10-Q 1 gbdcfy2019q210-q.htm 10-Q Document
______________________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________________________________________________________ 
FORM 10-Q

þ                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2019

OR

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 814-00794

Golub Capital BDC, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
27-2326940
(State or other jurisdiction of incorporation or organization)
 
 (I.R.S. Employer Identification No.)
666 Fifth Avenue, 18th Floor
New York, NY 10103
(Address of principal executive offices)

(212) 750-6060
(Registrant's telephone number, including area code)
Title of each class
Trading Symbol
Name of each exchange on which registered

Common Stock, par value $0.001 per share
GBDC
 The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes o No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ
Accelerated filer o
Non-accelerated filer  o 
Smaller reporting company o
Emerging growth company o
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No þ




As of May 8, 2019, the Registrant had 60,587,403 shares of common stock, $0.001 par value, outstanding.



Part I. Financial Information
  
Item 1.
Financial Statements
 
Consolidated Statements of Financial Condition as of March 31, 2019 (unaudited) and September 30, 2018
 
Consolidated Statements of Operations for the three and six months ended March 31, 2019 (unaudited) and 2018 (unaudited)
 
Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2019 (unaudited) and 2018 (unaudited)
 
Consolidated Statements of Cash Flows for the six months ended March 31, 2019 (unaudited) and 2018 (unaudited)
 
Consolidated Schedules of Investments as of March 31, 2019 (unaudited) and September 30, 2018
 
Notes to Consolidated Financial Statements (unaudited)
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
Item 4.
Controls and Procedures
Part II. Other Information
 
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.
Defaults Upon Senior Securities
Item 4.
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits


3

Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
(In thousands, except share and per share data)

 
March 31, 2019
 
September 30, 2018
 
(unaudited)
 
 
Assets
  

 
  

Investments, at fair value
  

 
  

Non-controlled/non-affiliate company investments
$
1,874,593

 
$
1,704,473

Non-controlled affiliate company investments
8,678

 
7,284

Controlled affiliate company investments
71,742

 
71,084

Total investments at fair value (amortized cost of $1,952,719 and $1,780,652, respectively)
1,955,013

 
1,782,841

Cash and cash equivalents
5,635

 
5,878

Foreign currencies (cost of $207 and $159, respectively)
207

 
159

Restricted cash, cash equivalents and foreign currencies (cost of $70,310 and $39,668, respectively)
70,308

 
39,668

Interest receivable
7,418

 
6,664

Other assets
1,027

 
342

Total Assets
$
2,039,608

 
$
1,835,552

Liabilities
  

 
  

Debt
$
1,051,173

 
$
845,683

Less unamortized debt issuance costs
4,938

 
2,934

Debt less unamortized debt issuance costs
1,046,235

 
842,749

Interest payable
9,851

 
4,135

Management and incentive fees payable
15,017

 
17,671

Accounts payable and accrued expenses
2,192

 
2,069

Accrued trustee fees
78

 
74

Total Liabilities
1,073,373

 
866,698

Commitments and Contingencies (Note 7)
  

 
  

Net Assets
  

 
  

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2019 and September 30, 2018

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 60,587,403 and 60,165,454 shares issued and outstanding as of March 31, 2019 and September 30, 2018, respectively
61

 
60

Paid in capital in excess of par
956,508

 
949,547

Distributable earnings 
9,666

 
19,247

Total Net Assets
966,235

 
968,854

Total Liabilities and Total Net Assets
$
2,039,608

 
$
1,835,552

Number of common shares outstanding
60,587,403

 
60,165,454

Net asset value per common share
$
15.95

 
$
16.10



See Notes to Consolidated Financial Statements.
4




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)

 
Three months ended March 31,
 
Six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Investment income
  

 
  

 
 
 
 
From non-controlled/non-affiliate company investments:
  

 
  

 
 
 
 
Interest income
$
41,475

 
$
34,215

 
$
80,152

 
$
67,407

Dividend income
19

 
13

 
58

 
610

Fee income
125

 
662

 
647

 
1,196

Total investment income from non-controlled/non-affiliate company investments
41,619

 
34,890

 
80,857

 
69,213

From non-controlled affiliate company investments:
  

 
  

 
 
 
 
Interest income
186

 
154

 
359

 
316

Total investment income from non-controlled affiliate company investments
186

 
154

 
359

 
316

From controlled affiliate company investments:
  

 
  

 
 
 
 
Dividend income

 
1,853

 

 
3,818

Total investment income from controlled affiliate company investments

 
1,853

 

 
3,818

Total investment income
41,805

 
36,897

 
81,216

 
73,347

Expenses
  

 
  

 
 
 
 
Interest and other debt financing expenses
10,636

 
7,906

 
20,420

 
15,620

Base management fee
6,594

 
5,929

 
13,033

 
11,859

Incentive fee
3,066

 
3,011

 
5,049

 
5,882

Professional fees
666

 
775

 
1,254

 
1,463

Administrative service fee
663

 
621

 
1,362

 
1,239

General and administrative expenses
124

 
127

 
225

 
245

Total expenses
21,749

 
18,369

 
41,343

 
36,308

Net investment income
20,056

 
18,528

 
39,873

 
37,039

Net gain (loss) on investments and foreign currency
  

 
  

 
 
 
 
Net realized gain (loss) on investments and foreign currency transactions:
  

 
  

 
 
 
 
Non-controlled/non-affiliate company investments
(1,852
)
 
(618
)
 
(3,800
)
 
(137
)
Foreign currency transactions
(9
)
 

 
(39
)
 

Net realized gain (loss) on investments and foreign currency transactions
(1,861
)
 
(618
)
 
(3,839
)
 
(137
)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation:
  

 
  

 
 
 
 
Non-controlled/non-affiliate company investments
(1,060
)
 
5,829

 
(799
)
 
6,817

Non-controlled affiliate company investments
(361
)
 
5

 
(279
)
 
564

Controlled affiliate company investments
1,077

 
(712
)
 
1,183

 
64

Translation of assets and liabilities in foreign currencies
(63
)
 

 
88

 

Net change in unrealized appreciation (depreciation) on investments and foreign currency translation
(407
)
 
5,122

 
193

 
7,445

Net gain (loss) on investments and foreign currency
(2,268
)
 
4,504

 
(3,646
)
 
7,308

Net increase in net assets resulting from operations
$
17,788

 
$
23,032

 
$
36,227

 
$
44,347

Per Common Share Data
  

 
  

 
 
 
 
Basic and diluted earnings per common share
$
0.29

 
$
0.39

 
$
0.60

 
$
0.75

Dividends and distributions declared per common share
$
0.32

 
$
0.32

 
$
0.76

 
$
0.72

Basic and diluted weighted average common shares outstanding
60,429,580

 
59,744,054

 
60,301,709

 
59,663,361


See Notes to Consolidated Financial Statements.
5





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Changes in Net Assets (unaudited)
(In thousands, except share data)

 
Common Stock
 
Paid in Capital in Excess of Par
 
Distributable Earnings (1)
 
Total Net Assets
 
Shares
 
Par Amount
 
 
 
Balance at September 30, 2017
59,577,293

 
$
60

 
$
939,307

 
$
18,579

 
$
957,946

Net increase in net assets resulting from operations:
 
 
 
 
 
 
 
 
 
Net investment income

 

 

 
37,039

 
37,039

Net realized gain (loss) on investments and foreign currency transactions

 

 

 
(137
)
 
(137
)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation

 

 

 
7,445

 
7,445

Distributions to stockholders:
  

 
  

 
  

 
 
 
 
Stock issued in connection with dividend reinvestment plan
290,238

 

 
5,011

 

 
5,011

Distributions from distributable earnings (1)

 

 

 
(42,948
)
 
(42,948
)
Total increase (decrease) for the six months ended March 31, 2018
290,238

 

 
5,011

 
1,399

 
6,410

Balance at March 31, 2018
59,867,531

 
$
60

 
$
944,318

 
$
19,978

 
$
964,356

Balance at December 31, 2017
59,741,248

 
$
60

 
$
942,179

 
$
16,063

 
$
958,302

Net increase in net assets resulting from operations:
 
 
 
 
 
 
 
 
 
Net investment income

 

 

 
18,528

 
18,528

Net realized gain (loss) on investments and foreign currency transactions

 

 

 
(618
)
 
(618
)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation

 

 

 
5,122

 
5,122

Distributions to stockholders:
 
 
 
 
 
 
 
 
 
Stock issued in connection with dividend reinvestment plan
126,283

 

 
2,139

 

 
2,139

Distributions from distributable earnings

 

 

 
(19,117
)
 
(19,117
)
Total increase (decrease) for the three months ended March 31, 2018
126,283

 

 
2,139

 
3,915

 
6,054

Balance at March 31, 2018
59,867,531

 
$
60

 
$
944,318

 
$
19,978

 
$
964,356

Balance at September 30, 2018
60,165,454

 
$
60

 
$
949,547

 
$
19,247

 
$
968,854

Net increase in net assets resulting from operations:
 
 
 
 
 
 
 
 
 
Net investment income

 

 

 
39,873

 
39,873

Net realized gain (loss) on investments and foreign currency transactions

 

 

 
(3,839
)
 
(3,839
)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation

 

 

 
193

 
193

Distributions to stockholders:
 
 
 
 
 
 
  

 
 
Stock issued in connection with dividend reinvestment plan
421,949

 
1

 
6,961

 

 
6,962

Distributions from distributable earnings

 

 

 
(45,808
)
 
(45,808
)
Total increase (decrease) for the six months ended March 31, 2019
421,949

 
1

 
6,961

 
(9,581
)
 
(2,619
)
Balance at March 31, 2019
60,587,403

 
$
61

 
$
956,508

 
$
9,666

 
$
966,235

Balance at December 31, 2018
60,422,239

 
$
60

 
$
953,681

 
$
11,213

 
$
964,954

Net increase in net assets resulting from operations:
 
 
 
 
 
 
 
 
 
Net investment income

 

 

 
20,056

 
20,056

Net realized gain (loss) on investments and foreign currency transactions

 

 

 
(1,861
)
 
(1,861
)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation

 

 

 
(407
)
 
(407
)
Distributions to stockholders:
 
 
 
 
 
 
  

 
 
Stock issued in connection with dividend reinvestment plan
165,164

 
1

 
2,827

 

 
2,828

Distributions from distributable earnings

 

 

 
(19,335
)
 
(19,335
)
Total increase (decrease) for the three months ended March 31, 2019
165,164

 
1

 
2,827

 
(1,547
)
 
1,281

Balance at March 31, 2019
60,587,403

 
$
61

 
$
956,508

 
$
9,666

 
$
966,235


(1) See Note 2. Significant Accounting Policies and Recent Accounting Updates.



See Notes to Consolidated Financial Statements.
6





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(In thousands)

 
Six months ended March 31,
  
2019
 
2018
Cash flows from operating activities
  

 
  

Net increase in net assets resulting from operations
$
36,227

 
$
44,347

Adjustments to reconcile net increase in net assets resulting from operations
to net cash (used in) provided by operating activities
 
 
 
Amortization of deferred debt issuance costs
1,136

 
1,435

Accretion of discounts and amortization of premiums
(3,930
)
 
(5,070
)
Net realized (gain) loss on investments
3,800

 
137

Net realized (gain) loss on foreign currency and other transactions
(49
)
 

Net change in unrealized (appreciation) depreciation on investments
(105
)
 
(7,445
)
Net change in unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies
(83
)
 

Proceeds from (fundings of) revolving loans, net
(4,051
)
 
1,923

Fundings of investments
(310,935
)
 
(271,602
)
Proceeds from principal payments and sales of portfolio investments
143,900

 
207,777

PIK interest
(851
)
 
(512
)
Changes in operating assets and liabilities:
 
 
 
Interest receivable
(754
)
 
(1,369
)
Other assets
(685
)
 
102

Interest payable
5,716

 
(1,138
)
Management and incentive fees payable
(2,654
)
 
1,944

Payable for investments purchased

 
350

Accounts payable and accrued expenses
123

 
(165
)
Accrued trustee fees
4

 
3

Net cash (used in) provided by operating activities
(133,191
)
 
(29,283
)
Cash flows from financing activities
  

 
  

Borrowings on debt
1,070,586

 
263,850

Repayments of debt
(865,037
)
 
(209,750
)
Capitalized debt issuance costs
(3,140
)
 
(1,082
)
Proceeds from other short-term borrowings
21,719

 

Repayments on other short-term borrowings
(21,646
)
 

Distributions paid
(38,846
)
 
(37,937
)
Net cash provided by (used in) financing activities
163,636

 
15,081

Net change in cash, cash equivalents, foreign currencies and restricted cash and cash equivalents
30,445

 
(14,202
)
Cash, cash equivalents, foreign currencies and restricted cash and cash equivalents, beginning of period
45,705

 
62,558

Cash, cash equivalents, foreign currencies and restricted cash and cash equivalents, end of period
$
76,150

 
$
48,356

Supplemental disclosure of cash flow information:
  

 
  

Cash paid during the period for interest
$
(13,568
)
 
$
(15,323
)
Distributions declared during the period
(45,808
)
 
(42,948
)
Supplemental disclosure of noncash financing activity:
 
 
 
Proceeds from issuance of Class A-1-R, Class A-2-R, and Class B-R 2014 Notes
$

 
$
246,000

Redemptions of Class A-1, Class A-2, and Class B 2014 Notes

 
(246,000
)
Stock issued in connection with dividend reinvestment plan
6,962

 
5,011




See Notes to Consolidated Financial Statements.
7





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited) - (continued)
(In thousands)


The following table provides a reconciliation of cash, cash equivalents, foreign currencies and restricted cash, cash equivalents and foreign currencies reported within the Consolidated Statements of Financial Condition that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:
 
As of March 31,
 
2019
 
2018
Cash and cash equivalents
$
5,635

 
$
5,868

Foreign currencies (cost of $207 and $0, respectively)
207

 

Restricted cash, cash equivalents and foreign currencies (cost of $70,310 and $42,488, respectively)
70,308

 
42,488

Total cash, cash equivalents, restricted cash and cash equivalents and foreign currencies shown in the Consolidated Statements of Cash Flows
$
76,150

 
$
48,356

See Note 2. Significant Accounting Policies and Recent Accounting Updates for a description of restricted cash, cash equivalents and foreign currencies.



See Notes to Consolidated Financial Statements.
8





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited)
March 31, 2019
(In thousands)


 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Investments
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
 
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Debt investments
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Aerospace and Defense
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

ILC Dover, LP~
Senior loan
 
L + 4.75%
(c) 
 
7.63%
 
12/2023
 
$
9,878

 
$
9,799

 
1.0

%
$
9,878

NTS Technical Systems^*~
One stop
 
L + 6.25%
(a) 
 
8.74%
 
06/2021
 
22,299

 
22,116

 
2.3

 
22,299

NTS Technical Systems~
One stop
 
L + 6.25%
(a) 
 
8.74%
 
06/2021
 
3,682

 
3,649

 
0.4

 
3,682

NTS Technical Systems(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
06/2021
 

 
(43
)
 

 

Tresys Technology Holdings, Inc.(7)
One stop
 
L + 6.75%
(a) 
 
9.25%
 
12/2019
 
3,899

 
3,845

 
0.1

 
1,170

Tresys Technology Holdings, Inc.(7)
One stop
 
L + 6.75%
(a) 
 
9.25%
 
12/2019
 
659

 
658

 
0.1

 
659

Tronair Parent, Inc.^
Senior loan
 
L + 4.75%
(a)(c) 
 
7.56%
 
09/2023
 
364

 
362

 
0.1

 
350

Tronair Parent, Inc.
Senior loan
 
L + 4.50%
(a)(c)(f) 
 
7.47%
 
09/2021
 
80

 
79

 

 
77

Whitcraft LLC^*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
04/2023
 
12,376

 
12,250

 
1.3

 
12,376

Whitcraft LLC^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
04/2023
 
193

 
191

 

 
193

Whitcraft LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
04/2023
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
53,430

 
52,905

 
5.3

 
50,684

Automobile
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Dent Wizard International Corporation~
Senior loan
 
L + 4.00%
(a) 
 
6.50%
 
04/2020
 
4,454

 
4,445

 
0.5

 
4,454

Grease Monkey International, LLC^*
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
11/2022
 
4,838

 
4,795

 
0.5

 
4,838

Grease Monkey International, LLC~
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
11/2022
 
149

 
146

 

 
149

Grease Monkey International, LLC~
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
11/2022
 
105

 
104

 

 
105

Grease Monkey International, LLC~
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
11/2022
 
75

 
75

 

 
75

Grease Monkey International, LLC
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
11/2022
 
43

 
42

 

 
43

Grease Monkey International, LLC
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
11/2022
 
12

 
11

 

 
12

Polk Acquisition Corp.*
Senior loan
 
L + 5.25%
(c) 
 
7.85%
 
06/2022
 
127

 
125

 

 
124

Power Stop, LLC~
Senior loan
 
L + 4.75%
(c)(f) 
 
7.35%
 
10/2025
 
1,352

 
1,346

 
0.1

 
1,352

Quick Quack Car Wash Holdings, LLC*
One stop
 
L + 6.50%
(a) 
 
9.00%
 
04/2023
 
8,707

 
8,618

 
0.9

 
8,707

Quick Quack Car Wash Holdings, LLC*
One stop
 
L + 6.50%
(a) 
 
9.00%
 
04/2023
 
149

 
148

 

 
149

Quick Quack Car Wash Holdings, LLC*
One stop
 
L + 6.50%
(a) 
 
9.00%
 
04/2023
 
100

 
99

 

 
100

Quick Quack Car Wash Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
9.00%
 
04/2023
 
40

 
39

 

 
40

Quick Quack Car Wash Holdings, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
04/2023
 

 
(3
)
 

 

  
 
 
 
 
 
 
 
 
 
20,151

 
19,990

 
2.0

 
20,148

Beverage, Food and Tobacco
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Abita Brewing Co., L.L.C.
One stop
 
L + 5.75%
(a) 
 
8.25%
 
04/2021
 
6,939

 
6,882

 
0.7

 
6,939

Abita Brewing Co., L.L.C.
One stop
 
L + 5.75%
 
 
N/A(6)
 
04/2021
 

 

 

 

C. J. Foods, Inc.^*~
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2020
 
8,539

 
8,503

 
0.9

 
8,539

C. J. Foods, Inc.^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2020
 
646

 
645

 
0.1

 
646

C. J. Foods, Inc.
One stop
 
L + 6.25%
(c) 
 
8.86%
 
05/2020
 
560

 
558

 
0.1

 
560

Cafe Rio Holding, Inc.^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2023
 
10,318

 
10,178

 
1.1

 
10,318

Cafe Rio Holding, Inc.
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2023
 
125

 
123

 

 
125

Cafe Rio Holding, Inc.*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2023
 
79

 
78

 

 
79

Cafe Rio Holding, Inc.
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2023
 
70

 
69

 

 
70

Cafe Rio Holding, Inc.
One stop
 
P + 4.50%
(f) 
 
10.00%
 
09/2023
 
2

 

 

 
2

Cafe Rio Holding, Inc.(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
09/2023
 

 
(3
)
 

 

Fintech Midco, LLC*~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
08/2024
 
12,930

 
12,814

 
1.3

 
12,930

Fintech Midco, LLC
One stop
 
L + 5.25%
(a) 
 
7.75%
 
08/2024
 
80

 
79

 

 
80

Fintech Midco, LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
08/2024
 

 
(1
)
 

 

Fintech Midco, LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
08/2024
 

 
(2
)
 

 

Flavor Producers, LLC~
Senior loan
 
L + 4.75%
(c) 
 
7.35%
 
12/2023
 
2,235

 
2,209

 
0.2

 
2,235


See Notes to Consolidated Financial Statements.
9





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Beverage, Food and Tobacco - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flavor Producers, LLC(5)
Senior loan
 
L + 4.75%
 
 
N/A(6)
 
12/2022
 
$

 
$
(1
)
 

%
$

FWR Holding Corporation^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
08/2023
 
5,232

 
5,175

 
0.5

 
5,232

FWR Holding Corporation
One stop
 
L + 5.50%
(a) 
 
8.00%
 
08/2023
 
102

 
101

 

 
102

FWR Holding Corporation
One stop
 
L + 5.50%
(a) 
 
8.00%
 
08/2023
 
64

 
64

 

 
64

FWR Holding Corporation
One stop
 
L + 5.50%
(a) 
 
7.99%
 
08/2023
 
50

 
49

 

 
50

FWR Holding Corporation
One stop
 
L + 5.50%
(a) 
 
8.00%
 
08/2023
 
17

 
16

 

 
17

FWR Holding Corporation(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
08/2023
 

 
(1
)
 

 

Global ID Corporation*
One stop
 
L + 6.50%
(c) 
 
9.13%
 
11/2021
 
5,118

 
5,084

 
0.5

 
5,118

Global ID Corporation*
One stop
 
L + 6.50%
(c) 
 
9.13%
 
11/2021
 
71

 
71

 

 
71

Global ID Corporation
One stop
 
L + 6.50%
(c) 
 
9.13%
 
11/2021
 
43

 
42

 

 
43

Global ID Corporation
One stop
 
L + 6.50%
 
 
N/A(6)
 
11/2021
 

 

 

 

Mendocino Farms, LLC
One stop
 
L + 8.50%
(a) 
 
3.50% cash/7.50% PIK
 
06/2023
 
50

 
50

 

 
50

Mendocino Farms, LLC(5)
One stop
 
L + 1.00%
 
 
N/A(6)
 
06/2023
 

 
(1
)
 

 

Mid-America Pet Food, L.L.C.^*
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
10,698

 
10,624

 
1.1

 
10,698

Mid-America Pet Food, L.L.C.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
12/2021
 

 
(1
)
 

 

NBC Intermediate, LLC^
Senior loan
 
L + 4.25%
(a) 
 
6.75%
 
09/2023
 
2,024

 
2,008

 
0.2

 
2,024

NBC Intermediate, LLC *
Senior loan
 
L + 4.25%
(a) 
 
6.75%
 
09/2023
 
1,091

 
1,082

 
0.1

 
1,091

NBC Intermediate, LLC
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
09/2023
 

 

 

 

Purfoods, LLC
One stop
 
L + 5.50%
(c) 
 
8.13%
 
05/2021
 
8,379

 
8,291

 
0.9

 
8,379

Purfoods, LLC
One stop
 
N/A
 
 
7.00% PIK
 
05/2026
 
116

 
116

 

 
116

Purfoods, LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
55

 
54

 

 
55

Purfoods, LLC
One stop
 
L + 5.50%
(a)(c) 
 
8.05%
 
05/2021
 
55

 
54

 

 
55

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
39

 
39

 

 
39

Purfoods, LLC~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
30

 
30

 

 
30

Purfoods, LLC~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
30

 
30

 

 
30

Purfoods, LLC*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
30

 
30

 

 
30

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
24

 
23

 

 
24

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
15

 
15

 

 
15

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
15

 
15

 

 
15

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
14

 
14

 

 
14

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
11

 
11

 

 
11

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
11

 
11

 

 
11

Purfoods, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2021
 
10

 
10

 

 
10

Purfoods, LLC
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2021
 

 

 

 

Purfoods, LLC
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2021
 

 

 

 

Rubio's Restaurants, Inc.^*
Senior loan
 
L + 5.25%
(c) 
 
7.85%
 
10/2019
 
11,115

 
11,021

 
1.1

 
10,560

Rubio's Restaurants, Inc.
Senior loan
 
P + 3.50%
(f) 
 
9.00%
 
10/2019
 
75

 
73

 

 
74

Wood Fired Holding Corp.*
One stop
 
L + 5.75%
(c) 
 
8.65%
 
12/2023
 
6,953

 
6,888

 
0.7

 
6,953

Wood Fired Holding Corp.
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2023
 

 

 

 

Wood Fired Holding Corp.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2023
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
94,060

 
93,218

 
9.5

 
93,504

Broadcasting and Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TouchTunes Interactive Networks, Inc.^
Senior loan
 
L + 4.75%
(a) 
 
7.25%
 
05/2021
 
1,440

 
1,437

 
0.2

 
1,440

 
 
 
 
 
 
 
 
 
 


 


 


 



See Notes to Consolidated Financial Statements.
10





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Building and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC^*
One stop
 
L + 5.00%
(c) 
 
7.63%
 
08/2020
 
$
21,096

 
$
21,022

 
2.2

%
$
21,096

Brooks Equipment Company, LLC*
One stop
 
L + 5.00%
(c) 
 
7.66%
 
08/2020
 
2,107

 
2,101

 
0.2

 
2,107

Brooks Equipment Company, LLC
One stop
 
P + 3.75%
(f) 
 
9.25%
 
08/2020
 
178

 
173

 

 
178

Jensen Hughes, Inc.
Senior loan
 
L + 4.25%
(c)(f) 
 
6.86%
 
03/2024
 
499

 
496

 
0.1

 
499

Jensen Hughes, Inc.
Senior loan
 
L + 4.25%
(c)(f) 
 
6.86%
 
03/2024
 
153

 
151

 

 
153

Jensen Hughes, Inc.
Senior loan
 
L + 4.25%
(c)(f) 
 
6.86%
 
03/2024
 
32

 
32

 

 
32

Jensen Hughes, Inc.
Senior loan
 
L + 4.25%
(a)(c)(f) 
 
6.86%
 
03/2024
 
8

 
7

 

 
8

MRI Software LLC^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
23,564

 
23,093

 
2.4

 
23,564

MRI Software LLC^*~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
13,674

 
13,558

 
1.4

 
13,674

MRI Software LLC^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
355

 
352

 
0.1

 
355

MRI Software LLC
One stop
 
L + 5.50%
(c) 
 
8.30%
 
06/2023
 
333

 
330

 

 
333

MRI Software LLC~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
294

 
291

 

 
294

MRI Software LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
294

 
291

 

 
294

MRI Software LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
193

 
191

 

 
193

MRI Software LLC^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
164

 
163

 

 
164

MRI Software LLC~
One stop
 
L + 5.50%
(c) 
 
8.30%
 
06/2023
 
105

 
104

 

 
105

MRI Software LLC~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2023
 
97

 
96

 

 
97

MRI Software LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
06/2023
 
61

 
58

 

 
61

MRI Software LLC
One stop
 
L + 5.50%
(a)(c) 
 
8.00%
 
06/2023
 
19

 
16

 

 
19

 
 
 
 
 
 
 
 
 
 
63,226

 
62,525

 
6.4

 
63,226

Chemicals, Plastics and Rubber
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Flexan, LLC*
One stop
 
L + 5.75%
(c) 
 
8.35%
 
02/2020
 
2,298

 
2,289

 
0.2

 
2,298

Flexan, LLC^
One stop
 
L + 5.75%
(c) 
 
8.35%
 
02/2020
 
1,080

 
1,078

 
0.1

 
1,080

Flexan, LLC
One stop
 
P + 4.50%
(f) 
 
10.00%
 
02/2020
 
17

 
17

 

 
17

Inhance Technologies Holdings LLC
One stop
 
L + 5.25%
(c) 
 
7.84%
 
07/2024
 
6,863

 
6,727

 
0.7

 
6,863

Inhance Technologies Holdings LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2024
 

 
(1
)
 

 

Inhance Technologies Holdings LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2024
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
10,258

 
10,109

 
1.0

 
10,258

Diversified/Conglomerate Manufacturing
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Chase Industries, Inc.~
Senior loan
 
L + 4.00%
(c)(f) 
 
6.61%
 
05/2025
 
6,836

 
6,731

 
0.7

 
6,836

Chase Industries, Inc.
Senior loan
 
L + 4.00%
(c)(f) 
 
6.65%
 
05/2023
 
83

 
81

 

 
83

Chase Industries, Inc.
Senior loan
 
L + 4.00%
(c)(f) 
 
6.60%
 
05/2025
 
12

 
8

 

 
12

Inventus Power, Inc.^*
One stop
 
L + 6.50%
(a) 
 
9.00%
 
04/2020
 
7,242

 
7,232

 
0.7

 
6,518

Inventus Power, Inc.
One stop
 
L + 6.50%
(a)(c) 
 
9.04%
 
04/2020
 
272

 
270

 

 
236

Onicon Incorporated^~
One stop
 
P + 4.50%
(f) 
 
10.00%
 
04/2022
 
22,118

 
21,895

 
2.3

 
22,118

Onicon Incorporated(8)(9)
One stop
 
L + 5.50%
(a) 
 
6.50%
 
04/2022
 
4,163

 
4,096

 
0.4

 
4,291

Onicon Incorporated
One stop
 
P + 4.50%
(f) 
 
10.00%
 
04/2022
 
135

 
130

 

 
135

Pasternack Enterprises, Inc. and Fairview Microwave, Inc~
Senior loan
 
L + 4.00%
(a) 
 
6.50%
 
07/2025
 
5,606

 
5,580

 
0.6

 
5,606

Pasternack Enterprises, Inc. and Fairview Microwave, Inc
Senior loan
 
L + 4.00%
 
 
N/A(6)
 
07/2023
 

 

 

 

PetroChoice Holdings, Inc.^
Senior loan
 
L + 5.00%
(c) 
 
7.74%
 
08/2022
 
1,723

 
1,695

 
0.2

 
1,723

Reladyne, Inc.^*
Senior loan
 
L + 5.00%
(c) 
 
7.80%
 
07/2022
 
16,793

 
16,629

 
1.7

 
16,793

Reladyne, Inc.
Senior loan
 
L + 5.00%
(b)(c) 
 
7.63%
 
07/2022
 
303

 
301

 

 
303

Reladyne, Inc.^
Senior loan
 
L + 5.00%
(c) 
 
7.80%
 
07/2022
 
172

 
171

 

 
172

Reladyne, Inc.~
Senior loan
 
L + 5.00%
(c) 
 
7.80%
 
07/2022
 
142

 
141

 

 
142

Reladyne, Inc.
Senior loan
 
L + 5.00%
(a) 
 
7.63%
 
07/2022
 
100

 
99

 

 
100


See Notes to Consolidated Financial Statements.
11





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Diversified/Conglomerate Manufacturing - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reladyne, Inc.~
Senior loan
 
L + 5.00%
(c) 
 
7.80%
 
07/2022
 
$
65

 
$
64

 

%
$
65

Reladyne, Inc.(5)
Senior loan
 
L + 5.00%
 
 
N/A(6)
 
07/2022
 

 
(2
)
 

 

Sunless Merger Sub, Inc.
Senior loan
 
L + 5.00%
(a)(f) 
 
7.54%
 
07/2019
 
1,321

 
1,322

 
0.1

 
1,321

Sunless Merger Sub, Inc.
Senior loan
 
P + 3.75%
(f) 
 
9.25%
 
07/2019
 
237

 
237

 

 
237

Togetherwork Holdings, LLC~
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
9,112

 
8,995

 
0.9

 
9,112

Togetherwork Holdings, LLC*
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
554

 
547

 
0.1

 
554

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
150

 
148

 

 
150

Togetherwork Holdings, LLC~
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
122

 
120

 

 
122

Togetherwork Holdings, LLC*~
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
115

 
114

 

 
115

Togetherwork Holdings, LLC*
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
107

 
106

 

 
107

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.99%
 
03/2024
 
72

 
71

 

 
72

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
67

 
66

 

 
67

Togetherwork Holdings, LLC~
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2025
 
4

 
4

 

 
4

  
 
 
 
 
 
 
 
 
 
77,626

 
76,851

 
7.7

 
76,994

Diversified/Conglomerate Service
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Accela, Inc.*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
09/2023
 
5,261

 
5,199

 
0.5

 
5,050

Accela, Inc.
One stop
 
L + 6.25%
(c) 
 
8.85%
 
09/2023
 
48

 
47

 

 
46

Agility Recovery Solutions Inc.^*
One stop
 
L + 6.00%
(a) 
 
8.50%
 
03/2023
 
15,789

 
15,600

 
1.6

 
15,789

Agility Recovery Solutions Inc.
One stop
 
L + 6.00%
(a) 
 
8.49%
 
03/2023
 
139

 
130

 

 
139

Anaqua, Inc.^*
One stop
 
L + 6.50%
(c) 
 
9.26%
 
07/2022
 
6,913

 
6,842

 
0.7

 
6,913

Anaqua, Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
07/2022
 

 
(1
)
 

 

Apptio, Inc. ~
One stop
 
L + 7.25%
(a) 
 
9.74%
 
01/2025
 
22,224

 
21,796

 
2.3

 
21,780

Apptio, Inc. (5)
One stop
 
L + 7.25%
 
 
N/A(6)
 
01/2025
 

 
(2
)
 

 
(2
)
AutoQuotes, LLC~
One stop
 
L + 6.00%
(c) 
 
8.63%
 
11/2024
 
4,635

 
4,559

 
0.5

 
4,635

AutoQuotes, LLC
One stop
 
L + 6.00%
 
 
N/A(6)
 
11/2024
 

 

 

 

Bazaarvoice, Inc.*~
One stop
 
L + 5.75%
(a) 
 
8.25%
 
02/2024
 
19,319

 
19,085

 
2.0

 
19,319

Bazaarvoice, Inc.
One stop
 
L + 5.75%
(a) 
 
8.25%
 
02/2024
 
50

 
47

 

 
50

Caliper Software, Inc.~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
11/2025
 
6,185

 
6,136

 
0.6

 
6,185

Caliper Software, Inc.
One stop
 
L + 5.50%
(a) 
 
8.00%
 
11/2023
 
9

 
8

 

 
9

Centrify Corporation*
One stop
 
L + 6.25%
(c) 
 
8.86%
 
08/2024
 
10,919

 
10,772

 
1.1

 
10,701

Centrify Corporation
One stop
 
P + 5.25%
(f) 
 
10.75%
 
08/2024
 
150

 
148

 

 
147

Clearwater Analytics, LLC^*
One stop
 
L + 5.00%
(a) 
 
7.50%
 
09/2022
 
8,532

 
8,346

 
0.9

 
8,532

Clearwater Analytics, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
09/2022
 

 
(2
)
 

 

Cloudbees, Inc.
One stop
 
L + 9.00%
(a) 
 
10.99% cash/0.50% PIK
 
05/2023
 
1,903

 
1,852

 
0.2

 
1,903

Cloudbees, Inc.
One stop
 
L + 9.00%
 
 
N/A(6)
 
05/2023
 

 

 

 

Confluence Technologies, Inc.
One stop
 
L + 7.50%
(a) 
 
9.99%
 
03/2024
 
6,998

 
6,868

 
0.7

 
6,998

Confluence Technologies, Inc.(5)
One stop
 
L + 7.50%
 
 
N/A(6)
 
03/2024
 

 
(1
)
 

 

Connexin Software, Inc.
One stop
 
L + 8.50%
(a) 
 
11.00%
 
02/2024
 
2,401

 
2,352

 
0.3

 
2,401

Connexin Software, Inc.
One stop
 
L + 8.50%
 
 
N/A(6)
 
02/2024
 

 

 

 

Conservice, LLC~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
12/2024
 
1,788

 
1,771

 
0.2

 
1,788

Conservice, LLC
One stop
 
L + 5.25%
 
 
N/A(6)
 
12/2024
 

 

 

 

Datto, Inc.*~
One stop
 
L + 8.00%
(c) 
 
10.49%
 
12/2022
 
11,156

 
10,990

 
1.2

 
11,156

Datto, Inc.(5)
One stop
 
L + 8.00%
 
 
N/A(6)
 
12/2022
 

 
(1
)
 

 

Daxko Acquisition Corporation^*
One stop
 
L + 4.75%
(a) 
 
7.25%
 
09/2023
 
11,190

 
10,979

 
1.2

 
11,190

Daxko Acquisition Corporation(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
09/2023
 

 
(1
)
 

 

Digital Guardian, Inc.
One stop
 
L + 9.00%
(c) 
 
10.80% cash/1.00% PIK
 
06/2023
 
4,020

 
3,978

 
0.4

 
4,228


See Notes to Consolidated Financial Statements.
12





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Digital Guardian, Inc.
Subordinated debt
 
N/A
 
 
8.00% PIK
 
01/2020
 
$
193

 
$
193

 

%
$
202

Digital Guardian, Inc.
Subordinated debt
 
N/A
 
 
8.00% PIK
 
04/2019
 
19

 
19

 

 
20

Digital Guardian, Inc.
Subordinated debt
 
N/A
 
 
8.00% PIK
 
06/2023
 
4

 

 

 
4

Digital Guardian, Inc.(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
06/2023
 

 

 

 
(1
)
Digital Guardian, Inc.
One stop
 
L + 9.00%
 
 
N/A(6)
 
06/2023
 

 

 

 
2

DISA Holdings Acquisition Subsidiary Corp.~
Senior loan
 
L + 4.00%
(c)(f) 
 
6.69%
 
06/2022
 
2,079

 
2,070

 
0.2

 
2,079

DISA Holdings Acquisition Subsidiary Corp.
Senior loan
 
L + 4.00%
(c)(f) 
 
6.69%
 
06/2022
 
2

 
1

 

 
2

DISA Holdings Acquisition Subsidiary Corp.
Senior loan
 
L + 4.00%
 
 
N/A(6)
 
06/2022
 

 

 

 

E2open, LLC*~
One stop
 
L + 5.00%
(c) 
 
7.63%
 
11/2024
 
36,857

 
36,336

 
3.8

 
36,857

E2open, LLC
One stop
 
L + 5.00%
(c) 
 
7.66%
 
11/2024
 
625

 
616

 
0.1

 
625

E2open, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
11/2024
 

 
(3
)
 

 

EGD Security Systems, LLC
One stop
 
L + 6.25%
(c) 
 
8.85%
 
06/2022
 
11,113

 
10,980

 
1.2

 
11,113

EGD Security Systems, LLC
One stop
 
L + 6.25%
(c) 
 
8.85%
 
06/2022
 
100

 
99

 

 
100

EGD Security Systems, LLC^
One stop
 
L + 6.25%
(c) 
 
8.88%
 
06/2022
 
98

 
97

 

 
98

EGD Security Systems, LLC^
One stop
 
L + 6.25%
(c) 
 
8.99%
 
06/2022
 
52

 
52

 

 
52

EGD Security Systems, LLC
One stop
 
L + 6.25%
(c) 
 
8.86%
 
06/2022
 
25

 
24

 

 
25

EGD Security Systems, LLC
One stop
 
L + 6.25%
 
 
N/A(6)
 
06/2022
 

 

 

 

GS Acquisitionco, Inc.*~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
05/2024
 
22,725

 
22,526

 
2.4

 
22,725

GS Acquisitionco, Inc.*
One stop
 
L + 5.25%
(a) 
 
7.75%
 
05/2024
 
873

 
866

 
0.1

 
873

GS Acquisitionco, Inc.
One stop
 
L + 5.25%
(c) 
 
7.86%
 
05/2024
 
200

 
197

 

 
200

GS Acquisitionco, Inc.~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
05/2024
 
185

 
183

 

 
185

GS Acquisitionco, Inc.(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
05/2024
 

 
(1
)
 

 

HealthcareSource HR, Inc.*
One stop
 
L + 6.75%
(c) 
 
9.35%
 
05/2020
 
23,269

 
23,139

 
2.4

 
23,269

HealthcareSource HR, Inc.
One stop
 
L + 6.75%
 
 
N/A(6)
 
05/2020
 

 

 

 

Hydraulic Authority III Limited(8)(9)(10)
One stop
 
L + 6.00%
(h)(i) 
 
7.00%
 
11/2025
 
5,929

 
5,873

 
0.6

 
6,049

Hydraulic Authority III Limited(8)(9)(10)
One stop
 
N/A
 
 
11.00% PIK
 
11/2028
 
85

 
85

 

 
87

Hydraulic Authority III Limited(8)(9)(10)
One stop
 
L + 6.00%
(h) 
 
7.00%
 
11/2025
 
15

 
14

 

 
15

ICIMS, Inc.~
One stop
 
L + 6.50%
(a) 
 
8.99%
 
09/2024
 
5,413

 
5,314

 
0.6

 
5,413

ICIMS, Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
09/2024
 

 
(1
)
 

 

III US Holdings, LLC
One stop
 
L + 6.00%
 
 
N/A(6)
 
09/2022
 

 

 

 

Imprivata, Inc.*~
Senior loan
 
L + 4.00%
(c) 
 
6.60%
 
10/2023
 
8,181

 
8,076

 
0.8

 
8,181

Imprivata, Inc.(5)
Senior loan
 
L + 4.00%
 
 
N/A(6)
 
10/2023
 

 
(2
)
 

 

Infogix, Inc.~
One stop
 
L + 6.00%
(c) 
 
8.60%
 
04/2024
 
3,313

 
3,299

 
0.3

 
3,313

Infogix, Inc.~
One stop
 
L + 6.00%
(c) 
 
8.60%
 
04/2024
 
512

 
505

 
0.1

 
512

Infogix, Inc.
One stop
 
L + 6.00%
 
 
N/A(6)
 
04/2024
 

 

 

 

Integral Ad Science, Inc.~
One stop
 
L + 7.25%
(a) 
 
8.50% cash/1.25% PIK
 
07/2024
 
5,032

 
4,943

 
0.5

 
5,032

Integral Ad Science, Inc.(5)
One stop
 
L + 7.25%
 
 
N/A(6)
 
07/2023
 

 
(1
)
 

 
(2
)
Integration Appliance, Inc.^*~
One stop
 
L + 7.25%
(a) 
 
9.74%
 
08/2023
 
34,762

 
34,419

 
3.6

 
34,762

Integration Appliance, Inc.
One stop
 
L + 7.25%
(a) 
 
9.74%
 
08/2023
 
749

 
743

 
0.1

 
749

Invoice Cloud, Inc.~
One stop
 
L + 6.50%
(c) 
 
5.95% cash/3.25% PIK
 
02/2024
 
3,846

 
3,780

 
0.4

 
3,807

Invoice Cloud, Inc.
One stop
 
L + 6.00%
 
 
N/A(6)
 
02/2024
 

 

 

 

Invoice Cloud, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
02/2024
 

 
(1
)
 

 
(2
)
JAMF Holdings, Inc.~
One stop
 
L + 8.00%
(c) 
 
10.69%
 
11/2022
 
5,276

 
5,200

 
0.5

 
5,276

JAMF Holdings, Inc.
One stop
 
L + 8.00%
(a) 
 
10.50%
 
11/2022
 
34

 
34

 

 
34

Kareo, Inc.
One stop
 
L + 9.00%
(a) 
 
11.50%
 
06/2022
 
4,518

 
4,371

 
0.5

 
4,550

Kareo, Inc.~
One stop
 
L + 9.00%
(a) 
 
11.50%
 
06/2022
 
414

 
408

 
0.1

 
417


See Notes to Consolidated Financial Statements.
13





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kareo, Inc.
One stop
 
L + 9.00%
(a) 
 
11.50%
 
06/2022
 
$
332

 
$
327

 

%
$
334

Kareo, Inc.
One stop
 
L + 9.00%
 
 
N/A(6)
 
06/2022
 

 

 

 

Keais Records Service, LLC~
One stop
 
L + 4.50%
(a) 
 
7.00%
 
10/2024
 
8,790

 
8,668

 
0.9

 
8,790

Keais Records Service, LLC
One stop
 
L + 4.50%
 
 
N/A(6)
 
10/2024
 

 

 

 

Keais Records Service, LLC(5)
One stop
 
L + 4.50%
 
 
N/A(6)
 
10/2024
 

 
(1
)
 

 

Learn-it Systems, LLC~
Senior loan
 
L + 4.50%
(c) 
 
7.11%
 
03/2025
 
880

 
867

 
0.1

 
867

Learn-it Systems, LLC
Senior loan
 
L + 4.50%
(a)(c) 
 
7.05%
 
03/2025
 
10

 
10

 

 
10

Learn-it Systems, LLC(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
03/2025
 

 
(1
)
 

 
(2
)
Maverick Bidco Inc.*~
One stop
 
L + 6.25%
(c) 
 
8.85%
 
04/2023
 
17,380

 
17,136

 
1.8

 
17,032

Maverick Bidco Inc.*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
04/2023
 
166

 
166

 

 
163

Maverick Bidco Inc.
One stop
 
L + 6.25%
(c) 
 
9.01%
 
04/2023
 
34

 
32

 

 
31

Mindbody, Inc.~
One stop
 
L + 7.00%
(a) 
 
9.48%
 
02/2025
 
22,609

 
22,388

 
2.3

 
22,383

Mindbody, Inc.(5)
One stop
 
L + 7.00%
 
 
N/A(6)
 
02/2025
 

 
(1
)
 

 
(1
)
Ministry Brands, LLC
Senior loan
 
L + 4.00%
(a) 
 
6.50%
 
12/2022
 
862

 
858

 
0.1

 
862

Ministry Brands, LLC
Senior loan
 
L + 4.00%
(a) 
 
6.50%
 
12/2022
 
493

 
491

 
0.1

 
493

Ministry Brands, LLC
Senior loan
 
L + 4.00%
(a) 
 
6.50%
 
12/2022
 
27

 
27

 

 
27

MMan Acquisition Co.^*
One stop
 
L + 3.00%
(c) 
 
5.74%
 
08/2023
 
9,876

 
9,768

 
0.9

 
8,197

Net Health Acquisition Corp.*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
12/2023
 
3,838

 
3,807

 
0.4

 
3,838

Net Health Acquisition Corp.*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
12/2023
 
537

 
533

 
0.1

 
537

Net Health Acquisition Corp.
One stop
 
L + 5.50%
 
 
N/A(6)
 
12/2023
 

 

 

 

Netsmart Technologies, Inc.
Senior loan
 
L + 3.75%
(a) 
 
6.25%
 
04/2023
 
1,728

 
1,718

 
0.2

 
1,719

Netsmart Technologies, Inc.(5)
Senior loan
 
L + 4.75%
 
 
N/A(6)
 
04/2023
 

 
(6
)
 

 
(1
)
Nextech Systems, LLC*~
One stop
 
L + 6.00%
(a) 
 
8.50%
 
03/2024
 
10,305

 
10,273

 
1.1

 
10,202

Nextech Systems, LLC~
One stop
 
L + 6.00%
(a) 
 
8.50%
 
03/2024
 
5,636

 
5,582

 
0.6

 
5,579

Nextech Systems, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
03/2024
 

 

 

 
(1
)
Nexus Brands Group, Inc.*
One stop
 
L + 6.00%
(c) 
 
8.59%
 
11/2023
 
5,721

 
5,665

 
0.6

 
5,721

Nexus Brands Group, Inc.(8)(9)
One stop
 
L + 6.00%
(c) 
 
6.84%
 
11/2023
 
3,247

 
3,216

 
0.3

 
3,323

Nexus Brands Group, Inc.
One stop
 
L + 6.00%
(c)(f) 
 
8.60%
 
11/2023
 
124

 
123

 

 
124

Nexus Brands Group, Inc.~
One stop
 
L + 6.00%
(c) 
 
8.60%
 
11/2023
 
90

 
90

 

 
90

Nexus Brands Group, Inc.
One stop
 
L + 6.00%
(a)(c) 
 
8.54%
 
11/2023
 
41

 
40

 

 
41

Nexus Brands Group, Inc.(8)(9)
One stop
 
L + 6.00%
 
 
N/A(6)
 
11/2023
 

 

 

 

Nexus Brands Group, Inc.(5)(8)(9)
One stop
 
L + 6.00%
 
 
N/A(6)
 
11/2023
 

 
(1
)
 

 

Personify, Inc.~
One stop
 
L + 5.75%
(c) 
 
8.35%
 
09/2024
 
7,296

 
7,229

 
0.8

 
7,296

Personify, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
09/2024
 

 
(1
)
 

 

Property Brands, Inc.
One stop
 
L + 6.00%
(a) 
 
8.50%
 
01/2024
 
10,817

 
10,622

 
1.1

 
10,709

Property Brands, Inc.*
One stop
 
L + 6.00%
(a) 
 
8.49%
 
01/2024
 
3,048

 
3,019

 
0.3

 
3,018

Property Brands, Inc.^
One stop
 
L + 6.00%
(a) 
 
8.50%
 
01/2024
 
218

 
216

 

 
216

Property Brands, Inc.
One stop
 
L + 6.00%
(a) 
 
8.50%
 
01/2024
 
142

 
141

 

 
141

Property Brands, Inc.
One stop
 
L + 6.00%
(a) 
 
8.50%
 
01/2024
 
80

 
79

 

 
79

Property Brands, Inc.
One stop
 
L + 6.00%
(c) 
 
8.49%
 
01/2024
 
50

 
49

 

 
50

Property Brands, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
01/2024
 

 
(1
)
 

 
(1
)
Property Brands, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
01/2024
 

 
(5
)
 

 
(6
)
RegEd Aquireco, LLC
Senior loan
 
L + 4.25%
(a) 
 
6.74%
 
12/2024
 
8,772

 
8,625

 
0.9

 
8,772

RegEd Aquireco, LLC
Senior loan
 
P + 3.25%
(f) 
 
8.75%
 
12/2024
 
3

 
2

 

 
3

RegEd Aquireco, LLC(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
12/2024
 

 
(6
)
 

 

Saba Software, Inc.^*~
Senior loan
 
L + 4.50%
(a) 
 
7.00%
 
05/2023
 
21,448

 
21,184

 
2.2

 
21,448


See Notes to Consolidated Financial Statements.
14





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Saba Software, Inc.~
Senior loan
 
L + 4.50%
(a) 
 
7.00%
 
05/2023
 
$
6,910

 
$
6,844

 
0.7

%
$
6,910

Saba Software, Inc.(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
05/2023
 

 
(2
)
 

 

Telesoft, LLC*
One stop
 
L + 5.00%
(c) 
 
7.80%
 
07/2022
 
4,139

 
4,112

 
0.4

 
4,139

Telesoft, LLC
One stop
 
L + 5.00%
 
 
N/A(6)
 
07/2022
 

 

 

 

TI Intermediate Holdings, LLC
Senior loan
 
L + 4.50%
(a)(f) 
 
7.00%
 
12/2024
 
1,675

 
1,659

 
0.2

 
1,675

TI Intermediate Holdings, LLC
Senior loan
 
L + 4.50%
(a) 
 
7.00%
 
12/2024
 
3

 
3

 

 
3

Transaction Data Systems, Inc.*~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2021
 
38,856

 
38,722

 
4.0

 
38,856

Transaction Data Systems, Inc.
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2021
 
60

 
59

 

 
60

Trintech, Inc.^~
One stop
 
L + 6.00%
(c) 
 
8.75%
 
12/2023
 
10,821

 
10,713

 
1.1

 
10,821

Trintech, Inc.^~
One stop
 
L + 6.00%
(c) 
 
8.75%
 
12/2023
 
3,395

 
3,361

 
0.4

 
3,395

Trintech, Inc.
One stop
 
L + 6.00%
(c) 
 
8.68%
 
12/2023
 
60

 
59

 

 
60

True Commerce, Inc.^
One stop
 
L + 5.75%
(c) 
 
8.35%
 
11/2023
 
5,581

 
5,527

 
0.6

 
5,581

True Commerce, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
11/2023
 

 
(1
)
 

 

Upserve, Inc.~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
07/2023
 
2,969

 
2,950

 
0.3

 
2,969

Upserve, Inc.
One stop
 
L + 5.50%
(a) 
 
8.00%
 
07/2023
 
100

 
99

 

 
100

Upserve, Inc.
One stop
 
L + 5.50%
 
 
N/A(6)
 
07/2023
 

 

 

 

Valant Medical Solutions, Inc.
One stop
 
L + 11.00%
(c) 
 
11.55% cash/2.25% PIK
 
10/2020
 
834

 
794

 
0.1

 
866

Valant Medical Solutions, Inc.
Subordinated debt
 
N/A
 
 
6.00%
 
02/2020
 
149

 
149

 

 
224

Valant Medical Solutions, Inc.
One stop
 
L + 11.00%
(c) 
 
11.55% cash/2.25% PIK
 
10/2020
 
10

 
10

 

 
11

Velocity Technology Solutions, Inc.*
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2023
 
8,186

 
8,073

 
0.8

 
8,186

Velocity Technology Solutions, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
12/2023
 

 
(1
)
 

 

Vendavo, Inc.*~
One stop
 
L + 8.50%
(c) 
 
11.13%
 
10/2022
 
28,935

 
28,502

 
3.0

 
28,935

Vendavo, Inc.(5)
One stop
 
L + 8.50%
 
 
N/A(6)
 
10/2022
 

 
(8
)
 

 

Verisys Corporation*
One stop
 
L + 6.75%
(c) 
 
9.35%
 
01/2023
 
3,866

 
3,829

 
0.4

 
3,866

Verisys Corporation
One stop
 
L + 6.75%
 
 
N/A(6)
 
01/2023
 

 

 

 

Workforce Software, LLC^
One stop
 
L + 6.50%
(c) 
 
9.28%
 
06/2021
 
5,790

 
5,762

 
0.6

 
5,848

Workforce Software, LLC~
One stop
 
L + 6.50%
(c) 
 
9.13%
 
06/2021
 
577

 
572

 
0.1

 
577

Workforce Software, LLC
One stop
 
L + 6.50%
 
 
N/A(6)
 
06/2021
 

 

 

 
1

  
 
 
 
 
 
 
 
 
 
583,643

 
576,665

 
60.2

 
580,746

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
15,113

 
14,837

 
1.6

 
15,113

Pace Analytical Services, LLC^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
1,405

 
1,388

 
0.1

 
1,405

Pace Analytical Services, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
713

 
705

 
0.1

 
713

Pace Analytical Services, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
344

 
339

 
0.1

 
344

Pace Analytical Services, LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
159

 
157

 

 
159

Pace Analytical Services, LLC^
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
118

 
116

 

 
118

Pace Analytical Services, LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
54

 
53

 

 
54

Pace Analytical Services, LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2022
 
30

 
28

 

 
30

Pace Analytical Services, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
09/2022
 

 
(1
)
 

 

Pace Analytical Services, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
09/2022
 

 
(1
)
 

 

WRE Holding Corp.*
Senior loan
 
L + 5.00%
(a) 
 
7.49%
 
01/2023
 
1,006

 
998

 
0.1

 
1,006

WRE Holding Corp.~
Senior loan
 
L + 5.00%
(a) 
 
7.49%
 
01/2023
 
42

 
42

 

 
42

WRE Holding Corp.
Senior loan
 
L + 5.00%
(a) 
 
7.49%
 
01/2023
 
18

 
18

 

 
18

WRE Holding Corp.
Senior loan
 
L + 5.00%
(a) 
 
7.49%
 
01/2023
 
12

 
12

 

 
12

 
 
 
 
 
 
 
 
 
 
19,014

 
18,691

 
2.0

 
19,014


See Notes to Consolidated Financial Statements.
15





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Electronics
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Appriss Holdings, Inc.^*~
One stop
 
L + 5.75%
(c) 
 
8.35%
 
05/2022
 
$
36,306

 
$
35,984

 
3.8

%
$
36,306

Appriss Holdings, Inc.
One stop
 
L + 5.75%
(c) 
 
8.38%
 
05/2022
 
732

 
704

 
0.1

 
732

Compusearch Software Holdings, Inc.^~
Senior loan
 
L + 4.25%
(c) 
 
6.75%
 
05/2021
 
2,057

 
2,054

 
0.2

 
2,057

Diligent Corporation*~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
04/2022
 
26,001

 
25,763

 
2.7

 
26,001

Diligent Corporation~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
04/2022
 
4,854

 
4,800

 
0.5

 
4,854

Diligent Corporation*~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
04/2022
 
4,766

 
4,688

 
0.5

 
4,766

Diligent Corporation^*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
04/2022
 
2,609

 
2,578

 
0.3

 
2,609

Diligent Corporation
One stop
 
L + 5.50%
(c)(d) 
 
8.23%
 
04/2022
 
172

 
169

 

 
172

Diligent Corporation~
One stop
 
L + 5.50%
(c) 
 
8.39%
 
04/2022
 
101

 
101

 

 
101

Diligent Corporation~
One stop
 
L + 5.50%
(d) 
 
8.19%
 
04/2022
 
81

 
80

 

 
81

Diligent Corporation
One stop
 
L + 5.50%
(d) 
 
8.35%
 
04/2022
 
55

 
54

 

 
55

Diligent Corporation
One stop
 
L + 5.50%
(d) 
 
8.35%
 
04/2022
 
39

 
39

 

 
39

Diligent Corporation~
One stop
 
L + 5.50%
(d) 
 
8.19%
 
04/2022
 
36

 
35

 

 
36

Diligent Corporation(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
04/2022
 

 
(3
)
 

 

Episerver, Inc.~(8)(9)
One stop
 
L + 6.00%
(a) 
 
6.00%
 
10/2024
 
9,961

 
9,840

 
1.0

 
9,724

Episerver, Inc.*
One stop
 
L + 5.75%
(a) 
 
8.25%
 
10/2024
 
5,775

 
5,704

 
0.6

 
5,775

Episerver, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
10/2024
 

 
(2
)
 

 

Gamma Technologies, LLC^*~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
06/2024
 
21,372

 
21,205

 
2.2

 
21,372

Gamma Technologies, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
06/2024
 

 
(1
)
 

 

SEI, Inc.*
Senior loan
 
L + 5.00%
(a) 
 
7.50%
 
07/2023
 
5,036

 
4,992

 
0.5

 
5,036

Sloan Company, Inc., The
One stop
 
L + 8.50%
(c) 
 
11.10%
 
04/2020
 
6,579

 
6,551

 
0.4

 
4,276

Sloan Company, Inc., The
One stop
 
L + 8.50%
(c) 
 
11.10%
 
04/2020
 
440

 
440

 

 
286

Sloan Company, Inc., The
One stop
 
L + 8.50%
(c) 
 
11.10%
 
04/2020
 
51

 
51

 

 
33

Sovos Compliance^*~
One stop
 
L + 6.00%
(a) 
 
8.50%
 
03/2022
 
9,186

 
9,094

 
1.0

 
9,186

Sovos Compliance^
One stop
 
L + 6.00%
(a) 
 
8.50%
 
03/2022
 
1,545

 
1,531

 
0.2

 
1,545

Sovos Compliance~
One stop
 
L + 6.00%
(a) 
 
8.50%
 
03/2022
 
172

 
172

 

 
172

Sovos Compliance(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
03/2022
 

 
(1
)
 

 

Sovos Compliance(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
03/2022
 

 
(2
)
 

 

Watchfire Enterprises, Inc.
Second lien
 
L + 8.00%
(c) 
 
10.60%
 
10/2021
 
9,434

 
9,354

 
1.0

 
9,434

 
 
 
 
 
 
 
 
 
 
147,360

 
145,974

 
15.0

 
144,648

Finance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institutional Shareholder Services~
Senior loan
 
L + 4.50%
(c) 
 
7.10%
 
03/2026
 
4,800

 
4,752

 
0.5

 
4,776

Institutional Shareholder Services
Senior loan
 
L + 4.50%
(c) 
 
7.10%
 
03/2024
 
8

 
6

 

 
6

 
 
 
 
 
 
 
 
 
 
4,808

 
4,758

 
0.5

 
4,782

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Teasdale Quality Foods, Inc.
Senior loan
 
L + 5.75%
(c) 
 
8.55%
 
10/2020
 
297

 
295

 

 
268

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See Notes to Consolidated Financial Statements.
16





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Healthcare, Education and Childcare
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Active Day, Inc.
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
$
13,197

 
$
13,034

 
1.3

%
$
12,801

Active Day, Inc.^
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
1,018

 
1,010

 
0.1

 
988

Active Day, Inc.*
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
656

 
652

 
0.1

 
637

Active Day, Inc.*
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
453

 
450

 
0.1

 
440

Active Day, Inc.
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
50

 
49

 

 
49

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.25%
(c) 
 
8.92%
 
03/2022
 
2,564

 
2,526

 
0.3

 
2,564

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.25%
(c) 
 
8.88%
 
03/2022
 
202

 
182

 

 
202

Acuity Eyecare Holdings, LLC^
One stop
 
L + 6.25%
(c) 
 
8.91%
 
03/2022
 
149

 
148

 

 
149

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.25%
 
 
N/A(6)
 
03/2022
 

 

 

 

Acuity Eyecare Holdings, LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
12/2020
 

 
(4
)
 

 

ADCS Clinics Intermediate Holdings, LLC~
One stop
 
L + 5.75%
(a) 
 
8.25%
 
05/2022
 
20,957

 
20,593

 
2.2

 
20,957

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
(a) 
 
8.25%
 
05/2022
 
107

 
105

 

 
107

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
(a) 
 
8.25%
 
05/2022
 
83

 
82

 

 
83

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
(a) 
 
8.25%
 
05/2022
 
31

 
31

 

 
31

ADCS Clinics Intermediate Holdings, LLC
One stop
 
P + 4.75%
(f) 
 
10.25%
 
05/2022
 
25

 
24

 

 
25

Agilitas USA, Inc.*
One stop
 
L + 5.50%
(c) 
 
8.30%
 
04/2022
 
8,312

 
8,262

 
0.9

 
8,312

Agilitas USA, Inc.
One stop
 
L + 5.50%
(c) 
 
8.30%
 
04/2022
 
10

 
10

 

 
10

Agilitas USA, Inc.
One stop
 
L + 5.50%
 
 
N/A(6)
 
04/2022
 

 

 

 

Aris Teleradiology Company, LLC(7)
Senior loan
 
L + 5.50%
(c) 
 
8.10%
 
03/2021
 
2,693

 
2,678

 
0.1

 
709

Aris Teleradiology Company, LLC(7)
Senior loan
 
L + 5.50%
(c) 
 
8.29%
 
03/2021
 
381

 
381

 

 
71

BIO18 Borrower, LLC~
One stop
 
L + 5.50%
(c) 
 
8.13%
 
11/2024
 
7,224

 
7,071

 
0.8

 
7,224

BIO18 Borrower, LLC
One stop
 
L + 5.50%
(b) 
 
8.06%
 
11/2024
 
33

 
32

 

 
33

BIO18 Borrower, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
11/2024
 

 
(4
)
 

 

BIOVT, LLC^*
One stop
 
L + 5.75%
(a) 
 
8.25%
 
01/2021
 
18,394

 
18,277

 
1.9

 
18,394

BIOVT, LLC~
One stop
 
L + 5.75%
(a) 
 
8.25%
 
01/2021
 
161

 
159

 

 
161

BIOVT, LLC(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
01/2021
 

 
(1
)
 

 

BIOVT, LLC(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
01/2021
 

 
(2
)
 

 

CLP Healthcare Services, Inc.^
Senior loan
 
L + 5.25%
(a) 
 
7.75%
 
12/2020
 
3,865

 
3,844

 
0.4

 
3,865

CRH Healthcare Purchaser, Inc.~
Senior loan
 
L + 4.50%
(c) 
 
7.10%
 
12/2024
 
8,245

 
8,166

 
0.9

 
8,245

CRH Healthcare Purchaser, Inc.(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
12/2024
 

 
(1
)
 

 

CRH Healthcare Purchaser, Inc.(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
12/2024
 

 
(3
)
 

 

DCA Investment Holding, LLC^*
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
18,488

 
18,332

 
1.9

 
18,488

DCA Investment Holding, LLC^*~
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
13,261

 
13,195

 
1.4

 
13,261

DCA Investment Holding, LLC*
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
2,437

 
2,414

 
0.3

 
2,437

DCA Investment Holding, LLC
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
216

 
214

 

 
216

DCA Investment Holding, LLC*
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
151

 
149

 

 
151

DCA Investment Holding, LLC*
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
148

 
146

 

 
148

DCA Investment Holding, LLC*
One stop
 
L + 5.25%
(c) 
 
7.85%
 
07/2021
 
47

 
47

 

 
47

DCA Investment Holding, LLC
One stop
 
P + 4.25%
(f) 
 
9.75%
 
07/2021
 
26

 
19

 

 
26

DCA Investment Holding, LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2021
 

 
(4
)
 

 

Deca Dental Management LLC^*
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
4,042

 
3,997

 
0.4

 
4,042

Deca Dental Management LLC~
One stop
 
L + 6.00%
(a)(c) 
 
8.55%
 
12/2021
 
492

 
486

 
0.1

 
492

Deca Dental Management LLC~
One stop
 
L + 6.00%
(c) 
 
8.60%
 
12/2021
 
356

 
353

 
0.1

 
356

Deca Dental Management LLC
One stop
 
L + 6.00%
(c) 
 
8.70%
 
12/2021
 
26

 
25

 

 
26

Deca Dental Management LLC
One stop
 
L + 6.00%
(a) 
 
8.50%
 
12/2021
 
8

 
7

 

 
8


See Notes to Consolidated Financial Statements.
17





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dental Holdings Corporation
One stop
 
L + 6.00%
(c) 
 
8.63%
 
02/2020
 
$
7,113

 
$
7,073

 
0.7

%
$
7,113

Dental Holdings Corporation
One stop
 
L + 6.00%
(c) 
 
8.63%
 
02/2020
 
1,132

 
1,128

 
0.1

 
1,132

Dental Holdings Corporation
One stop
 
L + 6.00%
(a)(b)(f) 
 
9.18%
 
02/2020
 
573

 
569

 
0.1

 
573

Elite Dental Partners LLC*
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2023
 
12,212

 
12,056

 
1.3

 
12,212

Elite Dental Partners LLC
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2023
 
128

 
120

 

 
128

Elite Dental Partners LLC
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2023
 
120

 
118

 

 
120

Elite Dental Partners LLC~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2023
 
114

 
113

 

 
114

Elite Dental Partners LLC~
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2023
 
110

 
108

 

 
110

Elite Dental Partners LLC
One stop
 
L + 5.25%
(a) 
 
7.75%
 
06/2023
 
8

 
7

 

 
8

ERG Buyer, LLC*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
05/2024
 
13,117

 
12,945

 
1.3

 
12,330

ERG Buyer, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2024
 

 
(2
)
 

 
(9
)
ERG Buyer, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2024
 

 
(10
)
 

 
(45
)
eSolutions, Inc.^*~
One stop
 
L + 6.50%
(a) 
 
9.00%
 
03/2022
 
31,557

 
31,232

 
3.3

 
31,557

eSolutions, Inc.
One stop
 
L + 6.50%
(a) 
 
8.99%
 
03/2022
 
46

 
45

 

 
46

Excelligence Learning Corporation^
One stop
 
L + 6.00%
(a) 
 
8.50%
 
04/2023
 
4,491

 
4,458

 
0.4

 
4,042

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
7,886

 
7,736

 
0.8

 
7,728

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
573

 
564

 
0.1

 
561

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
354

 
351

 
0.1

 
346

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
9.00%
 
05/2023
 
200

 
198

 

 
196

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
171

 
170

 

 
168

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
100

 
99

 

 
98

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
57

 
57

 

 
56

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
50

 
50

 

 
49

Eyecare Services Partners Holdings LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
33

 
29

 

 
32

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2023
 
32

 
26

 

 
31

G & H Wire Company, Inc.^
One stop
 
L + 5.75%
(b) 
 
8.33%
 
09/2023
 
5,397

 
5,345

 
0.6

 
5,397

G & H Wire Company, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
09/2022
 

 
(1
)
 

 

Immucor, Inc.
Senior loan
 
L + 5.00%
(c) 
 
7.60%
 
06/2021
 
1,589

 
1,575

 
0.2

 
1,588

Joerns Healthcare, LLC^*
One stop
 
L + 6.00%
(c) 
 
8.63%
 
05/2020
 
3,497

 
3,483

 
0.3

 
2,938

Katena Holdings, Inc.^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
06/2021
 
8,479

 
8,433

 
0.9

 
8,479

Katena Holdings, Inc.^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
06/2021
 
828

 
824

 
0.1

 
828

Katena Holdings, Inc.
One stop
 
L + 5.50%
(c) 
 
8.10%
 
06/2021
 
565

 
560

 
0.1

 
565

Katena Holdings, Inc.
One stop
 
P + 4.50%
(f) 
 
10.00%
 
06/2021
 
15

 
14

 

 
15

Lombart Brothers, Inc.^*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
04/2023
 
13,590

 
13,378

 
1.4

 
13,419

Lombart Brothers, Inc.^(8)
One stop
 
L + 6.25%
(c) 
 
8.85%
 
04/2023
 
1,639

 
1,612

 
0.2

 
1,619

Lombart Brothers, Inc.
One stop
 
P + 5.00%
(f) 
 
10.50%
 
04/2023
 
74

 
72

 

 
72

Lombart Brothers, Inc.(8)
One stop
 
P + 5.00%
(f) 
 
10.50%
 
04/2023
 
4

 
4

 

 
4

MD Now Holdings, Inc.~
One stop
 
L + 5.00%
(c) 
 
7.60%
 
08/2024
 
7,731

 
7,593

 
0.8

 
7,731

MD Now Holdings, Inc.(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
08/2024
 

 
(1
)
 

 

MD Now Holdings, Inc.(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
08/2024
 

 
(1
)
 

 

MWD Management, LLC & MWD Services, Inc.*
One stop
 
L + 5.25%
(c) 
 
7.85%
 
06/2023
 
5,836

 
5,784

 
0.6

 
5,836

MWD Management, LLC & MWD Services, Inc.^
One stop
 
L + 5.25%
(c) 
 
7.85%
 
06/2023
 
228

 
227

 

 
228

MWD Management, LLC & MWD Services, Inc.(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
06/2022
 

 
(1
)
 

 

MWD Management, LLC & MWD Services, Inc.(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
06/2023
 

 
(2
)
 

 


See Notes to Consolidated Financial Statements.
18





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oliver Street Dermatology Holdings, LLC~
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
$
9,314

 
$
9,158

 
0.9

%
$
8,383

Oliver Street Dermatology Holdings, LLC~
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
940

 
929

 
0.1

 
846

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
209

 
208

 

 
188

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
150

 
149

 

 
135

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.25%
(c) 
 
8.90%
 
05/2022
 
136

 
135

 

 
123

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
133

 
132

 

 
119

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
116

 
115

 

 
104

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
90

 
89

 

 
81

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
78

 
77

 

 
70

Oliver Street Dermatology Holdings, LLC~
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
48

 
48

 

 
43

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
46

 
45

 

 
41

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
41

 
41

 

 
37

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
32

 
32

 

 
29

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.25%
(c) 
 
8.85%
 
05/2022
 
30

 
29

 

 
27

Oliver Street Dermatology Holdings, LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
05/2022
 

 
(1
)
 

 

ONsite Mammography, LLC
One stop
 
L + 6.75%
(a) 
 
9.25%
 
11/2023
 
3,048

 
2,992

 
0.3

 
3,048

ONsite Mammography, LLC
One stop
 
L + 6.75%
(a)(d) 
 
9.45%
 
11/2023
 
39

 
38

 

 
39

ONsite Mammography, LLC
One stop
 
L + 6.75%
(d) 
 
9.62%
 
11/2023
 
8

 
7

 

 
8

Pinnacle Treatment Centers, Inc.
One stop
 
L + 5.75%
(c) 
 
8.49%
 
08/2021
 
9,829

 
9,690

 
1.0

 
9,829

Pinnacle Treatment Centers, Inc.~
One stop
 
L + 5.75%
(c) 
 
8.49%
 
08/2021
 
364

 
361

 
0.1

 
364

Pinnacle Treatment Centers, Inc.^
One stop
 
L + 5.75%
(c) 
 
8.49%
 
08/2021
 
54

 
54

 

 
54

Pinnacle Treatment Centers, Inc.
One stop
 
L + 5.75%
(c) 
 
8.49%
 
08/2021
 
42

 
41

 

 
42

Pinnacle Treatment Centers, Inc.
One stop
 
L + 5.75%
(c)(f) 
 
8.95%
 
08/2021
 
33

 
32

 

 
33

Pinnacle Treatment Centers, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
08/2021
 

 
(1
)
 

 

PPT Management Holdings, LLC
One stop
 
L + 7.50%
(a) 
 
3.49% cash/6.50% PIK
 
12/2022
 
11,141

 
10,727

 
1.0

 
9,443

PPT Management Holdings, LLC
One stop
 
L + 7.50%
(a) 
 
3.49% cash/6.50% PIK
 
12/2022
 
147

 
147

 

 
125

PPT Management Holdings, LLC
One stop
 
L + 7.50%
(a) 
 
3.49% cash/6.50% PIK
 
12/2022
 
87

 
87

 

 
74

PPT Management Holdings, LLC
One stop
 
L + 7.50%
(a) 
 
3.49% cash/6.50% PIK
 
12/2022
 
42

 
34

 

 
34

PPT Management Holdings, LLC(5)
One stop
 
L + 7.50%
(a) 
 
3.49% cash/6.50% PIK
 
12/2022
 
8

 
5

 

 
(24
)
Pyramid Healthcare, Inc.*
One stop
 
L + 6.50%
(c) 
 
9.10%
 
08/2020
 
1,142

 
1,133

 
0.1

 
1,142

Pyramid Healthcare, Inc.
One stop
 
L + 6.50%
(a)(c) 
 
9.02%
 
08/2020
 
75

 
74

 

 
75

Pyramid Healthcare, Inc.
One stop
 
L + 6.50%
 
 
N/A(6)
 
08/2020
 

 

 

 

Riverchase MSO, LLC*
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
10/2022
 
4,905

 
4,860

 
0.5

 
4,905

Riverchase MSO, LLC
Senior loan
 
L + 5.75%
(a)(c) 
 
8.34%
 
10/2022
 
65

 
64

 

 
65

RXH Buyer Corporation^*~
One stop
 
L + 5.75%
(c) 
 
8.35%
 
09/2021
 
16,995

 
16,855

 
1.8

 
16,995

RXH Buyer Corporation*
One stop
 
L + 5.75%
(c) 
 
8.35%
 
09/2021
 
1,923

 
1,908

 
0.2

 
1,923

RXH Buyer Corporation
One stop
 
L + 5.75%
(c)(f) 
 
9.02%
 
09/2021
 
62

 
60

 

 
62

SLMP, LLC^
One stop
 
L + 6.00%
(a) 
 
8.50%
 
05/2023
 
7,506

 
7,384

 
0.8

 
7,506

SLMP, LLC^
One stop
 
L + 6.00%
(a) 
 
8.50%
 
05/2023
 
296

 
293

 

 
296

SLMP, LLC
Subordinated debt
 
N/A
 
 
7.50% PIK
 
05/2027
 
90

 
90

 

 
90

SLMP, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
05/2023
 

 
(1
)
 

 

SLMP, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
05/2023
 

 
(1
)
 

 

Spear Education, LLC^
One stop
 
L + 5.75%
(c) 
 
8.55%
 
08/2019
 
4,573

 
4,568

 
0.5

 
4,573


See Notes to Consolidated Financial Statements.
19





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
Spear Education, LLC*
One stop
 
L + 5.75%
(c) 
 
8.55%
 
08/2019
 
$
74

 
$
74

 

%
$
74

Spear Education, LLC
One stop
 
L + 5.75%
 
 
N/A(6)
 
08/2019
 

 

 

 

Summit Behavioral Healthcare, LLC^
Senior loan
 
L + 4.75%
(d) 
 
7.44%
 
10/2023
 
8,733

 
8,633

 
0.9

 
8,733

Summit Behavioral Healthcare, LLC
Senior loan
 
L + 4.75%
(c)(d) 
 
7.45%
 
10/2023
 
115

 
113

 

 
115

Summit Behavioral Healthcare, LLC
Senior loan
 
L + 4.75%
(d) 
 
7.43%
 
10/2023
 
27

 
25

 

 
27

WHCG Management, LLC*
Senior loan
 
L + 5.00%
(c) 
 
7.60%
 
03/2023
 
2,358

 
2,338

 
0.2

 
2,217

WHCG Management, LLC
Senior loan
 
L + 5.00%
(c) 
 
7.61%
 
03/2023
 
100

 
99

 

 
94

WHCG Management, LLC(5)
Senior loan
 
L + 5.00%
 
 
N/A(6)
 
03/2023
 

 
(2
)
 

 

WIRB-Copernicus Group, Inc.^*~
Senior loan
 
L + 4.25%
(a) 
 
6.75%
 
08/2022
 
10,890

 
10,830

 
1.1

 
10,890

WIRB-Copernicus Group, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
08/2022
 

 
(1
)
 

 

WIRB-Copernicus Group, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
08/2022
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
354,291

 
350,064

 
36.2

 
346,247

Home and Office Furnishings, Housewares, and Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC~
Senior loan
 
L + 4.50%
(a) 
 
7.00%
 
02/2022
 
849

 
847

 
0.1

 
846

CST Buyer Company^
One stop
 
L + 5.00%
(a) 
 
7.50%
 
03/2023
 
2,357

 
2,310

 
0.2

 
2,357

CST Buyer Company
One stop
 
L + 5.00%
 
 
N/A(6)
 
03/2023
 

 

 

 

Plano Molding Company, LLC^
One stop
 
L + 7.50%
(a) 
 
9.99%
 
05/2021
 
9,998

 
9,907

 
1.0

 
9,198

 
 
 
 
 
 
 
 
 
 
13,204

 
13,064

 
1.3

 
12,401

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC^*~
One stop
 
L + 5.75%
(a) 
 
8.25%
 
12/2021
 
33,443

 
33,103

 
3.5

 
33,443

Captive Resources Midco, LLC(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2021
 

 
(14
)
 

 

Captive Resources Midco, LLC(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2021
 

 
(19
)
 

 

Integrity Marketing Acquisition, LLC~
Senior loan
 
L + 4.25%
(c) 
 
6.85%
 
11/2025
 
1,733

 
1,725

 
0.2

 
1,733

Integrity Marketing Acquisition, LLC
Senior loan
 
L + 4.25%
(c) 
 
7.05%
 
11/2025
 
15

 
15

 

 
15

Internet Pipeline, Inc.
One stop
 
L + 4.75%
(a) 
 
7.25%
 
08/2022
 
4,786

 
4,705

 
0.5

 
4,786

Internet Pipeline, Inc.*
One stop
 
L + 4.75%
(a) 
 
7.25%
 
08/2022
 
2,066

 
2,048

 
0.2

 
2,066

Internet Pipeline, Inc.*
One stop
 
L + 4.75%
(a) 
 
7.25%
 
08/2022
 
782

 
775

 
0.1

 
782

Internet Pipeline, Inc.
One stop
 
L + 4.75%
 
 
N/A(6)
 
08/2021
 

 

 

 

Orchid Underwriters Agency, LLC~
Senior loan
 
L + 4.50%
(c) 
 
7.38%
 
12/2024
 
2,385

 
2,363

 
0.2

 
2,385

Orchid Underwriters Agency, LLC
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
12/2024
 

 

 

 

Orchid Underwriters Agency, LLC(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
12/2024
 

 
(1
)
 

 

RSC Acquisition, Inc.~
Senior loan
 
L + 4.25%
(c) 
 
6.85%
 
11/2022
 
4,465

 
4,445

 
0.5

 
4,465

RSC Acquisition, Inc.
Senior loan
 
L + 4.25%
(c) 
 
6.93%
 
11/2022
 
2,291

 
2,269

 
0.2

 
2,291

RSC Acquisition, Inc.
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
11/2021
 

 

 

 

RSC Acquisition, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
11/2022
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
 
51,966

 
51,413

 
5.4

 
51,966


See Notes to Consolidated Financial Statements.
20





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EOS Fitness Opco Holdings, LLC~
One stop
 
L + 4.75%
(a) 
 
7.25%
 
01/2025
 
$
4,784

 
$
4,738

 
0.5

%
$
4,784

EOS Fitness Opco Holdings, LLC
One stop
 
P + 3.75%
(f) 
 
9.25%
 
01/2025
 
6

 
5

 

 
6

EOS Fitness Opco Holdings, LLC(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
01/2025
 

 
(1
)
 

 

PADI Holdco, Inc.~(8)(9)
One stop
 
E + 5.75%
(g) 
 
5.75%
 
04/2023
 
9,543

 
9,543

 
0.9

 
8,958

PADI Holdco, Inc.*
One stop
 
L + 5.75%
(c) 
 
8.50%
 
04/2023
 
9,628

 
9,437

 
1.0

 
9,628

PADI Holdco, Inc.
One stop
 
L + 5.75%
(b)(c) 
 
8.39%
 
04/2022
 
23

 
21

 

 
23

Self Esteem Brands, LLC^*~
Senior loan
 
L + 4.25%
(a) 
 
6.75%
 
02/2022
 
16,306

 
16,215

 
1.7

 
16,143

Self Esteem Brands, LLC(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
02/2022
 

 
(6
)
 

 
(8
)
Sunshine Sub, LLC~
One stop
 
L + 4.75%
(a) 
 
7.25%
 
05/2024
 
7,682

 
7,549

 
0.8

 
7,682

Sunshine Sub, LLC
One stop
 
L + 4.75%
(a) 
 
7.25%
 
05/2024
 
425

 
418

 
0.1

 
425

Sunshine Sub, LLC(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
05/2024
 

 
(1
)
 

 

Teaching Company, The*
One stop
 
L + 4.75%
(c) 
 
7.45%
 
07/2023
 
10,855

 
10,768

 
1.1

 
10,855

Teaching Company, The(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
07/2023
 

 
(1
)
 

 

Titan Fitness, LLC*
One stop
 
L + 4.75%
(a) 
 
7.24%
 
02/2025
 
15,686

 
15,532

 
1.6

 
15,529

Titan Fitness, LLC(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
02/2025
 

 
(2
)
 

 
(3
)
Titan Fitness, LLC(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
02/2025
 

 
(2
)
 

 
(3
)
WBZ Investment LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
09/2024
 
5,123

 
5,030

 
0.5

 
5,123

WBZ Investment LLC
One stop
 
L + 5.50%
(a) 
 
7.98%
 
09/2024
 
32

 
30

 

 
32

WBZ Investment LLC
One stop
 
L + 5.50%
 
 
N/A(6)
 
09/2024
 

 

 

 

 
 
 
 
 
 
 
 
 
 
80,093

 
79,273

 
8.2

 
79,174

Oil and Gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Info Holdings, Inc.*~
Senior loan
 
L + 4.25%
(a) 
 
6.75%
 
07/2025
 
14,548

 
14,362

 
1.5

 
14,548

Drilling Info Holdings, Inc.
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
07/2025
 

 

 

 

Drilling Info Holdings, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
07/2023
 

 
(2
)
 

 

 
 
 
 
 
 
 
 
 
 
14,548

 
14,360

 
1.5

 
14,548

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
11/2022
 
5,592

 
5,534

 
0.6

 
5,592

Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
11/2022
 
3,501

 
3,468

 
0.4

 
3,501

Georgica Pine Clothiers, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
11/2022
 
487

 
484

 
0.1

 
487

Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
11/2022
 
342

 
340

 
0.1

 
342

Georgica Pine Clothiers, LLC
One stop
 
L + 5.50%
(c)(f) 
 
8.91%
 
11/2022
 
35

 
34

 

 
35

IMPLUS Footwear, LLC
One stop
 
L + 6.75%
(c) 
 
9.35%
 
04/2021
 
9,959

 
9,879

 
1.0

 
9,959

IMPLUS Footwear, LLC
One stop
 
L + 6.75%
(c) 
 
9.38%
 
04/2021
 
1,754

 
1,739

 
0.2

 
1,754

IMPLUS Footcare, LLC
One stop
 
L + 6.75%
(c) 
 
9.35%
 
04/2021
 
57

 
57

 

 
57

Massage Envy, LLC^*~
One stop
 
L + 6.75%
(b) 
 
9.31%
 
09/2020
 
34,657

 
34,505

 
3.6

 
34,657

Massage Envy, LLC^
One stop
 
L + 6.75%
(a) 
 
9.24%
 
09/2020
 
98

 
98

 

 
98

Massage Envy, LLC
One stop
 
L + 6.75%
(a)(c)(f) 
 
9.51%
 
09/2020
 
75

 
75

 

 
75

Massage Envy, LLC*
One stop
 
L + 6.75%
(a)(b) 
 
9.26%
 
09/2020
 
64

 
63

 

 
64

Massage Envy, LLC^
One stop
 
L + 6.75%
(a)(f) 
 
9.25%
 
09/2020
 
48

 
48

 

 
48

Massage Envy, LLC*
One stop
 
L + 6.75%
(a)(f) 
 
9.26%
 
09/2020
 
41

 
41

 

 
41

Massage Envy, LLC^
One stop
 
L + 6.75%
(a)(f) 
 
9.25%
 
09/2020
 
40

 
40

 

 
40

Massage Envy, LLC^
One stop
 
L + 6.75%
(b) 
 
9.31%
 
09/2020
 
38

 
38

 

 
38

Massage Envy, LLC^
One stop
 
L + 6.75%
(a)(f) 
 
9.24%
 
09/2020
 
34

 
34

 

 
34

Massage Envy, LLC
One stop
 
L + 6.75%
(a)(b) 
 
9.25%
 
09/2020
 
30

 
29

 

 
30

Massage Envy, LLC^
One stop
 
L + 6.75%
(b) 
 
9.31%
 
09/2020
 
19

 
19

 

 
19


See Notes to Consolidated Financial Statements.
21





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Personal and Non Durable Consumer Products (Mfg. Only) - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
Massage Envy, LLC^
One stop
 
L + 6.75%
(a)(b) 
 
9.26%
 
09/2020
 
$
15

 
$
15

 

%
$
15

Massage Envy, LLC(5)
One stop
 
L + 6.75%
 
 
N/A(6)
 
09/2020
 

 
(1
)
 

 

Massage Envy, LLC(5)
One stop
 
L + 6.75%
 
 
N/A(6)
 
09/2020
 

 
(5
)
 

 

Orthotics Holdings, Inc.*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
02/2020
 
8,162

 
8,138

 
0.8

 
8,162

Orthotics Holdings, Inc.*(8)
One stop
 
L + 5.50%
(a) 
 
8.00%
 
02/2020
 
1,338

 
1,334

 
0.1

 
1,338

Orthotics Holdings, Inc.(8)
One stop
 
L + 5.50%
 
 
N/A(6)
 
02/2020
 

 

 

 

Orthotics Holdings, Inc.(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
02/2020
 

 
(4
)
 

 

WU Holdco, Inc.~
One stop
 
L + 5.50%
(c) 
 
8.11%
 
03/2026
 
952

 
952

 
0.1

 
952

WU Holdco, Inc.
One stop
 
L + 5.50%
 
 
N/A(6)
 
03/2026
 

 

 

 

WU Holdco, Inc.
One stop
 
L + 5.50%
 
 
N/A(6)
 
03/2025
 

 

 

 

 
 
 
 
 
 
 
 
 
 
67,338

 
66,954

 
7.0

 
67,338

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captain D's, LLC^
Senior loan
 
L + 4.50%
(a) 
 
6.99%
 
12/2023
 
3,881

 
3,835

 
0.4

 
3,881

Captain D's, LLC
Senior loan
 
P + 3.50%
(a)(f) 
 
8.18%
 
12/2023
 
21

 
20

 

 
21

Clarkson Eyecare LLC
One stop
 
L + 6.25%
(c) 
 
8.96%
 
04/2021
 
32

 
31

 

 
32

Clarkson Eyecare LLC
One stop
 
L + 6.25%
(a)(c) 
 
8.75%
 
04/2021
 
1

 

 

 
1

Community Veterinary Partners, LLC^
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
281

 
279

 

 
281

Community Veterinary Partners, LLC~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
111

 
111

 

 
111

Community Veterinary Partners, LLC*
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
99

 
97

 

 
99

Community Veterinary Partners, LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
94

 
94

 

 
94

Community Veterinary Partners, LLC~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
84

 
84

 

 
84

Community Veterinary Partners, LLC~
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
75

 
74

 

 
75

Community Veterinary Partners, LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2021
 
6

 
3

 

 
6

Community Veterinary Partners, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
10/2021
 

 
(3
)
 

 

Imperial Optical Midco Inc.
One stop
 
L + 4.75%
(b) 
 
7.31%
 
08/2023
 
2,711

 
2,675

 
0.3

 
2,711

Imperial Optical Midco Inc.
One stop
 
L + 4.75%
(b) 
 
7.33%
 
08/2023
 
49

 
45

 

 
49

Imperial Optical Midco Inc.
One stop
 
L + 4.75%
 
 
N/A(6)
 
08/2023
 

 

 

 

PPV Intermediate Holdings II, LLC
One stop
 
P + 4.00%
(f) 
 
9.50%
 
05/2023
 
32

 
31

 

 
32

PPV Intermediate Holdings II, LLC
One stop
 
N/A
 
 
7.90% PIK
 
05/2023
 
2

 
2

 

 
2

PPV Intermediate Holdings II, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
05/2020
 

 
(4
)
 

 

Ruby Slipper Cafe LLC, The
One stop
 
L + 7.50%
(c) 
 
10.27%
 
01/2023
 
1,030

 
1,022

 
0.1

 
1,030

Ruby Slipper Cafe LLC, The
One stop
 
L + 7.50%
(c) 
 
10.19%
 
01/2023
 
25

 
24

 

 
25

Ruby Slipper Cafe LLC, The
One stop
 
L + 7.50%
(c) 
 
10.18%
 
01/2023
 
5

 
5

 

 
5

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
3,851

 
3,797

 
0.4

 
3,851

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
230

 
227

 

 
230

Southern Veterinary Partners, LLC~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
204

 
202

 

 
204

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
172

 
169

 

 
172

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
131

 
130

 

 
131

Southern Veterinary Partners, LLC~
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
112

 
111

 

 
112

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
99

 
97

 

 
99

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
76

 
75

 

 
76

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2023
 
75

 
74

 

 
75

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
66

 
65

 

 
66

Southern Veterinary Partners, LLC*
One stop
 
L + 5.50%
(a) 
 
8.00%
 
05/2025
 
50

 
48

 

 
50

Southern Veterinary Partners, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2025
 

 
(5
)
 

 


See Notes to Consolidated Financial Statements.
22





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Personal, Food and Miscellaneous Services - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
Veterinary Specialists of North America, LLC^
One stop
 
P + 4.50%
(a)(f) 
 
9.53%
 
07/2021
 
$
7,293

 
$
7,250

 
0.8

%
$
7,293

Veterinary Specialists of North America, LLC^
One stop
 
P + 4.50%
(f) 
 
10.00%
 
07/2021
 
760

 
753

 
0.1

 
760

Veterinary Specialists of North America, LLC*
One stop
 
P + 4.50%
(f) 
 
10.00%
 
07/2021
 
413

 
411

 
0.1

 
413

Veterinary Specialists of North America, LLC*
One stop
 
P + 4.50%
(f) 
 
10.00%
 
07/2021
 
160

 
159

 

 
160

Veterinary Specialists of North America, LLC~
One stop
 
P + 4.50%
(f) 
 
10.00%
 
07/2021
 
132

 
131

 

 
132

Veterinary Specialists of North America, LLC
One stop
 
L + 5.50%
(a)(f) 
 
8.91%
 
07/2021
 
127

 
126

 

 
127

Veterinary Specialists of North America, LLC^
One stop
 
P + 4.50%
(f) 
 
10.00%
 
07/2021
 
122

 
121

 

 
122

Veterinary Specialists of North America, LLC*
One stop
 
P + 4.50%
(f) 
 
10.00%
 
07/2021
 
62

 
62

 

 
62

Veterinary Specialists of North America, LLC
One stop
 
L + 5.50%
(a) 
 
7.99%
 
07/2021
 
29

 
29

 

 
29

Wetzel's Pretzels, LLC*
One stop
 
L + 6.75%
(a) 
 
9.25%
 
09/2021
 
8,873

 
8,776

 
0.9

 
8,873

Wetzel's Pretzels, LLC
One stop
 
L + 6.75%
(a) 
 
9.25%
 
09/2021
 
19

 
19

 

 
19

  
 
 
 
 
 
 
 
 
 
31,595

 
31,252

 
3.1

 
31,595

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.^
Senior loan
 
L + 5.00%
(c) 
 
7.60%
 
12/2021
 
615

 
612

 
0.1

 
618

Messenger, LLC
One stop
 
L + 6.00%
(a)(f) 
 
8.52%
 
08/2023
 
3,393

 
3,333

 
0.4

 
3,393

Messenger, LLC
One stop
 
L + 6.00%
 
 
N/A(6)
 
08/2023
 

 

 

 

 
 
 
 
 
 
 
 
 
 
4,008

 
3,945

 
0.5

 
4,011

Retail Stores
 
 
 
 
 
 
 
 
 
 
 


 


 


Batteries Plus Holding Corporation
One stop
 
L + 6.75%
(a) 
 
9.25%
 
07/2022
 
11,872

 
11,705

 
1.2

 
11,872

Batteries Plus Holding Corporation
One stop
 
P + 5.75%
(f) 
 
11.25%
 
07/2022
 
7

 
6

 

 
7

Boot Barn, Inc.
Senior loan
 
L + 4.50%
(c) 
 
7.10%
 
06/2021
 
393

 
386

 
0.1

 
393

Cycle Gear, Inc.^
One stop
 
L + 5.00%
(c) 
 
7.80%
 
01/2021
 
10,357

 
10,223

 
1.1

 
10,357

Cycle Gear, Inc.^
One stop
 
L + 5.00%
(c) 
 
7.80%
 
01/2021
 
600

 
598

 
0.1

 
600

DTLR, Inc.^*
One stop
 
L + 6.50%
(c) 
 
9.24%
 
08/2022
 
22,616

 
22,384

 
2.3

 
22,616

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
06/2020
 
6,376

 
6,327

 
0.6

 
6,185

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
06/2020
 
2,564

 
2,544

 
0.3

 
2,487

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
06/2020
 
1,319

 
1,311

 
0.1

 
1,280

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c)(d) 
 
8.51%
 
06/2020
 
769

 
765

 
0.1

 
745

Elite Sportswear, L.P.*
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
06/2020
 
433

 
430

 
0.1

 
420

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
06/2020
 
200

 
199

 

 
194

Elite Sportswear, L.P.*
Senior loan
 
L + 5.75%
(c) 
 
8.35%
 
06/2020
 
191

 
190

 

 
185

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c)(d) 
 
8.51%
 
06/2020
 
20

 
20

 

 
19

Feeders Supply Company, LLC
One stop
 
L + 5.75%
(a) 
 
8.25%
 
04/2021
 
4,754

 
4,710

 
0.5

 
4,754

Feeders Supply Company, LLC
Subordinated debt
 
N/A
 
 
12.50% cash/7.00% PIK
 
04/2021
 
69

 
69

 

 
69

Feeders Supply Company, LLC
One stop
 
L + 5.75%
 
 
N/A(6)
 
04/2021
 

 

 

 

Jet Equipment & Tools Ltd.~(8)(9)(11)
One stop
 
L + 5.75%
(a) 
 
7.72%
 
11/2024
 
8,611

 
8,511

 
0.9

 
8,357

Jet Equipment & Tools Ltd.*(8)(11)
One stop
 
L + 5.75%
(c) 
 
8.38%
 
11/2024
 
5,000

 
4,951

 
0.5

 
4,950

Jet Equipment & Tools Ltd.~(8)(11)
One stop
 
L + 5.75%
(a) 
 
8.25%
 
11/2024
 
2,051

 
2,031

 
0.2

 
2,030

Jet Equipment & Tools Ltd.(5)(8)(9)(11)
One stop
 
L + 5.75%
 
 
N/A(6)
 
11/2024
 

 
(2
)
 

 
(1
)
Marshall Retail Group LLC, The^*
One stop
 
L + 6.00%
(c) 
 
8.80%
 
08/2020
 
11,896

 
11,860

 
1.2

 
11,896

Marshall Retail Group LLC, The
One stop
 
P + 4.75%
(f) 
 
10.25%
 
08/2019
 
658

 
656

 
0.1

 
658

Mills Fleet Farm Group LLC^*~
One stop
 
L + 6.25%
(a) 
 
8.75%
 
10/2024
 
6,685

 
6,591

 
0.7

 
6,685

Paper Source, Inc.^*~
One stop
 
L + 6.25%
(c) 
 
8.85%
 
09/2019
 
12,255

 
12,239

 
1.3

 
12,255


See Notes to Consolidated Financial Statements.
23





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Retail Stores - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Paper Source, Inc.*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
09/2019
 
$
1,628

 
$
1,624

 
0.2

%
$
1,628

Paper Source, Inc.
One stop
 
P + 5.00%
(f) 
 
10.50%
 
09/2019
 
339

 
336

 
0.1

 
339

Pet Holdings ULC^*~(8)(11)
One stop
 
L + 5.50%
(c) 
 
8.30%
 
07/2022
 
14,703

 
14,540

 
1.5

 
14,703

Pet Holdings ULC^*(8)(11)
One stop
 
L + 5.50%
(c) 
 
8.30%
 
07/2022
 
99

 
99

 

 
99

Pet Holdings ULC(5)(8)(11)
One stop
 
L + 5.50%
 
 
N/A(6)
 
07/2022
 

 
(2
)
 

 

Pet Supplies Plus, LLC*
Senior loan
 
L + 4.50%
(c) 
 
7.10%
 
12/2024
 
6,739

 
6,675

 
0.7

 
6,739

Pet Supplies Plus, LLC(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
12/2023
 

 
(1
)
 

 

PetPeople Enterprises, LLC^
One stop
 
L + 5.00%
(a) 
 
7.50%
 
09/2023
 
3,098

 
3,069

 
0.3

 
3,098

PetPeople Enterprises, LLC
One stop
 
L + 5.00%
(a) 
 
7.50%
 
09/2023
 
60

 
59

 

 
60

PetPeople Enterprises, LLC
One stop
 
L + 5.00%
(a) 
 
7.50%
 
09/2023
 
15

 
15

 

 
15

Sola Franchise, LLC and Sola Salon Studios, LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2024
 
4,843

 
4,754

 
0.5

 
4,843

Sola Franchise, LLC and Sola Salon Studios, LLC
One stop
 
L + 5.50%
(c) 
 
8.10%
 
10/2024
 
120

 
119

 

 
120

Sola Franchise, LLC and Sola Salon Studios, LLC
One stop
 
L + 5.50%
(a) 
 
8.00%
 
10/2024
 
7

 
7

 

 
7

Sola Franchise, LLC and Sola Salon Studios, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
10/2024
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
141,347

 
139,997

 
14.7

 
140,664

Telecommunications
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

NetMotion Wireless Holdings, Inc.^*
One stop
 
L + 6.25%
(c) 
 
8.85%
 
10/2021
 
6,360

 
6,292

 
0.7

 
6,360

NetMotion Wireless Holdings, Inc.
One stop
 
L + 6.25%
 
 
N/A(6)
 
10/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
 
6,360

 
6,292

 
0.7

 
6,360

Textile and Leather
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

SHO Holding I Corporation~
Senior loan
 
L + 5.00%
(c) 
 
7.74%
 
10/2022
 
2,199

 
2,173

 
0.2

 
2,111

SHO Holding I Corporation
Senior loan
 
L + 4.00%
(c) 
 
6.79%
 
10/2021
 
15

 
15

 

 
13

  
 
 
 
 
 
 
 
 
 
2,214

 
2,188

 
0.2

 
2,124

Utilities
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Arcos, LLC~
One stop
 
L + 5.75%
(c) 
 
8.35%
 
02/2021
 
8,750

 
8,670

 
0.9

 
8,663

Arcos, LLC
One stop
 
L + 5.75%
 
 
N/A(6)
 
02/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
 
8,750

 
8,670

 
0.9

 
8,663

Total non-controlled/non-affiliate company debt investments
 
 
 
 
 
 
$
1,851,027

 
$
1,830,890

 
189.5

%
$
1,830,803

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See Notes to Consolidated Financial Statements.
24





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Equity Investments (12)(13)
 
 
 
 
 
 
 
 
 
 
 


 


 


Aerospace and Defense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTS Technical Systems
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
$
1,506

 
0.1

%
$
573

NTS Technical Systems
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
256

 

 
350

NTS Technical Systems
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
128

 

 
193

Tresys Technology Holdings, Inc.
Equity
 
N/A
 
 
N/A
 
N/A
 
295

 
295

 

 

Whitcraft LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
4

 
375

 
0.1

 
600

 
 
 
 
 
 
 
 
 
 
 
 
2,560

 
0.2

 
1,716

Automobile
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grease Monkey International, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
354

 
354

 
0.1

 
701

Polk Acquisition Corp.
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 
144

 

 
59

Quick Quack Car Wash Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
207

 

 
207

 
 
 
 
 
 
 
 
 
 
 
 
705

 
0.1

 
967

Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benihana, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
43

 
699

 
0.1

 
1,039

C. J. Foods, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
75

 
0.1

 
580

Cafe Rio Holding, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
224

 

 
271

Global ID Corporation
LLC interest
 
N/A
 
 
N/A
 
N/A
 
2

 
242

 

 
359

Hopdoddy Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
27

 
130

 

 
92

Hopdoddy Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
12

 
36

 

 
26

Mendocino Farms, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
11

 
50

 

 
47

Purfoods, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
381

 
381

 
0.1

 
662

Rubio's Restaurants, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
2

 
945

 
0.1

 
905

Wood Fired Holding Corp.
LLC units
 
N/A
 
 
N/A
 
N/A
 
205

 
205

 

 
205

Wood Fired Holding Corp.
LLC units
 
N/A
 
 
N/A
 
N/A
 
205

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
2,987

 
0.4

 
4,186

Buildings and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
10

 
1,021

 
0.3

 
2,393

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chemicals, Plastics and Rubber
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
90

 

 
81

Flexan, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
1

 

 

 

Inhance Technologies Holdings LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
70

 

 
61

 
 
 
 
 
 
 
 
 
 
 
 
160

 

 
142

Diversified/Conglomerate Manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventus Power, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
370

 

 

Inventus Power, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
54

 

 
47

Inventus Power, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 

 

 

Reladyne, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
272

 
0.1

 
614

Sunless Merger Sub, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
160

 
160

 

 

 
 
 
 
 
 
 
 
 
 
 
 
856

 
0.1

 
661


See Notes to Consolidated Financial Statements.
25





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accela, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
296

 
$
296

 

%
$
167

Agility Recovery Solutions Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
67

 
341

 
0.1

 
436

Caliper Software, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
1,172

 
0.1

 
1,280

Caliper Software, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
104

 
104

 

 
100

Centrify Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
348

 

 
300

Centrify Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 
123

 

 

 

Cloudbees, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
33

 
207

 

 
205

Cloudbees, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
29

 
39

 

 
68

Confluence Technologies, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
87

 

 
133

Connexin Software, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
69

 
69

 

 
96

Digital Guardian, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
57

 
10

 

 
1

DISA Holdings Acquisition Subsidiary Corp.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
154

 

 
286

GS Acquisitionco, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 
98

 

 
160

HealthcareSource HR, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
348

 
0.1

 
484

Hydraulic Authority III Limited(8)(9)(10)
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
133

 
170

 

 
173

Hydraulic Authority III Limited(8)(9)(10)
Common stock
 
N/A
 
 
N/A
 
N/A
 
3

 

 

 

Kareo, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
23

 
160

 

 
4

Kareo, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
4

 

 
4

Kareo, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
2

 

 

 
5

Maverick Bidco Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
1

 
369

 

 
253

MMan Acquisition Co.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
20

 

 
16

MMan Acquisition Co.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
19

 
0.1

 
757

Net Health Acquisition Corp.
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
346

 
0.1

 
421

Nexus Brands Group, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
187

 

 
222

Personify, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
297

 
297

 

 
272

Pride Midco, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
1,107

 
0.1

 
1,184

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
417

 
0.1

 
521

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
103

 
4

 

 
183

Property Brands, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
28

 
284

 

 
342

RegEd Aquireco, LLC
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
138

 

 
138

RegEd Aquireco, LLC
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 

 

 

Valant Medical Solutions, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
5

 
68

 

 
14

Vendavo, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1,017

 
1,017

 
0.2

 
1,496

Verisys Corporation
LLC interest
 
N/A
 
 
N/A
 
N/A
 
261

 
261

 

 
246

Vitalyst, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
61

 

 
76

Vitalyst, LLC
Equity
 
N/A
 
 
N/A
 
N/A
 
1

 
7

 

 

Workforce Software, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
323

 
323

 

 
354

Xmatters, Inc. and Alarmpoint, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
242

 
221

 

 
256

Xmatters, Inc. and Alarmpoint, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
43

 
34

 

 
19

Xmatters, Inc. and Alarmpoint, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
10

 
10

 

 
16

 
 
 
 
 
 
 
 
 
 
 
 
8,797

 
0.9

 
10,688

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
3

 
304

 

 
350

 
 
 
 
 
 
 
 
 
 
 
 


 


 



See Notes to Consolidated Financial Statements.
26





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Electronics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diligent Corporation
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
56

 
$
1

 

%
$
216

Episerver, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
35

 
354

 
0.1

 
383

Project Silverback Holdings Corp.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
3

 
6

 

 

SEI, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
340

 
265

 
0.1

 
699

Sloan Company, Inc., The
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
152

 

 

Sloan Company, Inc., The
LLC units
 
N/A
 
 
N/A
 
N/A
 
2

 
14

 

 

 
 
 
 
 
 
 
 
 
 
 
 
792

 
0.2

 
1,298

Healthcare, Education and Childcare
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Day, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
614

 

 
370

Acuity Eyecare Holdings, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
362

 
387

 
0.1

 
424

ADCS Clinics Intermediate Holdings, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
579

 
0.1

 
455

ADCS Clinics Intermediate Holdings, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
6

 

 

BIO18 Borrower, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
92

 
484

 
0.1

 
484

BIOVT, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
407

 
0.1

 
722

CRH Healthcare Purchaser, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
201

 
201

 

 
201

DCA Investment Holding, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
8,637

 
864

 
0.1

 
1,142

DCA Investment Holding, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
87

 
9

 

 
259

Deca Dental Management LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
357

 
357

 
0.1

 
436

Dental Holdings Corporation
LLC units
 
N/A
 
 
N/A
 
N/A
 
883

 
831

 
0.1

 
465

Elite Dental Partners LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
360

 
0.1

 
456

Encore GC Acquisition, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
18

 
182

 

 
249

Encore GC Acquisition, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
18

 

 

 
44

ERG Buyer, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
370

 

 
194

ERG Buyer, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
4

 
4

 

 

Eyecare Services Partners Holdings LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
133

 

 
88

Eyecare Services Partners Holdings LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
1

 

 

G & H Wire Company, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
148

 
148

 

 
88

IntegraMed America, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
417

 

 
122

Katena Holdings, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
387

 
0.1

 
389

Lombart Brothers, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
1

 
157

 

 
242

MD Now Holdings, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
7

 
68

 

 
79

MWD Management, LLC & MWD Services, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
182

 
182

 

 
119

Oliver Street Dermatology Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
234

 
234

 

 
121

Pentec Acquisition Sub, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
116

 

 
167

Pinnacle Treatment Centers, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
231

 

 
279

Pinnacle Treatment Centers, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
2

 

 
17

Radiology Partners, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
43

 
85

 

 
213

Radiology Partners, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
11

 
76

 

 
54

RXH Buyer Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 
7

 
683

 
0.1

 
397

Sage Dental Management, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
249

 

 
12

Sage Dental Management, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
3

 
3

 

 

SLMP, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
289

 
290

 

 
350

Spear Education, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
62

 

 
78

Spear Education, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
1

 
1

 

 
42

SSH Corporation
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
40

 

 
201


See Notes to Consolidated Financial Statements.
27





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summit Behavioral Healthcare, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
$
68

 

%
$
38

Summit Behavioral Healthcare, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 

 

 

Surgical Information Systems, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
4

 
414

 
0.1

 
492

U.S. Renal Care, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 
2,665

 
0.2

 
1,699

WHCG Management, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
246

 

 
60

 
 
 
 
 
 
 
 
 
 


 
12,613

 
1.3

 
11,248

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC(14)
LLC units
 
N/A
 
 
N/A
 
N/A
 
1

 

 
0.1

 
534

Internet Pipeline, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
72

 

 
105

Internet Pipeline, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
44

 
1

 

 
221

Orchid Underwriters Agency, LLC
LP interest
 
N/A
 
 
N/A
 
N/A
 
37

 
37

 

 
37

 
 
 
 
 
 
 
 
 
 
 
 
110

 
0.1

 
897

Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LMP TR Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
712

 
712

 
0.1

 
1,019

PADI Holdco, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
414

 
0.1

 
457

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
31

 
49

 

 
49

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
21

 
33

 

 
33

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
18

 
27

 

 
27

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
15

 
24

 

 
24

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
7

 
10

 

 
10

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
1

 

 
1

 
 
 
 
 
 
 
 
 
 
 
 
1,270

 
0.2

 
1,620

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC(14)
LLC units
 
N/A
 
 
N/A
 
N/A
 
11

 
106

 

 
153

Massage Envy, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
749

 
210

 
0.2

 
1,684

 
 
 
 
 
 
 
 
 
 
 
 
316

 
0.2

 
1,837

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captain D's, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
70

 
70

 

 
44

Community Veterinary Partners, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
244

 

 
352

PPV Intermediate Holdings II, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
13

 
13

 

 
12

R.G. Barry Corporation
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
161

 

 
120

Ruby Slipper Cafe LLC, The
LLC units
 
N/A
 
 
N/A
 
N/A
 
12

 
124

 

 
155

Southern Veterinary Partners, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
216

 

 
349

Southern Veterinary Partners, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
64

 
2

 

 
58

Veterinary Specialists of North America, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
106

 

 
375

Wetzel's Pretzels, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
160

 

 
218

 
 
 
 
 
 
 
 
 
 
 
 
1,096

 

 
1,683

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
240

 

 
107

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See Notes to Consolidated Financial Statements.
28





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 
5

 
$
529

 
0.1

%
$
800

Cycle Gear, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
19

 
248

 
0.1

 
426

DTLR, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
4

 
411

 
0.1

 
830

Elite Sportswear, L.P.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
165

 

 

Feeders Supply Company, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
2

 
192

 

 
201

Feeders Supply Company, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 

 

 

Jet Equipment & Tools Ltd.(8)(9)(11)
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
339

 
0.1

 
555

Marshall Retail Group LLC, The
LLC units
 
N/A
 
 
N/A
 
N/A
 
15

 
154

 

 
119

Paper Source, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
8

 
1,387

 
0.1

 
430

Pet Holdings ULC(8)(11)
LP interest
 
N/A
 
 
N/A
 
N/A
 
455

 
386

 

 
330

Pet Supplies Plus, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
67

 
67

 

 
67

Sola Franchise, LLC and Sola Salon Studios, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
2

 
180

 

 
199

Sola Franchise, LLC and Sola Salon Studios, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
36

 

 
40

 
 
 
 
 
 
 
 
 
 
 
 
4,094

 
0.5

 
3,997

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company equity investments
 
 
 
 
 
 
 
 
$
37,921

 
4.5

%
$
43,790

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company investments
 
 
 
 
 
 
$
1,851,027

 
$
1,868,811

 
194.0

%
$
1,874,593

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlled affiliate company investments(15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Uinta Brewing Company^(7)(8)
One stop
 
L + 4.00%
(a) 
 
6.48%
 
08/2021
 
$
771

 
$
768

 
0.1

%
$
670

Uinta Brewing Company(7)(8)
One stop
 
L + 4.00%
(a) 
 
6.48%
 
08/2021
 
154

 
154

 

 
131

 
 
 
 
 
 
 
 
 
 
925

 
922

 
0.1

 
801

Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Switchfly LLC(8)
One stop
 
L + 3.00%
(c) 
 
5.80%
 
10/2023
 
2,295

 
2,248

 
0.2

 
2,066

Switchfly LLC(8)
One stop
 
L + 3.00%
(c) 
 
5.80%
 
10/2023
 
192

 
189

 

 
173

Switchfly LLC(8)
One stop
 
L + 3.00%
(c) 
 
5.80%
 
10/2023
 
17

 
17

 

 
15

Switchfly LLC(8)
One stop
 
L + 8.50%
 
 
N/A(6)
 
10/2023
 

 

 

 

 
 
 
 
 
 
 
 
 
 
2,504

 
2,454

 
0.2

 
2,254

Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.(8)
One stop
 
L + 10.00%
(a) 
 
10.50% cash/2.00% PIK
 
05/2019
 
4,164

 
4,164

 
0.5

 
4,164

Benetech, Inc.(8)
One stop
 
P + 8.75%
(a)(f) 
 
11.91% cash/2.00% PIK
 
05/2019
 
209

 
209

 

 
209

 
 
 
 
 
 
 
 
 
 
4,373

 
4,373

 
0.5

 
4,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company debt investments
 
 
 
 
 
 
$
7,802

 
$
7,749

 
0.8

%
$
7,428

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Investments (12)(13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Uinta Brewing Company(8)
LP interest
 
N/A
 
 
N/A
 
N/A
 
462

 
$
462

 

%
$

Uinta Brewing Company(8)
Common stock
 
N/A
 
 
N/A
 
N/A
 
123

 

 

 
135

 
 
 
 
 
 
 
 
 
 
585

 
462

 

 
135

Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Switchfly LLC(8)
LLC units
 
N/A
 
 
N/A
 
N/A
 
1,467

 
$
815

 
0.1

 
$
1,099

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See Notes to Consolidated Financial Statements.
29





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

 
Investment Type
 
Spread
Above
Index(1)
 
Interest
Rate
(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value (4)
Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.(8)
LLC interest
 
N/A
 
 
N/A
 
N/A
 
56

 
$

 

%
$

Benetech, Inc.(8)
LLC interest
 
N/A
 
 
N/A
 
N/A
 
56

 

 

 
16

 
 
 
 
 
 
 
 
 
 
 
 

 

 
16

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company equity investments
 
 
 
 
 
 
 
 
$
1,277

 
0.1

%
$
1,250

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company investments
 
 
 
 
 
 
$
7,802

 
$
9,026

 
0.9

%
$
8,678

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Controlled affiliate company investments(16)
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Investments(12)(13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Loan Fund LLC(8)(17)
LLC interest
 
N/A
 
 
N/A
 
N/A
 
74,882

 
$
74,882

 
7.4

%
$
71,742

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company equity investments
 
 
 
 
 
 

 
$
74,882

 
7.4

%
$
71,742

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
$
1,858,829

 
$
1,952,719

 
202.3

%
$
1,955,013

 
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash, cash equivalents and foreign currencies
 
  
 
  

 
  

 
  

 
  

Cash, restricted cash and foreign currencies
 
 
 
 
  
 
  

 
$
49,950

 
5.2

%
$
49,948

BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
 
2.32% (18)
 
  
 
  

 
26,202

 
2.7

 
26,202

Total cash, cash equivalents and restricted cash, cash equivalents and foreign currencies
 
 
 
$
76,152

 
7.9

%
$
76,150

 
 
 
 
 
 
 
 
 
 
 
Total investments and cash, cash equivalents and restricted cash and cash equivalents
 
 
 
 
 
 
 
$
2,028,871

 
210.2

%
$
2,031,163

 
^ 
 
Denotes that all or a portion of the loan secures the notes offered in the 2014 Debt Securitization (as defined in Note 6).
* 
 
Denotes that all or a portion of the loan secures the notes offered in the 2018 Debt Securitization (as defined in Note 6).
~ 
 
Denotes that all or a portion of the loan collateralizes the MS Credit Facility II (as defined in Note 6).
(1) 
The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Euro Interbank Offered Rate ("EURIBOR" or "E") or Prime ("P") and which reset daily, monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over LIBOR, EURIBOR or Prime and the weighted average current interest rate in effect as of March 31, 2019. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of March 29, 2019, which was the last business day of the period on which LIBOR or EURIBOR was determined. The actual index rate for each loan listed may not be the applicable index rate outstanding as of March 29, 2019, as the loan may have priced or repriced based on an index rate prior to March 29, 2019.
(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 2.49% as of March 29, 2019.
(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 2.56% as of March 29, 2019.
(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 2.60% as of March 29, 2019.
(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 2.66% as of March 29, 2019.
(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 2.71% as of March 29, 2019.
(f) Denotes that all or a portion of the loan was indexed to the Prime rate, which was 5.50% as of March 29, 2019.
(g) Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.31% as of March 29, 2019.
(h) Denotes that all or a portion of the loan was indexed to the 30-day GBP LIBOR, which was 0.73% as of March 29, 2019.
(i) Denotes that all or a portion of the loan was indexed to the 90-day GBP LIBOR, which was 0.85% as of March 29, 2019.
(j) Denotes that all or a portion of the loan was indexed to the 180-day GBP LIBOR, which was 0.95% as of March 29, 2019.
(2) 
For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of March 31, 2019.
(3) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

See Notes to Consolidated Financial Statements.
30





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments (unaudited) - (continued)
March 31, 2019
(In thousands)

(4) 
The fair value of the investment was valued using significant unobservable inputs. See Note 5. Fair Value Measurements.
(5) 
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(6) 
The entire commitment was unfunded as of March 31, 2019. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(7) 
Loan was on non-accrual status as of March 31, 2019, meaning that the Company has ceased recognizing interest income on the loan.
(8) 
The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of March 31, 2019, total non-qualifying assets at fair value represented 7.2% of the Company's total assets calculated in accordance with the 1940 Act.
(9) 
Investment is denominated in foreign currency and is translated into U.S. dollars as of the valuation date or the date of the transaction. See Note 2. Significant Accounting Policies and Recent Accounting Updates - Foreign Currency Transactions.
(10) 
The headquarters of this portfolio company is located in the United Kingdom.
(11) 
The headquarters of this portfolio company is located in Canada.
(12) 
Equity investments are non-income producing securities unless otherwise noted.
(13) 
Ownership of certain equity investments may occur through a holding company or partnership.
(14) 
The Company holds an equity investment that entitles it to receive preferential dividends.
(15)As defined in the 1940 Act, the Company is deemed to be an "affiliated person" of the portfolio company as the Company owns five percent or more of the portfolio company's voting securities ("non-controlled affiliate"). Transactions related to investments in non-controlled affiliates for the six months ended March 31, 2019 were as follows:
Portfolio Company
 
Fair value as of September 30, 2018
 
Purchases (cost)(k)
 
Redemptions
(cost)
 
Transfer in (out)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value as of March 31, 2019
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Benetech, Inc.
 
$
4,496

 
$
90

 
$
(197
)
 
$

 
$
2

 
$
(2
)
 
$
4,389

 
$

 
$
301

 
$

Switchfly LLC
 
2,788

 
407

 

 

 
(13
)
 
171

 
3,353

 

 
58

 

Uinta Brewing Company(l)
 

 

 

 
1,384

 

 
(448
)
 
936

 

 

 

Total Non-Controlled Affiliates
 
$
7,284

 
$
497

 
$
(197
)
 
$
1,384

 
$
(11
)
 
$
(279
)
 
$
8,678

 
$

 
$
359

 
$

(k) 
Purchases at cost includes amounts related to payment-in-kind ("PIK") interest capitalized and added to the principal balance of the respective loans.
(l) 
During the three months ended March 31, 2019, the Company's ownership increased to over five percent of the portfolio company's voting securities.
(16)As defined in the 1940 Act, the Company is deemed to be both an "affiliated person" of and "control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement) ("controlled affiliate"). Transactions related to investments in controlled affiliates for the six months ended March 31, 2019 were as follows:
Portfolio Company
 
Fair value as of September 30, 2018
 
Purchases (cost)
 
Redemptions
(cost)
 
Transfer in (out)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value as of March 31, 2019
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Senior Loan Fund LLC(m)
 
$
71,084

 
$
1,750

 
$
(2,275
)
 
$

 
$

 
$
1,183

 
$
71,742

 
$

 
$

 
$

Total Controlled Affiliates
 
$
71,084

 
$
1,750

 
$
(2,275
)
 
$

 
$

 
$
1,183

 
$
71,742

 
$

 
$

 
$

(m)  
Together with RGA Reinsurance Company ("RGA"), the Company co-invests through Senior Loan Fund LLC ("SLF"). SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not have sole control over significant actions of SLF for purposes of the 1940 Act or otherwise.
(17) 
The Company generally receives quarterly profit distributions from its equity investment in SLF. For each of the three and six months ended March 31, 2019, the Company did not receive a profit distribution from its equity investment in SLF. See Note 4. Investments.
(18) 
The rate shown is the annualized seven-day yield as of March 29, 2019.

See Notes to Consolidated Financial Statements.
31




Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments
September 30, 2018
(In thousands)


 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Investments
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Non-controlled/non-affiliate company investments
 
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Debt investments
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Aerospace and Defense
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

ILC Dover, LP
Senior loan
 
L + 4.75%
(c) 
 
7.14%
 
12/2023
 
$
9,928

 
$
9,841

 
1.0

%
$
9,928

NTS Technical Systems*^
One stop
 
L + 6.25%
(a) 
 
8.36%
 
06/2021
 
21,718

 
21,508

 
2.2

 
21,718

NTS Technical Systems(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
06/2021
 

 
(53
)
 

 

Tresys Technology Holdings, Inc.(7)
One stop
 
L + 6.75%
(a) 
 
8.99%
 
12/2018
 
3,899

 
3,845

 
0.1

 
780

Tresys Technology Holdings, Inc.(7)
One stop
 
L + 6.75%
(a) 
 
8.99%
 
12/2018
 
659

 
658

 
0.1

 
659

Tronair Parent, Inc.^
Senior loan
 
L + 4.75%
(c) 
 
7.56%
 
09/2023
 
366

 
363

 
0.1

 
366

Tronair Parent, Inc.
Senior loan
 
L + 4.50%
(a)(b)(c)(f) 
 
7.03%
 
09/2021
 
80

 
79

 

 
80

Whitcraft LLC*^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
04/2023
 
12,439

 
12,298

 
1.3

 
12,439

Whitcraft LLC^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
04/2023
 
194

 
192

 

 
194

Whitcraft LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
04/2023
 

 
(1
)
 

 

Whitcraft LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
04/2023
 

 
(2
)
 

 

 
 
 
 
 
 
 
 
 
 
49,283

 
48,728

 
4.8

 
46,164

Automobile
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Dent Wizard International Corporation*
Senior loan
 
L + 4.00%
(a) 
 
6.23%
 
04/2020
 
4,477

 
4,463

 
0.5

 
4,477

Grease Monkey International, LLC*^
Senior loan
 
L + 5.00%
(a) 
 
7.24%
 
11/2022
 
4,863

 
4,813

 
0.5

 
4,808

Grease Monkey International, LLC
Senior loan
 
L + 5.00%
(a) 
 
7.24%
 
11/2022
 
76

 
75

 

 
75

Grease Monkey International, LLC
Senior loan
 
L + 5.00%
(a) 
 
7.24%
 
11/2022
 
27

 
25

 

 
25

Grease Monkey International, LLC
Senior loan
 
L + 5.00%
(a) 
 
7.24%
 
11/2022
 
21

 
20

 

 
20

Grease Monkey International, LLC(5)
Senior loan
 
L + 5.00%
 
 
N/A(6)
 
11/2022
 

 
(2
)
 

 
(2
)
Quick Quack Car Wash Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.74%
 
04/2023
 
8,751

 
8,652

 
0.9

 
8,751

Quick Quack Car Wash Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.67%
 
04/2023
 
150

 
148

 

 
150

Quick Quack Car Wash Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.70%
 
04/2023
 
40

 
39

 

 
40

Quick Quack Car Wash Holdings, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
04/2023
 

 
(4
)
 

 

  
 
 
 
 
 
 
 
 
 
18,405

 
18,229

 
1.9

 
18,344

Beverage, Food and Tobacco
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Abita Brewing Co., L.L.C.
One stop
 
L + 5.75%
(a) 
 
7.99%
 
04/2021
 
6,998

 
6,926

 
0.7

 
6,998

Abita Brewing Co., L.L.C.
One stop
 
L + 5.75%
 
 
N/A(6)
 
04/2021
 

 

 

 

C. J. Foods, Inc.*^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2020
 
8,582

 
8,528

 
0.9

 
8,582

C. J. Foods, Inc.^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2020
 
649

 
647

 
0.1

 
649

C. J. Foods, Inc.
One stop
 
L + 6.25%
(c) 
 
8.58%
 
05/2020
 
517

 
514

 
0.1

 
517

Cafe Rio Holding, Inc.*^
One stop
 
L + 5.75%
(a) 
 
7.99%
 
09/2023
 
10,370

 
10,220

 
1.1

 
10,370

Cafe Rio Holding, Inc.
One stop
 
L + 5.75%
(a) 
 
7.99%
 
09/2023
 
80

 
79

 

 
80

Cafe Rio Holding, Inc.
One stop
 
L + 5.75%
(a) 
 
7.99%
 
09/2023
 
40

 
37

 

 
40

Cafe Rio Holding, Inc.
One stop
 
P + 4.75%
(f) 
 
10.00%
 
09/2023
 
10

 
8

 

 
10

Fintech Midco, LLC
One stop
 
L + 6.00%
(a) 
 
8.25%
 
08/2024
 
12,995

 
12,868

 
1.3

 
12,865

Fintech Midco, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
08/2024
 

 
(1
)
 

 
(1
)
Fintech Midco, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
08/2024
 

 
(2
)
 

 
(3
)
Firebirds International, LLC*
One stop
 
L + 5.75%
(a) 
 
7.89%
 
12/2018
 
1,049

 
1,048

 
0.1

 
1,049

Firebirds International, LLC*
One stop
 
L + 5.75%
(a) 
 
7.89%
 
12/2018
 
295

 
295

 

 
295

Firebirds International, LLC^
One stop
 
L + 5.75%
(a) 
 
7.89%
 
12/2018
 
95

 
95

 

 
95

Firebirds International, LLC
One stop
 
L + 5.75%
(c) 
 
7.99%
 
12/2018
 
41

 
41

 

 
41

Firebirds International, LLC
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2018
 

 

 

 

Flavor Producers, LLC
Senior loan
 
L + 4.75%
(c) 
 
7.13%
 
12/2023
 
2,155

 
2,127

 
0.2

 
2,155

Flavor Producers, LLC(5)
Senior loan
 
L + 4.75%
 
 
N/A(6)
 
12/2022
 

 
(1
)
 

 


See Notes to Consolidated Financial Statements.
32





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Beverage, Food and Tobacco - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FWR Holding Corporation^
One stop
 
L + 5.75%
(a) 
 
7.99%
 
08/2023
 
$
5,259

 
$
5,194

 
0.6

%
$
5,259

FWR Holding Corporation
One stop
 
L + 5.75%
(a) 
 
7.99%
 
08/2023
 
65

 
64

 

 
65

FWR Holding Corporation
One stop
 
L + 5.75%
(a)(f) 
 
8.80%
 
08/2023
 
42

 
41

 

 
42

FWR Holding Corporation(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
08/2023
 

 
(1
)
 

 

Global Franchise Group, LLC*
Senior loan
 
L + 5.75%
(a) 
 
7.99%
 
12/2019
 
3,220

 
3,203

 
0.3

 
3,220

Global Franchise Group, LLC
Senior loan
 
L + 5.75%
 
 
N/A(6)
 
12/2019
 

 

 

 

Global ID Corporation*
One stop
 
L + 6.50%
(c) 
 
8.84%
 
11/2021
 
5,144

 
5,104

 
0.5

 
5,144

Global ID Corporation
One stop
 
L + 6.50%
(c) 
 
8.84%
 
11/2021
 
72

 
71

 

 
72

Global ID Corporation
One stop
 
L + 6.50%
 
 
N/A(6)
 
11/2021
 

 

 

 

Global ID Corporation(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
11/2021
 

 
(1
)
 

 

Hopdoddy Holdings, LLC
One stop
 
L + 9.50%
(c) 
 
10.31% cash/1.50% PIK
 
08/2020
 
1,307

 
1,301

 
0.1

 
1,307

Hopdoddy Holdings, LLC
One stop
 
L + 9.50%
(c) 
 
10.34% cash/1.50% PIK
 
08/2020
 
47

 
47

 

 
47

Hopdoddy Holdings, LLC
One stop
 
L + 9.50%
(c) 
 
10.32% cash/1.50% PIK
 
08/2020
 
3

 
2

 

 
3

Mendocino Farms, LLC(5)
One stop
 
L + 8.50%
 
 
N/A(6)
 
06/2023
 

 
(2
)
 

 

Mid-America Pet Food, L.L.C.*^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
12/2021
 
10,752

 
10,664

 
1.1

 
10,752

Mid-America Pet Food, L.L.C.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
12/2021
 

 
(1
)
 

 

NBC Intermediate, LLC^
Senior loan
 
L + 4.25%
(a) 
 
6.50%
 
09/2023
 
2,079

 
2,061

 
0.2

 
2,058

NBC Intermediate, LLC *
Senior loan
 
L + 4.25%
(a) 
 
6.50%
 
09/2023
 
1,097

 
1,086

 
0.1

 
1,086

NBC Intermediate, LLC
Senior loan
 
P + 3.25%
(f) 
 
8.50%
 
09/2023
 
5

 
4

 

 
4

Purfoods, LLC
One stop
 
L + 6.00%
(c) 
 
8.31%
 
05/2021
 
8,379

 
8,270

 
0.9

 
8,379

Purfoods, LLC
One stop
 
N/A
 
 
7.00% PIK
 
05/2026
 
116

 
116

 

 
116

Purfoods, LLC
One stop
 
L + 6.00%
(a) 
 
8.15%
 
05/2021
 
65

 
64

 

 
65

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
39

 
39

 

 
39

Purfoods, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
30

 
30

 

 
30

Purfoods, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
30

 
30

 

 
30

Purfoods, LLC
One stop
 
L + 6.00%
(c) 
 
8.33%
 
05/2021
 
30

 
30

 

 
30

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
24

 
23

 

 
24

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
15

 
15

 

 
15

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
15

 
15

 

 
15

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
14

 
14

 

 
14

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
11

 
11

 

 
11

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
11

 
11

 

 
11

Purfoods, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2021
 
10

 
10

 

 
10

Purfoods, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
05/2021
 

 
(1
)
 

 

Rubio's Restaurants, Inc.*^
Senior loan
 
L + 5.25%
(c) 
 
7.64%
 
10/2019
 
11,173

 
11,000

 
1.2

 
11,173

Uinta Brewing Company^(7)
One stop
 
L + 8.50%
(a) 
 
10.74%
 
08/2019
 
3,725

 
3,716

 
0.3

 
2,459

Uinta Brewing Company(7)
One stop
 
L + 8.50%
(a) 
 
10.74%
 
08/2019
 
693

 
691

 
0.1

 
444

 
 
 
 
 
 
 
 
 
 
97,348

 
96,350

 
9.9

 
95,666

Broadcasting and Entertainment
 
 
 
 
 
 
 
 
 
  

 
  

 
 
 
  

TouchTunes Interactive Networks, Inc.^
Senior loan
 
L + 4.75%
(a) 
 
6.99%
 
05/2021
 
1,447

 
1,444

 
0.1

 
1,447

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Buildings and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC*^
One stop
 
L + 5.00%
(c) 
 
7.31%
 
08/2020
 
21,096

 
20,996

 
2.2

 
21,096

Brooks Equipment Company, LLC*
One stop
 
L + 5.00%
(b)(c) 
 
7.28%
 
08/2020
 
2,634

 
2,623

 
0.3

 
2,634

Brooks Equipment Company, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
08/2020
 

 
(6
)
 

 

Jensen Hughes, Inc.
Senior loan
 
L + 4.50%
(a) 
 
6.71%
 
03/2024
 
500

 
498

 
0.1

 
500

Jensen Hughes, Inc.
Senior loan
 
L + 4.50%
(a) 
 
6.74%
 
03/2024
 
153

 
151

 

 
153


See Notes to Consolidated Financial Statements.
33





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Buildings and Real Estate - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jensen Hughes, Inc.
Senior loan
 
L + 4.50%
(a) 
 
6.65%
 
03/2024
 
$
29

 
$
29

 

%
$
29

MRI Software LLC^
One stop
 
L + 5.50%
(c) 
 
7.89%
 
06/2023
 
23,684

 
23,156

 
2.4

 
23,684

MRI Software LLC*^
One stop
 
L + 5.50%
(c) 
 
7.89%
 
06/2023
 
13,744

 
13,614

 
1.4

 
13,744

MRI Software LLC^
One stop
 
L + 5.50%
(c) 
 
7.89%
 
06/2023
 
357

 
354

 
0.1

 
357

MRI Software LLC
One stop
 
L + 5.50%
(c) 
 
7.89%
 
06/2023
 
295

 
292

 

 
295

MRI Software LLC
One stop
 
L + 5.50%
(c) 
 
7.89%
 
06/2023
 
194

 
192

 

 
194

MRI Software LLC^
One stop
 
L + 5.50%
(a) 
 
7.65%
 
06/2023
 
165

 
163

 

 
165

MRI Software LLC
One stop
 
L + 5.50%
(a) 
 
7.67%
 
06/2023
 
35

 
32

 

 
35

MRI Software LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
06/2023
 

 
(6
)
 

 

 
 
 
 
 
 
 
 
 
 
62,886

 
62,088

 
6.5

 
62,886

Chemicals, Plastics and Rubber
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Flexan, LLC*
One stop
 
L + 5.75%
(c) 
 
8.14%
 
02/2020
 
2,310

 
2,296

 
0.3

 
2,310

Flexan, LLC^
One stop
 
L + 5.75%
(c) 
 
8.14%
 
02/2020
 
1,086

 
1,081

 
0.1

 
1,086

Flexan, LLC
One stop
 
P + 4.50%
(f) 
 
9.75%
 
02/2020
 
11

 
11

 

 
11

Inhance Technologies Holdings LLC
One stop
 
L + 5.25%
(b) 
 
7.43%
 
07/2024
 
6,880

 
6,731

 
0.7

 
6,811

Inhance Technologies Holdings LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2024
 

 
(1
)
 

 
(1
)
Inhance Technologies Holdings LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2024
 

 
(1
)
 

 
(2
)
 
 
 
 
 
 
 
 
 
 
10,287

 
10,117

 
1.1

 
10,215

Diversified/Conglomerate Manufacturing
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Chase Industries, Inc.
Senior loan
 
L + 4.00%
(c) 
 
6.34%
 
05/2025
 
6,870

 
6,756

 
0.7

 
6,870

Chase Industries, Inc.
Senior loan
 
L + 4.00%
(c) 
 
6.34%
 
05/2023
 
16

 
14

 

 
16

Chase Industries, Inc.
Senior loan
 
L + 4.00%
(c) 
 
6.38%
 
05/2025
 
12

 
8

 

 
12

Inventus Power, Inc.*^
One stop
 
L + 6.50%
(a) 
 
8.74%
 
04/2020
 
7,285

 
7,266

 
0.7

 
6,557

Inventus Power, Inc.
One stop
 
L + 6.50%
(a)(c) 
 
8.78%
 
04/2020
 
271

 
270

 

 
236

Onicon Incorporated*^
One stop
 
L + 5.50%
(a)(c) 
 
7.88%
 
04/2022
 
17,916

 
17,784

 
1.9

 
17,916

Onicon Incorporated(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
04/2022
 

 
(3
)
 

 

Pasternack Enterprises, Inc. and Fairview Microwave, Inc
Senior loan
 
L + 4.00%
(a)(f) 
 
6.24%
 
07/2025
 
5,634

 
5,607

 
0.6

 
5,606

Pasternack Enterprises, Inc. and Fairview Microwave, Inc
Senior loan
 
L + 4.00%
 
 
N/A(6)
 
07/2023
 

 

 

 

PetroChoice Holdings, Inc.^
Senior loan
 
L + 5.00%
(b) 
 
7.20%
 
08/2022
 
1,732

 
1,700

 
0.2

 
1,732

Plex Systems, Inc.*^
One stop
 
L + 7.50%
(a) 
 
9.82%
 
06/2020
 
18,797

 
18,635

 
1.9

 
18,797

Plex Systems, Inc.(5)
One stop
 
L + 7.50%
 
 
N/A(6)
 
06/2020
 

 
(14
)
 

 

Reladyne, Inc.*^
Senior loan
 
L + 5.00%
(c) 
 
7.34%
 
07/2022
 
16,878

 
16,691

 
1.7

 
16,878

Reladyne, Inc.^
Senior loan
 
L + 5.00%
(c) 
 
7.34%
 
07/2022
 
173

 
171

 

 
173

Reladyne, Inc.
Senior loan
 
L + 5.00%
(c) 
 
7.34%
 
07/2022
 
142

 
141

 

 
142

Reladyne, Inc.(5)
Senior loan
 
L + 5.00%
 
 
N/A(6)
 
07/2022
 

 
(3
)
 

 

Source Refrigeration & HVAC, Inc.*
Senior loan
 
L + 4.75%
(c) 
 
7.14%
 
04/2023
 
9,453

 
9,352

 
1.0

 
9,453

Source Refrigeration & HVAC, Inc.
Senior loan
 
L + 4.75%
(c) 
 
7.10%
 
04/2023
 
111

 
110

 

 
111

Source Refrigeration & HVAC, Inc.
Senior loan
 
P + 3.75%
(f) 
 
9.00%
 
04/2023
 
89

 
86

 

 
89

Source Refrigeration & HVAC, Inc.
Senior loan
 
L + 4.75%
(c) 
 
7.09%
 
04/2023
 
57

 
56

 

 
57

Source Refrigeration & HVAC, Inc.(5)
Senior loan
 
L + 4.75%
 
 
N/A(6)
 
04/2023
 

 
(2
)
 

 

Sunless Merger Sub, Inc.
Senior loan
 
L + 5.00%
(a)(f) 
 
7.28%
 
07/2019
 
1,381

 
1,384

 
0.2

 
1,381

Sunless Merger Sub, Inc.
Senior loan
 
P + 3.75%
(f) 
 
8.75%
 
07/2019
 
256

 
256

 

 
256

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.74%
 
03/2025
 
9,158

 
9,031

 
0.9

 
9,066

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.74%
 
03/2025
 
557

 
549

 
0.1

 
552

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.74%
 
03/2025
 
116

 
114

 

 
114

Togetherwork Holdings, LLC
One stop
 
L + 6.50%
(a) 
 
8.74%
 
03/2025
 
108

 
106

 

 
107


See Notes to Consolidated Financial Statements.
34





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Diversified/Conglomerate Manufacturing - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Togetherwork Holdings, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
03/2024
 
$

 
$
(1
)
 

%
$
(1
)
Togetherwork Holdings, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
03/2025
 

 
(2
)
 

 
(1
)
Togetherwork Holdings, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
03/2025
 

 
(3
)
 

 
(2
)
  
 
 
 
 
 
 
 
 
 
97,012

 
96,059

 
9.9

 
96,117

Diversified/Conglomerate Service
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Accela, Inc.
One stop
 
L + 6.00%
(c) 
 
8.39%
 
09/2023
 
5,261

 
5,193

 
0.5

 
5,261

Accela, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
09/2023
 

 
(1
)
 

 

Agility Recovery Solutions Inc.*^
One stop
 
L + 6.50%
(a) 
 
8.74%
 
03/2020
 
13,809

 
13,750

 
1.4

 
13,809

Agility Recovery Solutions Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
03/2020
 

 
(3
)
 

 

Anaqua, Inc.*^
One stop
 
L + 6.50%
(c) 
 
8.85%
 
07/2022
 
6,948

 
6,867

 
0.7

 
6,948

Anaqua, Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
07/2022
 

 
(1
)
 

 

Apttus Corporation
One stop
 
L + 7.85%
(e) 
 
10.06%
 
01/2023
 
4,127

 
3,969

 
0.4

 
4,312

Bazaarvoice, Inc.
One stop
 
L + 8.00%
(a) 
 
10.24%
 
02/2024
 
8,958

 
8,799

 
0.9

 
8,958

Bazaarvoice, Inc.
One stop
 
P + 7.00%
(f) 
 
12.25%
 
02/2024
 
30

 
28

 

 
30

Browz LLC
One stop
 
L + 9.50%
(b) 
 
10.17% cash/1.50% PIK
 
03/2023
 
1,503

 
1,473

 
0.2

 
1,503

Browz LLC
One stop
 
L + 9.50%
 
 
N/A(6)
 
03/2023
 

 

 

 

Centrify Corporation*
One stop
 
L + 6.25%
(c) 
 
8.59%
 
08/2024
 
10,974

 
10,813

 
1.1

 
10,864

Centrify Corporation(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
08/2024
 

 
(2
)
 

 
(2
)
Clearwater Analytics, LLC*^
One stop
 
L + 5.00%
(a) 
 
7.24%
 
09/2022
 
8,532

 
8,319

 
0.9

 
8,532

Clearwater Analytics, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
09/2022
 

 
(2
)
 

 

Cloudbees, Inc.
One stop
 
L + 9.00%
(a) 
 
10.61% cash/0.50% PIK
 
05/2023
 
1,898

 
1,841

 
0.2

 
1,870

Cloudbees, Inc.
One stop
 
L + 9.00%
 
 
N/A(6)
 
05/2023
 

 

 

 

Confluence Technologies, Inc.
One stop
 
L + 7.50%
(a) 
 
9.65%
 
03/2024
 
7,033

 
6,889

 
0.7

 
7,033

Confluence Technologies, Inc.
One stop
 
P + 6.50%
(a)(f) 
 
10.96%
 
03/2024
 
16

 
15

 

 
16

Connexin Software, Inc.
One stop
 
L + 8.50%
(a) 
 
10.74%
 
02/2024
 
2,401

 
2,348

 
0.3

 
2,401

Connexin Software, Inc.
One stop
 
L + 8.50%
 
 
N/A(6)
 
02/2024
 

 

 

 

Datto, Inc.*
One stop
 
L + 8.00%
(a) 
 
10.15%
 
12/2022
 
11,156

 
10,969

 
1.2

 
11,156

Datto, Inc.(5)
One stop
 
L + 8.00%
 
 
N/A(6)
 
12/2022
 

 
(1
)
 

 

Daxko Acquisition Corporation*^
One stop
 
L + 5.25%
(b) 
 
7.54%
 
09/2023
 
11,246

 
11,014

 
1.2

 
11,246

Daxko Acquisition Corporation(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
09/2023
 

 
(1
)
 

 

Digital Guardian, Inc.
One stop
 
L + 9.00%
(c) 
 
10.33% cash/1.00% PIK
 
06/2023
 
3,999

 
3,952

 
0.4

 
3,999

Digital Guardian, Inc.
Subordinated debt
 
N/A
 
 
8.00% PIK
 
01/2019
 
184

 
184

 

 
184

Digital Guardian, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
06/2023
 

 

 

 
(2
)
Digital Guardian, Inc.
One stop
 
L + 9.00%
 
 
N/A(6)
 
06/2023
 

 

 

 

DISA Holdings Acquisition Subsidiary Corp.*
Senior loan
 
L + 4.00%
(a)(f) 
 
6.10%
 
06/2022
 
2,006

 
1,997

 
0.2

 
2,006

DISA Holdings Acquisition Subsidiary Corp.
Senior loan
 
L + 4.00%
(a) 
 
6.10%
 
06/2022
 
2

 
2

 

 
2

DISA Holdings Acquisition Subsidiary Corp.(5)
Senior loan
 
L + 4.00%
 
 
N/A(6)
 
06/2022
 

 
(1
)
 

 

EGD Security Systems, LLC
One stop
 
L + 6.25%
(c) 
 
8.58%
 
06/2022
 
11,114

 
10,960

 
1.1

 
11,114

EGD Security Systems, LLC^
One stop
 
L + 6.25%
(c) 
 
8.56%
 
06/2022
 
98

 
97

 

 
98

EGD Security Systems, LLC
One stop
 
L + 6.25%
(c) 
 
8.58%
 
06/2022
 
75

 
74

 

 
75

EGD Security Systems, LLC^
One stop
 
L + 6.25%
(c) 
 
8.59%
 
06/2022
 
52

 
52

 

 
52

GS Acquisitionco, Inc.
One stop
 
L + 5.00%
(a) 
 
7.25%
 
05/2024
 
22,840

 
22,620

 
2.3

 
22,611

GS Acquisitionco, Inc.
One stop
 
L + 5.00%
(a) 
 
7.25%
 
05/2024
 
878

 
870

 
0.1

 
869

GS Acquisitionco, Inc.(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
05/2024
 

 
(1
)
 

 
(1
)
GS Acquisitionco, Inc.(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
05/2024
 

 
(5
)
 

 
(5
)
HealthcareSource HR, Inc.*
One stop
 
L + 6.75%
(c) 
 
9.14%
 
05/2020
 
23,389

 
23,203

 
2.4

 
23,389

HealthcareSource HR, Inc.(5)
One stop
 
L + 6.75%
 
 
N/A(6)
 
05/2020
 

 
(1
)
 

 


See Notes to Consolidated Financial Statements.
35





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Host Analytics, Inc.
One stop
 
N/A
 
 
8.50% cash/2.25% PIK
 
08/2021
 
$
3,169

 
$
3,131

 
0.3

%
$
3,169

Host Analytics, Inc.
One stop
 
N/A
 
 
8.50% cash/2.25% PIK
 
08/2021
 
2,656

 
2,557

 
0.3

 
2,656

Host Analytics, Inc.
One stop
 
N/A
 
 
8.50% cash/2.25% PIK
 
08/2021
 
741

 
733

 
0.1

 
741

Host Analytics, Inc.(5)
One stop
 
N/A
 
 
N/A(6)
 
08/2021
 

 
(6
)
 

 

ICIMS, Inc.
One stop
 
L + 6.50%
(c) 
 
8.64%
 
09/2024
 
5,412

 
5,305

 
0.5

 
5,304

ICIMS, Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
09/2024
 

 
(1
)
 

 
(1
)
III US Holdings, LLC
One stop
 
L + 6.50%
 
 
N/A(6)
 
09/2022
 

 

 

 

Imprivata, Inc.
Senior loan
 
L + 4.00%
(c) 
 
6.39%
 
10/2023
 
13,045

 
12,907

 
1.3

 
13,045

Imprivata, Inc.(5)
Senior loan
 
L + 4.00%
 
 
N/A(6)
 
10/2023
 

 
(2
)
 

 

Infogix, Inc.
One stop
 
L + 6.00%
(c) 
 
8.39%
 
04/2024
 
3,330

 
3,315

 
0.3

 
3,330

Infogix, Inc.
One stop
 
P + 5.00%
(f) 
 
10.25%
 
04/2024
 
9

 
9

 

 
9

Integral Ad Science, Inc.
One stop
 
L + 7.25%
(a) 
 
8.25% cash/1.25% PIK
 
07/2024
 
5,000

 
4,904

 
0.5

 
4,900

Integral Ad Science, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
07/2023
 

 
(1
)
 

 
(1
)
Integration Appliance, Inc.*^
One stop
 
L + 7.25%
(a) 
 
9.36%
 
08/2023
 
34,762

 
34,381

 
3.6

 
34,415

Integration Appliance, Inc.(5)
One stop
 
L + 7.25%
 
 
N/A(6)
 
08/2023
 

 
(7
)
 

 
(9
)
JAMF Holdings, Inc.
One stop
 
L + 8.00%
(c) 
 
10.32%
 
11/2022
 
4,550

 
4,475

 
0.5

 
4,550

JAMF Holdings, Inc.(5)
One stop
 
L + 8.00%
 
 
N/A(6)
 
11/2022
 

 
(1
)
 

 

Jobvite, Inc.
One stop
 
L + 8.00%
(a) 
 
10.15%
 
07/2023
 
2,048

 
1,979

 
0.2

 
1,968

Jobvite, Inc.
One stop
 
L + 8.00%
 
 
N/A(6)
 
07/2023
 

 

 

 

Jobvite, Inc.(5)
One stop
 
L + 8.00%
 
 
N/A(6)
 
07/2023
 

 

 

 
(1
)
Kareo, Inc.
One stop
 
L + 9.00%
(a) 
 
11.24%
 
06/2022
 
4,518

 
4,348

 
0.5

 
4,518

Kareo, Inc.
One stop
 
L + 9.00%
(a) 
 
11.24%
 
06/2022
 
332

 
327

 

 
332

Kareo, Inc.
One stop
 
L + 9.00%
 
 
N/A(6)
 
06/2022
 

 

 

 

Maverick Bidco Inc.*
One stop
 
L + 6.25%
(c) 
 
8.64%
 
04/2023
 
17,468

 
17,195

 
1.8

 
17,468

Maverick Bidco Inc.
One stop
 
L + 6.25%
(c) 
 
8.59%
 
04/2023
 
167

 
166

 

 
167

Maverick Bidco Inc.
One stop
 
L + 6.25%
(c) 
 
8.60%
 
04/2023
 
34

 
32

 

 
34

Maverick Bidco Inc.(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
04/2023
 

 
(3
)
 

 

Ministry Brands, LLC
Senior loan
 
L + 4.00%
(a) 
 
6.24%
 
12/2022
 
866

 
862

 
0.1

 
866

Ministry Brands, LLC
Senior loan
 
L + 4.00%
(a) 
 
6.24%
 
12/2022
 
496

 
493

 
0.1

 
496

Ministry Brands, LLC
Senior loan
 
L + 4.00%
(a) 
 
6.24%
 
12/2022
 
9

 
9

 

 
9

MMan Acquisition Co.^
One stop
 
L + 6.00%
(c) 
 
8.34%
 
08/2023
 
9,726

 
9,608

 
1.0

 
9,531

MMan Acquisition Co.
One stop
 
L + 6.00%
(c) 
 
8.34%
 
08/2023
 
100

 
99

 

 
98

Net Health Acquisition Corp.
One stop
 
L + 5.50%
(a) 
 
7.74%
 
12/2023
 
3,857

 
3,823

 
0.4

 
3,857

Net Health Acquisition Corp.
One stop
 
L + 5.50%
(a) 
 
7.74%
 
12/2023
 
540

 
536

 
0.1

 
540

Net Health Acquisition Corp.(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
12/2023
 

 
(1
)
 

 

Netsmart Technologies, Inc.
Senior loan
 
L + 3.75%
(a) 
 
5.99%
 
06/2025
 
1,737

 
1,725

 
0.2

 
1,750

Netsmart Technologies, Inc.(5)
Senior loan
 
L + 4.75%
 
 
N/A(6)
 
04/2023
 

 
(6
)
 

 

Nextech Systems, LLC
One stop
 
L + 6.00%
(a) 
 
8.24%
 
03/2024
 
10,357

 
10,322

 
1.1

 
10,357

Nextech Systems, LLC
One stop
 
L + 6.00%
 
 
N/A(6)
 
03/2024
 

 

 

 

Nexus Brands Group, Inc.
One stop
 
L + 6.00%
(c) 
 
8.33%
 
11/2023
 
5,750

 
5,689

 
0.6

 
5,750

Nexus Brands Group, Inc.
One stop
 
L + 6.00%
(c) 
 
8.39%
 
11/2023
 
91

 
90

 

 
91

Nexus Brands Group, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
11/2023
 

 
(1
)
 

 

Nexus Brands Group, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
11/2023
 

 
(1
)
 

 

Personify, Inc.
One stop
 
L + 5.75%
(c) 
 
8.14%
 
09/2024
 
5,349

 
5,296

 
0.5

 
5,295

Personify, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
09/2024
 

 
(1
)
 

 
(1
)
Property Brands, Inc.
One stop
 
L + 6.00%
(a) 
 
8.24%
 
01/2024
 
10,872

 
10,655

 
1.1

 
10,872

Property Brands, Inc.^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
01/2024
 
219

 
216

 

 
219


See Notes to Consolidated Financial Statements.
36





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Brands, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
01/2024
 
$

 
$
(1
)
 

%
$

Property Brands, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
01/2024
 

 
(1
)
 

 

Saba Software, Inc.*^
Senior loan
 
L + 4.50%
(a) 
 
6.74%
 
05/2023
 
22,515

 
22,217

 
2.3

 
22,515

Saba Software, Inc.(5)
Senior loan
 
L + 4.50%
 
 
N/A(6)
 
05/2023
 

 
(2
)
 

 

Saldon Holdings, Inc.*
Senior loan
 
L + 4.25%
(a) 
 
6.41%
 
09/2022
 
750

 
741

 
0.1

 
746

Saldon Holdings, Inc. *
Senior loan
 
L + 4.25%
(a) 
 
6.41%
 
09/2022
 
716

 
713

 
0.1

 
713

Telesoft, LLC*
One stop
 
L + 5.00%
(c) 
 
7.34%
 
07/2022
 
4,160

 
4,129

 
0.4

 
4,160

Telesoft, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
07/2022
 

 
(1
)
 

 

Transaction Data Systems, Inc.*
One stop
 
L + 5.25%
(a) 
 
7.50%
 
06/2021
 
39,051

 
38,889

 
4.0

 
39,051

Transaction Data Systems, Inc.
One stop
 
L + 5.25%
(c) 
 
7.64%
 
06/2021
 
15

 
14

 

 
15

Trintech, Inc.*^
One stop
 
L + 6.00%
(b) 
 
8.20%
 
12/2023
 
10,875

 
10,756

 
1.1

 
10,875

Trintech, Inc.^
One stop
 
L + 6.00%
(b) 
 
8.20%
 
12/2023
 
3,412

 
3,375

 
0.4

 
3,412

Trintech, Inc.
One stop
 
L + 6.00%
(b) 
 
8.20%
 
12/2023
 
30

 
28

 

 
30

True Commerce, Inc.^
One stop
 
L + 5.75%
(c) 
 
8.14%
 
11/2023
 
5,610

 
5,550

 
0.6

 
5,610

True Commerce, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
11/2023
 

 
(1
)
 

 

Upserve, Inc.
One stop
 
L + 5.50%
(a) 
 
7.65%
 
07/2023
 
2,969

 
2,948

 
0.3

 
2,947

Upserve, Inc.
One stop
 
L + 5.50%
 
 
N/A(6)
 
07/2023
 

 

 

 

Upserve, Inc.(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
07/2023
 

 
(1
)
 

 
(1
)
Valant Medical Solutions, Inc.
One stop
 
L + 11.00%
(a) 
 
10.88% cash/2.25% PIK
 
10/2020
 
828

 
775

 
0.1

 
828

Valant Medical Solutions, Inc.
One stop
 
N/A
 
 
6.00% PIK
 
02/2020
 
149

 
149

 

 
184

Valant Medical Solutions, Inc.
One stop
 
L + 11.00%
(a) 
 
10.88% cash/2.25% PIK
 
10/2020
 
10

 
10

 

 
10

Velocity Technology Solutions, Inc.
One stop
 
L + 6.00%
(c) 
 
8.39%
 
12/2023
 
8,228

 
8,103

 
0.9

 
8,228

Velocity Technology Solutions, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
12/2023
 

 
(1
)
 

 

Vendavo, Inc.*
One stop
 
L + 8.50%
(c) 
 
10.81%
 
10/2022
 
28,936

 
28,441

 
3.0

 
28,936

Vendavo, Inc.(5)
One stop
 
L + 8.50%
 
 
N/A(6)
 
10/2022
 

 
(9
)
 

 

Vendor Credentialing Service LLC^
One stop
 
L + 5.75%
(a) 
 
7.99%
 
11/2021
 
12,115

 
11,949

 
1.3

 
12,115

Vendor Credentialing Service LLC
One stop
 
L + 5.75%
 
 
N/A(6)
 
11/2021
 

 

 

 

Verisys Corporation*
One stop
 
L + 7.75%
(c) 
 
10.14%
 
01/2023
 
3,886

 
3,844

 
0.4

 
3,886

Verisys Corporation(5)
One stop
 
L + 7.75%
 
 
N/A(6)
 
01/2023
 

 
(1
)
 

 

Workforce Software, LLC^
One stop
 
L + 6.50%
(c) 
 
8.83%
 
06/2021
 
5,790

 
5,756

 
0.6

 
5,790

Workforce Software, LLC
One stop
 
L + 6.50%
(c) 
 
8.81%
 
06/2021
 
577

 
571

 
0.1

 
577

Workforce Software, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
06/2021
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
456,361

 
450,374

 
47.0

 
455,279

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
One stop
 
L + 6.25%
(a) 
 
8.49%
 
09/2022
 
15,190

 
14,912

 
1.6

 
15,190

Pace Analytical Services, LLC^
One stop
 
L + 6.25%
(a) 
 
8.49%
 
09/2022
 
1,412

 
1,396

 
0.1

 
1,412

Pace Analytical Services, LLC
One stop
 
L + 6.25%
(a) 
 
8.48%
 
09/2022
 
716

 
709

 
0.1

 
716

Pace Analytical Services, LLC*
One stop
 
L + 6.25%
(a) 
 
8.49%
 
09/2022
 
346

 
342

 

 
346

Pace Analytical Services, LLC^
One stop
 
L + 6.25%
(a) 
 
8.47%
 
09/2022
 
118

 
117

 

 
118

Pace Analytical Services, LLC
One stop
 
L + 6.25%
(a) 
 
8.49%
 
09/2022
 
10

 
8

 

 
10

Pace Analytical Services, LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
09/2022
 

 
(3
)
 

 

WRE Holding Corp.*
Senior loan
 
L + 4.75%
(a) 
 
6.99%
 
01/2023
 
1,008

 
999

 
0.1

 
1,008

WRE Holding Corp.
Senior loan
 
L + 4.75%
(a) 
 
6.99%
 
01/2023
 
42

 
42

 

 
42

WRE Holding Corp.
Senior loan
 
L + 4.75%
(a) 
 
6.99%
 
01/2023
 
21

 
21

 

 
21

WRE Holding Corp.
Senior loan
 
L + 4.75%
(a) 
 
6.99%
 
01/2023
 
5

 
5

 

 
5

 
 
 
 
 
 
 
 
 
 
18,868

 
18,548

 
1.9

 
18,868


See Notes to Consolidated Financial Statements.
37





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Electronics
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Appriss Holdings, Inc.*^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2022
 
$
36,397

 
$
36,016

 
3.7

%
$
36,034

Appriss Holdings, Inc.(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
05/2022
 

 
(33
)
 

 
(29
)
Compusearch Software Holdings, Inc.*^
Senior loan
 
L + 4.25%
(c) 
 
6.64%
 
05/2021
 
2,067

 
2,065

 
0.2

 
2,067

Diligent Corporation*
One stop
 
L + 5.50%
(d) 
 
8.09%
 
04/2022
 
26,132

 
25,856

 
2.7

 
26,132

Diligent Corporation
One stop
 
L + 5.50%
(d) 
 
8.09%
 
04/2022
 
4,879

 
4,816

 
0.5

 
4,879

Diligent Corporation*
One stop
 
L + 5.50%
(d) 
 
8.09%
 
04/2022
 
4,790

 
4,700

 
0.5

 
4,790

Diligent Corporation*^
One stop
 
L + 5.50%
(d) 
 
8.09%
 
04/2022
 
2,622

 
2,586

 
0.3

 
2,622

Diligent Corporation
One stop
 
L + 5.50%
(c) 
 
7.98%
 
04/2022
 
102

 
101

 

 
102

Diligent Corporation
One stop
 
L + 5.50%
(c) 
 
8.03%
 
04/2022
 
81

 
80

 

 
81

Diligent Corporation
One stop
 
L + 5.50%
(c)(d) 
 
8.03%
 
04/2022
 
36

 
35

 

 
36

Diligent Corporation(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
04/2022
 

 
(1
)
 

 

Diligent Corporation(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
04/2022
 

 
(2
)
 

 

Gamma Technologies, LLC*^
One stop
 
L + 5.50%
(a) 
 
7.74%
 
06/2024
 
21,478

 
21,297

 
2.2

 
21,478

Gamma Technologies, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
06/2024
 

 
(1
)
 

 

SEI, Inc.*
Senior loan
 
L + 5.25%
(a) 
 
7.49%
 
07/2023
 
5,477

 
5,428

 
0.6

 
5,477

Sloan Company, Inc., The
One stop
 
L + 13.00%
(c) 
 
10.89% cash/4.50% PIK
 
04/2020
 
6,467

 
6,426

 
0.5

 
5,173

Sloan Company, Inc., The
One stop
 
L + 13.00%
(c) 
 
10.89% cash/4.50% PIK
 
04/2020
 
432

 
432

 

 
346

Sloan Company, Inc., The
One stop
 
L + 13.00%
(c) 
 
10.89% cash/4.50% PIK
 
04/2020
 
50

 
50

 

 
40

Sovos Compliance*^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
03/2022
 
9,234

 
9,125

 
1.0

 
9,234

Sovos Compliance^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
03/2022
 
1,553

 
1,536

 
0.2

 
1,553

Sovos Compliance
One stop
 
L + 6.00%
(a) 
 
8.24%
 
03/2022
 
173

 
172

 

 
173

Sovos Compliance(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
03/2022
 

 
(1
)
 

 

Sovos Compliance(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
03/2022
 

 
(2
)
 

 

Watchfire Enterprises, Inc.
Second lien
 
L + 8.00%
(c) 
 
10.39%
 
10/2021
 
9,435

 
9,338

 
1.0

 
9,435

 
 
 
 
 
 
 
 
 
 
131,405

 
130,019

 
13.4

 
129,623

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyWebGrocer, Inc.*
One stop
 
L + 5.00%
(d) 
 
7.52%
 
09/2018
 
14,271

 
14,271

 
1.5

 
14,271

Teasdale Quality Foods, Inc.
Senior loan
 
L + 4.75%
(c) 
 
6.92%
 
10/2020
 
324

 
321

 

 
317

 
 
 
 
 
 
 
 
 
 
14,595

 
14,592

 
1.5

 
14,588

Healthcare, Education and Childcare
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Active Day, Inc.
One stop
 
L + 6.00%
(a) 
 
8.24%
 
12/2021
 
13,265

 
13,071

 
1.3

 
13,000

Active Day, Inc.^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
12/2021
 
1,024

 
1,014

 
0.1

 
1,003

Active Day, Inc.*
One stop
 
L + 6.00%
(a) 
 
8.24%
 
12/2021
 
660

 
655

 
0.1

 
646

Active Day, Inc.*
One stop
 
L + 6.00%
(a) 
 
8.24%
 
12/2021
 
456

 
451

 
0.1

 
447

Active Day, Inc.
One stop
 
P + 5.00%
(f) 
 
10.25%
 
12/2021
 
22

 
21

 

 
20

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.75%
(b) 
 
9.01%
 
03/2022
 
2,564

 
2,519

 
0.3

 
2,538

Acuity Eyecare Holdings, LLC
One stop
 
L + 6.75%
(b) 
 
9.04%
 
03/2022
 
203

 
180

 

 
185

Acuity Eyecare Holdings, LLC^
One stop
 
L + 6.75%
(b) 
 
9.02%
 
03/2022
 
149

 
148

 

 
148

Acuity Eyecare Holdings, LLC
One stop
 
P + 5.75%
(f) 
 
11.00%
 
03/2022
 
10

 
10

 

 
9

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
(b) 
 
8.04%
 
05/2022
 
21,065

 
20,641

 
2.1

 
20,644

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
(b) 
 
8.04%
 
05/2022
 
107

 
106

 

 
105

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
(b) 
 
8.04%
 
05/2022
 
83

 
82

 

 
81

ADCS Clinics Intermediate Holdings, LLC
One stop
 
L + 5.75%
(b) 
 
8.04%
 
05/2022
 
50

 
49

 

 
48

ADCS Clinics Intermediate Holdings, LLC*
One stop
 
L + 5.75%
(b) 
 
8.04%
 
05/2022
 
31

 
31

 

 
31

Agilitas USA, Inc.
One stop
 
L + 6.00%
(c) 
 
8.34%
 
04/2022
 
8,354

 
8,295

 
0.9

 
8,187

Agilitas USA, Inc.
One stop
 
L + 6.00%
(c) 
 
8.34%
 
04/2022
 
10

 
9

 

 
8

Agilitas USA, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
04/2022
 

 
(1
)
 

 


See Notes to Consolidated Financial Statements.
38





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aris Teleradiology Company, LLC*(7)
Senior loan
 
L + 5.50%
(c) 
 
8.00%
 
03/2021
 
$
2,693

 
$
2,678

 
0.1

%
$
1,236

Aris Teleradiology Company, LLC(7)
Senior loan
 
L + 5.50%
(c)(d) 
 
8.01%
 
03/2021
 
141

 
140

 

 
47

Avalign Technologies, Inc.^
Senior loan
 
L + 4.50%
(a) 
 
6.75%
 
07/2021
 
1,343

 
1,340

 
0.1

 
1,343

BIORECLAMATIONIVT, LLC*^
One stop
 
L + 6.25%
(a) 
 
8.49%
 
01/2021
 
16,852

 
16,718

 
1.7

 
16,852

BIORECLAMATIONIVT, LLC
One stop
 
P + 5.25%
(f) 
 
10.50%
 
01/2021
 
100

 
99

 

 
100

CLP Healthcare Services, Inc.^
Senior loan
 
L + 5.50%
(c) 
 
7.89%
 
12/2020
 
3,884

 
3,858

 
0.4

 
3,807

DCA Investment Holding, LLC*^
One stop
 
L + 5.25%
(c) 
 
7.64%
 
07/2021
 
18,584

 
18,393

 
1.9

 
18,584

DCA Investment Holding, LLC*^
One stop
 
L + 5.25%
(c) 
 
7.64%
 
07/2021
 
13,329

 
13,249

 
1.4

 
13,329

DCA Investment Holding, LLC
One stop
 
L + 5.25%
(c) 
 
7.64%
 
07/2021
 
2,450

 
2,422

 
0.3

 
2,450

DCA Investment Holding, LLC
One stop
 
L + 5.25%
(c) 
 
7.64%
 
07/2021
 
151

 
150

 

 
151

DCA Investment Holding, LLC
One stop
 
L + 5.25%
(c) 
 
7.64%
 
07/2021
 
149

 
147

 

 
149

DCA Investment Holding, LLC
One stop
 
L + 5.25%
(c) 
 
7.64%
 
07/2021
 
47

 
47

 

 
47

DCA Investment Holding, LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2021
 

 
(7
)
 

 

DCA Investment Holding, LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
07/2021
 

 
(9
)
 

 

Deca Dental Management LLC*^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
07/2020
 
4,062

 
4,040

 
0.4

 
4,062

Deca Dental Management LLC
One stop
 
L + 6.25%
(a)(c) 
 
8.57%
 
07/2020
 
494

 
492

 
0.1

 
494

Deca Dental Management LLC
One stop
 
L + 6.25%
(a) 
 
8.49%
 
07/2020
 
50

 
50

 

 
50

Deca Dental Management LLC(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
07/2020
 

 
(1
)
 

 

Dental Holdings Corporation
One stop
 
L + 5.50%
(d) 
 
8.02%
 
02/2020
 
7,142

 
7,081

 
0.7

 
7,142

Dental Holdings Corporation
One stop
 
L + 5.50%
(d) 
 
8.02%
 
02/2020
 
1,133

 
1,126

 
0.1

 
1,133

Dental Holdings Corporation
One stop
 
L + 5.50%
(b) 
 
7.67%
 
02/2020
 
220

 
214

 

 
220

Elite Dental Partners LLC*
One stop
 
L + 5.25%
(a) 
 
7.49%
 
06/2023
 
12,274

 
12,101

 
1.3

 
12,274

Elite Dental Partners LLC
One stop
 
L + 5.25%
(a) 
 
7.49%
 
06/2023
 
115

 
101

 

 
115

Elite Dental Partners LLC(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
06/2023
 

 
(1
)
 

 

ERG Buyer, LLC
One stop
 
L + 5.50%
(c) 
 
7.89%
 
05/2024
 
13,183

 
12,996

 
1.4

 
13,183

ERG Buyer, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2024
 

 
(2
)
 

 

ERG Buyer, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2024
 

 
(11
)
 

 

eSolutions, Inc.*^
One stop
 
L + 6.50%
(a) 
 
8.74%
 
03/2022
 
31,722

 
31,340

 
3.3

 
31,484

eSolutions, Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
03/2022
 

 
(1
)
 

 
(1
)
Excelligence Learning Corporation^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
04/2023
 
4,805

 
4,768

 
0.5

 
4,517

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
7,926

 
7,758

 
0.8

 
7,926

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
576

 
566

 
0.1

 
576

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
355

 
353

 
0.1

 
355

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
172

 
171

 

 
172

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.59%
 
05/2023
 
100

 
100

 

 
100

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
58

 
57

 

 
58

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
51

 
50

 

 
51

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
33

 
28

 

 
33

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.64%
 
05/2023
 
32

 
25

 

 
32

Eyecare Services Partners Holdings LLC
One stop
 
L + 6.25%
(c) 
 
8.63%
 
05/2023
 
25

 
22

 

 
25

G & H Wire Company, Inc.^
One stop
 
L + 5.75%
(a) 
 
7.99%
 
09/2023
 
5,425

 
5,367

 
0.6

 
5,425

G & H Wire Company, Inc.(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
09/2022
 

 
(1
)
 

 

Immucor, Inc.
Senior loan
 
L + 5.00%
(c) 
 
7.39%
 
06/2021
 
1,597

 
1,597

 
0.2

 
1,626

Joerns Healthcare, LLC*^
One stop
 
L + 6.00%
(c) 
 
8.31%
 
05/2020
 
3,497

 
3,476

 
0.3

 
3,253

Katena Holdings, Inc.^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
06/2021
 
8,523

 
8,466

 
0.9

 
8,352

Katena Holdings, Inc.^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
06/2021
 
833

 
827

 
0.1

 
816

Katena Holdings, Inc.
One stop
 
L + 6.00%
(c) 
 
8.39%
 
06/2021
 
568

 
562

 
0.1

 
557


See Notes to Consolidated Financial Statements.
39





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Katena Holdings, Inc.(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
06/2021
 
$

 
$
(1
)
 

%
$
(2
)
Lombart Brothers, Inc.^
One stop
 
L + 6.75%
(c) 
 
9.14%
 
04/2022
 
5,041

 
4,938

 
0.5

 
4,966

Lombart Brothers, Inc.^(8)
One stop
 
L + 6.75%
(c) 
 
9.14%
 
04/2022
 
1,648

 
1,620

 
0.2

 
1,623

Lombart Brothers, Inc.
One stop
 
P + 5.50%
(f) 
 
10.75%
 
04/2022
 
29

 
28

 

 
28

Lombart Brothers, Inc.(8)
One stop
 
P + 5.50%
(f) 
 
10.75%
 
04/2022
 
8

 
8

 

 
8

Maverick Healthcare Group, LLC*
Senior loan
 
L + 7.50%
(a) 
 
7.89% cash/2.00% PIK
 
04/2017
 
1,316

 
1,316

 
0.1

 
1,316

MD Now Holdings, Inc.
One stop
 
L + 5.25%
(c) 
 
7.64%
 
08/2024
 
7,770

 
7,619

 
0.8

 
7,692

MD Now Holdings, Inc.(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
08/2024
 

 
(1
)
 

 
(2
)
MD Now Holdings, Inc.(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
08/2024
 

 
(1
)
 

 
(2
)
MWD Management, LLC & MWD Services, Inc.
One stop
 
L + 5.25%
(c) 
 
7.64%
 
06/2023
 
5,866

 
5,808

 
0.6

 
5,866

MWD Management, LLC & MWD Services, Inc.^
One stop
 
L + 5.25%
(c) 
 
7.64%
 
06/2023
 
229

 
228

 

 
229

MWD Management, LLC & MWD Services, Inc.(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
06/2022
 

 
(1
)
 

 

MWD Management, LLC & MWD Services, Inc.(5)
One stop
 
L + 5.25%
 
 
N/A(6)
 
06/2023
 

 
(3
)
 

 

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
9,338

 
9,156

 
1.0

 
9,338

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
942

 
929

 
0.1

 
942

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
210

 
208

 

 
210

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
151

 
149

 

 
151

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
133

 
132

 

 
133

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
116

 
115

 

 
116

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
90

 
89

 

 
90

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.00%
(c)(f) 
 
8.85%
 
05/2022
 
81

 
80

 

 
81

Oliver Street Dermatology Holdings, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
78

 
78

 

 
78

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
46

 
45

 

 
46

Oliver Street Dermatology Holdings, LLC*
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
41

 
41

 

 
41

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
32

 
32

 

 
32

Oliver Street Dermatology Holdings, LLC^
One stop
 
L + 6.00%
(c) 
 
8.39%
 
05/2022
 
30

 
29

 

 
30

Oliver Street Dermatology Holdings, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
05/2022
 

 
(1
)
 

 

ONsite Mammography, LLC
One stop
 
L + 6.75%
(a) 
 
8.99%
 
11/2023
 
3,064

 
3,005

 
0.3

 
3,064

ONsite Mammography, LLC
One stop
 
L + 6.75%
(c)(d) 
 
9.15%
 
11/2023
 
22

 
21

 

 
22

ONsite Mammography, LLC(5)
One stop
 
L + 6.75%
 
 
N/A(6)
 
11/2023
 

 
(1
)
 

 

Pinnacle Treatment Centers, Inc.
One stop
 
L + 6.25%
(c) 
 
8.59%
 
08/2021
 
9,879

 
9,724

 
1.0

 
9,879

Pinnacle Treatment Centers, Inc.
One stop
 
L + 6.25%
(b)(c) 
 
8.52%
 
08/2021
 
58

 
57

 

 
58

Pinnacle Treatment Centers, Inc.^
One stop
 
L + 6.25%
(c) 
 
8.59%
 
08/2021
 
55

 
54

 

 
55

Pinnacle Treatment Centers, Inc.
One stop
 
L + 6.25%
(a) 
 
8.46%
 
08/2021
 
43

 
42

 

 
43

PPT Management Holdings, LLC^
One stop
 
L + 7.50%
(b)(f) 
 
9.69%
 
12/2022
 
10,713

 
10,443

 
0.9

 
8,758

PPT Management Holdings, LLC*
One stop
 
L + 7.50%
(b)(c)(f) 
 
9.69%
 
12/2022
 
139

 
140

 

 
114

PPT Management Holdings, LLC
One stop
 
L + 7.50%
(b)(f) 
 
9.69%
 
12/2022
 
84

 
84

 

 
68

PPT Management Holdings, LLC
One stop
 
L + 7.50%
(b)(f) 
 
9.69%
 
12/2022
 
40

 
31

 

 
32

PPT Management Holdings, LLC(5)
One stop
 
L + 7.50%
(b)(f) 
 
9.69%
 
12/2022
 
7

 
4

 

 
(30
)
Riverchase MSO, LLC
Senior loan
 
L + 5.25%
(c) 
 
7.64%
 
10/2022
 
4,930

 
4,880

 
0.5

 
4,930

Riverchase MSO, LLC
Senior loan
 
L + 5.25%
(c) 
 
7.63%
 
10/2022
 
54

 
53

 

 
54

RXH Buyer Corporation*^
One stop
 
L + 5.75%
(c) 
 
8.14%
 
09/2021
 
17,083

 
16,914

 
1.8

 
17,083

RXH Buyer Corporation*
One stop
 
L + 5.75%
(c) 
 
8.14%
 
09/2021
 
1,933

 
1,915

 
0.2

 
1,933

RXH Buyer Corporation
One stop
 
P + 4.75%
(c)(f) 
 
9.19%
 
09/2021
 
92

 
90

 

 
92

SLMP, LLC^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
05/2023
 
7,544

 
7,406

 
0.8

 
7,544

SLMP, LLC^
One stop
 
L + 6.00%
(a) 
 
8.24%
 
05/2023
 
298

 
294

 

 
298

SLMP, LLC
One stop
 
N/A
 
 
7.50% PIK
 
05/2027
 
90

 
90

 

 
90


See Notes to Consolidated Financial Statements.
40





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SLMP, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
05/2023
 
$

 
$
(1
)
 

%
$

SLMP, LLC(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
05/2023
 

 
(1
)
 

 

Spear Education, LLC^
One stop
 
L + 6.25%
(c) 
 
8.75%
 
08/2019
 
4,597

 
4,586

 
0.5

 
4,597

Spear Education, LLC
One stop
 
L + 6.25%
(c) 
 
8.59%
 
08/2019
 
74

 
74

 

 
74

Spear Education, LLC
One stop
 
L + 6.25%
(c) 
 
8.56%
 
08/2019
 
26

 
26

 

 
26

Summit Behavioral Healthcare, LLC^
Senior loan
 
L + 4.75%
(c) 
 
7.06%
 
10/2023
 
8,777

 
8,666

 
0.9

 
8,777

Summit Behavioral Healthcare, LLC
Senior loan
 
L + 4.75%
(c) 
 
7.07%
 
10/2023
 
65

 
63

 

 
65

Summit Behavioral Healthcare, LLC
Senior loan
 
L + 4.75%
(c) 
 
7.07%
 
10/2023
 
27

 
24

 

 
27

WHCG Management, LLC*
Senior loan
 
L + 5.00%
(c) 
 
7.39%
 
03/2023
 
2,370

 
2,348

 
0.3

 
2,370

WHCG Management, LLC
Senior loan
 
L + 5.00%
(c) 
 
7.35%
 
03/2023
 
100

 
99

 

 
100

WHCG Management, LLC(5)
Senior loan
 
L + 5.00%
 
 
N/A(6)
 
03/2023
 

 
(2
)
 

 

WIRB-Copernicus Group, Inc.*^
Senior loan
 
L + 4.25%
(a) 
 
6.49%
 
08/2022
 
10,901

 
10,834

 
1.1

 
10,901

WIRB-Copernicus Group, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
08/2022
 

 
(1
)
 

 

WIRB-Copernicus Group, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
08/2022
 

 
(2
)
 

 

 
 
 
 
 
 
 
 
 
 
329,007

 
324,822

 
33.4

 
323,259

Home and Office Furnishings, Housewares, and Durable Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC*
Senior loan
 
L + 4.50%
(a) 
 
6.74%
 
02/2022
 
548

 
547

 
0.1

 
550

CST Buyer Company^
One stop
 
L + 5.00%
(a) 
 
7.24%
 
03/2023
 
2,433

 
2,378

 
0.2

 
2,433

CST Buyer Company(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
03/2023
 

 
(1
)
 

 

Plano Molding Company, LLC*^
One stop
 
L + 7.50%
(a) 
 
9.67%
 
05/2021
 
10,048

 
9,937

 
1.0

 
9,848

 
 
 
 
 
 
 
 
 
 
13,029

 
12,861

 
1.3

 
12,831

Hotels, Motels, Inns, and Gaming
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Aimbridge Hospitality, LLC*^
One stop
 
L + 5.00%
(a) 
 
7.24%
 
06/2022
 
9,941

 
9,811

 
1.0

 
9,941

Aimbridge Hospitality, LLC*
One stop
 
L + 5.00%
(a) 
 
7.24%
 
06/2022
 
4,830

 
4,764

 
0.5

 
4,830

Aimbridge Hospitality, LLC
One stop
 
L + 5.00%
(a) 
 
7.24%
 
06/2022
 
805

 
794

 
0.1

 
805

Aimbridge Hospitality, LLC
One stop
 
L + 5.00%
(a) 
 
7.24%
 
06/2022
 
16

 
15

 

 
16

Aimbridge Hospitality, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
06/2022
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
15,592

 
15,383

 
1.6

 
15,592

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC*^
One stop
 
L + 5.75%
(a) 
 
7.99%
 
12/2021
 
34,313

 
33,908

 
3.5

 
34,313

Captive Resources Midco, LLC(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2021
 

 
(18
)
 

 

Captive Resources Midco, LLC(5)
One stop
 
L + 5.75%
 
 
N/A(6)
 
12/2021
 

 
(23
)
 

 

Internet Pipeline, Inc.
One stop
 
L + 4.75%
(a) 
 
7.00%
 
08/2022
 
4,809

 
4,715

 
0.5

 
4,809

Internet Pipeline, Inc.*
One stop
 
L + 4.75%
(a) 
 
7.00%
 
08/2022
 
2,077

 
2,056

 
0.2

 
2,077

Internet Pipeline, Inc.*
One stop
 
L + 4.75%
(a) 
 
7.00%
 
08/2022
 
786

 
778

 
0.1

 
786

Internet Pipeline, Inc.(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
08/2021
 

 
(1
)
 

 

RSC Acquisition, Inc.
Senior loan
 
L + 4.25%
(c)(d)(f) 
 
6.72%
 
11/2022
 
4,380

 
4,358

 
0.5

 
4,369

RSC Acquisition, Inc.
Senior loan
 
L + 4.25%
(d)(e) 
 
6.76%
 
11/2021
 
21

 
21

 

 
21

RSC Acquisition, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
11/2022
 

 
(2
)
 

 
(1
)
  
 
 
 
 
 
 
 
 
 
46,386

 
45,792

 
4.8

 
46,374

Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NFD Operating, LLC
One stop
 
L + 7.00%
(a) 
 
9.11%
 
06/2021
 
2,302

 
2,283

 
0.2

 
2,302

NFD Operating, LLC
One stop
 
L + 7.00%
 
 
N/A(6)
 
06/2021
 

 

 

 

PADI Holdco, Inc.(8)(9)
One stop
 
E + 5.75%
(g) 
 
5.75%
 
04/2023
 
9,591

 
9,591

 
1.0

 
9,313

PADI Holdco, Inc.*^
One stop
 
L + 5.75%
(c) 
 
8.14%
 
04/2023
 
9,677

 
9,465

 
1.0

 
9,677

PADI Holdco, Inc.
One stop
 
L + 5.75%
(c) 
 
8.14%
 
04/2022
 
125

 
123

 

 
125

Self Esteem Brands, LLC*^
Senior loan
 
L + 4.75%
(a) 
 
6.99%
 
02/2020
 
16,120

 
16,069

 
1.7

 
16,120


See Notes to Consolidated Financial Statements.
41





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Leisure, Amusement, Motion Pictures, Entertainment - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
Self Esteem Brands, LLC(5)
Senior loan
 
L + 4.75%
 
 
N/A(6)
 
02/2020
 
$

 
$
(3
)
 

%
$

Sunshine Sub, LLC
One stop
 
L + 4.75%
(a) 
 
6.99%
 
05/2024
 
7,720

 
7,575

 
0.8

 
7,720

Sunshine Sub, LLC(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
05/2024
 

 
(1
)
 

 

Sunshine Sub, LLC(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
05/2024
 

 
(3
)
 

 

Teaching Company, The
One stop
 
L + 4.75%
(c) 
 
7.09%
 
07/2023
 
10,855

 
10,757

 
1.1

 
10,855

Teaching Company, The(5)
One stop
 
L + 4.75%
 
 
N/A(6)
 
07/2023
 

 
(1
)
 

 

Titan Fitness, LLC*
One stop
 
L + 6.50%
(a) 
 
8.61%
 
06/2021
 
12,952

 
12,846

 
1.3

 
12,952

Titan Fitness, LLC*
One stop
 
L + 6.50%
(a) 
 
8.61%
 
06/2021
 
1,954

 
1,949

 
0.2

 
1,954

Titan Fitness, LLC*
One stop
 
L + 6.50%
(a) 
 
8.61%
 
06/2021
 
1,716

 
1,712

 
0.2

 
1,716

Titan Fitness, LLC^
One stop
 
L + 6.50%
(a) 
 
8.61%
 
06/2021
 
927

 
920

 
0.1

 
927

Titan Fitness, LLC(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
06/2021
 

 
(9
)
 

 

WBZ Investment LLC
One stop
 
L + 5.50%
(a) 
 
7.64%
 
09/2020
 
5,149

 
5,049

 
0.5

 
5,097

WBZ Investment LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
09/2024
 

 

 

 
(1
)
WBZ Investment LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
09/2024
 

 
(2
)
 

 
(2
)
 
 
 
 
 
 
 
 
 
 
79,088

 
78,320

 
8.1

 
78,755

Oil and Gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Drilling Info Holdings, Inc.
Senior loan
 
L + 4.25%
(b) 
 
6.54%
 
07/2025
 
14,413

 
14,217

 
1.5

 
14,341

Drilling Info Holdings, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
07/2023
 

 
(2
)
 

 

Drilling Info Holdings, Inc.(5)
Senior loan
 
L + 4.25%
 
 
N/A(6)
 
07/2025
 

 
(4
)
 

 
(1
)
 
 
 
 
 
 
 
 
 
 
14,413

 
14,211

 
1.5

 
14,340

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
One stop
 
L + 5.50%
(c) 
 
7.89%
 
11/2021
 
5,620

 
5,562

 
0.6

 
5,620

Georgica Pine Clothiers, LLC^
One stop
 
L + 5.50%
(c) 
 
7.89%
 
11/2021
 
490

 
487

 
0.1

 
490

Georgica Pine Clothiers, LLC*
One stop
 
L + 5.50%
(c) 
 
7.89%
 
11/2021
 
344

 
341

 

 
344

Georgica Pine Clothiers, LLC
One stop
 
L + 5.50%
(c)(f) 
 
8.42%
 
11/2021
 
46

 
45

 

 
46

IMPLUS Footwear, LLC
One stop
 
L + 6.75%
(c) 
 
9.14%
 
04/2021
 
10,013

 
9,913

 
1.0

 
10,013

IMPLUS Footwear, LLC
One stop
 
L + 6.75%
(c) 
 
9.09%
 
04/2021
 
1,763

 
1,745

 
0.2

 
1,763

IMPLUS Footcare, LLC
One stop
 
L + 6.75%
(c) 
 
9.14%
 
04/2021
 
57

 
57

 

 
57

Massage Envy, LLC*^
One stop
 
L + 6.75%
(c)(f) 
 
9.06%
 
09/2020
 
34,835

 
34,631

 
3.6

 
34,835

Massage Envy, LLC^
One stop
 
L + 6.75%
(c) 
 
9.06%
 
09/2020
 
99

 
98

 

 
99

Massage Envy, LLC
One stop
 
L + 6.75%
(c) 
 
9.09%
 
09/2020
 
64

 
64

 

 
64

Massage Envy, LLC^
One stop
 
L + 6.75%
(c)(f) 
 
9.07%
 
09/2020
 
48

 
48

 

 
48

Massage Envy, LLC
One stop
 
L + 6.75%
(c)(f) 
 
9.09%
 
09/2020
 
42

 
41

 

 
42

Massage Envy, LLC^
One stop
 
L + 6.75%
(c)(f) 
 
9.08%
 
09/2020
 
40

 
40

 

 
40

Massage Envy, LLC^
One stop
 
L + 6.75%
(c)(f) 
 
9.12%
 
09/2020
 
38

 
38

 

 
38

Massage Envy, LLC^
One stop
 
L + 6.75%
(c)(f) 
 
9.07%
 
09/2020
 
35

 
34

 

 
35

Massage Envy, LLC^
One stop
 
L + 6.75%
(c)(f) 
 
9.08%
 
09/2020
 
19

 
19

 

 
19

Massage Envy, LLC^
One stop
 
L + 6.75%
(c)(f) 
 
9.13%
 
09/2020
 
15

 
15

 

 
15

Massage Envy, LLC
One stop
 
L + 6.75%
(c) 
 
9.09%
 
09/2020
 
10

 
9

 

 
10

Massage Envy, LLC(5)
One stop
 
L + 6.75%
 
 
N/A(6)
 
09/2020
 

 
(7
)
 

 

Orthotics Holdings, Inc.*
One stop
 
L + 5.50%
(a) 
 
7.74%
 
02/2020
 
8,204

 
8,166

 
0.8

 
8,040

Orthotics Holdings, Inc.*(8)
One stop
 
L + 5.50%
(a) 
 
7.74%
 
02/2020
 
1,345

 
1,338

 
0.1

 
1,318

Orthotics Holdings, Inc.(5)(8)
One stop
 
L + 5.50%
 
 
N/A(6)
 
02/2020
 

 
(1
)
 

 

Orthotics Holdings, Inc.(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
02/2020
 

 
(6
)
 

 
(4
)
Team Technologies Acquisition Company^
Senior loan
 
L + 5.00%
(c)(f) 
 
7.35%
 
12/2018
 
4,242

 
4,241

 
0.5

 
4,231

Team Technologies Acquisition Company*
Senior loan
 
L + 5.50%
(c)(f) 
 
7.85%
 
12/2018
 
782

 
781

 
0.1

 
792

Team Technologies Acquisition Company(5)
Senior loan
 
L + 5.00%
 
 
N/A(6)
 
12/2018
 

 

 

 
(1
)
 
 
 
 
 
 
 
 
 
 
68,151

 
67,699

 
7.0

 
67,954


See Notes to Consolidated Financial Statements.
42





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captain D's, LLC*^
Senior loan
 
L + 4.50%
(b) 
 
6.71%
 
12/2023
 
$
3,965

 
$
3,913

 
0.4

%
$
3,965

Captain D's, LLC
Senior loan
 
P + 3.50%
(a)(f) 
 
7.86%
 
12/2023
 
20

 
19

 

 
20

Community Veterinary Partners, LLC^
One stop
 
L + 5.50%
(c) 
 
7.89%
 
10/2021
 
282

 
280

 

 
282

Community Veterinary Partners, LLC*
One stop
 
L + 5.50%
(c) 
 
7.89%
 
10/2021
 
99

 
97

 

 
99

Community Veterinary Partners, LLC
One stop
 
L + 5.50%
(c) 
 
7.89%
 
10/2021
 
75

 
75

 

 
75

Community Veterinary Partners, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
10/2021
 

 
(3
)
 

 

Imperial Optical Midco Inc.
One stop
 
L + 4.75%
(b) 
 
7.04%
 
08/2023
 
2,725

 
2,685

 
0.3

 
2,684

Imperial Optical Midco Inc.
One stop
 
L + 4.75%
(b) 
 
6.96%
 
08/2023
 
44

 
39

 

 
39

Imperial Optical Midco Inc.
One stop
 
L + 4.75%
 
 
N/A(6)
 
08/2023
 

 

 

 

PPV Intermediate Holdings II, LLC
One stop
 
N/A
 
 
7.90% PIK
 
05/2023
 
2

 
2

 

 
2

PPV Intermediate Holdings II, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
05/2023
 

 
(1
)
 

 

PPV Intermediate Holdings II, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
05/2020
 

 
(6
)
 

 

Ruby Slipper Cafe LLC, The
One stop
 
L + 7.50%
(c) 
 
9.85%
 
01/2023
 
1,035

 
1,026

 
0.1

 
1,035

Ruby Slipper Cafe LLC, The
One stop
 
L + 7.50%
(c) 
 
9.82%
 
01/2023
 
5

 
5

 

 
5

Ruby Slipper Cafe LLC, The
One stop
 
L + 7.50%
(c) 
 
9.84%
 
01/2023
 
5

 
4

 

 
5

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
3,870

 
3,812

 
0.4

 
3,870

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
231

 
228

 

 
231

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
205

 
203

 

 
205

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
173

 
170

 

 
173

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
100

 
97

 

 
100

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
77

 
76

 

 
77

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
67

 
66

 

 
67

Southern Veterinary Partners, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
05/2025
 
50

 
48

 

 
50

Southern Veterinary Partners, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2023
 

 
(2
)
 

 

Southern Veterinary Partners, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
05/2025
 

 
(7
)
 

 

Veterinary Specialists of North America, LLC^
One stop
 
L + 5.50%
(a) 
 
7.69%
 
07/2021
 
7,331

 
7,278

 
0.8

 
7,331

Veterinary Specialists of North America, LLC^
One stop
 
L + 5.50%
(a) 
 
7.74%
 
07/2021
 
764

 
755

 
0.1

 
764

Veterinary Specialists of North America, LLC*
One stop
 
L + 5.50%
(a) 
 
7.74%
 
07/2021
 
415

 
413

 
0.1

 
415

Veterinary Specialists of North America, LLC*
One stop
 
L + 5.50%
(a) 
 
7.74%
 
07/2021
 
160

 
160

 

 
160

Veterinary Specialists of North America, LLC^
One stop
 
L + 5.50%
(a) 
 
7.74%
 
07/2021
 
123

 
122

 

 
123

Veterinary Specialists of North America, LLC*
One stop
 
L + 5.50%
(a) 
 
7.74%
 
07/2021
 
62

 
62

 

 
62

Veterinary Specialists of North America, LLC
One stop
 
L + 5.50%
(a) 
 
7.74%
 
07/2021
 
12

 
10

 

 
12

Veterinary Specialists of North America, LLC(5)
One stop
 
L + 5.50%
 
 
N/A(6)
 
07/2021
 

 
(2
)
 

 

Wetzel's Pretzels, LLC*
One stop
 
L + 6.75%
(a) 
 
8.99%
 
09/2021
 
8,922

 
8,805

 
0.9

 
8,922

Wetzel's Pretzels, LLC
One stop
 
L + 6.75%
(a) 
 
8.86%
 
09/2021
 
3

 
2

 

 
3

  
 
 
 
 
 
 
 
 
 
30,822

 
30,431

 
3.1

 
30,776

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.^
Senior loan
 
L + 5.00%
(c) 
 
7.39%
 
12/2021
 
618

 
614

 
0.1

 
622

Messenger, LLC
One stop
 
L + 6.00%
(a)(f) 
 
8.23%
 
08/2023
 
3,410

 
3,343

 
0.3

 
3,376

Messenger, LLC
One stop
 
P + 5.00%
(f) 
 
10.25%
 
08/2023
 
3

 
3

 

 
3

 
 
 
 
 
 
 
 
 
 
4,031

 
3,960

 
0.4

 
4,001

Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
One stop
 
L + 6.75%
(a) 
 
8.99%
 
07/2022
 
11,933

 
11,739

 
1.2

 
11,933

Batteries Plus Holding Corporation(5)
One stop
 
L + 6.75%
 
 
N/A(6)
 
07/2022
 

 
(1
)
 

 

Cycle Gear, Inc.^
One stop
 
L + 6.50%
(c) 
 
8.84%
 
01/2020
 
10,321

 
10,263

 
1.1

 
10,321

Cycle Gear, Inc.^
One stop
 
L + 6.50%
(c) 
 
8.84%
 
01/2020
 
603

 
600

 
0.1

 
603

Cycle Gear, Inc.(5)
One stop
 
L + 6.50%
 
 
N/A(6)
 
01/2020
 

 
(7
)
 

 


See Notes to Consolidated Financial Statements.
43





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Retail Stores - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DTLR, Inc.*^
One stop
 
L + 6.50%
(b) 
 
8.68%
 
08/2022
 
$
22,732

 
$
22,466

 
2.3

%
$
22,732

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.14%
 
06/2020
 
6,872

 
6,815

 
0.7

 
6,872

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.14%
 
06/2020
 
2,763

 
2,740

 
0.3

 
2,763

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.14%
 
06/2020
 
1,422

 
1,413

 
0.2

 
1,422

Elite Sportswear, L.P.*
Senior loan
 
L + 5.75%
(c) 
 
8.14%
 
06/2020
 
466

 
464

 
0.1

 
466

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
(c) 
 
8.14%
 
06/2020
 
216

 
214

 

 
216

Elite Sportswear, L.P.*
Senior loan
 
L + 5.75%
(c) 
 
8.14%
 
06/2020
 
206

 
205

 

 
206

Elite Sportswear, L.P.
Senior loan
 
L + 5.75%
 
 
N/A(6)
 
06/2020
 

 

 

 

Elite Sportswear, L.P.(5)
Senior loan
 
L + 5.75%
 
 
N/A(6)
 
06/2020
 

 
(3
)
 

 

Feeders Supply Company, LLC
One stop
 
L + 5.75%
(a) 
 
8.01%
 
04/2021
 
4,826

 
4,769

 
0.5

 
4,826

Feeders Supply Company, LLC
Subordinated debt
 
N/A
 
 
12.50% cash/7.00% PIK
 
04/2021
 
67

 
67

 

 
67

Feeders Supply Company, LLC
One stop
 
L + 5.75%
 
 
N/A(6)
 
04/2021
 

 

 

 

Marshall Retail Group LLC, The^
One stop
 
L + 6.00%
(c) 
 
8.34%
 
08/2020
 
11,922

 
11,874

 
1.2

 
11,922

Marshall Retail Group LLC, The(5)
One stop
 
L + 6.00%
 
 
N/A(6)
 
08/2019
 

 
(9
)
 

 

Mills Fleet Farm Group LLC*^
One stop
 
L + 5.50%
(a) 
 
7.74%
 
02/2022
 
1,815

 
1,743

 
0.2

 
1,815

Paper Source, Inc.^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
09/2019
 
12,255

 
12,224

 
1.3

 
12,255

Paper Source, Inc.*
One stop
 
L + 6.25%
(c) 
 
8.64%
 
09/2019
 
1,628

 
1,621

 
0.2

 
1,628

Paper Source, Inc.
One stop
 
P + 5.00%
(f) 
 
10.25%
 
09/2019
 
965

 
960

 
0.1

 
965

Pet Holdings ULC*^(8)(10)
One stop
 
L + 5.50%
(c) 
 
7.84%
 
07/2022
 
14,764

 
14,575

 
1.5

 
14,764

Pet Holdings ULC*^(8)(10)
One stop
 
L + 5.50%
(c) 
 
7.84%
 
07/2022
 
100

 
99

 

 
100

Pet Holdings ULC(5)(8)(10)
One stop
 
L + 5.50%
 
 
N/A(6)
 
07/2022
 

 
(2
)
 

 

PetPeople Enterprises, LLC^
One stop
 
L + 5.00%
(a) 
 
7.25%
 
09/2023
 
3,114

 
3,082

 
0.3

 
3,114

PetPeople Enterprises, LLC
One stop
 
N/A
 
 
8.25% PIK
 
01/2019
 
168

 
168

 

 
168

PetPeople Enterprises, LLC
One stop
 
L + 5.00%
 
 
N/A(6)
 
09/2023
 

 

 

 

PetPeople Enterprises, LLC(5)
One stop
 
L + 5.00%
 
 
N/A(6)
 
09/2023
 

 
(1
)
 

 

 
 
 
 
 
 
 
 
 
 
109,158

 
108,078

 
11.3

 
109,158

Telecommunications
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

NetMotion Wireless Holdings, Inc.*^
One stop
 
L + 6.25%
(c) 
 
8.64%
 
10/2021
 
6,393

 
6,311

 
0.7

 
6,393

NetMotion Wireless Holdings, Inc.(5)
One stop
 
L + 6.25%
 
 
N/A(6)
 
10/2021
 

 
(1
)
 

 

  
 
 
 
 
 
 
 
 
 
6,393

 
6,310

 
0.7

 
6,393

Textiles and Leather
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

SHO Holding I Corporation*
Senior loan
 
L + 5.00%
(c) 
 
7.34%
 
10/2022
 
2,211

 
2,181

 
0.2

 
2,122

SHO Holding I Corporation
Senior loan
 
L + 4.00%
(a)(c) 
 
6.14%
 
10/2021
 
15

 
15

 

 
12

  
 
 
 
 
 
 
 
 
 
2,226

 
2,196

 
0.2

 
2,134

Utilities
  
 
  
 
 
  
 
  
 
  

 
  

 
  

 
  

Arcos, LLC
One stop
 
L + 6.00%
(c) 
 
8.39%
 
02/2021
 
3,553

 
3,519

 
0.4

 
3,553

Arcos, LLC
One stop
 
L + 6.00%
 
 
N/A(6)
 
02/2021
 

 

 

 

  
 
 
 
 
 
 
 
 
 
3,553

 
3,519

 
0.4

 
3,553

Total non-controlled/non-affiliate company debt investments
 
 
 
 
 
 
$
1,679,746

 
$
1,660,130

 
171.8

%
$
1,664,317

 
  
 
  
 
 
  
 
  
 
 
 
 
 
 
 
 
Equity investments (11)(12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aerospace and Defense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NTS Technical Systems
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
$
1,506

 
0.1

%
$
616

NTS Technical Systems
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
256

 

 
323

NTS Technical Systems
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
128

 

 
177

Tresys Technology Holdings, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
295

 
295

 

 


See Notes to Consolidated Financial Statements.
44





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Aerospace and Defense - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Whitcraft LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
4

 
$
375

 
0.1

%
$
611

 
 
 
 
 
 
 
 
 
 
 
 
2,560

 
0.2

 
1,727

Automobile
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grease Monkey International, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
354

 
354

 
0.1

 
512

Polk Acquisition Corp.
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 
144

 

 
95

Quick Quack Car Wash Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
207

 

 
207

 
 
 
 
 
 
 
 
 
 
 
 
705

 
0.1

 
814

Beverage, Food and Tobacco
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benihana, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
43

 
699

 
0.1

 
856

C. J. Foods, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
75

 
0.1

 
505

Cafe Rio Holding, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
224

 

 
265

Global ID Corporation
LLC interest
 
N/A
 
 
N/A
 
N/A
 
2

 
242

 

 
346

Hopdoddy Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
27

 
130

 

 
122

Hopdoddy Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
12

 
36

 

 
35

Mendocino Farms, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
11

 
50

 

 
50

Purfoods, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
381

 
381

 
0.1

 
527

Rubio's Restaurants, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
2

 
945

 
0.1

 
1,236

Uinta Brewing Company
LP interest
 
N/A
 
 
N/A
 
N/A
 
462

 
462

 

 

 
 
 
 
 
 
 
 
 
 
 
 
3,244

 
0.4

 
3,942

Buildings and Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brooks Equipment Company, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
10

 
1,021

 
0.3

 
2,369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chemicals, Plastics and Rubber
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Flexan, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
90

 

 
71

Flexan, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
1

 

 

 

Inhance Technologies Holdings LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
70

 

 
70

 
 
 
 
 
 
 
 
 
 
 
 
160

 

 
141

Diversified/Conglomerate Manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventus Power, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
370

 

 

Inventus Power, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
54

 

 
48

Inventus Power, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 

 

 

Reladyne, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
249

 
0.1

 
498

Sunless Merger Sub, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
160

 
160

 

 

 
 
 
 
 
 
 
 
 
 
 
 
833

 
0.1

 
546

Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accela, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
296

 
296

 

 
325

Agility Recovery Solutions Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
67

 
341

 
0.1

 
424

Apttus Corporation
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
18

 
263

 

 
354

Apttus Corporation
Warrant
 
N/A
 
 
N/A
 
N/A
 
34

 
194

 

 
185

Centrify Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
348

 

 
348

Centrify Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 
123

 

 

 

Cloudbees, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
33

 
207

 

 
207

Cloudbees, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
29

 
39

 

 
39

Confluence Technologies, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
87

 

 
100

Connexin Software, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
69

 
69

 

 
91

Digital Guardian, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
57

 
10

 

 
10

DISA Holdings Acquisition Subsidiary Corp.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
154

 

 
248


See Notes to Consolidated Financial Statements.
45





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Diversified/Conglomerate Service - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GS Acquisitionco, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 
$
98

 

%
$
127

HealthcareSource HR, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
348

 
0.1

 
413

Host Analytics, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
368

 
134

 
0.1

 
384

Jobvite, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
72

 
47

 

 
47

Kareo, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
23

 
160

 

 
2

Kareo, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
4

 

 
5

Maverick Bidco Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
1

 
369

 
0.1

 
437

MMan Acquisition Co.
LP interest
 
N/A
 
 
N/A
 
N/A
 
263

 
263

 

 
206

Net Health Acquisition Corp.
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
346

 
0.1

 
388

Nexus Brands Group, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 

 
136

 

 
155

Personify, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
297

 
297

 

 
297

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
417

 
0.1

 
500

Project Alpha Intermediate Holding, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
103

 
4

 

 
51

Property Brands, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
28

 
284

 

 
307

Valant Medical Solutions, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
5

 
68

 

 
51

Vendavo, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1,017

 
1,017

 
0.1

 
1,332

Verisys Corporation
LLC interest
 
N/A
 
 
N/A
 
N/A
 
261

 
261

 

 
239

Vitalyst, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
61

 

 
88

Vitalyst, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
1

 
7

 

 

Workforce Software, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
323

 
323

 
0.1

 
371

Xmatters, Inc. and Alarmpoint, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
242

 
221

 

 
211

Xmatters, Inc. and Alarmpoint, Inc.
Warrant
 
N/A
 
 
N/A
 
N/A
 
43

 
34

 

 
16

Xmatters, Inc. and Alarmpoint, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
10

 
10

 

 
12

 
 
 
 
 
 
 
 
 
 
 
 
6,917

 
0.8

 
7,970

Ecological
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pace Analytical Services, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
3

 
304

 

 
280

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electronics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diligent Corporation(13)
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
56

 
1

 

 
206

Project Silverback Holdings Corp.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
3

 
6

 

 

SEI, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
340

 
265

 
0.1

 
643

Sloan Company, Inc., The
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
152

 

 

Sloan Company, Inc., The
LLC units
 
N/A
 
 
N/A
 
N/A
 
2

 
14

 

 

 
 
 
 
 
 
 
 
 
 
 
 
438

 
0.1

 
849

Grocery
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyWebGrocer, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
1,418

 
1,446

 

 

MyWebGrocer, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
71

 
165

 

 
41

 
 
 
 
 
 
 
 
 
 
 
 
1,611

 

 
41

Healthcare, Education and Childcare
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Day, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
614

 
0.1

 
446

Acuity Eyecare Holdings, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
198

 
198

 

 
196

ADCS Clinics Intermediate Holdings, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
579

 
0.1

 
363

ADCS Clinics Intermediate Holdings, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
6

 

 

Advanced Pain Management Holdings, Inc.(7)
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
8

 
829

 

 

Advanced Pain Management Holdings, Inc.(7)
Common stock
 
N/A
 
 
N/A
 
N/A
 
67

 
67

 

 

Advanced Pain Management Holdings, Inc.(7)
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
64

 

 

BIORECLAMATIONIVT, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
407

 
0.1

 
666


See Notes to Consolidated Financial Statements.
46





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Healthcare, Education and Childcare - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DCA Investment Holding, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
8,637

 
$
864

 
0.1

%
$
1,073

DCA Investment Holding, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
87

 
9

 

 

Deca Dental Management LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
357

 
357

 
0.1

 
428

Dental Holdings Corporation
LLC units
 
N/A
 
 
N/A
 
N/A
 
883

 
831

 
0.1

 
733

Elite Dental Partners LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
360

 
0.1

 
360

Encore GC Acquisition, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
18

 
182

 

 
239

Encore GC Acquisition, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
18

 

 

 
19

ERG Buyer, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
349

 
0.1

 
349

ERG Buyer, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
4

 
4

 

 
4

Eyecare Services Partners Holdings LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
133

 

 
147

Eyecare Services Partners Holdings LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
1

 

 
5

G & H Wire Company, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
148

 
148

 

 
122

IntegraMed America, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
417

 

 
172

Katena Holdings, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
387

 

 
293

Lombart Brothers, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
1

 
157

 

 
177

MD Now Holdings, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
7

 
68

 

 
68

MWD Management, LLC & MWD Services, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
182

 
182

 

 
122

Oliver Street Dermatology Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
234

 
234

 

 
346

Pentec Acquisition Sub, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
1

 
116

 

 
178

Pinnacle Treatment Centers, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
231

 

 
268

Pinnacle Treatment Centers, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
2

 

 
6

Radiology Partners, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
43

 
85

 

 
191

Radiology Partners, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
11

 
76

 

 
48

RXH Buyer Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 
7

 
683

 

 
290

Sage Dental Management, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
249

 

 
28

Sage Dental Management, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
3

 
3

 

 

SLMP, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
289

 
289

 

 
308

Spear Education, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
62

 

 
75

Spear Education, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
1

 
1

 

 
28

SSH Corporation
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
40

 

 
187

Summit Behavioral Healthcare, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
68

 

 
73

Summit Behavioral Healthcare, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 

 

 
3

Surgical Information Systems, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
4

 
414

 
0.1

 
535

U.S. Renal Care, Inc.
LP interest
 
N/A
 
 
N/A
 
N/A
 
1

 
2,665

 
0.2

 
1,796

WHCG Management, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
246

 

 
135

 
 
 
 
 
 
 
 
 
 
 
 
12,677

 
1.1

 
10,477

Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captive Resources Midco, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
1

 

 
0.1

 
393

Internet Pipeline, Inc.
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
72

 

 
100

Internet Pipeline, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
44

 
1

 

 
174

 
 
 
 
 
 
 
 
 
 
 
 
73

 
0.1

 
667

Leisure, Amusement, Motion Pictures, Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LMP TR Holdings, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
712

 
712

 
0.1

 
1,151

PADI Holdco, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
414

 

 
454

Titan Fitness, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
7

 
712

 
0.2

 
1,403

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
31

 
49

 

 
49

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
21

 
33

 

 
33

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
18

 
27

 

 
27


See Notes to Consolidated Financial Statements.
47





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Leisure, Amusement, Motion Pictures, Entertainment - (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
15

 
$
24

 

%
$
24

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
7

 
10

 

 
10

WBZ Investment LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
1

 
1

 

 
1

 
 
 
 
 
 
 
 
 
 
 
 
1,982

 
0.3

 
3,152

Personal and Non Durable Consumer Products (Mfg. Only)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgica Pine Clothiers, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
11

 
106

 

 
176

Massage Envy, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
749

 
210

 
0.2

 
1,490

Team Technologies Acquisition Company
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
114

 

 
292

 
 
 
 
 
 
 
 
 
 
 
 
430

 
0.2

 
1,958

Personal, Food and Miscellaneous Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Captain D's, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
70

 
70

 

 
64

Community Veterinary Partners, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 
2

 
244

 

 
310

PPV Intermediate Holdings II, LLC
LLC interest
 
N/A
 
 
N/A
 
N/A
 
13

 
13

 

 
13

R.G. Barry Corporation
Preferred stock
 
N/A
 
 
N/A
 
N/A
 

 
161

 

 
176

Ruby Slipper Cafe LLC, The
LLC units
 
N/A
 
 
N/A
 
N/A
 
12

 
123

 

 
151

Southern Veterinary Partners, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
216

 
0.1

 
333

Southern Veterinary Partners, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 
64

 
2

 

 
24

Veterinary Specialists of North America, LLC
LLC units
 
N/A
 
 
N/A
 
N/A
 

 
106

 

 
185

Wetzel's Pretzels, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 
160

 

 
221

 
 
 
 
 
 
 
 
 
 
 
 
1,095

 
0.1

 
1,477

Printing and Publishing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brandmuscle, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
240

 

 
166

 
 
 
 
 
 
 
 
 
 
 
 


 


 


Retail Stores
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Batteries Plus Holding Corporation
LP interest
 
N/A
 
 
N/A
 
N/A
 
5

 
529

 
0.1

 
816

Cycle Gear, Inc.
LLC units
 
N/A
 
 
N/A
 
N/A
 
19

 
248

 

 
463

DTLR, Inc.
LLC interest
 
N/A
 
 
N/A
 
N/A
 
4

 
411

 
0.1

 
734

Elite Sportswear, L.P.
LLC interest
 
N/A
 
 
N/A
 
N/A
 

 
165

 

 
36

Feeders Supply Company, LLC
Preferred stock
 
N/A
 
 
N/A
 
N/A
 
2

 
192

 

 
241

Feeders Supply Company, LLC
Common stock
 
N/A
 
 
N/A
 
N/A
 

 

 

 
52

Marshall Retail Group LLC, The
LLC units
 
N/A
 
 
N/A
 
N/A
 
15

 
154

 

 
95

Paper Source, Inc.
Common stock
 
N/A
 
 
N/A
 
N/A
 
8

 
1,387

 
0.1

 
606

Pet Holdings ULC(8)(10)
LP interest
 
N/A
 
 
N/A
 
N/A
 
455

 
386

 
0.1

 
537

 
 
 
 
 
 
 
 
 
 
 
 
3,472

 
0.4

 
3,580

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company equity investments
 
 
 
 
 
 
 
 
$
37,762

 
4.2

%
$
40,156

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled/non-affiliate company investments
 
 
 
 
 
 
$
1,679,746

 
$
1,697,892

 
176.0

%
$
1,704,473

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlled affiliate company investments(14)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Switchfly, LLC(8)
One stop
 
P + 2.00%
(c)(f) 
 
7.25%
 
04/2020
 
$
2,295

 
$
2,258

 
0.2

%
$
2,066

Switchfly, LLC(8)
One stop
 
P + 2.00%
(f) 
 
7.25%
 
06/2018
 
192

 
192

 

 
173

Switchfly, LLC(8)
One stop
 
P + 2.00%
(f) 
 
7.25%
 
04/2020
 
17

 
17

 

 
15

 
 
 
 
 
 
 
 
 
 
2,504

 
2,467

 
0.2

 
2,254


See Notes to Consolidated Financial Statements.
48





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



 
Investment
Type
 
Spread
Above
Index(1)
 
Interest
Rate(2)
 
Maturity
Date
 
Principal ($) /
Shares(3)
 
Amortized Cost
 
Percentage
of Net
Assets
 
Fair
Value
(4)
Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.*(8)
One stop
 
L + 10.00%
(a) 
 
10.24% cash/2.00% PIK
 
05/2019
 
$
4,257

 
$
4,255

 
0.4

%
$
4,257

Benetech, Inc.(8)
One stop
 
P + 8.75%
(a)(f) 
 
11.77% cash/2.00% PIK
 
05/2019
 
223

 
223

 

 
223

 
 
 
 
 
 
 
 
 
 
4,480

 
4,478

 
0.4

 
4,480

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company debt investments
 
 
 
 
 
 
6,984

 
6,945

 
0.6

%
6,734

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Investments (11)(12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified/Conglomerate Service
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Switchfly LLC(8)
LLC units
 
N/A
 
 
N/A
 
N/A
 
408

 
$
408

 
0.1

%
$
534

 
 
 
 
 
 
 
 
 
 
 
 
408

 
0.1

 
534

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mining, Steel, Iron and Non-Precious Metals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benetech, Inc.(8)
LLC interest
 
N/A
 
 
N/A
 
N/A
 
56

 
$

 


$
16

Benetech, Inc.(8)
LLC interest
 
N/A
 
 
N/A
 
N/A
 
56

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 

 

 
16

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company equity investments
 
 
 
 
 
 
 
 
$
408

 
0.1

%
$
550

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-controlled affiliate company investments
 
 
 
 
 
 
$
6,984

 
$
7,353

 
0.7

%
$
7,284

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Controlled affiliate company investments(15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Funds and Vehicles
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Loan Fund LLC(8)(16)
LLC interest
 
N/A
 
 
N/A
 
N/A
 
75,407

 
$
75,407

 
7.3

%
$
71,084

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total controlled affiliate company equity investments
 
 
 
 
 
 
 
 
$
75,407

 
7.3

%
$
71,084

 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
$
1,686,730

 
$
1,780,652

 
184.0

%
$
1,782,841

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents, foreign currencies and restricted cash and cash equivalents
 
 
  
 
  

 
  

 
  

 
  

Cash, foreign currencies and restricted cash
 
 
  
 
  

 
$
35,173

 
3.6

%
$
35,173

BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)
2.00% (17)
 
  
 
  

 
10,532

 
1.1

 
10,532

Total cash and cash equivalents, foreign currencies and restricted cash and cash equivalents
 
 
 
 
 
$
45,705

 
4.7

%
$
45,705

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments and cash and cash equivalents, foreign currencies and restricted cash and cash equivalents
 
 
 
 
 
$
1,826,357

 
188.7

%
$
1,828,546

 
* 
 
Denotes that all or a portion of the investment collateralizes the MS Credit Facility (as defined in Note 6).
^ 
 
Denotes that all or a portion of the investment secures the notes offered in the 2014 Debt Securitization (as defined in Note 6).
# 
 
Denotes that all or a portion of the investment collateralizes the Credit Facility (as defined in Note 6).
(1) 
The majority of the investments bear interest at a rate that may be determined by reference to LIBOR, EURIBOR or Prime and which reset daily, monthly, quarterly, semiannually, or annually. For each, the Company has provided the spread over LIBOR, EURIBOR or Prime and the weighted average current interest rate in effect as of September 30, 2018. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of September 28, 2018, which was the last business day of the period on which LIBOR or EURIBOR was determined. The actual index rate for each loan listed may not be the applicable index rate outstanding as of September 28, 2018, as the loan may have priced or repriced based on an index rate prior to September 28, 2018.
(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 2.26% as of September 28, 2018.
(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 2.31% as of September 28, 2018.

See Notes to Consolidated Financial Statements.
49





Golub Capital BDC, Inc. and Subsidiaries
Consolidated Schedule of Investments - (continued)
September 30, 2018
(In thousands)



(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 2.40% as of September 28, 2018.
(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 2.60% as of September 28, 2018.
(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 2.92% as of September 28, 2018.
(f) Denotes that all or a portion of the loan was indexed to the Prime rate, which was 5.25% as of September 28, 2018.
(g) Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.32% as of September 28, 2018.
(2) 
For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of September 30, 2018.
(3) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(4) 
The fair value of the investment was valued using significant unobservable inputs. See Note 5. Fair Value Measurements.
(5) 
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(6) 
The entire commitment was unfunded as of September 30, 2018. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(7) 
Loan was on non-accrual status as of September 30, 2018, meaning that the Company has ceased recognizing interest income on the loan.
(8) 
The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2018, total non-qualifying assets at fair value represented 5.8% of the Company's total assets calculated in accordance with the 1940 Act.
(9) 
Loan is denominated in foreign currency and is translated into U.S. dollars as of the valuation date or the date of the transaction. See Note 2. Significant Accounting Policies and Recent Accounting Updates - Foreign Currency Transactions.
(10) 
The headquarters of this portfolio company is located in Canada.
(11) 
Equity investments are non-income producing securities unless otherwise noted.
(12) 
Ownership of certain equity investments may occur through a holding company or partnership.
(13) 
The Company holds an equity investment that entitles it to receive preferential dividends.
(14)As defined in the 1940 Act, the Company is deemed to be an "affiliated person" of the portfolio company as the Company owns five percent or more of the portfolio company's voting securities ("non-controlled affiliate"). Transactions related to investments in non-controlled affiliates for the year ended September 30, 2018 were as follows:
Portfolio Company
 
Fair value as of September 30, 2017
 
Purchases (cost)(h)
 
Redemptions
(cost)
 
Transfer in (out)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value as of September 30, 2018
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Benetech, Inc.
 
$
3,707

 
$
222

 
$
(551
)
 
$

 
$
1

 
$
1,117

 
$
4,496

 
$

 
$
638

 
$

Switchfly LLC(i)
 

 
254

 

 
2,120

 
25

 
389

 
2,788

 

 
29

 

Total Non-Controlled Affiliates
 
$
3,707

 
$
476

 
$
(551
)
 
$
2,120

 
$
26

 
$
1,506

 
$
7,284

 
$

 
$
667

 
$

(h) 
Purchases at cost includes amounts related to PIK interest capitalized and added to the principal balance of the respective loans.
(i) 
During the three months ended September 30, 2018, the Company's ownership increased to over five percent of the portfolio company's voting securities.
(15)As defined in the 1940 Act, the Company is deemed to be both an "affiliated person" of and "control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement) ("controlled affiliate"). Transactions related to investments in controlled affiliates for the year ended September 30, 2018 were as follows:
Portfolio Company
 
Fair value as of September 30, 2017
 
Purchases (cost)
 
Redemptions
(cost)
 
Transfer in (out)
 
Discount
accretion
 
Net change in unrealized
gain/(loss)
 
Fair value as of September 30, 2018
 
Net realized gain/(loss)
 
Interest and
fee income
 
Dividend
income
Senior Loan Fund LLC(j)
 
$
95,015

 
$
12,163

 
$
(34,213
)
 
$

 
$

 
$
(1,881
)
 
$
71,084

 
$

 
$

 
$
8,099

Total Controlled Affiliates
 
$
95,015

 
$
12,163

 
$
(34,213
)
 
$

 
$

 
$
(1,881
)
 
$
71,084

 
$

 
$

 
$
8,099

(j)  
Together with RGA, the Company co-invests through SLF. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not have sole control over significant actions of SLF for purposes of the 1940 Act or otherwise.
(16) 
The Company generally receives quarterly profit distributions from its equity investment in SLF. See Note 4. Investments.
(17) 
The rate shown is the annualized seven-day yield as of September 30, 2018.

See Notes to Consolidated Financial Statements.
50




Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Note 1. Organization

Golub Capital BDC, Inc. (“GBDC” and, collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company. GBDC has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, GBDC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. The Company may also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, U.S. middle-market companies. The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

On November 27, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Golub Capital Investment Corporation, a Maryland corporation (“GCIC”), Fifth Ave Subsidiary Inc., a Maryland corporation and wholly owned subsidiary of the Company (“Merger Sub”), the Investment Adviser and, for certain limited purposes, the Administrator. The Merger Agreement provides that, subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into GCIC, with GCIC continuing as the surviving company and as a wholly-owned subsidiary of the Company (the “Initial Merger”) and, immediately thereafter, GCIC will merge with and into the Company, with the Company continuing as the surviving company (together with the Initial Merger, the “Merger”).

Note 2. Significant Accounting Policies and Recent Accounting Updates

Basis of presentation:  The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 — Financial Services  Investment Companies (“ASC Topic 946”).
The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. The unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended September 30, 2018, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

Fair value of financial instruments:  The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

51

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)


Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in Note 5.

Use of estimates:  The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation:  As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries Golub Capital BDC 2010-1 Holdings LLC (“Holdings”), Golub Capital BDC 2010-1 LLC (“2010 Issuer”), Golub Capital BDC CLO 2014 LLC (“2014 Issuer”), Golub Capital BDC CLO III Depositor LLC (“2018 CLO Depositor”), Golub Capital BDC CLO III LLC (“2018 Issuer”), Golub Capital BDC Funding LLC (“Funding”), Golub Capital BDC Funding II LLC (“Funding II”), Golub Capital BDC Holdings, LLC (“BDC Holdings”), GC SBIC IV, L.P. (“SBIC IV”), GC SBIC V, L.P. (“SBIC V”) and GC SBIC VI, L.P. (“SBIC VI”). The Company does not consolidate its non-controlling interest in SLF. See further description of the Company’s investment in SLF in Note 4.

Assets related to transactions that do not meet ASC Topic 860 requirements for accounting sale treatment are reflected in the Company’s Consolidated Statements of Financial Condition as investments. Those assets are owned by special purpose entities, including 2010 Issuer, 2014 Issuer, 2018 Issuer, Funding and Funding II that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GBDC (or any affiliate of GBDC).

Cash and cash equivalents: Cash and cash equivalents are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Restricted cash, cash equivalents and foreign currencies:  Restricted cash, cash equivalents and foreign currencies include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash, cash equivalents and foreign currencies are held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets. In addition, restricted cash, cash equivalents and foreign currencies include amounts held within the Company’s small business investment company (“SBIC”) subsidiaries. The amounts held within the SBICs are generally restricted to the originations of new loans by the SBICs and the payment of U.S. Small Business Administration (“SBA”) debentures and related interest expense.

Foreign currency translation: The Company’s books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

(1)
cash and cash equivalents, restricted cash and cash equivalents, fair value of investments, interest receivable, and other assets and liabilities—at the spot exchange rate on the last business day of the period; and

(2)
purchases and sales of investments, income and expenses—at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Fluctuations arising from the translation of assets other than investments and liabilities are included with the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations.


52

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Revenue recognition:

Investments and related investment income:  Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three and six months ended March 31, 2019, interest income included $1,977 and $3,930, respectively, of accretion of discounts. For the three and six months ended March 31, 2018, interest income included $2,361 and $5,070, respectively, of accretion of discounts. For the three and six months ended March 31, 2019, the Company received loan origination fees of $1,604 and $4,652, respectively. For the three and six months ended March 31, 2018, the Company received loan origination fees of $2,036 and $4,105, respectively.

For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three and six months ended March 31, 2019, the Company recorded PIK income of $265 and $390, respectively, and received PIK payments in cash of $0 and $41, respectively. For the three and six months ended March 31, 2018, the Company recorded PIK income of $234 and $519, respectively, and received PIK payments in cash of $0 and $2, respectively.

In addition, the Company may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when earned. All other income is recorded into income when earned. For the three and six months ended March 31, 2019, fee income included $46 and $441, respectively, of prepayment premiums, which fees are non-recurring. For the three and six months ended March 31, 2018, fee income included $531 and $966, respectively, of prepayment premiums, which fees are non-recurring.

For the three and six months ended March 31, 2019, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $38,475 and $76,125, respectively. For the three and six months ended March 31, 2018, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $31,332 and $61,963, respectively.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

For the three and six months ended March 31, 2019, excluding the Company's investment in LLC equity interests in SLF, the Company recorded dividend income of $19 and $58, respectively, and return of capital distributions, excluding the Company's investment in LLC equity interests in SLF, of $0 and $0, respectively. For the three and six months ended March 31, 2019, the Company recorded dividend income of $0 and $0, respectively, and return of capital distributions of $0 and $2,275, respectively, from the Company's investment in LLC equity interests in SLF. For the three and six months ended March 31, 2018, excluding the Company's investment in LLC equity interests in SLF, the Company recorded dividend income of $13 and $610, respectively, and return of capital distributions, excluding the Company's investment in LLC equity interests in SLF, of $65 and $373, respectively. For the three and six months ended March 31, 2018, the Company recorded dividend income of $1,853 and $3,818, respectively, and return of capital distributions of $0 and $4,200, respectively, from the Company's investment in LLC equity interests in SLF.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at

53

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

fair value as a component of the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Consolidated Statements of Operations.

Non-accrual loans: A loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, payments are likely to remain current. The total fair value of non-accrual loans was $3,410 and $5,625 as of March 31, 2019 and September 30, 2018, respectively.

Partial loan sales:  The Company follows the guidance in ASC Topic 860 when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on the Company’s Consolidated Statements of Financial Condition and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 5 for additional information.

Income taxes:  The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. The Company may then be required to incur a 4% excise tax on such income. To the extent that the Company determines that it's estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and six months ended March 31, 2019, $0 and $0, respectively, was incurred for U.S. federal excise tax. For the three and six months ended March 31, 2018, $0 and $0, respectively, was incurred for U.S. federal excise tax.

The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through March 31, 2019. The Company's tax returns for the 2015 through 2017 tax years remain subject to examination by U.S. federal and most state tax authorities.

Dividends and distributions:  Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who participate in the DRIP will have their cash distribution reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. The Company may use newly issued shares under the guidelines of the DRIP (if the Company’s shares are trading at a premium to net asset value), or the Company may purchase shares in the open market in connection with the obligations under the plan. In particular, if the Company’s shares are trading

54

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

at a significant discount to net asset value (“NAV”) and the Company is otherwise permitted under applicable law to purchase such shares, the Company intends to purchase shares in the open market in connection with any obligations under the DRIP.

In the event the market price per share of the Company’s common stock on the date of a distribution exceeds the most recently computed NAV per share of the common stock, the Company will issue shares of common stock to participants in the DRIP at the greater of the most recently computed NAV per share of common stock or 95% of the current market price per share of common stock (or such lesser discount to the current market price per share that still exceeds the most recently computed NAV per share of common stock).

Share repurchase plan:  The Company has a share repurchase program (the “Program”) which allows the Company to repurchase up to $75,000 of the Company’s outstanding common stock on the open market at prices below the Company’s NAV as reported in its most recently published consolidated financial statements. The Board most recently reapproved the Program in August 2018 and the Program may be implemented at the discretion of management. The shares may be purchased from time to time at prevailing market prices, through open market transactions, including block transactions. The Company did not make any repurchases of its common stock during each of the three and six months ended March 31, 2019 and March 31, 2018.

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of March 31, 2019 and September 30, 2018, the Company had deferred debt issuance costs of $4,938 and $2,934, respectively. These amounts are amortized and included in interest expense in the Consolidated Statements of Operations over the estimated average life of the borrowings. Amortization expense for the three and six months ended March 31, 2019, was $467 and $1,136, respectively. Amortization expense for the three and six months ended March 31, 2018, was $641 and $1,435, respectively.

Accounting for derivative instruments:  The Company does not utilize hedge accounting and marks its derivatives, if any, to market through a net change in unrealized appreciation (depreciation) on derivative instruments in the Consolidated Statements of Operations.

Securities Exchange Commission (“SEC”) Disclosure Update and Simplification: In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification (the "SEC Release"), amending certain disclosure requirements intended to facilitate the disclosure of information to investors and simplify compliance. The effective date for the SEC Release is effective for all filings on or after November 5, 2018. The Company first adopted the SEC Release for the fiscal year ended September 30, 2018. The SEC Release required presentation changes to the Company's Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Net Assets. Prior to adoption, the Company presented, in accordance with previous SEC rules, distributable earnings on the Consolidated Statements of Financial Condition, as three components: 1) undistributed net investment income; 2) net unrealized appreciation (depreciation) on investments; and 3) net realized gain (loss) on investments and presented distributions from distributable earnings on the Consolidated Statements of Changes in Net Assets as two components: 1) distributions from net investment income; and 2) distributions from realized gain. In accordance with the SEC Release, distributable earnings and distributions from distributable earnings are shown in total on the Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Net Assets, respectively. The changes in presentation have been retrospectively applied to the Consolidated Statements of Changes in Net Assets for the six months ended March 31, 2018.

The following table provides the reconciliation of the components of distributable earnings to conform to the current period presentation for the six months ended March 31, 2018:
 
Total increase (decrease) for the six months ended March 31, 2018
 
Undistributed Net Investment Income
Net Unrealized Appreciation (Depreciation) on Investments
Net Realized Gain (Loss) on Investments
Distributable Earnings
Net investment income
$
37,039

$

$

$
37,039

Net realized gain (loss) on investments and foreign currency transactions


(137
)
(137
)
Net change in unrealized gain (loss) on investments and foreign currency translation

7,445


7,445

Net increase in net assets from operations
$
37,039

$
7,445

$
(137
)
$
44,347


The following table provides the reconciliation of the components of distributions from distributable earnings to conform to the current period presentation for the six months ended March 31, 2018:


55

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

 
Total increase (decrease) for the six months ended March 31, 2018
Distributions to stockholders:
 
Distributions from net investment income
$
(39,969
)
Distributions from realized gain
(2,979
)
Distributions from distributable earnings
$
(42,948
)

Note 3. Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GBDC. The Board most recently reapproved the Investment Advisory Agreement in May 2019. The Investment Adviser is a registered investment adviser with the SEC. The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).

The base management fee is calculated at an annual rate equal to 1.375% of average adjusted gross assets at the end of the two most recently completed calendar quarters (including assets purchased with borrowed funds and securitization-related assets, leverage, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian but adjusted to exclude cash and cash equivalents so that investors do not pay the base management fee on such assets) and is payable quarterly in arrears. Additionally, the Investment Adviser voluntarily excludes any assets funded with secured borrowing proceeds from the base management fee calculation. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents means U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of the Company, the base management fee will be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that an Incentive Fee for any quarter can only be paid to the Investment Adviser if, after such payment, the cumulative Incentive Fees paid to the Investment Adviser since April 13, 2010, the effective date of the Company’s election to become a BDC, would be less than or equal to 20.0% of the Company’s Cumulative Pre-Incentive Fee Net Income (as defined below).

The Company accomplishes this limitation by subjecting each quarterly Incentive Fee payable under the Income and Capital Gain Incentive Fee Calculation (as defined below) to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is equal to the difference between (a) 20.0% of Cumulative Pre-Incentive Fee Net Income and (b) cumulative Incentive Fees of any kind paid to the Investment Adviser by GBDC since April 13, 2010. To the extent the Incentive Fee Cap is zero or a negative value in any quarter, no Incentive Fee would be payable in that quarter. If, for any relevant period, the Incentive Fee Cap calculation results in the Company paying less than the amount of the Incentive Fee calculated above, then the difference between the Incentive Fee and the Incentive Fee Cap will not be paid by GBDC and will not be received by the Investment Adviser as an Incentive Fee either at the end of such relevant period or at the end of any future period. “Cumulative Pre-Incentive Fee Net Income” is equal to the sum of (a) Pre-Incentive Fee Net Investment Income (as defined below) for each period since April 13, 2010 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since April 13, 2010.

“Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.


56

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Incentive Fees are calculated and payable quarterly in arrears (or, upon termination of the Investment Advisory Agreement, as of the termination date).

The income and capital gains incentive fee calculation (the “Income and Capital Gain Incentive Fee Calculation”) has two parts, the income component (the “Income Incentive Fee”) and the capital gains component (the “Capital Gain Incentive Fee” and, together with the Income Incentive Fee, the “Incentive Fee”). The Income Incentive Fee is calculated quarterly in arrears based on the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter.

For the three and six months ended March 31, 2019, the Income Incentive Fee incurred was $3,735 and $6,196, respectively. For the three and six months ended March 31, 2018, the Income Incentive Fee incurred was $2,191 and $4,349, respectively.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee may be calculated under this formula with respect to a period in which the Company has incurred a loss. For example, if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value and an Incentive Fee will be paid even if the Company has incurred a loss in such period due to realized and/or unrealized capital losses unless the payment of such Incentive Fee would cause the Company to pay Incentive Fees on a cumulative basis that exceed the Incentive Fee Cap. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, the Company may be able to invest funds in debt instruments that provide for a higher return, which would increase Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Incentive Fee based on such net investment income.

The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of its total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian) used to calculate the 1.375% base management fee annual rate.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

Zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;
100% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than 2.5%) is referred to as the “catch-up” provision. The catch-up is meant to provide the Investment Adviser with 20.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply if the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.5% in any calendar quarter; and
20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter.

The Capital Gain Incentive Fee equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), which commenced with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Company’s “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the Company elected to become a BDC through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred debt issuance costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

57

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company’s portfolio when sold and (b) the accreted or amortized cost basis of such investment.
The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gain Incentive Fee calculation date and (b) the accreted or amortized cost basis of such investment.

In accordance with GAAP, the Company also is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized capital appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 20% of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period may result in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. For the three and six months ended March 31, 2019, the Company had a reversal of the accrual of the capital gain incentive fee of $669 and $1,147, respectively. For the three and six months ended March 31, 2018, the Company accrued a capital gain incentive fee of $820 and $1,533, respectively. Changes in the accrual for the capital gain incentive fee are included in incentive fee in the Consolidated Statements of Operations. As of March 31, 2019 and September 30, 2018, included in management and incentive fees payable on the Consolidated Statements of Financial Condition were $4,433 and $7,158, respectively, for cumulative accruals for capital gain incentive fees under GAAP, including the amounts payable pursuant to the Investment Advisory Agreement described above.

As of March 31, 2019 and September 30, 2018 the Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement (as described above) was $0 and $2,303, respectively. Any payment due under the terms of the Investment Advisory Agreement is calculated in arrears at the end of each calendar year. The Company paid $1,578 and $1,196 of Capital Gain Incentive Fee calculated in accordance with the Investment Advisory Agreement as of December 31, 2018 and December 31, 2017, respectively. The Company did not pay any capital gain incentive fee under the Investment Advisory Agreement for any period ended prior to December 31, 2017.

The sum of the Income Incentive Fee and the Capital Gain Incentive Fee is the “Incentive Fee.”

Administration Agreement:  Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment, provides the Company with clerical, bookkeeping and record keeping services at such facilities and provides the Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company’s day-to-day operations. The Company reimburses the Administrator the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, fees and expenses associated with performing compliance functions and the Company's allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses, including any allocation of expenses among the Company and other entities for which the Administrator provides similar services, are reasonable and comparable to administrative services charged by unaffiliated third party asset managers. Under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

Included in accounts payable and accrued expenses is $663 and $616 as of March 31, 2019 and September 30, 2018, respectively, for accrued allocated shared services under the Administration Agreement.

Other related party transactions:  The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash.


58

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Total expenses reimbursed to the Administrator during the three and six months ended March 31, 2019, were $845 and $1,209, respectively. Total expenses reimbursed to the Administrator during the three and six months ended March 31, 2018, were $521 and $1,320, respectively.

As of March 31, 2019 and September 30, 2018, included in accounts payable and accrued expenses were $338 and $364, respectively, for accrued expenses paid on behalf of the Company by the Administrator.

On June 22, 2016, the Company entered into an unsecured revolving credit facility with the Investment Adviser (the "Adviser Revolver"), with a maximum credit limit of $20,000 and expiration date of June 22, 2019. Refer to Note 6 for discussion of the Adviser Revolver.

During the three and six months ended March 31, 2019, the Company sold $0 and $0, respectively, of investments and unfunded commitments to SLF at fair value and recognized $0 and $0, respectively, of net realized gains. During the three and six months ended March 31, 2018, the Company sold $6,191 and $6,191, respectively, of investments and unfunded commitments to SLF at fair value and recognized $20 and $20, respectively, of net realized gains.

During the three and six months ended March 31, 2019, SLF incurred an administrative service fee of $64 and $144, respectively. During the three and six months ended March 31, 2018, SLF incurred an administrative service fee of $108 and $221, respectively.

On November 27, 2018, the Company entered into the Merger Agreement with GCIC, Merger Sub, the Investment Adviser and, for certain limited purposes, the Administrator. Refer to Note 11 for discussion of the Merger.

59

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Note 4. Investments

Investments as of March 31, 2019 and September 30, 2018 consisted of the following:
 
As of March 31, 2019
 
As of September 30, 2018
  
Principal
 
Amortized
Cost
 
Fair
Value
 
Principal
 
Amortized
Cost
 
Fair
Value
Senior secured
$
252,184

 
$
249,818

 
$
248,468

 
$
233,064

 
$
230,846

 
$
231,169

One stop
1,596,687

 
1,578,947

 
1,579,720

 
1,443,980

 
1,426,640

 
1,430,196

Second lien
9,434

 
9,354

 
9,434

 
9,435

 
9,338

 
9,435

Subordinated debt
524

 
520

 
609

 
251

 
251

 
251

LLC equity interests in SLF(1)
N/A

 
74,882

 
71,742

 
N/A

 
75,407

 
71,084

Equity
N/A

 
39,198

 
45,040

 
N/A

 
38,170

 
40,706

Total
$
1,858,829

 
$
1,952,719

 
$
1,955,013

 
$
1,686,730

 
$
1,780,652

 
$
1,782,841

 
(1) 
SLF’s proceeds from the LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.
The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.
 
As of March 31, 2019
 
As of September 30, 2018
Amortized Cost:
  

 
  

 
  

 
  

United States
  

 
  

 
  

 
  

Mid-Atlantic
$
386,836

 
19.8
%
 
$
354,662

 
19.9
%
Midwest
371,698

 
19.0

 
370,239

 
20.8

West
346,149

 
17.7

 
306,052

 
17.2

Southeast
479,974

 
24.6

 
422,844

 
23.7

Southwest
222,855

 
11.4

 
186,468

 
10.5

Northeast
108,212

 
5.6

 
125,329

 
7.0

Canada
30,853

 
1.6

 
15,058

 
0.9

United Kingdom
6,142

 
0.3

 

 

Total
$
1,952,719

 
100.0
%
 
$
1,780,652

 
100.0
%
 
 
 
 
 
 
 
 
Fair Value:
  

 
  

 
  

 
  

United States
  

 
  

 
  

 
  

Mid-Atlantic
$
381,896

 
19.5
%
 
$
347,560

 
19.5
%
Midwest
372,054

 
19.0

 
371,141

 
20.8

West
344,888

 
17.7

 
306,074

 
17.2

Southeast
486,389

 
24.9

 
428,235

 
24.0

Southwest
224,516

 
11.5

 
189,379

 
10.6

Northeast
107,923

 
5.5

 
125,051

 
7.0

Canada
31,023

 
1.6

 
15,401

 
0.9

United Kingdom
6,324

 
0.3

 

 

Total
$
1,955,013

 
100.0
%
 
$
1,782,841

 
100.0
%

60

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The industry compositions of the portfolio at amortized cost and fair value as of March 31, 2019 and September 30, 2018 were as follows:
 
As of March 31, 2019
 
As of September 30, 2018
Amortized Cost:
  

 
  

 
  

 
  

Aerospace and Defense
$
55,465

 
2.8
%
 
$
51,288

 
2.9
%
Automobile
20,695

 
1.1

 
18,934

 
1.1

Beverage, Food and Tobacco
97,589

 
5.0

 
99,594

 
5.6

Broadcasting and Entertainment
1,437

 
0.1

 
1,444

 
0.1

Buildings and Real Estate
63,546

 
3.3

 
63,109

 
3.5

Chemicals, Plastics and Rubber
10,269

 
0.5

 
10,277

 
0.6

Diversified/Conglomerate Manufacturing
77,707

 
4.0

 
96,892

 
5.4

Diversified/Conglomerate Service
588,731

 
30.1

 
460,166

 
25.8

Ecological
18,995

 
1.0

 
18,852

 
1.1

Electronics
146,766

 
7.5

 
130,457

 
7.3

Finance
4,758

 
0.2

 

 

Grocery
295

 
0.0
*
 
16,203

 
0.9

Healthcare, Education and Childcare
362,677

 
18.6

 
337,499

 
19.0

Home and Office Furnishings, Housewares, and Durable Consumer
13,064

 
0.7

 
12,861

 
0.7

Hotels, Motels, Inns, and Gaming

 

 
15,383

 
0.9

Insurance
51,523

 
2.7

 
45,865

 
2.6

Investment Funds and Vehicles
74,882

 
3.8

 
75,407

 
4.2

Leisure, Amusement, Motion Pictures, Entertainment
80,543

 
4.1

 
80,302

 
4.5

Mining, Steel, Iron and Non-Precious Metals
4,373

 
0.2

 
4,478

 
0.3

Oil and Gas
14,360

 
0.8

 
14,211

 
0.8

Personal and Non Durable Consumer Products (Mfg. Only)
67,270

 
3.4

 
68,129

 
3.8

Personal, Food and Miscellaneous Services
32,348

 
1.7

 
31,526

 
1.8

Printing and Publishing
4,185

 
0.2

 
4,200

 
0.2

Retail Stores
144,091

 
7.4

 
111,550

 
6.3

Telecommunications
6,292

 
0.3

 
6,310

 
0.3

Textiles and Leather
2,188

 
0.1

 
2,196

 
0.1

Utilities
8,670

 
0.4

 
3,519

 
0.2

Total
$
1,952,719

 
100.0
%
 
$
1,780,652

 
100.0
%
* Represents an amount less than 0.1%.



61

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

 
As of March 31, 2019
 
As of September 30, 2018
Fair Value:
  

 
  

 
  

 
  

Aerospace and Defense
$
52,400

 
2.7
%
 
$
47,891

 
2.7
%
Automobile
21,115

 
1.1

 
19,158

 
1.1

Beverage, Food and Tobacco
98,626

 
5.0

 
99,608

 
5.6

Broadcasting and Entertainment
1,440

 
0.1

 
1,447

 
0.1

Buildings and Real Estate
65,619

 
3.4

 
65,255

 
3.7

Chemicals, Plastics and Rubber
10,400

 
0.5

 
10,356

 
0.6

Diversified/Conglomerate Manufacturing
77,655

 
4.0

 
96,663

 
5.4

Diversified/Conglomerate Service
594,787

 
30.4

 
466,037

 
26.1

Ecological
19,364

 
1.0

 
19,148

 
1.1

Electronics
145,946

 
7.5

 
130,472

 
7.3

Finance
4,782

 
0.2

 

 

Grocery
268

 
0.0
*
 
14,629

 
0.8

Healthcare, Education and Childcare
357,495

 
18.3

 
333,736

 
18.7

Home and Office Furnishings, Housewares, and Durable Consumer
12,401

 
0.7

 
12,831

 
0.7

Hotels, Motels, Inns, and Gaming

 

 
15,592

 
0.9

Insurance
52,863

 
2.7

 
47,041

 
2.6

Investment Funds and Vehicles
71,742

 
3.7

 
71,084

 
4.0

Leisure, Amusement, Motion Pictures, Entertainment
80,794

 
4.1

 
81,907

 
4.6

Mining, Steel, Iron and Non-Precious Metals
4,389

 
0.2

 
4,496

 
0.3

Oil and Gas
14,548

 
0.7

 
14,340

 
0.8

Personal and Non Durable Consumer Products (Mfg. Only)
69,175

 
3.5

 
69,912

 
3.9

Personal, Food and Miscellaneous Services
33,278

 
1.7

 
32,253

 
1.8

Printing and Publishing
4,118

 
0.2

 
4,167

 
0.2

Retail Stores
144,661

 
7.4

 
112,738

 
6.3

Telecommunications
6,360

 
0.3

 
6,393

 
0.4

Textiles and Leather
2,124

 
0.2

 
2,134

 
0.1

Utilities
8,663

 
0.4

 
3,553

 
0.2

Total
$
1,955,013

 
100.0
%
 
$
1,782,841

 
100.0
%
* Represents an amount less than 0.1%.

Senior Loan Fund LLC:

The Company co-invests with RGA in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect of SLF must be approved by the SLF investment committee consisting of two representatives of each of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by SLF are measured at fair value using the same valuation methodologies as described in Note 5.

As of March 31, 2019 and September 30, 2018, SLF was capitalized by LLC equity interest subscriptions from its members. As of March 31, 2019 and September 30, 2018, the Company and RGA owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. SLF’s profits and losses are allocated to the Company and RGA in accordance with their respective ownership interests.

SLF has entered into a senior secured revolving credit facility (as amended, the “SLF Credit Facility”) with Wells Fargo Bank, N.A., through its wholly-owned subsidiary Senior Loan Fund II LLC (“SLF II”), which as of March 31, 2019 allowed SLF II to borrow up to $90,588 at any one time outstanding, subject to leverage and borrowing base restrictions.


62

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

As of March 31, 2019 and September 30, 2018, SLF had the following commitments from its members (in the aggregate):
 
As of March 31, 2019
 
As of September 30, 2018
  
Committed
 
Funded(1)
 
Committed
 
Funded(1)
LLC equity commitments
$
200,000

 
$
85,580

 
$
200,000

 
$
86,180

Total
$
200,000

 
$
85,580

 
$
200,000

 
$
86,180

 
(1) 
Funded LLC equity commitments are presented net of return of capital distributions subject to recall.
As of March 31, 2019 and September 30, 2018, SLF had total assets at fair value of $173,161 and $186,326, respectively. As of March 31, 2019, SLF had two portfolio company investments on non-accrual status with a fair value of $4,316. As of September 30, 2018, SLF had one portfolio company investment on non-accrual status with a fair value of $3,856. The portfolio companies in SLF are in industries and geographies similar to those in which the Company may invest directly. Additionally, as of March 31, 2019 and September 30, 2018, SLF had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $5,560 and $5,920, respectively.

Below is a summary of SLF’s senior secured loan portfolio, followed by a listing of the individual investments in SLF’s portfolio as of March 31, 2019 and September 30, 2018:
 
As of
 
As of
  
March 31, 2019
 
September 30, 2018
Senior secured loans(1)
$
176,676

 
$
183,668

Weighted average current interest rate on senior secured loans(2)
7.7
%
 
7.5
%
Number of borrowers in SLF
30

 
32

Largest portfolio company investments(1)
$
12,720

 
$
13,716

Total of five largest portfolio company investments(1)
$
55,395

 
$
57,330

 
(1) 
At principal amount.
(2) 
Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

63

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

SLF Investment Portfolio as of March 31, 2019
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares(2)
 
Fair
Value(3)
1A Smart Start LLC(4)
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
7.0%
 
$
2,977

 
$
2,969

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2019
 
7.5
 
6,172

 
3,086

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2019
 
7.5
 
422

 
211

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2019
 
N/A(6)
 

 

Boot Barn, Inc.(4)
 
Retail Stores
 
Senior loan
 
06/2021
 
7.1
 
9,533

 
9,533

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
7.4
 
4,418

 
4,415

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
N/A(6)
 

 

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2023
 
7.0
 
2,446

 
2,446

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2023
 
8.2
 
13

 
13

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
7.8
 
8,458

 
8,458

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
7.8
 
4,262

 
4,262

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
2,404

 
2,404

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
1,209

 
1,209

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
58

 
58

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
40

 
40

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
N/A(6)
 

 

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2022
 
6.7
 
4,797

 
4,797

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2022
 
6.7
 
53

 
53

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
7.5
 
4,462

 
4,462

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
N/A(6)
 

 

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
8.4
 
5,936

 
5,936

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
8.4
 
1,648

 
1,648

Flexan, LLC(4)
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
10.0
 
492

 
492

Gamma Technologies, LLC(4)
 
Electronics
 
Senior loan
 
06/2024
 
8.0
 
10,135

 
10,135

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2022
 
8.6
 
4,488

 
4,488

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
03/2024
 
6.9
 
2,288

 
2,288

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
03/2024
 
6.9
 
119

 
119

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
03/2024
 
6.9
 
64

 
64

Joerns Healthcare, LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2020
 
8.6
 
8,745

 
7,346

Mediaocean LLC(7)
 
Diversified/Conglomerate Service
 
Senior loan
 
08/2020
 
N/A(6)
 

 
(1
)
Paradigm DKD Group, LLC(5)
 
Buildings and Real Estate
 
Senior loan
 
05/2020
 
8.8
 
1,951

 
781

Paradigm DKD Group, LLC(5)
 
Buildings and Real Estate
 
Senior loan
 
05/2020
 
8.8
 
596

 
238

Pasternack Enterprises, Inc. and Fairview Microwave, Inc(4)
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
07/2025
 
6.5
 
5,291

 
5,291

Polk Acquisition Corp.(4)
 
Automobile
 
Senior loan
 
06/2022
 
7.9
 
4,489

 
4,400

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
8.3
 
96

 
93

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
7.9
 
53

 
52

Pyramid Healthcare, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
9.1
 
10,099

 
10,099

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
9.1
 
147

 
147

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
9.0
 
99

 
99

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
10.8
 
51

 
51

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior loan
 
11/2022
 
6.9
 
3,805

 
3,805

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior loan
 
11/2021
 
N/A(6)
 

 

Rubio's Restaurants, Inc (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
10/2019
 
7.9
 
4,915

 
4,670


64

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

SLF Investment Portfolio as of March 31, 2019 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares
(2)
 
Fair
Value(3)
Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
04/2019
 
7.8%
 
$
4,793

 
$
4,793

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
04/2019
 
8.0
 
1,586

 
1,586

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
7.74% cash/1.00% PIK
 
4,341

 
3,777

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
8.7
 
70

 
60

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
8.7
 
64

 
55

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
8.7
 
45

 
39

SEI, Inc.(4)
 
Electronics
 
Senior loan
 
07/2023
 
7.5
 
12,611

 
12,611

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2023
 
N/A(6)
 

 

Self Esteem Brands, LLC (4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2022
 
6.8
 
9,634

 
9,537

Self Esteem Brands, LLC (4)(7)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2022
 
N/A(6)
 

 
(7
)
Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
4,225

 
3,803

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
3,312

 
2,980

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
595

 
536

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
445

 
400

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
220

 
198

Upstream Intermediate, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2024
 
6.5
 
2,816

 
2,816

W3 Co.
 
Oil and Gas
 
Senior loan
 
03/2022
 
8.6
 
1,247

 
1,246

WHCG Management, LLC (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
03/2023
 
7.6
 
7,860

 
7,388

WIRB-Copernicus Group, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2022
 
6.8
 
5,581

 
5,581

Total senior loan investments
 
 
 
 
 
 
 
 
 
$
176,676

 
$
168,056

 
 
 
 
 
 
 
 
 
 
 
 
 
W3 Co.(8)(9)
 
Oil and Gas
 
LLC units
 
N/A
 
N/A
 
3

 
$
1,235

W3 Co.(8)(9)
 
Oil and Gas
 
Preferred stock
 
N/A
 
N/A
 

 
201

Total equity investments
 
 
 
 
 
 
 
 
 
 
 
$
1,436

 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
 
 
 
$
176,676

 
$
169,492


 
(1) 
Represents the weighted average annual current interest rate as of March 31, 2019. All interest rates are payable in cash.
(2) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(3) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.
(4) 
The Company also holds a portion of the first lien senior secured loan in this portfolio company.
(5) 
Loan was on non-accrual status as of March 31, 2019. As such, no interest is being earned on this investment.
(6)
The entire commitment was unfunded as of March 31, 2019. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(7)
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(8) 
Equity investment received as a result of the portfolio company's debt restructuring.
(9) 
Non-income producing.

65

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

SLF Investment Portfolio as of September 30, 2018
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
Principal ($) / Shares (2)
 
Fair
Value(3)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior Loan
 
02/2022
 
7.0
$
2,073

 
$
2,084

1A Smart Start LLC(4)
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior Loan
 
02/2022
 
6.7
 
922

 
924

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior Loan
 
11/2018
 
7.2
 
6,561

 
3,609

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior Loan
 
11/2018
 
7.2
 
449

 
247

Boot Barn, Inc.
 
Retail Stores
 
Senior Loan
 
06/2021
 
6.9
 
9,533

 
9,533

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior Loan
 
12/2021
 
7.1
 
4,678

 
4,674

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
12/2023
 
7.9
 
13

 
13

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
12/2023
 
6.7
 
2,499

 
2,499

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
7.9
 
8,502

 
8,332

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
7.9
 
4,284

 
4,198

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
 
2,417

 
2,417

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
 
1,215

 
1,215

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
 
40

 
40

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
  
58

 
58

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior Loan
 
06/2022
 
6.1
  
71

 
71

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior Loan
 
06/2022
 
6.1
  
4,821

 
4,821

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
01/2020
 
7.5
 
4,540

 
4,540

Flexan, LLC(4)
 
Chemicals, Plastics and Rubber
 
Senior Loan
 
02/2020
 
9.8
  
304

 
304

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior Loan
 
02/2020
 
8.1
  
5,967

 
5,967

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior Loan
 
02/2020
 
8.1
  
1,657

 
1,657

Gamma Technologies, LLC(4)
 
Electronics
 
Senior Loan
 
06/2024
 
7.7
  
10,186

 
10,186

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior Loan
 
09/2022
 
9.0
  
4,927

 
4,927

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior Loan
 
03/2024
 
6.7
  
2,293

 
2,293

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior Loan
 
03/2024
 
6.7
  
119

 
119

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior Loan
 
03/2024
 
6.7
 
64

 
64

Joerns Healthcare, LLC(4)
 
Healthcare, Education and Childcare
 
Senior Loan
 
05/2020
 
8.3
 
8,745

 
8,133

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior Loan
 
05/2020
 
8.5
  
702

 
524

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior Loan
 
05/2020
 
8.5
  
1,957

 
1,369

Pasternack Enterprises, Inc. and Fairview Microwave, Inc (4)
 
Diversified/Conglomerate Manufacturing
 
Senior Loan
 
07/2025
 
6.2
  
5,318

 
5,291

Payless ShoeSource, Inc.
 
Retail Stores
 
Senior Loan
 
08/2022
 
11.3
  
762

 
528

Polk Acquisition Corp.
 
Automobile
 
Senior Loan
 
06/2022
 
7.5
  
93

 
93

Polk Acquisition Corp.
 
Automobile
 
Senior Loan
 
06/2022
 
7.2
  
4,513

 
4,513

Polk Acquisition Corp.
 
Automobile
 
Senior Loan
 
06/2022
 
7.2
  
53

 
53

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
  
411

 
411

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
 
10,152

 
10,152

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
 
45

 
45

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
 
148

 
148

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior Loan
 
11/2021
 
6.8
 
17

 
17

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior Loan
 
11/2022
 
6.7
 
3,824

 
3,815

Rubio's Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior Loan
 
10/2019
 
7.6
 
4,941

 
4,941

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior Loan
 
04/2019
 
7.6
 
991

 
991

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior Loan
 
04/2019
 
7.6
 
5,061

 
5,061

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
70

 
64


66

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

SLF Investment Portfolio as of September 30, 2018 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
Principal ($) / Shares (2)
 
Fair
Value(3)
Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
4,345

 
3,997

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
45

 
42

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
64

 
59

Saldon Holdings, Inc. (4)
 
Diversified/Conglomerate Service
 
Senior Loan
 
09/2022
 
6.4
 
2,354

 
2,342

SEI, Inc.(4)
 
Electronics
 
Senior Loan
 
07/2023
 
7.5
 
13,716

 
13,716

Self Esteem Brands, LLC(4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior Loan
 
02/2020
 
7.0
 
10,142

 
10,142

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
6.9
 
4,507

 
4,416

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
6.9
 
486

 
476

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
7.1
 
650

 
637

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
7.1
 
239

 
235

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
6.9
 
3,532

 
3,460

Upstream Intermediate, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
01/2024
 
6.6
 
2,830

 
2,830

W3 Co.
 
Oil and Gas
 
Senior Loan
 
03/2022
 
8.2
 
1,253

 
1,251

WHCG Management, LLC(4)
 
Healthcare, Education and Childcare
 
Senior Loan
 
03/2023
 
7.4
 
7,900

 
7,900

WIRB-Copernicus Group, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2022
 
6.5
 
5,609

 
5,609

Total senior loan investments
 
 
 
 
 
 
 
 
 
$
183,668

 
$
178,053

 
 
 
 
 
 
 
 
 
 
 
 
 
Payless ShoeSource, Inc. (6)(7)
 
Retail Stores
 
LLC interest
 
N/A
 
N/A
 
35

 
$
54

W3 Co. (6)(7)
 
Oil and Gas
 
LLC units
 
N/A
 
N/A
 
3

 
1,073

Total equity investments
 
 
 
 
 
 
 
 
 
 
 
$
1,127

 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
 
 
 
$
183,668

 
$
179,180

 
(1) 
Represents the weighted average annual current interest rate as of September 30, 2018. All interest rates are payable in cash.
(2) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(3) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.
(4) 
The Company also holds a portion of the first lien senior secured loan in this portfolio company.
(5) 
Loan was on non-accrual status as of September 30, 2018. As such, no interest is being earned on this investment.
(6) 
Equity investment received as a result of the portfolio company's debt restructuring.
(7) 
Non-income producing.
As of March 31, 2019, the Company has committed to fund $175,000 of LLC equity interest subscriptions to SLF. As of March 31, 2019 and September 30, 2018, $74,883 and $75,407, respectively, of the Company’s LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and six months ended March 31, 2019, the Company received $0 and $0, respectively, in dividend income from the SLF LLC equity interests. For the three and six months ended March 31, 2018, the Company received $1,853 and $3,818, respectively, in dividend income from the SLF LLC equity interests.



67

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

See below for certain summarized financial information for SLF as of March 31, 2019 and September 30, 2018 and for the three and six months ended March 31, 2019 and 2018:
 
As of
 
As of
  
March 31, 2019
 
September 30, 2018
Selected Balance Sheet Information:
  

 
  

Investments, at fair value
$
169,492

 
$
179,180

Cash and other assets
3,669

 
7,146

Total assets
$
173,161

 
$
186,326

Senior credit facility
$
90,588

 
$
104,622

Unamortized debt issuance costs

 
(18
)
Other liabilities
583

 
484

Total liabilities
91,171

 
105,088

Members’ equity
81,990

 
81,238

Total liabilities and members' equity
$
173,161

 
$
186,326


 
Three months ended March 31,
 
Six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Selected Statement of Operations Information:
  

 
  

 
  

 
  

Interest income
$
3,538

 
$
4,844

 
$
7,174

 
$
9,752

Fee income

 

 
9

 
25

Total investment income
3,538

 
4,844

 
7,183

 
9,777

Interest and other debt financing expense
1,133

 
1,765

 
2,320

 
3,844

Administrative service fee
64

 
108

 
144

 
221

Other expenses
25

 
28

 
49

 
57

Total expenses
1,222

 
1,901

 
2,513

 
4,122

Net investment income
2,316

 
2,943

 
4,670

 
5,655

Net realized gain (loss) on investments

 

 
(1,314
)
 

Net change in unrealized appreciation (depreciation) on investments
(1,086
)
 
(1,639
)
 
(2,004
)
 
(1,218
)
Net increase (decrease) in members' equity
$
1,230

 
$
1,304

 
$
1,352

 
$
4,437


Note 5. Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1:     Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2:     Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.


68

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and six months ended March 31, 2019 and 2018. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of March 31, 2019 and September 30, 2018, with the exception of money market funds included in cash, cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, were valued using Level 3 inputs.

When determining fair value of Level 3 debt and equity investments, the Company may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA may include pro forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, the Company may base its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.


69

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Secured Borrowings

The Company has elected the fair value option under ASC Topic 825 - Financial Instruments, relating to accounting for debt obligations at their fair value for its secured borrowings which arose due to partial loan sales which did not meet the criteria for sale treatment under ASC Topic 860. The Company reports changes in the fair value of its secured borrowings as a component of the net change in unrealized (appreciation) depreciation on secured borrowings in the Consolidated Statements of Operations. The net gain or loss reflects the difference between the fair value and the principal amount due on maturity.

As of March 31, 2019 and September 30, 2018, there were no secured borrowings outstanding. Previous secured borrowings were valued using Level 3 inputs under the fair value hierarchy, and the Company’s approach to determining fair value of Level 3 secured borrowings is consistent with its approach to determining fair value of the Level 3 investments that are associated with these secured borrowings as previously described.

The following tables present fair value measurements of the Company’s investments and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of March 31, 2019 and September 30, 2018:
As of March 31, 2019
 
Fair Value Measurements Using
Description
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets, at fair value:
 
  

 
  

 
  

 
  

Debt investments(1)
 
$

 
$

 
$
1,838,231

 
$
1,838,231

Equity investments(1)
 

 

 
45,040

 
45,040

Money market funds(1)(2)
 
26,202

 

 

 
26,202

Investment measured at NAV(3)(4)
 

 

 

 
71,742

Total assets, at fair value:
 
$
26,202

 
$

 
$
1,883,271

 
$
1,981,215

As of September 30, 2018
 
Fair Value Measurements Using
Description
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets, at fair value:
 
  

 
  

 
  

 
  

Debt investments(1)
 
$

 
$

 
$
1,671,051

 
$
1,671,051

Equity investments(1)
 

 

 
40,706

 
40,706

Money market funds(1)(2)
 
10,532

 

 

 
10,532

Investment measured at NAV(3)(4)
 

 

 

 
71,084

Total assets, at fair value:
 
$
10,532

 
$

 
$
1,711,757

 
$
1,793,373

 
(1) 
Refer to the Consolidated Schedules of Investments for further details.
(2) 
Included in cash and cash equivalents and restricted cash, cash equivalents and foreign currencies on the Consolidated Statements of Financial Condition.
(3) 
Certain investments that are measured at fair value using the NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Financial Condition.
(4) 
Represents the Company's investment in LLC equity interests in SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in members’ capital.
The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2019, reported within the net change in unrealized appreciation (depreciation) on investments in the Company's Consolidated Statements of Operations attributable to the Company's Level 3 assets held as of March 31, 2019 was $806 and $2,308, respectively. The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2018, reported within the net change in unrealized appreciation (depreciation) on investments in the Company's Consolidated Statements of Operations attributable to the Company's Level 3 assets held as of March 31, 2018 was $6,025 and $7,265, respectively.


70

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The following table presents the changes in investments measured at fair value using Level 3 inputs for the six months ended March 31, 2019 and 2018:

 
For the six months ended March 31, 2019
  
Debt
Investments
 
Equity
Investments
 
Total
Investments
Fair value, beginning of period
$
1,671,051

 
$
40,706

 
$
1,711,757

Net change in unrealized appreciation (depreciation) on investments
(4,384
)
 
3,306

 
(1,078
)
Realized gain (loss) on investments
(2,647
)
 
(1,153
)
 
(3,800
)
Funding of (proceeds from) revolving loans, net
4,051

 

 
4,051

Fundings of investments
303,880

 
5,305

 
309,185

PIK interest
851

 

 
851

Proceeds from principal payments and sales of portfolio investments
(138,501
)
 
(3,124
)
 
(141,625
)
Accretion of discounts and amortization of premiums
3,930

 

 
3,930

Fair value, end of period
$
1,838,231

 
$
45,040

 
$
1,883,271

 
For the six months ended March 31, 2018
  
Debt
Investments
 
Equity
Investments
 
Total
Investments
Fair value, beginning of period
$
1,538,606

 
$
51,394

 
$
1,590,000

Net change in unrealized appreciation (depreciation) on investments
5,166

 
2,215

 
7,381

Realized gain (loss) on investments
(4,417
)
 
4,280

 
(137
)
Funding of (proceeds from) revolving loans, net
(1,923
)
 

 
(1,923
)
Fundings of investments
264,857

 
2,633

 
267,490

PIK interest
512

 

 
512

Proceeds from principal payments and sales of portfolio investments
(196,841
)
 
(6,736
)
 
(203,577
)
Accretion of discounts and amortization of premiums
5,070

 

 
5,070

Fair value, end of period
$
1,611,030

 
$
53,786

 
$
1,664,816



71

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of March 31, 2019 and September 30, 2018.

Quantitative information about Level 3 Fair Value Measurements
 
Fair value as of March 31, 2019
 
Valuation Techniques
 
Unobservable Input
 
Range (Weighted Average)
Assets:
  

 
  
 
  
 
  
Senior secured loans(1)(2)
$
238,754

 
Market rate approach
 
Market interest rate
 
4.3% - 9.3% (7.4%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
6.0x - 22.7x (11.5x)
 
8,934

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
One stop loans(1)(3)(4)
$
1,574,152

 
Market rate approach
 
Market interest rate
 
5.5% - 13.9% (8.8%)
  
 
 
Market comparable companies
 
EBITDA multiples
 
4.5x - 35.0x (13.8x)
  
  
 
  
 
Revenue multiples
 
1.5x - 9.2x (5.2x)
 
2,938

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
Subordinated debt and second lien loans(1)(5)
$
10,043

 
Market rate approach
 
Market interest rate
 
6.0% - 19.5% (10.5%)
  
  
 
Market comparable companies
 
EBITDA multiples
 
8.5x - 13.0x (8.5x)
  
  

 
  
 
Revenue multiples
 
3.0x - 3.2x (3.1x)
Equity(6)(7)
$
45,040

 
Market comparable companies
 
EBITDA multiples
 
4.5x - 30.5x (12.7x)
  
  
 
  
 
Revenue multiples
 
1.5x - 6.0x (3.6x)
 
(1) 
The fair value of this asset class was determined using the market rate and market comparable approaches, as applicable, as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of March 31, 2019 was determined using the market rate and market comparable approaches, as applicable.
(2) 
Excludes $780 of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.
(3) 
Excludes $2,630 of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.
(4) 
The Company valued $1,401,374 and $172,778 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(5) 
The Company valued $9,593 and $450 of subordinated debt and second lien loans using EBITDA and revenue multiples, respectively. All subordinated debt and second lien loans were also valued using the market rate approach.
(6) 
Excludes $71,742 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.
(7) 
The Company valued $40,086 and $4,954 of equity investments using EBITDA and revenue multiples, respectively.

72

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

Quantitative information about Level 3 Fair Value Measurements
 
Fair value as of September 30, 2018
 
Valuation Techniques
 
Unobservable Input
 
Range
(Weighted Average)
Assets:
  

 
  
 
  
 
  
Senior secured loans(1)(2)
$
225,960

 
Market rate approach
 
Market interest rate
 
4.3% - 9.9% (7.2%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
5.0x - 15.0x (11.1x)
 
3,926

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
One stop loans(1)(3)(4)
$
1,422,601

 
Market rate approach
 
Market interest rate
 
2.0% - 13.8% (8.8%)
  
 
 
Market comparable companies
 
EBITDA multiples
 
4.5x - 35.0x (13.6x)
  
  
 
  
 
Revenue multiples
 
1.3x - 10.2x (4.1x)
 
3,253

 
Market comparable
 
Broker/dealer bids or quotes
 
N/A
Subordinated debt and second lien loans(1)(5)
$
9,686

 
Market rate approach
 
Market interest rate
 
8.0% - 19.5% (10.4%)
  
  

 
Market comparable companies
 
EBITDA multiples
 
10.5x - 11.0x (10.5x)
 
 
 
 
 
Revenue multiples
 
5.1x
Equity(6)(7)
$
40,706

 
Market comparable companies
 
EBITDA multiples
 
4.5x - 28.5x (12.2x)
  
  
 
  
 
Revenue multiples
 
1.3x - 10.2x (4.0x)
 
(1) 
The fair value of this asset class was determined using the market rate and market comparable approaches, as applicable, as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2018 was determined using the market rate and market comparable approaches, as applicable.
(2) 
Excludes $1,283 of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.
(3) 
Excludes $4,342 of non-accrual loans at fair value, which the Company valued using the market comparable companies approach.
(4) 
The Company valued $1,253,179 and $169,422 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.
(5) 
The Company valued $9,502 and $184 of subordinated debt and second lien loans using EBITDA and revenue multiples, respectively. All subordinated debt and second lien loans were also valued using the market rate approach.
(6) 
Excludes $71,084 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.
(7) 
The Company valued $36,714 and $3,992 of equity investments using EBITDA and revenue multiples, respectively.
The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation would have resulted in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield was significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may have been lower.

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the Consolidated Statements of Financial Condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.


73

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The following are the carrying values and fair values of the Company’s debt as of March 31, 2019 and September 30, 2018. Fair value is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if available.
 
As of March 31, 2019
 
As of September 30, 2018
  
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Debt
$
1,051,173

 
$
1,042,594

 
$
845,683

 
$
837,578


Note 6. Borrowings

In accordance with the 1940 Act, with certain limited exceptions, prior to February 6, 2019 the Company was allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, was at least 200% after such borrowing. The Small Business Credit Availability Act (“SBCAA”), which was signed into law on March 23, 2018, among other things, amended Section 61(a) of the 1940 Act to add a new Section 61(a)(2) that reduces the asset coverage requirement applicable to business development companies from 200% to 150% so long as the business development company meets certain disclosure requirements and obtains certain approvals. On February 5, 2019, the Company’s stockholders voted to approve the asset coverage requirement decrease to 150% from 200% in accordance with Section 61(a)(2) of the 1940 Act. Effective February 6, 2019, the reduced asset coverage requirement permits the Company to have a ratio of total consolidated assets to outstanding indebtedness of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement.  The Company currently intends to target a GAAP debt-to-equity ratio of about 1.0x. On September 13, 2011, the Company received exemptive relief from the SEC allowing it to modify the asset coverage requirement to exclude the SBA debentures from the asset coverage calculation. As such, the Company’s ratio of total consolidated assets to outstanding indebtedness may be less than the applicable asset coverage requirement under the 1940 Act. This provides the Company with increased investment flexibility but also increases its risks related to leverage. As of March 31, 2019, the Company’s asset coverage for borrowed amounts was 224.96% (excluding the SBA debentures).

Debt Securitizations: On July 16, 2010, the Company completed a $300,000 term debt securitization, which was subsequently increased to $350,000 (as amended, “2010 Debt Securitization”). Term debt securitizations are also known as collateralized loan obligations ("CLOs") and are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company's overall asset coverage requirements. The notes (“2010 Notes”) offered in the 2010 Debt Securitization were issued by the 2010 Issuer, a subsidiary of Holdings. Through October 19, 2016, the 2010 Debt Securitization consisted of $203,000 of Aaa/AAA Class A 2010 Notes that bore interest at a rate of three-month LIBOR plus 1.74%, $12,000 of Class B 2010 Notes that bore interest at a rate of three-month LIBOR plus 2.40% and $135,000 of Subordinated 2010 Notes that do not bear interest. On October 20, 2016, the Company and the 2010 Issuer further amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A 2010 Notes by redeeming in full the Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205,000 that bore interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B 2010 Notes by redeeming in full the Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10,000 that bore interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Holdings retained the Class B-Refi 2010 Notes. Through July 20, 2018, all principal collections received on the underlying collateral could have been used by the 2010 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2010 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the leverage in the 2010 Debt Securitization. The 2010 Notes were scheduled to mature on July 20, 2023.

On July 20, 2018, in connection with a new revolving credit facility, the 2010 Issuer redeemed the outstanding 2010 Notes pursuant to the terms of the indenture governing such 2010 Notes. Following such redemption, the agreements governing the 2010 Debt Securitization were terminated.


74

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The interest charged under the 2010 Debt Securitization was based on three-month LIBOR. For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2010 Debt Securitization were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$

 
$
1,822

 
$

 
$
3,525

Amortization of debt issuance costs

 
75

 

 
137

Total interest and other debt financing expenses
$

 
$
1,897

 
$

 
$
3,662

Cash paid for interest expense
$

 
$
1,747

 
$

 
$
3,427

Annualized average stated interest rate
N/A

 
3.6
%
 
N/A

 
3.4
%
Average outstanding balance
$

 
$
205,000

 
$

 
$
205,000


On June 5, 2014, the Company completed a $402,569 term debt securitization (“2014 Debt Securitization”). The notes (“2014 Notes”) offered in the 2014 Debt Securitization were issued by the 2014 Issuer and are secured by a diversified portfolio of senior secured and second lien loans held by the 2014 Issuer. The 2014 Debt Securitization initially consisted of $191,000 of Aaa/AAA Class A-1 2014 Notes, $20,000 of Aaa/AAA Class A-2 2014 Notes and $35,000 of Aa2/AA Class B 2014 Notes. In partial consideration for the loans transferred to the 2014 Issuer as part of the 2014 Debt Securitization, the Company received and retained $37,500 of Class C 2014 Notes and $119,069 of LLC equity interests in the 2014 Issuer. On March 23, 2018, the Company and the 2014 Issuer amended the 2014 Debt Securitization to, among other things, (a) refinance the issued Class A-1 2014 Notes by redeeming in full the $191,000 of Class A-1 2014 Notes and issuing new Class A-1-R 2014 Notes in an aggregate principal amount of $191,000 that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.75% of the previously outstanding Class A-1 2014 Notes, (b) refinance the Class A-2 2014 Notes by redeeming in full the $20,000 of Class A-2 2014 Notes and issuing new Class A-2-R 2014 Notes in an aggregate principal amount of $20,000 that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.95% of the previously outstanding Class A-2 2014 Notes, (c) refinance the Class B 2014 Notes by redeeming in full the $35,000 of Class B 2014 Notes and issuing new Class B-R 2014 Notes in an aggregate principal amount of $35,000 that bear interest at a rate of three-month LIBOR plus 1.40%, which is a decrease from the rate of three-month LIBOR plus 2.50% of the previously outstanding Class B 2014 Notes, (d) refinance the Class C 2014 Notes by redeeming in full the $37,500 of Class C 2014 Notes and issuing new Class C-R 2014 Notes in an aggregate principal amount of $37,500 that bear interest at a rate of three-month LIBOR plus 1.55%, which is a decrease from the rate of three-month LIBOR plus 3.50% of the previously outstanding Class C 2014 Notes. The Class C-R 2014 Notes were retained by the Company, and the Company remains the sole owner of the equity of the 2014 Issuer. The Class A-1-R, Class A-2-R and Class B-R 2014 Notes are included in the March 31, 2019 and September 30, 2018 Consolidated Statement of Financial Condition as debt of the Company and the Class C-R 2014 Notes and LLC equity interests were eliminated in consolidation.

Through April 28, 2018, all principal collections received on the underlying collateral could have been used by the 2014 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2014 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2014 Debt Securitization. For the three and six months ended March 31, 2019, the Company had repayments on the 2014 Notes of $9,561 and $18,040, respectively. For the three and six months ended March 31, 2018, the Company had repayments on the 2014 Notes of $0 and $0, respectively. The 2014 Notes are scheduled to mature on April 25, 2026.

As of March 31, 2019 and September 30, 2018, there were 76 and 83 portfolio companies with a total fair value of $321,539 and $346,130, respectively, securing the 2014 Notes. The pool of loans in the 2014 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.


75

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The interest charged under the 2014 Debt Securitization is based on three-month LIBOR. The three-month LIBOR in effect as of March 31, 2019 based on the last interest rate reset was 2.8%. For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2014 Debt Securitization were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$
1,697

 
$
2,143

 
$
3,398

 
$
4,171

Amortization of debt issuance costs

 
178

 
110

 
339

Total interest and other debt financing expenses
$
1,697

 
$
2,321

 
$
3,508

 
$
4,510

Cash paid for interest expense
$
1,702

 
$
3,446

 
$
3,400

 
$
5,450

Annualized average stated interest rate
3.8
%
 
3.5
%
 
3.7
%
 
3.4
%
Average outstanding balance
$
181,992

 
$
246,000

 
$
186,655

 
$
246,000


As of March 31, 2019, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-1-R, A-2-R and B-R 2014 Notes are as follows:
Description
 
Class A-1-R 2014 Notes
 
Class A-2-R 2014 Notes
 
Class B-R 2014 Notes
Type
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
Amount Outstanding
 
$130,752
 
$13,691
 
$35,000
Moody’s Rating
 
"Aaa"
 
"Aaa"
 
"Aa1"
S&P Rating
 
"AAA"
 
"AAA"
 
"AA+"
Interest Rate
 
LIBOR + 0.95%
 
LIBOR + 0.95%
 
LIBOR + 1.40%

On November 16, 2018, the Company completed a $602.4 million term debt securitization (the “2018 Debt Securitization”). The notes offered in the 2018 Debt Securitization (the “2018 Notes”) were issued by the 2018 Issuer, a subsidiary of 2018 CLO Depositor, and are backed by a diversified portfolio of senior secured and second lien loans. The transaction was executed through a private placement of approximately $327.0 million of AAA/AAA Class A 2018 Notes, which bear interest at the three-month LIBOR plus 1.48%; $61.2 million of AA Class B 2018 Notes, which bear interest at the three-month LIBOR plus 2.10%; $20.0 million of A Class C-1 2018 Notes, which bear interest at the three-month LIBOR plus 2.80%; $38.8 million of A Class C-2 2018 Notes, which bear interest at the three-month LIBOR plus 2.65%; $42.0 million of BBB- Class D 2018 Notes, which bear interest at the three-month LIBOR plus 2.95%; and $113.4 million of Subordinated 2018 Notes which do not bear interest. The Company indirectly retained all of the Class C-2, Class D and Subordinated 2018 Notes. Through January 20, 2023, all principal collections received on the underlying collateral may be used by the 2018 Issuer to purchase new collateral under the direction of the Investment Adviser, in its capacity as collateral manager of the 2018 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2018 Debt Securitization. The 2018 Notes are scheduled to mature on January 20, 2031. The Class A, Class B and Class C-1 2018 Notes are included in the March 31, 2019 Consolidated Statements of Financial Condition as debt of the Company. As of March 31, 2019 the Class C-2, Class D and Subordinated 2018 Notes were eliminated in consolidation.

As of March 31, 2019, there were 96 portfolio companies with a total fair value of $590,971 securing the 2018 Notes. The pool of loans in the 2018 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.


76

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

The interest charged under the 2018 Debt Securitization is based on three-month LIBOR. The three-month LIBOR in effect as of March 31, 2019 based on the last interest rate reset was 2.8%. For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2018 Debt Securitization were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$
4,353

 
$

 
$
6,578

 
$

Amortization of debt issuance costs
104

 

 
157

 

Total interest and other debt financing expenses
$
4,457

 
$

 
$
6,735

 
$

Cash paid for interest expense
$

 
$

 
$

 
$

Annualized average stated interest rate
4.3
%
 
N/A

 
4.3
%
 
N/A

Average outstanding balance
$
408,200

 
$

 
$
305,028

 
$


As of March 31, 2019, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A, B and C-1 2018 Notes are as follows:
Description
 
Class A 2018 Notes
 
Class B 2018 Notes
 
Class C-1 2018 Notes
Type
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
 
Senior Secured Floating Rate
Amount Outstanding
 
$327,000
 
$61,200
 
$20,000
Fitch Rating
 
"AAA"
 
"NR"
 
"NR"
S&P Rating
 
"AAA"
 
"AA"
 
"A"
Interest Rate
 
LIBOR + 1.48%
 
LIBOR + 2.10%
 
LIBOR + 2.80%

The Investment Adviser served as collateral manager to the 2010 Issuer and serves as collateral manager to the 2014 Issuer and 2018 Issuer under separate collateral management agreements and receives a fee for providing these services. The total fees payable by the Company under its Investment Advisory Agreement are reduced by an amount equal to the total aggregate fees paid to the Investment Adviser by the 2010 Issuer, the 2014 Issuer and the 2018 Issuer for rendering such collateral management services.

As part of each of the 2010 Debt Securitization, the 2014 Debt Securitization and the 2018 Debt Securitization, GBDC entered into master loan sale agreements under which GBDC agreed to directly or indirectly sell or contribute certain senior secured and second lien loans (or participation interests therein) to the 2010 Issuer, the 2014 Issuer and the 2018 Issuer, as applicable, and to purchase or otherwise acquire the Subordinated 2010 Notes, the LLC equity interests in the 2014 Issuer and the Subordinated 2018 Notes, as applicable. As of March 31, 2019, the 2014 Notes and the 2018 Notes (other than the Subordinated 2018 Notes) were the secured obligations of the 2014 Issuer and 2018 Issuer, respectively, and indentures governing each of the 2014 Notes and the 2018 Notes include customary covenants and events of default.

SBA Debentures: On August 24, 2010, SBIC IV received approval for a license from the SBA to operate as an SBIC. On December 5, 2012, SBIC V received a license from the SBA to operate as an SBIC. On January 10, 2017, SBIC VI received a license from the SBA to operate as an SBIC. SBICs are subject to a variety of regulations and oversight by the SBA concerning the size and nature of the companies in which they may invest as well as the structures of those investments.

The licenses allow the SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to issuance of a capital commitment by the SBA and customary procedures. These debentures are non-recourse to GBDC, have interest payable semiannually and a ten-year maturity. The interest rate is fixed at the time of issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350,000 and the maximum amount that a single SBIC licensee may issue is $175,000. As of March 31, 2019, SBIC IV, SBIC V and SBIC VI had $115,000, $150,000 and $22,000, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and March 2029. As of September 30, 2018, SBIC IV, SBIC V and SBIC VI had $115,000, $150,000 and $12,500, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and March 2028. The reinvestment period for SBIC IV expired on September 30, 2018. The original amount of debentures committed to SBIC IV

77

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

by the SBA was $150,000. In March 2018 and September 2017, SBIC IV repaid $10,000 and $25,000, respectively, of the aggregate principal amount of the SBA-guaranteed debentures outstanding at the time and $10,000 and $25,000, respectively, of debenture commitments were terminated. As of March 31, 2019, SBIC V and SBIC VI had $25,000 and $28,000 of undrawn debenture commitments, respectively, of which $12,500 and $0, respectively, is available to be drawn, subject to SBA regulatory requirements. As of September 30, 2018, SBIC V and SBIC VI had $0 and $37,500 of undrawn debenture commitments, respectively, of which $0 and $9,500, respectively is available to be drawn, subject to SBA regulatory requirements.

The interest rate on the outstanding debentures as of March 31, 2019 is fixed at an average annualized interest rate of 3.4%. For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the SBA debentures were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$
2,384

 
$
2,263

 
$
4,747

 
$
4,539

Amortization of debt issuance costs
214

 
270

 
432

 
549

Total interest and other debt financing expenses
$
2,598

 
$
2,533

 
$
5,179

 
$
5,088

Cash paid for interest expense
$
4,711

 
$
4,512

 
$
4,711

 
$
4,512

Annualized average stated interest rate
3.4
%
 
3.4
%
 
3.4
%
 
3.4
%
Average outstanding balance
$
286,156

 
$
273,916

 
$
281,780

 
$
270,420


Revolving Credit Facilities: On July 21, 2011, Funding entered into a senior secured revolving credit facility (as amended, the “Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent and lender. On February 4, 2019, the Credit Facility was repaid in full and subsequently terminated. Prior to termination, the Credit Facility allowed Funding to borrow up to $170,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

Through a series of amendments, most recently on September 21, 2018, the Company and Funding amended the Credit Facility to, among other things, extend the expiration of the reinvestment period to September 20, 2019, extend the stated maturity date to September 21, 2023, and permit borrowings in foreign currencies. On December 14, 2017, the Company and Funding amended the Credit Facility to, among other things, decrease the size of the Credit Facility from $225,000 to $170,000 and decrease the interest the Credit Facility bears from one-month LIBOR plus 2.25% to one-month LIBOR plus 2.15%. In addition to the stated interest rate on the Credit Facility, the Company was required to pay a non-usage fee at a rate between 0.50% and 1.75% per annum depending on the size of the unused portion of the Credit Facility. The Credit Facility was collateralized by all of the assets held by Funding, and GBDC had pledged its interests in Funding as collateral to Wells Fargo Bank, N.A., as the collateral agent, under an ancillary agreement to secure the obligations of GBDC as the transferor and servicer under the Credit Facility. Both GBDC and Funding made customary representations and warranties and were required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Credit Facility was subject to the 200% asset coverage requirements contained in the 1940 Act.

The Company transferred certain loans and debt securities it originated or acquired from time to time to Funding through a purchase and sale agreement and caused Funding to originate or acquire loans, consistent with the Company’s investment objectives.

As of March 31, 2019 and September 30, 2018, the Company had outstanding debt under the Credit Facility of $0 and $136,000, respectively. For the three and six months ended March 31, 2019, the Company had borrowings on the Credit Facility of $47,700 and $274,522, respectively, and repayments on the Credit Facility of $144,954 and $410,547, respectively. For the three and six months ended March 31, 2018, the Company had borrowings on the Credit Facility of $144,750 and $243,350, respectively, and repayments on the Credit Facility of $148,350 and $199,750, respectively.


78

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the Credit Facility were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$
479

 
$
946

 
$
1,455

 
$
1,513

Facility fees
4

 
91

 
189

 
437

Amortization of debt issuance costs
58

 
118

 
156

 
410

Total interest and other debt financing expenses
$
541

 
$
1,155

 
$
1,800

 
$
2,360

Cash paid for interest expense and facility fees
$
784

 
$
1,031

 
$
2,033

 
$
1,934

Annualized average stated interest rate
4.7
%
 
3.8
%
 
4.5
%
 
3.5
%
Average outstanding balance
$
41,702

 
$
100,843

 
$
64,194

 
$
87,128


On July 20, 2018, the 2010 Issuer entered into a credit facility (as amended, the “MS Credit Facility”) with Morgan Stanley Bank, N.A., as lender, Morgan Stanley Senior Secured Funding, Inc., as administrative agent, and U.S. Bank National Association, as collateral agent for the administrative agent and the lenders. On November 1, 2018, the 2010 Issuer amended the MS Credit Facility to, among other things, increase the size of the MS Credit Facility from $300,000 to $450,000. The other material terms of the MS Credit Facility were unchanged. On November 16, 2018, a portion of the proceeds from the private placement of the 2018 Notes, net of expenses, was used to repay all amounts outstanding under the MS Credit Facility, following which the agreements governing the MS Credit Facility were terminated.

The period from the closing date until January 18, 2019 was referred to as the revolving period and during such revolving period, the 2010 Issuer could request drawdowns under the MS Credit Facility. The MS Credit Facility bore interest at a rate equal to one-month LIBOR plus 1.90% during the revolving period and was scheduled to mature on March 20, 2019.

The MS Credit Facility was secured by all of the assets held by the 2010 Issuer. Pursuant to a collateral management agreement, the Investment Adviser had agreed to perform certain duties with respect to the purchase and management of the assets securing the MS Credit Facility. The Investment Adviser was not paid a fee for such services under the collateral management agreement, but was reimbursed for expenses incurred in the performance of such obligations other than any ordinary overhead expenses, which shall not be reimbursed. The 2010 Issuer made customary representations and warranties and was required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the MS Credit Facility was subject to the leverage restrictions contained in 1940 Act.

As of March 31, 2019 and September 30, 2018, the Company had outstanding debt under the MS Credit Facility of $0 and $234,700, respectively. For the three and six months ended March 31, 2019, the Company had borrowings on the MS Credit Facility of $0 and $147,100, respectively, and repayments on the MS Credit Facility of $0 and $381,800, respectively.

For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest and facility fees, average interest rates and average outstanding balances for the MS Credit Facility were as follows:

 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$

 
$

 
$
1,453

 
$

Amortization of debt issuance costs

 

 
190

 

Total interest and other debt financing expenses
$

 
$

 
$
1,643

 
$

Cash paid for interest expense and facility fees
$

 
$

 
$
3,174

 
$

Annualized average stated interest rate
N/A

 
N/A

 
4.2
%
 
N/A

Average outstanding balance
$

 
$

 
$
68,576

 
$


On February 1, 2019, Funding II entered into a credit facility (the "MS Credit Facility II") with Morgan Stanley Senior Funding, Inc., as the administrative agent, each of the lenders from time to time party thereto, each of the securitization subsidiaries from time to

79

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

time party thereto, and Wells Fargo Bank, N.A., as collateral agent, account bank and collateral custodian. As of March 31, 2019, the MS Credit Facility II allows Funding II to borrow up to $200,000 at any one time outstanding, subject to leverage and borrowing base restrictions.
The period from February 1, 2019 until February 1, 2021 is referred to as the revolving period and during such revolving period, Funding II may request drawdowns under the MS Credit Facility II. During the revolving period, borrowings under the MS Credit Facility II bear interest at the applicable base rate plus 2.05%. Following expiration of the revolving period, the interest rate on borrowings under the MS Credit Facility II will reset to the applicable base rate plus 2.55% for the remaining term of the MS Credit Facility II. The revolving period will continue through February 1, 2021 unless there is an earlier termination or event of default. The base rate under the MS Credit Facility II is (i) the one-month LIBOR with respect to any advances denominated in U.S. dollars or U.K. pound sterling, (ii) the one-month EURIBOR with respect to any advances denominated in euros, and (iii) the one-month Canadian Dollar Offered Rate with respect to any advances denominated in Canadian dollars. The scheduled maturity date of the MS Credit Facility II is February 1, 2024.
The MS Credit Facility II is secured by all of the assets held by Funding II. Both the Company and Funding II have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. The borrowings under the MS Credit Facility II will be subject to the leverage restrictions contained in the 1940 Act.
As of March 31, 2019 and September 30, 2018, the Company had outstanding debt under the MS Credit Facility II of $176,530 and $0, respectively. For the three and six months ended March 31, 2019, the Company had borrowings on the MS Credit Facility II of $231,263 and $231,263, respectively, and repayments on the MS Credit Facility II of $54,650 and $54,650, respectively.

For the three and six months ended March 31, 2019 and 2018, the components of interest expense, cash paid for interest and facility fees, average interest rates and average outstanding balances for the MS Credit Facility II were as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Stated interest expense
$
1,188

 
$

 
$
1,188

 
$

Facility fees
26

 

 
26

 

Amortization of debt issuance costs
91

 

 
91

 

Total interest and other debt financing expenses
$
1,305

 
$

 
$
1,305

 
$

Cash paid for interest expense and facility fees
$

 
$

 
$

 
$

Annualized average stated interest rate
4.5
%
 
N/A

 
4.5
%
 
N/A

Average outstanding balance
$
107,022

 
$

 
$
52,923

 
$


Revolver:  On June 22, 2016, the Company entered into the Adviser Revolver with the Investment Adviser, with a maximum credit limit of $20,000 and expiration date of June 22, 2019. The Adviser Revolver bears an interest rate equal to the short-term Applicable Federal Rate, which was 2.5% as of March 31, 2019. As of March 31, 2019 and September 30, 2018, the Company had no outstanding debt under the Adviser Revolver. For the three and six months ended March 31, 2019 and 2018, the Company had no borrowings and repayments, did not incur any interest expense and no cash was paid for interest on the Adviser Revolver.

Other Short-Term Borrowings:  Borrowings with original maturities of less than one year are classified as short-term.  The Company’s short-term borrowings are the result of investments that were sold under repurchase agreements.  Investments sold under repurchase agreements are accounted for as collateralized borrowings as the sale of the investment does not qualify for sale accounting under ASC Topic 860 and remains as an investment on the Consolidated Statements of Financial Condition.

As of March 31, 2019 and September 30, 2018, the Company had no short-term borrowings outstanding. For the three and six months ended March 31, 2019, the annualized effective interest rate on short-term borrowings was 4.7% and 4.9%, respectively, and interest expense was $38 and $250, respectively. For the three and six months ended March 31, 2018, the annualized effective interest rate on short-term borrowings was 0.0% and 0.0%, respectively, and interest expense was $0 and $0, respectively. The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2019, reported within the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies was ($32) and $0, respectively. The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2018, reported within the net

80

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies was $0 and $0, respectively.

For the three and six months ended March 31, 2019, the average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, the 2018 Debt Securitization, SBA debentures, Credit Facility, MS Credit Facility, MS Credit Facility II, Adviser Revolver, and Other Short-Term Borrowings) was $1,028,373 and $969,424, respectively. For the three and six months ended March 31, 2018, the average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility, and Adviser Revolver) was $825,759 and $808,548, respectively.

For the three and six months ended March 31, 2019, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company's total debt was 4.0% and 3.9%, respectively. For the three and six months ended March 31, 2018, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company's total debt was 3.9% and 3.9%, respectively.

A summary of the Company’s maturity requirements for borrowings as of March 31, 2019 is as follows:
 
Payments Due by Period
  
Total
 
Less Than
1 Year
 
1 – 3 Years
 
3 – 5 Years
 
More Than
5 Years
2014 Debt Securitization
$
179,443

 
$

 
$

 
$

 
$
179,443

2018 Debt Securitization
408,200

 

 

 

 
408,200

SBA debentures
287,000

 

 
80,000

 
87,350

 
119,650

MS Credit Facility II
176,530

 

 

 
176,530

 

Total borrowings
$
1,051,173

 
$

 
$
80,000

 
$
263,880

 
$
707,293


Note 7. Commitments and Contingencies

Commitments: The Company had outstanding commitments to fund investments totaling $49,390 and $57,650 under various undrawn revolvers and other credit facilities as of March 31, 2019 and September 30, 2018, respectively. As described in Note 4, the Company had commitments of up to $100,117 and $99,593 to SLF as of March 31, 2019 and September 30, 2018, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

Indemnifications:  In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims that may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the Consolidated Statements of Financial Condition. The Company has entered and, in the future, may again enter into derivative instruments that contain elements of off-balance sheet market and credit risk. There were no commitments outstanding for derivative contracts as of March 31, 2019 and September 30, 2018. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of the derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

Concentration of credit and counterparty risk:  Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company has engaged and, in the future, may engage again in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on its derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings:  In the normal course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.

81

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)


Note 8. Financial Highlights

The financial highlights for the Company are as follows:
 
 
Six months ended March 31,
Per share data:(1)
 
2019
 
2018
Net asset value at beginning of period
 
$
16.10

 
$
16.08

Net increase in net assets as a result of issuance of shares(2)
 
0.01

 

Distributions declared:
 
 
 
 
From net investment income
 
(0.63
)
 
(0.67
)
From capital gains
 
(0.13
)
 
(0.05
)
Net investment income
 
0.66

 
0.62

Net realized gain (loss) on investments and foreign currency transactions
 
(0.06
)
 

Net change in unrealized appreciation (depreciation) on investments and foreign currency translation
 
0.00**

 
0.13

Net asset value at end of period
 
$
15.95

 
$
16.11

Per share market value at end of period
 
$
17.88

 
$
17.89

Total return based on market value(3)
 
(0.25
)%
 
(0.93
)%
Number of common shares outstanding
 
60,587,403

 
59,867,531

 
 
Six months ended March 31,
Listed below are supplemental data and ratios to the financial highlights:
 
2019
 
2018
Ratio of net investment income to average net assets*
 
8.25
%
 
7.74
%
Ratio of total expenses to average net assets(4)*
 
8.03
%
 
6.96
%
Ratio of incentive fees to average net assets
 
0.52
%
 
0.61
%
Ratio of expenses (without incentive fees) to average net assets*
 
7.51
%
 
6.35
%
Total return based on average net asset value(5)*
 
7.50
%
 
9.26
%
Net assets at end of period
 
$
966,235

 
$
964,356

Average debt outstanding
 
$
969,424

 
$
808,548

Average debt outstanding per share
 
$
16.00

 
$
13.51

Portfolio turnover*
 
224.96
%
 
24.06
%
Asset coverage ratio(6)
 
15.23
%
 
272.33
%
Asset coverage ratio per unit(7)
 
$
2,250

 
$
2,723

Average market value per unit:(8)
 
 
 
 
2010 Debt Securitization
 
N/A

 
N/A

2014 Debt Securitization
 
N/A

 
N/A

2018 Debt Securitization
 
N/A

 
N/A

SBA Debentures
 
N/A

 
N/A

Credit Facility
 
N/A

 
N/A

MS Credit Facility
 
N/A

 
N/A

MS Credit Facility II
 
N/A

 
N/A

Revolver
 
N/A

 
N/A

Adviser Revolver
 
N/A

 
N/A

 
* Annualized for periods of less than one year.
** Represents an amount less than 0.01 per share.
(1) 
Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.
(2) 
Net increase in net assets as a result of issuance of shares related to shares issued through the DRIP.
(3) 
Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.

82

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

(4) 
Expenses, other than incentive fees, are annualized for a period less than one year.
(5) 
Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.
(6) 
Effective February 6, 2019, in accordance with Section 61(a)(2) of the 1940 Act, with certain limited exceptions, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 ACT, is at least 150% after such borrowing (excluding the Company's SBA debentures pursuant to exemptive relief received by the Company from the SEC). Prior to February 6, 2019, in accordance with the 1940 Act, with certain limited exceptions, the Company was allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, was at least 200% after such borrowing (excluding the Company's SBA debentures pursuant to exemptive relief received by the Company from the SEC).
(7) 
Asset coverage ratio per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage ratio per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. These amounts exclude the SBA debentures pursuant to exemptive relief the Company received from the SEC on September 13, 2011.
(8) 
Not applicable because such senior securities are not registered for public trading.

Note 9. Earnings Per Share

The following information sets forth the computation of the net increase in net assets per share resulting from operations for the three and six months ended March 31, 2019 and 2018:
 
Three months ended March 31,
 
Six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Earnings available to stockholders
$
17,788

 
$
23,032

 
$
36,227

 
$
44,347

Basic and diluted weighted average shares outstanding
60,429,580

 
59,744,054

 
60,301,709

 
59,663,361

Basic and diluted earnings per share
$
0.29

 
$
0.39

 
$
0.60

 
$
0.75


Note 10. Dividends and Distributions

The Company’s dividends and distributions are recorded on the ex-dividend date. The following table summarizes the Company’s dividend declarations and distributions during the six months ended March 31, 2019 and 2018:
Date Declared
 
Record Date
 
Payment Date
 
Amount
Per Share
 
Cash
Distribution
 
DRIP Shares
Issued
 
DRIP Shares
Value
Six months ended March 31, 2019
 
  

 
  

 
  

 
  

 
11/27/2018
 
12/12/2018
 
12/28/2018
 
$
0.44

(1) 
$
22,339

 
256,785

 
$
4,134

 
02/05/2019
 
03/07/2019
 
03/28/2019
 
$
0.32

 
$
16,507

 
165,164

 
$
2,828

Six months ended March 31, 2018
 
  

 
  

 
  

 
  

 
11/17/2017
 
12/12/2017
 
12/28/2017
 
$
0.40

(2) 
$
20,959

 
163,955

 
$
2,872

 
02/06/2018
 
03/08/2018
 
03/30/2018
 
$
0.32

 
$
16,978

 
126,283

 
$
2,139

 

(1) 
Includes a special distribution of $0.12 per share.
(2) 
Includes a special distribution of $0.08 per share.

Note 11. Pending Merger with Golub Capital Investment Corporation

On November 27, 2018, the Company entered into the Merger Agreement with GCIC, Merger Sub, the Investment Adviser and, for certain limited purposes, the Administrator. The Merger Agreement provides that, subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into GCIC, with GCIC continuing as the surviving company and as a wholly-owned subsidiary of the Company and, immediately thereafter, GCIC will merge with and into the Company, with the Company continuing as the surviving company. The parties to the Merger Agreement intend the Merger to be treated as a “reorganization” within the meaning of Section 368(a) of the Code.

In the Merger, each share of GCIC common stock issued and outstanding immediately prior to the effective time of the Merger will be converted into 0.865 shares of the Company’s common stock (the “Exchange Ratio”) in connection with the closing of the Merger. The Exchange Ratio will only be adjusted if, between the date of the Merger Agreement and the effective time of the Merger, the

83

Golub Capital BDC, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except shares and per share data)

respective outstanding shares of the Company’s common stock or GCIC common stock shall have been increased or decreased or changed into or exchanged for a different number or kind of shares or securities, in each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, combination or exchange of shares, or if a stock dividend or dividend payable in any other securities shall be declared with a record date within such period. No fractional shares of the Company’s common stock will be issued, and holders of GCIC common stock will receive cash in lieu of fractional shares.

Consummation of the Merger, which is currently anticipated to occur during the second half of calendar year 2019, is subject to certain closing conditions, including (1) requisite approvals of the Company’s stockholders and GCIC’s stockholders, (2) approval of the Company’s stockholders of an amendment to the Investment Advisory Agreement to be effective upon closing of the Merger, (3) the absence of certain legal impediments to the consummation of the Merger, (4) effectiveness of the registration statement for the Company’s common stock to be issued as consideration in the Merger, (5) subject to certain exceptions, the accuracy of the representations and warranties and compliance with the covenants of each party to the Merger Agreement, (6) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and (7) a requirement that, as of a determination date that is within 48 hours (excluding Sundays and holidays) prior to the closing of the Merger, both (a) the value of the consideration paid by the Company, measured as the product of the Exchange Ratio and the greater of the closing market price and the NAV per share of the Company’s common stock, is greater than or equal to the NAV per share of GCIC common stock and (b) the product of the Exchange Ratio and the NAV per share of the Company’s common stock is less than or equal to the NAV per share of the GCIC common stock.

The Merger Agreement also contains certain termination rights in favor of the Company and GCIC, including if the Merger is not completed on or before November 27, 2019 or if the requisite approvals of the Company’s stockholders or GCIC’s stockholders are not obtained. The Merger Agreement also provides that, upon the termination of the Merger Agreement under certain circumstances, the Company may be required to pay GCIC, or GCIC may be required to pay the Company, a termination fee of $29.0 million.

The Merger is expected to be accounted for as an asset acquisition of GCIC by the Company in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues. Generally, under asset acquisition accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. The cost of the group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their relative fair values of net identifiable assets acquired other than certain “non-qualifying” assets (for example cash) and does not give rise to goodwill. The final allocation of the purchase price will be determined after the Merger is completed and after completion of a final analysis to determine the estimated relative fair values of GCIC’s assets and liabilities.

In connection with the Merger, the Company is seeking stockholder approval to amend the Investment Advisory Agreement to revise (1) the cap on Incentive Fees paid to the Investment Adviser to be calculated on a per share, rather than aggregate, basis, and (2) the calculation of the Income Incentive Fee, the Capital Gain Incentive Fee and Incentive Fee Cap to exclude any amounts resulting solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger, such as the premium to NAV to be paid for the shares of GCIC’s common stock in the Merger.


Note 12. Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through May 8, 2019, the date the financial statements were available to be issued. There are no subsequent events to disclose except for the following:

On May 7, 2019, the Board declared a quarterly distribution of $0.32 per share payable on June 28, 2019 to holders of record as of June 7, 2019.



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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with our interim and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, “we,” “us,” “our” and “Golub Capital BDC” refer to Golub Capital BDC, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

our future operating results;
our business prospects and the prospects of our portfolio companies;
the effect of investments that we expect to make and the competition for those investments;
our contractual arrangements and relationships with third parties;
actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, collectively, Golub Capital;
the dependence of our future success on the general economy and its effect on the industries in which we invest;
the ability of our portfolio companies to achieve their objectives;
the use of borrowed money to finance a portion of our investments;
the adequacy of our financing sources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
general economic and political trends and other external factors;
the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;
the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;
our ability to qualify and maintain our qualification as a regulated investment company, or RIC, and as a business development company;
general price and volume fluctuations in the stock markets;
the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued thereunder and any actions toward repeal thereof;
the effect of changes to tax legislation and our tax position; and
the Merger (as defined below), the likelihood the Merger is completed and the anticipated timing of its completion

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth elsewhere in this quarterly report on Form 10-Q and as “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2018.

We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code.

Our shares are currently listed on The Nasdaq Global Select Market under the symbol “GBDC”.

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Our investment objective is to generate current income and capital appreciation by investing primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. We may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in U.S. middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $30.0 billion in capital under management as of March 31, 2019, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, which was most recently reapproved by our board of directors in May 2019, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC. Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily one stop and other senior secured loans by primarily investing approximately $5.0 million to $30.0 million of capital, on average, in the securities of U.S. middle-market companies. We may also selectively invest more than $30.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.

We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase our risk of losing part or all of our investment.

As of March 31, 2019 and September 30, 2018, our portfolio at fair value was comprised of the following:
 
 
As of March 31, 2019
 
As of September 30, 2018
Investment Type
 
Investments at
 Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
Investments at
 Fair Value
(In thousands)
 
Percentage of
Total
Investments
Senior secured
 
$
248,468

 
12.7
%
 
$
231,169

 
13.0
%
One stop
 
1,579,720

 
80.8

 
1,430,196

 
80.2

Second lien
 
9,434

 
0.5

 
9,435

 
0.5

Subordinated debt
 
609

 
0.0
*
 
251

 
0.0
*
LLC equity interests in SLF (1)
 
71,742

 
3.7

 
71,084

 
4.0

Equity
 
45,040

 
2.3

 
40,706

 
2.3

Total
 
$
1,955,013

 
100.0
%
 
$
1,782,841

 
100.0
%
 
*
Represents an amount less than 0.1%.
(1) 
Proceeds from the limited liability company, or LLC, equity interests invested in Senior Loan Fund LLC, or SLF, were utilized by SLF to invest in senior secured loans.
One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we may adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of March 31, 2019 and September 30, 2018, one stop loans included $172.8 million and $169.4 million, respectively, of late stage lending loans at fair value.

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As of March 31, 2019 and September 30, 2018, we had debt and equity investments in 211 and 199 portfolio companies, respectively, and an investment in SLF.

The following table shows the weighted average income yield and weighted average investment income yield of our earning portfolio company investments, which represented nearly 100% of our debt investments, as well as the total return based on our average net asset value, and the total return based on the change in the quoted market price of our stock and assuming distributions were reinvested in accordance with our dividend reinvestment plan, or DRIP, in each case for the three and six months ended March 31, 2019 and 2018 was as follows:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Weighted average annualized income yield (1)
8.8%
 
8.2%
 
8.7%
 
8.0%
Weighted average annualized investment income yield (2)
9.2%
 
8.8%
 
9.1%
 
8.7%
Total return based on average net asset value (3)*
7.5%
 
9.7%
 
7.5%
 
9.3%
Total return based on market value (4)
10.5%
 
0.2%
 
(0.3)%
 
(0.9)%
 
* Annualized for periods of less than one year.

(1) 
Represents income from interest and fees, excluding amortization of capitalized fees and discounts, divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.
(2) 
Represents income from interest, fees and amortization of capitalized fees and discounts divided by the average fair value of earning portfolio investments, and does not represent a return to any investor in us.
(3) 
Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.
(4) 
Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.
Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured, one stop, second lien or subordinated loans, typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies—Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Consolidated Statements of Operations.

Expenses:  Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

calculating our net asset value, or NAV (including the cost and expenses of any independent valuation firm);
fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses may include, among other items, due diligence reports, appraisal reports, any studies that may be commissioned by GC Advisors and travel and lodging expenses;
expenses related to unsuccessful portfolio acquisition efforts;

87


offerings of our common stock and other securities;
administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);
fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;
transfer agent, dividend agent and custodial fees and expenses;
U.S. federal and state registration and franchise fees;
all costs of registration and listing our shares on any securities exchange;
U.S. federal, state and local taxes;
independent directors’ fees and expenses;
costs of preparing and filing reports or other documents required by the SEC or other regulators;
costs of any reports, proxy statements or other notices to stockholders, including printing costs;
costs associated with individual or group stockholders;
costs associated with compliance under the Sarbanes-Oxley Act;
our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;
direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;
proxy voting expenses; and
all other expenses incurred by us or the Administrator in connection with administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

GC Advisors, as collateral manager for Golub Capital BDC 2010-1 LLC, or the 2010 Issuer, our indirect subsidiary, under a collateral management agreement, or the 2010 Collateral Management Agreement, was entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the 2010 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2010 Collateral Management Agreement, the term ‘‘collection period’’ referred to a quarterly period running from the day after the end of the prior collection period to the fifth business day of the calendar month in which a payment date occurs. Following redemption of the notes issued by the 2010 Issuer, or the 2010 Notes, on July 20, 2018, the 2010 Collateral Management Agreement was terminated.

GC Advisors, as collateral manager for Golub Capital BDC 2010-LLC, or the 2014 Issuer, our wholly-owned subsidiary, under a collateral management agreement, or the 2014 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2014 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2014 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the tenth business day prior to the payment date.

GC Advisors, as collateral manager for Golub Capital BDC CLO III LLC, or the 2018 Issuer, our indirect subsidiary, under a collateral management agreement, or the 2018 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2018 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2018 Collateral Management Agreement, the term "collection period" refers to the period commencing on the third business day prior to the preceding payment date and ending on (but excluding) the third business day prior to such payment date.

Collateral management fees were paid directly by the 2010 Issuer and are paid directly by the 2014 Issuer and 2018 Issuer to GC Advisors and are offset against the management fees payable under the Investment Advisory Agreement. In addition, the 2010 Issuer and 2014 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring and subsequent amendments of a $350.0 million term debt securitization, or the 2010 Debt Securitization, and the initial structuring of a $402.6 million term debt securitization, or the 2014 Debt Securitization. The 2018 Issuer paid Morgan Stanley & Co. LLC structuring and placement fees for its services in connection with the structuring of a $602.4 million term debt securitization, or the 2018 Debt Securitization. Term debt securitizations are also known as collateralized loan obligations, or CLOs, and are a form of secured financing incurred by us, which is consolidated by us and subject to our overall asset coverage requirement. The 2010 Issuer, the 2014 Issuer and 2018 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and

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providing required services in connection with the administration of the 2010 Debt Securitization, the 2014 Debt Securitization, and 2018 Debt Securitization, and collectively the Debt Securitizations, as applicable.

We believe that these administrative expenses approximate the amount of ongoing fees and expenses that we would be required to pay in connection with a traditional secured credit facility. Our common stockholders indirectly bear all of these expenses.

Pending Merger with GCIC: On November 27, 2018, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Golub Capital Investment Corporation, a Maryland corporation, or GCIC, Fifth Ave Subsidiary Inc., a Maryland corporation and our wholly owned subsidiary, or the Merger Sub, GC Advisors and, for certain limited purposes, the Administrator. The Merger Agreement provides that, subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into GCIC, with GCIC continuing as the surviving company and as a wholly-owned subsidiary of us and, immediately thereafter, GCIC will merge with and into us, with us continuing as the surviving company. See Note 11 in the notes to our consolidated financial statements for further information.

Recent Developments

On May 7, 2019, our board of directors declared a quarterly distribution of $0.32 per share payable on June 28, 2019 to holders of record as of June 7, 2019.

Consolidated Results of Operations

Consolidated operating results for the three and six months ended March 31, 2019 and 2018 are as follows:
 
For the three months ended March 31,
 
Variances
 
For the six months ended March 31,
 
Variances
  
2019
 
2018
 
2019 vs. 2018
 
2019
 
2018
 
2019 vs. 2018
  
(In thousands)
 
(In thousands)
Interest income
$
39,684

 
$
32,008

 
$
7,676

 
$
76,581

 
$
62,653

 
$
13,928

Income from accretion of discounts and origination fees
1,977

 
2,361

 
(384
)
 
3,930

 
5,070

 
(1,140
)
Dividend income from LLC equity interests in SLF

 
1,853

 
(1,853
)
 

 
3,818

 
(3,818
)
Dividend income
19

 
13

 
6

 
58

 
610

 
(552
)
Fee income
125

 
662

 
(537
)
 
647

 
1,196

 
(549
)
Total investment income
41,805

 
36,897

 
4,908

 
81,216

 
73,347

 
7,869

Total expenses
21,749

 
18,369

 
3,380

 
41,343

 
36,308

 
5,035

Net investment income
20,056

 
18,528

 
1,528

 
39,873

 
37,039

 
2,834

Net realized gain (loss) on investments and foreign currency transactions
(1,861
)
 
(618
)
 
(1,243
)
 
(3,839
)
 
(137
)
 
(3,702
)
Net change in unrealized appreciation (depreciation) on investments, foreign currency translation
(407
)
 
5,122

 
(5,529
)
 
193

 
7,445

 
(7,252
)
Net increase in net assets resulting from
   operations
$
17,788

 
$
23,032

 
$
(5,244
)
 
$
36,227

 
$
44,347

 
$
(8,120
)
Average earning debt investments, at fair value(1)
$
1,842,007

 
$
1,605,811

 
$
236,196

 
$
1,783,174

 
$
1,589,098

 
$
194,076

 
(1) 
Does not include our investment in LLC equity interests in SLF.
Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of operating results may not be meaningful.

Investment Income

Investment income increased from the three months ended March 31, 2018 to the three months ended March 31, 2019 by $4.9 million primarily as a result of an increase in the average earning debt investments balance, which is the average balance of accruing loans in our investment portfolio, of $236.2 million and an increase in the London Interbank Offered Rate, or LIBOR. These increases were partially offset by a decline in accretion of discounts resulting from decreased debt investment payoffs and a decline in dividend income from investments in SLF of $1.9 million.

Investment income increased from the six months ended March 31, 2018 to the six months ended March 31, 2019 by $7.9 million primarily as a result of an increase in the average earning debt investments balance, which is the average balance of accruing loans in our investment portfolio, of $194.1 million and an increase in LIBOR. These increases were partially offset by a decline in accretion of discounts resulting from decreased debt investment payoffs and a decline in dividend income from our investments in SLF of $3.8 million.

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The income yield by debt security type for the three and six months ended March 31, 2019 and 2018 was as follows:

 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Senior secured
7.5%
 
7.1%
 
7.4%
 
6.8%
One stop
8.9%
 
8.4%
 
8.8%
 
8.2%
Second lien
10.9%
 
9.8%
 
10.7%
 
9.7%
Subordinated debt
6.8%
 
19.8%
 
8.3%
 
19.8%

Annualized income yields on one stop and senior secured loans increased for the three and six months ended March 31, 2019 primarily due to the rise in LIBOR. As of March 31, 2019, we have one second lien investment and four subordinated debt investments as shown in the Consolidated Schedule of Investments. Due to the limited number of second lien and subordinated debt investments, quarterly income yields on second lien and subordinated debt investments can be significantly impacted by the addition, subtraction or refinancing of one investment.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.

Expenses

The following table summarizes our expenses for the three and six months ended March 31, 2019 and 2018:
 
 
For the three months ended March 31,
 
Variances
 
For the six months ended March 31,
 
Variances
  
 
2019
 
2018
 
2019 vs. 2018
 
2019
 
2018
 
2019 vs. 2018
  
 
(In thousands)
 
(In thousands)
Interest and other debt financing expenses
 
$
10,169

 
$
7,265

 
$
2,904

 
$
19,284

 
$
14,185

 
$
5,099

Amortization of debt issuance costs
 
467

 
641

 
(174
)
 
1,136

 
1,435

 
(299
)
Base management fee
 
6,594

 
5,929

 
665

 
13,033

 
11,859

 
1,174

Income incentive fee
 
3,735

 
2,191

 
1,544

 
6,196

 
4,349

 
1,847

Capital gain incentive fee
 
(669
)
 
820

 
(1,489
)
 
(1,147
)
 
1,533

 
(2,680
)
Professional fees
 
666

 
775

 
(109
)
 
1,254

 
1,463

 
(209
)
Administrative service fee
 
663

 
621

 
42

 
1,362

 
1,239

 
123

General and administrative expenses
 
124

 
127

 
(3
)
 
225

 
245

 
(20
)
Total expenses
 
$
21,749

 
$
18,369

 
$
3,380

 
$
41,343

 
$
36,308

 
$
5,035

Average debt outstanding
 
$
1,028,373

 
$
825,759

 
$
202,614

 
$
969,424

 
$
808,548

 
$
160,876


Interest Expense

Interest and other debt financing expenses increased by $2.9 million from the three months ended March 31, 2018 to the three months ended March 31, 2019 primarily due to the increase in LIBOR and an increase in the weighted average of outstanding borrowings from $825.8 million for the three months ended March 31, 2018 to $1,028.4 million for the three months ended March 31, 2019. Interest and other debt financing expenses increased by $5.1 million from the six months ended March 31, 2018 to the six months ended March 31, 2019 primarily due to the increase in LIBOR and an increase in the weighted average of outstanding borrowings from $808.5 million for the six months ended March 31, 2018 to $969.4 million for the six months ended March 31, 2019. For more information about our outstanding borrowings for the three and six months ended March 31, 2019 and 2018, including the terms thereof, see Note 6 in the notes to our consolidated financial statements and the “Liquidity and Capital Resources” section below.

The effective average interest rate on our outstanding debt increased to 4.2% for the three months ended March 31, 2019 from 3.9% for the three months ended March 31, 2018 primarily due to the increase in LIBOR, which is the index that determines the interest rate on our floating rate liabilities, which was partially offset by by a weighted average decrease in the spread over LIBOR on our variable rate debt outstanding.


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The effective average interest rate on our outstanding debt increased to 4.2% for the six months ended March 31, 2019 from 3.9% for the six months ended March 31, 2018 primarily due to the increase in LIBOR, which is the index that determines the interest rate on our floating rate liabilities, which was partially offset by a weighted average decrease in the spread over LIBOR on our variable rate debt outstanding.

Management Fee

The base management fee increased as a result of a sequential increase in average adjusted gross assets from the three and six months ended March 31, 2018 to the three and six months ended March 31, 2019.

Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee increased by $1.5 million and $1.8 million, respectively, from the three and six months ended March 31, 2018 to the three and six months ended March 31, 2019, primarily as a result of the increase in Pre-Incentive Fee Net Investment Income (as defined in Note 3 of our consolidated financial statements) of $1.6 million and $2.0 million, respectively. For the three months ended March 31, 2019, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 16.2% compared to 10.2% for the three months ended March 31, 2018. For six months ended March 31, 2019, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 13.8% compared to 10.1% for six months ended March 31, 2018.

The Capital Gain Incentive Fee equals (a) 20.0% of our Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. Our “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the we elected to become a business development company through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred financing costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis. In addition, in accordance with generally accepted accounting principles in the United States of America, or GAAP, we are required to also include the aggregate unrealized capital appreciation on investments in the calculation and accrue the capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement.

The accrual for the capital gain incentive fee under GAAP was a reversal of $0.7 million, or $0.01 per share, and a reversal of $1.1 million, or $0.02 per share for the three and six months ended March 31, 2019, respectively. The accrual for the capital gain incentive fee under GAAP was $0.8 million, or $0.01 per share, and $1.5 million, or $0.02 per share for the three and six months ended March 31, 2018, respectively. The decrease in accruals for a capital gain incentive fee under GAAP for the three and six months ended March 31, 2019 from the three and six months ended March 31, 2018, was primarily the result of unrealized depreciation of debt and equity investments. For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” section below.

The cumulative capital gain incentive fee accrued in accordance with GAAP as of March 31, 2019 and 2018 was $4.4 million and $7.2 million, respectively, none of which was payable as a Capital Gain Incentive Fee pursuant to the Investment Advisory Agreement. Any payment due under the terms of the Investment Advisory Agreement is calculated in arrears at the end of each calendar year. We paid $1.6 million and $1.2 million in Capital Gain Incentive Fees calculated under the terms of Investment Advisory Agreement as of December 31, 2018 and 2017, respectively. We did not pay any Capital Gain Incentive Fee calculated under the terms of Investment Advisory Agreement prior to December 31, 2017.

Professional Fees, Administrative Service Fee, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses remained stable from the three months ended March 31, 2018 to the three months ended March 31, 2019 and decreased by $0.1 million from the six months ended March 31, 2018 to the six months ended March 31, 2019. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.


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The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed by us to the Administrator for the three and six months ended March 31, 2019 and 2018 were $0.8 million and $0.5 million, respectively.

As of March 31, 2019 and September 30, 2018, included in accounts payable and accrued expenses were $0.3 million and $0.4 million, respectively, for accrued expenses paid on behalf of us by the Administrator.

Excise Tax Expense

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code, and determined without regard to any deduction for dividends paid for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders that will generally relieve us from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and six months ended March 31, 2019 and 2018, we did not incur any expense for U.S. federal excise tax.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the periods presented:
 
For the three months ended March 31,
 
Variances
 
For the six months ended March 31,
 
Variances
  
2019
 
2018
 
2019 vs. 2018
 
2019
 
2018
 
2019 vs. 2018
  
(In thousands)
 
(In thousands)
Net realized gain (loss) on investments
$
(1,852
)
 
$
(618
)
 
$
(1,234
)
 
$
(3,800
)
 
$
(137
)
 
$
(3,663
)
Foreign currency transactions
(9
)
 

 
(9
)
 
(39
)
 

 
(39
)
Net realized gain (loss) on investments and foreign currency transactions
$
(1,861
)
 
$
(618
)
 
$
(1,243
)
 
$
(3,839
)
 
$
(137
)
 
$
(3,702
)
Unrealized appreciation on investments
13,051

 
13,177

 
(126
)
 
24,395

 
20,006

 
4,389

Unrealized (depreciation) on investments
(14,472
)
 
(7,343
)
 
(7,129
)
 
(25,473
)
 
(12,625
)
 
(12,848
)
Unrealized appreciation (depreciation) on investments in SLF(1)
1,077

 
(712
)
 
1,789

 
1,183

 
64

 
1,119

Unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies
(63
)
 

 
(63
)
 
88

 

 
88

Net change in unrealized appreciation (depreciation) on investments, investments in SLF and foreign currency translation
$
(407
)
 
$
5,122

 
$
(5,529
)
 
$
193

 
$
7,445

 
$
(7,252
)
 
(1) 
Unrealized appreciation (depreciation) on investments in SLF includes our investment in LLC equity interests in SLF.
For the three months ended March 31, 2019, we had a net realized loss on investments and foreign currency transactions of $1.9 million primarily due to a realized loss recognized on the restructure of one portfolio company investment which was partially offset by a realized gain on the sale of one portfolio company equity investment. For the six months ended March 31, 2019, we had a net realized loss of $3.8 million primarily due to a realized loss recognized on the restructure of one portfolio company investment, realized losses on the sale of two portfolio company equity investments, partially offset by the realized gain from the sale of one portfolio company equity investment.

For the three months ended March 31, 2019, we had $13.1 million in unrealized appreciation on 130 portfolio company investments, which was partially offset by $14.5 million in unrealized depreciation on 185 portfolio company investments. For the six months ended March 31, 2019, we had $24.4 million in unrealized appreciation on 167 portfolio company investments, which was partially offset by $25.5 million in unrealized depreciation on 182 portfolio company investments. Unrealized appreciation during the three and six months ended March 31, 2019 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments and the reversal of the net unrealized depreciation associated with the sale or restructure of three portfolio company equity investments. Unrealized depreciation resulted from the amortization of discounts, negative credit related adjustments

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that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sale of portfolio company investments during the three and six months ended March 31, 2019.

For the three months ended March 31, 2019, we had $1.1 million in unrealized appreciation on our investment in SLF LLC equity interests, which was primarily driven by net investment income associated with SLF's investment portfolio netted against net negative credit related adjustments at SLF. For the six months ended March 31, 2019, we had $1.2 million in unrealized appreciation on our investment in SLF LLC equity interests, which was primarily driven by net investment income associated with SLF's investment portfolio netted against net negative credit related adjustments at SLF. SLF did not pay a dividend to us for the three and six months ended March 31, 2019.

For the three months ended March 31, 2018, we had a net realized loss on investments of $0.6 million primarily due to the write off of one non-accrual portfolio company investment which was partially offset by a gain on the sale of one equity investment. For the six months ended March 31, 2018, we had a net realized loss of $0.1 million primarily due to the write off of one non-accrual portfolio company investment which was partially offset by the sale of portfolio company investments to SLF and the sale of seven equity investments.

For the three months ended March 31, 2018, we had $13.2 million in unrealized appreciation on 123 portfolio company investments, which was partially offset by $7.3 million in unrealized depreciation on 151 portfolio company investments. For the six months ended March 31, 2018, we had $20.0 million in unrealized appreciation on 141 portfolio company investments, which was partially offset by $12.6 million in unrealized depreciation on 149 portfolio company investments. Unrealized appreciation during the three and six months ended March 31, 2018 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and six months ended March 31, 2018.

For the three months ended March 31, 2018, we had $0.7 million in unrealized depreciation on our investment in SLF LLC equity interests, which was primarily driven by net negative credit related adjustments associated with SLF's investment portfolio. For the six months ended March 31, 2018, we had $0.1 million in unrealized appreciation on our investment in SLF LLC equity interests, which was driven by net positive credit related adjustments associated with SLF's investment portfolio that were partially offset by SLF's one non-accrual portfolio company investment.

Liquidity and Capital Resources

For the six months ended March 31, 2019, we experienced a net increase in cash, cash equivalents, foreign currencies and restricted cash and cash equivalents of $30.4 million. During the period, cash used in operating activities was $133.2 million, primarily as a result of fundings of portfolio investments of $310.9 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $143.9 million and net investment income of $39.9 million. Lastly, cash provided by financing activities was $163.6 million, primarily driven by borrowings on debt of $1,070.6 million that were partially offset by repayments of debt of $865.0 million and distributions paid of $38.8 million.

For the six months ended March 31, 2018, we experienced a net decrease in cash, cash equivalents and restricted cash and cash equivalents of $14.2 million. During the period, cash used in operating activities was $29.3 million, primarily as a result of fundings of portfolio investments of $271.6 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $207.8 million and net investment income of $37.0 million. Lastly, cash provided by financing activities was $15.1 million, primarily driven by borrowings on debt of $263.9 million that were partially offset by repayments of debt of $209.8 million and distributions paid of $37.9 million.

As of March 31, 2019 and September 30, 2018, we had cash and cash equivalents of $5.6 million and $5.9 million, respectively. In addition, we had foreign currencies of $0.2 million and $0.2 million as of March 31, 2019 and September 30, 2018, respectively, and restricted cash, cash equivalents and foreign currencies of $70.3 million and $39.7 million as of March 31, 2019 and September 30, 2018, respectively. Cash and cash equivalents are available to fund new investments, pay operating expenses and pay distributions. As of March 31, 2019, $43.9 million of our restricted cash, cash equivalents and foreign currencies could be used to fund new investments that meet the investment guidelines established in the Debt Securitizations, which are described in further detail in Note 6 to our consolidated financial statements, and for the payment of principal and interest expense on the notes issued in the Debt Securitizations. As of March 31, 2019, $2.5 million of our restricted cash and cash equivalents was held by Funding and could be used to fund investments. As of March 31, 2019, $4.7 million of our restricted cash and cash equivalents could be used to fund new investments that meet the guidelines under new senior secured revolving credit facility, or MS Credit Facility II, that Golub Capital BDC Funding II LLC, or Funding II, our wholly-owned subsidiary, entered into on February 1, 2019, with Morgan Stanley Senior

93


Funding, Inc., as the administrative agent, each of the lenders from time to time party thereto, each of the securitization subsidiaries from time to time party thereto, and Wells Fargo Bank, N.A., as collateral agent, account bank and collateral custodian, as well as for the payment of interest expense and revolving debt of the MS Credit Facility II. As of March 31, 2019, $19.2 million of our restricted cash and cash equivalents could be used to fund new investments that meet the regulatory and investment guidelines established by the U.S. Small Business Administration, or SBA, for our small business investment company, or SBIC, subsidiaries which are described in further detail in Note 6 to our consolidated financial statements, and for interest expense and fees on our outstanding SBA debentures.

On February 1, 2019, Funding II entered into the MS Credit Facility II. As of March 31, 2019 the MS Credit Facility II allowed Funding II to borrow up to $200.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of March 31, 2019, we had $176.5 million outstanding under the MS Credit Facility II. As of March 31, 2019, subject to leverage and borrowing base restrictions, we had approximately $23.5 million of remaining commitments and $23.5 million of availability on the MS Credit Facility II.
In connection with entry into the MS Credit Facility II, on February 4, 2019, Funding repaid all $97.1 million of the debt outstanding at the Credit Facility. Following such repayment, the agreements governing the Credit Facility were terminated. Prior to termination, the Credit Facility allowed Funding to borrow up to $170.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of September 30, 2018, we had $136.0 million outstanding under the Credit Facility. As of September 30, 2018, subject to leverage and borrowing base restrictions, we had approximately $34.0 million of remaining commitments and $34.0 million of availability on the Credit Facility.

On July 20, 2018, the 2010 Issuer entered into a credit facility, or, as amended, the MS Credit Facility, with Morgan Stanley Bank, N.A., as lender, Morgan Stanley Senior Secured Funding, Inc., as administrative agent, and U.S. Bank National Association, as collateral agent for the administrative agent and lenders. As of September 30, 2018, the MS Credit Facility allowed the 2010 Issuer to borrow up to $300.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of September 30, 2018, we had $234.7 million outstanding under the MS Credit Facility. As of September 30, 2018, subject to leverage and borrowing base restrictions, we had approximately $65.3 million, of remaining commitments and $6.7 million of availability on the MS Credit Facility. On November 1, 2018 we entered into an amendment to the documents governing the MS Credit Facility, which increased the borrowing capacity from $300.0 million to $450.0 million. On November 16, 2018, in connection with and as part of the private placement of the notes issued in the 2018 Debt Securitization, a portion of the proceeds, net of expenses, were used to repay all amounts outstanding under the MS Credit Facility, following which the agreements governing the MS Credit Facility were terminated.

On June 22, 2016, we entered into an unsecured revolving credit facility with GC Advisors, or the Adviser Revolver, which permits us to borrow up to $20.0 million at any one time outstanding. We entered into the Adviser Revolver in order to have the ability to borrow funds on a short-term basis and have in the past repaid, and generally intend in the future to repay, borrowings under the Adviser Revolver within the same quarter in which they are drawn. As of March 31, 2019 and September 30, 2018, we had no amounts outstanding on the Adviser Revolver.

On July 16, 2010, we completed the 2010 Debt Securitization, which was subsequently increased to $350.0 million. On July 20, 2018, the 2010 Notes were redeemed and, following such redemption, the agreements governing the 2010 Debt Securitization were terminated.

On June 5, 2014, we completed the 2014 Debt Securitization in which the 2014 Issuer issued an aggregate of $402.6 million of notes, or the 2014 Notes, including, prior to their redemption on March 23, 2018, $191.0 million of Class A-1 2014 Notes, which bore interest at a rate of three-month LIBOR plus 1.75%, $20.0 million of Class A-2 2014 Notes, which bore interest at a rate of three-month LIBOR plus 1.95%, $35.0 million of Class B 2014 Notes, which bore interest at a rate of three-month LIBOR plus 2.50%, $37.5 million of Class C 2014 Notes, which bore interest at a rate of three-month LIBOR plus 3.50%, and $119.1 million of LLC equity interests in the 2014 Issuer that do not bear interest. We retained all of the Class C 2014 Notes and LLC equity interests in the 2014 Issuer totaling $37.5 million and $119.1 million, respectively. On March 23, 2018, we amended the 2014 Debt Securitization to, among other things, (a) refinance the issued Class A-1 notes issued by the 2014 Issuer by redeeming in full the $191.0 million of Class A-1 2014 Notes and issuing new Class A-1-R 2014 Notes in an aggregate principal amount of $191.0 million that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.75% of the previously outstanding Class A-1 2014 Notes, (b) refinance the Class A-2 2014 Notes by redeeming in full the $20.0 million of Class A-2 2014 Notes and issuing new Class A-2-R 2014 Notes in an aggregate principal amount of $20.0 million that bear interest at a rate of three-month LIBOR plus 0.95%, which is a decrease from the rate of three-month LIBOR plus 1.95% of the previously outstanding Class A-2 2014 Notes, (c) refinance the Class B 2014 Notes by redeeming in full the $35.0 million of Class B 2014 Notes and issuing new Class B-R 2014 Notes in an aggregate principal amount of $35.0 million that bear interest at a rate of three-month LIBOR plus 1.40%, which is a decrease from the rate of three-month LIBOR plus 2.50% of the previously outstanding Class B 2014 Notes, (d) refinance the Class C 2014 Notes by redeeming in full the $37.5 million of Class C 2014 Notes and issuing new Class C-R 2014 Notes in an

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aggregate principal amount of $37.5 million that bear interest at a rate of three-month LIBOR plus 1.55%, which is a decrease from the rate of three-month LIBOR plus 3.50% of the previously outstanding Class C 2014 Notes. The Class C-R 2014 Notes were retained by us, and we remain the sole owner of the equity of the 2014 Issuer.

The Class A-1-R, Class A-2-R and Class B-R 2014 Notes are included in the March 31, 2019 Consolidated Statements of Financial Condition as our debt and the Class C-R 2014 Notes and LLC equity interests in the 2014 Issuer were eliminated in consolidation. As of March 31, 2019, we had outstanding debt under the 2014 Debt Securitization of $179.4 million. The Class A-1-R, Class A-2-R and Class B-R 2014 Notes are included in the September 30, 2018 Consolidated Statements of Financial Condition as our debt and the Class C-R 2014 Notes and LLC equity interests in the 2014 Issuer were eliminated in consolidation. As of September 30, 2018, we had outstanding debt under the 2014 Debt Securitization of $197.5 million.

On November 16, 2018, we completed the 2018 Debt Securitization in which the 2018 Issuer issued an aggregate of $602.4 million of notes, or the 2018 Notes, including $327.0 million of AAA/AAA Class A 2018 Notes, which bear interest at the three-month LIBOR plus 1.48%; $61.2 million of AA Class B 2018 Notes, which bear interest at the three-month LIBOR plus 2.10%; $20.0 million of A Class C-1 2018 Notes, which bear interest at the three-month LIBOR plus 2.80%; $38.8 million of A Class C-2 2018 Notes, which bear interest at the three-month LIBOR plus 2.65%; $42.0 million of BBB- Class D 2018 Notes, which bear interest at the three-month LIBOR plus 2.95%; and $113.4 million of Subordinated 2018 Notes which do not bear interest. We indirectly retained all of the Class C-2, Class D and Subordinated 2018 Notes.

The Class A, Class B and Class C-1 2018 Notes are included in the March 31, 2019 Consolidated Statements of Financial Condition as our debt and the Class C-2, Class D and Subordinated 2018 Notes were eliminated in consolidation. As of March 31, 2019, we had outstanding debt under the 2018 Debt Securitization of $408.2 million.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350.0 million and the maximum amount that a single SBIC licensee may issue is $175.0 million. As of March 31, 2019, GC SBIC IV, L.P., or SBIC IV, GC SBIC V, L.P., or SBIC V, and GC SBIC VI, L.P., or SBIC VI, had $115.0 million, $150.0 million, and $22.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and March 2029. As of September 30, 2018, SBIC IV, SBIC V and SBIC VI, had $115.0 million, $150.0 million and $12.5 million, respectively, of outstanding SBA-guaranteed debentures that mature between September 2021 and March 2028. The reinvestment period for SBIC IV expired on September 30, 2018. The original amount of debentures committed to SBIC IV by the SBA was $150.0 million. In March 2018 and September 2017, SBIC IV repaid $10.0 million and $25.0 million, respectively, of the aggregate principal amount of the SBA-guaranteed debentures outstanding at the time and $10.0 million and $25.0 million, respectively, of debenture commitments were terminated. As of March 31, 2019, SBIC V and SBIC VI had $25.0 million and $28.0 million of undrawn debenture commitments, respectively, of which $12.5 million and $0, respectively, was available to be drawn, subject to SBA regulatory requirements. As of September 30, 2018, SBIC V and SBIC VI had $0 and $37.5 million of undrawn debenture commitments, respectively, of which $0 and $9.5 million, respectively was available to be drawn, subject to SBA regulatory requirements.

As of March 31, 2019, in accordance with the 1940 Act, with certain limited exceptions, we were allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. Prior to February 6, 2019, in accordance with the 1940 Act, with certain limited exceptions, we were allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, was at least 200% after such borrowing. On February 5, 2019, our stockholders voted to approve the application of the reduced asset coverage requirements to 150% in accordance with Section 61(a)(2) of the 1940 Act, which was amended by the Small Business Credit Availability Act enacted into law in March 2018, and the reduced asset coverage requirements approved by our stockholders became effective as of February 6, 2019.We currently intend to continue to target a GAAP debt-to-equity ratio of about 1.0x.

On September 13, 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage requirement to exclude the SBA debentures from our asset coverage calculation. As such, our ratio of total consolidated assets to outstanding indebtedness may be less than 150% This provides us with increased investment flexibility but also increases our risks related to leverage. As of March 31, 2019, our asset coverage for borrowed amounts was 224.96% (excluding the SBA debentures).

As of March 31, 2019 and September 30, 2018, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $49.4 million and $57.7 million, respectively. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers, subject to the terms of each loan’s respective credit agreement. As of March 31, 2019, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments, cash and restricted cash balances that we maintain, availability under our Credit Facility and Adviser

95


Revolver and ongoing principal repayments on debt investments. In addition, we generally hold some syndicated loans in larger portfolio companies that are saleable over a relatively short period to generate cash.

Due to the interplay of the 1940 Act restrictions on principal and joint transactions and the U.S. risk retention rules adopted pursuant to Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank, as a business development company, we sought and received no action relief from the SEC to ensure we could engage in CLO financings which assets are transferred through GC Advisors.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future securities offerings and through our DRIP as well as future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition, we may, from time to time, amend or refinance our leverage facilities and securitization financings, to the extent permitted by applicable law. In addition to capital not being available, it also may not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing capital generated from repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able to raise capital and are at or near our targeted leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy and have, in the past, received such smaller allocations under similar circumstances.

Portfolio Composition, Investment Activity and Yield

As of March 31, 2019 and September 30, 2018, we had investments in 211 and 199 portfolio companies, respectively, with a total fair value of $1,883.3 million and $1,711.8 million, respectively, and had investments in SLF with a total fair value of $71.7 million and $71.1 million, respectively.

The following table shows the asset mix of our new investment commitments for the three and six months ended March 31, 2019 and 2018:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
  
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
 
(In thousands)
 
Percentage of
Commitments
Senior secured
$
9,962

 
8.6
%
 
$
27,383

 
19.8
%
 
$
50,918

 
16.0
%
 
$
65,881

 
23.5
%
One stop
104,169

 
89.7

 
106,456

 
76.9

 
261,186

 
81.8

 
209,090

 
74.5

Subordinated debt
23

 
0.0
*
 

 

 
23

 
0.0
*
 

 

LLC equity interests in SLF(1)
1,750

 
1.5

 
3,062

 
2.2

 
1,750

 
0.5

 
3,062

 
1.1

Equity
207

 
0.2

 
1,519

 
1.1

 
5,305

 
1.7

 
2,633

 
0.9

Total new investment commitments
$
116,111

 
100.0
%
 
$
138,420

 
100.0
%
 
$
319,182

 
100.0
%
 
$
280,666

 
100.0
%
 
*
Represents an amount less than 0.1%.
(1) SLF's proceeds from LLC equity interests were utilized by SLF to invest in senior secured loans. As of March 31, 2019, SLF had investments in senior secured loans to 30 different borrowers.

For the three and six months ended March 31, 2019, we had approximately $78.2 million and $138.3 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and six months ended March 31, 2019 and 2018, we had sales of investments in two and six portfolio companies, respectively, aggregating approximately $2.1 million and $5.6 million, respectively, in net proceeds.

For the three and six months ended March 31, 2018, we had approximately $99.2 million and $195.5 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and six months ended March 31, 2018, we had sales of investments in four and ten portfolio companies, respectively, aggregating approximately $6.7 million and $12.3 million, respectively, in net proceeds.


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The following table shows the principal, amortized cost and fair value of our portfolio of investments by asset class:
 
As of March 31, 2019(1)
 
As of September 30, 2018(1)
  
Principal
 
Amortized
Cost
 
Fair
Value
 
Principal
 
Amortized
Cost
 
Fair
Value
  
(In thousands)
 
(In thousands)
Senior secured:
  

 
  

 
  

 
  

 
  

 
  

Performing
$
249,110

 
$
246,759

 
$
247,688

 
$
230,230

 
$
228,028

 
$
229,886

Non-accrual(2)
3,074

 
3,059

 
780

 
2,834

 
2,818

 
1,283

One stop:
  

 
  

 
  

 
  

 
  

 
  

Performing
1,591,204

 
1,573,522

 
1,577,090

 
1,435,004

 
1,417,730

 
1,425,854

Non-accrual(2)
5,483

 
5,425

 
2,630

 
8,976

 
8,910

 
4,342

Second lien:
  

 
  

 
  

 
  

 
  

 
  

Performing
9,434

 
9,354

 
9,434

 
9,435

 
9,338

 
9,435

Non-accrual(2)

 

 

 

 

 

Subordinated debt:
  

 
  

 
  

 
  

 
  

 
  

Performing
524

 
520

 
609

 
251

 
251

 
251

Non-accrual(2)

 

 

 

 

 

LLC equity interests in SLF(3)
N/A

 
74,882

 
71,742

 
N/A

 
75,407

 
71,084

Equity
N/A

 
39,198

 
45,040

 
N/A

 
38,170

 
40,706

Total
$
1,858,829

 
$
1,952,719

 
$
1,955,013

 
$
1,686,730

 
$
1,780,652

 
$
1,782,841

 
(1) 
22 and 27 of our loans included a feature permitting a portion of the interest due on such loan to be PIK interest as of March 31, 2019 and September 30, 2018, respectively.
(2) 
We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.”
(3) 
Proceeds from the LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.
As of March 31, 2019, we had three debt investments on non-accrual status and non-accrual investments as a percentage of total debt investments at cost and fair value were 0.5% and 0.2%, respectively.  As of September 30, 2018, we had three debt investments on non-accrual status and non-accrual investments as a percentage of total investments at cost and fair value were 0.7% and 0.3%, respectively. As of March 31, 2019 and September 30, 2018, the fair value of our debt investments as a percentage of the outstanding principal value was 98.9% and 99.1%, respectively.

The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three and six months ended March 31, 2019 and 2018:
 
For the three months ended March 31,
 
For the six months ended March 31,
  
2019
 
2018
 
2019
 
2018
Weighted average rate of new investment fundings
8.7%
 
8.4%
 
8.0%
 
7.9%
Weighted average spread over LIBOR of new floating rate investment fundings
6.0%
 
6.4%
 
5.6%
 
6.2%
Weighted average rate of new fixed rate investment fundings
8.0%
 
9.9%
 
8.0%
 
9.9%
Weighted average fees of new investment fundings
1.2%
 
1.5%
 
1.3%
 
1.5%
Weighted average rate of sales and payoffs of portfolio investments(1)
8.7%
 
7.9%
 
8.6%
 
7.4%
Weighted average annualized income yield(2)
8.8%
 
8.2%
 
8.7%
 
8.0%
 
(1) 
Excludes exits on investments on non-accrual status.
(2) 
Represents income from interest and fees, excluding amortization of capitalized fees and discounts, divided by the average fair value of earning debt investments, and does not represent a return to any investor in us.


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As of March 31, 2019, 96.4% and 96.4% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans. As of September 30, 2018, 98.6% and 98.6% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans.
As of March 31, 2019 and September 30, 2018, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies (excluding SLF) was $27.4 million and $26.2 million, respectively. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.

As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:
 
 
 
Internal Performance Ratings
Rating
 
Definition
5
 
Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.
4
 
Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.
3
 
Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower may be out of compliance with debt covenants; however, loan payments are generally not past due.
2
 
Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
1
 
Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.


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The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of March 31, 2019 and September 30, 2018:
 
 
March 31, 2019
 
September 30, 2018
Internal
Performance
Rating
 
Investments
at Fair Value
(In thousands)
 
Percentage of
Total
Investments
 
Investments
at Fair Value
(In thousands)
 
Percentage of
Total
Investments
5
 
$
116,854

 
6.0
%
 
$
113,873

 
6.4
%
4
 
1,644,156

 
84.1

 
1,455,754

 
81.6

3
 
176,088

 
9.0

 
195,414

 
11.0

2
 
17,899

 
0.9

 
17,250

 
1.0

1
 
16

 
0.0*

 
550

 
0.0
*
Total
 
$
1,955,013

 
100.0
%
 
$
1,782,841

 
100.0
%
 
*
Represents an amount less than 0.1%.

Senior Loan Fund LLC

We co-invest with RGA Reinsurance Company, or RGA, in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of each of us and RGA (with unanimous approval required from (i) one representative of each of us and RGA or (ii) both representatives of each of us and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business.

As of March 31, 2019, SLF is capitalized by LLC equity interest subscriptions from its members. As of March 31, 2019 and September 30, 2018, we and RGA owned 87.5% and 12.5%, respectively, of the LLC equity interests. SLF’s profits and losses are allocated to us and RGA in accordance with our respective ownership interests.

As of March 31, 2019 and September 30, 2018, SLF had the following commitments from its members (in the aggregate):
 
As of March 31, 2019
 
As of September 30, 2018
  
Committed
 
Funded(1)
 
Committed
 
Funded(1)
  
(In thousands)
 
(In thousands)
LLC equity commitments 
$
200,000

 
$
85,580

 
$
200,000

 
$
86,180

Total
$
200,000

 
$
85,580

 
$
200,000

 
$
86,180

 
(1) 
Funded LLC equity commitments are presented net of return of capital distributions subject to recall.
As of March 31, 2019, the senior secured revolving credit facility, or, as amended, the SLF Credit Facility, that Senior Loan Fund II LLC, a wholly-owned subsidiary of SLF, or SLF II, entered into with Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo Bank, N.A., as lender, allows SLF II to borrow up to $90.6 million subject to leverage and borrowing base restrictions. The reinvestment period of the SLF Credit Facility ended August 29, 2018, and after such date, the maximum commitment is equal to advances outstanding. The stated maturity date is August 30, 2020. As of March 31, 2019 and September 30, 2018, SLF II had outstanding debt under the SLF Credit Facility of $90.6 million and $104.6 million, respectively. As of March 31, 2019, the SLF Credit Facility bears interest at one-month LIBOR plus 2.05% per annum.

As of March 31, 2019 and September 30, 2018, SLF had total assets at fair value of $173.2 million and $186.3 million, respectively. As of March 31, 2019, SLF had two portfolio companies on non-accrual status with a fair value of $4.3 million. As of September 30, 2018, SLF had one portfolio company investment on non-accrual status with a fair value of $3.9 million. The portfolio companies in SLF are in industries and geographies similar to those in which we may invest directly. Additionally, as of March 31, 2019 and September 30, 2018, SLF had commitments to fund various undrawn revolving credit and delayed draw loans to its portfolio companies totaling $5.6 million and $5.9 million, respectively.


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Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of March 31, 2019 and September 30, 2018:
 
As of March 31, 2019
 
As of September 30, 2018
  
(Dollars in thousands)
Senior secured loans(1)
$
176,676

 
$
183,668

Weighted average current interest rate on senior secured loans(2)
7.7
%
 
7.5
%
Number of borrowers in SLF
30

 
32

Largest portfolio company investment(1)
$
12,720

 
$
13,716

Total of five largest portfolio company investments(1)
$
55,395

 
$
57,330

 
(1) 
At principal amount.
(2) 
Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

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SLF Investment Portfolio as of March 31, 2019
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares(2)
 
Fair
Value(3)
1A Smart Start LLC(4)
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior loan
 
02/2022
 
7.0%
 
$
2,977

 
$
2,969

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2019
 
7.5
 
6,172

 
3,086

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2019
 
7.5
 
422

 
211

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior loan
 
06/2019
 
N/A(6)
 

 

Boot Barn, Inc.(4)
 
Retail Stores
 
Senior loan
 
06/2021
 
7.1
 
9,533

 
9,533

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
7.4
 
4,418

 
4,415

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior loan
 
12/2021
 
N/A(6)
 

 

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2023
 
7.0
 
2,446

 
2,446

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
12/2023
 
8.2
 
13

 
13

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
7.8
 
8,458

 
8,458

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
7.8
 
4,262

 
4,262

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
2,404

 
2,404

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
1,209

 
1,209

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
58

 
58

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
8.1
 
40

 
40

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior loan
 
10/2021
 
N/A(6)
 

 

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2022
 
6.7
 
4,797

 
4,797

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior loan
 
06/2022
 
6.7
 
53

 
53

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
7.5
 
4,462

 
4,462

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2020
 
N/A(6)
 

 

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
8.4
 
5,936

 
5,936

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
8.4
 
1,648

 
1,648

Flexan, LLC(4)
 
Chemicals, Plastics and Rubber
 
Senior loan
 
02/2020
 
10.0
 
492

 
492

Gamma Technologies, LLC(4)
 
Electronics
 
Senior loan
 
06/2024
 
8.0
 
10,135

 
10,135

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior loan
 
09/2022
 
8.6
 
4,488

 
4,488

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
03/2024
 
6.9
 
2,288

 
2,288

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
03/2024
 
6.9
 
119

 
119

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior loan
 
03/2024
 
6.9
 
64

 
64

Joerns Healthcare, LLC(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
05/2020
 
8.6
 
8,745

 
7,346

Mediaocean LLC(7)
 
Diversified/Conglomerate Service
 
Senior loan
 
08/2020
 
N/A(6)
 

 
(1
)
Paradigm DKD Group, LLC(5)
 
Buildings and Real Estate
 
Senior loan
 
05/2020
 
8.8
 
1,951

 
781

Paradigm DKD Group, LLC(5)
 
Buildings and Real Estate
 
Senior loan
 
05/2020
 
8.8
 
596

 
238

Pasternack Enterprises, Inc. and Fairview Microwave, Inc(4)
 
Diversified/Conglomerate Manufacturing
 
Senior loan
 
07/2025
 
6.5
 
5,291

 
5,291

Polk Acquisition Corp.(4)
 
Automobile
 
Senior loan
 
06/2022
 
7.9
 
4,489

 
4,400

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
8.3
 
96

 
93

Polk Acquisition Corp.
 
Automobile
 
Senior loan
 
06/2022
 
7.9
 
53

 
52

Pyramid Healthcare, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
9.1
 
10,099

 
10,099

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
9.1
 
147

 
147

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
9.0
 
99

 
99

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2020
 
10.8
 
51

 
51

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior loan
 
11/2022
 
6.9
 
3,805

 
3,805

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior loan
 
11/2021
 
N/A(6)
 

 

Rubio's Restaurants, Inc (4)
 
Beverage, Food and Tobacco
 
Senior loan
 
10/2019
 
7.9
 
4,915

 
4,670


101


SLF Investment Portfolio as of March 31, 2019 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) /
Shares
(2)
 
Fair
Value(3)
Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
04/2019
 
7.8%
 
$
4,793

 
$
4,793

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior loan
 
04/2019
 
8.0
 
1,586

 
1,586

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
7.74% cash/1.00% PIK
 
4,341

 
3,777

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
8.7
 
70

 
60

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
8.7
 
64

 
55

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
12/2020
 
8.7
 
45

 
39

SEI, Inc.(4)
 
Electronics
 
Senior loan
 
07/2023
 
7.5
 
12,611

 
12,611

SEI, Inc.
 
Electronics
 
Senior loan
 
07/2023
 
N/A(6)
 

 

Self Esteem Brands, LLC (4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2022
 
6.8
 
9,634

 
9,537

Self Esteem Brands, LLC (4)(7)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior loan
 
02/2022
 
N/A(6)
 

 
(7
)
Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
4,225

 
3,803

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
3,312

 
2,980

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
595

 
536

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
445

 
400

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior loan
 
10/2020
 
8.6
 
220

 
198

Upstream Intermediate, LLC
 
Healthcare, Education and Childcare
 
Senior loan
 
01/2024
 
6.5
 
2,816

 
2,816

W3 Co.
 
Oil and Gas
 
Senior loan
 
03/2022
 
8.6
 
1,247

 
1,246

WHCG Management, LLC (4)
 
Healthcare, Education and Childcare
 
Senior loan
 
03/2023
 
7.6
 
7,860

 
7,388

WIRB-Copernicus Group, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior loan
 
08/2022
 
6.8
 
5,581

 
5,581

Total senior loan investments
 
 
 
 
 
 
 
 
 
$
176,676

 
$
168,056

 
 
 
 
 
 
 
 
 
 
 
 
 
W3 Co.(8)(9)
 
Oil and Gas
 
LLC units
 
N/A
 
N/A
 
3

 
$
1,235

W3 Co.(8)(9)
 
Oil and Gas
 
Preferred stock
 
N/A
 
N/A
 

 
201

Total equity investments
 
 
 
 
 
 
 
 
 
 
 
$
1,436

 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
 
 
 
$
176,676

 
$
169,492


 
(1) 
Represents the weighted average annual current interest rate as of March 31, 2019. All interest rates are payable in cash.
(2) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(3) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in our board of directors' valuation process described elsewhere herein.
(4) 
We also hold a portion of the first lien senior secured loan in this portfolio company.
(5) 
Loan was on non-accrual status as of March 31, 2019. As such, no interest is being earned on this investment.
(6) 
The entire commitment was unfunded as of March 31, 2019. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.
(7) 
The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
(8) 
Equity investment received as a result of the portfolio company's debt restructuring.
(9) 
Non-income producing.


102


SLF Investment Portfolio as of September 30, 2018
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) / Shares (2)
 
Fair
Value(3)
1A Smart Start LLC
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior Loan
 
02/2022
 
7.0
 
$
2,073

 
$
2,084

1A Smart Start LLC(4)
 
Home and Office Furnishings, Housewares, and Durable Consumer
 
Senior Loan
 
02/2022
 
6.7
 
 
922

 
924

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior Loan
 
11/2018
 
7.2
 
 
6,561

 
3,609

Advanced Pain Management Holdings, Inc.(5)
 
Healthcare, Education and Childcare
 
Senior Loan
 
11/2018
 
7.2
 
 
449

 
247

Boot Barn, Inc.
 
Retail Stores
 
Senior Loan
 
06/2021
 
6.9
 
 
9,533

 
9,533

Brandmuscle, Inc.
 
Printing and Publishing
 
Senior Loan
 
12/2021
 
7.1
 
 
4,678

 
4,674

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
12/2023
 
7.9
 
 
13

 
13

Captain D's, LLC(4)
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
12/2023
 
6.7
 
 
2,499

 
2,499

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
7.9
 
 
8,502

 
8,332

CLP Healthcare Services, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
7.9
 
 
4,284

 
4,198

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
 
 
2,417

 
2,417

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
 
 
1,215

 
1,215

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
 
 
40

 
40

Community Veterinary Partners, LLC
 
Personal, Food and Miscellaneous Services
 
Senior Loan
 
10/2021
 
7.9
  
 
58

 
58

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior Loan
 
06/2022
 
6.1
  
 
71

 
71

DISA Holdings Acquisition Subsidiary Corp.(4)
 
Diversified/Conglomerate Service
 
Senior Loan
 
06/2022
 
6.1
  
 
4,821

 
4,821

Encore GC Acquisition, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
01/2020
 
7.5
 
 
4,540

 
4,540

Flexan, LLC(4)
 
Chemicals, Plastics and Rubber
 
Senior Loan
 
02/2020
 
9.8
  
 
304

 
304

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior Loan
 
02/2020
 
8.1
  
 
5,967

 
5,967

Flexan, LLC
 
Chemicals, Plastics and Rubber
 
Senior Loan
 
02/2020
 
8.1
  
 
1,657

 
1,657

Gamma Technologies, LLC(4)
 
Electronics
 
Senior Loan
 
06/2024
 
7.7
  
 
10,186

 
10,186

III US Holdings, LLC
 
Diversified/Conglomerate Service
 
Senior Loan
 
09/2022
 
9.0
  
 
4,927

 
4,927

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior Loan
 
03/2024
 
6.7
  
 
2,293

 
2,293

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior Loan
 
03/2024
 
6.7
  
 
119

 
119

Jensen Hughes, Inc.
 
Buildings and Real Estate
 
Senior Loan
 
03/2024
 
6.7
 
 
64

 
64

Joerns Healthcare, LLC(4)
 
Healthcare, Education and Childcare
 
Senior Loan
 
05/2020
 
8.3
 
 
8,745

 
8,133

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior Loan
 
05/2020
 
8.5
  
 
702

 
524

Paradigm DKD Group, LLC
 
Buildings and Real Estate
 
Senior Loan
 
05/2020
 
8.5
  
 
1,957

 
1,369

Pasternack Enterprises, Inc. and Fairview Microwave, Inc (4)
 
Diversified/Conglomerate Manufacturing
 
Senior Loan
 
07/2025
 
6.2
  
 
5,318

 
5,291

Payless ShoeSource, Inc.
 
Retail Stores
 
Senior Loan
 
08/2022
 
11.3
  
 
762

 
528

Polk Acquisition Corp.
 
Automobile
 
Senior Loan
 
06/2022
 
7.5
  
 
93

 
93

Polk Acquisition Corp.
 
Automobile
 
Senior Loan
 
06/2022
 
7.2
  
 
4,513

 
4,513

Polk Acquisition Corp.
 
Automobile
 
Senior Loan
 
06/2022
 
7.2
  
 
53

 
53

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
  
 
411

 
411

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
 
 
10,152

 
10,152

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
 
 
45

 
45

Pyramid Healthcare, Inc.
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2019
 
8.8
 
 
148

 
148

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior Loan
 
11/2021
 
6.8
 
 
17

 
17

RSC Acquisition, Inc.(4)
 
Insurance
 
Senior Loan
 
11/2022
 
6.7
 
 
3,824

 
3,815

Rubio's Restaurants, Inc.(4)
 
Beverage, Food and Tobacco
 
Senior Loan
 
10/2019
 
7.6
 
 
4,941

 
4,941

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior Loan
 
04/2019
 
7.6
 
 
991

 
991

Rug Doctor LLC
 
Personal and Non Durable Consumer Products (Mfg. Only)
 
Senior Loan
 
04/2019
 
7.6
 
 
5,061

 
5,061

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
 
70

 
64


103


SLF Investment Portfolio as of September 30, 2018 - (continued)
Portfolio Company
 
Business Description
 
Security Type
 
Maturity
Date
 
Current
Interest
Rate(1)
 
Principal ($) / Shares (2)
 
Fair
Value(3)
Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
4,345

 
3,997

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
 
45

 
42

Sage Dental Management, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
12/2020
 
8.4
 
 
64

 
59

Saldon Holdings, Inc. (4)
 
Diversified/Conglomerate Service
 
Senior Loan
 
09/2022
 
6.4
 
 
2,354

 
2,342

SEI, Inc.(4)
 
Electronics
 
Senior Loan
 
07/2023
 
7.5
 
 
13,716

 
13,716

Self Esteem Brands, LLC(4)
 
Leisure, Amusement, Motion Pictures, Entertainment
 
Senior Loan
 
02/2020
 
7.0
 
 
10,142

 
10,142

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
6.9
 
 
4,507

 
4,416

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
6.9
 
 
486

 
476

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
7.1
 
 
650

 
637

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
7.1
 
 
239

 
235

Teasdale Quality Foods, Inc.
 
Grocery
 
Senior Loan
 
10/2020
 
6.9
 
 
3,532

 
3,460

Upstream Intermediate, LLC
 
Healthcare, Education and Childcare
 
Senior Loan
 
01/2024
 
6.6
 
 
2,830

 
2,830

W3 Co.
 
Oil and Gas
 
Senior Loan
 
03/2022
 
8.2
 
 
1,253

 
1,251

WHCG Management, LLC(4)
 
Healthcare, Education and Childcare
 
Senior Loan
 
03/2023
 
7.4
 
 
7,900

 
7,900

WIRB-Copernicus Group, Inc.(4)
 
Healthcare, Education and Childcare
 
Senior Loan
 
08/2022
 
6.5
 
 
5,609

 
5,609

Total senior loan investments
 
 
 
 
 
 
 
 
 
 
$
183,668

 
$
178,053

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payless ShoeSource, Inc. (6)(7)
 
Retail Stores
 
LLC interest
 
N/A
 
N/A
 
 
35

 
$
54

W3 Co. (6)(7)
 
Oil and Gas
 
LLC units
 
N/A
 
N/A
 
 
3

 
1,073

Total equity investments
 
 
 
 
 
 
 
 
 
 
 
 
$
1,127

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments
 
 
 
 
 
 
 
 
 
 
$
183,668

 
$
179,180

 
(1) 
Represents the weighted average annual current interest rate as of September 30, 2018. All interest rates are payable in cash.
(2) 
The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.
(3) 
Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in our board of directors' valuation process described elsewhere herein.
(4) 
We also hold a portion of the first lien senior secured loan in this portfolio company.
(5) 
Loan was on non-accrual status as of September 30, 2018. As such, no interest is being earned on this investment.
(6) 
Equity investment received as a result of the portfolio company's debt restructuring.
(7) 
Non-income producing.
As of March 31, 2019, we have committed to fund $175.0 million of LLC equity interests to SLF. As of March 31, 2019 and September 30, 2018, $74.9 million and $75.4 million, respectively, of our LLC equity interest commitment to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and six months ended March 31, 2019, we did not receive dividend income from the SLF LLC equity interests. For the three months ended March 31, 2018, we received $1.9 million and $3.8 million, respectively, in dividend income from the SLF LLC equity interests.

For the three and six months ended March 31, 2019, we earned an annualized total return on our weighted average capital invested in SLF of 6.3% and 3.4%, respectively. For the three and six months ended March 31, 2018, we earned an annualized total return on our weighted average capital invested in SLF of 5.0% and 8.2%, respectively. The annualized total return on weighted average capital invested is calculated by dividing total income earned on our investments in SLF by the combined daily average of our investments in (1) the NAV of the SLF LLC equity interests, and (2) the principal of the SLF subordinated notes, if any.

104


Below is certain summarized financial information for SLF as of March 31, 2019 and September 30, 2018, and for the three and six months ended March 31, 2019 and 2018:
 
March 31, 2019
 
September 30, 2018
  
(In thousands)
Selected Balance Sheet Information, at fair value
  

 
  

Investments, at fair value
$
169,492

 
$
179,180

Cash and other assets
3,669

 
7,146

Receivable from investments sold

 

Total assets
$
173,161

 
$
186,326

Senior credit facility
$
90,588

 
$
104,622

Unamortized debt issuance costs

 
(18
)
Other liabilities
583

 
484

Total liabilities
91,171

 
105,088

Members’ equity
81,990

 
81,238

Total liabilities and members' equity
$
173,161

 
$
186,326


 
Three months ended March 31,
 
Six months ended March 31,
  
2019
 
2018
 
2019
 
2018
  
(In thousands)
 
(In thousands)
Selected Statement of Operations Information:
  

 
  

 
 
 
 
Interest income
$
3,538

 
$
4,844

 
$
7,174

 
$
9,752

Fee income

 

 
9

 
25

Total investment income
3,538

 
4,844

 
7,183

 
9,777

Interest and other debt financing expenses
1,133

 
1,765

 
2,320

 
3,844

Administrative service fee
64

 
108

 
144

 
221

Other expenses
25

 
28

 
49

 
57

Total expenses
1,222

 
1,901

 
2,513

 
4,122

Net investment income
2,316

 
2,943

 
4,670

 
5,655

Net realized gains (losses) on investments

 

 
(1,314
)
 

Net change in unrealized appreciation (depreciation) on investments
(1,086
)
 
(1,639
)
 
(2,004
)
 
(1,218
)
Net increase (decrease) in members' equity
$
1,230

 
$
1,304

 
$
1,352

 
$
4,437


Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of March 31, 2019 is as follows:
 
Payments Due by Period (In millions)
  
Total
 
Less Than
1 Year
 
1 – 3 Years
 
3 – 5 Years
 
More Than
5 Years
2014 Debt Securitization
$
179.4

 
$

 
$

 
$

 
$
179.4

2018 Debt Securitization
408.2

 

 

 

 
408.2

SBA debentures
287.0

 

 
80.0

 
87.4

 
119.7

MS Credit Facility II
176.5

 

 

 
176.5

 

Unfunded commitments(1)
49.4

 
49.4

 

 

 

Total contractual obligations
$
1,100.6

 
$
49.4

 
$
80.0

 
$
263.9

 
$
707.3

 
(1) 
Unfunded commitments represent unfunded commitments to fund investments, excluding our investments in SLF, as of March 31, 2019. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this

105


amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of March 31, 2019, subject to the terms of each loan’s respective credit agreement.
We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of March 31, 2019 and September 30, 2018, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $49.4 million and $57.7 million, respectively. We have commitments of up to $100.1 million and $99.6 million to SLF as of March 31, 2019 and September 30, 2018, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make quarterly distributions to our stockholders as determined by our board of directors. For additional details on distributions, see “Income taxes” in Note 2 to our consolidated financial statements.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a business development company under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification may result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

106



We entered into the Investment Advisory Agreement with GC Advisors. Mr. Lawrence Golub, our chairman, is a manager of GC Advisors, and Mr. David Golub, our chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.

Golub Capital LLC provides, and other affiliates of Golub Capital have historically provided, us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

Under the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis. We are not a party to the Staffing Agreement.

GC Advisors serves as collateral manager to the 2014 Issuer and the 2018 Issuer under the 2014 Collateral Management Agreement and the 2018 Collateral Management Agreement, respectively, and prior to the redemption of the 2010 Notes on July 20, 2018, served as the collateral manager to the 2010 Issuer under the 2010 Collateral Management Agreement. Fees payable to GC Advisors for providing these services offset against the base management fee payable by us under the Investment Advisory Agreement.

We have entered into the Adviser Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

During the first calendar quarter of 2019, the Golub Capital Employee Grant Program Rabbi Trust, or the Trust, did not purchase any shares of our common stock. During calendar year 2018, the Trust, purchased approximately $7.2 million of shares, or 396,099 shares, of our common stock for the purpose of awarding incentive compensation to employees of Golub Capital.

On November 27, 2018, we entered into the Merger Agreement with GCIC, Merger Sub, GC Advisors and, for certain limited purposes, the Administrator. See Note 11 in the notes to our consolidated financial statements for further information.

GC Advisors also sponsors or manages, and may in the future sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital Investment Corporation and Golub Capital BDC 3, Inc., each an unlisted business development company that primarily focuses on investing in one stop and other senior secured loans. In addition, our officers and directors serve in similar capacities for and Golub Capital Investment Corporation and Golub Capital BDC 3, Inc. GC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Delaware.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.


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Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods may include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from values that may ultimately be received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:

Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring. Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors. The audit committee of our board of directors reviews these preliminary valuations. At least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm. The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.
Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were

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no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and six months ended March 31, 2019 and 2018. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of March 31, 2019 and September 30, 2018, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and

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record these fees as fee income when received. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our Consolidated Statements of Operations.

Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans was $3.4 million as of March 31, 2019 and $5.6 million as of September 30, 2018.

Partial loan sales: We follow the guidance in ASC Topic 860, when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on our statements of assets and liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

Income taxes: See “Consolidated Results of Operations - Expenses - Excise Tax Expense.”

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to the floating LIBOR are also subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of March 31, 2019 and September 30, 2018, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.01% and 1.01%, respectively. Prior to their redemption on March 23, 2018, the Class A-1, A-2 and B 2014 Notes issued as part of the 2014 Debt Securitization had floating interest rate provisions based on three-month LIBOR that reset quarterly. The Class A-1-R, A-2-R and B-R 2014 Notes issued in connection with the refinancing of the 2014 Debt Securitization have floating rate interest provisions based on the three-month LIBOR that reset quarterly, as do the Class A, B and C-1 2018 Notes issued as part of the 2018 Debt Securitization. Finally, the MS Credit Facility II has a floating interest rate provision primarily based on one-month LIBOR. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

Assuming that the interim and unaudited Consolidated Statement of Financial Condition as of March 31, 2019 were to remain constant and that we took no actions to alter interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.

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Change in interest rates
 
Increase (decrease) in
interest income
 
Increase (decrease) in
interest expense
 
Net increase
(decrease) in
 investment income
  
 
(In thousands)
Down 25 basis points
 
$
(4,515
)
 
$
(1,910
)
 
$
(2,605
)
Up 50 basis points
 
9,030

 
3,821

 
5,209

Up 100 basis points
 
18,061

 
7,642

 
10,419

Up 150 basis points
 
27,091

 
11,463

 
15,628

Up 200 basis points
 
36,122

 
15,283

 
20,839


Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of March 31, 2019, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the Debt Securitizations and the MS Credit Facility II, or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swaps, futures, options and forward contracts to the limited extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.



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Item 4: Controls and Procedures.

As of March 31, 2019 (the end of the period covered by this report), management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


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Part II - Other Information

Item 1: Legal Proceedings.

We, GC Advisors and Golub Capital LLC may, from time to time, be involved in legal and regulatory proceedings arising out of our respective operations in the normal course of business or otherwise. While there can be no assurance of the ultimate disposition of any such proceedings, each of us, GC Advisors and Golub Capital LLC do not believe it is currently subject to any material legal proceedings.

Item 1A: Risk Factors.

There have been no material changes during the three months ended March 31, 2019 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2018 and our Quarterly Report on Form 10-Q for the quarter ended December 31, 2018.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures

None.

Item 5: Other Information.

None.

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Item 6: Exhibits.

EXHIBIT INDEX
 
 
 
Number
 
Description
 
 
 
 
 
Loan and Servicing Agreement, dated as of February 1, 2019, by and among Golub Capital BDC Funding II LLC and Morgan Stanley Senior Funding, Inc. (Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 814-00794), filed on February 7, 2019).
 
 
Purchase and Sale Agreement, dated as of February 1, 2019, by and among Golub Capital BDC Funding II LLC and Golub Capital BDC, Inc. (Incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 814-00794), filed on February 7, 2019).
 
 
Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
 
  
Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
 
 
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 

_________________
* Filed herewith
 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 
Golub Capital BDC, Inc.
 
 
 
Dated: May 8, 2019
By
/s/ David B. Golub
 
 
David B. Golub
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
Dated: May 8, 2019
By
/s/ Ross A. Teune
 
 
Ross A. Teune
 
 
Chief Financial Officer
 
 
(Principal Accounting and Financial Officer)


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