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Forward Currency Contracts
 6 Months Ended
Mar. 31, 2023
Foreign Currency [Abstract]  
Forward Currency Contracts Note 5. Forward Currency Contracts
The Company enters into forward currency contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.

The outstanding forward currency contracts as of March 31, 2023 and September 30, 2022 were as follows:
As of March 31, 2023
CounterpartyCurrency to be soldCurrency to be purchasedSettlement dateUnrealized appreciation ($)Unrealized depreciation ($)
Macquarie Bank Limited£2,228 GBP$2,903 USD4/28/2023$153 $— 
Macquarie Bank Limited€13,960 EUR$16,735 USD4/28/20231,553 — 
Macquarie Bank Limited€6,760 EUR$8,044 USD4/28/2023692 — 
Macquarie Bank Limited£10,058 GBP$12,706 USD7/17/2023270 — 
Macquarie Bank Limited$15,600 CAD$12,236 USD8/27/2024601 — 
Macquarie Bank Limited$30,000 CAD$23,399 USD8/27/20241,031 — 
Macquarie Bank Limited£25,000 GBP$34,298 USD8/27/20243,192 — 
Macquarie Bank Limited$22,600 CAD$17,739 USD8/30/2024881 — 
Macquarie Bank Limited£20,550 GBP$28,297 USD9/3/20242,722 — 
Macquarie Bank Limited€26,000 EUR$31,803 USD2/27/20252,698 — 
Macquarie Bank Limited£13,945 GBP$19,149 USD3/31/20251,797 — 
Macquarie Bank Limited$7,000 CAD$5,386 USD7/18/2025155 — 
Macquarie Bank Limited€10,100 EUR$10,918 USD7/21/2025— (307)
$15,745 $(307)
As of September 30, 2022
CounterpartyCurrency to be soldCurrency to be purchasedSettlement dateUnrealized appreciation ($)Unrealized depreciation ($)
Macquarie Bank Limited£8,925 GBP$11,219 USD2/28/2023$1,226 $— 
Macquarie Bank Limited£3,780 GBP$4,804 USD3/27/2023572 — 
Macquarie Bank Limited£2,228 GBP$2,903 USD4/28/2023408 — 
Macquarie Bank Limited€13,960 EUR$16,735 USD4/28/20232,778 — 
Macquarie Bank Limited€6,760 EUR$8,044 USD4/28/20231,287 — 
Macquarie Bank Limited£10,058 GBP$12,706 USD7/17/20231,459 — 
Macquarie Bank Limited$18,425 CAD$13,783 USD10/30/2023372 — 
Macquarie Bank Limited$25,000 CAD$19,609 USD8/27/20241,267 — 
Macquarie Bank Limited$30,000 CAD$23,399 USD8/27/20241,399 — 
Macquarie Bank Limited£25,000 GBP$34,298 USD8/27/20246,285 — 
Macquarie Bank Limited$22,600 CAD$17,739 USD8/30/20241,156 — 
Macquarie Bank Limited£20,550 GBP$28,297 USD9/3/20245,265 — 
Macquarie Bank Limited€26,000 EUR$31,803 USD2/27/20254,637 — 
Macquarie Bank Limited£13,945 GBP$19,149 USD3/31/20253,538 — 
Macquarie Bank Limited$7,000 CAD$5,386 USD7/18/2025236 — 
Macquarie Bank Limited€10,100 EUR$10,918 USD7/21/2025448 — 
$32,333 $— 

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company has entered into an International Swaps and Derivatives Association, Inc. Master
Agreement (“ISDA Master Agreement”) with its derivative counterparty, Macquarie Bank Limited (“Macquarie”). The ISDA Master Agreement is a bilateral agreement between the Company and Macquarie that governs over the counter (“OTC”) derivatives, including forward currency contracts, and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from Macquarie, if any, is included in the Consolidated Statements of Financial Condition as cash collateral held at broker for forward currency contracts or cash collateral received from broker for forward currency contracts. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be of good standing and by monitoring the financial stability of those counterparties.

The following table is intended to provide additional information about the effect of the forward currency contracts on the financial statements of the Company including: the fair value of derivatives by risk category, the location of those fair values on the Consolidated Statements of Financial Condition, and the Company’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Company as of March 31, 2023 and September 30, 2022.

As of March 31, 2023
CounterpartyRisk exposure categoryUnrealized appreciation on forward currency contracts Unrealized depreciation on forward currency contracts Net amounts presented in the Consolidated Statement of Financial Condition
Collateral (Received) Pledged (1)
Net Amount (2)
Macquarie Bank LimitedForeign exchange$15,745 $(307)$15,438 $— $15,438 

As of September 30, 2022
CounterpartyRisk exposure categoryUnrealized appreciation on forward currency contracts Unrealized depreciation on forward currency contracts Net amounts presented in the Consolidated Statement of Financial Condition
Collateral (Received) Pledged (1)
Net Amount (2)
Macquarie Bank LimitedForeign exchange$32,333 $— $32,333 $— $32,333 

(1) The actual collateral pledged may be more than the amount shown due to over collateralization.
(2)Represents the net amount due from/(to) counterparties in the event of default.
The impact of derivative transactions for the three and six months ended March 31, 2023 and 2022 on the Consolidated Statements of Operations, including realized and unrealized gains (losses) is summarized in the table below:

Realized gain (loss) on forward currency contracts recognized in income
Risk exposure categoryThree months ended March 31,Six months ended March 31,
2023202220232022
Foreign exchange $708 $— $1,171 $— 
Change in unrealized appreciation (depreciation) on forward currency contracts recognized in income
Risk exposure categoryThree months ended March 31,Six months ended March 31,
2023202220232022
Foreign exchange $(2,447)$1,856 $(16,895)$2,137 
The following table is a summary of the average outstanding daily volume for forward currency contracts for the three and six months ended March 31, 2023 and 2022:

Average U.S. Dollar notional outstandingThree months ended March 31,Six months ended March 31,
2023202220232022
Forward currency contracts$235,559 $260,211 $248,082 $260,211 

Exclusion of the Investment Adviser from Commodity Pool Operator Definition

Engaging in commodity interest transactions such as swap transactions or futures contracts for the Company may cause the Investment Adviser to fall within the definition of “commodity pool operator” under the Commodity Exchange Act (the “CEA”) and related Commodity Futures Trading Commission (the “CFTC”) regulations. The Investment Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the CEA and the CFTC regulations in connection with its management of the Company and, therefore, is not subject to CFTC registration or regulation under the CEA as a commodity pool operator with respect to its management of the Company.