Item 1.
Financial Statements
Unaudited Consolidated Balance Sheet as of March 31, 2017 and Consolidated Balance Sheet as of December 31, 2016 3
Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2017 and 2016 4
Unaudited Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2017 and 2016 5
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 6
Unaudited Consolidated Schedule of Investments as of March 31, 2017 7
Consolidated Schedule of Investments as of December 31, 2016 14
Notes to Unaudited Consolidated Financial Statements 21
Unaudited Schedule of Investments in and Advances to Affiliates for the Three Months Ended March 31, 2017 38
Schedule of Investments in and Advances to Affiliates for the Year Ended December 31, 2016 42
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
59
Item 4.
Controls and Procedures
59
PART II – OTHER INFORMATION
Item 1.
Legal Proceedings
60
Item 1A.
Risk Factors
60
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
60
Item 3.
Defaults Upon Senior Securities
60
Item 4.
Mine Safety Disclosures
60
Item 5.
Other Information
60
Item 6.
Exhibits
61
Signatures 62
Exhibits
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
| March 31, 2017 | December 31, 2016 |
| (Unaudited) |
| Assets: |
| Investments at fair value: |
| Non-Control / Non-Affiliate investments (cost of $948,873,881 and $888,974,154 as of March 31, 2017 and December 31, 2016, respectively) | $ | 922,229,496 | $ | 857,604,639 |
| Affiliate investments (cost of $199,044,196 and $162,539,224 as of March 31, 2017 and December 31, 2016, respectively) | 192,981,537 | 161,510,773 |
| Control investments (cost of $42,926,673 and $45,418,113 as of March 31, 2017 and December 31, 2016, respectively) | 17,997,769 | 18,791,769 |
| Total investments at fair value | 1,133,208,802 | 1,037,907,181 |
| Cash and cash equivalents | 90,603,276 | 107,087,663 |
| Interest, fees and other receivables | 5,494,514 | 10,189,788 |
| Prepaid expenses and other current assets | 1,848,178 | 1,659,570 |
| Deferred financing fees | 3,001,250 | 2,699,960 |
| Property and equipment, net | 107,211 | 106,494 |
| Total assets | $ | 1,234,263,231 | $ | 1,159,650,656 |
| Liabilities: |
| Accounts payable and accrued liabilities | $ | 3,301,982 | $ | 6,797,244 |
| Interest payable | 1,559,113 | 3,996,940 |
| Taxes payable | — | 489,691 |
| Deferred income taxes | 570,505 | 2,053,701 |
| Borrowings under credit facility | 91,090,267 | 127,011,475 |
| Notes | 162,914,760 | 162,755,381 |
| SBA-guaranteed debentures payable | 245,619,315 | 245,389,966 |
| Total liabilities | 505,055,942 | 548,494,398 |
| Commitments and contingencies (Note 7) |
| Net Assets: |
| Common stock, $0.001 par value per share (150,000,000 shares authorized, 47,681,397 and 40,401,292 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively) | 47,681 | 40,401 |
| Additional paid-in capital | 819,123,942 | 686,835,054 |
| Investment income in excess of distributions | 2,265,568 | 5,884,512 |
| Accumulated realized losses | (37,530,553 | ) | (24,211,594 | ) |
| Net unrealized depreciation | (54,699,349 | ) | (57,392,115 | ) |
| Total net assets | 729,207,289 | 611,156,258 |
| Total liabilities and net assets | $ | 1,234,263,231 | $ | 1,159,650,656 |
| Net asset value per share | $ | 15.29 | $ | 15.13 |

See accompanying notes.
3
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
| Three MonthsEnded | Three MonthsEnded |
| March 31, 2017 | March 31, 2016 |
| Investment income: |
| Interest income: |
| Non-Control / Non-Affiliate investments | $ | 20,470,837 | $ | 18,182,654 |
| Affiliate investments | 3,372,135 | 3,384,369 |
| Control investments | 269,536 | 193,616 |
| Total interest income | 24,112,508 | 21,760,639 |
| Dividend income: |
| Non-Control / Non-Affiliate investments | 281,229 | (1,246,760 | ) |
| Affiliate investments | — | 160,055 |
| Total dividend income | 281,229 | (1,086,705 | ) |
| Fee and other income: |
| Non-Control / Non-Affiliate investments | 1,917,238 | 1,623,886 |
| Affiliate investments | 300,264 | 310,015 |
| Control investments | 100,000 | 100,000 |
| Total fee and other income | 2,317,502 | 2,033,901 |
| Payment-in-kind interest income: |
| Non-Control / Non-Affiliate investments | 2,639,382 | 2,921,604 |
| Affiliate investments | 738,466 | 989,213 |
| Total payment-in-kind interest income | 3,377,848 | 3,910,817 |
| Interest income from cash and cash equivalents | 101,683 | 37,218 |
| Total investment income | 30,190,770 | 26,655,870 |
| Operating expenses: |
| Interest and other financing fees | 6,910,303 | 6,518,570 |
| Compensation expenses | 4,250,413 | 9,450,493 |
| General and administrative expenses | 1,210,621 | 1,088,724 |
| Total operating expenses | 12,371,337 | 17,057,787 |
| Net investment income | 17,819,433 | 9,598,083 |
| Realized and unrealized gains (losses) on investments and foreign currency borrowings: |
| Net realized gains (losses): |
| Non-Control / Non-Affiliate investments | (12,360,335 | ) | 584,787 |
| Affiliate investments | 3,532,816 | 1,427 |
| Control investments | (4,491,440 | ) | — |
| Net realized gains (losses) | (13,318,959 | ) | 586,214 |
| Net unrealized appreciation (depreciation): |
| Investments | 2,871,558 | 3,084,323 |
| Foreign currency borrowings | (178,792 | ) | (852,523 | ) |
| Net unrealized appreciation (depreciation) | 2,692,766 | 2,231,800 |
| Net realized and unrealized gains (losses) on investments and foreign currency borrowings | (10,626,193 | ) | 2,818,014 |
| Tax benefit | — | 11,161 |
| Net increase in net assets resulting from operations | $ | 7,193,240 | $ | 12,427,258 |
| Net investment income per share—basic and diluted | $ | 0.42 | $ | 0.29 |
| Net increase in net assets resulting from operations per share—basic and diluted | $ | 0.17 | $ | 0.37 |
| Dividends/distributions per share: |
| Regular quarterly dividends/distributions | $ | 0.45 | $ | 0.54 |
| Total dividends/distributions per share | $ | 0.45 | $ | 0.54 |
| Weighted average shares outstanding—basic and diluted | 42,743,469 | 33,480,346 |

See accompanying notes.
4
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Changes in Net Assets
| Common Stock | AdditionalPaid-InCapital | InvestmentIncomein Excess ofDistributions | AccumulatedRealizedGains (Losses) on Investments | NetUnrealizedAppreciation(Depreciation) | TotalNetAssets |
| Numberof Shares | ParValue |
| Balance, December 31, 2015 | 33,375,126 | $ | 33,375 | $ | 549,242,439 | $ | 16,127,141 | $ | (25,813,329 | ) | $ | (31,221,871 | ) | $ | 508,367,755 |
| Net investment income | — | — | — | 9,598,083 | — | — | 9,598,083 |
| Stock-based compensation | — | — | 4,301,118 | — | — | — | 4,301,118 |
| Realized gain (loss) on investments | — | — | — | — | 586,214 | (351,458 | ) | 234,756 |
| Net unrealized gain on investments / foreign currency | — | — | — | — | — | 2,583,258 | 2,583,258 |
| Tax benefit | — | — | — | 11,161 | — | — | 11,161 |
| Dividends / distributions | 42,694 | 42 | 844,036 | (18,108,221 | ) | — | — | (17,264,143 | ) |
| Issuance of restricted stock | 351,000 | 351 | (351 | ) | — | — | — | — |
| Common stock withheld for payroll taxes upon vesting of restricted stock | (192,384 | ) | (192 | ) | (3,483,882 | ) | — | — | — | (3,484,074 | ) |
| Balance, March 31, 2016 | 33,576,436 | $ | 33,576 | $ | 550,903,360 | $ | 7,628,164 | $ | (25,227,115 | ) | $ | (28,990,071 | ) | $ | 504,347,914 |

| Common Stock | AdditionalPaid-InCapital | InvestmentIncomein Excess ofDistributions | AccumulatedRealizedLosses on Investments | NetUnrealizedAppreciation (Depreciation) | TotalNetAssets |
| Numberof Shares | ParValue |
| Balance, December 31, 2016 | 40,401,292 | $ | 40,401 | $ | 686,835,054 | $ | 5,884,512 | $ | (24,211,594 | ) | $ | (57,392,115 | ) | $ | 611,156,258 |
| Net investment income | — | — | — | 17,819,433 | — | — | 17,819,433 |
| Stock-based compensation | — | — | 1,453,904 | — | — | — | 1,453,904 |
| Realized gain (loss) on investments | — | — | — | — | (13,318,959 | ) | 12,342,077 | (976,882 | ) |
| Net unrealized loss on investments / foreign currency | — | — | — | — | — | (9,649,311 | ) | (9,649,311 | ) |
| Dividends / distributions | 40,559 | 40 | 749,913 | (21,438,377 | ) | — | — | (20,688,424 | ) |
| Public offering of common stock | 7,000,000 | 7,000 | 132,198,931 | — | — | — | 132,205,931 |
| Issuance of restricted stock | 347,000 | 347 | (347 | ) | — | — | — | — |
| Common stock withheld for payroll taxes upon vesting of restricted stock | (107,454 | ) | (107 | ) | (2,113,513 | ) | — | — | — | (2,113,620 | ) |
| Balance, March 31, 2017 | 47,681,397 | $ | 47,681 | $ | 819,123,942 | $ | 2,265,568 | $ | (37,530,553 | ) | $ | (54,699,349 | ) | $ | 729,207,289 |

See accompanying notes.
5
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows
| Three Months Ended | Three Months Ended |
| March 31, 2017 | March 31, 2016 |
| Cash flows from operating activities: |
| Net increase in net assets resulting from operations | $ | 7,193,240 | $ | 12,427,258 |
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities: |
| Purchases of portfolio investments | (161,518,093 | ) | (11,812,331 | ) |
| Repayments received/sales of portfolio investments | 53,770,711 | 53,620,680 |
| Loan origination and other fees received | 2,638,485 | 274,158 |
| Net realized (gain) loss on investments | 13,318,959 | (586,214 | ) |
| Net unrealized appreciation on investments | (1,388,362 | ) | (2,647,804 | ) |
| Net unrealized depreciation on foreign currency borrowings | 178,792 | 852,523 |
| Deferred income taxes | (1,483,196 | ) | (436,517 | ) |
| Payment-in-kind interest accrued, net of payments received | (690,432 | ) | (317,840 | ) |
| Amortization of deferred financing fees | 587,438 | 531,993 |
| Accretion of loan origination and other fees | (1,349,409 | ) | (1,135,001 | ) |
| Accretion of loan discounts | (83,480 | ) | (95,188 | ) |
| Accretion of discount on SBA-guaranteed debentures payable | — | 31,899 |
| Depreciation expense | 17,790 | 15,592 |
| Stock-based compensation | 1,453,904 | 4,301,118 |
| Changes in operating assets and liabilities: |
| Interest, fees and other receivables | 4,695,274 | (1,891,253 | ) |
| Prepaid expenses and other current assets | (188,608 | ) | (886,837 | ) |
| Accounts payable and accrued liabilities | (3,495,262 | ) | (5,225,308 | ) |
| Interest payable | (2,437,827 | ) | (2,156,101 | ) |
| Taxes payable | (489,691 | ) | (735,498 | ) |
| Net cash provided by (used in) operating activities | (89,269,767 | ) | 44,129,329 |
| Cash flows from investing activities: |
| Purchases of property and equipment | (18,507 | ) | (33,916 | ) |
| Net cash used in investing activities | (18,507 | ) | (33,916 | ) |
| Cash flows from financing activities: |
| Repayments of SBA-guaranteed debentures payable | — | (7,800,000 | ) |
| Borrowings under credit facility | 50,000,000 | 30,000,000 |
| Repayments of credit facility | (86,100,000 | ) | (34,000,000 | ) |
| Financing fees paid | (500,000 | ) | — |
| Net proceeds related to public offering of common stock | 132,205,931 | — |
| Common stock withheld for payroll taxes upon vesting of restricted stock | (2,113,620 | ) | (3,484,074 | ) |
| Cash dividends/distributions paid | (20,688,424 | ) | (17,264,143 | ) |
| Net cash provided by (used in) financing activities | 72,803,887 | (32,548,217 | ) |
| Net increase (decrease) in cash and cash equivalents | (16,484,387 | ) | 11,547,196 |
| Cash and cash equivalents, beginning of period | 107,087,663 | 52,615,418 |
| Cash and cash equivalents, end of period | $ | 90,603,276 | $ | 64,162,614 |
| Supplemental disclosure of cash flow information: |
| Cash paid for interest | $ | 8,541,314 | $ | 7,932,474 |
| Summary of non-cash financing transactions: |
| Dividends/distributions paid through DRIP share issuances | $ | 749,953 | $ | 844,078 |

See accompanying notes.
6
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of InvestmentsMarch 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| Non–Control / Non–Affiliate Investments: |
| ACA Holdings LLC (F/K/A My Alarm Center, LLC) (0%)* | Security Company | Preferred Units (2,000,000 units) | $ | 2,000,000 | $ | — |
| 2,000,000 | — |
| Access Medical Acquisition, Inc. (2%)* | Operator of Primary Care Clinics | Subordinated Notes (10% Cash, 2% PIK, Due 01/22) | $ | 13,819,514 | 13,602,148 | 13,602,148 |
| Class A Units (1,500,000 units) | 901,026 | 3,772,000 |
| 13,819,514 | 14,503,174 | 17,374,148 |
| Aden & Anais Holdings, Inc. (0%)* | Baby Products | Common Stock (20,000 shares) | 2,000,000 | 2,000,000 |
| 2,000,000 | 2,000,000 |
| Agilex Flavors & Fragrances, Inc. (2%)* | Custom Fragrance Producer | Subordinated Note (12% Cash, Due 11/21) | 13,168,124 | 13,053,417 | 13,053,417 |
| Common Units (1,250 units) | 1,250,000 | 2,432,000 |
| 13,168,124 | 14,303,417 | 15,485,417 |
| AGM Automotive, LLC (1%)* | Auto Industry Interior Components Supplier | Units (1,500,000 units) | 630,134 | 4,364,000 |
| 630,134 | 4,364,000 |
| AM General, LLC (4%)* | Defense Manufacturing | Senior Note (8.3% Cash, Due 12/21) | 9,750,000 | 9,606,135 | 9,606,135 |
| Second Lien Term Note (12.8% Cash, Due 06/22) | 20,000,000 | 19,419,234 | 19,419,234 |
| 29,750,000 | 29,025,369 | 29,025,369 |
| Avantor Performance Materials Holdings, LLC (2%)* | Life Sciences and Advanced Technologies | Second Lien Term Note (9.3% Cash, Due 03/25) | 14,368,421 | 14,218,421 | 14,218,421 |
| 14,368,421 | 14,218,421 | 14,218,421 |
| Avkem International, LLC (1%)* | Flux and Foundry Manufacturer and Supplier | Subordinated Note (10% Cash, 4% PIK, Due 12/17) | 4,112,935 | 4,084,270 | 4,084,270 |
| 4,112,935 | 4,084,270 | 4,084,270 |
| AVL Holdings, Inc. (0%)* | Manufacturer and Distributor for Independent Artists and Authors | Common Stock (138 shares) | 1,300,000 | 1,831,000 |
| 1,300,000 | 1,831,000 |
| Baker Hill Acquisition, LLC (2%)* | Loan Origination Software Solutions Provider | Second Lien Term Notes (12% Cash, Due 03/21) | 13,500,000 | 13,342,258 | 12,371,000 |
| Limited Partnership Interest | 1,498,500 | 721,000 |
| 13,500,000 | 14,840,758 | 13,092,000 |
| Cafe Enterprises, Inc. (1%)* | Restaurant | Subordinated Note (7% Cash, 7% PIK, Due 09/19) | 14,128,449 | 13,999,989 | 10,253,000 |
| Series C Preferred Stock (10,000 shares) | 1,000,000 | — |
| 14,128,449 | 14,999,989 | 10,253,000 |
| Captek Softgel International, Inc. (2%)* | Nutraceutical Manufacturer | Subordinated Note (10% Cash, 2% PIK, Due 06/21) | 15,484,373 | 15,239,007 | 15,239,007 |
| Common Stock (15,000 shares) | 1,500,000 | 1,511,000 |
| 15,484,373 | 16,739,007 | 16,750,007 |
| Carolina Beverage Group, LLC (0%)* | Beverage Manufacturingand Packaging | Class B Units (11,974 units) | 119,735 | 597,000 |
| 119,735 | 597,000 |
| Centerfield Media Holding Company (0%)* | Digital Marketing | Common Shares (500 shares) | 500,000 | 1,110,000 |
| 500,000 | 1,110,000 |
| Community Intervention Services, Inc. (2%)* | Provider of Behavioral Health Services | Subordinated Note (7% Cash, 6% PIK, Due 01/21) (5) | 19,017,309 | 17,732,558 | 12,440,000 |
| 19,017,309 | 17,732,558 | 12,440,000 |
| Comverge, Inc. (2%)* | Provider of Intelligent Energy Management Solutions | Senior Note (12% Cash, Due 05/18) | 15,505,583 | 15,422,028 | 15,422,028 |
| Preferred Stock (703 shares) | 554,458 | 851,000 |
| Common Stock (1,000,000 shares) | 100,000 | 1,350,000 |
| 15,505,583 | 16,076,486 | 17,623,028 |
| CPower Ultimate HoldCo, LLC (0%)* | Demand Response Business | Units (345,542 units) | 345,542 | 345,542 |
| 345,542 | 345,542 |

7
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of Investments — (Continued)March 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| CWS Holding Company, LLC (0%)* | Manufacturer of Custom Windows and Sliding Doors | Class A Units (1,500,000 units) | $ | 1,500,000 | $ | 2,127,000 |
| 1,500,000 | 2,127,000 |
| Data Source Holdings, LLC (0%)* | Print Supply Chain Management Services | Common Units (47,503 units) | 1,000,000 | 889,000 |
| 1,000,000 | 889,000 |
| Del Real, LLC (2%)* | Hispanic Refrigerated Foods Company | Subordinated Note (11% Cash, Due 04/23) | $ | 14,000,000 | 13,735,237 | 13,735,237 |
| Class A Units (3,000,000 units) | 3,000,000 | 3,000,000 |
| 14,000,000 | 16,735,237 | 16,735,237 |
| DialogDirect, Inc. (1%)* | Business Process Outsourcing Provider | Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20)(6) | 16,676,951 | 16,020,226 | 9,380,000 |
| 16,676,951 | 16,020,226 | 9,380,000 |
| Dimora Brands, Inc. (F/K/A TK USA Enterprises, Inc.) (2%)* | Hardware Designer and Distributor | Second Lien Term Note (11% Cash, Due 10/23) | 12,500,000 | 12,273,646 | 12,273,646 |
| 12,500,000 | 12,273,646 | 12,273,646 |
| DLC Acquisition, LLC (5%)* | Staffing Firm | Senior Notes (10% Cash, Due 12/20) | 22,425,000 | 22,183,724 | 22,183,724 |
| Senior Note (10% Cash, 2% PIK, Due 12/20) | 17,014,412 | 16,830,451 | 16,830,451 |
| 39,439,412 | 39,014,175 | 39,014,175 |
| Dyno Acquiror, Inc. (1%)* | Sewing Products and Seasonal Decorative Products Supplier | Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20) | 4,611,389 | 4,579,161 | 4,579,161 |
| Series A Units (600,000 units) | 600,000 | 808,000 |
| 4,611,389 | 5,179,161 | 5,387,161 |
| Eckler's Holdings, Inc. (1%)* | Restoration Parts and Accessories for Classic Cars and Trucks | Subordinated Note (10% Cash, 5.5% PIK, Due 03/19) | 10,966,663 | 10,915,450 | 9,087,000 |
| Common Stock (18,029 shares) | 183,562 | — |
| Series A Preferred Stock (1,596 shares) | 1,596,126 | — |
| Series B Preferred Stock (702 shares) | 435,127 | — |
| 10,966,663 | 13,130,265 | 9,087,000 |
| Flowchem Holdings LLC (0%)* | Services to Crude Oil Pipeline Operators | Common Units (1,000,000 units) | 782,356 | 2,718,000 |
| 782,356 | 2,718,000 |
| Fridababy Holdings, LLC (3%)* | Baby Products | Senior Notes (10.1% Cash, Due 10/21) | 23,000,000 | 22,576,465 | 22,576,465 |
| Class B Units (4,500 units) | 273,401 | 273,401 |
| 23,000,000 | 22,849,866 | 22,849,866 |
| FrontStream Holdings, LLC (2%)* | Payment and Donation Management Product Service Provider | Subordinated Note (13% Cash, Due 12/20) | 13,375,000 | 13,260,545 | 12,247,000 |
| Series C-2 Preferred Shares (500 shares) | 500,000 | 203,000 |
| 13,375,000 | 13,760,545 | 12,450,000 |
| Frontstreet Facility Solutions, Inc. (1%)* | Retail, Restaurant and Commercial Facilities Maintenance | Subordinated Note (11% Cash, 2% PIK, Due 07/18) | 8,462,629 | 8,425,293 | 3,850,000 |
| Series A Convertible Preferred Stock (2,500 shares) | 250,000 | — |
| Series B Convertible Preferred Stock (5,556 shares) | 500,000 | — |
| 8,462,629 | 9,175,293 | 3,850,000 |
| Frozen Specialties, Inc. (2%)* | Frozen Foods Manufacturer | Subordinated Note (10% Cash, 4% PIK, Due 12/17) | 13,812,107 | 13,812,107 | 13,812,107 |
| 13,812,107 | 13,812,107 | 13,812,107 |
| GST AutoLeather, Inc. (3%)* | Supplier of Automotive Interior Leather | Subordinated Note (11% Cash, 2% PIK, Due 01/21) | 23,247,130 | 22,941,643 | 22,941,643 |
| 23,247,130 | 22,941,643 | 22,941,643 |
| Halo Branded Solutions, Inc. (2%)* | Supply Chain Services | Subordinated Notes (11% Cash, 1% PIK, Due 10/22) | 10,436,424 | 10,223,983 | 10,223,983 |
| Class A1 Units (2,600 units) | 2,600,000 | 4,078,000 |
| 10,436,424 | 12,823,983 | 14,301,983 |
| HKW Capital Partners IV, L.P.(0%)*(4) | Multi-Sector Holdings | 0.6% Limited Partnership Interest | 972,171 | 1,367,888 |
| 972,171 | 1,367,888 |

8
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of Investments — (Continued)March 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| HTC Borrower, LLC (4%)* | Hunting and Outdoor Products | Subordinated Notes (10% Cash, 3% PIK, Due 09/20) | $ | 26,327,694 | $ | 26,066,199 | $ | 26,066,199 |
| 26,327,694 | 26,066,199 | 26,066,199 |
| ICP Industrial, Inc. (3%)* | Coatings Formulator and Manufacturer | Subordinated Note (9.5% Cash, Due 04/22) | 7,500,000 | 7,437,820 | 7,437,820 |
| Subordinated Notes (10% Cash, 1% PIK, Due 10/22) | 8,108,568 | 7,971,222 | 7,971,222 |
| Subordinated Notes (14% PIK, Due 10/22) | 5,946,403 | 5,893,249 | 5,893,249 |
| Class A Units (1,289 units) | 1,751,483 | 1,941,000 |
| 21,554,971 | 23,053,774 | 23,243,291 |
| Inland Pipe Rehabilitation Holding Company LLC (0%)* | Cleaning and Repair Services | Membership Interest Purchase Warrant (3%) | 853,500 | 1,749,000 |
| 853,500 | 1,749,000 |
| IPS Structural Adhesives Holdings, Inc. (2%)* | Specialty Adhesives and Plumbing Products Manufacturer | Second Lien Term Note (10.5% Cash, Due 12/24) | 15,000,000 | 14,706,098 | 14,706,098 |
| 15,000,000 | 14,706,098 | 14,706,098 |
| KidKraft, Inc. (4%)* | Children's Toy Manufacturer and Distributor | Second Lien Term Note (11% Cash, 1% PIK, Due 03/22) | 27,737,601 | 27,223,302 | 27,223,302 |
| 27,737,601 | 27,223,302 | 27,223,302 |
| K-Square Restaurant Partners, LP (F/K/A The Krystal Company) (1%)* | Restaurant | Class A Units of Limited Partnership (2,000 units) | 638,260 | 3,808,000 |
| 638,260 | 3,808,000 |
| Lakeview Health Holdings, Inc. (3%)* | Substance Abuse Treatment Service Provider | Senior Note (7.8% Cash, Due 12/21) | 18,566,101 | 18,374,384 | 18,374,384 |
| Common Stock (2,000 shares) | 2,000,000 | 2,000,000 |
| 18,566,101 | 20,374,384 | 20,374,384 |
| Media Storm, LLC (1%)* | Marketing Services | Subordinated Note (10% Cash, Due 08/19) | 6,545,455 | 6,537,680 | 5,541,000 |
| Membership Units (1,216,204 units) | 1,176,957 | 378,000 |
| 6,545,455 | 7,714,637 | 5,919,000 |
| MIC Holding LLC (F/K/A Magpul Industries Corp.) (2%)* | Firearm Accessories Manufacturer and Distributor | Preferred Units (1,470 units) | 1,470,000 | 3,114,000 |
| Common Units (30,000 units) | 30,000 | 8,787,000 |
| 1,500,000 | 11,901,000 |
| Micross Solutions LLC (4%)* | Provider of Semiconductor Products and Services | Subordinated Note (12% Cash, 3% PIK, Due 06/18) | 24,618,795 | 24,540,305 | 24,540,305 |
| Class A-2 Common Units (1,979,524 units) | 2,019,693 | 1,884,000 |
| 24,618,795 | 26,559,998 | 26,424,305 |
| Motor Vehicle Software Corporation (3%)* | Provider of EVR Services | Subordinated Note (10% Cash, 0.5% PIK, Due 03/21) | 20,270,406 | 19,958,931 | 19,958,931 |
| Class A Units (1,000,000 units) | 1,087,460 | 1,396,000 |
| 20,270,406 | 21,046,391 | 21,354,931 |
| Nautic Partners VII, LP (0%)*(4) | Multi-Sector Holdings | 0.4% Limited Partnership Interest | 1,062,707 | 1,516,000 |
| 1,062,707 | 1,516,000 |
| Nomacorc, LLC (2%)* | Synthetic Wine Cork Producer | Subordinated Note (10% Cash, 2.3% PIK, Due 07/21) | 20,993,317 | 20,703,887 | 16,852,000 |
| Limited Partnership Interest | 2,153,274 | — |
| 20,993,317 | 22,857,161 | 16,852,000 |
| Orchid Underwriters Agency, LLC (1%)* | Insurance Underwriter | Subordinated Note (10% Cash, 1.5% PIK, Due 03/23) | 2,601,517 | 2,549,517 | 2,549,517 |
| Subordinated Note (13.5% PIK, Due 03/24) | 904,725 | 886,725 | 886,725 |
| Class A Preferred Units (15,000 units) | 338,158 | 869,000 |
| Class A Common Units (15,000 units) | — | 919,000 |
| 3,506,242 | 3,774,400 | 5,224,242 |
| Pike Corporation (0%)* | Provider of Energy Infrastructure Solutions | Subordinated Note (9% Cash, Due 09/24) | 1,000,000 | 990,000 | 990,000 |
| 1,000,000 | 990,000 | 990,000 |
| PowerDirect Marketing, LLC (0%)* | Marketing Services | Senior Note (13% Cash, 2% PIK, Due 06/17)(6) | 8,498,403 | 4,677,482 | 450,000 |
| Common Unit Purchase Warrants | 590,200 | — |
| 8,498,403 | 5,267,682 | 450,000 |
| ProAmpac PG Borrower LLC (2%)* | Manufacturer of Flexible Packaging Products | Second Lien Term Note (9.6% Cash, Due 11/24) | 15,000,000 | 14,779,774 | 14,779,774 |
| 15,000,000 | 14,779,774 | 14,779,774 |

9
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of Investments — (Continued)March 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| REP WWEX Acquisition Parent, LLC (2%)* | Third-Party Logistics Provider | Second Lien Term Note (9.8% Cash, Due 02/25) | $ | 15,000,000 | $ | 14,779,723 | $ | 14,779,723 |
| 15,000,000 | 14,779,723 | 14,779,723 |
| RMP Group, Inc. (1%)* | Provider of RCM Services to Hospitals and Physician Groups | Subordinated Note (10.5% Cash, 1% PIK, Due 09/22) | 10,008,219 | 9,808,219 | 9,808,219 |
| Units (1,000 units) | 1,000,000 | 1,000,000 |
| 10,008,219 | 10,808,219 | 10,808,219 |
| RockYou, Inc. (0%)* | Mobile Game Advertising Network | Common Stock (67,585 shares) | 111,000 | 111,000 |
| 111,000 | 111,000 |
| Rotolo Consultants, Inc. (1%)* | Landscape Services | Subordinated Note (11% Cash, 3% PIK, Due 08/21) | 6,956,121 | 6,849,145 | 6,849,145 |
| Series A Preferred Units (39 units) | 3,654,253 | 2,444,000 |
| 6,956,121 | 10,503,398 | 9,293,145 |
| SCA Pharmaceuticals, LLC (0%)* | Provider of Pharmaceutical Products | Subordinated Note (10.1% Cash, Due 12/20) | 3,000,000 | 2,715,480 | 2,715,480 |
| 3,000,000 | 2,715,480 | 2,715,480 |
| SCUF Gaming, Inc. (4%)* | Gaming Controller Manufacturer | Senior Notes (9.5% Cash, Due 12/21) | 25,008,000 | 24,527,667 | 24,527,667 |
| Revolver Loan (9.5% Cash, Due 06/18) | 1,500,000 | 1,500,000 | 1,500,000 |
| Common Stock (27,112 shares) | 742,000 | 742,000 |
| 26,508,000 | 26,769,667 | 26,769,667 |
| Smile Brands, Inc. (3%)* | Dental Service Organization | Subordinated Notes (10% Cash, 2% PIK, Due 02/23) | 22,454,231 | 22,035,700 | 22,035,700 |
| Class A Units (3,000 units) | 3,000,000 | 1,952,000 |
| 22,454,231 | 25,035,700 | 23,987,700 |
| SPC Partners V, LP (0%)*(4) | Multi-Sector Holdings | 0.7% Limited Partnership Interest | 1,922,865 | 2,092,000 |
| 1,922,865 | 2,092,000 |
| Specialized Desanders, Inc. (2%)*(4) | Sand and Particulate Removal Equipment Provider for Oil and Gas Companies | Subordinated Note (12% Cash, 2% PIK, Due 03/20) | 16,110,042 | 15,979,621 | 12,643,516 |
| Class C Partnership Units (2,000,000 units) | 1,937,421 | 3,006,000 |
| 16,110,042 | 17,917,042 | 15,649,516 |
| Tate's Bake Shop (2%)* | Producer of Baked Goods | Subordinated Note (10% Cash, 3% PIK, Due 02/20) | 10,817,982 | 10,695,615 | 10,695,615 |
| Limited Partnership Interest | 925,000 | 1,308,000 |
| 10,817,982 | 11,620,615 | 12,003,615 |
| TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (3%)* | Specialty Staffing Service Provider | Senior Notes (9.5% Cash Due 09/19) | 20,528,936 | 20,204,484 | 20,204,484 |
| Limited Partnership Units - Merlin (500,500 units) | 285,485 | 286,000 |
| Class A Units - CSG (100,000 units) | 100,000 | 100,000 |
| 20,528,936 | 20,589,969 | 20,590,484 |
| The Cook & Boardman Group, LLC (2%)* | Distributor of Doors and Related Products | Subordinated Note (10% Cash, 2.5% PIK, Due 03/20) | 14,933,072 | 14,761,757 | 14,761,757 |
| Class A Units (1,400,000 units) | 1,400,000 | 2,483,000 |
| 14,933,072 | 16,161,757 | 17,244,757 |
| Tosca Services, LLC (4%)* | Perishable Food Supply Chain Management | Senior Note (10.5% Cash, Due 12/20) | 29,250,000 | 28,952,542 | 28,952,542 |
| 29,250,000 | 28,952,542 | 28,952,542 |
| Trademark Global LLC (2%)* | Supplier to Mass Market Internet Retail | Subordinated Note (10% Cash, 1.3% PIK, Due 04/23) | 14,800,000 | 14,590,484 | 14,590,484 |
| Class A Units (1,500,000 units) | 1,500,000 | 1,500,000 |
| Class B Units (1,500,000 units) | — | — |
| 14,800,000 | 16,090,484 | 16,090,484 |
| Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)* | Luggage and Travel Bag Supplier | Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22) | 10,176,685 | 9,976,856 | 9,976,856 |
| Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4) | 9,014,272 | 8,834,426 | 8,685,393 |
| Common Units - Travelpro (2,000,000 units) | 2,000,000 | 2,321,000 |
| 19,190,957 | 20,811,282 | 20,983,249 |

10
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of Investments — (Continued)March 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| United Biologics, LLC (2%)* | Allergy Immunotherapy | Senior Note (12% Cash, 2% PIK, Due 04/18) | $ | 12,823,343 | $ | 12,823,342 | $ | 12,823,342 |
| Class A-1 Common Units (18,818 units) | 137,324 | 137,000 |
| Class A Common Units (177,935 units) | 1,999,989 | 1,579,000 |
| Class A-2 Common Kicker Units (444,003 units) | — | — |
| Class A-1 Common Kicker Units (14,114 units) | — | — |
| Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants | 838,117 | 328,000 |
| 12,823,343 | 15,798,772 | 14,867,342 |
| Vantage Mobility International, LLC (4%)* | Wheelchair Accessible Vehicle Manufacturer | Subordinated Notes (10.2% Cash, Due 09/21) | 29,350,000 | 28,809,367 | 28,809,367 |
| Class A Units (1,750,000 units) | 1,750,000 | 1,587,000 |
| 29,350,000 | 30,559,367 | 30,396,367 |
| Water Pik, Inc. (4%)* | Oral Health and Shower Head Supplier | Second Lien Term Loan (9.8% Cash, Due 01/21) | 31,150,970 | 30,788,788 | 30,788,788 |
| 31,150,970 | 30,788,788 | 30,788,788 |
| Wheel Pros Holdings, Inc. (2%)* | Wheel/Rim and Performance Tire Distributor | Subordinated Note (11% Cash, Due 06/20) | 13,822,500 | 13,617,984 | 13,617,984 |
| Class A Units (2,000 units) | 1,954,144 | 2,000,000 |
| 13,822,500 | 15,572,128 | 15,617,984 |
| Women's Marketing, Inc. (2%)* | Full-Service Media Organization | Subordinated Note (11% Cash, 1.5% PIK, Due 06/21)(6) | 17,402,357 | 16,141,439 | 11,093,000 |
| Class A Common Units (16,300 units) | 1,630,000 | — |
| 17,402,357 | 17,771,439 | 11,093,000 |
| WSO Holdings, LP (1%)* | Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer | Common Points (3,121 points) | 3,089,581 | 3,679,000 |
| 3,089,581 | 3,679,000 |
| YummyEarth Inc. (3%)* | Organic Candy Manufacturer | Senior Notes (9.6% Cash, Due 08/20) | 23,500,000 | 23,149,762 | 21,356,000 |
| Limited Partnership Interest | 3,496,500 | — |
| 23,500,000 | 26,646,262 | 21,356,000 |
| Subtotal Non–Control / Non–Affiliate Investments | 890,608,128 | 948,873,881 | 922,229,496 |
| Affiliate Investments: |
| All Metals Holding, LLC (1%)* | Steel Processor and Distributor | Subordinated Note (12% Cash, 1% PIK, Due 12/21) | 6,449,609 | 6,272,347 | 6,272,347 |
| Units (318,977 units) | 793,331 | 777,000 |
| 6,449,609 | 7,065,678 | 7,049,347 |
| CIS Secure Computing Inc. (2%)* | Secure Communications and Computing Solutions Provider | Subordinated Note (12% Cash, 2% PIK, Due 03/18) | 10,736,796 | 10,736,796 | 10,736,796 |
| Common Stock (84 shares) | 502,320 | 1,904,000 |
| 10,736,796 | 11,239,116 | 12,640,796 |
| Consolidated Lumber Holdings, LLC (0%)* | Lumber Yard Operator | Class A Units (15,000 units) | 1,500,000 | 2,449,000 |
| 1,500,000 | 2,449,000 |
| DPII Holdings, LLC (0%)* | Satellite Communication Business | Tranche I & II Subordinated Notes (12% Cash, 4% PIK, Due 01/18)(6) | 3,782,281 | 3,114,285 | 2,669,001 |
| Tranche III Subordinated Note (19% PIK, Due 01/18)(6) | 2,524,987 | 2,148,462 | — |
| Class A Membership Interest (17,308 units) | 1,107,692 | — |
| 6,307,268 | 6,370,439 | 2,669,001 |
| FCL Holding SPV, LLC (0%)* | Commercial Printing Services | Class A Interest (24,873 units) | 292,000 | 596,000 |
| Class B Interest (48,427 units) | — | — |
| Class C Interest (3,746 units) | — | — |
| 292,000 | 596,000 |

11
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of Investments — (Continued)March 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| Frank Entertainment Group, LLC (2%)* | Movie Theatre and Family Entertainment Operator | Senior Note (10% Cash, 5.8% PIK, Due 06/18) | $ | 10,141,360 | $ | 10,093,317 | $ | 9,561,000 |
| Class A Redeemable Preferred Units (196,718 units) | 3,934,666 | 4,566,904 |
| Class B Redeemable Preferred Units (18,667 units) | 433,334 | 660,810 |
| Class C Redeemable Preferred Units (25,846 units) | 600,000 | — |
| Class A Common Units (43,077 units) | 1,000,000 | — |
| Class A Common Warrants | 632,000 | — |
| 10,141,360 | 16,693,317 | 14,788,714 |
| Native Maine Operations, Inc. (3%)* | Fresh Foodservice Distributor | Senior Notes (10.1% Cash, Due 01/22) | 18,000,000 | 17,634,876 | 17,634,876 |
| Series A Preferred Units (20,000 units) | 2,000,000 | 2,000,000 |
| 18,000,000 | 19,634,876 | 19,634,876 |
| NB Products, Inc. (7%)* | Distributor of Work Apparel and Accessories | Subordinated Note (12% Cash, 2% PIK, Due 02/20) | 23,220,842 | 22,888,502 | 22,888,502 |
| Jr. Subordinated Note (10% PIK, Due 02/20) | 4,823,476 | 4,720,827 | 4,720,827 |
| Jr. Subordinated Bridge Note (20% PIK, Due 05/21) | 2,102,715 | 2,074,768 | 2,074,768 |
| Series A Redeemable Senior Preferred Stock (7,839 shares) | 7,621,648 | 9,645,000 |
| Common Stock (1,668,691 shares) | 333,738 | 11,270,000 |
| 30,147,033 | 37,639,483 | 50,599,097 |
| Passport Food Group, LLC (3%)* | Manufacturer of Ethnic Food Products | Senior Notes (10.1% Cash, Due 03/22) | 20,000,000 | 19,600,000 | 19,600,000 |
| Common Shares (20,000 shares) | 2,000,000 | 2,000,000 |
| 20,000,000 | 21,600,000 | 21,600,000 |
| PCX Aerostructures, LLC (3%)* | Aerospace Component Manufacturer | Subordinated Note (10.5% Cash, Due 10/19) | 29,647,359 | 29,171,148 | 22,452,000 |
| Series A Preferred Stock (6,066 shares) | 6,065,621 | — |
| Series B Preferred Stock (411 shares) | 410,514 | — |
| Class A Common Stock (121,922 shares) | 30,480 | — |
| 29,647,359 | 35,677,763 | 22,452,000 |
| Team Waste, LLC (1%)* | Environmental and Facilities Services | Preferred Units (455,000 units) | 9,100,000 | 9,240,000 |
| 9,100,000 | 9,240,000 |
| Technology Crops, LLC (2%)* | Supply Chain Management Services | Subordinated Notes (12% Cash, 5% PIK, Due 09/17) | 11,986,209 | 11,986,209 | 11,986,209 |
| Common Units (50 units) | 500,000 | — |
| 11,986,209 | 12,486,209 | 11,986,209 |
| TGaS Advisors, LLC (1%)* | Advisory Solutions to Pharmaceutical Companies | Senior Note (10% Cash, 1% PIK, Due 11/19) | 9,636,239 | 9,498,497 | 9,498,497 |
| Preferred Units (1,685,357 units) | 1,556,069 | 1,244,000 |
| 9,636,239 | 11,054,566 | 10,742,497 |
| Tulcan Fund IV, L.P. (F/K/A Dyson Corporation) (0%)* | Custom Forging and Fastener Supplies | Common Units (1,000,000 units) | 1,000,000 | — |
| 1,000,000 | — |
| United Retirement Plan Consultants, Inc. (0%)* | Retirement Plan Administrator | Series A Preferred Shares (9,400 shares) | 205,748 | 265,000 |
| Common Shares (100,000 shares) | 1,000,000 | 300,000 |
| 1,205,748 | 565,000 |
| Waste Recyclers Holdings, LLC (0%)* | Environmental and Facilities Services | Class A Preferred Units (280 units) | 2,251,100 | — |
| Class B Preferred Units (11,484,867 units) | 3,304,218 | 713,000 |
| Common Unit Purchase Warrant (1,170,083 units) | 748,900 | — |
| Common Units (153,219 units) | 180,783 | — |
| 6,485,001 | 713,000 |
| Wythe Will Tzetzo, LLC (1%)* | Confectionery Goods Distributor | Series A Preferred Units (99,829 units) | — | 5,256,000 |
| — | 5,256,000 |
| Subtotal Affiliate Investments | 153,051,873 | 199,044,196 | 192,981,537 |

12
| TRIANGLE CAPITAL CORPORATIONUnaudited Consolidated Schedule of Investments — (Continued)March 31, 2017 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| Control Investments: |
| CRS Reprocessing, LLC (1%)* | FluidReprocessingServices | Senior Notes (4.5% Cash, Due 06/17) | $ | 2,942,769 | $ | 2,942,769 | $ | 2,942,769 |
| Split Collateral Term Loans (8% Cash, Due 06/17) | 13,192,464 | 13,192,464 | 6,110,000 |
| Series F Preferred Units (705,321 units) | 9,134,807 | — |
| Common Units (15,174 units) | — | — |
| 16,135,233 | 25,270,040 | 9,052,769 |
| DCWV Acquisition Corporation (0%)* | Arts & Crafts and Home Decor Products Designer and Supplier | Senior Subordinated Note (15% PIK, Due 12/19)(6) | 302,958 | 250,000 | 250,000 |
| Subordinated Note (12% Cash, 3% PIK, Due 12/19)(6) | 8,399,803 | 6,178,633 | 667,000 |
| Jr. Subordinated Note (15% PIK, Due 12/19)(6) | 2,533,508 | 2,000,000 | — |
| Series A Preferred Equity (1,200 shares) | 1,200,000 | — |
| 100% Common Shares | — | — |
| 11,236,269 | 9,628,633 | 917,000 |
| SRC Worldwide, Inc. (1%)* | Specialty Chemical Manufacturer | Common Stock (5,000 shares) | 8,028,000 | 8,028,000 |
| 8,028,000 | 8,028,000 |
| Subtotal Control Investments | 27,371,502 | 42,926,673 | 17,997,769 |
| Total Investments, March 31, 2017 (155%)* | $ | 1,071,031,503 | $ | 1,190,844,750 | $ | 1,133,208,802 |

* Fair value as a percent of net assets
| (1) | All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. |

| (2) | Disclosures of interest rates on notes include cash interest rates and payment-in-kind (“PIK”) interest rates. |

| (3) | All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors. |

| (4) | Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 2.6% of total investments at fair value as of March 31, 2017. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a). |

| (5) | PIK non-accrual investment |

| (6) | Non-accrual investment |

| (7) | All of the Company's investments, unless otherwise noted, are encumbered either as security for the Company's senior secured credit facility or in support of the SBA-guaranteed debentures issued by Triangle Mezzanine Fund LLLP and Triangle Mezzanine Fund II LP. |

See accompanying notes.
13
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of InvestmentsDecember 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| Non–Control / Non–Affiliate Investments: |
| ACA Holdings LLC (F/K/A My Alarm Center, LLC) (0%)* | Security Company | Preferred Units (2,000,000 units) | $ | 2,000,000 | $ | 1,242,000 |
| 2,000,000 | 1,242,000 |
| Access Medical Acquisition, Inc. (3%)* | Operator of Primary Care Clinics | Subordinated Notes (10% Cash, 2% PIK, Due 01/22) | $ | 13,819,514 | 13,593,292 | 13,593,292 |
| Class A Units (1,500,000 units) | 901,026 | 3,618,000 |
| 13,819,514 | 14,494,318 | 17,211,292 |
| Aden & Anais Holdings, Inc. (0%)* | Baby Products | Common Stock (20,000 shares) | 2,000,000 | 2,000,000 |
| 2,000,000 | 2,000,000 |
| Agilex Flavors & Fragrances, Inc. (2%)* | Custom Fragrance Producer | Subordinated Note (12% Cash, Due 11/21) | 13,168,124 | 13,048,983 | 13,048,983 |
| Common Units (1,250 units) | 1,250,000 | 2,227,000 |
| 13,168,124 | 14,298,983 | 15,275,983 |
| AGM Automotive, LLC (1%)* | Auto Industry Interior Components Supplier | Units (1,500,000 units) | 630,134 | 4,266,000 |
| 630,134 | 4,266,000 |
| Avkem International, LLC (1%)* | Flux and Foundry Manufacturer and Supplier | Subordinated Note (10% Cash, 4% PIK, Due 12/17) | 4,112,935 | 4,075,177 | 4,075,177 |
| 4,112,935 | 4,075,177 | 4,075,177 |
| AVL Holdings, Inc. (0%)* | Manufacturer and Distributor for Independent Artists and Authors | Common Stock (138 shares) | 1,300,000 | 1,767,000 |
| 1,300,000 | 1,767,000 |
| Baker Hill Acquisition, LLC (2%)* | Loan Origination Software Solutions Provider | Subordinated Notes (12% Cash, Due 03/21) | 13,500,000 | 13,334,260 | 12,320,000 |
| Limited Partnership Interest | 1,498,500 | 721,000 |
| 13,500,000 | 14,832,760 | 13,041,000 |
| Cafe Enterprises, Inc. (2%)* | Restaurant | Subordinated Note (7% Cash, 7% PIK, Due 09/19) | 13,882,800 | 13,743,461 | 10,331,000 |
| Series C Preferred Stock (10,000 shares) | 1,000,000 | — |
| 13,882,800 | 14,743,461 | 10,331,000 |
| Capital Contractors, Inc. (0%)* | Janitorial and Facilities Maintenance Services | Subordinated Notes (5% Cash, Due 6/20) | 9,843,542 | 9,711,658 | — |
| Series A Redeemable Preferred Stock (200 shares) | 2,000,000 | — |
| Common Stock Warrants (20 shares) | 492,000 | — |
| 9,843,542 | 12,203,658 | — |
| Captek Softgel International, Inc. (3%)* | Nutraceutical Manufacturer | Subordinated Note (10% Cash, 2.5% PIK, Due 06/21) | 15,407,336 | 15,150,497 | 15,150,497 |
| Common Stock (15,000 shares) | 1,500,000 | 1,500,000 |
| 15,407,336 | 16,650,497 | 16,650,497 |
| Carolina Beverage Group, LLC (0%)* | Beverage Manufacturingand Packaging | Class B Units (11,974 units) | 119,735 | 264,000 |
| 119,735 | 264,000 |
| Centerfield Media Holding Company (4%)* | Digital Marketing | Subordinated Note (10% Cash, 3.5% PIK, Due 03/21) | 18,857,978 | 18,567,590 | 19,235,000 |
| Common Shares (1,000 shares) | 1,000,000 | 2,220,000 |
| 18,857,978 | 19,567,590 | 21,455,000 |
| Community Intervention Services, Inc. (2%)* | Provider of Behavioral Health Services | Subordinated Note (7% Cash, 6% PIK, Due 01/21) (5) | 18,736,265 | 17,717,756 | 14,134,000 |
| 18,736,265 | 17,717,756 | 14,134,000 |
| Comverge, Inc. (3%)* | Provider of Intelligent Energy Management Solutions | Senior Note (12% Cash, Due 05/18) | 15,505,583 | 15,406,749 | 15,406,749 |
| Preferred Stock (703 shares) | 554,458 | 835,000 |
| Common Stock (1,000,000 shares) | 100,000 | 353,000 |
| 15,505,583 | 16,061,207 | 16,594,749 |
| CPower Ultimate HoldCo, LLC (0%)* | Demand Response Business | Units (345,542 units) | 345,542 | 345,542 |
| 345,542 | 345,542 |

14
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of Investments — (Continued)December 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| CWS Holding Company, LLC (0%)* | Manufacturer of Custom Windows and Sliding Doors | Class A Units (1,500,000 units) | $ | 1,500,000 | $ | 2,076,000 |
| 1,500,000 | 2,076,000 |
| Data Source Holdings, LLC (0%)* | Print Supply Chain Management Services | Common Units (47,503 units) | 1,000,000 | 940,000 |
| 1,000,000 | 940,000 |
| Del Real, LLC (2%)* | Hispanic Refrigerated Foods Company | Subordinated Note (11% Cash, Due 04/23) | $ | 14,000,000 | 13,727,515 | 13,727,515 |
| Class A Units (3,000,000 units) | 3,000,000 | 3,000,000 |
| 14,000,000 | 16,727,515 | 16,727,515 |
| DialogDirect, Inc. (2%)* | Business Process Outsourcing Provider | Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20) | 16,126,541 | 16,020,226 | 11,994,000 |
| 16,126,541 | 16,020,226 | 11,994,000 |
| Dimora Brands, Inc. (F/K/A TK USA Enterprises, Inc.) (2%)* | Hardware Designer and Distributor | Subordinated Note (11% Cash, Due 10/23) | 12,500,000 | 12,267,514 | 12,267,514 |
| 12,500,000 | 12,267,514 | 12,267,514 |
| DLC Acquisition, LLC (6%)* | Staffing Firm | Senior Notes (10% Cash, Due 12/20) | 21,312,500 | 21,047,577 | 21,047,577 |
| Senior Note (10% Cash, 2% PIK, Due 12/20) | 16,929,763 | 16,735,793 | 16,735,793 |
| 38,242,263 | 37,783,370 | 37,783,370 |
| Dyno Acquiror, Inc. (1%)* | Sewing Products and Seasonal Decorative Products Supplier | Subordinated Note (12% Cash, 2% PIK, Due 11/19) | 7,531,330 | 7,474,744 | 7,474,744 |
| Series A Units (600,000 units) | 600,000 | 739,000 |
| 7,531,330 | 8,074,744 | 8,213,744 |
| Eckler's Holdings, Inc. (1%)* | Restoration Parts and Accessories for Classic Cars and Trucks | Subordinated Note (11% Cash, 4.5% PIK, Due 07/18) | 9,941,563 | 9,882,596 | 8,396,000 |
| Common Stock (18,029 shares) | 183,562 | — |
| Series A Preferred Stock (1,596 shares) | 1,596,126 | — |
| Series B Preferred Stock (185 shares) | 185,127 | — |
| 9,941,563 | 11,847,411 | 8,396,000 |
| Fresh-G Restaurant Holding, LLC (0%)* | Restaurant | Class A Units (5,000 units) | 500,000 | — |
| 500,000 | — |
| Flowchem Holdings LLC (0%)* | Services to Crude Oil Pipeline Operators | Common Units (1,000,000 units) | 782,356 | 2,552,000 |
| 782,356 | 2,552,000 |
| Fridababy Holdings, LLC (4%)* | Baby Products | Senior Notes (10% Cash, Due 10/21) | 23,000,000 | 22,558,007 | 22,558,007 |
| Class B Units (4,500 units) | 273,401 | 273,401 |
| 23,000,000 | 22,831,408 | 22,831,408 |
| FrontStream Holdings, LLC (2%)* | Payment and Donation Management Product Service Provider | Subordinated Note (12.5% Cash, Due 12/20) | 13,375,000 | 13,254,632 | 12,643,000 |
| Series C-2 Preferred Shares (500 shares) | 500,000 | 435,000 |
| 13,375,000 | 13,754,632 | 13,078,000 |
| Frontstreet Facility Solutions, Inc. (1%)* | Retail, Restaurant and Commercial Facilities Maintenance | Subordinated Note (11% Cash, 2% PIK, Due 07/18) | 8,462,629 | 8,418,332 | 6,771,000 |
| Series A Convertible Preferred Stock (2,500 shares) | 250,000 | — |
| Series B Convertible Preferred Stock (5,556 shares) | 500,000 | — |
| 8,462,629 | 9,168,332 | 6,771,000 |
| Frozen Specialties, Inc. (2%)* | Frozen Foods Manufacturer | Subordinated Note (10% Cash, 4% PIK, Due 12/17) | 13,675,353 | 13,675,353 | 13,675,353 |
| 13,675,353 | 13,675,353 | 13,675,353 |
| GST AutoLeather, Inc. (4%)* | Supplier of Automotive Interior Leather | Subordinated Note (11% Cash, 2% PIK, Due 01/21) | 23,131,473 | 22,812,032 | 22,812,032 |
| 23,131,473 | 22,812,032 | 22,812,032 |
| Halo Branded Solutions, Inc. (2%)* | Supply Chain Services | Subordinated Notes (11% Cash, 1% PIK, Due 10/22) | 10,410,398 | 10,190,992 | 10,190,992 |
| Class A1 Units (2,600 units) | 2,600,000 | 3,308,000 |
| 10,410,398 | 12,790,992 | 13,498,992 |
| HKW Capital Partners IV, L.P.(0%)*(4) | Multi-Sector Holdings | 0.6% Limited Partnership Interest | 835,283 | 1,231,000 |
| 835,283 | 1,231,000 |

15
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of Investments — (Continued)December 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| HTC Borrower, LLC (4%)* | Hunting and Outdoor Products | Subordinated Notes (10% Cash, 3% PIK, Due 09/20) | $ | 26,131,706 | $ | 25,854,767 | $ | 25,854,767 |
| 26,131,706 | 25,854,767 | 25,854,767 |
| ICP Industrial, Inc. (4%)* | Coatings Formulator and Manufacturer | Subordinated Note (9.5% Cash, Due 04/22) | 7,500,000 | 7,435,556 | 7,435,556 |
| Subordinated Notes (10% Cash, 1% PIK, Due 10/22) | 8,088,123 | 7,946,278 | 7,946,278 |
| Subordinated Notes (14% PIK, Due 10/22) | 5,743,159 | 5,688,352 | 5,688,352 |
| Class A Units (1,289 units) | 1,751,483 | 1,929,000 |
| 21,331,282 | 22,821,669 | 22,999,186 |
| Inland Pipe Rehabilitation Holding Company LLC (0%)* | Cleaning and Repair Services | Membership Interest Purchase Warrant (3%) | 853,500 | 1,527,000 |
| 853,500 | 1,527,000 |
| IPS Structural Adhesives Holdings, Inc. (2%)* | Specialty Adhesives and Plumbing Products Manufacturer | Second Lien Term Note (10.5% Cash, Due 12/24) | 15,000,000 | 14,700,000 | 14,700,000 |
| 15,000,000 | 14,700,000 | 14,700,000 |
| KidKraft, Inc. (4%)* | Children's Toy Manufacturer and Distributor | Second Lien Term Note (11% Cash, 1% PIK, Due 03/22) | 27,668,623 | 27,135,218 | 27,135,218 |
| 27,668,623 | 27,135,218 | 27,135,218 |
| K-Square Restaurant Partners, LP (F/K/A The Krystal Company) (1%)* | Restaurant | Class A Units of Limited Partnership (2,000 units) | 638,260 | 3,830,000 |
| 638,260 | 3,830,000 |
| Lakeview Health Holdings, Inc. (3%)* | Substance Abuse Treatment Service Provider | Senior Note (7.8% Cash, Due 12/21) | 18,612,633 | 18,412,633 | 18,412,633 |
| Common Stock (2,000 shares) | 2,000,000 | 2,000,000 |
| 18,612,633 | 20,412,633 | 20,412,633 |
| Media Storm, LLC (1%)* | Marketing Services | Subordinated Note (10% Cash, Due 08/19) | 6,545,455 | 6,533,934 | 5,055,000 |
| Membership Units (1,216,204 units) | 1,176,957 | 260,000 |
| 6,545,455 | 7,710,891 | 5,315,000 |
| MIC Holding LLC (F/K/A Magpul Industries Corp.) (2%)* | Firearm Accessories Manufacturer and Distributor | Preferred Units (1,470 units) | 1,470,000 | 3,012,000 |
| Common Units (30,000 units) | 30,000 | 8,837,000 |
| 1,500,000 | 11,849,000 |
| Micross Solutions LLC (4%)* | Provider of Semiconductor Products and Services | Subordinated Note (12% Cash, 3% PIK, Due 06/18) | 24,435,074 | 24,342,230 | 24,342,230 |
| Class A-2 Common Units (1,979,524 units) | 2,019,693 | 1,875,000 |
| 24,435,074 | 26,361,923 | 26,217,230 |
| Motor Vehicle Software Corporation (3%)* | Provider of EVR Services | Subordinated Note (10% Cash, 0.5% PIK, Due 03/21) | 20,245,100 | 19,917,945 | 19,917,945 |
| Class A Units (1,000,000 units) | 1,076,210 | 1,372,000 |
| 20,245,100 | 20,994,155 | 21,289,945 |
| Nautic Partners VII, LP (0%)*(4) | Multi-Sector Holdings | 0.4% Limited Partnership Interest | 1,093,312 | 1,520,000 |
| 1,093,312 | 1,520,000 |
| Nomacorc, LLC (3%)* | Synthetic Wine Cork Producer | Subordinated Note (10% Cash, 2.3% PIK, Due 07/21) | 20,875,890 | 20,572,926 | 16,597,000 |
| Limited Partnership Interest | 2,150,637 | — |
| 20,875,890 | 22,723,563 | 16,597,000 |
| Orchid Underwriters Agency, LLC (4%)* | Insurance Underwriter | Term B Note (10% Cash, Due 11/19) | 21,409,670 | 21,125,036 | 21,125,036 |
| Class A Preferred Units (15,000 units) | 1,500,000 | 1,972,000 |
| Class A Common Units (15,000 units) | — | 1,624,000 |
| 21,409,670 | 22,625,036 | 24,721,036 |
| PowerDirect Marketing, LLC (0%)* | Marketing Services | Senior Note (13% Cash, 2% PIK, Due 06/17)(6) | 8,573,531 | 5,077,482 | 850,000 |
| Common Unit Purchase Warrants | 590,200 | — |
| 8,573,531 | 5,667,682 | 850,000 |
| ProAmpac PG Borrower LLC (2%)* | Manufacturer of Flexible Packaging Products | Second Lien Term Note (9.5% Cash, Due 11/24) | 15,000,000 | 14,775,000 | 14,775,000 |
| 15,000,000 | 14,775,000 | 14,775,000 |

16
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of Investments — (Continued)December 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| RockYou, Inc. (0%)* | Mobile Game Advertising Network | Common Stock (67,585 shares) | $ | 111,000 | $ | 111,000 |
| 111,000 | 111,000 |
| Rotolo Consultants, Inc. (1%)* | Landscape Services | Subordinated Note (11% Cash, 3% PIK, Due 08/21) | $ | 6,904,210 | 6,792,686 | 6,792,686 |
| Series A Preferred Units (39 units) | 3,654,253 | 1,671,000 |
| 6,904,210 | 10,446,939 | 8,463,686 |
| SCA Pharmaceuticals, LLC (0%)* | Provider of Pharmaceutical Products | Subordinated Note (10% Cash, Due 12/20) | 3,000,000 | 2,700,000 | 2,700,000 |
| 3,000,000 | 2,700,000 | 2,700,000 |
| SCUF Gaming, Inc. (4%)* | Gaming Controller Manufacturer | Senior Notes (9.5% Cash, Due 12/21) | 25,008,000 | 24,507,840 | 24,507,840 |
| Common Stock (27,112 shares) | 742,000 | 742,000 |
| 25,008,000 | 25,249,840 | 25,249,840 |
| Smile Brands, Inc. (4%)* | Dental Service Organization | Subordinated Notes (10% Cash, 2% PIK, Due 02/23) | 22,341,283 | 21,910,129 | 21,910,129 |
| Class A Units (3,000 units) | 3,000,000 | 3,000,000 |
| 22,341,283 | 24,910,129 | 24,910,129 |
| SPC Partners V, LP (0%)*(4) | Multi-Sector Holdings | 0.7% Limited Partnership Interest | 1,922,865 | 2,019,000 |
| 1,922,865 | 2,019,000 |
| Specialized Desanders, Inc. (2%)*(4) | Sand and Particulate Removal Equipment Provider for Oil and Gas Companies | Subordinated Note (12% Cash, 2% PIK, Due 03/20) | 16,110,042 | 15,966,524 | 12,524,143 |
| Class C Partnership Units (2,000,000 units) | 1,937,421 | 2,813,000 |
| 16,110,042 | 17,903,945 | 15,337,143 |
| Tate's Bake Shop (2%)* | Producer of Baked Goods | Subordinated Note (10% Cash, 3% PIK, Due 02/20) | 10,737,451 | 10,606,430 | 10,606,430 |
| Limited Partnership Interest | 925,000 | 1,310,000 |
| 10,737,451 | 11,531,430 | 11,916,430 |
| TCFI Merlin LLC (2%)* | Specialty Staffing Service Provider | Senior Notes (10% Cash, 1% PIK, Due 09/19) | 13,396,027 | 13,212,935 | 13,212,935 |
| Limited Partnership Units (500,500 units) | 500,000 | 578,000 |
| 13,396,027 | 13,712,935 | 13,790,935 |
| The Cook & Boardman Group, LLC (3%)* | Distributor of Doors and Related Products | Subordinated Note (10% Cash, 2.5% PIK, Due 03/20) | 14,840,320 | 14,656,890 | 14,656,890 |
| Class A Units (1,400,000 units) | 1,400,000 | 2,663,000 |
| 14,840,320 | 16,056,890 | 17,319,890 |
| Trademark Global LLC (3%)* | Supplier to Mass Market Internet Retail | Subordinated Note (10% Cash, 1.3% PIK, Due 04/23) | 14,800,000 | 14,584,165 | 14,584,165 |
| Class A Units (1,500,000 units) | 1,500,000 | 1,500,000 |
| Class B Units (1,500,000 units) | — | — |
| 14,800,000 | 16,084,165 | 16,084,165 |
| Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)* | Luggage and Travel Bag Supplier | Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22) | 10,126,055 | 9,919,675 | 9,919,675 |
| Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4) | 8,970,540 | 8,784,798 | 8,562,599 |
| Common Units - Travelpro (2,000,000 units) | 2,000,000 | 2,077,000 |
| 19,096,595 | 20,704,473 | 20,559,274 |
| United Biologics, LLC (2%)* | Allergy Immunotherapy | Senior Note (12% Cash, 2% PIK, Due 04/18) | 12,758,807 | 12,686,184 | 12,686,184 |
| Class A-1 Common Units (18,818 units) | 137,324 | 137,000 |
| Class A Common Units (177,935 units) | 1,999,989 | 1,767,000 |
| Class A-2 Common Kicker Units (444,003 units) | — | — |
| Class A-1 Common Kicker Units (14,114 units) | — | — |
| Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants | 838,117 | 361,000 |
| 12,758,807 | 15,661,614 | 14,951,184 |
| Vantage Mobility International, LLC (5%)* | Wheelchair Accessible Vehicle Manufacturer | Subordinated Notes (10.2% Cash, Due 09/21) | 29,350,000 | 28,785,893 | 28,785,893 |
| Class A Units (1,750,000 units) | 1,750,000 | 1,750,000 |
| 29,350,000 | 30,535,893 | 30,535,893 |

17
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of Investments — (Continued)December 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| Water Pik, Inc. (5%)* | Oral Health and Shower Head Supplier | Second Lien Term Loan (9.8% Cash, Due 01/21) | $ | 31,150,970 | $ | 30,769,847 | $ | 30,769,847 |
| 31,150,970 | 30,769,847 | 30,769,847 |
| Wheel Pros Holdings, Inc. (3%)* | Wheel/Rim and Performance Tire Distributor | Subordinated Note (11% Cash, Due 06/20) | 13,822,500 | 13,605,040 | 13,605,040 |
| Class A Units (2,000 units) | 1,954,144 | 1,954,000 |
| 13,822,500 | 15,559,184 | 15,559,040 |
| Women's Marketing, Inc. (2%)* | Full-Service Media Organization | Subordinated Note (11% Cash, 1.5% PIK, Due 06/21)(6) | 16,868,045 | 16,141,439 | 11,093,000 |
| Class A Common Units (16,300 units) | 1,630,000 | — |
| 16,868,045 | 17,771,439 | 11,093,000 |
| WSO Holdings, LP (1%)* | Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer | Common Points (3,000 points) | 3,000,000 | 3,576,000 |
| 3,000,000 | 3,576,000 |
| YummyEarth Inc. (3%)* | Organic Candy Manufacturer | Senior Notes (9.5% Cash, Due 08/20) | 22,000,000 | 21,565,471 | 19,564,000 |
| Limited Partnership Interest | 3,496,500 | — |
| 22,000,000 | 25,061,971 | 19,564,000 |
| Subtotal Non–Control / Non–Affiliate Investments | 825,243,841 | 888,974,154 | 857,604,639 |
| Affiliate Investments: |
| All Metals Holding, LLC (1%)* | Steel Processor and Distributor | Subordinated Note (12% Cash, 1% PIK, Due 12/21) | 6,433,333 | 6,249,220 | 6,249,220 |
| Units (318,977 units) | 793,331 | 754,000 |
| 6,433,333 | 7,042,551 | 7,003,220 |
| CIS Secure Computing Inc. (2%)* | Secure Communications and Computing Solutions Provider | Subordinated Note (12% Cash, 3% PIK, Due 03/18) | 11,670,708 | 11,670,708 | 11,670,708 |
| Common Stock (84 shares) | 502,320 | 2,155,000 |
| 11,670,708 | 12,173,028 | 13,825,708 |
| Consolidated Lumber Company LLC (1%)* | Lumber Yard Operator | Subordinated Note (10% Cash, 2% PIK, Due 09/20) | 4,193,848 | 4,121,389 | 4,278,000 |
| Class A Units (15,000 units) | 1,500,000 | 2,481,000 |
| 4,193,848 | 5,621,389 | 6,759,000 |
| DPII Holdings, LLC (0%)* | Satellite Communication Business | Tranche I & II Subordinated Notes (12% Cash, 4% PIK, Due 01/18)(6) | 3,744,709 | 3,227,001 | 2,356,001 |
| Tranche III Subordinated Note (19% PIK, Due 01/18)(6) | 2,408,752 | 2,148,462 | — |
| Class A Membership Interest (17,308 units) | 1,107,692 | — |
| 6,153,461 | 6,483,155 | 2,356,001 |
| FCL Holding SPV, LLC (0%)* | Commercial Printing Services | Class A Interest (24,873 units) | 292,000 | 645,000 |
| Class B Interest (48,427 units) | — | 101,000 |
| Class C Interest (3,746 units) | — | — |
| 292,000 | 746,000 |
| Frank Entertainment Group, LLC (3%)* | Movie Theatre and Family Entertainment Operator | Senior Note (10% Cash, 5.8% PIK, Due 06/18) | 9,997,644 | 9,940,684 | 9,940,684 |
| Class A Redeemable Preferred Units (10.5% Cash) (196,718 units) | 3,934,666 | 4,566,904 |
| Class B Redeemable Preferred Units (18,667 units) | 433,334 | 1,660,810 |
| Class C Redeemable Preferred Units (25,846 units) | 600,000 | 600,000 |
| Class A Common Units (43,077 units) | 1,000,000 | — |
| Class A Common Warrants | 632,000 | — |
| 9,997,644 | 16,540,684 | 16,768,398 |
| MS Bakery Holdings, Inc. (F/K/A Main Street Gourmet, LLC) (1%)* | Baked Goods Provider | Preferred Units (233 units) | 211,867 | 397,000 |
| Common B Units (3,000 units) | 23,140 | 2,110,000 |
| Common A Units (1,652 units) | 14,993 | 1,162,000 |
| 250,000 | 3,669,000 |

18
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of Investments — (Continued)December 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| NB Products, Inc. (8%)* | Distributor of Work Apparel and Accessories | Subordinated Note (12% Cash, 2% PIK, Due 02/20) | $ | 23,105,315 | $ | 22,751,190 | $ | 22,751,190 |
| Jr. Subordinated Note (10% PIK, Due 02/20) | 4,705,830 | 4,595,921 | 4,595,921 |
| Jr. Subordinated Bridge Note (20% PIK, Due 05/21) | 2,002,586 | 1,972,727 | 1,972,727 |
| Series A Redeemable Senior Preferred Stock (7,839 shares) | 7,621,648 | 9,412,000 |
| Common Stock (1,668,691 shares) | 333,738 | 9,779,000 |
| 29,813,731 | 37,275,224 | 48,510,838 |
| PCX Aerostructures, LLC (4%)* | Aerospace Component Manufacturer | Subordinated Note (10.5% Cash, Due 10/19) | 29,647,359 | 29,148,152 | 21,960,000 |
| Series A Preferred Stock (6,066 shares) | 6,065,621 | — |
| Series B Preferred Stock (411 shares) | 410,514 | — |
| Class A Common Stock (121,922 shares) | 30,480 | — |
| 29,647,359 | 35,654,767 | 21,960,000 |
| Team Waste, LLC (1%)* | Environmental and Facilities Services | Preferred Units (455,000 units) | 9,100,000 | 9,100,000 |
| 9,100,000 | 9,100,000 |
| Technology Crops, LLC (2%)* | Supply Chain Management Services | Subordinated Notes (12% Cash, 5% PIK, Due 09/17) | 11,837,622 | 11,837,622 | 11,837,622 |
| Common Units (50 units) | 500,000 | — |
| 11,837,622 | 12,337,622 | 11,837,622 |
| TGaS Advisors, LLC (2%)* | Advisory Solutions to Pharmaceutical Companies | Senior Note (10% Cash, 1% PIK, Due 11/19) | 9,674,276 | 9,521,986 | 9,521,986 |
| Preferred Units (1,685,357 units) | 1,556,069 | 1,270,000 |
| 9,674,276 | 11,078,055 | 10,791,986 |
| Tulcan Fund IV, L.P. (F/K/A Dyson Corporation) (0%)* | Custom Forging and Fastener Supplies | Common Units (1,000,000 units) | 1,000,000 | — |
| 1,000,000 | — |
| United Retirement Plan Consultants, Inc. (0%)* | Retirement Plan Administrator | Series A Preferred Shares (9,400 shares) | 205,748 | 257,000 |
| Common Shares (100,000 shares) | 1,000,000 | 301,000 |
| 1,205,748 | 558,000 |
| Waste Recyclers Holdings, LLC (0%)* | Environmental and Facilities Services | Class A Preferred Units (280 units) | 2,251,100 | — |
| Class B Preferred Units (11,484,867 units) | 3,304,218 | 817,000 |
| Common Unit Purchase Warrant (1,170,083 units) | 748,900 | — |
| Common Units (153,219 units) | 180,783 | — |
| 6,485,001 | 817,000 |
| Wythe Will Tzetzo, LLC (1%)* | Confectionery Goods Distributor | Series A Preferred Units (99,829 units) | — | 6,808,000 |
| — | 6,808,000 |
| Subtotal Affiliate Investments | 119,421,982 | 162,539,224 | 161,510,773 |
| Control Investments: |
| CRS Reprocessing, LLC (1%)* | FluidReprocessingServices | Senior Notes (4.3% Cash, Due 06/17) | 2,942,769 | 2,942,769 | 2,942,769 |
| Split Collateral Term Loans (8% Cash, Due 06/17) | 11,192,464 | 11,192,464 | 6,182,000 |
| Series F Preferred Units (705,321 units) | 9,134,807 | — |
| Common Units (15,174 units) | — | — |
| 14,135,233 | 23,270,040 | 9,124,769 |
| DCWV Acquisition Corporation (0%)* | Arts & Crafts and Home Decor Products Designer and Supplier | Senior Subordinated Note (15% PIK, Due 12/19)(6) | 291,875 | 250,000 | 250,000 |
| Subordinated Note (12% Cash, 3% PIK, Due 12/19)(6) | 8,090,699 | 6,178,633 | 1,389,000 |
| Jr. Subordinated Note (15% PIK, Due 12/19)(6) | 2,440,829 | 2,000,000 | — |
| Series A Preferred Equity (1,200 shares) | 1,200,000 | — |
| 100% Common Shares | — | — |
| 10,823,403 | 9,628,633 | 1,639,000 |

19
| TRIANGLE CAPITAL CORPORATIONConsolidated Schedule of Investments — (Continued)December 31, 2016 |
| Portfolio Company | Industry | Type of Investment(1)(2)(7) | PrincipalAmount | Cost | FairValue(3) |
| Gerli & Company (0%)* | Specialty Woven Fabrics Manufacturer | Subordinated Note (13% Cash, Due 1/17)(6) | $ | 648,527 | $ | 375,000 | $ | — |
| Subordinated Note (8.5% Cash, Due 1/17)(6) | 4,900,843 | 3,000,000 | — |
| Class A Preferred Shares (1,211 shares) | 855,000 | — |
| Class C Preferred Shares (744 shares) | — | — |
| Class E Preferred Shares (400 shares) | 161,440 | — |
| Common Stock (300 shares) | 100,000 | — |
| 5,549,370 | 4,491,440 | — |
| SRC Worldwide, Inc. (1%)* | Specialty Chemical Manufacturer | Common Stock (5,000 shares) | 8,028,000 | 8,028,000 |
| 8,028,000 | 8,028,000 |
| Subtotal Control Investments | 30,508,006 | 45,418,113 | 18,791,769 |
| Total Investments, December 31, 2016 (170%)* | $ | 975,173,829 | $ | 1,096,931,491 | $ | 1,037,907,181 |

* Fair value as a percent of net assets
| (1) | All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. |

| (2) | Disclosures of interest rates on notes include cash interest rates and payment-in-kind (“PIK”) interest rates. |

| (3) | All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors. |

| (4) | Investment is not a qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. Non-qualifying assets represent 2.5% of total investments at fair value as of December 31, 2016. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a). |

| (5) | PIK non-accrual investment |

| (6) | Non-accrual investment |

| (7) | All of the Company's investments, unless otherwise noted, are encumbered either as security for the Company's senior secured credit facility or in support of the SBA-guaranteed debentures issued by Triangle Mezzanine Fund LLLP and Triangle Mezzanine Fund II LP. |

See accompanying notes.
20
TRIANGLE CAPITAL CORPORATION
Notes to Unaudited Consolidated Financial Statements
1. ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION
Organization and Business
Triangle Capital Corporation and its wholly owned subsidiaries, including Triangle Mezzanine Fund LLLP (“Triangle SBIC”), Triangle Mezzanine Fund II LP (“Triangle SBIC II”) and Triangle Mezzanine Fund III LP (“Triangle SBIC III”) (collectively, the “Company”), are specialty finance companies. Triangle SBIC, Triangle SBIC II and Triangle SBIC III are specialty finance limited partnerships formed to make investments primarily in lower middle market companies located throughout the United States. On September 11, 2003, Triangle SBIC was licensed to operate as a Small Business Investment Company (“SBIC”) under the authority of the United States Small Business Administration (“SBA”). On May 26, 2010, Triangle SBIC II obtained its license to operate as an SBIC and on January 6, 2017, Triangle SBIC III obtained its license to operate as an SBIC. As SBICs, Triangle SBIC, Triangle SBIC II and Triangle SBIC III are subject to a variety of regulations concerning, among other things, the size and nature of the companies in which they may invest and the structure of those investments.
The Company currently operates as a closed-end, non-diversified investment company and has elected to be treated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company is internally managed by its executive officers under the supervision of its Board of Directors (the "Board"). The Company does not pay management or advisory fees, but instead incurs the operating costs associated with employing executive management and investment and portfolio management professionals. Triangle SBIC has also elected to be treated as a BDC under the 1940 Act.
Basis of Presentation
The financial statements of the Company include the accounts of Triangle Capital Corporation and its wholly-owned subsidiaries. The effects of all intercompany transactions between Triangle Capital Corporation and its subsidiaries have been eliminated in consolidation. Under the investment company rules and regulations pursuant to Article 6 of Regulation S-X and Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, Financial Services - Investment Companies, the Company is precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolio company is another investment company. An exception to this general principle occurs if the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company's investment portfolio is carried on the Consolidated Balance Sheets at fair value, as discussed further in Note 2, with any adjustments to fair value recognized as “Net unrealized appreciation (depreciation)” on the Unaudited Consolidated Statements of Operations.
The accompanying unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. Additionally, the unaudited financial statements and accompanying notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
Public Offering of Common Stock
On February 28, 2017, the Company filed a prospectus supplement pursuant to which 7,000,000 shares of common stock were offered for sale at a price to the public of $19.50 per share. Pursuant to this offering, 7,000,000 shares were sold and delivered resulting in net proceeds to the Company, after underwriting discounts and offering expenses, of approximately $132.2 million.
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
2. INVESTMENTS
Portfolio Composition
The Company primarily invests in subordinated debt securities of privately held companies, generally secured by second lien security interests in portfolio company assets. In addition, the Company generally invests in an equity instrument of the borrower, such as warrants to purchase common stock in the portfolio company or direct preferred or common equity interests. On a more limited basis, the Company also invests in senior debt securities secured by first lien security interests in portfolio companies. The Company's investments generally range from $5.0 million to $50.0 million per portfolio company.
The cost basis of the Company's debt investments includes any unamortized original issue discount, unamortized loan origination fees and payment-in-kind (“PIK”) interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments, are shown in the following tables:
| Cost | Percentage ofTotal Portfolio | Fair Value | Percentage ofTotal Portfolio |
| March 31, 2017: |
| Subordinated debt and 2nd lien notes | $ | 759,242,347 | 64 | % | $ | 698,774,893 | 62 | % |
| Senior debt and 1st lien notes | 287,597,925 | 24 | 280,154,364 | 25 |
| Equity shares | 140,341,761 | 12 | 152,202,545 | 13 |
| Equity warrants | 3,662,717 | — | 2,077,000 | — |
| $ | 1,190,844,750 | 100 | % | $ | 1,133,208,802 | 100 | % |
| December 31, 2016: |
| Subordinated debt and 2nd lien notes | $ | 753,635,857 | 69 | % | $ | 690,159,367 | 67 | % |
| Senior debt and 1st lien notes | 198,616,110 | 18 | 191,643,157 | 18 |
| Equity shares | 140,524,807 | 13 | 154,216,657 | 15 |
| Equity warrants | 4,154,717 | — | 1,888,000 | — |
| $ | 1,096,931,491 | 100 | % | $ | 1,037,907,181 | 100 | % |

During the three months ended March 31, 2017, the Company made nine new investments totaling approximately $146.6 million and investments in ten existing portfolio companies totaling approximately $14.9 million. During the three months ended March 31, 2016, the Company made investments in ten existing portfolio companies totaling approximately $11.8 million.
Investment Valuation Process
The Company has established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. The three levels of valuation inputs established by ASC Topic 820 are as follows:
Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.
The Company’s investment portfolio is comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore, the Company determines the fair value of its investments in good faith using Level 3 inputs, pursuant to a valuation policy and process that is established by the management of the Company with the assistance of certain third-party advisors and subsequently approved by the Board. There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition,
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.
The Company’s valuation process is led by the Company’s executive officers. The Company’s valuation process begins with a quarterly review of each investment in the Company’s investment portfolio by the Company’s executive officers and investment committee. Valuations of each portfolio security are then prepared by the Company’s investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under the Company’s valuation policy, each investment valuation is subject to (i) a review by the lead investment officer responsible for the portfolio company investment and (ii) a peer review by a second investment officer or executive officer of the Company. Generally, any investment that is valued below cost is subjected to review by one of the Company’s executive officers. After the peer review is complete, the Company engages two independent valuation firms, including Duff & Phelps, LLC (collectively, the “Valuation Firms”), to provide third-party reviews of certain investments, as described further below. Finally, the Board has the responsibility for reviewing and approving, in good faith, the fair value of the Company’s investments in accordance with the 1940 Act.
The Valuation Firms provide third-party valuation consulting services to the Company which consist of certain procedures that the Company identified and requested the Valuation Firms to perform (hereinafter referred to as the “Procedures”). The Procedures are performed with respect to each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures are generally performed with respect to a portfolio company when there has been a significant change in the fair value of the investment. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the Company’s stockholders’ best interest, to request the Valuation Firms to perform the Procedures on one or more portfolio companies. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.
The total number of investments and the percentage of the investment portfolio on which the Procedures were performed are summarized below by period:
| For the quarter ended: | Totalcompanies | Percent of totalinvestments atfair value(1) |
| March 31, 2016 | 18 | 27% |
| June 30, 2016 | 19 | 30% |
| September 30, 2016 | 19 | 33% |
| December 31, 2016 | 20 | 33% |
| March 31, 2017 | 18 | 30% |

| (1) | Exclusive of the fair value of new investments made during the quarter. |

Upon completion of the Procedures, the Valuation Firms concluded that, with respect to each investment reviewed by each Valuation Firm, the fair value of those investments subjected to the Procedures appeared reasonable. The Board is ultimately responsible for determining the fair value of the Company’s investments in good faith.
Investment Valuation Inputs
Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. The securities in which the Company invests are generally only purchased and sold in merger and acquisition transactions, in which case the entire portfolio company is sold to a third-party purchaser. As a result, unless the Company has the ability to control such a transaction, the assumed principal market for the Company’s securities is a hypothetical secondary market. The Level 3 inputs to the Company’s valuation process reflect the Company’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
Enterprise Value Waterfall Approach
In valuing equity securities (including warrants), the Company estimates fair value using an “Enterprise Value Waterfall” valuation model. The Company estimates the enterprise value of a portfolio company and then allocates the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the Company assumes that any outstanding debt or other securities that are senior to the Company’s equity securities are required to be repaid at par. Additionally, the Company estimates the fair value of a limited number of its debt securities using the Enterprise Value Waterfall approach in cases where the Company does not expect to receive full repayment.
To estimate the enterprise value of the portfolio company, the Company primarily uses a valuation model based on a transaction multiple, which generally is the original transaction multiple, and measures of the portfolio company’s financial performance. In addition, the Company considers other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when the Company believes there are comparable companies that are publicly traded, the Company performs a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, the Company may utilize the liquidation or collateral value of the portfolio company's assets in its estimation of enterprise value.
The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which generally is either earnings before interest, taxes, depreciation and amortization, as adjusted (“Adjusted EBITDA”) or revenues. Such inputs can be based on historical operating results, projections of future operating results or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, the Company utilizes the most recent portfolio company financial statements and forecasts available as of the valuation date. The Company also consults with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues.
Fair value measurements using the Enterprise Value Waterfall model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Enterprise Value Waterfall model remain constant, any increase (decrease) in either the transaction multiple, Adjusted EBITDA or revenues for a particular equity security would result in a higher (lower) fair value for that security.
Income Approach
In valuing debt securities, the Company utilizes an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when the Company believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, the Company uses a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.
The Company considers the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develops an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment (the “Required Rate of Return”). The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA, are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from the Company’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, the Company may conclude that the Required Rate of Return is equal to the stated rate on the investment and therefore, the debt security is appropriately priced. In instances where the Company determines that the Required Rate of Return is different from the stated rate on the investment, the Company discounts the contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
Fair value measurements using the Income Approach model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Required Rate of Return or Leverage Ratio inputs for a particular debt security would result in a lower (higher) fair value for that security. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Adjusted EBITDA input for a particular debt security would result in a higher (lower) fair value for that security.
The fair value of the Company’s royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of the Company’s valuation process.
The ranges and weighted average values of the significant Level 3 inputs used in the valuation of the Company’s debt and equity securities at March 31, 2017 and December 31, 2016 are summarized as follows:
| March 31, 2017: | Fair Value(1) | ValuationModel | Level 3Inputs | Range ofInputs | Weighted Average |
| Subordinated debt and 2nd lien notes | $ | 674,451,893 | IncomeApproach | Required Rate of Return | 8.3% – 35.0% | 13.4% |
| Leverage Ratio | 0.1x – 10.6x | 4.8x |
| Adjusted EBITDA | $2.5 million – $291.4 million | $38.5 million |
| Subordinated debt and 2nd lien notes | 24,323,000 | EnterpriseValue WaterfallApproach | Adjusted EBITDA Multiple | 5.7x – 8.6x | 6.9x |
| Adjusted EBITDA | $0.9 million – $8.4 million | $5.5 million |
| Revenue Multiple | 0.8x – 0.8x | 0.8x |
| Revenues | $98.0 million – $98.0 million | $98.0 million |
| Senior debt and 1st lien notes | 279,704,364 | IncomeApproach | Required Rate of Return | 4.5% – 20.0% | 10.8% |
| Leverage Ratio | 0.0x – 8.7x | 3.5x |
| Adjusted EBITDA | $4.0 million – $110.3 million | $14.4 million |
| Equity shares and warrants | 149,915,545 | EnterpriseValue WaterfallApproach | Adjusted EBITDA Multiple | 3.3x – 14.9x | 7.5x |
| Adjusted EBITDA | $0.0 million – $80.1 million | $15.2 million |
| Revenue Multiple | 0.8x – 3.4x | 1.4x |
| Revenues | $18.1 million – $98.0 million | $63.4 million |

| (1) | One equity security with a total fair value of $4,364,000 was redeemed subsequent to the end of the reporting period and was valued at its transaction price. One senior debt investment with a total fair value of $450,000 is expected to be repaid subsequent to the end of the reporting period and was valued at its expected settlement value. |

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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
| December 31, 2016: | Fair Value(1) | ValuationModel | Level 3Input | Range ofInputs | Weighted Average |
| Subordinated debt and 2nd lien notes | $ | 646,856,367 | IncomeApproach | Required Rate of Return | 9.5% – 35.0% | 13.8% |
| Leverage Ratio | 0.1x – 9.5x | 4.8x |
| Adjusted EBITDA | $2.6 million – $169.8 million | $27.9 million |
| Subordinated debt and 2nd lien notes | 19,790,000 | EnterpriseValue WaterfallApproach | Adjusted EBITDA Multiple | 5.0x – 6.7x | 5.8x |
| Adjusted EBITDA | $0.6 million – 4.9 million | $2.1 million |
| Revenue Multiple | 0.8x – 0.8x | 0.8x |
| Revenues | $98.0 million – $98.0 million | $98.0 million |
| Senior debt and 1st lien notes | 190,793,157 | IncomeApproach | Required Rate of Return | 4.3% – 20.0% | 11.0% |
| Leverage Ratio | 0.0x – 8.3x | 3.2x |
| Adjusted EBITDA | $4.0 million – $14.1 million | $9.3 million |
| Equity shares and warrants | 152,435,657 | EnterpriseValue WaterfallApproach | Adjusted EBITDA Multiple | 3.3x – 14.9x | 7.4x |
| Adjusted EBITDA | ($1.4 million) – $82.1 million | $15.0 million |
| Revenue Multiple | 0.8x – 4.0x | 1.4x |
| Revenues | $19.0 million – $98.0 million | $61.7 million |

| (1) | Certain subordinated debt investments with a total fair value of $23,513,000 and certain equity securities with a total fair value of $3,669,000 were repaid or redeemed subsequent to the end of the reporting period and were valued at their transaction price. One senior debt investment with a total fair value of $850,000 is expected to be repaid subsequent to the end of the reporting period and was valued at its expected settlement value. |

The following table presents the Company’s investment portfolio at fair value as of March 31, 2017 and December 31, 2016, categorized by the ASC Topic 820 valuation hierarchy, as previously described:
| Fair Value as of March 31, 2017 |
| Level 1 | Level 2 | Level 3 | Total |
| Subordinated debt and 2nd lien notes | $ | — | $ | — | $ | 698,774,893 | $ | 698,774,893 |
| Senior debt and 1st lien notes | — | — | 280,154,364 | 280,154,364 |
| Equity shares | — | — | 152,202,545 | 152,202,545 |
| Equity warrants | — | — | 2,077,000 | 2,077,000 |
| $ | — | $ | — | $ | 1,133,208,802 | $ | 1,133,208,802 |
| Fair Value as of December 31, 2016 |
| Level 1 | Level 2 | Level 3 | Total |
| Subordinated debt and 2nd lien notes | $ | — | $ | — | $ | 690,159,367 | $ | 690,159,367 |
| Senior debt and 1st lien notes | — | — | 191,643,157 | 191,643,157 |
| Equity shares | — | — | 154,216,657 | 154,216,657 |
| Equity warrants | — | — | 1,888,000 | 1,888,000 |
| $ | — | $ | — | $ | 1,037,907,181 | $ | 1,037,907,181 |

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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2017 and 2016:
| Three Months EndedMarch 31, 2017: | SubordinatedDebt and 2ndLien Notes | Senior Debtand 1st LienNotes | EquityShares | EquityWarrants | Total |
| Fair value, beginning of period | $ | 690,159,367 | $ | 191,643,157 | $ | 154,216,657 | $ | 1,888,000 | $ | 1,037,907,181 |
| New investments | 64,868,421 | 91,059,316 | 5,590,356 | — | 161,518,093 |
| Proceeds from sales of investments | — | — | (6,266,765 | ) | (33,003 | ) | (6,299,768 | ) |
| Loan origination fees received | (1,255,000 | ) | (1,383,485 | ) | — | — | (2,638,485 | ) |
| Principal repayments received | (46,128,905 | ) | (1,342,038 | ) | — | — | (47,470,943 | ) |
| PIK interest earned | 3,041,385 | 336,463 | — | — | 3,377,848 |
| PIK interest payments received | (2,687,416 | ) | — | — | (2,687,416 | ) |
| Accretion of loan discounts | 28,786 | 54,694 | — | — | 83,480 |
| Accretion of deferred loan origination revenue | 1,092,544 | 256,865 | — | — | 1,349,409 |
| Realized gain (loss) | (13,353,325 | ) | — | 493,363 | (458,997 | ) | (13,318,959 | ) |
| Unrealized gain (loss) | 3,009,036 | (470,608 | ) | (1,831,066 | ) | 681,000 | 1,388,362 |
| Fair value, end of period | $ | 698,774,893 | $ | 280,154,364 | $ | 152,202,545 | $ | 2,077,000 | $ | 1,133,208,802 |

| Three Months EndedMarch 31, 2016: | SubordinatedDebt and 2ndLien Notes | Senior Debtand 1st LienNotes | EquityShares | EquityWarrants | Total |
| Fair value, beginning of period | $ | 699,125,083 | $ | 132,929,264 | $ | 141,555,369 | $ | 3,667,000 | $ | 977,276,716 |
| New investments | 8,027,333 | 1,000,000 | 2,134,998 | 650,000 | 11,812,331 |
| Reclassifications | 6,748,247 | (6,748,247 | ) | — | — | — |
| Proceeds from sales of investments | — | — | (4,522,005 | ) | (112,876 | ) | (4,634,881 | ) |
| Loan origination fees received | (274,158 | ) | — | — | — | (274,158 | ) |
| Principal repayments received | (47,493,762 | ) | (1,492,037 | ) | — | — | (48,985,799 | ) |
| PIK interest earned | 3,552,577 | 358,240 | — | — | 3,910,817 |
| PIK interest payments received | (3,399,684 | ) | (193,293 | ) | — | — | (3,592,977 | ) |
| Accretion of loan discounts | 46,593 | 48,595 | — | — | 95,188 |
| Accretion of deferred loan origination revenue | 1,019,361 | 115,640 | — | — | 1,135,001 |
| Realized gain (loss) | — | (1,560,322 | ) | 2,309,760 | (163,224 | ) | 586,214 |
| Unrealized gain (loss) | (3,680,421 | ) | 2,400,226 | 2,475,899 | 1,452,100 | 2,647,804 |
| Fair value, end of period | $ | 663,671,169 | $ | 126,858,066 | $ | 143,954,021 | $ | 5,493,000 | $ | 939,976,256 |

All realized and unrealized gains and losses are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Unaudited Consolidated Statements of Operations. Pre-tax net unrealized losses on investments of $11.0 million during the three months ended March 31, 2017, were related to portfolio company investments that were still held by the Company as of March 31, 2017. Pre-tax net unrealized gains on investments of $3.4 million during the three months ended March 31, 2016 were related to portfolio company investments that were still held by the Company as of March 31, 2016.
The Company’s primary investment objective is to generate current income and capital appreciation by investing directly in privately-held lower middle market companies to help these companies fund acquisitions, growth or refinancing. During the three months ended March 31, 2017, the Company made investments of approximately $157.2 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2017, the Company made investments of $4.3 million in companies to which it was previously committed to provide such
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
financing. During the three months ended March 31, 2016, the Company made investments of approximately $9.2 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2016, the Company made investments of $2.6 million in companies to which it was previously committed to provide such financing. The details of the Company’s investments have been disclosed on the Consolidated Schedules of Investments.
Warrants
When originating a debt security, the Company will sometimes receive warrants or other equity-related securities from the borrower. The Company determines the cost basis of the warrants or other equity-related securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity-related securities received. Any resulting difference between the face amount of the debt and its recorded fair value resulting from the assignment of value to the warrant or other equity instruments is treated as original issue discount and accreted into interest income over the life of the loan.
Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments
Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments.
Investment Classification
In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, “Control Investments” are investments in those companies that the Company is deemed to “Control.” “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of the Company, as defined in the 1940 Act, other than Control Investments. “Non-Control / Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities of such company, has greater than 50.0% representation on its board or has the power to exercise control over management or policies of such portfolio company. The Company is deemed to be an affiliate of a company in which the Company has invested if it owns at least 5.0%, but no more than 25.0%, of the voting securities of such company.
Investment Income
Interest income, adjusted for amortization of premium and accretion of original issue discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes, until all principal and interest has been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date. The Company had negative dividend income of approximately $1.1 million during the three months ended March 31, 2016, consisting of dividend income of approximately $0.2 million and a negative true-up adjustment of $1.3 million related to a portfolio company distribution that was received in 2015. In 2015, the Company received information that indicated that the tax character of the distribution was 100% dividend income, but received updated information in 2016 indicating that only 14% of the distribution was dividend income and the remainder was a return of capital, which necessitated the adjustment.
Fee Income
Origination, facility, commitment, consent and other advance fees received in connection with loan agreements ("Loan Origination Fees") are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
| Three Months Ended | Three Months Ended |
| March 31, 2017 | March 31, 2016 |
| Recurring Fee Income: |
| Amortization of loan origination fees | $ | 619,200 | $ | 557,240 |
| Management, valuation and other fees | 201,960 | 192,128 |
| Total Recurring Fee Income | 821,160 | 749,368 |
| Non-Recurring Fee Income: |
| Prepayment fees | 716,133 | 614,471 |
| Acceleration of unamortized loan origination fees | 730,209 | 577,762 |
| Loan amendment fees | 50,000 | 10,000 |
| Other fees | — | 82,300 |
| Total Non-Recurring Fee Income | 1,496,342 | 1,284,533 |
| Total Fee Income | $ | 2,317,502 | $ | 2,033,901 |

Payment-in-Kind Interest
The Company currently holds, and expects to hold in the future, some loans in its portfolio that contain PIK interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.
PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company’s taxable income and therefore affects the amount the Company is required to distribute to its stockholders to maintain its qualification as a regulated investment company ("RIC") for federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.
Concentration of Credit Risk
The Company’s investments are generally in lower middle market companies in a variety of industries. As of both March 31, 2017 and December 31, 2016, there were no individual investments representing greater than 10% of the fair value of the Company’s portfolio. As of March 31, 2017 and December 31, 2016, the Company’s largest single portfolio company investment represented approximately 4.5% and 4.7%, respectively, of the fair value of the Company’s portfolio. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses on equity interests, can fluctuate dramatically upon repayment of an investment or sale of an equity interest and in any given year can be highly concentrated among several portfolio companies.
The Company’s investments carry a number of risks including, but not limited to: (i) investing in lower middle market companies which may have limited financial resources and may have limited operating histories, (ii) investing in senior subordinated debt which ranks equal to or lower than debt held by other investors and (iii) holding investments that are not publicly traded and are subject to legal and other restrictions on resale and other risks common to investing in below investment grade debt and equity instruments.
As of March 31, 2017, $842.6 million of the Company's assets were pledged as collateral for the Company's third amended and restated senior secured credit facility (the “Credit Facility”) and $391.7 million were subject to superior claim over the Company's shareholders by the SBA. If the Company defaults on its obligations under the Credit Facility or its SBA-guaranteed debentures, the lenders and/or the SBA may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claims.
29
Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
Investments Denominated in Foreign Currency
As of both March 31, 2017 and December 31, 2016, the Company held investments in two portfolio companies that were denominated in Canadian dollars.
At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into United States dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into United States dollars using the rates of exchange prevailing on the respective dates of such transactions.
Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into United States dollars using the applicable foreign exchange rates described above, the Company does not isolate that portion of the change in fair values resulting from foreign currency exchange rates fluctuations from the change in fair values of the underlying investment. All fluctuations in fair value are included in net unrealized appreciation (depreciation) of investments in the Company's Unaudited Consolidated Statements of Operations.
Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the United States dollar.
3. INCOME TAXES
The Company has elected for federal income tax purposes to be treated as a RIC under the Internal Revenue Code of 1986, as amended (the "Code"), and intends to make the required distributions to its stockholders as specified therein. In order to maintain its qualification as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains. The Company has historically met its minimum distribution requirements and continually monitors its distribution requirements with the goal of ensuring compliance with the Code.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash. For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), the Company must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year. The Company may also have to include in ICTI other amounts that it has not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in the Company’s ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
The Company has certain wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), each of which holds one or more of its portfolio investments that are listed on the Consolidated Schedule of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold certain portfolio companies that are organized as limited liability companies (“LLCs”) (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross revenue for income tax purposes must consist of investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause
30
Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, their income is taxed to the Taxable Subsidiaries and does not flow through to the RIC, thereby helping the Company preserve its RIC status and resultant tax advantages. The Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expense as a result of their ownership of the portfolio companies. This income tax expense is reflected in the Company’s Unaudited Consolidated Statements of Operations. Additionally, any unrealized appreciation related to portfolio investments held by the Taxable Subsidiaries (net of unrealized depreciation related to portfolio investments held by the Taxable Subsidiaries) is reflected net of applicable federal and state income taxes in the Company's Unaudited Consolidated Statements of Operations, with the related deferred tax assets presented in the Company's Unaudited Consolidated Balance Sheet.
For federal income tax purposes, the cost of investments owned as of March 31, 2017 and December 31, 2016 was approximately $1.2 billion and $1.1 billion, respectively.
4. BORROWINGS
The Company had the following borrowings outstanding as of March 31, 2017 and December 31, 2016:
| Issuance/Pooling Date | Maturity Date | Interest Rate as of March 31, 2017 | March 31, 2017 | December 31, 2016 |
| SBA-Guaranteed Debentures: |
| March 25, 2009 | March 1, 2019 | 5.337% | $ | 22,000,000 | $ | 22,000,000 |
| March 24, 2010 | March 1, 2020 | 4.825% | 6,800,000 | 6,800,000 |
| September 22, 2010 | September 1, 2020 | 3.687% | 32,590,000 | 32,590,000 |
| March 29, 2011 | March 1, 2021 | 4.474% | 75,400,000 | 75,400,000 |
| September 21, 2011 | September 1, 2021 | 3.392% | 19,100,000 | 19,100,000 |
| March 27, 2013 | March 1, 2023 | 3.155% | 30,000,000 | 30,000,000 |
| September 24, 2014 | September 1, 2024 | 3.790% | 31,310,000 | 31,310,000 |
| September 21, 2016 | September 1, 2026 | 2.723% | 32,800,000 | 32,800,000 |
| Less: Deferred financing fees | (4,380,685 | ) | (4,610,034 | ) |
| Total SBA-Guaranteed Debentures | $ | 245,619,315 | $ | 245,389,966 |
| Credit Facility: |
| May 4, 2015 | May 3, 2020 | 3.579% | $ | 91,090,267 | $ | 127,011,475 |
| Total Credit Facility | $ | 91,090,267 | $ | 127,011,475 |
| Notes: |
| October 19, 2012 | December 15, 2022 | 6.375% | $ | 80,500,000 | $ | 80,500,000 |
| February 6, 2015 | March 15, 2022 | 6.375% | 86,250,000 | 86,250,000 |
| Less: Deferred financing fees | (3,835,240 | ) | (3,994,619 | ) |
| Total Notes | $ | 162,914,760 | $ | 162,755,381 |

SBA-Guaranteed Debentures
Under the Small Business Investment Act of 1958, as amended (the "Small Business Investment Act"), and current SBA policy applicable to SBICs, an SBIC (or group of SBICs under common control) can have outstanding at any time, SBA-guaranteed debentures up to two times (and in certain cases, up to three times) the amount of its regulatory capital. As of March 31, 2017, the maximum statutory limit on the dollar amount of outstanding SBA-guaranteed debentures that can be issued by a single SBIC was $150.0 million and by a group of SBICs under common control was $350.0 million. As of March 31, 2017, Triangle SBIC had issued the maximum $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. Interest payments on SBA-guaranteed debentures are payable semi-annually and there are no principal payments required on these debentures prior to maturity, nor do the debentures carry any prepayment penalties. The weighted average interest rates for all SBA-guaranteed debentures as of both March 31, 2017 and December 31, 2016 were 3.90%. As of both March 31, 2017 and December 31, 2016, all SBA-guaranteed debentures were pooled.
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
In addition to a one-time 1.0% fee on the total commitment from the SBA, the Company also pays a one-time 2.425% fee on the amount of each SBA-guaranteed debenture issued. These fees are capitalized as deferred financing costs and are amortized over the term of the debt agreements using the effective interest method. Upon prepayment of an SBA-guaranteed debenture, any unamortized deferred financing costs related to the SBA-guaranteed debenture are written off and recognized as a loss on extinguishment of debt in the Unaudited Consolidated Statements of Operations.
The fair values of the SBA-guaranteed debentures are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2017 and December 31, 2016, the carrying amounts of the SBA-guaranteed debentures were approximately $245.6 million and $245.4 million, respectively. As of March 31, 2017 and December 31, 2016, the fair values of the SBA-guaranteed debentures were $257.7 million and $264.9 million, respectively.
Credit Facility
In May 2015, the Company entered into the Credit Facility, which has a current commitment of $300.0 million supported by 13 financial institutions. The revolving period of the Credit Facility ends May 3, 2019 followed by a one-year amortization period with a final maturity date of May 3, 2020. The Company has the ability to borrow foreign currencies under the Credit Facility.
The Credit Facility has an accordion feature that allows for an increase in the total borrowing size up to $350.0 million, subject to certain conditions and the satisfaction of specified financial covenants. The Credit Facility, which is structured to operate like a revolving credit facility, is secured primarily by the Company's assets, excluding the assets of the Company’s wholly-owned SBIC subsidiaries.
Borrowings under the Credit Facility bear interest, subject to the Company's election, on a per annum basis equal to (i) the applicable base rate plus 1.75% (or 1.50% if the Company receives an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75% (or 2.50% if the Company receives an investment grade credit rating) or (iii) for borrowings denominated in Canadian dollars, the applicable Canadian Dealer Offered Rate plus 2.75% (or 2.50% if the Company receives an investment grade credit rating). The applicable base rate is equal to the greater of (i) the prime rate, (ii) the federal funds rate plus 0.5% or (iii) the adjusted one-month LIBOR plus 2.0%. The applicable LIBOR rate depends on the term of the draw under the Credit Facility. The Company pays a commitment fee of 1.00% per annum on undrawn amounts if the used portion of the Credit Facility is less than or equal to 25.0% of total commitments, or 0.375% per annum on undrawn amounts if the used portion of the Credit Facility is greater than 25.0% of total commitments. These commitment fees are included in interest and other financing fees on the Company's Unaudited Consolidated Statements of Operations. Borrowings under the Credit Facility are limited to a borrowing base, which includes certain cash and a portion of eligible debt investments.
As of March 31, 2017, the Company had United States dollar borrowings of $69.6 million outstanding under the Credit Facility with an interest rate of 3.54% and non-United States dollar borrowings denominated in Canadian dollars of $28.6 million ($21.5 million in United States dollars) outstanding under the Credit Facility with a weighted average interest rate of 3.70%. The borrowings denominated in Canadian dollars are translated into United States dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign exchange rates on the Credit Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in the Company's Unaudited Consolidated Statements of Operations. The borrowings denominated in Canadian dollars may be positively or negatively affected by movements in the rate of exchange between the United States dollar and the Canadian dollar. This movement is beyond the control of the Company and cannot be predicted. As of December 31, 2016, the Company had United States dollar borrowings of $105.7 million outstanding under the Credit Facility with an interest rate of 3.37% and non-United States dollar borrowings denominated in Canadian dollars of $28.6 million ($21.3 million United States dollars) outstanding under the Credit Facility with an interest rate of 3.64%.
The fair value of the borrowings outstanding under the Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2017 and December 31, 2016, the fair values of the borrowings outstanding under the Credit Facility were $91.1 million and $127.0 million, respectively.
The Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining a minimum interest coverage ratio, (ii) maintaining a minimum consolidated tangible net worth, (iii) maintaining a minimum asset coverage ratio and (iv) maintaining the Company's status as a RIC and as a BDC. The Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The Credit Facility also permits Branch Banking and
32
Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
Trust Company, the administrative agent, to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. As of March 31, 2017 and December 31, 2016, the Company was in compliance with all covenants of the Credit Facility.
Notes
In October 2012, the Company issued $70.0 million of unsecured notes due 2022 (the "December 2022 Notes") and in November 2012, issued $10.5 million of December 2022 Notes pursuant to the exercise of an over-allotment option. The December 2022 Notes mature on December 15, 2022, and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after December 15, 2015. The December 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning December 15, 2012. As of March 31, 2017 and December 31, 2016, the carrying amounts of the December 2022 Notes were $78.8 million and $78.7 million, respectively. As of March 31, 2017 and December 31, 2016, the fair values of the December 2022 Notes were $82.3 million and $81.9 million, respectively.
In February 2015, the Company issued $86.3 million of unsecured notes due 2022 (the "March 2022 Notes"). The March 2022 Notes mature on March 15, 2022 and may be redeemed in whole or in part at any time or from time to time at the Company's option on or after March 15, 2018. The March 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning March 15, 2015. The net proceeds to the Company from the sale of the March 2022 Notes, after underwriting discounts and offering expenses, were approximately $83.4 million. As of March 31, 2017 and December 31, 2016, the carrying amounts of the March 2022 Notes were $84.2 million and $84.1 million, respectively. As of March 31, 2017 and December 31, 2016, the fair values of the March 2022 Notes were $89.2 million and $87.7 million, respectively. The fair values of the December 2022 Notes and the March 2022 Notes are based on the closing prices of each respective security on the New York Stock Exchange, which are Level 1 inputs under ASC 820.
The indenture and supplements thereto relating to the December 2022 Notes and the March 2022 Notes contain certain covenants, including but not limited to (i) a requirement that the Company comply with the asset coverage requirement of the 1940 Act or any successor provisions, after giving effect to any exemptive relief granted to the Company by the Securities and Exchange Commission (“SEC”), (ii) a requirement that the Company will not declare any cash dividend, or declare any other cash distribution, upon a class of its capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, the Company has an asset coverage (as defined in the 1940 Act) of at least 200% after deducting the amount of such dividend, distribution or purchase price, as the case may be, giving effect to any exemptive relief granted to the Company by the SEC and (iii) a requirement to provide financial information to the holders of the notes and the trustee under the indenture if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As of March 31, 2017 and December 31, 2016, the Company was in compliance with all covenants of the December 2022 Notes and the March 2022 Notes.
33
Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
5. EQUITY-BASED AND OTHER COMPENSATION PLANS
The Board and the Company's stockholders have approved the Triangle Capital Corporation Amended and Restated 2007 Equity Incentive Plan (the “Plan”), under which there are 2,400,000 shares of the Company’s Common Stock authorized for issuance. Under the Plan, the Board (or compensation committee, if delegated administrative authority by the Board) may award stock options, restricted stock or other stock-based incentive awards to executive officers, employees and directors. Equity-based awards granted under the Plan to independent directors generally will vest over a one-year period and equity-based awards granted under the Plan to executive officers and employees generally will vest ratably over a four-year period.
The Company accounts for its equity-based compensation plan using the fair value method, as prescribed by ASC Topic 718, Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of the Company’s common stock on the date of the grant and amortizes this fair value to compensation expense ratably over the requisite service period or vesting term.
The following table presents information with respect to the Plan for the three months ended March 31, 2017 and 2016:
| Three Months EndedMarch 31, 2017 | Three Months EndedMarch 31, 2016 |
| Number ofShares | Weighted AverageGrant Date FairValue per Share | Number ofShares | Weighted AverageGrant Date FairValue per Share |
| Unvested shares, beginning of period | 631,622 | $21.23 | 778,116 | $24.10 |
| Shares granted during the period | 347,000 | $19.25 | 351,000 | $17.53 |
| Shares vested during the period | (219,609 | ) | $22.65 | (396,771 | ) | $23.13 |
| Unvested shares, end of period | 759,013 | $19.92 | 732,345 | $21.48 |

In the three months ended March 31, 2017, the Company recognized equity-based compensation expense of approximately $1.5 million. In the three months ended March 31, 2016, the Company recognized equity-based compensation expense of approximately $4.3 million, $2.7 million of which related to the accelerated vesting of outstanding shares of restricted stock of the Company's former Chief Executive Officer, Garland S. Tucker, III, who retired from his officer positions in February 2016. This expense is included in compensation expenses in the Company’s Unaudited Consolidated Statements of Operations.
As of March 31, 2017, there was approximately $13.9 million of total unrecognized compensation cost related to the Company’s non-vested restricted shares. This cost is expected to be recognized over a weighted average period of approximately 2.6 years.
In February 2017, both the compensation committee of the Board and the Board adopted the Omnibus Incentive Plan, or the Omnibus Plan, and recommended that it be submitted to the Company’s stockholders for their approval at the Company’s 2017 Annual Meeting of Stockholders. The Company currently compensates its professionals through two separate plans: the Plan, which provides for grants of restricted stock and options to employees, officers and directors, and the 2012 Executive Cash Incentive Plan, or the Cash Incentive Plan, which provides for the payment of cash bonuses to employees and officers. The Omnibus Plan was created primarily for the purpose of combining the Plan and the Cash Incentive Plan in order to reduce the administrative burden of monitoring the terms and conditions of two separate plans. The terms of the Plan and the Cash Incentive Plan, as combined and reflected in the Omnibus Plan, are substantially similar to the respective terms of each standalone plan. The Omnibus Plan will provide for grants of restricted stock, incentive stock options, non-statutory stock options and cash-based and/or stock-based performance awards, collectively, “Awards,” to the Company’s existing and future employees. In addition, the Omnibus Plan will increase the maximum number of shares of the Company’s common stock with respect to which Awards may be granted under the Omnibus Plan to 4,000,000 shares of the Company’s common stock from 2,400,000 shares of the Company’s common stock that were approved under the Plan. Finally, if approved by the Company’s stockholders, the Omnibus Plan will not expire until ten years following such approval. If stockholders approve the Omnibus Plan at the 2017 Annual Meeting of Stockholders, no further awards will be issued under the terms of the Plan or the Cash Incentive Plan, but will instead be granted under the terms of the Omnibus Plan. The effective date of the Omnibus Plan will be the date on which it is approved by the Company’s stockholders, if at all.
The Board has adopted a nonqualified deferred compensation plan covering the Company’s executive officers and key employees. Any compensation deferred and the Company’s contributions will earn a return based on the returns on certain investments designated by the Compensation Committee of the Board. Participants are 100% vested in amounts deferred under
34
Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
the deferred compensation plan and the earnings thereon. Contributions to the plan and earnings thereon generally vest ratably over a four-year period.
The Company maintains a 401(k) plan in which all full-time employees who are at least 21 years of age and have 90 days of service are eligible to participate and receive employer contributions. Eligible employees may contribute a portion of their compensation on a pretax basis into the 401(k) plan up to the maximum amount allowed under the Code, and direct the investment of their contributions.
6. TRANSACTIONS WITH CONTROLLED COMPANIES
During each of the three months ended March 31, 2017 and 2016, the Company received management fees from SRC Worldwide, Inc., a 100%-owned portfolio company, of $100,000. These fees were recognized as fee income in the Company's Unaudited Consolidated Statements of Operations.
7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Company is party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company's portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The balances of unused commitments to extend financing as of March 31, 2017 and December 31, 2016 were as follows:
| Portfolio Company | Investment Type | March 31, 2017 | December 31, 2016 |
| Avantor Performance Materials Holdings, LLC | Delayed Draw Term Loan | $ | 631,579 | $ | — |
| Cafe Enterprises, Inc. | Second Lien Debt | 500,000 | — |
| DPII Holdings LLC | Guaranty | 576,925 | 576,925 |
| DLC Acquisition, LLC | Revolver | 1,800,000 | 3,000,000 |
| Eckler's Holdings, Inc. | Equity Investment | 1,000,000 | — |
| Halo Branded Solutions, Inc. | Delayed Draw Term Loan | 3,250,000 | 3,250,000 |
| HKW Capital Partners IV, L.P. | Private Equity | 393,144 | 530,032 |
| Lakeview Health Acquisition Company | Revolver | 1,387,367 | 1,387,367 |
| Native Maine Operations | Revolver | 1,000,000 | — |
| Nautic Partners VII, LP | Private Equity | 645,739 | 642,172 |
| Nomacorc, LLC | Equity Investment | 846,725 | 849,362 |
| Orchid Underwriters Agency, LLC | Delayed Draw Term Loan | 800,000 | 8,400,000 |
| Orchid Underwriters Agency, LLC | Revolver | — | 5,000,000 |
| SCA Pharmaceuticals, LLC | Delayed Draw Term Loan | 12,000,000 | 12,000,000 |
| SCUF Gaming, Inc. | Revolver | 2,000,000 | 3,500,000 |
| Smile Brands, Inc. | Equity Investment | 1,000,000 | 1,000,000 |
| Smile Brands, Inc. | Delayed Draw Term Loan | 18,826,531 | 18,826,531 |
| SPC Partners V, LP | Private Equity | 522,881 | 522,881 |
| SPC Partners VI, LP | Private Equity | 3,000,000 | 3,000,000 |
| TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") | Revolver | 687,790 | — |
| Team Waste, LLC | Equity Investment | 900,000 | 900,000 |
| TGaS Advisors, LLC | Revolver | 2,000,000 | 2,000,000 |
| YummyEarth Inc. | Delayed Draw Term Loan | — | 1,500,000 |
| Total unused commitments to extend financing | $ | 53,768,681 | $ | 66,885,270 |

The Company may, in the future, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. Since its inception, neither Triangle Capital Corporation nor any of its subsidiaries have been party to any material legal proceedings.
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Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
8. FINANCIAL HIGHLIGHTS
The following is a schedule of financial highlights for the three months ended March 31, 2017 and 2016:
| Three Months Ended March 31, |
| 2017 | 2016 |
| Per share data: |
| Net asset value at beginning of period | $ | 15.13 | $ | 15.23 |
| Net investment income(1) | 0.42 | 0.29 |
| Net realized loss on investments(1) | (0.31 | ) | 0.02 |
| Net unrealized appreciation (depreciation) on investments / foreign currency(1) | 0.06 | 0.07 |
| Total increase from investment operations(1) | 0.17 | 0.38 |
| Dividends paid to stockholders from net investment income | (0.45 | ) | (0.54 | ) |
| Total dividends paid | (0.45 | ) | (0.54 | ) |
| Shares issued pursuant to Dividend Reinvestment Plan | — | 0.01 |
| Common stock offering | 0.61 | — |
| Stock-based compensation | (0.11 | ) | (0.04 | ) |
| Other(2) | (0.06 | ) | (0.02 | ) |
| Net asset value at end of period | $ | 15.29 | $ | 15.02 |
| Market value at end of period(3) | $ | 19.09 | $ | 20.58 |
| Shares outstanding at end of period | 47,681,397 | 33,576,436 |
| Net assets at end of period | $ | 729,207,289 | $ | 504,347,914 |
| Average net assets | $ | 613,068,728 | $ | 512,794,887 |
| Ratio of total expenses, including provision for taxes, to average net assets (annualized) | 8.07 | % | 13.30 | % |
| Ratio of net investment income to average net assets (annualized) | 11.63 | % | 7.49 | % |
| Portfolio turnover ratio | 5.44 | % | 1.25 | % |
| Total return(4) | 6.54 | % | 10.52 | % |
| Supplemental Data: |
| Efficiency ratio(5) | 18.09 | % | 39.54 | % |

| (1) | Weighted average basic per share data. |

| (2) | Represents the impact of the different share amounts used in calculating per share data as a result of calculating certain per share data based upon the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date. |

| (3) | Represents the closing price of the Company’s common stock on the last day of the period. |

| (4) | Total return equals the change in the market value of the Company’s common stock during the period, plus dividends declared per share during the period, divided by the market value of the Company’s common stock at the beginning of the period. Total return is not annualized. |

| (5) | Efficiency ratio equals the sum of (i) compensation and related expenses and (ii) general and administrative expenses divided by total investment income. |

36
Triangle Capital CorporationNotes to Unaudited Consolidated Financial Statements — (Continued)
9. SUBSEQUENT EVENTS
In April 2017, the Company invested $5.0 million in a debt security of Constellis Holdings. Under the terms of the investment, the debt security bears interest at a rate of LIBOR plus 9.0% per annum.
In May 2017, the Company amended its Credit Facility to, among other things, increase current commitments from $300 million to $435 million and extend the maturity by two years (the "Amended Credit Facility"). The current commitments of $435 million are supported by a diversified group of thirteen lenders, and the Amended Credit Facility has an accordion feature that allows for an increase in commitments to up to $550 million from new and existing lenders on the same terms and conditions as the existing commitments. The revolving period of the Amended Credit Facility ends April 30, 2021 followed by a one-year amortization period with a final maturity date of April 30, 2022.
37
| TRIANGLE CAPITAL CORPORATIONUnaudited Schedule of Investments in and Advances to AffiliatesThree Months Ended March 31, 2017 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2016 Value | Gross Additions(3) | Gross Reductions(4) | March 31, 2017 Value |
| Control Investments: |
| CRS Reprocessing, LLC | Senior Notes (4.5% Cash) | $ | — | $ | — | $ | 32,020 | $ | 2,942,769 | $ | — | $ | — | $ | 2,942,769 |
| Split Collateral Term Loans (8% Cash) | — | (2,072,000 | ) | 237,516 | 6,182,000 | 2,000,000 | 2,072,000 | 6,110,000 |
| Series F Preferred Units (705,321 units) | — | — | — | — | — | — | — |
| Common Units (15,174 units) | — | — | — | — | — | — |
| — | (2,072,000 | ) | 269,536 | 9,124,769 | 2,000,000 | 2,072,000 | 9,052,769 |
| DCWV Acquisition Corporation | Senior Subordinated Note (15% PIK)(5) | — | — | — | 250,000 | — | — | 250,000 |
| Subordinated Note (12% Cash, 3% PIK)(5) | — | (722,000 | ) | — | 1,389,000 | — | 722,000 | 667,000 |
| Jr. Subordinated Note (15% PIK)(5) | — | — | — | — | — | — | — |
| Series A Preferred Equity (1,200 shares) | — | — | — | — | — | — | — |
| 100% Common Shares | — | — | — | — | — | — | — |
| — | (722,000 | ) | — | 1,639,000 | — | 722,000 | 917,000 |
| Gerli & Company | Subordinated Note (13% Cash) | (375,000 | ) | 375,000 | — | — | 375,000 | 375,000 | — |
| Subordinated Note (8.5% Cash) | (3,000,000 | ) | 3,000,000 | — | — | 3,000,000 | 3,000,000 | — |
| Class A Preferred Shares (1,211 shares) | (855,000 | ) | 855,000 | — | — | 855,000 | 855,000 | — |
| Class C Preferred Shares (744 shares) | — | — | — | — | — | — | — |
| Class E Preferred Shares (400 shares) | (161,440 | ) | 161,440 | — | — | 161,440 | 161,440 | — |
| Common Stock (300 shares) | (100,000 | ) | 100,000 | — | — | 100,000 | 100,000 | — |
| (4,491,440 | ) | 4,491,440 | — | — | 4,491,440 | 4,491,440 | — |
| SRC Worldwide, Inc. | Common Stock (5,000 shares) | — | — | 100,000 | 8,028,000 | 8,028,000 |
| — | — | 100,000 | 8,028,000 | — | — | 8,028,000 |
| Total Control Investments | (4,491,440 | ) | 1,697,440 | 369,536 | 18,791,769 | 6,491,440 | 7,285,440 | 17,997,769 |
| Affiliate Investments: |
| All Metals Holding, LLC | Subordinated Note (12% Cash, 1% PIK) | — | — | 218,436 | 6,249,220 | 23,127 | — | 6,272,347 |
| Units (318,977 units) | — | 23,000 | — | 754,000 | 23,000 | — | 777,000 |
| — | 23,000 | 218,436 | 7,003,220 | 46,127 | — | 7,049,347 |
| CIS Secure Computing Inc. | Subordinated Note (12% Cash, 2% PIK) | — | — | 402,316 | 11,670,708 | 66,088 | 1,000,000 | 10,736,796 |
| Common Stock (84 shares) | — | (251,000 | ) | — | 2,155,000 | — | 251,000 | 1,904,000 |
| — | (251,000 | ) | 402,316 | 13,825,708 | 66,088 | 1,251,000 | 12,640,796 |

38
| TRIANGLE CAPITAL CORPORATIONUnaudited Schedule of Investments in and Advances to Affiliates — (Continued)Three Months Ended March 31, 2017 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2016 Value | Gross Additions(3) | Gross Reductions(4) | March 31, 2017 Value |
| Consolidated Lumber Company LLC | Subordinated Note (10% Cash, 2% PIK) | $ | — | $ | (156,611 | ) | $ | 194,082 | $ | 4,278,000 | $ | 78,750 | $ | 4,356,750 | $ | — |
| Class A Units (15,000 units) | — | (32,000 | ) | — | 2,481,000 | — | 32,000 | 2,449,000 |
| — | (188,611 | ) | 194,082 | 6,759,000 | 78,750 | 4,388,750 | 2,449,000 |
| DPII Holdings, LLC | Tranche I & II Subordinated Notes (12% Cash, 4% PIK)(5) | — | 425,716 | — | 2,356,001 | 425,716 | 112,716 | 2,669,001 |
| Tranche III Subordinated Note (19% PIK)(5) | — | — | — | — | — | — | — |
| Class A Membership Interest (17,308 units) | — | — | — | — | — | — | — |
| — | 425,716 | — | 2,356,001 | 425,716 | 112,716 | 2,669,001 |
| FCL Holding SPV, LLC | Class A Interest (24,873 units) | — | (49,000 | ) | — | 645,000 | — | 49,000 | 596,000 |
| Class B Interest (48,427 units) | — | (101,000 | ) | — | 101,000 | — | 101,000 | — |
| Class B Interest (3,746 units) | — | — | — | — | — | — |
| — | (150,000 | ) | — | 746,000 | — | 150,000 | 596,000 |
| Frank Entertainment Group, LLC | Senior Note (10% Cash, 5.8% PIK) | — | (532,317 | ) | 402,574 | 9,940,684 | 152,633 | 532,317 | 9,561,000 |
| Class A Redeemable Preferred Units (10.5% Cash) (196,718 units) | — | — | — | 4,566,904 | — | — | 4,566,904 |
| Class B Redeemable Preferred Units (18,667 units) | — | (1,000,000 | ) | — | 1,660,810 | — | 1,000,000 | 660,810 |
| Class C Redeemable Preferred Units (25,846 units) | — | (600,000 | ) | — | 600,000 | — | 600,000 | — |
| Class A Common Units (43,077 units) | — | — | — | — | — | — | — |
| Class A Common Warrants | — | — | — | — | — | — | — |
| — | (2,132,317 | ) | 402,574 | 16,768,398 | 152,633 | 2,132,317 | 14,788,714 |
| MS Bakery Holdings, Inc. (F/K/A Main Street Gourmet, LLC) | Preferred Units (233 units) | 185,133 | (185,133 | ) | — | 397,000 | 185,133 | 582,133 | — |
| Common B Units (3,000 units) | 2,087,323 | (2,086,860 | ) | — | 2,110,000 | 2,087,323 | 4,197,323 | — |
| Common A Units (1,652 units) | 1,147,007 | (1,147,007 | ) | — | 1,162,000 | 1,147,007 | 2,309,007 | — |
| 3,419,463 | (3,419,000 | ) | — | 3,669,000 | 3,419,463 | 7,088,463 | — |
| Native Maine Operations, Inc. | Senior Notes (10.1% Cash) | — | — | 504,164 | — | 17,634,876 | — | 17,634,876 |
| Preferred Units (20,000 units) | — | — | — | — | 2,000,000 | — | 2,000,000 |
| — | — | 504,164 | — | 19,634,876 | — | 19,634,876 |

39
| TRIANGLE CAPITAL CORPORATIONUnaudited Schedule of Investments in and Advances to Affiliates — (Continued)Three Months Ended March 31, 2017 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2016 Value | Gross Additions(3) | Gross Reductions(4) | March 31, 2017 Value |
| NB Products, Inc. | Subordinated Note (12% Cash, 2% PIK) | $ | — | $ | — | $ | 884,270 | $ | 22,751,190 | $ | 137,312 | $ | — | $ | 22,888,502 |
| Jr. Subordinated Note (10% PIK) | — | — | 117,646 | 4,595,921 | 124,906 | — | 4,720,827 |
| Jr. Subordinated Bridge Note (20% PIK) | — | — | 100,129 | 1,972,727 | 102,041 | — | 2,074,768 |
| Series A Redeemable Senior Preferred Stock (7,839 shares) | — | 233,000 | — | 9,412,000 | 233,000 | — | 9,645,000 |
| Common Stock (1,668,691 shares) | — | 1,491,000 | — | 9,779,000 | 1,491,000 | — | 11,270,000 |
| — | 1,724,000 | 1,102,045 | 48,510,838 | 2,088,259 | — | 50,599,097 |
| Passport Food Group, LLC | Senior Notes (10% Cash) | — | — | — | — | 19,600,000 | — | 19,600,000 |
| Common Shares (20,000 shares) | — | — | — | — | 2,000,000 | — | 2,000,000 |
| — | — | — | — | 21,600,000 | — | 21,600,000 |
| PCX Aerostructures, LLC | Subordinated Note (10.5% Cash) | — | 469,004 | 801,239 | 21,960,000 | 492,000 | — | 22,452,000 |
| Series A Preferred Stock (6,066 shares) | — | — | — | — | — | — |
| Series B Preferred Stock (411 shares) | — | — | — | — | — | — | — |
| Class A Common Stock (121,922 shares) | — | — | — | — | — | — | — |
| — | 469,004 | 801,239 | 21,960,000 | 492,000 | — | 22,452,000 |
| Team Waste, LLC | Preferred Units (455,000 units) | — | 140,000 | — | 9,100,000 | 140,000 | — | 9,240,000 |
| — | 140,000 | — | 9,100,000 | 140,000 | — | 9,240,000 |
| Technology Crops, LLC | Subordinated Notes (12% Cash, 5% PIK) | — | — | 505,196 | 11,837,622 | 148,587 | — | 11,986,209 |
| Common Units (50 units) | — | — | — | — | — | — | — |
| — | — | 505,196 | 11,837,622 | 148,587 | — | 11,986,209 |
| TGaS Advisors, LLC | Senior Note (10% Cash, 1% PIK) | — | — | 280,813 | 9,521,986 | 38,754 | 62,243 | 9,498,497 |
| Preferred Units (1,685,357 units) | — | (26,000 | ) | — | 1,270,000 | — | 26,000 | 1,244,000 |
| — | (26,000 | ) | 280,813 | 10,791,986 | 38,754 | 88,243 | 10,742,497 |
| Tulcan Fund IV, L.P. (F/K/A Dyson Corporation) | Common Units (1,000,000 units) | — | — | — | — | — | — | — |
| — | — | — | — | — | — | — |
| United Retirement Plan Consultants, Inc. | Series A Preferred Shares (9,400 shares) | — | 8,000 | — | 257,000 | 8,000 | — | 265,000 |
| Common Shares (100,000 shares) | — | (1,000 | ) | — | 301,000 | — | 1,000 | 300,000 |
| — | 7,000 | — | 558,000 | 8,000 | 1,000 | 565,000 |

40
| TRIANGLE CAPITAL CORPORATIONUnaudited Schedule of Investments in and Advances to Affiliates — (Continued)Three Months Ended March 31, 2017 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2016 Value | Gross Additions(3) | Gross Reductions(4) | March 31, 2017 Value |
| Waste Recyclers Holdings, LLC | Class A Preferred Units (280 units) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
| Class B Preferred Units (11,484,867 units) | — | (104,000 | ) | — | 817,000 | — | 104,000 | 713,000 |
| Common Unit Purchase Warrant (1,170,083 units) | — | — | — | — | — | — | — |
| Common Units (153,219 units) | — | — | — | — | — | — | — |
| — | (104,000 | ) | — | 817,000 | — | 104,000 | 713,000 |
| Wythe Will Tzetzo, LLC | Series A Preferred Units (99,829 units) | — | (1,552,000 | ) | — | 6,808,000 | — | 1,552,000 | 5,256,000 |
| — | (1,552,000 | ) | — | 6,808,000 | — | 1,552,000 | 5,256,000 |
| Investments not held at the end of the period | 113,353 | — | — | — | 113,353 | 113,353 | — |
| Total Affiliate Investments | $ | 3,532,816 | $ | (5,034,208 | ) | $ | 4,410,865 | $ | 161,510,773 | $ | 48,452,606 | $ | 16,981,842 | $ | 192,981,537 |

| (1) | All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. |

| (2) | Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. |

| (3) | Gross additions include increase in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest. Gross Additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation. |

| (4) | Gross reductions include decreases in the total cost basis of investments resulting from principal or PIK repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation. |

| (5) | Non-accrual investment |

This schedule should be read in conjunction with Triangle Capital Corporation's Unaudited Consolidated Financial Statements, including the Unaudited Consolidated Schedule of Investments.
41
| TRIANGLE CAPITAL CORPORATIONSchedule of Investments in and Advances to AffiliatesYear Ended December 31, 2016 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2015 Value | Gross Additions(3) | Gross Reductions(4) | December 31, 2016 Value |
| Control Investments: |
| CRS Reprocessing, LLC | Senior Notes (4.3% Cash) | $ | — | $ | — | $ | 120,067 | $ | 2,942,769 | $ | — | $ | — | $ | 2,942,769 |
| Split Collateral Term Loans (8% Cash) | — | (5,010,464 | ) | 897,649 | 6,192,464 | 5,000,000 | 5,010,464 | 6,182,000 |
| Series F Preferred Units (705,321 units) | — | (5,221,000 | ) | — | 5,221,000 | — | 5,221,000 | — |
| Common Units (15,174 units) | — | — | 333 | — | — | — |
| — | (10,231,464 | ) | 1,018,049 | 14,356,233 | 5,000,000 | 10,231,464 | 9,124,769 |
| DCWV Acquisition Corporation | Senior Subordinated Note (15% PIK)(5) | — | — | — | 250,000 | — | — | 250,000 |
| Subordinated Note (12% Cash, 3% PIK)(5) | — | (1,728,000 | ) | — | 3,117,000 | — | 1,728,000 | 1,389,000 |
| Jr. Subordinated Note (15% PIK)(5) | — | — | — | — | — | — | — |
| Series A Preferred Equity (1,200 shares) | — | — | — | — | — | — | — |
| 100% Common Shares | — | — | — | — | — | — | — |
| — | (1,728,000 | ) | — | 3,367,000 | — | 1,728,000 | 1,639,000 |
| Gerli & Company | Subordinated Note (13% Cash)(5) | — | (375,000 | ) | — | 375,000 | — | 375,000 | — |
| Subordinated Note (8.5% Cash)(5) | — | (437,000 | ) | — | 437,000 | — | 437,000 | — |
| Class A Preferred Shares (1,211 shares) | — | — | — | — | — | — | — |
| Class C Preferred Shares (744 shares) | — | — | — | — | — | — | — |
| Class E Preferred Shares (400 shares) | — | — | — | — | — | — | — |
| Common Stock (300 shares) | — | — | — | — | — | — | — |
| — | (812,000 | ) | — | 812,000 | — | 812,000 | — |
| SRC Worldwide, Inc. | Common Stock (5,000 shares) | — | 1,307,000 | 700,000 | 6,921,000 | 1,307,000 | 200,000 | 8,028,000 |
| — | 1,307,000 | 700,000 | 6,921,000 | 1,307,000 | 200,000 | 8,028,000 |
| Total Control Investments | — | (11,464,464 | ) | 1,718,049 | 25,456,233 | 6,307,000 | 12,971,464 | 18,791,769 |
| Affiliate Investments: |
| All Aboard America! Holdings Inc. | Subordinated Note (12% Cash, 3% PIK) | — | — | 2,440,362 | 14,953,191 | 577,433 | 15,530,624 | — |
| Membership Units in LLC | 3,118,958 | (2,723,218 | ) | — | 5,024,000 | 3,118,958 | 8,142,958 | — |
| 3,118,958 | (2,723,218 | ) | 2,440,362 | 19,977,191 | 3,696,391 | 23,673,582 | — |
| All Metals Holding, LLC | Subordinated Note (12% Cash, 1% PIK) | — | — | — | — | 6,249,220 | — | 6,249,220 |
| Units (318,977 units) | — | (39,331 | ) | — | — | 793,331 | 39,331 | 754,000 |
| — | (39,331 | ) | — | — | 7,042,551 | 39,331 | 7,003,220 |

42
| TRIANGLE CAPITAL CORPORATIONSchedule of Investments in and Advances to Affiliates — (Continued)Year Ended December 31, 2016 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2015 Value | Gross Additions(3) | Gross Reductions(4) | December 31, 2016 Value |
| American De-Rosa Lamparts, LLC and Hallmark Lighting, LLC | Subordinated Note (12% Cash, 3% PIK) | $ | — | $ | — | $ | 663,502 | $ | 7,186,235 | $ | 227,130 | $ | 7,413,365 | $ | — |
| Membership Units (8,364 units) | 3,555,652 | (3,251,347 | ) | 102,800 | 3,872,000 | 3,555,652 | 7,427,652 | — |
| 3,555,652 | (3,251,347 | ) | 766,302 | 11,058,235 | 3,782,782 | 14,841,017 | — |
| CIS Secure Computing Inc. | Subordinated Note (12% Cash, 3% PIK) | — | — | 1,757,750 | 11,323,440 | 347,268 | — | 11,670,708 |
| Common Stock (84 shares) | — | 1,956,000 | — | 199,000 | 1,956,000 | — | 2,155,000 |
| — | 1,956,000 | 1,757,750 | 11,522,440 | 2,303,268 | — | 13,825,708 |
| Consolidated Lumber Company LLC | Subordinated Note (10% Cash, 2% PIK) | — | 156,611 | 1,480,383 | 14,332,445 | 564,627 | 10,619,072 | 4,278,000 |
| Class A Units (15,000 units) | — | 981,000 | 451,128 | 1,500,000 | 981,000 | — | 2,481,000 |
| — | 1,137,611 | 1,931,511 | 15,832,445 | 1,545,627 | 10,619,072 | 6,759,000 |
| DPII Holdings, LLC | Tranche I & II Subordinated Notes (12% Cash, 4% PIK)(5) | — | (871,000 | ) | 115,147 | 3,558,804 | 5,708 | 1,208,511 | 2,356,001 |
| Tranche III Subordinated Note (19% PIK)(5) | — | (2,148,462 | ) | — | — | 2,148,462 | 2,148,462 | — |
| Class A Membership Interest (17,308 units) | — | (795,000 | ) | — | 795,000 | — | 795,000 | — |
| — | (3,814,462 | ) | 115,147 | 4,353,804 | 2,154,170 | 4,151,973 | 2,356,001 |
| FCL Holding SPV, LLC | Class A Interest (24,873 units) | — | (416,000 | ) | — | — | 645,000 | — | 645,000 |
| Class B Interest (48,427 units) | — | 101,000 | — | — | 101,000 | — | 101,000 |
| Class B Interest (3,746 units) | — | 353,000 | — | — | — | — | — |
| — | 38,000 | — | — | 746,000 | — | 746,000 |
| Frank Entertainment Group, LLC | Senior Note (10% Cash, 5.8% PIK) | — | — | 1,599,606 | 9,592,545 | 605,281 | 257,142 | 9,940,684 |
| Class A Redeemable Preferred Units (10.5% Cash) (196,718 units) | — | — | 324,995 | 4,566,904 | — | — | 4,566,904 |
| Class B Redeemable Preferred Units (18,667 units) | — | — | — | 1,660,810 | — | — | 1,660,810 |
| Class C Redeemable Preferred Units (25,846 units) | — | — | — | 600,000 | — | — | 600,000 |
| Class A Common Units (43,077 units) | — | — | — | — | — | — | — |
| Class A Common Warrants | — | — | — | — | — | — | — |
| — | — | 1,924,601 | 16,420,259 | 605,281 | 257,142 | 16,768,398 |
| GenPref LLC | 7.0% LLC Interest | 30,823 | 6,762 | — | 16,400 | 37,585 | 53,985 | — |
| 30,823 | 6,762 | — | 16,400 | 37,585 | 53,985 | — |
| MS Bakery Holdings, Inc. (F/K/A Main Street Gourmet, LLC) | Preferred Units (233 units) | — | 30,000 | — | 367,000 | 30,000 | — | 397,000 |
| Common B Units (3,000 units) | — | 303,000 | — | 1,807,000 | 303,000 | — | 2,110,000 |
| Common A Units (1,652 units) | — | 167,000 | — | 995,000 | 167,000 | — | 1,162,000 |
| — | 500,000 | — | 3,169,000 | 500,000 | — | 3,669,000 |

43
| TRIANGLE CAPITAL CORPORATIONSchedule of Investments in and Advances to Affiliates — (Continued)Year Ended December 31, 2016 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2015 Value | Gross Additions(3) | Gross Reductions(4) | December 31, 2016 Value |
| NB Products, Inc. | Subordinated Note (12% Cash, 2% PIK) | $ | — | $ | — | $ | 3,368,353 | $ | 20,327,140 | $ | 2,424,050 | $ | — | $ | 22,751,190 |
| Jr. Subordinated Note (10% PIK) | — | — | 462,929 | 4,126,030 | 469,891 | — | 4,595,921 |
| Jr. Subordinated Bridge Note (20% PIK) | — | — | 244,654 | — | 1,972,727 | — | 1,972,727 |
| Series A Redeemable Senior Preferred Stock (7,839 shares) | — | 887,000 | — | 8,525,000 | 887,000 | — | 9,412,000 |
| Common Stock (1,668,691 shares) | — | 5,782,000 | — | 3,997,000 | 5,782,000 | — | 9,779,000 |
| — | 6,669,000 | 4,075,936 | 36,975,170 | 11,535,668 | — | 48,510,838 |
| PCX Aerostructures, LLC | Subordinated Note (10.5% Cash) | — | (6,001,060 | ) | 3,339,521 | 18,612,000 | 9,409,060 | 6,061,060 | 21,960,000 |
| Series A Preferred Stock (6,066 shares) | — | (1,912,668 | ) | — | 1,191,000 | 721,668 | 1,912,668 | — |
| Series B Preferred Stock (411 shares) | — | (410,514 | ) | — | — | 410,514 | 410,514 | — |
| Class A Common Stock (121,922 shares) | — | (3,626 | ) | — | — | 3,626 | 3,626 | — |
| — | (8,327,868 | ) | 3,339,521 | 19,803,000 | 10,544,868 | 8,387,868 | 21,960,000 |
| Team Waste, LLC | Preferred Units (455,000 units) | — | — | 36,000 | 5,500,000 | 3,600,000 | — | 9,100,000 |
| — | — | 36,000 | 5,500,000 | 3,600,000 | — | 9,100,000 |
| Technology Crops, LLC | Subordinated Notes (12% Cash, 5% PIK) | — | — | 1,944,252 | 11,252,123 | 585,499 | — | 11,837,622 |
| Common Units (50 units) | — | (400,000 | ) | — | 400,000 | — | 400,000 | — |
| — | (400,000 | ) | 1,944,252 | 11,652,123 | 585,499 | 400,000 | 11,837,622 |
| TGaS Advisors, LLC | Senior Note (10% Cash, 1% PIK) | — | — | 1,180,938 | 9,633,898 | 177,061 | 288,973 | 9,521,986 |
| Preferred Units (1,685,357 units) | — | (27,712 | ) | 33,000 | 1,427,000 | — | 157,000 | 1,270,000 |
| — | (27,712 | ) | 1,213,938 | 11,060,898 | 177,061 | 445,973 | 10,791,986 |
| Tulcan Fund IV, L.P. (F/K/A Dyson Corporation) | Common Units (1,000,000 units) | — | — | — | 416,000 | — | 416,000 | — |
| — | — | — | 416,000 | — | 416,000 | — |
| UCS Super HoldCo LLC | Membership Units (1,000 units) | (2,000,000 | ) | 2,000,000 | — | — | 2,000,000 | 2,000,000 | — |
| Participation Interest | (626,437 | ) | 700,000 | — | 300,000 | 700,000 | 1,000,000 | — |
| (2,626,437 | ) | 2,700,000 | — | 300,000 | 2,700,000 | 3,000,000 | — |
| United Retirement Plan Consultants, Inc. | Series A Preferred Shares (9,400 shares) | — | 505,252 | — | 446,000 | 265,000 | 454,000 | 257,000 |
| Common Shares (100,000 shares) | — | (599,000 | ) | — | — | 611,000 | 310,000 | 301,000 |
| — | (93,748 | ) | — | 446,000 | 876,000 | 764,000 | 558,000 |

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| TRIANGLE CAPITAL CORPORATIONSchedule of Investments in and Advances to Affiliates — (Continued)Year Ended December 31, 2016 |
| Portfolio Company | Type of Investment(1) | Amount of Realized Gain/ (Loss) | Amount of Unrealized Gain/ (Loss) | Amount of Interest or Dividends Credited to Income(2) | December 31, 2015 Value | Gross Additions(3) | Gross Reductions(4) | December 31, 2016 Value |
| Waste Recyclers Holdings, LLC | Class A Preferred Units (280 units) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
| Class B Preferred Units (11,484,867 units) | — | 74,000 | — | 743,000 | 74,000 | — | 817,000 |
| Common Unit Purchase Warrant (1,170,083 units) | — | — | — | — | — | — | — |
| Common Units (153,219 units) | — | — | — | — | — | — | — |
| — | 74,000 | — | 743,000 | 74,000 | — | 817,000 |
| Wythe Will Tzetzo, LLC | Series A Preferred Units (99,829 units) | — | (1,528,000 | ) | 195,997 | 8,336,000 | — | 1,528,000 | 6,808,000 |
| — | (1,528,000 | ) | 195,997 | 8,336,000 | — | 1,528,000 | 6,808,000 |
| Investments not held at the end of the period | 319,802 | — | — | — | 319,802 | 319,802 | — |
| Total Affiliate Investments | $ | 4,398,798 | $ | (7,124,313 | ) | $ | 19,741,317 | $ | 177,581,965 | $ | 52,826,553 | $ | 68,897,745 | $ | 161,510,773 |

| (1) | All debt investments are income producing, unless otherwise noted. Equity and equity-linked investments are non-income producing, unless otherwise noted. |

| (2) | Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in Control or Affiliate categories, respectively. |

| (3) | Gross additions include increase in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest. Gross Additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation. |

| (4) | Gross reductions include decreases in the total cost basis of investments resulting from principal or PIK repayments or sales. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation. |

| (5) | Non-accrual investment |

This schedule should be read in conjunction with Triangle Capital Corporation's Consolidated Financial Statements for the year ended December 31, 2016, including the Consolidated Schedule of Investments as of December 31, 2016.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion is designed to provide a better understanding of our unaudited consolidated financial statements for the three months ended March 31, 2017, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2016. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.
Forward-Looking Statements
Some of the statements in this Quarterly Report constitute forward-looking statements because they relate to future events or our future performance or financial condition. Forward-looking statements may include, among other things, statements as to our future operating results, our business prospects and the prospects of our portfolio companies, the impact of the investments that we expect to make, the ability of our portfolio companies to achieve their objectives, our expected financings and investments, the adequacy of our cash resources and working capital, and the timing of cash flows, if any, from the operations of our portfolio companies. Words such as “expect,” “anticipate,” “target,” “goals,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “continue,” “forecast,” “may,” “should,” “potential,” variations of such words, and similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. Readers are cautioned that the forward-looking statements contained in this Quarterly Report are only predictions, are not guarantees of future performance, and are subject to risks, events, uncertainties and assumptions that are difficult to predict. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors discussed herein and in Item 1A entitled “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2016. Other factors that could cause actual results to differ materially include, but are not limited to, changes in the economy, risks associated with possible disruption due to terrorism in our operations or the economy generally, and future changes in laws or regulations and conditions in our operating areas. These statements are based on our current expectations, estimates, forecasts, information and projections about the industry in which we operate and the beliefs and assumptions of our management as of the date of this Quarterly Report. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless we are required to do so by law. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Overview of Our Business
We are a Maryland corporation which has elected to be treated and operates as an internally managed business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. Our wholly-owned subsidiaries, Triangle Mezzanine Fund LLLP, or Triangle SBIC, Triangle Mezzanine Fund II LP, or Triangle SBIC II and Triangle Mezzanine Fund III LP, or Triangle SBIC III, are licensed as small business investment companies, or SBICs, by the United States Small Business Administration, or SBA. In addition, Triangle SBIC has also elected to be treated as a BDC under the 1940 Act. We, Triangle SBIC, Triangle SBIC II and Triangle SBIC III invest primarily in debt instruments, equity investments, warrants and other securities of lower middle market privately-held companies located primarily in the United States.
Our business is to provide capital to lower middle market companies located primarily in the United States. We focus on investments in companies with a history of generating revenues and positive cash flows, an established market position and a proven management team with a strong operating discipline. Our target portfolio company has annual revenues between $20.0 million and $300.0 million and annual earnings before interest, taxes, depreciation and amortization, or EBITDA, between $5.0 million and $75.0 million.
We invest primarily in subordinated debt securities secured by second lien security interests in portfolio company assets, coupled with equity interests. On a more limited basis, we also invest in senior debt securities secured by first lien security interests in portfolio company assets. Our investments generally range from $5.0 million to $50.0 million per portfolio company. In certain situations, we have partnered with other funds to provide larger financing commitments.
We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the
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loan using the effective interest method or, in some cases, recognized as earned. In addition, we generate revenue in the form of capital gains, if any, on warrants or other equity-related securities that we acquire from our portfolio companies. Our debt investments generally have a term of between three and seven years. In addition, our fixed debt investments typically bear interest between 10.0% and 15.0% per annum and our variable debt investments are generally LIBOR-based and typically bear interest between 8.0% and 13.0% per annum. Certain of our debt investments have a form of interest, referred to as payment-in-kind, or PIK, interest, that is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term. In our negotiations with potential portfolio companies, we generally seek to minimize PIK interest. Cash interest on our debt investments is generally payable monthly; however, some of our debt investments pay cash interest on a quarterly basis. As of March 31, 2017 and December 31, 2016, the weighted average yield on our outstanding debt investments other than non-accrual debt investments was approximately 11.5% and 11.7%, respectively. The weighted average yield on all of our outstanding investments (including equity and equity-linked investments but excluding non-accrual debt investments) was approximately 10.1% and 10.2% as of March 31, 2017 and December 31, 2016, respectively. The weighted average yield on all of our outstanding investments (including equity and equity-linked investments and non-accrual debt investments) was approximately 10.1% and 9.7% as of March 31, 2017 and December 31, 2016, respectively.
Triangle SBIC, Triangle SBIC II and Triangle SBIC III are eligible to issue debentures to the SBA, which pools these with debentures of other SBICs and sells them in the capital markets at favorable interest rates, in part as a result of the guarantee of payment from the SBA. Triangle SBIC, Triangle SBIC II and Triangle SBIC III invest these funds in portfolio companies. We intend to continue to operate Triangle SBIC, Triangle SBIC II and Triangle SBIC III as SBICs, subject to SBA approval, and to utilize the proceeds from the issuance of SBA-guaranteed debentures, referred to herein as SBA leverage, to enhance returns to our stockholders.
Portfolio Investment Composition
The total value of our investment portfolio was $1.1 billion as of March 31, 2017, as compared to $1.0 billion as of December 31, 2016. As of March 31, 2017, we had investments in 92 portfolio companies with an aggregate cost of $1.2 billion. As of December 31, 2016, we had investments in 88 portfolio companies with an aggregate cost of $1.1 billion. As of both March 31, 2017 and December 31, 2016, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.
As of March 31, 2017 and December 31, 2016, our investment portfolio consisted of the following investments:
| Cost | Percentage ofTotalPortfolio | Fair Value | Percentage ofTotalPortfolio |
| March 31, 2017: |
| Subordinated debt and 2nd lien notes | $ | 759,242,347 | 64 | % | $ | 698,774,893 | 62 | % |
| Senior debt and 1st lien notes | 287,597,925 | 24 | 280,154,364 | 25 |
| Equity shares | 140,341,761 | 12 | 152,202,545 | 13 |
| Equity warrants | 3,662,717 | — | 2,077,000 | — |
| $ | 1,190,844,750 | 100 | % | $ | 1,133,208,802 | 100 | % |
| December 31, 2016: |
| Subordinated debt and 2nd lien notes | $ | 753,635,857 | 69 | % | $ | 690,159,367 | 67 | % |
| Senior debt and 1st lien notes | 198,616,110 | 18 | 191,643,157 | 18 |
| Equity shares | 140,524,807 | 13 | 154,216,657 | 15 |
| Equity warrants | 4,154,717 | — | 1,888,000 | — |
| $ | 1,096,931,491 | 100 | % | $ | 1,037,907,181 | 100 | % |

Investment Activity
During the three months ended March 31, 2017, we made nine new investments totaling $146.6 million, debt investments in six existing portfolio companies totaling $14.3 million and equity investments in six existing portfolio companies totaling $0.6 million. We had three portfolio company loans repaid at par totaling $43.6 million and received normal principal repayments and partial loan prepayments totaling $3.9 million in the three months ended March 31, 2017. We converted a portion of a subordinated debt investment in one portfolio company into an equity investment and recognized a realized loss on such conversion totaling $0.3 million. We wrote off equity investments in three portfolio companies and recognized realized losses on the write-offs totaling $4.1 million and wrote off debt investments in two portfolio companies and recognized realized losses on the write-offs of $13.1 million. In addition, we received proceeds related to the sales of certain equity securities
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totaling $6.3 million and recognized net realized gains on such sales totaling $4.1 million in the three months ended March 31, 2017.
During the three months ended March 31, 2016, we made debt investments in four existing portfolio companies totaling $9.2 million and equity investments in seven existing portfolio companies totaling $2.6 million. We had three portfolio company loans repaid at par totaling $43.9 million and received normal principal repayments and partial loan prepayments totaling $4.8 million in the three months ended March 31, 2016. We converted subordinated debt investments in one portfolio company into an equity investment and recognized a realized loss on such conversion totaling $1.6 million. In addition, we received proceeds related to the sales of certain equity securities totaling $4.9 million and recognized net realized gains on such sales totaling $2.1 million in the three months ended March 31, 2016.
Total portfolio investment activity for the three months ended March 31, 2017 and 2016 was as follows:
| Three Months EndedMarch 31, 2017: | SubordinatedDebt and 2ndLien Notes | Senior Debtand 1st LienNotes | EquityShares | EquityWarrants | Total |
| Fair value, beginning of period | $ | 690,159,367 | $ | 191,643,157 | $ | 154,216,657 | $ | 1,888,000 | $ | 1,037,907,181 |
| New investments | 64,868,421 | 91,059,316 | 5,590,356 | — | 161,518,093 |
| Proceeds from sales of investments | — | — | (6,266,765 | ) | (33,003 | ) | (6,299,768 | ) |
| Loan origination fees received | (1,255,000 | ) | (1,383,485 | ) | — | — | (2,638,485 | ) |
| Principal repayments received | (46,128,905 | ) | (1,342,038 | ) | — | — | (47,470,943 | ) |
| PIK interest earned | 3,041,385 | 336,463 | — | — | 3,377,848 |
| PIK interest payments received | (2,687,416 | ) | — | — | (2,687,416 | ) |
| Accretion of loan discounts | 28,786 | 54,694 | — | — | 83,480 |
| Accretion of deferred loan origination revenue | 1,092,544 | 256,865 | — | — | 1,349,409 |
| Realized gain (loss) | (13,353,325 | ) | — | 493,363 | (458,997 | ) | (13,318,959 | ) |
| Unrealized gain (loss) | 3,009,036 | (470,608 | ) | (1,831,066 | ) | 681,000 | 1,388,362 |
| Fair value, end of period | $ | 698,774,893 | $ | 280,154,364 | $ | 152,202,545 | $ | 2,077,000 | $ | 1,133,208,802 |
| Weighted average yield on debt investments at end of period(1) | 11.5 | % |
| Weighted average yield on total investments at end of period(1) | 10.1 | % |
| Weighted average yield on total investments at end of period | 10.1 | % |

| (1) | Excludes non-accrual debt investments |

| Three Months EndedMarch 31, 2016: | SubordinatedDebt and 2ndLien Notes | Senior Debtand 1st LienNotes | EquityShares | EquityWarrants | Total |
| Fair value, beginning of period | $ | 699,125,083 | $ | 132,929,264 | $ | 141,555,369 | $ | 3,667,000 | $ | 977,276,716 |
| New investments | 8,027,333 | 1,000,000 | 2,134,998 | 650,000 | 11,812,331 |
| Reclassifications | 6,748,247 | (6,748,247 | ) | — | — | — |
| Proceeds from sales of investments | — | — | (4,522,005 | ) | (112,876 | ) | (4,634,881 | ) |
| Loan origination fees received | (274,158 | ) | — | — | — | (274,158 | ) |
| Principal repayments received | (47,493,762 | ) | (1,492,037 | ) | — | — | (48,985,799 | ) |
| PIK interest earned | 3,552,577 | 358,240 | — | — | 3,910,817 |
| PIK interest payments received | (3,399,684 | ) | (193,293 | ) | — | — | (3,592,977 | ) |
| Accretion of loan discounts | 46,593 | 48,595 | — | — | 95,188 |
| Accretion of deferred loan origination revenue | 1,019,361 | 115,640 | — | — | 1,135,001 |
| Realized gain (loss) | — | (1,560,322 | ) | 2,309,760 | (163,224 | ) | 586,214 |
| Unrealized gain (loss) | (3,680,421 | ) | 2,400,226 | 2,475,899 | 1,452,100 | 2,647,804 |
| Fair value, end of period | $ | 663,671,169 | $ | 126,858,066 | $ | 143,954,021 | $ | 5,493,000 | $ | 939,976,256 |
| Weighted average yield on debt investments at end of period(1) | 12.3 | % |
| Weighted average yield on total investments at end of period(1) | 10.6 | % |
| Weighted average yield on total investments at end of period | 10.2 | % |

| (1) | Excludes non-accrual debt investments |

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Non-Accrual Assets
Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2017, the fair value of our non-accrual assets was $24.5 million, which comprised 2.2% of the total fair value of our portfolio, and the cost of our non-accrual assets was $50.5 million, which comprised 4.2% of the total cost of our portfolio. As of December 31, 2016, the fair value of our non-accrual assets was $15.9 million, which comprised 1.5% of the total fair value of our portfolio, and the cost of our non-accrual assets was $38.4 million, which comprised 3.5% of the total cost of our portfolio.
Our non-accrual assets as of March 31, 2017 were as follows:
DCWV Acquisition Corporation
In September 2015, we placed our debt investments in DCWV Acquisition Corporation, or DCWV, on non-accrual status effective with the monthly payment due September 30, 2015. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in DCWV for financial reporting purposes. As of March 31, 2017, the cost of our debt investments in DCWV was $8.4 million and the fair value of such investments was $0.9 million.
DialogDirect, Inc.
In March 2017, we placed our debt investments in DialogDirect, Inc., or Dialog, on non-accrual status effective with the monthly payment due January 31, 2017. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in Dialog for financial reporting purposes. As of March 31, 2017, the cost of our debt investments in Dialog was $16.0 million and the fair value of such investments was $9.4 million.
DPII Holdings, LLC
During the three months ended March 31, 2016, we placed our Tranche I & II subordinated debt investments in DPII Holdings, LLC, or Datapath, on PIK non-accrual status. During the three months ended June 30, 2016, we invested approximately $1.6 million in a Tranche III subordinated debt investment in order to provide liquidity to support Datapath. This Tranche III subordinated debt investment bears interest at a rate of 0% Cash and 19% PIK. In the three months ended June 30, 2016, we placed both our Tranche I & II subordinated debt investments and our Tranche III subordinated debt investment in Datapath on full non-accrual status. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investments in Datapath for financial reporting purposes. As of March 31, 2017, the cost of our debt investments in Datapath was $5.3 million and the fair value of such investments was $2.7 million.
PowerDirect Marketing, LLC
In August 2014, we placed our debt investment in PowerDirect Marketing, LLC, or PowerDirect, on non-accrual status effective with the monthly payment due July 31, 2014. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in PowerDirect for financial reporting purposes. As of March 31, 2017, the cost of our debt investment in PowerDirect was $4.7 million and the fair value of such investment was $0.5 million.
Women's Marketing, Inc.
During the three months ended September 30, 2016, we placed our debt investment in Women's Marketing, Inc., or Women's Marketing, on PIK non-accrual status. In December 2016, we placed our debt investment in Women's Marketing on non-accrual status effective with the monthly payment due November 30, 2016. As a result, under U.S. GAAP, we no longer recognize interest income on our debt investment in Women's Marketing for financial reporting purposes. As of March 31, 2017, the cost of our debt investment in Women's Marketing was $16.1 million and the fair value of such investment was $11.1 million.
PIK Non-Accrual Assets
In addition to our non-accrual assets, as of March 31, 2017, we had a debt investment in one portfolio company (our subordinated debt in Community Intervention Services, Inc.) that was on non-accrual only with respect to the PIK interest component of the loan. As of March 31, 2017, the fair value of this debt investment was $12.4 million, or 1.1% of the total fair value of our portfolio, and the cost of this debt investment was $17.7 million, or 1.5% of the total cost of our portfolio.
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Results of Operations
Comparison of three months ended March 31, 2017 and March 31, 2016
Investment Income
For the three months ended March 31, 2017, total investment income was $30.2 million, a 13.3% increase from $26.7 million of total investment income for the three months ended March 31, 2016. This increase was primarily attributable to an increase in portfolio debt investments from March 31, 2016 to March 31, 2017, a $1.5 million increase in non-recurring dividend income and a $0.2 million increase in non-recurring fee income, partially offset by a decrease in PIK interest income due to a decrease in PIK yielding investments from March 31, 2016 to March 31, 2017, and a $0.8 million decrease in investment income relating to non-accrual assets. Non-recurring fee income was $1.5 million for the three months ended March 31, 2017, as compared to $1.3 million for the three months ended March 31, 2016. Non-recurring dividend income was $0.3 million for the three months ended March 31, 2017, as compared to ($1.2 million) for the three months ended March 31, 2016. Our net negative non-recurring dividend income during the three months ended March 31, 2016 consisted of non-recurring dividend income of approximately $0.2 million and a negative true-up adjustment of $1.3 million related to a portfolio company distribution that was received in 2015. In 2015, we received information that indicated that the tax character of the distribution was 100% dividend income, but received updated information in 2016 indicating that only 14% of the distribution was dividend income and the remainder was a return of capital, which necessitated the adjustment.
Operating Expenses
For the three months ended March 31, 2017, operating expenses decreased by 27.5% to $12.4 million from $17.1 million for the three months ended March 31, 2016. Our operating expenses consist of interest and other financing fees, compensation expenses and general and administrative expenses.
For the three months ended March 31, 2017, interest and other financing fees increased by 6.0% to $6.9 million from $6.5 million for the three months ended March 31, 2016. The increase in interest and other financing fees was related primarily to the interest and fee amortization of $0.2 million on the incremental $25.0 million of borrowings outstanding under our SBA-guaranteed debentures and an increase in interest and other financing fees of $0.1 million related to increased borrowings under our third amended and restated senior secured credit facility, or the Credit Facility.
Compensation expenses are primarily influenced by headcount and levels of business activity. Our compensation expenses include salaries, discretionary compensation, equity-based compensation and benefits. Discretionary compensation is significantly impacted by our level of total investment income, our investment results including investment realizations, prevailing labor markets and the external environment. As a result of these and other factors, our compensation expenses can fluctuate materially from period to period. Accordingly, the amount of compensation expenses recognized in any particular period may not be indicative of compensation expenses in a future period.
For the three months ended March 31, 2017, compensation expenses decreased by 55.0% to $4.3 million from $9.5 million for the three months ended March 31, 2016. This decrease in compensation expenses was primarily related to one-time expenses associated with the retirement of our former Chief Executive Officer, Garland S. Tucker, III, from his officer positions in February 2016. Our Board of Directors, or the Board, awarded Mr. Tucker a $2.5 million cash bonus and accelerated the vesting of his outstanding shares of restricted stock, including 47,000 shares of restricted stock awarded to him in February 2016 based on his performance during 2015, and certain other compensation in connection with his retirement and in recognition of his long service. We recognized $5.5 million in one-time compensation expenses for the three months ended March 31, 2016 associated with Mr. Tucker's retirement.
For the three months ended March 31, 2017, general and administrative expenses increased by 11.2% to $1.2 million from $1.1 million for the three months ended March 31, 2016.
In addition, our efficiency ratio (defined as the sum of compensation expenses and general and administrative expenses as a percentage of total investment income) decreased to 18.1% for the three months ended March 31, 2017 from 39.5% for the three months ended March 31, 2016.
Net Investment Income
As a result of the $3.5 million increase in total investment income and the $4.7 million decrease in operating expenses, net investment income increased by 85.7% to $17.8 million for the three months ended March 31, 2017 as compared to $9.6 million for the three months ended March 31, 2016.
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Net Increase/Decrease in Net Assets Resulting from Operations
In the three months ended March 31, 2017, we recognized realized losses totaling $13.3 million, which consisted primarily of a net loss on the write-off of one control investment totaling $4.5 million and net losses on the restructuring/write-off of three non-control investments totaling $13.0 million, partially offset by a net gain on the sale of one non-control/non-affiliate investment totaling $0.6 million and net gains on the sales of three affiliate investments totaling $3.5 million. In addition, during the three months ended March 31, 2017, we recorded net unrealized appreciation totaling $2.7 million, consisting of net unrealized depreciation on our current portfolio of $9.6 million and net unrealized appreciation reclassification adjustments of $12.3 million related to the realized gains and losses noted above.
In the three months ended March 31, 2016, we recognized realized gains totaling $0.6 million, which consisted primarily of net gains on the sales/repayments of six non-control/non-affiliate investments totaling $2.1 million, partially offset by a loss on the restructuring of one non-control/non-affiliate investment totaling $1.5 million. In addition, during the three months ended March 31, 2016, we recorded net unrealized appreciation totaling $2.2 million, consisting of net unrealized appreciation on our current portfolio of $2.6 million and net unrealized depreciation reclassification adjustments of $0.4 million related to the realized gains and losses noted above.
As a result of these events, our net increase in net assets resulting from operations was $7.2 million for the three months ended March 31, 2017, as compared to a net increase in net assets resulting from operations of $12.4 million for the three months ended March 31, 2016.
Liquidity and Capital Resources
We believe that our current cash and cash equivalents on hand, our available borrowing capacity under the Credit Facility and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months.
In the future, depending on the valuation of Triangle SBIC’s assets, Triangle SBIC II's assets and Triangle SBIC III’s assets pursuant to SBA guidelines, Triangle SBIC, Triangle SBIC II and Triangle SBIC III may be limited by provisions of the Small Business Investment Act of 1958, or the Small Business Investment Act, and SBA regulations governing SBICs, from making certain distributions to Triangle Capital Corporation that may be necessary to enable Triangle Capital Corporation to make the minimum required distributions to its stockholders and qualify as a regulated investment company, or RIC.
Cash Flows
For the three months ended March 31, 2017, we experienced a net decrease in cash and cash equivalents in the amount of $16.5 million. During that period, our operating activities used $89.3 million in cash, consisting primarily of new portfolio investments of $161.5 million, partially offset by repayments received from portfolio companies and proceeds from sales of portfolio investments of approximately $53.8 million. In addition, our financing activities increased cash by $72.8 million, consisting primarily of proceeds from our public stock offering of $132.2 million, partially offset by cash dividends paid in the amount of $20.7 million and net repayments under the Credit Facility of $36.1 million. As of March 31, 2017, we had $90.6 million of cash and cash equivalents on hand.
For the three months ended March 31, 2016, we experienced a net increase in cash and cash equivalents in the amount of $11.5 million. During that period, our operating activities provided $44.1 million in cash, consisting primarily of repayments received from portfolio companies and proceeds from sales of portfolio investments of approximately $53.6 million, partially offset by new portfolio investments of $11.8 million. In addition, our financing activities decreased cash by $32.5 million, primarily due to cash dividends paid in the amount of $17.3 million, net repayments under the Credit Facility of $4.0 million and the repayment of the SBA-guaranteed LMI debenture of $7.8 million. As of March 31, 2016, we had $64.2 million of cash and cash equivalents on hand.
Financing Transactions
Due to Triangle SBIC’s, Triangle SBIC II's and Triangle SBIC III’s status as licensed SBICs, Triangle SBIC, Triangle SBIC II and Triangle SBIC III have the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the Small Business Investment Act and the SBA rules applicable to SBICs, an SBIC (or group of SBICs under common control) can have outstanding at any time debentures guaranteed by the SBA up to two times (and in certain cases, up to three times) the amount of its regulatory capital, which generally is the amount raised from private investors. The maximum statutory limit on the dollar amount of outstanding debentures guaranteed by the SBA issued by a single SBIC is currently $150.0 million and by a group of SBICs under common control is $350.0 million. Debentures guaranteed by the SBA have a maturity of ten years, with interest payable semi-annually. The principal amount of the debentures is not required to be paid before maturity but may
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be prepaid at any time, without penalty. As a result of its guarantee of our SBA-guaranteed debentures, the SBA has fixed-dollar claims on the assets of Triangle SBIC, Triangle SBIC II and Triangle SBIC III that are superior to the claims of our security holders.
As of March 31, 2017, Triangle SBIC had issued the maximum $150.0 million of SBA-guaranteed debentures and Triangle SBIC II had issued $100.0 million of SBA-guaranteed debentures, leaving borrowing capacity of a maximum of $100.0 million of SBA-guaranteed debentures for Triangle SBIC III. In addition to the one-time 1.0% fee on the total commitment from the SBA, we also pay a one-time 2.425% fee on the amount of each debenture issued. These fees are capitalized as deferred financing costs and are amortized over the term of the debt agreements using the effective interest method. The weighted average interest rate for all SBA-guaranteed debentures as of March 31, 2017 was 3.90%. As of both March 31, 2017 and December 31, 2016, all SBA-guaranteed debentures were pooled.
In May 2015, we entered the Credit Facility, which has a current commitment of $300.0 million supported by 13 financial institutions. The revolving period of the Credit Facility ends May 3, 2019 followed by a one-year amortization period with a final maturity date of May 3, 2020. We have the ability to borrow in both United States dollars as well as foreign currencies under the Credit Facility.
The Credit Facility has an accordion feature that allows for an increase in the total borrowing size up to $350.0 million, subject to certain conditions and the satisfaction of specified financial covenants. The Credit Facility, which is structured to operate like a revolving credit facility, is secured primarily by our assets, excluding the assets of our wholly-owned SBIC subsidiaries.
Borrowings under the Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.75% (or 1.50% if we receive an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75% (or 2.50% if we receive an investment grade credit rating) or (iii) for borrowings denominated in Canadian dollars, the applicable Canadian Dealer Offered Rate plus 2.75% (or 2.50% if we receive an investment grade credit rating). The applicable base rate is equal to the greater of (i) the prime rate, (ii) the federal funds rate plus 0.5% or (iii) the adjusted one-month LIBOR plus 2.0%. The applicable LIBOR rate depends on the term of the draw under the Credit Facility. We pay a commitment fee of 1.00% per annum on undrawn amounts if the used portion of the Credit Facility is less than or equal to 25.0% of total commitments, or 0.375% per annum on undrawn amounts if the used portion of the Credit Facility is greater than 25.0% of total commitments.
As of March 31, 2017, we had United States dollar borrowings of $69.6 million outstanding under the Credit Facility with an interest rate of 3.54% and non-United States dollar borrowings denominated in Canadian dollars of $28.6 million ($21.5 million in United States dollars) outstanding under the Credit Facility with a weighted average interest rate of 3.70%. The borrowings denominated in Canadian dollars are translated into United States dollars based on the spot rate at each balance sheet date. The impact resulting from changes in foreign exchange rates on the Credit Facility borrowings is included in unrealized appreciation (depreciation) on foreign currency borrowings in our Unaudited Consolidated Statements of Operations. The borrowings denominated in Canadian dollars may be positively or negatively affected by movements in the rate of exchange between the United States dollar and the Canadian dollar. This movement is beyond our control and cannot be predicted.
The Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining a minimum interest coverage ratio, (ii) maintaining a minimum consolidated tangible net worth, (iii) maintaining a minimum asset coverage ratio and (iv) maintaining our status as a RIC and as a BDC. The Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The Credit Facility also permits Branch Banking and Trust Company, the administrative agent, to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. In connection with the Credit Facility, we also entered into new collateral documents. As of March 31, 2017, we were in compliance with all covenants of the Credit Facility.
In October 2012, we issued $70.0 million of unsecured notes due December 2022, or the December 2022 Notes, and in November 2012, we issued $10.5 million of December 2022 Notes pursuant to the exercise of an over-allotment option. The December 2022 Notes mature on December 15, 2022, and may be redeemed in whole or in part at any time or from time to time at our option on or after December 15, 2015. The December 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning December 15, 2012.
In February 2015, we issued $86.3 million of unsecured notes due March 2022, or the March 2022 Notes. The March 2022 Notes mature on March 15, 2022 and may be redeemed in whole or in part at any time or from time to time at our option on or after March 15, 2018. The March 2022 Notes bear interest at a rate of 6.375% per year payable quarterly on March 15,
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June 15, September 15 and December 15 of each year, beginning March 15, 2015. The net proceeds from the sale of the March 2022 Notes, after underwriting discounts and offering expenses, were $83.4 million.
The indenture and related supplements thereto relating to the December 2022 Notes and the March 2022 Notes contain certain covenants, including but not limited to (i) a requirement that we comply with the asset coverage requirement of the 1940 Act or any successor provisions, after giving effect to any exemptive relief granted to us by the SEC, (ii) a requirement that we will not declare any cash dividend, or declare any other cash distribution, upon a class of our capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration of any such dividend or distribution, or at the time of any such purchase, we have an asset coverage (as defined in the 1940 Act) of at least 200% after deducting the amount of such dividend, distribution or purchase price, as the case may be, giving effect to any exemptive relief granted to us by the SEC, and (iii) a requirement that we provide financial information to the holders of the notes and the trustee under the indenture if we should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, or the Exchange Act. As of March 31, 2017 and December 31, 2016, we were in compliance with all covenants of the December 2022 Notes and the March 2022 Notes.
Distributions to Stockholders
We have elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, and intend to make the required distributions to our stockholders as specified therein. In order to maintain our qualification as a RIC and to obtain RIC tax benefits, we must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then we are generally required to pay income taxes only on the portion of our taxable income and gains we do not distribute (actually or constructively) and certain built-in gains. We have historically met our minimum distribution requirements and continually monitor our distribution requirements with the goal of ensuring compliance with the Code. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and our ability to make distributions will be limited by the asset coverage requirement and related provisions under the 1940 Act and contained in the indenture and related supplements governing the December 2022 Notes and the March 2022 Notes.
The minimum distribution requirements applicable to RICs require us to distribute to our stockholders each year at least 90% of our investment company taxable income, or ICTI, as defined by the Code. Depending on the level of ICTI earned in a tax year, we may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of the next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. We may be required to recognize ICTI in certain circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), we must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in ICTI other amounts that we have not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in our ICTI for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
Recent Developments
In April 2017, we invested $5.0 million in a debt security of Constellis Holdings. Under the terms of the investment, the debt security bears interest at a rate of LIBOR plus 9.0% per annum.
In May 2017, we amended our Credit Facility to, among other things, increase current commitments from $300 million to $435 million and extend the maturity by two years, such amended Credit Facility referred to herein as the Amended Credit Facility. The current commitments of $435 million are supported by a diversified group of thirteen lenders, and the Amended Credit Facility has an accordion feature that allows for an increase in commitments to up to $550 million from new and existing lenders on the same terms and conditions as the existing commitments. The revolving period of the Amended Credit Facility ends April 30, 2021 followed by a one-year amortization period with a final maturity date of April 30, 2022.
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Critical Accounting Policies and Use of Estimates
The preparation of our unaudited financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods covered by such financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. On an on-going basis, we evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.
Investment Valuation
The most significant estimate inherent in the preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We have established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC Topic 820. Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. The three levels of valuation inputs established by ASC Topic 820 are as follows:
Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.
Our investment portfolio is comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are generally not available. Therefore, we determine the fair value of our investments in good faith using Level 3 inputs, pursuant to a valuation policy and process that is established by our management with the assistance of certain third-party advisors and subsequently approved by the Board. There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of our investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.
Our valuation process is led by our executive officers. The valuation process begins with a quarterly review of each investment in our investment portfolio by our executive officers and our investment committee. Valuations of each portfolio security are then prepared by our investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under our valuation policy, each investment valuation is subject to (i) a review by the lead investment officer responsible for the portfolio company investment and (ii) a peer review by a second investment officer or executive officer. Generally, any investment that is valued below cost is subjected to review by one of our executive officers. After the peer review is complete, we engage two independent valuation firms, including Duff & Phelps, LLC, collectively, the "Valuation Firms," to provide third-party reviews of certain investments, as described further below. Finally, the Board has the responsibility for reviewing and approving, in good faith, the fair value of our investments in accordance with the 1940 Act.
The Valuation Firms provide third-party valuation consulting services to us which consist of certain limited procedures that we identified and requested the Valuation Firms to perform, which we refer to herein as the Procedures. The Procedures are performed with respect to each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In addition, the Procedures are generally performed with respect to a portfolio company when there has been a significant change in the fair value of the investment. In certain instances, we may determine that it is not cost-effective, and as a result is not in our stockholders’ best interest, to request the Valuation Firms to perform the Procedures on one or more portfolio companies. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.
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| For the quarter ended: | Totalcompanies | Percent of totalinvestments atfair value(1) |
| March 31, 2016 | 18 | 27% |
| June 30, 2016 | 19 | 30% |
| September 30, 2016 | 19 | 33% |
| December 31, 2016 | 20 | 33% |
| March 31, 2017 | 18 | 30% |

| (1) | Exclusive of the fair value of new investments made during the quarter. |

Upon completion of the Procedures, the Valuation Firms concluded that, with respect to each investment reviewed by each Valuation Firm, the fair value of those investments subjected to the Procedures appeared reasonable. The Board is ultimately responsible for determining the fair value of our investments in good faith.
Investment Valuation Inputs
Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. Under ASC Topic 820, the fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. Under ASC Topic 820, if no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market. The securities in which we invest are generally only purchased and sold in merger and acquisition transactions, in which case the entire portfolio company is sold to a third-party purchaser. As a result, unless we have the ability to control such a transaction, the assumed principal market for our securities is a hypothetical secondary market. The Level 3 inputs to our valuation process reflect management’s best estimate of the assumptions that would be used by market participants in pricing the investment in a transaction in a hypothetical secondary market.
Enterprise Value Waterfall Approach
In valuing equity securities (including warrants), we estimate fair value using an “Enterprise Value Waterfall” valuation model. We estimate the enterprise value of a portfolio company and then allocate the enterprise value to the portfolio company’s securities in order of their relative liquidation preference. In addition, the model assumes that any outstanding debt or other securities that are senior to our equity securities are required to be repaid at par. Additionally, we estimate the fair value of a limited number of our debt securities using the Enterprise Value Waterfall approach in cases where we do not expect to receive full repayment.
To estimate the enterprise value of the portfolio company, we primarily use a valuation model based on a transaction multiple, which generally is the original transaction multiple, and measures of the portfolio company’s financial performance. In addition, we consider other factors, including but not limited to (i) offers from third parties to purchase the portfolio company, (ii) the implied value of recent investments in the equity securities of the portfolio company, (iii) publicly available information regarding recent sales of private companies in comparable transactions and (iv) when management believes there are comparable companies that are publicly traded, we perform a review of these publicly traded companies and the market multiple of their equity securities. For certain non-performing assets, we may utilize the liquidation or collateral value of the portfolio company's assets in our estimation of enterprise value.
The significant Level 3 inputs to the Enterprise Value Waterfall model are (i) an appropriate transaction multiple and (ii) a measure of the portfolio company’s financial performance, which generally is either earnings before interest, taxes, depreciation and amortization, as adjusted, or Adjusted EBITDA, or revenues. Such inputs can be based on historical operating results, projections of future operating results or a combination thereof. The operating results of a portfolio company may be unaudited, projected or pro forma financial information and may require adjustments for certain non-recurring items. In determining the operating results input, we utilize the most recent portfolio company financial statements and forecasts available as of the valuation date. Management also consults with the portfolio company’s senior management to obtain updates on the portfolio company’s performance, including information such as industry trends, new product development, loss of customers and other operational issues. Additionally, we consider some or all of the following factors:
| • | financial standing of the issuer of the security; |

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| • | comparison of the business and financial plan of the issuer with actual results; |

| • | the size of the security held; |

| • | pending reorganization activity affecting the issuer, such as merger or debt restructuring; |

| • | ability of the issuer to obtain needed financing; |

| • | changes in the economy affecting the issuer; |

| • | financial statements and reports from portfolio company senior management and ownership; |

| • | the type of security, the security’s cost at the date of purchase and any contractual restrictions on the disposition of the security; |

| • | information as to any transactions or offers with respect to the security and/or sales to third parties of similar securities; |

| • | the issuer’s ability to make payments and the type of collateral; |

| • | the current and forecasted earnings of the issuer; |

| • | statistical ratios compared to lending standards and to other similar securities; |

| • | pending public offering of common stock by the issuer of the security; |

| • | special reports prepared by analysts; and |

| • | any other factors we deem pertinent with respect to a particular investment. |

Fair value measurements using the Enterprise Value Waterfall model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Enterprise Value Waterfall model remain constant, any increase (decrease) in either the transaction multiple, Adjusted EBITDA or revenues for a particular equity security would result in a higher (lower) fair value for that security.
Income Approach
In valuing debt securities, we utilize an “Income Approach” model that considers factors including, but not limited to, (i) the stated yield on the debt security, (ii) the portfolio company’s current Adjusted EBITDA as compared to the portfolio company’s historical or projected Adjusted EBITDA as of the date the investment was made and the portfolio company’s anticipated Adjusted EBITDA for the next twelve months of operations, (iii) the portfolio company’s current Leverage Ratio (defined as the portfolio company’s total indebtedness divided by Adjusted EBITDA) as compared to its Leverage Ratio as of the date the investment was made, (iv) publicly available information regarding current pricing and credit metrics for similar proposed and executed investment transactions of private companies and (v) when management believes a relevant comparison exists, current pricing and credit metrics for similar proposed and executed investment transactions of publicly traded debt. In addition, we use a risk rating system to estimate the probability of default on the debt securities and the probability of loss if there is a default. This risk rating system covers both qualitative and quantitative aspects of the business and the securities held.
We consider the factors above, particularly any significant changes in the portfolio company’s results of operations and leverage, and develop an expectation of the yield that a hypothetical market participant would require when purchasing the debt investment, which we refer to herein as the Required Rate of Return. The Required Rate of Return, along with the Leverage Ratio and Adjusted EBITDA, are the significant Level 3 inputs to the Income Approach model. For investments where the Leverage Ratio and Adjusted EBITDA have not fluctuated significantly from the date the investment was made or have not fluctuated significantly from management’s expectations as of the date the investment was made, and where there have been no significant fluctuations in the market pricing for such investments, we may conclude that the Required Rate of Return is equal to the stated rate on the investment and therefore, the debt security is appropriately priced. In instances where we determine that the Required Rate of Return is different from the stated rate on the investment, we discount the contractual cash flows on the debt instrument using the Required Rate of Return in order to estimate the fair value of the debt security.
Fair value measurements using the Income Approach model can be sensitive to changes in one or more of the inputs. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Required Rate of Return or Leverage Ratio inputs for a particular debt security would result in a lower (higher) fair value for that security. Assuming all other inputs to the Income Approach model remain constant, any increase (decrease) in the Adjusted EBITDA input for a particular debt security would result in a higher (lower) fair value for that security.
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The fair value of our royalty rights are calculated based on specific provisions contained in the pertinent operating or royalty agreements. The determination of the fair value of such royalty rights is not a significant component of our valuation process.
Revenue Recognition
Interest and Dividend Income
Interest income, adjusted for amortization of premium and accretion of original issue discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The cessation of recognition of such interest will negatively impact the reported fair value of the investment. We write off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.
We may have to include in our ICTI interest income, including OID income, from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements to maintain our RIC status, even though we will not have received and may not ever receive any corresponding cash amount. Additionally, any loss recognized by us for U.S. federal income tax purposes on previously accrued interest income will be treated as a capital loss.
Fee Income
Origination, facility, commitment, consent and other advance fees received in connection with the origination of a loan, or Loan Origination Fees, are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of our business, we receive certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.
Payment-in-Kind (PIK) Interest Income
We currently hold, and we expect to hold in the future, some loans in our portfolio that contain PIK interest provisions. The PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to us in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.
PIK interest, which is a non-cash source of income until it is collected, is included in our taxable income and therefore affects the amount we are required to distribute to our stockholders to maintain our qualification as a RIC for U.S. federal income tax purposes, even though we have not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. We write off any previously accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.
We may have to include in our ICTI, PIK interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount.
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Off-Balance Sheet Arrangements
In the normal course of business, we are party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to our portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The balances of unused commitments to extend financing as of March 31, 2017 and December 31, 2016 were as follows:
| Portfolio Company | Investment Type | March 31, 2017 | December 31, 2016 |
| Avantor Performance Materials Holdings, LLC | Delayed Draw Term Loan | $ | 631,579 | $ | — |
| Cafe Enterprises, Inc. | Second Lien Debt | 500,000 | — |
| DPII Holdings LLC | Guaranty | 576,925 | 576,925 |
| DLC Acquisition, LLC | Revolver | 1,800,000 | 3,000,000 |
| Eckler's Holdings, Inc. | Equity Investment | 1,000,000 | — |
| Halo Branded Solutions, Inc. | Delayed Draw Term Loan | 3,250,000 | 3,250,000 |
| HKW Capital Partners IV, L.P. | Private Equity | 393,144 | 530,032 |
| Lakeview Health Acquisition Company | Revolver | 1,387,367 | 1,387,367 |
| Native Maine Operations | Revolver | 1,000,000 | — |
| Nautic Partners VII, LP | Private Equity | 645,739 | 642,172 |
| Nomacorc, LLC | Equity Investment | 846,725 | 849,362 |
| Orchid Underwriters Agency, LLC | Delayed Draw Term Loan | 800,000 | 8,400,000 |
| Orchid Underwriters Agency, LLC | Revolver | — | 5,000,000 |
| SCA Pharmaceuticals, LLC | Delayed Draw Term Loan | 12,000,000 | 12,000,000 |
| SCUF Gaming, Inc. | Revolver | 2,000,000 | 3,500,000 |
| Smile Brands, Inc. | Equity Investment | 1,000,000 | 1,000,000 |
| Smile Brands, Inc. | Delayed Draw Term Loan | 18,826,531 | 18,826,531 |
| SPC Partners V, LP | Private Equity | 522,881 | 522,881 |
| SPC Partners VI, LP | Private Equity | 3,000,000 | 3,000,000 |
| TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") | Revolver | 687,790 | — |
| Team Waste, LLC | Equity Investment | 900,000 | 900,000 |
| TGaS Advisors, LLC | Revolver | 2,000,000 | 2,000,000 |
| YummyEarth Inc. | Delayed Draw Term Loan | — | 1,500,000 |
| Total unused commitments to extend financing | $ | 53,768,681 | $ | 66,885,270 |

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are subject to market risk. Market risk includes risks that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies we invest in; conditions affecting the general economy; overall market changes; legislative reform; local, regional, national or global political, social or economic instability; and interest rate fluctuations.
In addition, we are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio. Our net investment income is affected by fluctuations in various interest rates, including LIBOR, Canadian Dealer Offered Rate and prime rates. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. We regularly measure exposure to interest rate risk and determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. As of March 31, 2017, we were not a party to any hedging arrangements.
As of March 31, 2017, 59.6%, or $624.4 million (at cost), of our debt portfolio investments bore interest at fixed rates and 40.4%, or $422.4 million (at cost), of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based, and many of which are subject to certain floors. A hypothetical 200 basis point increase or decrease in the interest rates on our variable-rate debt investments could increase or decrease, as applicable, our investment income by a maximum of $8.4 million on an annual basis. All of our SBA-guaranteed debentures, our December 2022 Notes and our March 2022 Notes bear interest at fixed rates. Our Credit Facility bears interest, subject to our election, on a per annum basis equal to (i) the applicable base rate plus 1.75% (or 1.50% if we receive an investment grade credit rating), (ii) the applicable LIBOR rate plus 2.75% (or 2.50% if we receive an investment grade credit rating), or (iii) for borrowings denominated in Canadian dollars, the applicable Canadian Dealer Offered Rate plus 2.75% (or 2.50% if we receive an investment grade credit rating). The applicable base rate is equal to the greater of (i) the prime rate, (ii) the federal funds rate plus 0.5% or (iii) the adjusted one-month LIBOR plus 2.0%. The applicable LIBOR rate depends on the term of the draw under the Credit Facility. We pay a commitment fee of 1.00% per annum on undrawn amounts if the used portion of the facility is less than or equal to 25.0% of total commitments, or 0.375% per annum on undrawn amounts if the used portion of the facility is greater than 25.0% of total commitments.
Because we currently borrow, and plan to borrow in the future, money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio.
We may also have exposure to foreign currencies (currently the Canadian dollar) related to certain investments. Such investments are translated into United States dollars based on the spot rate at each balance sheet date, exposing us to movements in the exchange rate. In order to reduce our exposure to fluctuations in exchange rates, we generally borrow in Canadian dollars under our Credit Facility to finance such investments. As of March 31, 2017, we had non-United States dollar borrowings denominated in Canadian dollars of $28.6 million ($21.5 million United States dollars) outstanding under the Credit Facility with a weighted average interest rate of 3.70%.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective. It should be noted that any system of controls,
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however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the first quarter of 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
Neither Triangle Capital Corporation nor any of its subsidiaries is currently a party to any material pending legal proceedings.
Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 22, 2017, which could materially affect our business, financial condition or operating results. There have been no material changes during the three months ended March 31, 2017 to the risk factors discussed in our Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Sales of Unregistered Securities
During the three months ended March 31, 2017, we issued 40,559 shares of our common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value for the shares of common stock issued during the three months ended March 31, 2017 under the dividend reinvestment plan was approximately $0.7 million.
Issuer Purchases of Equity Securities
During the three months ended March 31, 2017, 107,454 shares of our common stock were delivered to us at an average price per share of $19.67 in satisfaction of tax withholding obligations of holders of restricted shares issued under the Triangle Capital Corporation Amended and Restated 2007 Equity Incentive Plan that vested during the period. These shares are reflected in the following table:
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchasedas Part of PubliclyAnnounced Plans or Programs | Maximum Number of Shares that May Yet BePurchased Under the Plans or Programs |
| January 1 through January 31, 2017 | — | — | — | — |
| February 1 through February 28, 2017 | 107,454 | $ | 19.67 | — | — |
| March 1 through March 31, 2017 | — | — | — | — |

Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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| Number | Exhibit |
| 3.1 | Articles of Amendment and Restatement of the Registrant (Filed as Exhibit (a)(3) to the Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-138418) filed with the Securities and Exchange Commission on December 29, 2006 and incorporated herein by reference). |
| 3.2 | Fifth Amended and Restated Bylaws of the Registrant (Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2015 and incorporated herein by reference). |
| 4.1 | Form of Common Stock Certificate (Filed as Exhibit (d) to the Registrant’s Post-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-138418) filed with the Securities and Exchange Commission on February 15, 2007 and incorporated herein by reference). |
| 4.2 | Dividend Reinvestment Plan of the Registrant (Filed as Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission on March 12, 2008 and incorporated herein by reference). |
| 4.3 | Agreement to Furnish Certain Instruments (Filed as Exhibit 4.19 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission on February 25, 2009 and incorporated herein by reference). |
| 4.4 | Indenture, dated March 2, 2012 between the Registrant and the Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit (d)(5) to the Registrant’s Post-Effective Amendment No. 2 to the Registration Statement on Form N-2 (File No. 33-175160) filed with the Securities and Exchange Commission on March 2, 2012 and incorporated herein by reference). |
| 4.5 | Second Supplemental Indenture, dated October 19, 2012 between the Registrant and the Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 19, 2012 and incorporated herein by reference). |
| 4.6 | Form of 6.375% Note due 2022 (Included as part of Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 19, 2012 and incorporated herein by reference). |
| 4.7 | Third Supplemental Indenture, dated February 6, 2015 between the Registrant and the Bank of New York Mellon Trust Company, N.A. (Filed as Exhibit (d)(12) to the Registrant's Post-Effective Amendment No. 1 on Form N-2 (File No. 333-199102) filed with the Securities and Exchange Commission on February 6, 2015 and incorporated herein by reference). |
| 4.8 | Form of 6.375% Note due 2022 (Included as part of Exhibit (d)(12) to the Registrant's Post-Effective Amendment No. 1 on Form N-2 (File No. 333-199102) filed with the Securities and Exchange Commission on February 6, 2015 and incorporated herein by reference). |
| 11 | Statement re computation of per share earnings (Included in the consolidated financial statements filed with this report).* |
| 31.1 | Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 31.2 | Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 32.1 | Chief Executive Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
| 32.2 | Chief Financial Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |

| * | Filed Herewith. |

| ** | Furnished Herewith. |

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TRIANGLE CAPITAL CORPORATION |
| Date: | May 3, 2017 | /s/ E. Ashton Poole |
| E. Ashton Poole |
| President and Chief Executive Officer |
| (Principal Executive Officer) |
| Date: | May 3, 2017 | /s/ Steven C. Lilly |
| Steven C. Lilly |
| Chief Financial Officer and Secretary |
| (Principal Financial Officer) |
| Date: | May 3, 2017 | /s/ C. Robert Knox, Jr. |
| C. Robert Knox, Jr. |
| Principal Accounting Officer |

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EXHIBIT INDEX
| Number | Exhibit |
| 11 | Statement re computation of per share earnings (Included in the consolidated financial statements filed with this report).* |
| 31.1 | Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 31.2 | Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
| 32.1 | Chief Executive Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
| 32.2 | Chief Financial Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |

| * | Filed Herewith. |

| ** | Furnished Herewith. |


Question: What is the total weighted average Cash and Payment-In-Kind (PIK) interest rate payable under the subordinated and senior notes portfolio in the year 2023?

Python solution:
def solution():
    # Define variables name and value

    smile_brands_investment = 22_341_283 # Subordinated Notes (10% Cash, 2% PIK, Due 02/23)
    smile_brands_cash= 10
    smile_brands_PIK = 2
    trademark_global_investment = 14_800_000 # Subordinated Note (10% Cash, 1.3% PIK, Due 04/23)
    trademark_global_cash = 10
    trademark_global_PIK = 1.3
    travelpro_investment = 10_126_055 # Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22)
    travelpro_cash = 11
    travelpro_PIK = 2

    # Do math calculation to get the answer
    total_investment = smile_brands_investment + trademark_global_investment + travelpro_investment
    avg_cash_rate = ((smile_brands_investment * smile_brands_cash) + 
                     (trademark_global_investment * trademark_global_cash) + 
                     (travelpro_investment * travelpro_cash)) / total_investment
    avg_pik_rate = ((smile_brands_investment * smile_brands_PIK) + 
                    (trademark_global_investment * trademark_global_PIK) + 
                    (travelpro_investment * travelpro_PIK)) / total_investment
    average_weighted_interest_rate = avg_cash_rate + avg_pik_rate
    return round(average_weighted_interest_rate, 2)


Answer: 12