N-CSRS 1 v087260_n-csrs.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-CSR
 
CERTIFIED SHAREHOLDER REPORT
OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
 
Investment Company Act file number 811-21960
 
TENNENBAUM OPPORTUNITIES FUND V, LLC
(Exact Name of Registrant as Specified in Charter)
 
2951 28TH STREET, SUITE 1000
SANTA MONICA, CALIFORNIA 90405
(Address of Principal Executive Offices) (Zip Code)
 
ELIZABETH GREENWOOD, SECRETARY
TENNENBAUM OPPORTUNITIES FUND V, LLC
2951 28TH STREET, SUITE 1000
SANTA MONICA, CALIFORNIA 90405
(Name and Address of Agent for Service)
 
Registrant's telephone number, including area code: (310) 566-1000
 
Copies to:
RICHARD T. PRINS, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK 10036
 
Date of fiscal year end: DECEMBER 31, 2007

Date of reporting period: JUNE 30, 2007



ITEM 1. REPORTS TO STOCKHOLDERS.
 



Semi-Annual Shareholder Report


Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)
June 30, 2007



Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Semi-Annual Shareholder Report
(Unaudited)


June 30, 2007
 
Contents

Unaudited Consolidated Financial Statements

Consolidated Statement of Assets and Liabilities
2
Consolidated Statement of Investments
3
Consolidated Statement of Operations
5
Consolidated Statements of Changes in Net Assets
6
Consolidated Statement of Cash Flows
7
Notes to Consolidated Financial Statements
8
   
Supplemental Information (Unaudited)
  
   
Consolidated Portfolio Asset Allocation
24
Consolidating Statement of Assets and Liabilities
25
Consolidating Statement of Operations
26
 
Tennenbaum Opportunities Fund V, LLC (the “Company”) files a schedule of its investment in Tennenbaum Opportunities Partners V, LP (the “Partnership”) with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. Investments listed in the Consolidated Statement of Investments are held by the Partnership, which also files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Forms N-Q of the Company and the Partnership are available on the SEC’s website at http://www.sec.gov. The Forms N-Q of the Company and the Partnership may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

A free copy of the proxy voting guidelines of the Company and the Partnership and information regarding how the Company and the Partnership voted proxies relating to portfolio securities during the most recent twelve-month period may be obtained without charge on the SEC’s website at http://www.sec.gov, or by calling the advisor of the Company and the Partnership, Tennenbaum Capital Partners, LLC, at (310) 566-1000. Collect calls for this purpose are accepted.


(A Delaware Limited Liability Company)
 
Consolidated Statement of Assets and Liabilities (Unaudited)
 
June 30, 2007
 
   
Cost
  
Fair Value
  
Assets
          
Investments in securities
          
Debt securities
  
$
183,512,424
  
$
172,713,223
  
Equity securities
    
116,858,216
   
121,922,307
 
Total investments in securities
    
300,370,640
   
294,635,530
 
               
Cash and cash equivalents
         
53,667,336
 
Subscriptions receivable
          
98,500,000
 
Deferred debt issuance costs
          
7,264,609
 
Accrued interest income on securities
          
3,401,405
 
Deferred equity placement costs
          
1,885,275
 
Prepaid expenses and other assets
          
410,349
 
Total assets
          
459,764,504
 
               
Liabilities
             
Credit facility payable
          
102,500,000
 
Payable for investment securities purchased
          
16,356,666
 
Dividends payable to common shareholders
          
5,691,111
 
Equity placement costs payable
          
3,423,250
 
Management and advisory fees payable
          
2,462,500
 
Interest payable
          
730,406
 
Director fees payable
          
40,250
 
Accrued expenses and other liabilities
          
624,838
 
Total liabilities
          
131,829,021
 
               
Preferred stock
              
Series Z; $500/share liquidation preference; 560 shares authorized,
      
issued and outstanding
         
280,000
 
Accumulated distributions on Series Z preferred stock
          
16,427
 
Total preferred stock
          
296,427
 
               
Preferred limited partnership interests
              
Series A preferred limited partnership interests in Tennenbaum
             
Opportunities Partners V, LP; $20,000/interest liquidation preference;
             
25,000 interests authorized, 3,050 interests issued and outstanding
          
61,000,000
 
Accumulated dividends on Series A preferred limited partnership interests
          
339,793
 
Total preferred limited partnership interests
          
61,339,793
 
             
Minority interest
              
General partnership interest in Tennenbaum Opportunities Partners V, LP
  
—
  
             
Net assets applicable to common shareholders
        
$
266,299,263
  
               
Composition of net assets applicable to common shareholders
      
Common stock, $0.001 par value; unlimited shares authorized, 9,809.4239
             
shares issued and outstanding, 5,391.2826 subscribed and pending issuance
        
$
15
  
Paid-in capital in excess of par
          
292,376,874
 
Distributions and accumulated net investment loss
          
(20,091,532
)
Accumulated net realized gain on investments
          
105,236
 
Accumulated net unrealized depreciation on investments
          
(5,735,110
)
Accumulated dividends to Series A preferred limited partnership interests
          
(339,793
)
Accumulated dividends to Series Z preferred shareholders
          
(16,427
)
Net assets applicable to common shareholders
        
$
266,299,263
  
               
Common stock, NAV per share
       
$
17,518.87
  
               
See accompanying notes.
              

2

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)
 
Consolidated Statement of Investments (Unaudited)
 
June 30, 2007
 
Showing Percentage of Total Cash and Investments of the Company
 
   
Principal
 
Fair
  
Cash and
 
Security
  
Amount
 
Value
  
Investments
  
               
Debt Securities (49.59%)
              
Bank Debt (30.70%) (1)
              
Automobiles (4.97%)
              
EaglePicher Holdings Inc., 2nd Lien Term Loan, LIBOR +8.5%, due 6/30/11
              
(Acquired 11/24/06, Amortized Cost $10,308,333)
  
$
10,000,000
  
$
10,266,670
    
2.95
%
EaglePicher Holdings Inc., 3rd Lien Term Loan, LIBOR +12.5%, due 12/30/11
                    
(Acquired 11/24/06, Amortized Cost $4,111,212)
 
$
4,073,919
    
4,196,137
   
1.20
%
EaglePicher Holdings Inc., Tranche B Term Loan, LIBOR +4.5%, due 12/30/10
                    
(Acquired 10/12/06, Amortized Cost $2,854,828)
  
$
2,840,625
    
2,844,684
   
0.82
%
Total Automobiles
          
17,307,491
       
                     
Cable & Other Pay Television Services (5.17%)
                    
Bresnan Communications, LLC, 2nd Lien Term Loan, LIBOR +4.5%, due 3/29/14
                    
(Acquired 11/22/06, Amortized Cost $18,206,094)
  
$
17,750,000
    
18,027,344
   
5.17
%
                     
Communications Services, NEC (4.78%)
                    
WildBlue Communications, Inc. 1st Lien Delayed Draw Term Loan,
                    
LIBOR +4% Cash +4% PIK, due 12/31/09
                    
(Acquired 6/28/07, Amortized Cost $7,862,044)
  
$
7,839,177
    
7,760,785
   
2.23
%
WildBlue Communications, Inc. 2nd Lien Delayed Draw Term Loan,
                    
LIBOR +5% Cash +4.5% PIK, due 8/15/11
                    
(Acquired 6/28/07, Amortized Cost $8,944,622)
  
$
8,944,622
    
8,899,899
   
2.55
%
Total Communications Services, NEC
          
16,660,684
       
                     
Computer Communications Equipment (4.12%)
                    
Enterasys Network Distribution Ltd. Senior Secured Note, LIBOR +9%, due 2/22/11
                    
(Acquired 3/9/07, Amortized Cost $2,588,317) - (Ireland)
  
$
2,614,462
    
2,666,751
   
0.76
%
Enterasys Networks, Inc. Senior Secured Note, LIBOR +9%, due 2/22/11
                   
(Acquired 3/9/07, Amortized Cost $11,348,775)
  
$
11,463,409
    
11,692,677
   
3.36
%
Total Computer Communications Equipment
          
14,359,428
       
 
                    
Retail Stores (3.18%)
                    
Toys R Us, Real Estate Term Loan, LIBOR +3%, due 12/9/08
                    
(Acquired 10/18/06, Amortized Cost $11,031,875)
  
$
11,000,000
    
11,062,733
   
3.18
%
                     
Telephone Communications (8.63%)
                    
Global Crossing Limited, Tranche B Term Loan, LIBOR +6.25%, due 5/9/12
                   
(Acquired 6/4/07, Amortized Cost $20,381,556)
 
$
20,381,556
    
20,407,033
   
5.86
%
Interstate Fibernet, Inc. 1st Lien Senior Secured Note,
                   
LIBOR +8% Cash +0.5% PIK, due 7/25/09
                   
(Acquired 2/23/07, Amortized Cost $2,995,708)
  
$
2,875,272
    
2,979,501
   
0.86
%
Interstate Fibernet, Inc. 2nd Lien Senior Secured Note,
                   
LIBOR +7.75% Cash +0.75% PIK, due 8/26/09
                   
(Acquired 1/12/07, Amortized Cost $6,715,754)
  
$
6,665,854
    
6,665,854
   
1.91
%
Total Telephone Communications
          
30,052,388
       
                     
Buildings and Real Estate (-0.15%)
                    
Realogy Corp Revolver, LIBOR +2.25%, due 4/10/13
                   
(Acquired 6/18/07, 7/9/07, 7/13/07, and 8/17/07, Amortized Cost $(450,000))
  
$
10,000,000
    
(530,000
)
  
(0.15
%)
                     
Total Bank Debt Securities (Cost $106,899,118)
          
106,940,068
       

3

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)
 
Consolidated Statement of Investments (Unaudited) (Continued)
 
June 30, 2007
 
Showing Percentage of Total Cash and Investments of the Company
 
   
Principal
     
Percent of
 
   
Amount
 
Fair
  
Cash and
  
Security
  
or Shares
 
Value
  
Investments
  
               
Debt Securities (continued)
              
Corporate Debt Securities (18.89%)
              
Leisure, Amusement, Motion Pictures and Entertainment (5.59%)
              
Bally Total Fitness Holdings, Inc. Senior Subordinated Notes, 9.875%, due 10/15/07 (2)
  
$
19,646,000
  
$
19,456,416
    
5.59
%
                     
Retail Stores (13.30%)
                    
Linens 'n Things, Inc. Floating Rate Note, LIBOR +5.625%, due 1/15/14
  
$
62,515,000
    
46,316,739
   
13.30
%
                            
Total Corporate Debt Securities (Cost $76,613,306)
          
65,773,155
       
                           
Total Debt Securities (Cost $183,512,424)
          
172,713,223
       
                     
Equity Securities (35.01%)
                    
Buildings and Real Estate (24.81%)
                    
Fleetwood Enterprises, Inc. Common Stock (2)
    
2,966,000
   
26,842,300
   
7.71
%
Owens Corning, Inc. Common Stock (2)
    
1,770,767
   
59,550,894
   
17.10
%
Total Buildings and Real Estate
        
86,393,194
       
                     
Utilities (10.20%)
                
Mirant Corporation Common Stock (2)
    
833,039
   
35,529,113
   
10.20
%
                         
Total Equity Securities (Cost $116,858,216)
          
121,922,307
       
                            
Total Investment in Securities (Cost $300,370,640)
          
294,635,530
       
                     
Cash and Cash Equivalents (15.40%)
                    
American Express Credit Corporation Commercial Paper, 5.25%, due 7/20/07
  
$
2,000,000
    
1,991,542
   
0.57
%
Bear Stearns Commercial Paper, 5.25%, due 7/20/07
  
$
14,000,000
    
13,940,792
   
4.00
%
Rabobank Commercial Paper, 5.32%, due 7/2/07
  
$
10,000,000
    
9,995,567
   
2.87
%
Toyota Motor Credit Corp Commercial Paper, 5.24%, due 7/20/07
  
$
14,000,000
    
13,940,904
   
4.00
%
UBS Finance Commercial Paper, 5.35%, due 7/2/07
  
$
13,000,000
    
12,994,204
   
3.73
%
Wells Fargo Bank Overnight REPO
  
$
752,432
    
752,432
   
0.22
%
Cash Held on Account at Various Institutions
  
$
51,895
    
51,895
   
0.01
%
Total Cash and Cash Equivalents
         
53,667,336
       
                           
Total Cash and Investments in Securities
        
$
348,302,866
    
100.00
%
 
Notes to Statement of Investments:

(1) Certain investments in bank debt may be considered to be subject to contractual restrictions, and such investments are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally limited to commercial lenders or accredited investors and often require approval of the agent or borrower.
 
(2) Non-income producing security.
 
Aggregate purchases and aggregate sales of investment securities, other than Government securities, totaled $246,268,396 and $62,267,456, respectively. Aggregate purchases includes securities received as payment in-kind. Aggregate sales includes principal paydowns on debt securities.

The total value of restricted securities as of June 30, 2007 was $106,940,068 or 30.70% of total cash and investments of the Company.

See accompanying notes.

4

(A Delaware Limited Liability Company)
 
Consolidated Statement of Operations (Unaudited)
 
Six Months Ended June 30, 2007
 
Investment income
      
Interest income
  
$
8,751,380
  
Other income
    
635
 
Total interest and related investment income
    
8,752,015
 
         
Operating expenses
        
Management and advisory fees
    
13,368,988
 
Interest expense
    
1,150,650
 
Commitment fees
    
778,853
 
Amortization of deferred debt issuance costs
    
430,891
 
Legal fees, professional fees and due diligence expenses
    
346,226
 
Insurance expense
    
190,758
 
Director fees
    
91,980
 
Organizational costs
    
27,218
 
Other operating expenses
    
66,707
 
Total expenses
    
16,452,271
 
         
Net investment loss
    
(7,700,256
)
         
Net realized and unrealized loss on investments
        
Net realized gain from investments
    
105,236
 
         
Change in net unrealized appreciation/depreciation on investments
        
Net unrealized appreciation, beginning of period
    
1,218,589
 
Net unrealized depreciation, end of period
    
(5,735,110
)
Net change in unrealized appreciation/depreciation on investments
    
(6,953,699
)
Net realized and unrealized loss on investments
    
(6,848,463
)
         
Distributions to Series A preferred limited partners
    
(81,327
)
Net change in reserve for distributions to Series A preferred
        
limited partnership interests
    
(317,551
)
Net change in reserve for dividends to Series Z
        
preferred shareholders
    
(11,262
)
         
Net decrease in net assets applicable to common shareholders
       
resulting from operations
  
$
(14,958,859
)
 
See accompanying notes.
        

5

(A Delaware Limited Liability Company)
 
Consolidated Statements of Changes in Net Assets
 
   
 
      
   
Six Months
  
October 10, 2006
  
   
Ended
  
(Inception) to
  
   
June 30, 2007
(unaudited)
  
December 31, 2006
  
           
Total common shareholder committed capital
  
$
985,000,000
  
$
725,000,000
  
               
Net assets applicable to common shareholders, beginning of period
  
$
145,281,047
  
$
—
  
               
Common shareholders contributions
   
150,500,000
   
145,000,000
 
Equity placement and offering costs charged to paid-in capital
    
(2,212,975
)
  
(75,000
)
Common shareholders contributions, net
    
148,287,025
   
144,925,000
 
               
Net investment loss
    
(7,700,256
)
  
(806,728
)
Net realized gain on investments
    
105,236
   
(28,408
)
Net change in unrealized appreciation/depreciation on investments
    
(6,953,699
)
  
1,218,589
 
Distributions to Series A preferred limited partners from
              
net investment income
    
(81,327
)
  
-
 
Net change in reserve for distributions to Series A preferred
              
limited partnership interests
    
(317,551
)
  
(22,242
)
Net change in reserve for dividends to Series Z preferred
             
shareholders
    
(11,262
)
  
(5,164
)
               
Net decrease in net assets applicable to common shareholders
             
resulting from operations
    
(14,958,859
)
  
356,047
 
               
Distributions to common shareholders from net investment income
    
(12,309,950
)
  
—
  
               
Net assets applicable to common shareholders, end of period
             
(including distributions and accumulated net investment loss of
             
$20,091,532 at June 30, 2007)
  
$
266,299,263
  
$
145,281,047
  
 
See accompanying notes.
              

6

(A Delaware Limited Liability Company)
 
Consolidated Statement of Cash Flows (Unaudited)
 
Six Months Ended June 30, 2007
 
Operating activities
      
Net decrease in net assets applicable to common shareholders
     
resulting from operations
  
$
(14,958,859
)
Adjustments to reconcile net decrease in net assets applicable to common
       
shareholders resulting from operations to net cash used in operating activities:
        
Net realized gain on investments
    
(105,236
)
Net change in unrealized appreciation on investments
    
6,953,699
 
Distributions paid to Series A preferred limited partners
    
81,327
 
Increase in reserve for distributions to Series A preferred limited
       
partnership interests
    
317,551
 
Increase in reserve for dividends to Series Z preferred shareholders
    
11,262
 
Income from paid in-kind capitalization and other non-cash income
    
(370,512
)
Amortization of deferred debt issuance costs
    
430,891
 
Changes in assets and liabilities:
        
Purchases of investment securities
    
(246,268,396
)
Proceeds from sales, maturities and paydowns of investment securities
    
62,267,456
 
Increase in accrued interest income
    
(2,124,025
)
Decrease in prepaid expenses and other assets
    
29,683
 
Decrease in payable for investment securities purchased
    
(1,678,339
)
Increase in management and advisory fees payable
    
1,163,542
 
Decrease in rating agency fees payable
    
(900,000
)
Increase in interest payable
    
674,533
 
Increase in Director fees payable
    
40,250
 
Increase in accrued expenses and other liabilities
    
112,798
 
Net cash used in operating activities
    
(194,322,375
)
         
Financing activities
        
Proceeds from issuance of common shares
   
52,000,000
 
Proceeds from draws on credit facility
    
102,500,000
 
Principal repayments on credit facility
    
(72,000,000
)
Proceeds from issuance of Series A preferred limited partnership interests in
       
Tennenbaum Opportunities Partners V, LP
    
61,000,000
 
Redemptions of Series A preferred limited partnership interests in
       
Tennenbaum Opportunities Partners V, LP
    
(10,000,000
)
Distributions paid to Series A preferred limited partners
    
(81,327
)
Distributions paid to common shareholders
    
(6,618,839
)
Payments for debt issuance costs
   
(1,779,586
)
Net cash provided by financing activities
    
125,020,248
 
         
Net decrease in cash and cash equivalents
    
(69,302,127
)
Cash and cash equivalents at beginning of period
    
122,969,463
 
Cash and cash equivalents at end of period
  
$
53,667,336
  
         
Supplemental disclosures
        
Non-cash financing activities:
        
Equity placement and offering costs
  
$
2,928,250
  
Interest payments
    
475,661
 
 
See accompanying notes.
        

7

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2007

1. Organization and Nature of Operations

Tennenbaum Opportunities Fund V, LLC (the “Company”), a Delaware limited liability company, is registered as a nondiversified, closed-end management investment company under the Investment Company Act of 1940 (the “1940 Act”). The Company was formed to acquire a portfolio of investments consisting primarily of bank loans, distressed debt, stressed high yield debt, mezzanine investments and public equities. The stated objective of the Company is to achieve high total returns while minimizing losses.
 
The Company’s Certificate of Formation was filed with the Delaware Secretary of State on September 27, 2006. The Company has elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes. As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements.
 
The Company’s investment operations commenced and initial funding was received on October 10, 2006. On December 15, 2006, the Company contributed substantially all of its assets totaling $145,565,245 to Tennenbaum Opportunities Partners, LP, a Delaware limited partnership (the “Partnership”), in exchange for 100% of the Partnership’s common limited partnership interests in a non-taxable transaction. The contributed assets consisted of investment securities of $109,052,546 (including unrealized gain $1,232,304), cash of $49,518,680, and other liabilities over assets of $13,005,981. The Partnership is also registered as a nondiversified, closed-end management investment company under the 1940 Act, but has elected to be treated as a partnership for U.S. federal income tax purposes. The Partnership’s Certificate of Limited Partnership was filed with the Delaware Secretary of State on September 29, 2006. Following the asset transfer, all portfolio activity is conducted by and in the Partnership.
 
These consolidated financial statements include the accounts of the Company and the Partnership. All significant intercompany transactions and balances have been eliminated in the consolidation.
 
The General Partner of the Partnership is SVOF/MM, LLC (“SVOF/MM”). The managing member of SVOF/MM is Tennenbaum Capital Partners, LLC (“TCP”), which serves as the Investment Manager of both the Company and the Partnership. Babson Capital Management LLC serves as Co-Manager of both the Company and the Partnership. TCP is controlled and managed by Tennenbaum & Co., LLC (“Tennenbaum & Co.”) and certain affiliates. Substantially all of the equity interests in the General Partner are owned directly or indirectly by TCP, Babson Capital Management LLC and employees of TCP. The Company, the Partnership, TCP, Tennenbaum & Co., SVOF/MM and their members and affiliates may be considered related parties.
 
8

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2007
 
1. Organization and Nature of Operations (continued)

Company management consists of the Investment Manager and the Board of Directors. Partnership management consists of the General Partner and the Board of Directors. The Investment Manager and the General Partner direct and execute the day-to-day operations of the Company and the Partnership, respectively, subject to oversight from the respective Board of Directors, which sets the broad policies for the Company and performs certain functions required by the 1940 Act in the case of the Partnership. The Board of Directors of the Partnership has delegated investment management of the Partnership’s assets to the Investment Manager and the Co-Manager. Each Board of Directors consists of three persons, two of whom are independent. The holders of the preferred interests voting separately as a class will be entitled to elect two of the Directors. The remaining directors will be subject to election by holders of common interests and preferred interests voting together as a single class.

Company Structure

As of June 30, 2007, the total maximum capitalization of the consolidated Company was approximately $1.97 billion, consisting of $985 million of common equity commitments, $329 million of preferred limited partnership interests in the Partnership (the “Series A Preferred”), $656 million under a senior secured revolving credit facility issued by the Partnership (the “Senior Facility”), and $280,000 in Series Z preferred stock of the Company. Such amounts are subject to increase. The contributed common equity, preferred equity and the amount drawn under the Senior Facility are used to purchase Partnership investments and to pay certain fees and expenses of the Partnership and the Company. Substantially all of these investments are included in the collateral for the Senior Facility and are available to pay certain fees and expenses of the Partnership incurred in connection with its organization and capitalization.

The Company will liquidate and distribute its assets and will be dissolved on October 10, 2016, subject to up to two one-year extensions if requested by the Investment Manager and approved by the outstanding common shares. The Partnership will liquidate and distribute its assets and will be dissolved on October 10, 2016, subject to up to two one-year extensions if requested by the General Partner and approved by the Company as the holder of the common limited partnership interests in the Partnership. However, the Operating Agreement and Partnership Agreement will prohibit liquidation of the Company and the Partnership, respectively, prior to October 10, 2016 if the Series A Preferred are not redeemed in full prior to such liquidation.
 
9

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
1. Organization and Nature of Operations (continued)

Common Equity

As of June 30, 2007, investors committed to purchase $985 million of the Company’s common shares over a thirty-month period on dates specified by the Company. The Company accepted initial commitments of $725 million in October 2006 and received 20% of this initial commitment at its inception of operations on October 10, 2006. The Company accepted additional commitments of $260 million on February 22, 2007 (the “Second Close”), and received 20% of these additional commitments on or about February 26, 2007. The Company called an additional 10% of the common share commitment on June 28, 2007, which it received on or about August 1, 2007.

In order to ensure that the appropriate portion of the organizational, offering and operational expenses (excluding interest and preferred dividends) of the Company and the Partnership through the date of the Second Close was borne by the subscribers to the Second Close, the price per share of the initial drawdown in respect of the Second Close was net asset value plus a premium of approximately $873.88, and a distribution in the aggregate amount of this premium ($308.50 per share) was declared to the Company’s common shareholders of record prior to the issuance of the new shares in the Second Close. The effect of the premium received on the net asset value of the Company before the aforementioned distribution is reflected in the Financial Highlights as an increase from capital stock transactions of $308.50 per share, which was entirely offset by the aforementioned distribution.

As of June 30, 2007, the ratio of contributed to committed capital was 0.30:1.

Preferred Limited Partnership Interests

At June 30, 2007, the Partnership had 3,050 Series A preferred limited partnership interests (the “Series A Preferred”) issued and outstanding with a liquidation preference of $20,000 per interest. The Series A Preferred are redeemable at the option of the Partnership, subject to certain limitations, and, during the ramp-up period, may be reissued. Additionally, under certain conditions, the Partnership may be required to either redeem certain of the Series A Preferred or repay indebtedness, at the Company’s option. Such conditions would include a failure by the Partnership to maintain adequate collateral as required by its credit facility agreement or by the Statement of Preferences of the Series A Preferred, or a failure by the Partnership to maintain sufficient asset coverage as required by the 1940 Act. At June 30, 2007, the Partnership was in full compliance with such requirements.

10
Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
1. Organization and Nature of Operations (continued)

The Series A Preferred accrue dividends at an annual rate equal to LIBOR plus 0.65%, or in the case of any holders of Series A Preferred that are CP Conduits (as defined in the Senior Facility credit agreement), the higher of (i) LIBOR plus 0.65% or (ii) the CP Conduit’s cost of funds rate plus 0.65%, subject to certain limitations and adjustments.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of the Investment Manager and the General Partner, the consolidated financial results of the Company included herein contain all adjustments necessary to present fairly the consolidated financial position of the Company as of June 30, 2007, the consolidated results of its operations and its consolidated cash flows for the six months then ended, and the consolidated changes in net assets for the six months then ended and for the period from October 10, 2006 (inception) to December 31, 2006. The following is a summary of the significant accounting policies of the Company and the Partnership.

Investment Valuation

Management values investments held by the Partnership at fair value based upon the principles and methods of valuation set forth in policies adopted by the Partnership’s Board of Directors and in conformity with the Senior Facility and Statement of Preferences for the Series A Preferred. Investments listed on a recognized exchange, whether U.S. or foreign, are valued for financial reporting purposes as of the last business day of the reporting period using the closing price on the date of valuation.

Liquid investments not listed on a recognized exchange are valued by an approved nationally recognized security pricing service or by using either the average of the bid prices on the date of valuation, as supplied by three approved broker-dealers, or the lower of two quotes from approved broker-dealers. At June 30, 2007, all of the investments of the Partnership were valued based on prices from a recognized exchange, nationally recognized third-party pricing service or an approved third-party appraisal.

Investments not listed on a recognized exchange nor priced by an approved source (“Unquoted Investments”) are valued as follows for purposes of inclusion as permitted collateral in the borrowing base of the Senior Facility:
 
11

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
2. Summary of Significant Accounting Policies (continued)

a)
for semi-liquid investment positions with a value of 2% of the Partnership’s Total Capitalization (as defined in the Senior Facility credit agreement) or greater but less than 4% of Total Capitalization, the most recent quote provided by an approved investment banking firm or an approved third-party appraisal;

b)
for semi-liquid investment positions with a value greater than 4% of Total Capitalization, the most recent valuation provided by an approved third-party appraisal; and

c)
for illiquid investment positions with a value of 2% of Total Capitalization or greater, the most recent valuation provided by an approved third-party appraisal.

However, notwithstanding items (a) through (c), above, the Investment Manager may determine the market value of Unquoted Investments without obtaining a third-party quote or appraisal, up to an aggregate of 5% of the total capitalization of the Partnership.

Investments for which market quotations are not readily available or are determined to be unreliable are valued at fair value under guidelines adopted by the Board of Directors and subject to their approval. Fair value is generally defined as the amount that an investment could be sold for in an orderly disposition over a reasonable time. Generally, to increase objectivity in valuing the Partnership’s assets, the Investment Manager will utilize external measures of value, such as public markets or third-party transactions, whenever possible.

The Investment Manager’s valuation is not based on long-term work-out value, immediate liquidation value, nor incremental value for potential changes that may take place in the future. The values assigned to investments that are valued by the Investment Manager are based on available information and do not necessarily represent amounts that might ultimately be realized, as these amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. The Investment Manager generally uses three methods to fair value securities:

(i) Cost Method. The cost method is based on the original cost of the securities to the Partnership. This method is generally used in the early stages of a portfolio company’s development until significant positive or negative events occur subsequent to the date of the original investment by the Partnership in such company that dictate a change to another valuation method.
 
12

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
2. Summary of Significant Accounting Policies (continued) 

(ii)  Private Market Method. The private market method uses actual, executed, historical transactions in a portfolio company’s securities by responsible third parties as a basis for valuation. In connection with utilizing the private market method, the Investment Manager may also use, where applicable, unconditional firm offers by responsible third parties as a basis for valuation.

(iii)  Analytic Method. The analytical method is generally used by the Investment Manager to value an investment position when there is no established public or private market in the portfolio company’s securities or when the factual information available to the Investment Manager dictates that an investment should no longer be valued under either the cost or private market method. This valuation method is based on the judgment of the Investment Manager, using data available for the applicable portfolio securities.

Because of the inherent uncertainty of valuations, these estimated values may differ significantly from the values that would have been used had a ready market for such investments existed, and the differences could be material.

Investment Transactions

The Partnership records investment transactions on the trade date, except for private transactions that have conditions to closing, which are recorded on the closing date. The cost of investments purchased is based upon the purchase price plus those professional fees which are specifically identifiable to the investment transaction. Realized gains and losses on investments are recorded based on the specific identification method, which typically allocates the highest cost inventory to the basis of securities sold.

Cash and Cash Equivalents

Cash consists of amounts held in accounts with brokerage firms and the custodian bank. Cash equivalents consist of highly liquid investments with an original maturity of three months or less. For purposes of reporting cash flows, cash consists of the cash held with brokerage firms and the custodian bank, and cash equivalents maturing within 90 days.

Repurchase Agreements

In connection with transactions in repurchase agreements, it is the Partnership’s policy that its custodian take possession of the underlying collateral securities, for which the fair value exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by the Partnership may be delayed or limited.
 
13
Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
2. Summary of Significant Accounting Policies (continued) 

Investments in Restricted Securities

The Partnership may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold to institutional investors in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and additional expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Statement of Investments. Restricted securities, including any restricted investments in affiliates, are valued in accordance with the investment valuation policies discussed above.

Investments in Foreign Securities

The Partnership may invest in securities traded in foreign countries and denominated in foreign currencies. At June 30, 2007, the Partnership did not hold any investments denominated in foreign currencies.  Purchases and sales of investment securities and income and expense items denominated in foreign currencies, when they occur, are translated into U.S dollars on the respective dates of such transactions.  As such, foreign security positions and transactions are susceptible to foreign currency as well as overall market risk. Accordingly, potential unrealized gains and losses from foreign security transactions may be affected by fluctuations in foreign exchange rates. Such fluctuations are included in the net realized and unrealized gain or loss from investments.

Securities of foreign companies and foreign governments may involve special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different securities transactions clearance and settlement practices, and potential future adverse political and economic developments. Moreover, securities of some foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government.

Debt Issuance Costs

Costs of $7,721,709 were incurred in connection with placing the Partnership’s Senior Facility. These costs are being deferred and are amortized on a straight-line basis over eight years, the estimated life of the Senior Facility. The impact of utilizing the straight-line amortization method versus the effective-interest method is not expected to be material to the operations of the Company or the Partnership.
 
14
 
Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
2. Summary of Significant Accounting Policies (continued) 

Equity Placement and Offering Costs

Placement and offering costs in 2006 and 2007 for the Company’s common equity were $1,245,000 and $2,928,250, respectively. As of June 30, 2007, $2,287,975 of the costs have been charged to paid-in capital; the remaining amount will be charged to paid-in capital in connection with future capital calls.

Organization Costs

Organization costs of $0.19 million were incurred in connection with the formation of the Company and the Partnership; $0.16 million were expensed to operations in 2006 and $0.03 million were expensed to operations in 2007.

Purchase Discounts

The majority of the Partnership’s high yield and distressed debt securities are purchased at a considerable discount to par as a result of the underlying credit risks and financial results of the issuer and due to general market factors that influence the financial markets as a whole. GAAP requires that discounts on corporate (investment grade) bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method. The process of accreting the purchase discount of a debt security to par over the holding period results in accounting entries that increase the cost basis of the investment and record a noncash income accrual to the statement of operations. The Partnership considers it prudent to follow GAAP guidance that requires the Investment Manager to consider the collectibility of interest when making accruals. Statement of Position 93-1 discusses financial accounting and reporting for high yield debt securities and notes for which, because of the credit risks associated with high yield and distressed debt securities, income recognition must be carefully considered and constantly evaluated for collectibility.

Accordingly, when accounting for purchase discounts, management recognizes discount accretion income when it is probable that such amounts will be collected and when such amounts can be estimated. A reclassification entry is recorded at year-end to reflect purchase discounts on all realized investments. For income tax purposes, the economic gain resulting from the sale of debt securities purchased at a discount is allocated between interest income and realized gains.
 
15

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
2. Summary of Significant Accounting Policies (continued) 

Distributions to Common Interestholders

Distributions to the Company’s common shareholders are recorded on the ex-dividend date. The amount to be paid by the Partnership as a distribution to the Company is determined by the General Partner, which has provided the Investment Manager with criteria for such distributions, and is generally based upon the estimated taxable earnings of the Company. The amount to be paid by the Company as a distribution to its shareholders is determined by its Board of Directors, which has provided the Investment Manager with criteria for such distributions, and is generally based amounts received from the Partnership, less any Company-level expenses and dividends to Series Z Preferred Shareholders. Net realized capital gains are distributed at least annually. The General Partner and the Company declared distributions to the Company and the Company’s common shareholders, respectively, of $12,309,950 during the six months ended June 30, 2007.

Income Taxes

The Company intends to comply with the applicable provisions of the Internal Revenue Code of 1986, as amended, pertaining to regulated investment companies and to make distributions of taxable income sufficient to relieve it from substantially all federal
income and excise taxes. Accordingly, no provision for income taxes is required in the consolidated financial statements. The Partnership’s income or loss is reported in the Partners’ income tax returns. As of June 30, 2007, all tax years of the Company and the Partnership since inception remain subject to examination by federal and state tax authorities. No such examinations are currently pending.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States. Capital accounts within the financial statements are adjusted at year-end for permanent book and tax differences. These adjustments are primarily due to non-deductible expenses and differing treatments for short-term realized gains and have no impact on net assets or the results of operations. Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains and losses on certain investment transactions and the timing of the deductibility of certain expenses, and will reverse in subsequent periods.

16

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
2. Summary of Significant Accounting Policies (continued)

Cost and unrealized appreciation (depreciation) for U.S. federal income tax purposes of the investments of the Company were as follows:

Unrealized appreciation
  
$
10,118,313
  
Unrealized depreciation
    
(15,853,423
)
Net unrealized appreciation
  
$
(5,735,110
)
         
Cost
  
$
300,370,640
  

Use of Estimates

The preparation of the financial statements 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions to be reasonable and accurate, actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FIN No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN No. 48 requires recognition of tax benefits that satisfy a greater than 50% probability threshold. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN No. 48 became effective for the Company and the Partnership beginning January 1, 2007. The adoption of FIN 48 did not have a significant impact on the financial statements of the Company or the Partnership.
 
17
Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
2. Summary of Significant Accounting Policies (continued)
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for the Company beginning January 1, 2008. At this time, the Company and the Partnership are assessing the potential impact of SFAS No. 157 on the financial statements.

3. Allocations and Distributions

Distributions made to the common shareholders of the Company are based on distributions received from the Partnership, less any Company-level expenses and dividends to Series Z preferred shareholders. As set forth in the Partnership Agreement, distributions made to the Company and the General Partner with respect to any accounting period are determined as follows:

a)
First, 100% to the Company until the amount distributed to the Company, together with amounts previously distributed to the Company, equals an 8% annual weighted-average return on undistributed capital attributable to the Company;

b)
Then, 100% to the General Partner until the cumulative amount of such distributions equals 25% of all amounts previously distributed to the Company pursuant to clause (a) above; and

c)
All remaining amounts: (i) 80% to the Company and (ii) 20% to the General Partner.

The timing of distributions is determined by the General Partner, which has provided the Investment Manager with certain criteria for such distributions. The timing of distributions to the common shareholders of the Company is determined by its Board of Directors, which has provided the Investment Manager with certain criteria for such distributions.

Net investment income or loss, realized gain or loss on investments, and appreciation or depreciation on investments for the period is allocated to the Company and the General Partner in a manner consistent with that used to determine distributions. As of June 30, 2007, the Partnership’s cumulative annualized return did not exceed the 8% threshold; accordingly, no allocation to the General Partner was made.

The Company’s Series Z share dividend rate is fixed at 8% per annum.
 
18
Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
4. Management Fees and Other Expenses

Pursuant to the advisory agreements, the Investment Manager is entitled to receive an annual management and advisory fee, payable monthly in arrears, equal to 1.50% of the sum of the amount of the Series A Preferred, the maximum amount available under the Senior Facility, and the total committed common equity, subject to reduction by (i) returns of contributed common equity, (ii) the amount of the Senior Facility commitment when the Senior Facility is no longer outstanding, and (iii) the amount of the Series A Preferred when less than $1 million in liquidation value of preferred securities is outstanding. For purposes of computing the management fee, total committed capital at June 30, 2007 was $1.97 billion, consisting of $985 million of common equity commitments, $329 million of Series A Preferred, and $656 million of debt. In addition, the Investment Manager is entitled to an allocation as discussed in Note 3, above.

The Co-Manager receives a portion of the management fee paid to the Investment Manager, and a portion of the allocation paid to the General Partner, as compensation for its services.

The Company and the Partnership pay all respective expenses incurred in connection with the business of the Company and the Partnership, including fees and expenses of outside contracted services, such as custodian, administrative, legal, audit and tax preparation fees, costs of valuing investments, insurance costs, brokers’ and finders’ fees relating to investments, and any other transaction costs associated with the purchase and sale of investments of the Partnership.

5. Senior Secured Revolving Credit Facility
 
The Partnership has entered into a credit agreement with certain lenders, which provides for a senior secured revolving credit facility (the “Senior Facility”) pursuant to which amounts may be drawn up to $656,000,000. The Senior Facility matures December 15, 2014, subject to extension by the lenders at the request of the Partnership for one 364-day period.

Advances under the Senior Facility bear interest at LIBOR or EURIBOR plus 0.35% per annum, except in the case of loans from CP Conduits, which bear interest at the higher of (i) LIBOR or EURIBOR (as applicable) plus 0.35% or (ii) the CP Conduit’s cost of funds plus 0.35%, subject to certain limitations. Advances under the swingline facility bear interest at the LIBOR Market Index Rate plus 0.35% per annum or the main refinancing rate as set by the European Central Bank for such period, plus 0.85% per annum. In addition to amounts due on outstanding debt, the Senior Facility accrues commitment fees of 0.15% per annum on the unused portion of the Senior Facility, or 0.20% per annum when less than $131,200,000 in borrowings are outstanding.
 
19

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
5. Senior Secured Revolving Credit Facility (continued)

During the six months ended June 30, 2007, daily weighted-average debt outstanding was $40,290,055, and the weighted-average interest rate on outstanding debt was 5.8%. Interest payments made under the Senior Facility totaled $475,661 during the six months ended June 30, 2007.

6. Commitments, Concentration of Credit Risk and Off-Balance Sheet Risk

The Partnership conducts business with brokers and dealers that are primarily headquartered in New York and Los Angeles and are members of the major securities exchanges. Banking activities are conducted with a firm headquartered in the New York area.

In the normal course of business, the Partnership’s securities activities involve executions, settlement and financing of various securities transactions resulting in receivables from, and payables to, brokers, dealers and the Partnership’s custodian. These activities may expose the Company and the Partnership to risk in the event such parties are unable to fulfill contractual obligations. Management does not anticipate any losses from counterparties with whom it conducts business.

Consistent with standard business practice, the Company and the Partnership enter into contracts that contain a variety of indemnifications. The maximum exposure of the Company and the Partnership under these arrangements is unknown. However, the Company and the Partnership expect the risk of loss to be remote.

7. Series Z Preferred Capital

In addition to the Partnership’s Series A Preferred described in Note 1, the Company had 560 Series Z preferred shares issued and outstanding as of June 30, 2007. The Series Z preferred shares have a liquidation preference of $500 per share plus accumulated but unpaid dividends and pay dividends at an annual rate equal to 8% of liquidation preference. The Series Z preferred shares are redeemable at any time at the option of the Company and may only be transferred with the consent of the Company.
 
20

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

8. Shareholders’ Capital

Issuances of common stock to the Company’s investors for the six months ended June 30, 2007 and for the period from October 10, 2006 (Inception) to December 31, 2006 were as follows:

   
Six Months Ended
June 30, 2007
  
October 10, 2006 (Inception) to
December 31, 2006
  
Number of common shares issued
    
2,559.4239
    
7,250.0000
  
Number of common shares subscribed and
             
pending issuance
    
5,391.2826
    
—
  
     
7,950.7065
    
7,250.000
  
               
Gross proceeds from share issuance
  
$
52,000,000
  
$
145,000,000
  
Subscription receivable for common shares
    
98,500,000
    
—
  
Equity placement and offering costs
    
(2,212,975
)
  
(75,000
)
Net proceeds
  
$
148,287,025
  
$
144,925,000
  
 
 
21

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

9. Subsequent Events

On July 2, 2007, the Company accepted an additional $120 million in common shareholder commitments and, accordingly, increased its common limited partnership interest commitment in the Partnership by $120 million.
 
10. Financial Highlights
 
   
 
      
   
Six Months
  
October 10, 2006
  
   
Ended
  
(Inception)
  
   
June 30, 2007
(unaudited)
  
December 31, 2006
 
Per Common Share(1)
          
Net asset value, beginning of period
 
$
20,038.77
  
$
20,000.00
  
               
Equity placement costs charged to paid-in capital
    
(249.84
)
  
(10.34
)
               
Investment operations:
              
Net investment loss
    
(868.65
)
  
(111.27
)
Net realized and unrealized gain (loss)
    
(377.97
)
  
164.16
 
Distributions to Series A preferred limited partnership
              
interests from net investment income
    
(8.29
)
  
-
 
Net change in reserve for distributions to Series A
              
preferred limited partnership interests
    
(35.30
)
  
(3.07
)
Net change in reserve for dividends to Series Z
             
shareholders
    
(1.01
)
  
(0.71
)
               
Total from investment operations
    
(1,291.22
)
  
49.11
 
               
Net increase from capital stock transactions
    
308.50
   
-
 
               
Distributions to common shareholders from net investment income
    
(1,287.34
)
  
-
 
               
Net asset value, end of period
  
$
17,518.87
  
$
20,038.77
  
               
Return on invested assets (2), (3)
    
2.7
%
  
3.2
%
               
Total return to common shareholders (2), (4)
    
(7.6
%)
  
0.2
%

22

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007
 
10. Financial Highlights (continued)

   
 
      
   
Six Months
  
October 10, 2006
  
   
Ended
  
(Inception)
  
   
June 30, 2007
(unaudited)
  
December 31, 2006
 
           
Ratios and Supplemental Data:
          
Ending net assets attributable to common shareholders
  
$
266,299,263
  
$
145,281,047
  
Net investment (loss) / average common shareholder equity (5), (6), (7)
    
(8.3%)
 
  
(3.3%)
 
               
Expenses and General Partner allocation/average common shareholder equity
              
Operating expenses (5), (6), (7)
    
17.7%
 
  
14.3%
 
General Partner interest allocation
    
0.0%
 
  
0.0%
 
Total expenses and General Partner interest allocation
    
17.7%
 
  
14.3%
 
               
Portfolio turnover rate (2)
    
31.0%
 
  
6.1%
 
Weighted-average debt outstanding
  
$
40,290,055
  
$
4,253,012
  
Weighted-average interest rate
    
5.8%
 
  
5.7%
 
Weighted-average number of shares
    
9,106.9162
   
7,250.0000
 
Average debt per share
  
$
4,424
  
$
587
  
                 
    
  
    
   
  
               
Annualized Inception to Date Performance Data as of June 30, 2007:
              
Return on common equity (4), (5)
    
(10.0%)
 
      
Return on invested assets (5)
    
8.3%
 
      
Internal rate of return (8)
    
(13.3%)
 
      
                     
    
  
   
    
 
 
(1) Per share changes in net asset value are computed based on the actual number of shares outstanding during the time in which such activity occurred.

(2) Not annualized for periods of less than one year.

(3) Return on invested assets is a time-weighted, geometrically linked rate of return and excludes cash and cash equivalents.

(4) Returns (net of dividends to preferred limited partners of the Partnership, allocations to the General Partner, and fund expenses, including financing costs and management fees) calculated on a monthly geometrically linked, time-weighted basis.

(5) Annualized for periods of less than one year.

(6) These ratios included interest expense but do not reflect the effect of dividend payments to preferred limited partners of the Partnership. The ratio of expenses to average common shareholder equity is higher in earlier periods, and net investment income to average common shareholder equity is reduced, due to the Company's relatively smaller capital base while the Company is ramping up.
 
(7) The per share amounts and percentages reflect income and expenses assuming inclusion of TOFV's proportionate share of the income and expenses of TOPV.

(8) Returns are net of dividends to preferred limited partners of the Partnership, allocations to the General Partner and fund expenses, including financing costs and management fees. Internal rate of return (“IRR”) is the imputed annual return over an investment period and, mathematically, is the rate of return at which the discounted cash flows equal the initial cash outlays. The internal rate of return presented assumes liquidation of the fund at net asset value as of the balance sheet date, and is reduced in earlier periods due to the equity placement and offering costs that were charged to paid-in capital and the organizational costs that were expensed at the inception of the fund.

23

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Partnership)
 
Portfolio Asset Allocation (% of Cash and Investments)
(Unaudited)
 
June 30, 2007
 
 

24

(A Delaware Limited Liability Company)
 
Consolidating Statement of Assets and Liabilities (Unaudited)
 
June 30, 2007
 
   
Tennenbaum
 
Tennenbaum
     
 Tennenbaum
 
   
Opportunities
 
Opportunities
     
 Opportunities
 
   
Fund V, LLC
  
Partners V, LP
      
 Fund V, LLC
  
   
Standalone
  
Standalone
  
Eliminations
  
 Consolidated
  
Assets
                   
Investments in securities
                   
Debt securities
  
$
—
  
$
172,713,223
  
$
—
  
$
172,713,223
  
Equity securities
    
—
   
121,922,307
   
—
   
121,922,307
 
Total investments in securities
    
—
   
294,635,530
   
—
   
294,635,530
 
                           
Investments in subsidiary
    
266,887,379
   
—
   
(266,887,379
)
  
—
 
                           
Cash and cash equivalents
   
813
   
53,666,523
   
—
   
53,667,336
 
Subscriptions receivable
    
98,500,000
   
98,500,000
   
(98,500,000
)
  
98,500,000
 
Deferred debt issuance costs
    
—
   
7,264,609
   
—
   
7,264,609
 
Distributions receivable
    
5,691,111
         
(5,691,111
)
  
—
 
Accrued interest income on securities
    
—
   
3,401,405
   
—
   
3,401,405
 
Deferred equity placement costs
    
1,885,275
   
—
   
—
   
1,885,275
 
Receivable from subsidiary
    
1,537,975
   
—
   
(1,537,975
)
  
—
 
Receivable from parent
    
—
   
353,116
   
(353,116
)
  
—
 
Prepaid expenses and other assets
    
136,783
   
273,566
   
—
   
410,349
 
Total assets
    
374,639,336
   
458,094,749
   
(372,969,581
)
  
459,764,504
 
                           
Liabilities
                         
Credit facility payable
    
—
   
102,500,000
   
—
   
102,500,000
 
Payable for investment securities purchased
    
98,500,000
   
16,356,666
   
(98,500,000
)
  
16,356,666
 
Distributions payable to common shareholders
    
5,691,111
   
5,691,111
   
(5,691,111
)
  
5,691,111
 
Equity placement costs payable
    
3,423,250
   
—
   
—
   
3,423,250
 
Management and advisory fees payable
    
—
   
2,462,500
   
—
   
2,462,500
 
Interest payable
    
—
   
730,406
   
—
   
730,406
 
Payable to subsidiary
    
353,116
   
—
   
(353,116
)
  
—
 
Payable to parent
    
—
   
1,537,975
   
(1,537,975
)
  
—
 
Director fees payable
    
13,417
   
26,833
   
—
   
40,250
 
Accrued expenses and other liabilities
    
62,752
   
562,086
   
—
   
624,838
 
Total liabilities
    
108,043,646
   
129,867,577
   
(106,082,202
)
  
131,829,021
 
                           
Preferred interests/stock
                          
Series A preferred limited partnership interests;
                         
$20,000/interest liquidation preference; 25,000 interests
                         
authorized, 3,050 interests issued and outstanding
    
—
   
61,000,000
   
—
   
61,000,000
 
Accumulated dividends on Series A preferred limited
   
—
   
339,793
   
—
   
339,793
 
partnership interests
                          
Series Z preferred stock; $500/share liquidation preference;
                         
560 shares authorized, issued and outstanding
   
280,000
   
—
   
—
   
280,000
 
Accumulated dividends on Series Z preferred stock
    
16,427
   
—
   
—
   
16,427
 
Total preferred interest/stock
    
296,427
   
61,339,793
   
—
   
61,636,220
 
                           
Minority interest
                          
General partnership interest in Tennenbaum Opportunities
                         
Partners V, LP
    
—
   
—
   
—
   
—
 
 
                          
Net assets applicable to common shareholder
  
$
266,299,263
  
$
266,887,379
  
$
(266,887,379
)
$
266,299,263
  
                           
Composition of net assets applicable to common
                         
shareholder
                          
5,391.2826 subscribed and pending issuance
  
$
15
  
$
—
  
$
—
  
$
15
  
Paid-in capital in excess of par
    
292,376,874
   
—
   
—
   
292,376,874
 
Paid-in capital
   
—
   
293,294,966
   
(293,294,966
)
  
—
 
Accumulated losses
    
(25,721,406
)
  
(26,067,794
)
  
26,067,794
   
(25,721,406
)
Accumulated dividends to Series A preferred limited
                         
partnership interests
    
(339,793
)
  
(339,793
)
  
339,793
   
(339,793
)
Accumulated dividends to Series Z preferred shareholders
    
(16,427
)
  
—
   
—
   
(16,427
)
Net assets applicable to common shareholders
  
$
266,299,263
  
$
266,887,379
  
$
(266,887,379
)
$
266,299,263
  

25

Tennenbaum Opportunities Fund V, LLC
(A Delaware Limited Liability Company)
 
Consolidating Statement of Operations (Unaudited)
 
Six Months Ended June 30, 2007
 
   
Tennenbaum
 
Tennenbaum
     
Tennenbaum
 
   
Opportunities
 
Opportunities
     
Opportunities
 
   
Fund V, LLC
 
Partners V, LP
     
Fund V, LLC
 
   
Standalone
 
Standalone
 
Eliminations
 
Consolidated
 
Investment income
                  
Interest income
  
$
813
  
$
8,750,567
  
$
—
  
$
8,751,380
  
Other income
    
—
   
635
   
—
   
635
 
Dividends from subsidiary
    
12,309,950
   
—
   
(12,309,950
)
  
—
 
Total interest and related investment income
    
12,310,763
   
8,751,202
   
(12,309,950
)
  
8,752,015
 
                           
Operating expenses
                          
Management and advisory fees
    
—
   
13,368,988
   
—
   
13,368,988
 
Interest expense
    
—
   
1,150,650
   
—
   
1,150,650
 
Commitment fees
    
—
   
778,853
   
—
   
778,853
 
Amortization of deferred debt issuance costs
    
—
   
430,891
   
—
   
430,891
 
Legal fees, professional fees and due diligence
                         
expenses
    
66,924
   
279,302
   
—
   
346,226
 
Insurance expense
    
63,586
   
127,172
   
—
   
190,758
 
Director fees
    
30,660
   
61,320
   
—
   
91,980
 
Organizational costs
    
5,000
   
22,218
   
—
   
27,218
 
Other operating expenses
    
3,026
   
63,681
   
—
   
66,707
 
Total expenses
    
169,196
   
16,283,075
   
—
   
16,452,271
 
                           
Net investment loss
    
12,141,567
   
(7,531,873
)
  
(12,309,950
)
  
(7,700,256
)
                           
Net realized and unrealized loss
                          
Net realized gain
    
—
   
105,236
   
—
   
105,236
 
Net change in unrealized appreciation/
                          
depreciation
    
(27,089,164
)
  
(6,953,699
)
  
27,089,164
   
(6,953,699
)
Net realized and unrealized loss
    
(27,089,164
)
  
(6,848,463
)
  
27,089,164
   
(6,848,463
)
                           
Distributions to Series A preferred limited
                         
partners
    
—
   
(81,327
)
  
—
   
(81,327
)
Net change in reserve for distributions to
                         
Series A preferred limited partnership interests
    
—
   
(317,551
)
  
—
   
(317,551
)
Net change in reserve for distributions to
                         
Series Z preferred shareholders
    
(11,262
)
  
—
   
—
   
(11,262
)
                           
Net decrease in net assets applicable to
                         
common shareholders resulting from
                         
operations
  
$
(14,958,859
)
$
(14,779,214
)
$
14,779,214
  
$
(14,958,859
)

26
 
ITEM 2. CODE OF ETHICS.
 
Not applicable for filing of Semiannual Reports to Shareholders.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
 
Not applicable for filing of Semiannual Reports to Shareholders.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 
Not applicable for filing of Semiannual Reports to Shareholders.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
 
Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS
 
Included in Semiannual Shareholder Report in Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
 
Not applicable for filing of Semiannual Reports to Shareholders.
 
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.
 
Not applicable for filing of Semiannual Reports to Shareholders.
 
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
 
None.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
None.

ITEM 11. CONTROLS AND PROCEDURES.
 
(a) The Registrant’s Chief Executive Officer and Chief Financial Officer have evaluated the Registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported in a timely manner.
 
(b) None.
 
ITEM 12. EXHIBITS.
 
(a) (1)  Not applicable for filing of Semiannual Reports to Shareholders.
 
(a) (2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.
 
(a) (3) Not applicable.
 
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Tennenbaum Opportunities Fund V, LLC
 
By: /s/ Hugh Steven Wilson      
Name: Hugh Steven Wilson
Title: Chief Executive Officer
Date: September 10, 2007
    
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
By: /s/ Hugh Steven Wilson      
Name: Hugh Steven Wilson
Title: Chief Executive Officer
Date: September 10, 2007
    
 
By: /s/ Peyman S. Ardestani      
Name: Peyman S. Ardestani
Title: Chief Financial Officer
Date: September 10, 2007