UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended September 30, 2018

 

OR

 

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

 

Commission file number: 814-00866

 

MONROE CAPITAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

Maryland 27-4895840
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
   
311 South Wacker Drive, Suite 6400
Chicago, Illinois
60606
(Address of Principal Executive Office) (Zip Code)

 

(312) 258-8300

(Registrant’s Telephone Number, Including Area Code)

 

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  x     No  ¨

 

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  x     No  ¨

 

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 the 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     ¨ Accelerated filer      x
       
Non-accelerated filer      ¨      Smaller reporting company     ¨
       
Emerging growth company ¨    

 

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. ¨

 

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

 

As of November 5, 2018, the registrant had 20,444,564 shares of common stock, $0.001 par value, outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION 3
     
Item 1. Consolidated Financial Statements 3
     
  Consolidated Statements of Assets and Liabilities as of September 30, 2018 (unaudited) and December 31, 2017 3
     
  Consolidated Statements of Operations for the three and nine months ended September 30, 2018 (unaudited) and 2017 (unaudited) 4
     
  Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2018 (unaudited) and 2017 (unaudited) 5
     
  Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 (unaudited) and 2017 (unaudited) 6
     
  Consolidated Schedules of Investments as of September 30, 2018 (unaudited) and December 31, 2017 7
     
  Notes to Consolidated Financial Statements (unaudited) 25
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 52
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 74
     
Item 4. Controls and Procedures 75
     
PART II. OTHER INFORMATION 75
     
Item 1. Legal Proceedings 75
     
Item 1A. Risk Factors 75
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 81
     
Item 3. Defaults Upon Senior Securities 81
     
Item 4. Mine Safety Disclosures 81
     
Item 5. Other Information 81
     
Item 6. Exhibits 82
     
Signatures   83

 

 2 

 

Part I. Financial Information

Item 1. Consolidated Financial Statements

 

MONROE CAPITAL CORPORATION

 

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except per share data)

 

   September 30, 2018   December 31, 2017 
   (unaudited)     
ASSETS          
Investments, at fair value:          
Non-controlled/non-affiliate company investments  $399,792   $425,747 
Non-controlled affiliate company investments   56,183    58,751 
Controlled affiliate company investments   26,318    9,640 
Total investments, at fair value (amortized cost of: $510,102 and $507,580, respectively)   482,293    494,138 
Cash   3,969    4,332 
Restricted cash   5,938    2,867 
Interest receivable   6,382    5,335 
Other assets   492    760 
Total assets   499,074    507,432 
           
LIABILITIES          
Debt:          
Revolving credit facility   51,536    117,092 
2023 Notes   69,000    - 
SBA debentures payable   115,000    109,520 
Total debt   235,536    226,612 
Less: Unamortized deferred financing costs   (6,721)   (4,670)
Total debt, less unamortized deferred financing costs   228,815    221,942 
Interest payable   766    1,535 
Unrealized loss on foreign currency forward contracts   58    - 
Management fees payable   2,196    2,064 
Incentive fees payable   -    1,157 
Accounts payable and accrued expenses   2,450    2,035 
Directors’ fees payable   37    - 
Total liabilities   234,322    228,733 
Net assets  $264,752   $278,699 
           
Commitments and contingencies (See Note 11)          
           
ANALYSIS OF NET ASSETS          
Common stock, $0.001 par value, 100,000 shares authorized, 20,445 and 20,240 shares issued and outstanding, respectively  $20   $20 
Capital in excess of par value   288,844    286,141 
Undistributed net investment income (accumulated distributions in excess of net investment income)   9,477    6,707 
Accumulated net realized gain (loss)   (5,980)   (372)
Accumulated net unrealized gain (loss)   (27,609)   (13,797)
Total net assets  $264,752   $278,699 
           
Net asset value per share  $12.95   $13.77 

 

See Notes to Consolidated Financial Statements.

 3 

 

MONROE CAPITAL CORPORATION

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

(in thousands, except per share data)

 

   Three months ended September 30,   Nine months ended September 30, 
   2018   2017   2018   2017 
Investment income:                    
Interest income:                    
Non-controlled/non-affiliate company investments  $10,938   $10,887   $34,689   $30,995 
Non-controlled affiliate company investments   1,815    1,470    5,394    3,777 
Controlled affiliate company investments   -    200    -    594 
Total interest income   12,753    12,557    40,083    35,366 
Dividend income:                    
Non-controlled/non-affiliate company investments   288    251    813    751 
Controlled affiliate company investments   550    -    1,075    - 
Total dividend income   838    251    1,888    751 
Fee income:                    
Non-controlled/non-affiliate company investments   188    661    1,495    1,626 
Non-controlled affiliate company investments   -    -    83    - 
Total fee income   188    661    1,578    1,626 
Total investment income   13,779    13,469    43,549    37,743 
                     
Operating expenses:                    
Interest and other debt financing expenses   2,895    1,907    8,437    6,101 
Base management fees   2,196    1,953    6,561    5,661 
Incentive fees   -    1,721    1,751    4,471 
Professional fees   260    277    869    854 
Administrative service fees   327    295    973    926 
General and administrative expenses   338    292    739    760 
Excise taxes   -    100    11    100 
Directors’ fees   37    37    111    111 
Expenses before incentive fee waiver   6,053    6,582    19,452    18,984 
Incentive fee waiver   -    -    -    (250)
Total expenses, net of incentive fee waiver   6,053    6,582    19,452    18,734 
Net investment income   7,726    6,887    24,097    19,009 
                     
Net gain (loss):                    
Net realized gain (loss):                    
Non-controlled/non-affiliate company investments   (1,414)   (2,900)   (1,414)   (572)
Non-controlled affiliate company investments   (4,186)   -    (4,186)   - 
Secured borrowings   -    -    -    66 
Foreign currency and other transactions   (11)   -    (8)   - 
Net realized gain (loss)   (5,611)   (2,900)   (5,608)   (506)
                     
Net change in unrealized gain (loss):                    
Non-controlled/non-affiliate company investments   (5,981)   3,099    (6,661)   3,788 
Non-controlled affiliate company investments   2,396    454    (8,684)   (8,902)
Controlled affiliate company investments   275    (1,155)   978    (3,389)
Secured borrowings   -    -    -    (6)
Foreign currency and other transactions   202    (67)   555    (83)
Net change in unrealized gain (loss)   (3,108)   2,331    (13,812)   (8,592)
                     
Net gain (loss)   (8,719)   (569)   (19,420)   (9,098)
                     
Net increase (decrease) in net assets resulting from operations  $(993)  $6,318   $4,677   $9,911 
                     
Per common share data:                    
Net investment income per share - basic and diluted  $0.38   $0.34   $1.19   $1.05 
Net increase (decrease) in net assets resulting from operations per share - basic and diluted  $(0.05)  $0.31   $0.23   $0.55 
Weighted average common shares outstanding - basic and diluted   20,417    20,240    20,301    18,081 

 

See Notes to Consolidated Financial Statements.

 4 

 

MONROE CAPITAL CORPORATION

 

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(unaudited)

 

(in thousands)

 

   Common Stock   Capital in  

Undistributed

net

  

Accumulated

net

  

Accumulated

net

     
   Number of shares   Par
value
  

excess of

par value

  

investment

income

  

realized

gain (loss)

  

unrealized

gain (loss)

  

Total

net assets

 
Balances at June 30, 2017   20,240   $20   $286,269   $6,869   $2,390   $(11,240)  $284,308 
Net increase (decrease) in net assets resulting from operations   -    -    -    6,887    (2,900)   2,331    6,318 
Issuance of common stock, net of offering and underwriting costs   -    -    -    -    -    -    - 
Distributions to stockholders   -    -    -    (7,084)   -    -    (7,084)
Balances at September 30, 2017   20,240   $20   $286,269   $6,672   $(510)  $(8,909)  $283,542 
                                    
                                    
Balances at June 30, 2018   20,279   $20   $286,651   $8,907   $(369)  $(24,501)  $270,708 
Net increase (decrease) in net assets resulting from operations   -    -    -    7,726    (5,611)   (3,108)   (993)
Issuance of common stock, net of offering and underwriting costs   166    -    2,193    -    -    -    2,193 
Distributions to stockholders   -    -    -    (7,156)   -    -    (7,156)
Balances at September 30, 2018   20,445   $20   $288,844   $9,477   $(5,980)  $(27,609)  $264,752  

 

 

   Common Stock   Capital in   Undistributed
net
   Accumulated
net
   Accumulated
net
     
   Number of
shares
   Par
value
   excess of
par value
   investment
income
   realized
gain (loss)
   unrealized
gain (loss)
   Total
 net assets
 
Balances at December 31, 2016   16,582   $17   $233,526   $7,037   $587   $(317)  $240,850 
Net increase (decrease) in net assets resulting from operations   -    -    -    19,009    (506)   (8,592)   9,911 
Issuance of common stock, net of offering and underwriting costs   3,624    3    52,218    -    -    -    52,221 
Distributions to stockholders   34    -    525    (19,374)   (591)   -    (19,440)
Balances at September 30, 2017   20,240   $20   $286,269   $6,672   $(510)  $(8,909)  $283,542 
                                    
Balances at December 31, 2017   20,240   $20   $286,141   $6,707   $(372)  $(13,797)  $278,699 
Net increase (decrease) in net assets resulting from operations   -    -    -    24,097    (5,608)   (13,812)   4,677 
Issuance of common stock, net of offering and underwriting costs   183    -    2,402    -    -    -    2,402 
Distributions to stockholders   22    -    301    (21,327)   -    -    (21,026)
Balances at September 30, 2018   20,445   $20   $288,844   $9,477   $(5,980)  $(27,609)  $264,752 

 

 

See Notes to Consolidated Financial Statements.

 5 

 

MONROE CAPITAL CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

(in thousands)

 

   Nine months ended September 30, 
   2018   2017 
         
Cash flows from operating activities:          
Net increase (decrease) in net assets resulting from operations  $4,677   $9,911 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:          
Net change in unrealized (gain) loss on investments   14,367    8,503 
Net change in unrealized (gain) loss on secured borrowings   -    6 
Net change in unrealized (gain) loss on foreign currency and other transactions   (555)   83 
Net realized (gain) loss on investments   5,600    572 
Net realized (gain) loss on secured borrowings   -    (66)
Net realized (gain) loss on foreign currency and other transactions   8    - 
Payment-in-kind interest income   (1,389)   (1,363)
Payment-in-kind dividend income   (792)   - 
Net accretion of discounts and amortization of premiums   (1,837)   (1,278)
Proceeds from principal payments and sales of investments   120,840    144,445 
Purchases of investments   (124,944)   (169,056)
Amortization of deferred financing costs   951    760 
Changes in operating assets and liabilities:          
Interest receivable   (1,047)   (1,577)
Other assets   268    116 
Payable for open trades   -    7,425 
Interest payable   (769)   (194)
Management fees payable   132    204 
Incentive fees payable   (1,157)   499 
Directors’ fees payable   37    37 
Accounts payable and accrued expenses   415    (265)
Net cash provided by (used in) operating activities   14,805    (1,238)
           
Cash flows from financing activities:          
Borrowings on revolving credit facility   86,107    93,529 
Repayments of revolving credit facility   (151,050)   (162,000)
Proceeds from 2023 Notes   69,000    - 
SBA debentures borrowings   5,480    40,600 
Payments of deferred financing costs   (3,002)   (1,339)
Repayments on secured borrowings   -    (1,254)
Proceeds from shares sold, net of offering and underwriting costs   2,402    52,221 
Stockholder distributions paid, net of stock issued under the dividend reinvestment plan of $301, and $525, respectively   (21,026)   (19,440)
Net cash provided by (used in) financing activities   (12,089)   2,317 
           
Net increase (decrease) in Cash and Restricted Cash   2,716    1,079 
Effect of foreign currency exchange rates   (8)   - 
Cash and Restricted Cash, beginning of period (1)   7,199    8,331 
Cash and Restricted Cash, end of period (2)  $9,907   $9,410 
           
Supplemental disclosure of cash flow information:          
Cash interest paid during the period  $8,197   $5,405 
Cash paid for excise taxes during the period  $91   $495 

 

 
(1)Represents cash and restricted cash of $4,332 and $2,867, respectively, from the consolidated statement of assets and liabilities as of December 31, 2017. Represents cash and restricted cash of $5,958 and $2,373, respectively, from the consolidated statement of assets and liabilities as of December 31, 2016.

 

(2)Represents cash and restricted cash of $3,969 and $5,938, respectively, from the consolidated statement of assets and liabilities as of September 30, 2018. Represents cash and restricted cash of $3,721 and $5,689, respectively, from the consolidated statement of assets and liabilities as of September 30, 2017.

 

See Notes to Consolidated Financial Statements.

 6 

 

  

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Non-Controlled/Non-Affiliate Company Investments                               
Senior Secured Loans                               
Banking, Finance, Insurance & Real Estate                               
Echelon Funding I, LLC (Delayed Draw) (e) (f) (g)  L+7.50%    9.60%    2/24/2021  15,750   $15,221   $15,412    5.8%
HFZ Capital Group, LLC (e)   L+10.17%  12.34% Cash/ 0.17% PIK(h)    10/21/2019   18,000    17,766    18,000    6.8%
Liftforward SPV II, LLC (e) (f)  L+10.75%  12.99%    11/10/2020   10,000    4,210    4,264    1.6%
PKS Holdings, LLC (e)  L+9.50%  11.60%    11/30/2022   1,766    1,614    1,695    0.7%
PKS Holdings, LLC (Revolver) (e) (f)  L+9.50%  11.60%    11/30/2022   80            0.0%
               45,596    38,811    39,371    14.9%
Beverage, Food & Tobacco                               
All Holding Company, LLC (i)  L+7.00%  9.24%    11/15/2021   5,225    5,157    5,081    1.9%
California Pizza Kitchen, Inc.  L+6.00%  8.39%    8/23/2022   6,860    6,806    6,689    2.5%
               12,085    11,963    11,770    4.4%
Capital Equipment                               
Hastings Manufacturing Company  L+8.25%  10.49%    4/24/2023   2,963    2,906    2,970    1.1%
Hastings Manufacturing Company (Delayed Draw) (f) (g)  L+8.25%  10.49%    4/24/2023   899            0.0%
               3,862    2,906    2,970    1.1%
Chemicals, Plastics & Rubber                               
Midwest Composite Technologies, LLC  L+6.75%  8.99%    8/31/2023   900    882    900    0.3%
Midwest Composite Technologies, LLC (Delayed Draw) (f) (g)  L+6.75%  8.99%    8/31/2023   600            0.0%
Midwest Composite Technologies, LLC (Revolver) (f)  L+6.75%  8.99%    8/31/2023   90            0.0%
Valudor Products LLC  L+7.50%  9.74%    6/19/2023   1,614    1,583    1,610    0.6%
Valudor Products LLC (j)  L+7.50%  9.74%    6/19/2023   211    205    222    0.1%
Valudor Products LLC (Revolver) (f)  L+9.50%  11.74%    6/19/2023   818    699    700    0.3%
               4,233    3,369    3,432    1.3%
Construction & Building                               
Cali Bamboo, LLC  L+6.25%  8.49%    7/10/2020   5,278    5,238    5,278    2.0%
Cali Bamboo, LLC (Revolver) (f)  L+6.25%  8.49%    7/10/2020   2,165    1,515    1,515    0.6%
Cornerstone Detention Products, Inc. (k)   L+11.83%  10.74% Cash/ 3.33% PIK(l)    4/8/2019   3,392    3,384    3,392    1.3%
Cornerstone Detention Products, Inc. (Revolver) (f)  L+8.50%  10.74%    4/8/2019   1,000    200    200    0.1%
TRP Construction Group, LLC (i)  L+6.50%  8.74%    10/5/2022   7,960    7,827    7,964    3.0%
TRP Construction Group, LLC (Delayed Draw) (f) (g)  L+6.50%  8.74%    10/5/2022   7,000    5,684    5,687    2.1%
TRP Construction Group, LLC (Revolver) (f)  L+6.50%  8.74%    10/5/2022   2,133            0.0%
               28,928    23,848    24,036    9.1%
Consumer Goods: Durable                               
Parterre Flooring & Surface Systems, LLC (i)  L+7.25%  9.49%    8/22/2022   11,400    11,214    11,240    4.2%
Parterre Flooring & Surface Systems, LLC (Revolver) (f)  L+7.25%  9.49%    8/22/2022   2,400            0.0%
               13,800    11,214    11,240    4.2%
Consumer Goods: Non-Durable                               
Solaray, LLC  L+6.50%  8.83%    9/11/2023   3,239    3,215    3,239    1.2%
Solaray, LLC  L+6.50%  8.89%    9/11/2023   696    696    696    0.3%
               3,935    3,911    3,935    1.5%

 

 7 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Energy: Oil & Gas                                 
Landpoint, LLC  L+12.75% 

12.74% Cash/

2.25% PIK

(m)    12/20/2019   2,256   $2,252   $2,224    0.8%
Landpoint, LLC (Revolver) (f)  L+10.50%  12.74%    12/20/2019   312    283    280    0.1%
               2,568    2,535    2,504    0.9%
Environmental Industries                               
Synergy Environmental Corporation (i)  L+6.50%  8.74%    4/29/2021   2,952    2,909    2,952    1.1%
Synergy Environmental Corporation (i)  L+6.50%  8.74%    4/29/2021   494    486    494    0.2%
Synergy Environmental Corporation (Delayed Draw) (f) (g)  L+6.50%  8.74%    4/29/2021   1,326    843    843    0.3%
Synergy Environmental Corporation (Revolver) (f)  L+6.50%  8.74%    4/29/2021   671    47    47    0.0%
               5,443    4,285    4,336    1.6%
Healthcare & Pharmaceuticals                               
American Optics Holdco, Inc. (e) (n)  L+8.00%  10.24%    9/13/2022   4,102    4,034    4,168    1.6%
American Optics Holdco, Inc. (Revolver) (e) (f) (n)  L+8.00%  10.24%    9/13/2022   440    110    110    0.0%
American Optics Holdco, Inc. (e) (n)  L+8.00%  10.24%    9/13/2022   755    742    767    0.3%
American Optics Holdco, Inc. (Revolver) (e) (f) (n)  L+8.00%  10.24%    9/13/2022   440            0.0%
Familia Dental Group Holdings, LLC (i)  L+8.00%  10.24%    4/8/2021   5,087    5,040    5,138    1.9%
Familia Dental Group Holdings, LLC  L+8.00%  10.24%    4/8/2021   490    490    495    0.2%
Familia Dental Group Holdings, LLC (Revolver) (f)  L+8.00%  10.24%    4/8/2021   573    344    344    0.1%
Rockdale Blackhawk, LLC (DIP Facility)  n/a  15.10%    12/31/2018   155    155    155    0.1%
Rockdale Blackhawk, LLC (DIP Facility) (f)  n/a  15.10%    12/31/2018   7,234    5,750    5,750    2.2%
Rockdale Blackhawk, LLC  L+13.00%  15.24%(o)    3/31/2020   10,923    10,465    9,297    3.5%
Rockdale Blackhawk, LLC (Capex)  L+13.00%  15.24%(o)    3/31/2020   549    549    467    0.2%
Rockdale Blackhawk, LLC (Revolver)  L+13.00%  15.24%(o)    3/31/2020   1,849    1,849    1,574    0.6%
Rockdale Blackhawk, LLC (Revolver)  L+13.00%  15.24%(o)    3/31/2020   730    730    621    0.2%
               33,327    30,258    28,886    10.9%
High Tech Industries                               
Corbett Technology Solutions, Inc. (i)  L+7.00%  9.24%    11/8/2021   4,984    4,930    5,084    1.9%
Corbett Technology Solutions, Inc. (Revolver) (f)  L+7.00%  9.24%    11/8/2021   867            0.0%
Energy Services Group, LLC  L+8.42%  10.72%    5/4/2022   4,448    4,400    4,493    1.7%
Energy Services Group, LLC (e) (p)  L+8.42%  9.42%    5/4/2022   5,288    5,313    5,335    2.0%
Energy Services Group, LLC  L+8.42%  10.72%    5/4/2022   1,266    1,250    1,279    0.5%
Newforma, Inc. (i)  L+5.50%  7.89%    6/30/2022   14,850    14,673    14,976    5.6%
Newforma, Inc. (Revolver) (f)  L+5.50%  7.89%    6/30/2022   1,250            0.0%
Prototek Sheetmetal Fabrication, LLC  L+7.25%  9.49%    12/12/2022   3,474    3,413    3,508    1.3%
Prototek Sheetmetal Fabrication, LLC (Delayed Draw) (f) (g)  L+7.25%  9.49%    12/12/2022   2,331    815    823    0.3%
Prototek Sheetmetal Fabrication, LLC (Revolver) (f)  L+7.25%  9.49%    12/12/2022   233            0.0%
RedZone Robotics, Inc.  L+6.75%  8.99%    6/5/2023   949    930    944    0.4%
RedZone Robotics, Inc. (Revolver) (f)  L+6.75%  8.99%    6/5/2023   158            0.0%
RPL Bidco Limited (e) (n) (p)  L+7.50%  8.30%    11/9/2023   14,073    14,116    14,214    5.4%
RPL Bidco Limited (Delayed Draw) (e) (f) (g) (n) (p)  L+7.50%  8.30%    11/9/2023   2,085            0.0%
RPL Bidco Limited (Revolver) (e) (f) (n) (p)  L+7.50%  8.30%    11/9/2023   521            0.0%
               56,777    49,840    50,656    19.1%

 

 8 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Hotels, Gaming & Leisure                                 
TRG, LLC  L+12.10% 

9.60% Cash/

4.61% PIK

(q)    3/31/2021   17,132   $17,067   $18,365    6.9%
TRG, LLC (CapEx)  L+9.50% 

9.60% Cash/

2.00% PIK

    3/31/2021   1,368    1,364    1,467    0.6%
TRG, LLC (Revolver) (f)  L+9.50%  11.60%    3/31/2021   262    131    140    0.1%
               18,762    18,562    19,972    7.6%
Media: Advertising, Printing & Publishing                               
AdTheorent, Inc.  L+8.50%  10.60%    12/22/2021   4,711    4,646    4,696    1.8%
Atlas Sign Industries of FLA, LLC (i)  L+9.50%  11.74%    5/15/2023   3,500    3,305    3,341    1.3%
Destination Media, Inc. (i)  L+6.50%  8.74%    4/7/2022   7,416    7,331    7,564    2.8%
Destination Media, Inc. (Revolver) (f)  L+6.50%  8.74%    4/7/2022   542            0.0%
MC Sign Lessor Corp.  L+7.00%  9.10%    12/22/2022   9,950    9,776    10,049    3.8%
MC Sign Lessor Corp. (Delayed Draw) (f) (g)  L+7.00%  9.10%    12/22/2022   2,083            0.0%
MC Sign Lessor Corp. (Revolver) (f)  L+7.00%  9.10%    12/22/2022   625            0.0%
               28,827    25,058    25,650    9.7%
Retail                               
Bluestem Brands, Inc.  L+7.50%  9.74%    11/6/2020   2,476    2,464    1,653    0.6%
Forman Mills, Inc. (i)  L+7.50%  9.74%    10/4/2021   8,415    8,303    8,259    3.1%
LuLu’s Fashion Lounge, LLC  L+7.00%  9.24%    8/29/2022   4,625    4,511    4,718    1.8%
The Worth Collection, Ltd. (i)  L+8.50%  10.74%    9/29/2021   10,587    10,446    9,137    3.5%
Yandy Holding, LLC  L+11.00%  13.24%    9/30/2019   4,202    4,186    4,185    1.6%
Yandy Holding, LLC (Revolver) (f)  L+11.00%  13.24%    9/30/2019   907            0.0%
               31,212    29,910    27,952    10.6%
Services: Business                               
APCO Worldwide, Inc.  L+8.00%  10.24%    6/30/2022   4,937    4,858    4,910    1.8%
Burroughs, Inc. (i)  L+7.50%  9.60%    12/22/2022   5,925    5,844    5,700    2.1%
Burroughs, Inc. (Revolver)  L+7.50%  9.60%    12/22/2022   750    750    721    0.3%
EB Employee Solutions, LLC (i)  L+8.00%  10.24%    2/28/2019   3,121    3,111    3,100    1.2%
First Call Resolution, LLC (i)  L+7.00%  9.10%    9/22/2022   4,110    4,051    4,132    1.6%
First Call Resolution, LLC  L+7.00%  9.39%    9/22/2022   10,000    9,826    10,055    3.8%
Madison Logic, Inc. (i)  L+8.00%  10.24%    11/30/2021   9,999    9,859    9,999    3.8%
Madison Logic, Inc. (Revolver) (f)  L+8.00%  10.24%    11/30/2021   988            0.0%
               39,830    38,299    38,617    14.6%
Services: Consumer                               
PeopleConnect Intermediate, LLC  L+6.50%  8.84%    7/1/2020   4,355    4,317    4,355    1.6%
PeopleConnect Intermediate, LLC  L+12.50%  14.84%    7/1/2020   4,677    4,633    4,668    1.8%
PeopleConnect Intermediate, LLC (Revolver) (f)  L+9.50%  11.84%    7/1/2020   236    118    118    0.1%
               9,268    9,068    9,141    3.5%

 

 9 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Wholesale                                 
Mid-West Wholesale Hardware Co. (i)  L+8.00%  10.24%    2/9/2022   16,444   $16,198   $16,460    6.2%
Mid-West Wholesale Hardware Co. (Revolver) (f)  L+8.00%  10.24%    2/9/2022   4,421    3,158    3,158    1.2%
Nearly Natural, Inc. (i)  L+7.00%  9.39%    12/15/2022   6,947    6,826    7,017    2.6%
Nearly Natural, Inc. (Revolver) (f)  L+7.00%  9.39%    12/15/2022   1,522            0.0%
               29,334    26,182    26,635    10.0%
Total Non-Controlled/Non-Affiliate Senior Secured Loans              367,787    330,019    331,103    125.0%
                                
Unitranche Secured Loans (r)                               
Chemicals, Plastics & Rubber                               
MFG Chemical, LLC (i)  L+6.00%  8.24%    6/23/2022   10,477    10,351    10,361    3.9%
MFG Chemical, LLC (Delayed Draw) (f) (g)  L+6.00%  8.24%    6/23/2022   1,135            0.0%
               11,612    10,351    10,361    3.9%
Consumer Goods: Durable                               
RugsUSA, LLC  L+6.50%  8.89%    4/28/2023   4,000    3,963    4,014    1.5%
               4,000    3,963    4,014    1.5%
Healthcare & Pharmaceuticals                               
Collaborative Neuroscience Network, LLC  L+11.50%  13.74%    n/a (s)   6,120    6,089    5,838    2.2%
Collaborative Neuroscience Network, LLC  n/a 

12.00% Cash/

3.00% PIK

    n/a(s)   301    301    301    0.1%
Collaborative Neuroscience Network, LLC (Revolver)  L+10.00%  12.24%    n/a(s)   200    192    200    0.1%
Priority Ambulance, LLC (t)  L+6.00%  8.39%    4/12/2022   9,932    9,932    9,917    3.8%
Priority Ambulance, LLC (i)  L+6.00%  8.39%    4/12/2022   525    496    524    0.2%
Priority Ambulance, LLC (Delayed Draw) (f) (g)  L+6.00%  8.39%    4/12/2022   103            0.0%
               17,181    17,010    16,780    6.4%
Total Non-Controlled/Non-Affiliate Unitranche Secured Loans           32,793    31,324    31,155    11.8%
                                
Junior Secured Loans                               
Banking, Finance, Insurance & Real Estate                               
Confie Seguros Holdings II Co.  L+9.50%  11.74%    5/8/2019   8,594    8,485    8,379    3.2%
               8,594    8,485    8,379    3.2%
Beverage, Food & Tobacco                               
CSM Bakery Supplies, LLC  L+7.75%  10.09%    7/5/2021   5,792    5,792    5,590    2.1%
               5,792    5,792    5,590    2.1%
High Tech Industries                               
Answers Finance, LLC  P+7.90%  9.00%(u)    9/15/2021   391    389    359    0.1%
Micro Holdings Corp.  L+7.50%  9.67%    8/18/2025   3,000    2,972    3,038    1.2%
               3,391    3,361    3,397    1.3%
Media: Broadcasting & Subscription                               
Mergermarket Bidco Limited  L+7.25%  9.42%    8/4/2025   4,500    4,457    4,511    1.7%
               4,500    4,457    4,511    1.7%
Media: Diversified & Production                               
The Octave Music Group, Inc.  L+8.25%  10.36%    5/27/2022   5,000    4,954    5,000    1.9%
               5,000    4,954    5,000    1.9%

 

 10 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Services: Consumer                                 
Education Corporation of America  L+11.00%  13.39%    3/31/2020   625   $622   $625    0.2%
               625    622    625    0.2%
Total Non-Controlled/Non-Affiliate Junior Secured Loans              27,902    27,671    27,502    10.4%
                                
Equity Securities (v) (w)                               
Banking, Finance, Insurance & Real Estate                               
PKS Holdings, LLC (warrant to purchase 14,247 class A preferred units) (e)    (x)    11/30/2027       116    84    0.0%
                    116    84    0.0%
Chemicals, Plastics & Rubber                               
Valudor Products, LLC (501,014 class A-1 units)   n/a  10.00% PIK           501    473    0.2%
                    501    473    0.2%
Healthcare & Pharmaceuticals                               
Collaborative Neuroscience Network, LLC (warrant to purchase up to 2 LLC units)    (x)    12/27/2022           71    0.0%
Collaborative Neuroscience Network, LLC (warrant to purchase up to 2 LLC units)    (x)    12/31/2027               0.0%
                        71    0.0%
High Tech Industries                               
Answers Finance, LLC (76,539 shares of common stock)    (x)           2,413    191    0.1%
                    2,413    191    0.1%
Hotels, Gaming & Leisure                               
Playtime, LLC - Preferred Units (8,665 units)    (x)           200    31    0.0%
                    200    31    0.0%
Media: Advertising, Printing & Publishing                               
AdTheorent, Inc. (128,866 class A voting units)    (x)           129    146    0.1%
Atlas Sign Industries of FLA, LLC (warrant to purchase 0.8% of the equity)    (x)    5/14/2026       125    107    0.0%
InMobi Pte, Ltd. (represents the right to purchase 2.80% of the equity) (e) (n)    (x)    9/18/2025           219    0.1%
                    254    472    0.2%
Retail                               
The Tie Bar Operating Company, LLC - Class A Preferred Units (1,275 units)               86    124    0.1%
The Tie Bar Operating Company, LLC - Class B Preferred Units (1,275 units)               1        0.0%
                    87    124    0.1%
Services: Business                               
APCO Worldwide, Inc. (100 class A voting common stock)    (x)           395    363    0.1%
                    395    363    0.1%
Services: Consumer                               
Education Corporation of America - Series G Preferred Stock (8,333 shares)   n/a  12.00% PIK           9,158    8,046    3.0%
                    9,158    8,046    3.0%
Wholesale                               
Nearly Natural, Inc. (152,174 class A units)    (x)           152    177    0.1%
                    152    177    0.1%
Total Non-Controlled/Non-Affiliate Equity Securities                13,276    10,032    3.8%
Total Non-Controlled/Non-Affiliate Company Investments               $402,290   $399,792    151.0%

 

 11 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Non-Controlled Affiliate Company Investments (y)                                 
Senior Secured Loans                               
Banking, Finance, Insurance & Real Estate                               
American Community Homes, Inc.  L+10.00% 

10.24% Cash/

2.00% PIK

    7/22/2019   7,560   $7,518   $6,743    2.5%
American Community Homes, Inc.  L+14.50% 

10.24% Cash/

6.50% PIK

    7/22/2019   4,530    4,508    4,041    1.5%
American Community Homes, Inc.  L+10.00% 

10.24% Cash/

2.00% PIK

    7/22/2019   572    568    510    0.2%
American Community Homes, Inc.  L+10.00% 

10.24% Cash/

2.00% PIK

    7/22/2019   458    453    409    0.2%
American Community Homes, Inc.  L+14.50% 

10.24% Cash/

6.50% PIK

    7/22/2019   244    241    217    0.1%
American Community Homes, Inc. (Delayed Draw) (f) (g)  L+8.00%  10.24%    7/22/2019   1,667    1,577    1,406    0.5%
               15,031    14,865    13,326    5.0%
Containers, Packaging & Glass                               
Summit Container Corporation (i)  L+8.00%  10.24%    1/6/2021   3,399    3,403    3,261    1.2%
Summit Container Corporation (Revolver) (f) (i)  L+8.00%  10.17%    1/6/2021   5,500    5,259    5,259    2.0%
               8,899    8,662    8,520    3.2%
Healthcare & Pharmaceuticals                               
SHI Holdings, Inc. (i)  L+10.25%  12.49%    7/10/2019   2,605    2,596    2,605    1.0%
SHI Holdings, Inc. (Revolver) (f)   L+10.25%  12.49%    7/10/2019   3,136    2,988    2,993    1.1%
               5,741    5,584    5,598    2.1%
Retail                               
Luxury Optical Holdings Co.  L+8.00%  10.24% PIK    9/12/2019   4,578    4,559    4,038    1.5%
Luxury Optical Holdings Co. (Delayed Draw) (f) (g)  L+11.50%  13.74%    9/12/2019   1,059    624    622    0.3%
Luxury Optical Holdings Co. (Revolver)  L+8.00%  10.24% PIK    9/12/2019   211    211    186    0.1%
TPP Operating, Inc.   n/a   n/a(o)    n/a   9,370    9,330        0.0%
TPP Operating, Inc.   n/a   n/a(o)    n/a   7,671    7,629        0.0%
TPP Operating, Inc.   n/a   n/a(o)    n/a   4,336    4,289        0.0%
               27,225    26,642    4,846    1.9%
Services: Business                               
Curion Holdings, LLC (i)   n/a 

10.00% Cash/

4.00% PIK

    5/2/2022   3,855    3,812    3,668    1.4%
Curion Holdings, LLC (Revolver) (f)   n/a  14.00%    5/2/2022   308    189    186    0.1%
               4,163    4,001    3,854    1.5%
Total Non-Controlled Affiliate Senior Secured Loans              61,059    59,754    36,144    13.7%
                                
Unitranche Secured Loans (r)                               
Consumer Goods: Non-Durable                               
Incipio Technologies, Inc. (z)  L+9.06% 

10.74% Cash/

0.56% PIK

(aa)    7/1/2019   13,803    13,724    12,927    4.9%
Incipio Technologies, Inc. (ab)  L+8.50%  10.74%    7/1/2019   3,613    3,613    3,613    1.3%
Incipio Technologies, Inc. (Delayed Draw) (f) (g)  L+8.50%  10.74%    7/1/2019   1,535    1,271    1,271    0.5%
               18,951    18,608    17,811    6.7%
Total Non-Controlled Affiliate Unitranche Secured Loans              18,951    18,608    17,811    6.7%

 12 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread Above
 Index (b)
 

Interest

Rate

    Maturity  Principal  

Amortized

Cost

  

Fair

Value (c)

   % of
Net Assets (d)
 
Junior Secured Loans                                  
Consumer Goods: Non-Durable                                
Incipio Technologies, Inc. (ac)  n/a  10.70% PIK (o)    12/31/2020   3,766   $   $1,422    0.5%
Incipio Technologies, Inc. (ad)  n/a  10.70% PIK (o)    12/31/2020   7,194            0.0%
                10,960        1,422    0.5%
Services: Business                                
Curion Holdings, LLC (i)  n/a  15.00% PIK (o)    1/2/2023   1,720    1        0.0%
Curion Holdings, LLC (i)  n/a  15.00% PIK (o)    1/2/2023   44            0.0%
                1,764    1        0.0%
Total Non-Controlled Affiliate Company Junior Secured Loans            12,724    1    1,422    0.5%
                                 
Equity Securities (w)                                
Banking, Finance, Insurance & Real Estate                                
American Community Homes, Inc. (warrant to purchase up to 9.0% of the equity)    (x)                   0.0%
                             0.0%
Consumer Goods: Non-Durable                                
Incipio Technologies, Inc. (1,774 shares of series C common units)    (x)                   0.0%
Millennial Brands LLC (10 preferred units)   n/a   15.00% PIK (o)           967        0.0%
Millennial Brands LLC (75,502 common units)       (x)                   0.0%
                     967        0.0%
Healthcare & Pharmaceuticals                                
SHI Holdings, Inc. (24 shares of common stock)    (x)           27    806    0.3%
                     27    806    0.3%
Retail                                
Luxury Optical Holdings Co. (86 shares of common stock)    (x)                   0.0%
TPP Operating, Inc. (24 shares of common stock)    (x)           1,953        0.0%
TPP Operating, Inc. (16 shares of common stock)    (x)           1,302        0.0%
                     3,255        0.0%
Services: Business                                
Curion Holdings, LLC (58,779 shares of common stock)    (x)                   0.0%
                             0.0%
Total Non-Controlled Affiliate Equity Securities                    4,249    806    0.3%
Total Non-Controlled Affiliate Company Investments                $82,612   $56,183    21.2%
                                 
Controlled Affiliate Company Investments (ae)                                
Equity Securities                                
Investment Funds & Vehicles                                
MRCC Senior Loan Fund I, LLC (e)               25,200    26,318    10.0%
Total Controlled Affiliate Equity Securities                    25,200    26,318    10.0%
Total Controlled Affiliate Company Investments                $25,200   $26,318    10.0%
                                 
TOTAL INVESTMENTS                   $510,102   $482,293    182.2%

 

 13 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

Derivative Instruments

 

Foreign currency forward contracts

 

  

Notional

Amount

  

Notional

Amount

        

Unrealized

Gain

 
Description  to be Purchased   to be Sold   Counterparty  Settlement Date  (Loss) 
Foreign currency forward contract  $138   £108   Bannockburn Global Forex, LLC  10/1/2018  $(3)
Foreign currency forward contract  $137   £107   Bannockburn Global Forex, LLC  1/2/2019   (3)
Foreign currency forward contract  $292   £228   Bannockburn Global Forex, LLC  2/28/2019   (5)
Foreign currency forward contract  $136   £106   Bannockburn Global Forex, LLC  4/1/2019   (2)
Foreign currency forward contract  $293   £229   Bannockburn Global Forex, LLC  5/31/2019   (5)
Foreign currency forward contract  $136   £106   Bannockburn Global Forex, LLC  7/1/2019   (2)
Foreign currency forward contract  $294   £230   Bannockburn Global Forex, LLC  8/30/2019   (5)
Foreign currency forward contract  $134   £105   Bannockburn Global Forex, LLC  10/1/2019   (2)
Foreign currency forward contract  $295   £230   Bannockburn Global Forex, LLC  11/29/2019   (5)
Foreign currency forward contract  $133   £104   Bannockburn Global Forex, LLC  1/2/2020   (2)
Foreign currency forward contract  $296   £231   Bannockburn Global Forex, LLC  2/28/2020   (5)
Foreign currency forward contract  $132   £103   Bannockburn Global Forex, LLC  4/1/2020   (2)
Foreign currency forward contract  $130   £102   Bannockburn Global Forex, LLC  5/5/2020   (2)
Foreign currency forward contract  $296   £230   Bannockburn Global Forex, LLC  5/29/2020   (5)
Foreign currency forward contract  $295   £230   Bannockburn Global Forex, LLC  8/28/2020   (5)
Foreign currency forward contract  $294   £229   Bannockburn Global Forex, LLC  11/30/2020   (5)
                   $(58)

 

 
(a)All of our investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of our investments are issued by U.S. portfolio companies unless otherwise noted.
(b)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at September 30, 2018. Certain investments are subject to a LIBOR or Prime interest rate floor, or rate cap.
(c)Because there is no readily available market value for these investments, the fair value of these investments is determined in good faith using significant unobservable inputs by our board of directors as required by the Investment Company Act of 1940. (See Note 4 in the accompanying notes to the consolidated financial statements.)
(d)Percentages are based on net assets of $264,752 as of September 30, 2018.
(e)This investment is treated as a non-qualifying investment 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, non-qualifying assets totaled 18.16% of the Company’s total assets excluding prepaid expenses.
(f)All or a portion of this commitment was unfunded at September 30, 2018. As such, interest is earned only on the funded portion of this commitment.
(g)This delayed draw loan requires that certain financial covenants be met by the portfolio company prior to any fundings.
(h)The PIK portion of the interest rate for HFZ Capital Group, LLC is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 0.17% per annum.
(i)All of this loan is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(j)This investment represents a note convertible to preferred shares of the borrower.
(k)A portion of this loan (principal of $2,035) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(l)A portion of the PIK interest rate for Cornerstone Detention Products, Inc. is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 2.33% per annum.
(m)The PIK portion of the interest rate for Landpoint, LLC is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 2.25% per annum.
(n)This is an international company.

 

 14 

 

 

MONROE CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)

September 30, 2018

(in thousands, except for shares and units)

 

(o)This position was on non-accrual status as of September 30, 2018, meaning that the Company has ceased accruing interest income on the position. See Note 2 in the accompanying notes to the consolidated financial statements for additional information on the Company’s accounting policies.
(p)This loan is denominated in Great Britain pounds and is translated into U.S. dollars as of the valuation date.
(q)A portion of the PIK interest rate for TRG, LLC is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 2.61% per annum.
(r)The Company structures its unitranche secured loans as senior secured loans. The Company obtains security interests in the assets of these portfolio companies that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of a portfolio company. Generally, the Company syndicates a “first out” portion of the loan to an investor and retains a “last out” portion of the loan, in which case the “first out” portion of the loan will generally receive priority with respect to payments of principal, interest and any other amounts due thereunder. Unitranche structures combine characteristics of traditional first lien senior secured as well as second lien and subordinated loans and the Company’s unitranche secured loans will expose the Company to the risks associated with second lien and subordinated loans and may limit the Company’s recourse or ability to recover collateral upon a portfolio company’s bankruptcy. Unitranche secured loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. Unitranche secured loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. In many cases the Company, together with its affiliates, are the sole or majority lender of these unitranche secured loans, which can afford the Company additional influence with a borrower in terms of monitoring and, if necessary, remediation in the event of underperformance.
(s)This is a demand note with no stated maturity.
(t)A portion of this loan (principal of $9,258) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(u)This loan is subject to a prime rate cap of 1.10%.
(v)Represents less than 5% ownership of the portfolio company’s voting securities.
(w)Ownership of certain equity investments may occur through a holding company or partnership.
(x)Represents a non-income producing security.
(y)As defined in the 1940 Act, the Company is deemed to be an “Affiliated Person” of the portfolio company as it owns five percent or more of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to control).
(z)A portion of this loan (principal of $5,061) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(aa)The PIK portion of the interest rate for Incipio Technologies, Inc. is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 0.56% per annum.
(ab)A portion of this loan (principal of $46) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(ac)A portion of this loan (principal of $1,015) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
(ad)A portion of this loan (principal of $1,938) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
(ae)As defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and to “Control” this portfolio company as it owns more than 25% in company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.

n/a - not applicable

 

See Notes to Consolidated Financial Statements.

 15 

 

 

MONROE CAPITAL CORPORATION
 
CONSOLIDATED SCHEDULE OF INVESTMENTS
December 31, 2017
(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread
Above
Index (b)
  Interest
Rate
   Maturity  Principal   Amortized
Cost
   Fair
Value (c)
   % of Net
Assets (d)
 
Non-Controlled/Non-Affiliate Company Investments                               
Senior Secured Loans                               
Banking, Finance, Insurance & Real Estate                               
Echelon Funding I, LLC (Delayed Draw) (e) (f) (g)  L+10.25%   11.61%  2/24/2021   15,750   $15,415   $15,654    5.6%
HFZ Capital Group, LLC (e)  L+10.00%   11.36%  10/21/2019   18,000    17,613    17,991    6.5%
Liftforward SPV II, LLC (e) (f)  L+10.75%   12.32%  11/10/2020   10,000    4,212    4,268    1.5%
PKS Holdings, LLC (e)  L+9.50%   10.85%  11/30/2022   1,800    1,640    1,719    0.6%
PKS Holdings, LLC (Revolver) (e) (f)  L+9.50%   10.85%  11/30/2022   80            0.0%
               45,630    38,880    39,632    14.2%
Beverage, Food & Tobacco                               
All Holding Company, LLC (h)  L+7.00%   8.57%  11/15/2021   5,328    5,246    5,368    1.9%
California Pizza Kitchen, Inc.  L+6.00%   7.57%  8/23/2022   6,913    6,850    6,791    2.5%
               12,241    12,096    12,159    4.4%
Construction & Building                               
Cali Bamboo, LLC  L+8.00%   9.57%  7/10/2020   5,319    5,266    5,319    1.9%
Cali Bamboo, LLC (Revolver) (f)  L+8.00%   9.57%  7/10/2020   2,165    1,039    1,039    0.4%
Cornerstone Detention Products, Inc. (i)  L+11.83%   10.07% Cash/
3.33% PIK
 (j)  4/8/2019   3,521    3,501    3,500    1.3%
Cornerstone Detention Products, Inc. (Revolver) (f)  L+8.50%   10.07%  4/8/2019   400    200    199    0.1%
TRP Construction Group, LLC (h)  L+6.50%   8.07%  10/5/2022   8,000    7,845    7,992    2.9%
TRP Construction Group, LLC (Revolver) (f)  L+6.50%   8.07%  10/5/2022   2,134            0.0%
               21,539    17,851    18,049    6.6%
Consumer Goods: Durable                               
Parterre Flooring & Surface Systems, LLC (h)  L+7.25%   8.82%  8/22/2022   11,850    11,625    11,808    4.2%
Parterre Flooring & Surface Systems, LLC (Revolver) (f)  L+7.25%   8.82%  8/22/2022   2,400            0.0%
               14,250    11,625    11,808    4.2%
Consumer Goods: Non-Durable                               
Gibson Brands, Inc. (k)  8.88%   8.88%  8/1/2018   10,000    8,664    8,435    3.0%
Solaray, LLC  L+6.50%   8.02%  9/11/2023   3,264    3,236    3,264    1.2%
Solaray, LLC (Delayed Draw)  L+6.50%   8.19%  9/11/2023   699    699    699    0.3%
               13,963    12,599    12,398    4.5%
Energy: Oil & Gas                               
Landpoint, LLC  L+12.75%   12.07% Cash/
2.25% PIK
 (l)  12/20/2019   2,386    2,372    2,352    0.8%
Landpoint, LLC (Revolver) (f)  L+10.50%   12.07%  12/20/2019   313            0.0%
               2,699    2,372    2,352    0.8%
Environmental Industries                               
Synergy Environmental Corporation (h)  L+8.00%   9.57%  4/29/2021   3,011    2,958    3,036    1.1%
Synergy Environmental Corporation (h)  L+8.00%   9.57%  4/29/2021   504    495    508    0.2%
Synergy Environmental Corporation (Delayed Draw) (f) (g)  L+8.00%   9.57%  4/29/2018   1,342    859    866    0.3%
Synergy Environmental Corporation (Revolver) (f)  L+8.00%   9.57%  4/29/2021   671    47    47    0.0%
               5,528    4,359    4,457    1.6%

 

See Notes to Consolidated Financial Statements.

 

 16 

 

MONROE CAPITAL CORPORATION
 
CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2017
(in thousands, except for shares and units)

 

Portfolio Company (a)  Spread
Above
Index (b)
  Interest
Rate
   Maturity  Principal   Amortized
Cost
   Fair
Value (c)
   % of Net
Assets (d)
 
Healthcare & Pharmaceuticals                               
American Optics Holdco, Inc. (e) (m)  L+8.00%   9.57%  9/13/2022   4,133   $4,055   $4,136    1.5%
American Optics Holdco, Inc. (Revolver) (e) (f) (m)  L+8.00%   9.57%  9/13/2022   440            0.0%
American Optics Holdco, Inc. (e) (m)  L+8.00%   9.57%  9/13/2022   760    746    761    0.3%
American Optics Holdco, Inc. (Revolver) (e) (f) (m)  L+8.00%   9.57%  9/13/2022   440            0.0%
Beaver-Visitec International Holdings, Inc.  L+5.00%   6.69%  8/19/2023   4,938    4,895    4,938    1.8%
Edge Systems Holdings Corp.  L+7.75%   9.32%  12/1/2021   3,384    3,329    3,445    1.2%
Edge Systems Holdings Corp. (Revolver) (f)  P+6.75%   11.25%  12/1/2021   260            0.0%
Familia Dental Group Holdings, LLC (h)  L+8.00%   9.57%  4/8/2021   5,259    5,199    5,322    1.9%
Familia Dental Group Holdings, LLC  L+8.00%   9.57%  4/8/2021   506    506    512    0.2%
Familia Dental Group Holdings, LLC (Revolver) (f)  L+8.00%   9.57%  4/8/2021   573    344    344    0.1%
               20,693    19,074    19,458    7.0%
High Tech Industries                               
Answers Finance, LLC  L+5.00%   6.57%  4/15/2021   253    251    249    0.1%
Corbett Technology Solutions, Inc. (h)  L+7.00%   8.57%  11/8/2021   4,275    4,224    4,318    1.5%
Corbett Technology Solutions, Inc. (Revolver) (f)  L+7.00%   8.57%  11/8/2021   867    607    607    0.2%
Energy Services Group, LLC  L+9.82%   11.39%  5/4/2022   4,620    4,568    4,678    1.7%
Energy Services Group, LLC (e) (n)  L+9.82%   10.82%  5/4/2022   2,495    2,361    2,509    0.9%
Energy Services Group, LLC (Delayed Draw) (f) (g)  L+9.82%   11.39%  5/4/2022   1,313    1,096    1,126    0.4%
Newforma, Inc. (h)  L+7.50%   9.19%  6/30/2022   14,962    14,754    15,060    5.4%
Newforma, Inc. (Revolver) (f)  L+7.50%   9.19%  6/30/2022   1,250            0.0%
Prototek Sheetmetal Fabrication, LLC  L+7.50%   9.07%  12/12/2022   3,500    3,430    3,430    1.2%
Prototek Sheetmetal Fabrication, LLC (Delayed Draw) (f) (g)  L+7.50%   9.07%  12/12/2022