Capital Funding LLC I
|
|
Delaware
|
Katonah
Management Holdings LLC(2)
|
|
Delaware
|
Katonah
X Management LLC(2)(3)
|
|
Delaware
|
Katonah
2007-I Management LLC(2)(3)
|
|
Delaware
|
Katonah
2008-II Management LLC(2)(3)
|
|
Delaware
|
Katonah
Scott’s Cove Management LLC(2)(3)
|
|
Delaware
|
KPKSI
Management Holdings LLC(2)
|
|
Delaware
|
KPKSI
Holdings LLC(2)(4)
|
|
Delaware
|
(1)
|
Excludes
a 35% interest in PKSIL LLC.
|
(2)
|
Represents
a wholly-owned portfolio company that is not consolidated for financial
reporting purposes.
|
(3)
|
A
wholly-owned subsidiary of Katonah Management Holdings
LLC.
|
(4)
|
A
wholly-owned subsidiary of KPKSI Management Holdings
LLC.
|
Date:
March 25, 2009
|
By
|
/
S / Dayl W. Pearson
|
|
Dayl
W. Pearson
President
and Chief Executive Officer
(Principal
Executive
Officer)
|
Date:
March 25, 2009
|
By
|
/
S / Michael I. Wirth
|
|
Michael
I. Wirth
Chief
Financial Officer and Chief Compliance Officer
(Principal
Financial
Officer)
|
Date:
March 25, 2009
|
By
|
/
S / Dayl W. Pearson
|
|
Dayl
W. Pearson
President
and Chief Executive Officer
(Principal
Executive
Officer)
|
Date:
March 25, 2009
|
By
|
/
S / Michael I. Wirth
|
|
Michael
I. Wirth
Chief
Financial Officer and Chief Compliance Officer
(Principal
Financial
Officer)
|