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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K



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

For the fiscal year ended December 31, 2014

OR



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

For the transition period to

Commission File No. 000-54899

CARLYLE GMS FINANCE, INC.

(Exact name of Registrant as specified in its charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Maryland                                                       |  | 80-0789789                             
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

520 Madison Avenue, 38th Floor, New York, NY 10022

(Address of principal executive office) (Zip Code)

(212) 813-4900

(Registrants telephone number, including area code)





N/A

(Former name, former
address and former fiscal year, if changed since last report)





Securities
registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

(Title of Class)





Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.    Yes   ̈    No  x

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K.     ̈

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  | x  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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

As of December 31, 2014, there was no established public market for the registrants common stock.

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                              |  |                              
|----------------------------- |  | -----------------------------
|Class                         |  | Outstanding at March 27, 2015
|Common stock, $0.01 par value |  | 21,171,378                   

Documents Incorporated by Reference:Portions of the registrants Proxy Statement for its 2015
Annual Meeting of Stockholders to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III of this Form 10-K.



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CARLYLE GMS FINANCE, INC.

INDEX



|         |  |                                                                                                              |  |  |     | 
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  |  | --- | 
|Part I   |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 1.  |  | Business                                                                                                     |  |  | 3   | 
|         |  |                                                                                                             
|Item 1A. |  | Risk Factors                                                                                                 |  |  | 20  | 
|         |  |                                                                                                             
|Item 1B. |  | Unresolved Staff Comments                                                                                    |  |  | 45  | 
|         |  |                                                                                                             
|Item 2.  |  | Properties                                                                                                   |  |  | 46  | 
|         |  |                                                                                                             
|Item 3.  |  | Legal Proceedings                                                                                            |  |  | 46  | 
|         |  |                                                                                                             
|Item 4.  |  | Mine Safety Disclosures                                                                                      |  |  | 46  | 
|         |  |                                                                                                             
|Part II  |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 5.  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  |  | 47  | 
|         |  |                                                                                                             
|Item 6.  |  | Selected Financial Data                                                                                      |  |  | 48  | 
|         |  |                                                                                                             
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  |  | 50  | 
|         |  |                                                                                                             
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  |  | 67  | 
|         |  |                                                                                                             
|Item 8.  |  | Financial Statements and Supplementary Data                                                                  |  |  | 69  | 
|         |  |                                                                                                             
|Item 9.  |  | Changes and Disagreements with Accountants on Accounting and Financial Disclosure                            |  |  | 108 | 
|         |  |                                                                                                             
|Item 9A. |  | Controls and Procedures                                                                                      |  |  | 108 | 
|         |  |                                                                                                             
|Item 9B. |  | Other Information                                                                                            |  |  | 109 | 
|         |  |                                                                                                             
|Part III |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 10. |  | Directors, Executive Officers and Corporate Governance                                                       |  |  | 110 | 
|         |  |                                                                                                             
|Item 11. |  | Executive Compensation                                                                                       |  |  | 110 | 
|         |  |                                                                                                             
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  |  | 110 | 
|         |  |                                                                                                             
|Item 13. |  | Certain Relationships and Related Transactions, and Director Independence                                    |  |  | 110 | 
|         |  |                                                                                                             
|Item 14. |  | Principal Accountant Fees and Services                                                                       |  |  | 110 | 
|         |  |                                                                                                             
|Part IV  |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 15. |  | Exhibits and Financial Statement Schedules                                                                   |  |  | 111 | 



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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-K, and from time to time our management may make, forward-looking
statements. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle GMS Finance, Inc. (we, us, our,
GMS Finance, or the Company). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The
forward-looking statements contained in this Form 10-K and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:



| |  |  | our, or our portfolio companies, future business, operations, operating results or prospects;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | the return or impact of current and future investments;
| | - |  | -------------------------------------------------------



| |  |  | the impact of a protracted decline in the liquidity of credit markets on our business;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the impact of fluctuations in interest rates on our business;
| | - |  | -------------------------------------------------------------



| |  |  | the impact of changes in laws or regulations (including the interpretation thereof) governing our operations or the operations of our portfolio companies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | our ability to recover unrealized losses;
| | - |  | -----------------------------------------



| |  |  | market conditions and our ability to access alternative debt markets and additional debt and equity capital;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | our contractual arrangements and relationships with third parties;
| | - |  | ------------------------------------------------------------------



| |  |  | the general economy and its impact on the industries in which we invest;
| | - |  | ------------------------------------------------------------------------



| |  |  | the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | our expected financings and investments;
| | - |  | ----------------------------------------



| |  |  | our ability to successfully integrate any acquisitions;
| | - |  | -------------------------------------------------------



| |  |  | the adequacy of our cash resources and working capital;
| | - |  | -------------------------------------------------------



| |  |  | the timing, form and amount of any dividend distributions;
| | - |  | ----------------------------------------------------------



| |  |  | the timing of cash flows, if any, from the operations of our portfolio companies;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | our intent to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------

We use words such as anticipates, believes, expects, intends, will,
should, may and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or
expressed in the forward-looking statements for any reason, including the factors set forth in Risk Factors in Part I, Item 1A of and elsewhere in this Form 10-K.

We have based the forward-looking statements included in this Form 10-K on information available to us on the date of this Form 10-K, and we
assume no obligation to update any such forward-looking statements.



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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 have filed or in the future may file with the Securities and Exchange Commission (the SEC), including our annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K.



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PART I

In this annual report, except where the context suggests otherwise:



| |  |  | the terms CGMSIM, Adviser and Investment Adviser refer to Carlyle GMS Investment Management L.L.C., our investment adviser;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | the terms CGMSFA and Administrator refer to Carlyle GMS Finance Administration L.L.C., our administrator;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | the term Carlyle refers to The Carlyle Group L.P., its affiliates and its consolidated subsidiaries, a global alternative asset manager publicly traded on NASDAQ Global Select Market under the symbol
CG. Refer to the sec.gov website for further information on Carlyle; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | references to this Form 10-K are to our Annual Report on Form 10-K for the year ended December 31, 2014.
| | - |  | ----------------------------------------------------------------------------------------------------------

Item 1. Business

GMS Finance is a Maryland corporation structured as an externally managed, non-diversified closed-end investment company. GMS Finance is
externally managed by CGMSIM, an investment adviser that is registered with the SEC under the Investment Advisers Act of 1940, as amended (the Advisers Act). The CGMSIM team managing our investments (the CGMSIM Investment
Team) forms the exclusive Carlyle platform for U.S. middle market debt investments.

GMS Finances investment objective is to
generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and
amortization (EBITDA). GMS Finance seeks to achieve its investment objective by investing primarily in first lien (which may include unitranche loans and the first-out and last-out tranches thereof) and second lien senior secured loans
(collectively, Middle Market Senior Loans). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, we expect
that between 70% and 80% of the value of our assets, including the amount of any borrowings for investment purposes, will be invested in Middle Market Senior Loans, with the balance invested in higher-yielding investments, which may include middle
market junior loans such as corporate mezzanine loans, equity co-investments, broadly syndicated first lien senior secured loans and second lien loans, high-yield bonds, structured finance obligations and/or other opportunistic investments
(Opportunistic Investments). We expect that the composition of our portfolio will change over time given our Investment Advisers view on, among other things, the economic and credit environment (including with respect to interest
rates) in which we are operating.

The growth and development of our Company has been guided by several fundamental tenets:



| |  |  | Experienced Investment TeamThe Company is managed by an experienced management team of investment professionals with extensive middle market lending experience. Our Advisers investment committee that
is responsible for reviewing and approving our middle market loan investments (the CGMSIM Investment Committee) consists of seasoned investment professionals from across the Global Market Strategies (GMS) segment of Carlyle.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Attractive Origination ModelThe CGMSIM Investment Teams multi-channel origination model produces attractive investment opportunities through a variety of sources including over 250 private equity
firms, other middle market lenders, financial advisors and experienced management teams to source debt investments in middle market companies and to source other high-yielding investments that provide attractive risk-adjusted returns. The CGMSIM
Investment Team has cultivated very strong relationships with private equity sponsors and debt capital providers, with whom we work with closely in sourcing and executing transactions.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Diligent Investment StrategyOur investment decisions are based on in-depth, fundamental underwriting and credit research grounded in a conservative credit orientation. This systematic, consistent approach
is augmented by industry expertise and tenured underwriting professionals who both lead the CGMSIM Investment Team and serve on the CGMSIM Investment Committee.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Leverage the GMS Platform The Company benefits from the well branded and scalable origination and underwriting platform of GMS. The CGMSIM Investment Team leverages the industry expertise of 11 structured
credit research analysts who currently advise the GMS collateralized loan obligations (CLOs) funds and cover approximately 17 industries.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Leverage the Carlyle NetworkCarlyle, a leading global alternative asset manager, provides infrastructure, including back-office support, reporting assistance and accounting resources, and investment insight
through proprietary deal flow, industry experience and sector knowledge.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following highlights illustrate our
accomplishments since the commencement of our operations:



| |  |  | Capital Commitments and InvestmentsAs of March 15, 2015, we have raised a total of $1.1 billion in total capital commitments in GMS Finance. Of that total, and inclusive of the use of leverage and
recycled proceeds from sales and paydowns, we have deployed $552.4 million in 55 funded first lien debt investments, $106.8 million in 17 funded second lien debt investments and $116.5 million in 24 structured finance obligations through
December 31, 2014.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Credit FacilitiesIn an effort to effectively manage our liabilities, the Companys wholly-owned subsidiary, Carlyle GMS Finance SPV LLC (the Borrower Sub), amended its senior secured
revolving credit facility (as amended, the Revolving Credit Facility) and reduced the maximum commitments to $400 million. In addition, on March 21, 2014, the Company entered into a senior secured revolving credit facility (as
amended, the Facility) with a maximum principal amount of $150 million.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Team EnhancementsOur Investment Adviser added a seasoned investment professional to oversee GMS Finance, serving as its president and on the CGMSIM Investment Committee, in August 2014. With past experience
of successfully building credit platforms to global scale, reach and experience through the different credit cycles, he plays an important role in the continued growth and expansion of GMS Finance.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Strong Management Alignment With InvestorsCertain members of Carlyles senior management team, Carlyle employees and operating executives, and certain partners and affiliates of Carlyle committed to
purchase an aggregate of approximately $43.0 million of common stock in our initial closing of capital commitments (the Initial Closing). In addition, the Investment Adviser intends to make, or require individual employees to make,
capital commitments to purchase shares in the Company in an amount equal to approximately 25% of all after-tax incentive fees received from the Company.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

GMS Finance

GMS Finance is a Maryland
corporation formed on February 8, 2012. On May 2, 2013, GMS Finance filed its election to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (together with the rules and
regulations promulgated thereunder, the Investment Company Act). GMS Finance has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (RIC)
under Subchapter M of the Internal Revenue Code of 1986, as amended, (the Code).

On May 2, 2013, GMS Finance completed
its Initial Closing and subsequently commenced substantial investment operations. Prior to May 2, 2013, GMS Finance had not commenced operations and was a development stage company as defined by Accounting Standards Codification
(ASC) 915, Development Stage



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Entity. During this time, GMS Finance focused substantially all of its efforts on establishing its business. If GMS Finance has not consummated an initial public offering of its common
stock that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the date of such initial public offering (a Qualified IPO) by May 2, 2018, then our Board of Directors
(subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts to wind down and/or liquidate and dissolve the Company.

GMS Finance is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS
Act). GMS Finance will remain an emerging growth company for up to five years following an initial public offering, although if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30
before that time, GMS Finance would cease to be an emerging growth company as of the following December 31.

The Borrower Sub is a
Delaware limited liability company that was formed on January 3, 2013. The Borrower Sub invests in first and second lien senior secured loans. The Borrower Sub is a wholly-owned subsidiary of the Company and is consolidated in our consolidated
financial statements included in Part II, Item 8 of this Form 10-K commencing from the date of its formation, January 3, 2013.

GMS Finance is externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Our Administrator
provides the administrative services necessary for us to operate. Both the Investment Adviser and the Administrator are wholly-owned subsidiaries of Carlyle Investment Management L.L.C. (CIM), a subsidiary of Carlyle.

As a BDC, GMS Finance is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire
any assets other than qualifying assets specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).

GMS Finance has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a RIC under the Code,
and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, GMS Finance must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its
stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, GMS Finance generally does not have to pay corporate level taxes on any income that it distributes to
stockholders, provided that GMS Finance satisfies those requirements.

About Our Adviser

Our investment activities are managed by our Investment Adviser. CGMSIM is responsible for sourcing potential investments, conducting research
and due diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments and portfolio companies on an ongoing basis. For providing these services, the
Investment Adviser receives fees from us pursuant to an investment advisory agreement (the Investment Advisory Agreement). For more information on the Investment Advisory Agreement, including the fees consisting of two componentsa
base management fee and an incentive fee, see Note 4 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.

The CGMSIM Investment Committee, which also serves as the investment committee to NF Investment Corp. (NFIC), is led by Michael J.
Petrick, Managing Director of Carlyle, Chairman of the CGMSIM Investment Committee, Head of GMS and Chairman of the GMS Finance and NFIC Boards of Directors and Michael A. Hart, Managing Director of Carlyle, President of GMS Finance and NFIC and
member of the GMS Finance and NFIC Boards of Directors. Other members of the CGMSIM Investment Committee include senior GMS investment professionals who are responsible for reviewing and approving our investments. The CGMSIM Investment Committee
members are seasoned investment professionals with experience through different credit cycles.



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Pursuant to a personnel agreement between the Investment Adviser and The Carlyle Group Employee
Co., L.L.C. (Carlyle Employee Co.), an affiliate of the Investment Adviser, Carlyle Employee Co. provides the Investment Adviser with access to investment professionals that comprise the CGMSIM Investment Team. As of March 15, 2015,
the CGMSIM Investment Team includes a team of approximately 30 investment professionals designated from Carlyles GMS platform.

Our
executive officers and directors, the employees of the Investment Adviser and members of the CGMSIM Investment Committee serve or may serve as investment advisors, officers, directors or principals of entities or investment funds that operate in the
same or a related line of business as we do and/or investment funds, accounts and other similar arrangements advised by Carlyle. An affiliated investment vehicle currently formed, such as NFIC, or formed in the future and managed by the Investment
Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. As a result, the Investment Adviser and/or its affiliates may face
conflicts in allocating investment opportunities between us and such other entities. Accordingly, we may not be given the opportunity to participate in certain investments made by investment funds managed by advisors affiliated with the Investment
Adviser. However, the Investment Adviser and its affiliates will endeavor to allocate investment opportunities in a fair and equitable manner and consistent with applicable allocation procedures. See Risk FactorsRisks Related to Our
Business and StructureThere are significant potential conflicts of interest, including the management of NFIC, other funds affiliated with Carlyle by our Investment Advisers key investment professionals, which could impact our
investment returns in Part I, Item 1A of this Form 10-K for more information.

Prior to a Qualified IPO, subject to the
receipt of any necessary regulatory approvals, CGMSIM intends to make (or require individual employees or entities in which employees own interests to make) capital commitments to purchase shares of our common stock in an aggregate amount equal to
approximately 25% of each installment of the net after-tax incentive fees that CGMSIM receives from us. In addition, we have been informed by CGMSIM that, following the completion of a Qualified IPO, CGMSIM intends to purchase shares of our common
stock in the open market at a purchase price, in the aggregate, equal to approximately 25% of each installment of the net after-tax incentive fees that CGMSIM receives from us, subject to market conditions. CGMSIM may then distribute those shares to
members of the CGMSIM Investment Team.

On February 26, 2014, the SEC granted us and NFIC, as well as future funds advised by CGMSIM,
exemptive relief (Exemptive Relief) to co-invest in suitable investments, subject to certain terms and conditions in the Exemptive Relief. In addition, we and NFIC may invest alongside other affiliated funds and persons in certain
circumstances where doing so is consistent with applicable law and SEC staff interpretations, including the entities investment objectives and policies. For example, we may invest alongside such funds consistent with guidance promulgated by
the SEC staff permitting us and such other funds to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that CGMSIM, acting on our behalf and on behalf of its other clients, and other
affiliated funds and persons negotiates no term other than price.

About Carlyle

Carlyle is one of the worlds largest and most diversified multi-product global alternative asset management firms. Carlyle and its
affiliates advise an array of specialized investment funds and other investment vehicles that invest across a range of industries, geographies, asset classes and investment strategies. Since its founding in Washington, D.C. in 1987, Carlyle has
grown to become a leading global alternative asset manager with more than $194 billion in assets under management (AUM) across 128 funds and 142 fund of funds vehicles as of December 31, 2014. Carlyle has more than
1,650 employees, including more than 700 investment professionals in 40 offices across six continents, and serves over 1,650 active carry fund investors from 78 countries.

Carlyles GMS platform was established in 1999 with its first high yield fund. As of December 31, 2014, it advises a group of 69
active funds that pursue investment strategies including long/short credit, long/short emerging markets equities, macroeconomic strategies, commodities trading, and structured transactions,



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quantitative market strategies, leveraged loans and structured credit, energy mezzanine opportunities, middle market lending and distressed debt.

Primary areas of focus for Carlyles GMS teams include:



| |  |  | Structured Credit Funds.The structured credit funds invest primarily in performing senior secured bank loans through structured vehicles and other investment vehicles. In 2014, Carlyle closed five new U.S. CLOs
and three CLOs in Europe with a total of $3.2 billion and $1.5 billion, respectively, of AUM at December 31, 2014. As of December 31, 2014, the structured credit team advised 47 funds in the United States, Europe, and Asia totaling, in the
aggregate, approximately $17 billion in AUM.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Distressed and Corporate Opportunities.The distressed and corporate opportunities funds generally invest in liquid and illiquid securities and obligations, including secured debt, senior and subordinated
unsecured debt, convertible debt obligations, preferred stock and public and private equity of financially distressed companies in defensive and asset-rich industries. In certain investments, these funds may seek to restructure pre-reorganization
debt claims into controlling positions in the equity of reorganized companies. As of December 31, 2014, Carlyles distressed and corporate opportunities team advised two funds totaling, in the aggregate, over $1 billion in AUM.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Middle Market Finance.The middle market finance business is comprised of Carlyles BDCs (including us), a CLO consisting of middle market senior, first lien loans, and Carlyles corporate mezzanine
funds, which invest in the first-lien, second-lien and mezzanine loans of middle-market companies, typically defined as companies with annual EBITDA ranging from $10 million to $100 million that lack access to the broadly syndicated loan and bond
markets. As of December 31, 2014, Carlyles middle market investment team advised five funds totaling, in the aggregate, approximately $2 billion in AUM.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Energy Mezzanine Opportunities.The energy mezzanine opportunities team invests primarily in privately negotiated mezzanine debt investments in North American energy and power projects and companies. As of
December 31, 2014, Carlyles energy mezzanine opportunities team advised one fund with approximately $2 billion in AUM.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Long/Short Credit.Claren Road Asset Management LLC (Claren Road) advises two long/short credit hedge funds focusing on the global high grade and high yield markets totaling, in the aggregate, over $7
billion in AUM as of December 31, 2014. Claren Road seeks to profit from market mispricing of long and/or short positions in corporate bonds and loans, and their derivatives, across investment grade, below investment grade (high yield) or
distressed companies.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Emerging Market Equity and Macroeconomic Strategies.Emerging Sovereign Group LLC (ESG) advises six emerging markets equities and macroeconomic hedge funds with over $5 billion in the aggregate of AUM
as of December 31, 2014. ESGs emerging markets equities funds invest in publicly-traded equities across a range of developing countries. ESGs macroeconomic funds pursue investment strategies in developed and developing countries,
and opportunities resulting from changes in the global economic environment.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Commodities. Vermillion Asset Management, a New York-based commodities investment manager (Vermillion) advises five hedge funds and one structured product fund totaling, in the aggregate, over $1
billion of AUM as of December 31, 2014. Vermillions investment strategies include relative value, enhanced index and long-biased physical commodities, commodity sector-focused funds, and structured transactions. Vermillion seeks to
produce positive, uncorrelated returns, through a liquid, relative-value, low volatility approach to trading both physical commodities and their derivatives and structuring transactions in physical commodities.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Quantitative Market Strategies. Carlyle Quantitative Market Strategies (CQMS) currently manages one hedge fund and one mutual fund,
both of which are focused on a balanced risk approach to asset
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | allocation. CQMS seeks to generate long-term capital appreciation with minimal drawdowns by dynamically rebalancing its asset allocation based on changes in volatility and correlation in the
financial markets.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NFIC is an externally managed, non-diversified closed-end investment company that has elected to be
regulated as a BDC under the Investment Company Act and has elected to be treated as a RIC under the Code. NFIC seeks to achieve its investment objective by investing primarily in Middle Market Senior Loans, subject to, in the case of second lien
senior secured loans, a limit of 10% of NFICs total assets. In addition, NFIC may invest up to 10% of its total assets in high yield securities whose risk profile, as determined at the sole discretion of the Investment Adviser, is similar to
or better than the risk profile of Middle Market Senior Loans. NFIC has the same Adviser and Administrator as us. Refer to the sec.gov website for further information on NFIC.

Carlyle sponsors several investment funds, accounts and other similar arrangements with strategies overlapping with our strategy, including,
without limitation, NFIC, Carlyle Energy Mezzanine Opportunities Fund and successor funds, Carlyle Strategic Partners series of funds, as well as carry funds, hedge funds, managed accounts and structured credit CLO funds. The terms of certain of
these investment funds, accounts or other similar arrangements require Carlyle to allocate investment opportunities to such investment funds in priority to allocations to other vehicles, such as us. As a result, there are circumstances where
investments appropriate for us are instead allocated, in whole or in part, to such other investment funds, accounts or other similar arrangements. Where Carlyle otherwise has discretion to allocate investment opportunities among various funds,
accounts and other similar arrangements, it should be noted that Carlyle may determine to allocate such investment opportunities away from us. Apart from the circumstances described above, Carlyle is presented with investment opportunities that
generally fall within our investment objective and that of other Carlyle investment funds or managed accounts, whether focused on a debt strategy or otherwise, and in such circumstances Carlyle allocates such opportunities among us and such other
Carlyle funds on a basis that Carlyle determines to be fair and reasonable taking into account the sourcing of the transaction, the nature of the investment focus of each such other Carlyle investment fund, the relative amounts of capital available
for investment, the nature and extent of involvement in the transaction on the part of the respective teams of investment professionals, any requirements contained in the partnership agreements of such other Carlyle funds and other considerations
deemed relevant by Carlyle in good faith. Consistent with the foregoing, Carlyle expects that other Carlyle investment funds will make investments in the debt of private companies. In addition, Carlyle expects that we will make investments in
geographic regions in which other Carlyle investment funds have been or may be specifically organized to invest.

In addition, NFIC
invests in Middle Market Senior Loans, and thus substantially all investment opportunities that fall within our investment objective also fall within NFICs investment objective. On February 26, 2014, the SEC granted us and NFIC, as well
as future funds advised by CGMSIM, Exemptive Relief to co-invest in suitable investments, subject to certain terms and conditions in the Exemptive Relief.

While Carlyle and CGMSIM seek to implement their respective allocation processes in a fair and equitable manner under the particular
circumstances, there can be no assurance that it will result in equivalent allocation of or participation in investment opportunities or equivalent performance of investments allocated to us as compared to the other entities.

Carlyle may also from time to time form or have financial or operational interests in the management of one or more hedge funds or similar
alternative investment vehicles which may be permitted to allocate a portion of their portfolios to long-dated, illiquid, restricted, or other similar securities and investment opportunities (which may include private equity and mezzanine
investments), and whose investment strategies may therefore overlap with ours. It is therefore possible that such hedge funds may consider the same investment opportunities as us. Generally, any private debt investments that may be made by such
hedge funds would (i) only be made as part of a broader investment portfolio and be limited to a minority percentage of the hedge funds overall portfolio and (ii) generally be expected to be passive minority investments, made on an
opportunistic basis. Nevertheless, it cannot be completely ruled out that such hedge funds may on any given occasion compete with us for the same investment opportunity.



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About Our Administrator

CGMSFA, a Delaware limited liability company, serves as our Administrator. Pursuant to an administration agreement between us and the
Administrator (the Administration Agreement), the Administrator provides services to us and we reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by the Administrator in performing its
obligations under the Administration Agreement, including our allocable portion of the compensation of certain of our officers and staff. In addition, the Administrator has entered into a sub-administration agreement with Carlyle Employee Co. (the
Carlyle Employee Co. Sub-Administration Agreement) and a sub-administration agreement with CELF Advisors LLP (CELF and such agreement, the CELF Sub-Administration Agreement), which provide the Administrator with
access to personnel. The Administrator has also entered into a sub-administration agreement with State Street Bank and Trust Company (State Street and such agreement, the State Street Sub-Administration Agreement), which
serves as our custodian, transfer agent, distribution paying agent and registrar.

Competition

Our primary competitors in providing financing to middle market companies include public and private funds, other BDCs, including affiliated
funds, commercial and investment banks, commercial finance companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our potential competitors are substantially larger and have considerably
greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk
tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that
the Investment Company Act and the Code impose on us. The competitive pressures we face may have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to
take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.

We expect to use the expertise of the members of the CGMSIM Investment Committee and the CGMSIM Investment Team to assess investment risks and
determine appropriate pricing for our investments. In addition, we expect that the relationships developed by the CGMSIM Investment Team will enable us to learn about and compete effectively for, financing opportunities with attractive middle market
companies in the industries in which we seek to invest. For additional information concerning the competitive risks we face, see Part I, Item 1A of this Form 10-K Risk FactorsRisks Related to Our InvestmentsWe operate in a
highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.

Staffing

We do not currently have any
employees. Our Chief Financial Officer and Treasurer and Chief Operating Officer and General Counsel presently serve as managing directors of Carlyle and are retained by CGMSFA pursuant to a sub-administration agreement between CGMSFA and Carlyle
Employee Co. Our Chief Compliance Officer and Secretary presently serves as a director of Carlyle and is retained by CGMSFA pursuant to a sub-administration agreement between CGMSFA and CELF. Each of these professionals performs their respective
functions for us under the terms of our Administration Agreement.

Our day-to-day investment operations are managed by CGMSIM. Pursuant to
its personnel agreement with Carlyle Employee Co., CGMSIM has access to the members of the CGMSIM Investment Committee, and a team of additional experienced investment professionals who, collectively, comprise the CGMSIM Investment Team. CGMSIM may
hire additional investment professionals to provide services to GMS Finance. See Note 7 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.



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Investment Strategy and Approach

Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market
companies. We seek to achieve our investment objective by investing primarily in Middle Market Senior Loans of private U.S. middle market companies and opportunistically pursuing investments with high risk-adjusted returns across the capital
structure and company size depending on broader market conditions. We seek to generate strong risk-adjusted net returns by assembling a diversified portfolio of investments across a broad range of industries and instruments.

We target U.S. middle market companies, generally controlled by private equity investment firms that require capital for growth, acquisitions,
recapitalizations, refinancings and leveraged buyouts. We may also make opportunistic loans to independently owned and publicly held middle market companies. We seek to partner with strong management teams executing long-term growth strategies.
Target businesses typically exhibit some or all of the following characteristics:



| |  |  | EBITDA of $10$100 million;
| | - |  | ---------------------------



| |  |  | Minimum of 35% original sponsor cash equity;
| | - |  | --------------------------------------------



| |  |  | Sustainable leading positions in their respective markets;
| | - |  | ----------------------------------------------------------



| |  |  | Scalable revenues and operating cash flow;
| | - |  | ------------------------------------------



| |  |  | Experienced management teams with successful track records;
| | - |  | -----------------------------------------------------------



| |  |  | Stable, predictable cash flows with low technology and market risks;
| | - |  | --------------------------------------------------------------------



| |  |  | Diversified product offering and customer base;
| | - |  | -----------------------------------------------



| |  |  | Low capital expenditures requirements;
| | - |  | --------------------------------------



| |  |  | A North American base of operations;
| | - |  | ------------------------------------



| |  |  | Strong customer relationships;
| | - |  | ------------------------------



| |  |  | Products, services or distribution channels having distinctive competitive advantages; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Defensible niche strategy or other barriers to entry.
| | - |  | -----------------------------------------------------

While we believe that the criteria
listed above are important in identifying and investing in prospective portfolio companies, not all of these criteria will be necessarily met by each prospective portfolio company. In addition, we may change our investment objective and/or
investment criteria over time without notice to or consent from our investors.

Portfolio Composition

As of December 31, 2014 and 2013, the fair value of our investments was approximately $698.7 million and $212.8 million, respectively, in
72 and 27 portfolio companies/structured finance obligations, respectively.



10



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##### Table of Contents

The type, geography and industry composition of investmentsnon-controlled/non-affiliated at
fair value as of December 31, 2014 and 2013 was each as follows:



|                               |  |                    |        |   |      |  |        |  
|------------------------------ |  | ------------------ | ------ | - | ---- |  | ------ | -
|                               |  | As of December 31, |       
|Type% of Fair Value           |  | 2014               |        |   | 2013 | 
|First Lien Debt                |  |                    | 73.68  | % |      |  | 66.57  | %
|Second Lien Debt               |  |                    | 15.44  |   |      |  | 18.69  |  
|Structured Finance Obligations |  |                    | 10.88  |   |      |  | 14.74  |  
|                               |  |                    |        |   |      |  |        |  
|Total                          |  |                    | 100.00 | % |      |  | 100.00 | %
|                               |  |                    |        |   |      |  |        |  
|                               | 
|                               |  | As of December 31, |       
|Geography% of Fair Value      |  | 2014               |        |   | 2013 | 
|Cayman Islands                 |  |                    | 10.52  | % |      |  | 14.74  | %
|Ireland                        |  |                    | 1.70   |   |      |  |       |  
|United Kingdom                 |  |                    | 3.51   |   |      |  | 11.69  |  
|United States                  |  |                    | 84.27  |   |      |  | 73.57  |  
|                               |  |                    |        |   |      |  |        |  
|Total                          |  |                    | 100.00 | % |      |  | 100.00 | %
|                               |  |                    |        |   |      |  |        |  



|                                          |  |                    |        |   |      |  |        |  
|----------------------------------------- |  | ------------------ | ------ | - | ---- |  | ------ | -
|                                          |  | As of December 31, |       
|Industry% of Fair Value                  |  | 2014               |        |   | 2013 | 
|Aerospace and Defense                     |  |                    | 8.59   | % |      |  |       | %
|Automotive                                |  |                    | 3.37   |   |      |  | 4.54   |  
|Banking, Finance, Insurance & Real Estate |  |                    | 4.09   |   |      |  | 9.03   |  
|Beverage, Food & Tobacco                  |  |                    |       |   |      |  | 3.73   |  
|Business Services                         |  |                    | 9.06   |   |      |  | 11.72  |  
|Capital Equipment                         |  |                    | 1.42   |   |      |  |       |  
|Chemicals, Plastics & Rubber              |  |                    | 2.36   |   |      |  | 5.52   |  
|Construction & Building                   |  |                    | 2.58   |   |      |  |       |  
|Consumer Services                         |  |                    | 5.94   |   |      |  | 3.91   |  
|Containers, Packaging & Glass             |  |                    | 4.02   |   |      |  | 2.12   |  
|Durable Consumer Goods                    |  |                    | 4.57   |   |      |  | 5.78   |  
|Energy: Electricity                       |  |                    | 1.19   |   |      |  |       |  
|Energy: Oil & Gas                         |  |                    | 1.74   |   |      |  | 5.89   |  
|Environmental Industries                  |  |                    | 2.98   |   |      |  | 4.60   |  
|Healthcare & Pharmaceuticals              |  |                    | 7.64   |   |      |  | 10.05  |  
|High Tech Industries                      |  |                    | 5.25   |   |      |  | 7.03   |  
|Hotel, Gaming & Leisure                   |  |                    | 1.23   |   |      |  |       |  
|Media: Advertising, Printing & Publishing |  |                    | 0.96   |   |      |  | 3.15   |  
|Metals & Mining                           |  |                    | 1.47   |   |      |  |       |  
|Non-durable Consumer Goods                |  |                    | 3.73   |   |      |  | 5.39   |  
|Retail                                    |  |                    | 1.83   |   |      |  |       |  
|Software                                  |  |                    | 3.95   |   |      |  |       |  
|Structured Finance                        |  |                    | 10.88  |   |      |  | 14.74  |  
|Telecommunications                        |  |                    | 4.01   |   |      |  | 2.80   |  
|Transportation: Cargo                     |  |                    | 2.79   |   |      |  |       |  
|Transportation: Consumer                  |  |                    | 1.57   |   |      |  |       |  
|Utilities: Electric                       |  |                    | 0.84   |   |      |  |       |  
|Wholesale                                 |  |                    | 1.94   |   |      |  |       |  
|                                          |  |                    |        |   |      |  |        |  
|Total                                     |  |                    | 100.00 | % |      |  | 100.00 | %
|                                          |  |                    |        |   |      |  |        |  



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See the Consolidated Schedules of Investments as of December 31, 2014 and 2013 in our
consolidated financial statements in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type and amount of investments.

Investment ProcessMiddle Market Senior Loans

We view our investment process as consisting of four distinct phases described below:

Origination. Our Investment Adviser sources middle market investment opportunities through the CGMSIM Investment Teams extensive network of
relationships with private equity firms, other middle market senior lenders, and investment and commercial banks. The CGMSIM Investment Team supplements these relationships through personal visits and marketing campaigns focused on maximizing
investment deal flow. It is their responsibility to identify specific opportunities, to refine opportunities through candid exploration of the underlying facts and circumstances and to apply creative and flexible thinking to solve clients
financing needs. The origination personnel are located in New York and California. Each originator maintains long-standing relationships with potential sources of deal flow and is responsible for covering a specified target market. We believe those
originators strength and breadth of relationships across a wide range of markets generate numerous financing opportunities, which should enable our Investment Adviser to be highly selective in recommending investments.

Credit Evaluation. Our Investment Adviser utilizes a systematic, consistent approach to credit evaluation with a particular focus on an
acceptable level of debt repayment and deleveraging under a base case set of projections, which we refer to as the Base Case, which typically reflects a more conservative estimate than the set of projections provided by a
prospective portfolio company, which we refer to as the Management Case. In addition, our Investment Adviser leverages the industry-specific expertise within the GMS platform. Our Investment Adviser has access to 11 GMS Structured Credit
research analysts who cover approximately 17 industries and advise GMS CLO funds. The key criteria that our Investment Adviser considers include (i) strong and resilient underlying business fundamentals, (ii) a substantial equity
cushion in the form of capital ranking junior in right of payment to our investment and (iii) a conclusion that the overall Base Case and in some cases a downside case allows for adequate debt repayment and deleveraging. Our
Investment Adviser focuses on the criteria for evaluating prospective portfolio companies discussed above under Competitive Strengths. In evaluating a particular company, our Investment Adviser puts more emphasis on credit considerations
(such as (i) debt repayment and deleveraging under a Base Case set of projections, (ii) the ability of the company to maintain a modest liquidity cushion under a Base Case set of projections, and (iii) the ability of the company to
service its fixed charge obligations under a Base Case set of projections) than on profit potential and loan pricing. Our Investment Advisers due diligence process for middle market credits typically entails:



| |  |  | a thorough review of historical and pro forma financial information;
| | - |  | --------------------------------------------------------------------



| |  |  | on-site visits;
| | - |  | ---------------



| |  |  | meetings with management;
| | - |  | -------------------------



| |  |  | a review of loan documents and material contracts;
| | - |  | --------------------------------------------------



| |  |  | third-party quality of earnings accounting due diligence;
| | - |  | -----------------------------------------------------------



| |  |  | when appropriate, background checks on key managers;
| | - |  | ----------------------------------------------------



| |  |  | third-party research relating to the companys business, industry, markets, products and services and competitors;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | the commission of third-party market studies when appropriate; and
| | - |  | ------------------------------------------------------------------



| |  |  | sensitivity of Management Case projections
| | - |  | ------------------------------------------

Execution. In executing transactions for us,
our Investment Adviser applies a thorough, consistent approach to credit evaluation, and maintains discipline with respect to credit, pricing and structure to ensure the ultimate



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success of the financing. Upon completion of due diligence, the investment professionals working on a proposed portfolio investment deliver a memorandum to the CGMSIM Investment Committee. Once
an investment has been approved by a majority of the CGMSIM Investment Committee, including an affirmative vote by the Chairman of the CGMSIM Investment Committee or his designee, it moves through a series of steps, including initial documentation
using standard document templates and the establishment of negotiating boundaries, final documentation, including resolution of business points and the execution of original documents held in escrow. Upon completion of final documentation, a loan is
funded after execution of a final closing memorandum.

Monitoring. We view active portfolio monitoring as a vital part of our
investment process. We consider regular dialogue with company management and sponsors as well as detailed, internally generated monitoring reports to be critical to our performance. Our Investment Adviser has implemented a monitoring template
designed to reasonably ensure compliance with these standards. This template is used as a tool by our Investment Adviser to assess investment performance relative to plan. In addition, our portfolio companies may rely on us to provide them with
financial and capital markets expertise.

As part of the monitoring process, our Investment Adviser has developed risk policies pursuant
to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as Internal Risk Ratings:

Internal Risk Ratings Definitions



|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Rating |  | Definition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|1      |  | PerformingLow Risk: Borrower is operating more than 10% ahead of the Base Case.                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | 
|2      |  | PerformingStable Risk: Borrower is operating within 10% of the Base Case (above or below). This is the initial rating assigned to all new borrowers.                                                                                                                                                                                                                                                                                                                                             
|       | 
|3      |  | PerformingManagement Notice: Borrower is operating more than 10% below the Base Case. A financial covenant default may have occurred, but there is a low risk of payment default.                                                                                                                                                                                                                                                                                                                
|       | 
|4      |  | Watch List: Borrower is operating more than 20% below the Base Case and there is a high risk of covenant default, or it may have already occurred. Payments are current although subject to greater uncertainty, and there is
moderate to high risk of payment default.                                                                                                                                                                                                                           
|       | 
|5      |  | Watch ListPossible Loss: Borrower is operating more than 30% below the Base Case. At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or
refinance all outstanding debt on current terms. Payment default is very likely or may have occurred. Loss of principal is possible.                                                                                                                                     
|       | 
|6      |  | Watch ListProbable Loss: Borrower is operating more than 40% below the Base Case, and at the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or
refinance all outstanding debt on current terms. Payment default is very likely or may have already occurred. Additionally, the prospects for improvement in the borrowers situation are sufficiently negative that impairment of some or all
principal is probable.

Our Investment Adviser has developed a risk rating model that is based on evaluating portfolio company
performance in comparison to the Base Case when considering certain credit metrics including, but not limited to, adjusted EBITDA and net senior leverage as well as specific events including, but not limited to, default and impairment.



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Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to
each debt investment in our portfolio. In connection with our quarterly valuation process, our Investment Adviser reviews our investment ratings on a regular basis. The following table summarizes the Internal Risk Ratings as of December 31,
2014 and 2013:



|                             |  |                   |       |  |                   |  |        |            |  |   |                 |  |  |  |        |  
|---------------------------- |  | ----------------- | ----- |  | ----------------- |  | ------ | ---------- |  | - | --------------- |  |  |  | ------ | -
|                             |  | December 31, 2014 |       |  | December 31, 2013 | 
|                             |  | Fair Value        |       |  | % of Fair Value   |  |        | Fair Value |  |   | % of Fair Value | 
|(dollar amounts in millions) |  |                   |       |  |                   |  |        |            |  |   |                 | 
|Internal Risk Rating 1       |  | $                 | 55.6  |  |                   |  | 8.93   | %          |  | $ |                |  |  |  |       | %
|Internal Risk Rating 2       |  |                   | 517.1 |  |                   |  | 83.04  |            |  |   | 181.4           |  |  |  | 100.00 |  
|Internal Risk Rating 3       |  |                   | 41.0  |  |                   |  | 6.58   |            |  |   |                |  |  |  |       |  
|Internal Risk Rating 4       |  |                   | 9.0   |  |                   |  | 1.45   |            |  |   |                |  |  |  |       |  
|Internal Risk Rating 5       |  |                   |      |  |                   |  |       |            |  |   |                |  |  |  |       |  
|Internal Risk Rating 6       |  |                   |      |  |                   |  |       |            |  |   |                |  |  |  |       |  
|                             |  |                   |       |  |                   |  |        |            |  |   |                 |  |  |  |        |  
|Total                        |  | $                 | 622.7 |  |                   |  | 100.00 | %          |  | $ | 181.4           |  |  |  | 100.00 | %
|                             |  |                   |       |  |                   |  |        |            |  |   |                 |  |  |  |        |  

Investment ProcessStructured Finance Obligations

For Opportunistic Investments, our Investment Adviser seeks to leverage the GMS platform to identify investments that fit our investment
mandate. We use the proprietary deal flow generated by the GMS platform to enhance portfolio returns. Our Investment Advisers evaluation of structured finance obligations for investment opportunities begins with due diligence. The due
diligence focuses on appropriate factors, such as the manager, underlying assets, ratings, structure and key risks. Information is derived from a number of sources, including third-party structured finance analysis platforms. The structured finance
obligations deal committee reviews and approves each deal. The structured finance obligations deal committee includes a majority of the members of the CGMSIM Investment Committee and is chaired by Mr. Petrick, the Chairman of the CGMSIM
Investment Committee, the Chairman of our Board of Directors and Head of GMS. As part of our monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of the structured
finance obligation investments. As of December 31, 2014 and 2013, we had no structured finance obligations on the Watch List.

Election to be
Taxed as a RIC

The Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as
a RIC under the Code. As a RIC, we generally do not have to pay corporate-level U.S. federal income taxes on any income that we distribute to our stockholders as dividends. To qualify as a RIC, we must, among other things, meet certain
source-of-income and asset diversification requirements. In addition, we must distribute to our stockholders, for each taxable year, at least 90% of our investment company taxable income, which is generally our net ordinary taxable
income plus the excess of realized net short-term capital gains over realized net long-term capital losses (the Annual Distribution Requirement). The following discussion assumes that we qualify as a RIC and have satisfied the Annual
Distribution Requirement.

If we:



| |  |  | qualify as a RIC; and
| | - |  | ---------------------



| |  |  | satisfy the Annual Distribution Requirement,
| | - |  | --------------------------------------------

then we are not subject to U.S. federal income tax on the
portion of our net taxable income we distribute (or are deemed to distribute) to stockholders. We are subject to U.S. federal income tax at regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our
stockholders.

In addition, if we fail to distribute in a timely manner an amount at least equal to the sum of (1) 98% of our
ordinary income for the calendar year, (2) 98.2% of our capital gain net income (both long-term and short-term)



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##### Table of Contents

for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year (the Excise Tax Distribution
Requirements), we are liable for a 4% excise tax on the portion of the undistributed amounts of such income that are less than the amounts required to be distributed based on the Excise Tax Distribution Requirements. For this purpose, however,
any ordinary income or capital gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year is considered to have been distributed by year end (or earlier if estimated taxes are paid). We
currently intend to make sufficient distributions each taxable year to satisfy the Excise Tax Distribution Requirements.

In order to
qualify as a RIC for U.S. federal income tax purposes, we must, among other things:



| |  |  | continue to qualify as a BDC under the Investment Company Act at all times during each taxable year;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign currencies, net
income from certain qualified publicly traded partnerships, or other income derived with respect to our business of investing in such stock or securities or foreign currencies (the 90% Gross Income Test); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | diversify our holdings so that at the end of each quarter of the taxable year:
| | - |  | ------------------------------------------------------------------------------



| |  |  | at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more
than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, or two or more issuers that are controlled, as determined
under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or of certain qualified publicly traded partnerships (the Diversification Tests).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our
portfolio and/or (2) other requirements relating to our qualification as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Distribution Requirements, we
may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not
be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income
rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions as described below. We intend to monitor our transactions, make the appropriate tax
elections and make the appropriate entries in our books and records when we make any such investments in order to mitigate the effect of these rules.

A RIC is limited in its ability to deduct expenses in excess of its investment company taxable income (which is, generally,
ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If our expenses in a given year exceed gross taxable income, we would have a net operating loss for that year. However, a RIC is not
permitted to carry forward net operating losses to subsequent years. In addition, expenses can be used only to offset investment company taxable income, not net capital gain. Due to these limits on the deductibility of expenses, we may for U.S.
federal income tax purposes have aggregate taxable income for several years that we distribute and that is taxable to our stockholders even if such income is greater than the aggregate net income we actually earned during those years. Such
distributions may be made from our cash assets or by liquidation of investments, if necessary. We may realize gains or losses from such liquidations. In the event we realize net capital gains from such transactions, a holder may receive a larger
capital gain distribution than the holder would have received in the absence of such transactions.



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Our Regulatory StructureRegulation as a Business Development Company

General

A BDC is regulated under the
Investment Company Act. A BDC must be organized in the United States for the purpose of investing in or lending to primarily private companies and making significant managerial assistance available to them. A BDC may use capital provided by public
stockholders and from other sources to make long-term, private investments in businesses. A publicly-traded BDC provides stockholders the ability to retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, of
investing in primarily privately owned companies. Until a Qualified IPO, we do not intend to list our common stock on a stock exchange and it will not be publicly traded.

We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority
of the outstanding voting securities, as required by the Investment Company Act. A majority of the outstanding voting securities of a company is defined under the Investment Company Act as the lesser of: (a) 67% or more of such companys
voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company. We do not anticipate
any substantial change in the nature of our business.

As with other companies regulated by the Investment Company Act, a BDC must adhere
to certain substantive regulatory requirements. A majority of our directors must be persons who are not interested persons, as that term is defined in the Investment Company Act. Additionally, we are required to provide and maintain a bond issued by
a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such persons office.

As a BDC, we are generally required to meet an
asset coverage ratio, defined under the Investment Company Act as the ratio of our total assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 200% after each issuance
of senior securities. We may also be prohibited under the Investment Company Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases,
prior approval by the SEC. As a BDC, we are generally limited in our ability to invest in any portfolio company in which our Investment Adviser or any of its affiliates currently has an investment or to make any co-investments with our Investment
Adviser or its affiliates without an exemptive order from the SEC, subject to certain exceptions.

We do not intend to acquire securities
issued by any investment company that exceed the limits imposed by the Investment Company Act. Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company,
invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. The portion of our portfolio
invested in securities issued by investment companies ordinarily will subject our stockholders to additional indirect expenses. Our investment portfolio is also subject to diversification requirements by virtue of our intended status to be a RIC for
U.S. tax purposes. See Part I, Item 1A of this Form 10-K Risk FactorsRisks Related to Our Business and Structure for more information.

We are generally not able to issue and sell our common stock at a price below net asset value per share. See Part I, Item 1A of this
Form 10-KRisk FactorsRisks Related to Our Business and StructureRegulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. We may, however, sell our
common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value of our common stock if our Board of Directors determines that such sale is



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in our best interests and the best interests of our stockholders, and our stockholders approve such sale. In addition, we may generally issue new shares of our common stock at a price below net
asset value in rights offerings to existing stockholders, in payment of dividends and in certain other limited circumstances.

We will be
periodically examined by the SEC for compliance with the Investment Company Act.

As a BDC, we are subject to certain risks and
uncertainties. See Part I, Item 1A of this Form 10-K Risk FactorsRisks Related to Our Business and Structure.

Qualifying
Assets

We may invest up to 30% of our portfolio opportunistically in non-qualifying assets, which will be driven primarily
through opportunities sourced through the GMS platform. However, under the Investment Company Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the Investment Company Act, which are referred to as
qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the BDCs total assets. The principal categories of qualifying assets relevant to our proposed business are the following:



| | (1) | Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who
is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the Investment
Company Act as any issuer which:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | is organized under the laws of, and has its principal place of business in, the United States;
| | --- | ----------------------------------------------------------------------------------------------



| | (b) | is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the Investment Company Act; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | satisfies any of the following:
| | --- | -------------------------------



| | i. | does not have any class of securities that is traded on a national securities exchange;
| | -- | ---------------------------------------------------------------------------------------



| | ii. | has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Securities of any eligible portfolio company which we control.
| | --- | --------------------------------------------------------------



| | (3) | Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and
subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio
company.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------



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Managerial Assistance to Portfolio Companies

A BDC must have been organized under the laws of, and have its principal place of business in, any state or states within the United States and
must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above. However, in order to count portfolio securities as qualifying assets for the purpose of the 70% test, the BDC must either
control the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance; except that, where the BDC purchases such securities in
conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance means, among other things, any arrangement whereby the BDC,
through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company.

Temporary Investments

Pending investment
in other types of qualifying assets, as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we
refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets. We may also invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or
securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date
and at a price which is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more
than 25% of our gross assets constitute repurchase agreements from a single counterparty, we would not meet the diversification tests in order to qualify as a RIC. Thus, we do not intend to enter into repurchase agreements with a single counterparty
in excess of this limit. Our Investment Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

Senior Securities

We are permitted,
under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 200% immediately after each such issuance.
In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of
the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage.

Code of Ethics

We and CGMSIM have each
adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act, respectively, that establishes procedures for personal investments and restricts certain transactions by our
personnel. Our codes of ethics generally do not permit investments by our and CGMSIMs personnel in securities that may be purchased or sold by us.

Compliance Policies and Procedures

We
and CGMSIM have each adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their
adequacy and the effectiveness of their implementation and designate a Chief Compliance Officer to be responsible for administering the policies and procedures.



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Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act) imposes a wide variety of new regulatory requirements on
publicly-held companies and their insiders. Many of these requirements affect us. For example:



| |  |  | pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the Exchange Act), our President and Chief Financial Officer must certify the accuracy of the financial statements contained
in our periodic reports;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pursuant to Rule 13a-15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting starting with this Form 10-K and, starting from the date on
which we cease to be an emerging growth company under the JOBS Act, must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the 1934 Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in
other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act
and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

Proxy Voting Policies and Procedures

We
have delegated our proxy voting responsibility to our Investment Adviser, CGMSIM. The Proxy Voting Policies and Procedures of CGMSIM are set forth below. These guidelines are reviewed periodically by CGMSIM and our non-interested directors, and,
accordingly, are subject to change.

An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the
best interests of its clients. As part of this duty, CGMSIM recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.

These policies and procedures for voting proxies are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers
Act.

CGMSIM will vote proxies relating to our portfolio securities in what CGMSIM perceives to be the best interest of our stockholders.
CGMSIM will review on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although CGMSIM will generally vote against proposals that may have a negative impact on our
portfolio securities, CGMSIM may vote for such a proposal if there exist compelling long-term reasons to do so.

CGMSIMs proxy
voting decisions will be made by the CGMSIM Investment Committee. To ensure that the vote is not the product of a conflict of interest, CGMSIM will require that: (1) anyone involved in the decision making process disclose to the CGMSIM
Investment Committee, and disinterested directors, any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision making
process or vote administration are prohibited from revealing how CGMSIM intends to vote on a proposal in order to reduce any attempted influence from interested parties.



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Privacy Principles

We are committed to maintaining the privacy of our stockholders and to safeguarding their non-public personal information. The following
information is provided to help investors understand what personal information we collect, how we protect that information and why, in certain cases, we may share information with select other parties.

Pursuant to our privacy policy, we do not disclose any non-public personal information concerning any of our stockholders who are individuals
unless the disclosure meets certain permitted exceptions under Regulation S-P. We generally do not use or disclose any stockholder information for any purpose other than as required by law.

We may collect non-public information about investors from our subscription agreements or other forms, such as name, address, account number
and the types and amounts of investments, and information about transactions with us or our affiliates, such as participation in other investment programs, ownership of certain types of accounts or other account data and activity. We may disclose
the information that we collect from our stockholders or former stockholders, as described above, only to our affiliates and service providers and only as allowed by applicable law or regulation. Any party that receives this information uses it only
for the services required by us and as allowed by applicable law or regulation, and is not permitted to share or use this information for any other purpose. To protect the non-public personal information of individuals, we permit access only by
authorized personnel who need access to that information to provide services to us and our stockholders. In order to guard our stockholders non-public personal information, we maintain physical, electronic and procedural safeguards that are
designed to comply with applicable law. Non-public personal information that we collect about our stockholders is generally stored on secured servers located in the United States. An individual stockholders right to privacy extends to all
forms of contact with us, including telephone, written correspondence and electronic media, such as the Internet.

Pursuant to our privacy
policy, we provide a clear and conspicuous notice to each investor that details our privacy policies and procedures at the time of the investors subscription. We post our privacy policy on our website
(http://carlyle.com/our-business/global-market-strategies/carlyle-gms-finance-inc) and promptly update the policy with any amendments.

Reporting
Obligations

We furnish our stockholders with annual reports containing audited financial statements, quarterly reports, and such other
periodic reports as we determine to be appropriate or as may be required by law. We are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under the Exchange Act.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as reports on Forms 3, 4 and 5
regarding directors, officers or 10% beneficial owners of us, filed or furnished pursuant to section 13(a), 15(d) or 16(a) of the Exchange Act, are available on our website
(http://carlyle.com/our-business/global-market-strategies/carlyle-gms-finance-inc).

Stockholders and the public may also read and copy
any materials we file with the SEC at the SECs Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
also maintains a website (www.sec.gov) that contains such information.

Item 1A. Risk Factors

Potential investors should be aware that an investment in the Company involves a high degree of risk. There can be no assurance that the
Companys investment objectives will be achieved or that an investor will receive a return of its capital. In addition, there will be occasions when the Adviser and its affiliates may encounter



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potential conflicts of interest in connection with the Company. The following considerations, in addition to the considerations set forth elsewhere herein, should be carefully evaluated before
making an investment in the Company.

Risks Related to Economic Conditions

Capital markets have been in a period of disruption and instability for an extended period of time. These market conditions have materially and adversely
affected debt and equity capital markets in the United States and abroad, which may in the future have a negative impact on our business and operations.

The global capital markets have been in a period of disruption for an extended period of time as evidenced by a lack of liquidity in the debt
capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of certain major financial institutions. In addition, since 2011 speculation regarding
the inability of Greece and certain other European countries to pay their national debt, the response by Eurozone policy makers to mitigate sovereign debt risk and the concerns regarding the stability of the Eurozone currency have resulted in
downgrades or downgrade reviews of the debt of Eurozone sovereigns and financial institutions and created uncertainty in the credit markets. Despite actions of the United States federal government and foreign governments, these events contributed to
worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular. While
recent market conditions have improved somewhat, there have been continuing periods of volatility and there can be no assurance that adverse market conditions will not repeat themselves or worsen in the future. As long as these conditions persist,
we and other companies in the financial services sector may have limited access, if available, to alternative markets for debt and equity capital. Equity capital may be difficult to raise to the extent we complete an initial public offering and
commence trading on an exchange because, subject to some limited exceptions which will apply to us, as a BDC we will generally not be able to issue additional shares of our common stock at a price less than net asset value. In addition, our ability
to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in the Investment Company Act, must equal at least 200% immediately after each time we incur indebtedness. The
debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future. Any inability to raise capital could have a negative effect on our business, financial condition and results of
operations.

Given the extreme volatility and dislocation in the capital markets over the past several years, many BDCs have faced, and
may in the future face, a challenging environment in which to raise or access capital. In addition, significant changes in the capital markets, including the extreme volatility and disruption over the past several years, has had, and may in the
future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving these investments. While most of our investments are not publicly traded, applicable accounting standards require us to assume as
part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can adversely affect our
investment valuations. Further, the illiquidity of our investments may make it difficult for us to sell such investments if required and to value such investments. As a result, we may realize significantly less than the value at which we will have
recorded our investments. In addition, significant changes in the capital markets may have a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. An inability to raise capital, and
any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations.

The downgrade of the U.S. credit rating and uncertainty about financial stability could have a significant adverse effect on our business, results of
operations and financial condition.

Due to federal budget deficit concerns, S&P downgraded the federal governments
credit rating from AAA to AA+ for the first time in history on August 5, 2011. These developments, and the governments credit concerns in general, including those relating to budget deficit issues or Congresss failure or potential
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raise the debt ceiling on a timely basis, could negatively impact both the perception of credit risk associated with our debt portfolio and our ability to access the debt markets on favorable
terms. In addition, a decreased credit rating could create broader financial turmoil and uncertainty, which may weigh heavily on our financial performance and the value of our common stock.

Also, to the extent uncertainty regarding any economic recovery in Europe continues to negatively impact consumer confidence and consumer
credit factors, our business and results of operations could be significantly and adversely affected.

On December 18, 2013, the U.S.
Federal Reserve announced that it would scale back its bond-buying program, or quantitative easing, which is designed to stimulate the economy and expand the Federal Reserves holdings of long-term securities until key economic indicators, such
as the unemployment rate, show signs of improvement. The Federal Reserve signaled it would reduce its purchases of long-term Treasury bonds and would scale back on its purchases of mortgage-backed securities.

It is unclear what effect, if any, the incremental reduction in the rate of the U.S. Federal Reserves monthly purchases will have on the
value of our investments. However, it is possible that absent continued quantitative easing by the Federal Reserve, these developments could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt
markets on favorable terms.

Economic recessions or downturns could impair our portfolio companies and harm our operating results.

Many of the portfolio companies in which we make investments may be susceptible to economic slowdowns or recessions and may be unable to repay
the loans we made to them during these periods. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse
economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income
and assets. Unfavorable economic conditions also could increase our and our portfolio companies funding costs, limit our and our portfolio companies access to the capital markets or result in a decision by lenders not to extend credit to
us or our portfolio companies. These events could prevent us from increasing investments and harm our operating results.

A portfolio
companys failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger
cross-defaults under other agreements and jeopardize the portfolio companys ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new
terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that
portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other creditors.

We have been in a period of
capital markets disruption and instability; as a result, we may be unable to launch or complete a Qualified IPO of our common stock or list our shares on a recognized exchange.

As noted above, the U.S. and global capital markets have been in a period of disruption and instability for a prolonged period of time. While
recent market conditions have improved somewhat, there have been continuing periods of volatility and there can be no assurance that adverse market conditions will not repeat themselves or worsen in the future. A prolonged period of market
illiquidity may have an adverse effect on our business, financial condition and results of operations. Unfavorable economic conditions could also increase our portfolio companies funding costs, limit their access to the capital markets or
result in a decision by lenders not to extend credit to them. These events could limit our investment originations, limit their ability to grow, negatively impact our operating results, and delay or prevent us from launching or completing a
Qualified IPO of our common stock or listing our shares on a recognized exchange.



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Risks Related to Our Business and Structure

We have limited operating history.

We were formed in February 2012. As a result of a limited operating history, we are subject to many of the business risks and uncertainties
associated with recently formed businesses, including the risk that we will not achieve our investment objective and that the value of our common stock could decline substantially.

CGMSIM, the CGMSIM Investment Team, Carlyle and our Directors and Executive Officers have limited prior experience managing a BDC.

Our Adviser was organized in February 2012 and has a limited operating history. Additionally, our Adviser, the members of the CGMSIM Investment
Team, Carlyle and our Directors and Executive Officers have limited prior experience managing the Company, and the investment philosophy and techniques used by our Investment Adviser to manage an SEC-reporting company may differ from the investment
philosophy and techniques previously employed by the investment team in identifying and managing past investments. Accordingly, we can offer no assurance that we will replicate the historical performance of other businesses or companies with which
the CGMSIM Investment Team has been affiliated, and our investment returns could be substantially lower than the returns achieved by such other companies.

Our financial condition and results of operations depend on our ability to manage future growth effectively.

Our ability to achieve our investment objective and to grow depends on our Investment Advisers ability to identify, invest in and monitor
companies that meet our investment criteria.

Accomplishing this result on a cost-effective basis is largely a function of our Investment
Advisers structuring of the investment process, its ability to provide competent, attentive and efficient services to us and its ability to access financing for us on acceptable terms. The CGMSIM Investment Team has substantial
responsibilities under the Investment Advisory Agreement, has substantial responsibilities in connection with managing NFIC, and may also be called upon to provide managerial assistance to our portfolio companies. However, we can offer no assurance
that any such investment professionals will contribute effectively to the work of the Investment Adviser. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of
operations.

We may need to raise additional capital to grow because we must distribute most of our income.

We may need additional capital to fund growth in our investments. We have issued and expect to issue additional equity securities in connection
with the private offering of our shares of common stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the Securities Act), and other applicable securities laws (the
Private Offering) and expect to continue to borrow from financial institutions. A reduction in the availability of new capital could limit our ability to grow. We must distribute at least 90% of our investment company taxable income to
our stockholders to maintain our RIC status. As a result, any such cash earnings may not be available to fund investment originations. We have borrowed under the Revolving Credit Facility and Facility and in the future may borrow under additional
debt facilities from financial institutions and issue additional debt and equity securities. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may have an adverse
effect on the value of our securities. In addition, as a BDC, our ability to borrow or issue preferred stock may be restricted if our total assets are less than 200% of our total borrowings and preferred stock.

Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment
objective, may limit our investment choices and may subject us to greater regulation.

The Investment Company Act imposes numerous
constraints on the operations of BDCs. For example, BDCs are required to invest at least 70% of their total assets in specified types of qualifying assets, primarily in



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private U.S. companies or thinly-traded U.S. public companies, cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. In
addition, subject to certain limited exceptions, an investment in an issuer that has outstanding securities listed on a national exchange may be treated as a qualifying asset only if such issuer has a market capitalization that is less than $250
million at the time of such investment. In addition, as a RIC we are required to satisfy certain source-of-income, diversification and distribution requirements. These constraints, among others, may hinder our ability to take advantage of attractive
investment opportunities and to achieve our investment objective.

Furthermore, any failure to comply with the requirements imposed on
BDCs by the Investment Company Act could cause the SEC to bring an enforcement action against us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our stockholders, we may elect to withdraw our status as a
BDC. If we decide to withdraw our election, or if we otherwise fail to qualify, or maintain our qualification, as a BDC, we may be subject to substantially greater regulation under the Investment Company Act as a closed-end investment company.
Compliance with such regulations would significantly decrease our operating flexibility, and could significantly increase our cost of doing business.

Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of
raising additional capital may expose us to risks, including the typical risks associated with leverage.

We may issue debt
securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as senior securities, up to the maximum amount permitted by the Investment Company Act. Under the provisions of
the Investment Company Act, we are permitted, as a BDC, to issue senior securities in amounts such that our asset coverage ratio, as defined in the Investment Company Act, equals at least 200% of total assets less all liabilities and indebtedness
not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on
the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders.
Furthermore, as a result of issuing senior securities, our common stockholders would also be exposed to typical risks associated with increased leverage, including an increased risk of loss resulting from increased indebtedness.

If we issue preferred stock, the preferred stock would rank senior to common stock in our capital structure, preferred
stockholders would have separate voting rights on certain matters and might have other rights, preferences, or privileges more favorable than those of our common stockholders, and the issuance of preferred stock could have the effect of delaying,
deferring or preventing a transaction or a change of control that might involve a premium price for holders of our common stock or otherwise be in their best interest.

We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common
stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if our Board of Directors determines that such sale is in the best interests of us and our
stockholders and our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates the market
value of such securities (less any distributing commission or discount). We do not presently intend to issue our common stock at a price below the then-current net asset value per share of our common stock in connection with the Private Offering. If
we raise additional funds by issuing more common stock, including in connection with a Qualified IPO, or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will
decrease, and holders of our common stock might experience dilution.



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We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the
risk of investing in us.

As part of our business strategy, we, including through our wholly-owned subsidiary, borrow from and may
in the future issue additional senior debt securities to banks, insurance companies and other lenders. Holders of these loans or senior securities would have fixed-dollar claims on our assets that are superior to the claims of our stockholders. If
the value of our assets decreases, leverage will cause our net asset value to decline more sharply than it otherwise would have without leverage. Similarly, any decrease in our income would cause our net income to decline more sharply than it would
have if we had not borrowed. This decline could negatively affect our ability to make dividend payments on our common stock. Our ability to service our borrowings depends largely on our financial performance and is subject to prevailing economic
conditions and competitive pressures. In addition, the management fees are payable based on our gross assets, including cash and assets acquired through the use of leverage, which may give our Adviser an incentive to use leverage to make additional
investments. See We may be obligated to pay our Investment Adviser even if we incur a loss. The amount of leverage that we employ will depend on our Investment Advisers and our Board of Directors assessment of
market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.

Our credit facilities also impose financial and operating covenants that restrict our business activities, remedies on default and similar
matters. As of December 31, 2014, we are in compliance with the covenants of our credit facilities. However, our continued compliance with these covenants depends on many factors, some of which are beyond our control. Accordingly, although we
believe we will continue to be in compliance, we cannot assure you that we will continue to comply with the covenants in our credit facilities. Failure to comply with these covenants could result in a default. If we were unable to obtain a waiver of
a default from the lenders or holders of that indebtedness, as applicable, those lenders or holders could accelerate repayment under that indebtedness. An acceleration could have a material adverse impact on our business, financial condition and
results of operations. Lastly, we may be unable to obtain additional leverage, which would, in turn, affect our return on capital.

As of
December 31, 2014, we had $308.4 million of outstanding consolidated indebtedness, which would have an annualized interest cost of 2.17% under the terms of our credit facilities, excluding fees (such as fees on undrawn amounts and amortization
of upfront fees), to the extent the amount remains outstanding. Since we generally pay interest at a floating rate on our credit facilities, an increase in interest rates will generally increase our borrowing costs. We expect that our annualized
interest cost and returns required to cover interest will increase after we issue debt securities.

Changes in interest rates may increase our cost
of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.

General interest rate fluctuations and changes in credit spreads on floating rate loans may have a substantial negative impact on our
investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income and our net asset value. Substantially all of our debt investments will have variable
interest rates that reset periodically based on benchmarks such as LIBOR and the prime rate, so an increase in interest rates from their historically low present levels may make it more difficult for our portfolio companies to service their
obligations under the debt investments that we will hold. In addition, to the extent we borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds and the rate at which
we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income to the extent we use debt to finance our investments. In periods of
rising interest rates, our cost of funds would increase, which could reduce our net investment income.

In addition, a rise in the general
level of interest rates can be expected to lead to higher interest rates applicable to our debt investments. Accordingly, an increase in interest rates would make it easier for us to meet



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or exceed the incentive fee hurdle rate and may result in a substantial increase of the amount of incentive fees payable to our Investment Adviser with respect to our pre-incentive fee net
investment income.

Our portfolio companies may prepay loans, which may have the effect of reducing our investment income if the returned capital
cannot be invested in transactions with equal or greater yields.

Loans are generally callable at any time, most of them at no
premium to par. We are generally unable to predict the rate and frequency of such repayments. Whether a loan is called will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market
conditions that allow such portfolio company the ability to replace existing financing with less expensive capital. As market conditions change frequently, we will often be unable to predict when, and if, this may be possible for each of our
portfolio companies. In the case of some of these loans, having the loan called early may have the effect of reducing our actual investment income below our expected investment income if the capital returned cannot be invested in transactions with
equal or greater yields.

The financial projections of our portfolio companies could prove inaccurate.

We generally evaluate the capital structure of portfolio companies on the basis of financial projections prepared by the management of such
portfolio companies. These projected operating results are normally based primarily on judgments of the management of the portfolio companies. In all cases, projections are only estimates of future results that are based upon assumptions made at the
time that the projections are developed. General economic conditions, which are not predictable with accuracy, along with other factors may cause actual performance to fall short of the financial projections that were used to establish a given
portfolio companys capital structure. Because of the leverage that is typically employed by our portfolio companies, this could cause a substantial decrease in the value of our investment in the portfolio company. The inaccuracy of financial
projections could thus cause our performance to fall short of our expectations.

Our portfolio securities may not have a readily available market
price and, in such a case, we will value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors, which valuation is inherently subjective and may not reflect what we may actually realize for the
sale of the investment.

A large percentage of our portfolio investments are in the form of debt investments that are not publicly
traded. The fair value of these securities is not readily determinable. We value these investments on at least a quarterly basis in accordance with our valuation policy, which is at all times consistent with accounting principles generally accepted
in the United States (US GAAP). Our Board of Directors utilizes the services of a third-party valuation firm to aid it in determining the fair value of these investments. The Board of Directors discusses valuations and determines the
fair value in good faith based on the input of our Investment Adviser and the third-party valuation firm. The participation of our Investment Adviser in our valuation process could result in a conflict of interest, since the management fees are
based in part on our gross assets and also because our Investment Adviser is receiving performance-based incentive fees. The factors that are considered in the fair value pricing of our investments include the nature and realizable value of any
collateral, the portfolio companys ability to make payments and its earnings, the markets in which the portfolio company does business, comparisons to publicly-traded companies, discounted cash flow, relevant credit market indices, and other
relevant factors. Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value
may differ materially from the values that would have been used if a ready market for these securities existed. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility.

Our net asset value as of a particular date may be materially greater than or less than the value that would be realized if our assets were to
be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of its assets on a particular date, the actual price that we would realize upon the



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disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our net asset value. Volatile market conditions could also cause reduced
liquidity in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in our net asset value.

We may experience fluctuations in our quarterly results.

We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rate payable on the debt
securities we acquire, the default rate on such securities, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and
general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

There are significant potential conflicts of interest, including the management of NFIC and other funds affiliated with Carlyle by our Investment
Advisers key investment professionals, which could impact our investment returns.

Our executive officers and directors, as
well as the other current and future principals of our Investment Adviser, CGMSIM, may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do. Currently, our executive officers, as well
as the other principals of our Investment Adviser, CGMSIM, manage other funds affiliated with Carlyle. In addition, the CGMSIM Investment Team has responsibilities for sourcing and managing U.S. middle market debt investments for NFIC. Accordingly,
they have obligations to investors in NFIC, the fulfillment of which obligations may not be in the best interests of, or may be adverse to the interests of, us or our stockholders.

In addition, we note that any affiliated investment vehicle currently existing, or formed in the future, and managed by our Investment Adviser
or its affiliates, including Carlyle, may, notwithstanding different stated investment objectives, have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. As a result, CGMSIM
may face conflicts in allocating investment opportunities between us and such other entities. Although CGMSIM will endeavor to allocate investment opportunities in a fair and equitable manner, it is possible that, in the future, we may not be given
the opportunity to participate in investments made by investment funds managed by our Investment Adviser or an investment manager affiliated with our Investment Adviser, including Carlyle. In any such case, when CGMSIM identifies an investment, it
will be forced to choose which investment fund should make the investment.

We and our affiliates may own investments at different levels
of a portfolio companys capital structure or otherwise own different classes of a portfolio companys securities. Such investments may inherently give rise to conflicts of interest or perceived conflicts of interest between or among the
various classes of securities that may be held. Conflicts may also arise because portfolio decisions regarding our portfolio may benefit our affiliates. Our affiliates may pursue or enforce rights with respect to one of our portfolio companies, and
those activities may have an adverse effect on us. As a result, prices, availability, liquidity and terms of our investments may be negatively impacted by the activities of our affiliates, and transactions for us may be impaired or effected at
prices or terms that may be less favorable than would otherwise have been the case.

Carlyle considers its One Carlyle
philosophy and the ability of its professionals to communicate and collaborate across funds, industries and geographies one of its significant competitive strengths. As a result of the expansion of its platform into various lines of business in the
alternative asset management industry, Carlyle is subject to a number of actual and potential conflicts of interest and subject to greater regulatory oversight than that to which it would otherwise be subject if it had just one line of business. In
addition, as Carlyle expands its platform, the allocation of investment opportunities among its investment funds, including us, is expected to become more complex. In addressing these conflicts and regulatory requirements across Carlyles
various businesses, Carlyle has and may continue to implement certain policies and procedures (for example, information barriers). As a practical matter, the establishment and maintenance of such information barriers means that collaboration between
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investments may be limited, reducing potential synergies that Carlyle has cultivated across these businesses through its One Carlyle approach. In addition, we may come into possession
of material non-public information with respect to issuers in which we may be considering making an investment. As a consequence, we may be precluded from providing such information or other ideas to other funds affiliated with Carlyle that benefit
from such information. To the extent we or any other funds affiliated with Carlyle fail to appropriately deal with any such conflicts, it could negatively impact our reputation or Carlyles reputation and our ability to raise additional funds
and the willingness of counterparties to do business with us or result in potential litigation against us. Our communications with Carlyle Corporate Private Equity, Real Asset and Solutions personnel are subject to certain restrictions as set forth
in Carlyles information barrier policy. In that regard, it is not generally expected the investment personnel involved in our day-to-day affairs will discuss any issuer-specific information with other members of Carlyle outside the GMS group.
In addition to the information barriers between GMS and Private Equity, Real Assets and Solutions, there is an information barrier between different fund groups within GMS.

In the ordinary course of business, we may enter into transactions with affiliates and portfolio companies that may be considered related
party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby certain of our executive officers screen each of our
transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us, any stockholders that own more than 5% of us and our employees and directors. We will not enter into any agreements unless and
until we are satisfied that doing so will not raise concerns under the Investment Company Act or, if such concerns exist, we have taken appropriate actions to seek Board of Directors review and approval or SEC exemptive relief for such transaction.
Our Board of Directors will review these procedures on an annual basis.

In the course of our investing activities, we pay management and
incentive fees to CGMSIM and reimburse CGMSIM for certain expenses it incurs in accordance with our Investment Advisory Agreement. As a result, investors in our common stock invest on a gross basis and receive distributions on a
net basis after expenses, resulting in a lower rate of return than an investor might achieve through direct investments. Accordingly, there may be times when the senior management team of CGMSIM has interests that differ from those of
our stockholders, giving rise to a conflict.

We entered into a royalty-free License Agreement with CIM, pursuant to which CIM has granted
us a non-exclusive license to use the name Carlyle. Under the License Agreement, we have the right to use the Carlyle name for so long as CGMSIM or one of its affiliates remains our Investment Adviser. In addition, we pay
CGMSFA, an affiliate of CGMSIM, its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including, compensation paid to or compensatory distributions received by
our officers (including our Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our
Sarbanes-Oxley Act internal control assessment. These arrangements create conflicts of interest that our Board of Directors monitors.

The valuation
process for certain of our portfolio holdings creates a conflict of interest.

Many of our portfolio investments are expected to be
made in the form of securities that are not publicly traded. As a result, our Board of Directors determines the fair value of these securities in good faith as described above in There is uncertainty as to the value of our portfolio
investments. In connection with that determination, investment professionals of CGMSIM provide our Board of Directors with valuations based upon the most recent portfolio company financial statements available and projected financial
results of each portfolio company. In addition, the interested directors on our Board of Directors have an indirect pecuniary interest in CGMSIM. The participation of CGMSIMs investment professionals in our valuation process, and the indirect
pecuniary interest in our Investment Adviser by the interested directors on our Board of Directors, could result in a conflict of interest as CGMSIMs management fees are based, in part, on our gross assets and our incentive fees are based, in
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We may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.

Our Investment Adviser is entitled to incentive compensation for each calendar quarter in an amount equal to a percentage of the
excess of our pre-incentive fee net investment income for that quarter (before deducting incentive compensation) above a performance threshold for that quarter. Our pre-incentive fee net investment income for incentive compensation purposes excludes
realized and unrealized capital losses and depreciation that we may incur in the calendar quarter, even if such capital losses or depreciation result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay
CGMSIM incentive compensation for a calendar quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter, subject to the deferral provisions.

Our fee structure may induce our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple
levels of fees and expenses.

The incentive fees payable by us to CGMSIM may create an incentive for CGMSIM to pursue investments
on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The incentive fees payable to our Investment Adviser are calculated based on a percentage of our return on invested capital.
This may encourage our Investment Adviser to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would impair the value of our common stock. In
addition, the Investment Adviser receives the incentive fees based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fees based on income, there is no hurdle rate applicable to the portion of the
incentive fees based on net capital gains. As a result, the Investment Adviser may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could
result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

The catch-up portion of the incentive fees may encourage CGMSIM to accelerate or defer interest payable by portfolio companies
from one calendar quarter to another, potentially resulting in fluctuations in timing and dividend amounts.

Moreover, because the base
management fees payable to our Adviser are payable based on our gross assets, including those assets acquired through the use of leverage, CGMSIM has a financial incentive to incur leverage which may not be consistent with our stockholders
interests.

We may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including
private funds, and, to the extent we so invest, bear our ratable share of any such investment companys expenses, including management and performance fees. We also remain obligated to pay management and incentive fees to CGMSIM with respect to
the assets invested in the securities and instruments of other investment companies. With respect to each of these investments, each of our stockholders bear his or her share of the management and incentive fees of CGMSIM as well as indirectly
bearing the management and performance fees and other expenses of any investment companies in which we invest.

We will become subject to
corporate-level income tax if we are unable to qualify and maintain our qualification as a regulated investment company under Subchapter M of the Code.

Although we have elected to be treated as a RIC under Subchapter M of the Code for 2013 and intend to continue to elect to be so treated in
succeeding tax years, no assurance can be given that we will be able to qualify for and maintain RIC status. To obtain and maintain RIC tax treatment under the Code, we must meet the following annual distribution, income source and asset
diversification requirements.



| |  |  | The Annual Distribution Requirement for a RIC will be satisfied if we distribute to our stockholders, for each taxable year, at least 90% of our
investment company taxable income, which is generally our ordinary taxable income plus the excess of realized net short-term capital gains over realized net
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | long-term capital losses, if any. Because we use debt financing, we are subject to certain asset coverage ratio requirements under the Investment Company Act and financial covenants under loan
and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC tax
treatment and thus become subject to corporate-level income tax.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The income source requirement will be satisfied if we derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of
stock or other securities or foreign currencies, net income from certain qualified publicly traded partnerships, or other income derived with respect to our business of investing in such stock or securities or foreign currencies.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. Failure to meet those requirements may result in our having
to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous
prices and could result in substantial losses.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If we fail to qualify for RIC tax treatment for any reason or become subject
to corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.

We may have difficulty satisfying the Annual Distribution Requirement in order to qualify and maintain RIC status if we recognize income before or
without receiving cash representing such income.

We may make investments that produce income that is not matched by a
corresponding cash receipt by us. Any such income would be treated as income earned by us and therefore would be subject to the distribution requirements of the Code. Such investments may require us to borrow money or dispose of other securities in
order to comply with those requirements. However, under the Investment Company Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless an asset
coverage test is met. See Part I, Item 1 of this Form 10-K BusinessOur Regulatory StructureRegulation as a Business Development CompanySenior Securities.

If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions,
we may not be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of
ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions.

For any period that we do not qualify as a publicly offered regulated investment company, as defined in the Code, stockholders will be taxed
as though they received a distribution of some of our expenses.

A publicly offered regulated investment company is a
RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market or (iii) held by at least 500 persons at all times during the taxable year. We currently do
not qualify as a publicly offered RIC; we may qualify as a publicly offered RIC for future taxable years. For any period that we are not a publicly offered RIC, a non-corporate stockholders allocable portion of our affected expenses, including
our management fees, is treated as an additional distribution to the stockholder and is deductible by such stockholder only to the extent permitted under the limitations described below. For non-corporate stockholders, including individuals, trusts,
and estates, significant limitations generally apply to the deductibility of certain expenses of a non-publicly offered RIC, including advisory fees. In particular, these expenses, referred to as miscellaneous itemized deductions, are deductible to
an individual only to the extent they exceed 2% of such a stockholders adjusted gross income, and are not deductible for alternative minimum tax purposes.



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We are subject to risks in using custodians, administrators and other agents.

We depend on the services of custodians, administrators, including State Street, and other agents to carry out certain securities transactions
and administrative services for us. In the event of the insolvency of a custodian, we may not be able to recover equivalent assets in full as we will rank among the custodians unsecured creditors in relation to assets which the custodian
borrows, lends or otherwise uses. In addition, our cash held with a custodian may not be segregated from the custodians own cash, and we therefore may rank as unsecured creditors in relation thereto. The inability to recover assets from the
custodian could have a material impact on our performance.

We will expend significant financial and other resources to comply with the requirements
of being a public entity.

As a public entity, we are subject to the reporting requirements of the Exchange Act and requirements of
the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act
requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting, which are discussed below. See Part I, Item 1 of this Form 10-K BusinessOur Regulatory
StructureRegulation as a Business Development CompanySarbanes-Oxley Act of 2002. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls, significant resources and
management oversight is required. We will continue to implement procedures, processes, policies and practices for the purpose of addressing the standards and requirements applicable to public companies. These activities may divert managements
attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We expect to incur significant additional annual expenses related to these steps and,
among other things, directors and officers liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, additional administrative expenses payable to our Administrator to compensate them for hiring
additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses.

The systems and
resources necessary to comply with public company reporting requirements will increase further once we cease to be an emerging growth company under the JOBS Act. As long as we remain an emerging growth company, we intend to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act and exemptions from the requirement to hold advisory votes on executive compensation. We will remain an emerging growth company for up to five years following an initial public offering, although if the market value of our common
stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an emerging growth company as of the following December 31.

We are obligated to maintain proper and effective internal control over financial reporting. Failure to achieve and maintain effective internal controls
over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and the value of our common stock.

We are obligated to maintain proper and effective internal control over financial reporting, including the internal control evaluation and
certification requirements of Section 404 of the Sarbanes-Oxley Act (Section 404). We will not be required to comply with all of the requirements under Section 404 until the date we are no longer an emerging growth company
under the JOBS Act. Accordingly, our internal controls over financial reporting do not currently meet all of the standards contemplated by Section 404 that we will eventually be required to meet. Specifically, we are required to conduct annual
management assessments of the effectiveness of our internal controls over financial reporting. However, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over
financial reporting until the date we are no longer an emerging growth company under the JOBS Act.



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If we are not able to implement the applicable requirements of Section 404 in a timely
manner or with adequate compliance, our operations, financial reporting or financial results could be adversely affected. Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and
thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, and result in a breach of the covenants under the agreements governing any of our financing arrangements.
There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements could also suffer if we or our
independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our common stock, to the
extent we have completed a Qualified IPO.

Stockholders may be subject to filing requirements under the Exchange Act as a result of an investment in
us.

Because our common stock is registered under the Exchange Act, ownership information for any person who beneficially owns 5%
or more of our common stock must be disclosed in a Schedule 13D or other filings with the SEC. Beneficial ownership for these purposes is determined in accordance with the rules of the SEC, and includes having voting or investment power over the
securities. In some circumstances, investors who choose to reinvest their dividends may see their percentage stake in us increased to more than 5%, thus triggering this filing requirement. Although we provide in our quarterly financial statements
the amount of outstanding stock and the amount of the investors stock, the responsibility for determining the filing obligation and preparing the filing remains with the investor. In addition, owners of 10% or more of our common stock are
subject to reporting obligations under Section 16(a) of the Exchange Act.

Certain investors are limited in their ability to make significant
investments in us.

Private funds that are excluded from the definition of investment company either pursuant to
Section 3(c)(1) or 3(c)(7) of the Investment Company Act are restricted from acquiring directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition). Investment companies
registered under the Investment Company Act are also subject to this restriction as well as other limitations under the Investment Company Act that would restrict the amount that they are able to invest in our securities. As a result, certain
investors may be precluded from acquiring additional shares, at a time that they might desire to do so.

Stockholders may be subject to the
short-swing profits rules under the Exchange Act as a result of an investment in us.

Persons with the right to appoint a director
or who hold 10% or more of a class of our shares may be subject to Section 16(b) of the Exchange Act, which recaptures for the benefit of the issuer profits from the purchase and sale of registered stock within a six-month period.

Investors in the Private Offering are subject to transfer restrictions.

Prior to the completion of a Qualified IPO, investors who participate in the Private Offering may not sell, assign, transfer or otherwise
dispose of (in each case, a Transfer) any common stock unless (i) we give consent and (ii) the Transfer is made in accordance with applicable securities laws. No Transfer will be effectuated except by registration of the
Transfer on our books. Each transferee must agree to be bound by these restrictions and all other obligations as an investor in us. Following completion of a Qualified IPO, investors will be restricted from selling or disposing of their shares of
common stock contractually by a lock-up agreement with the underwriters of the IPO and secondary offerings, and by the terms of the subscription agreement entered into by the Company and each investor in connection with the Private Offering. It is
possible that, once we are no longer accepting new commitments, we may seek to implement a program intended to provide limited liquidity and price discovery to holders of our common stock through an auction process; however, there can be no



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assurance that such a program will, in fact, be established or, if established, will provide meaningful levels of liquidity. In the event we implement such a program, investors would be subject
to conditions and limitations on Transfers of our common stock made through the program.

Our Board of Directors is authorized to reclassify any
unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.

Under the Maryland General Corporation Law (MGCL) and our charter, our Board of Directors is authorized to classify and reclassify
any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to the issuance of shares of each class or series, the Board of Directors is required by Maryland law and our charter to set the terms,
preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the Board of Directors could authorize the
issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be
in their best interest. The cost of any such reclassification would be borne by our existing common stockholders. Certain matters under the Investment Company Act require the separate vote of the holders of any issued and outstanding preferred
stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. In addition, the Investment Company Act provides that holders of preferred stock are entitled to vote
separately from holders of common stock to elect two preferred stock directors. We currently have no plans to issue preferred stock, but may determine to do so in the future. The issuance of preferred stock convertible into shares of common stock
might also reduce the net income per share and net asset value per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of
Section 61 of the Investment Company Act, including obtaining common stockholder approval. These effects, among others, could have an adverse effect on an investment in our common stock.

Provisions of the MGCL and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

The MGCL and our charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of
GMS Finance or the removal of our directors. We are subject to the Maryland Business Combination Act (MBCA), subject to any applicable requirements of the Investment Company Act. Our Board of Directors has adopted a resolution exempting
from the MBCA any business combination between us and any other person, subject to prior approval of such business combination by our Board of Directors, including approval by a majority of our disinterested directors. If the resolution exempting
business combinations is repealed or our Board of Directors does not approve a business combination, the Business Combination Act may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an
offer. Our bylaws exempt from the Maryland Control Share Acquisition Act (Control Share Act) acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Act, the Control Share Act also
may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such a transaction. However, we will amend our bylaws to be subject to the Control Share Act only if our Board of Directors determines
that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the Investment Company Act. The SEC staff has issued informal guidance setting
forth its position that certain provisions of the Control Share Act would, if implemented, violate Section 18(i) of the Investment Company Act.

We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter
classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of Directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares
of our stock, to amend our charter without stockholder approval



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and to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a
transaction or a change in control that might otherwise be in the best interests of our stockholders.

Our Board of Directors may change our
investment objective, operating policies and strategies without prior notice or stockholder approval.

Our Board of Directors has
the authority to modify or waive our operating policies and strategies without prior notice (except as required by the Investment Company Act) and without stockholder approval. In addition, none of our investment policies is fundamental and any of
them may be changed without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current
operating policies and strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.

A failure in our operational systems or infrastructure, or those of third parties, as well as cyber-attacks could significantly disrupt our business or
negatively affect our liquidity, financial condition or results of operations.

We rely heavily on our and third parties
financial, accounting, information and other data processing systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems
in our activities. We face various security threats on a regular basis, including ongoing cyber security threats to and attacks on our information technology infrastructure that are intended to gain access to our proprietary information, destroy
data or disable, degrade or sabotage our systems. These security threats could originate from a wide variety of sources, including unknown third parties outside the Company. Although we are not currently aware that we have been subject to
cyber-attacks or other cyber incidents which, individually or in the aggregate, have materially affected our operations or financial condition, there can be no assurance that the various procedures and controls we utilize to mitigate these threats
will be sufficient to prevent disruptions to our systems. If any of these systems do not operate properly or are disabled for any reason or if there is any unauthorized disclosure of data, whether as a result of tampering, a breach of our network
security systems, a cyber-incident or attack or otherwise, we could suffer substantial financial loss, increased costs, a disruption of our businesses, liability to our funds and fund investors, regulatory intervention or reputational damage. In
addition, we operate in businesses that are highly dependent on information systems and technology. Our information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase
from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on us.

Furthermore, we depend on our and our Investment Advisers headquarters in New York, New York, where most of our executives, investment
professionals and administrative and operations personnel are located, for the continued operation of our business. Disasters, such as natural disasters, pandemics, events arising from local or larger scale political or social matters or weather
events, or disruptions in the infrastructure that supports our businesses, such as sudden electrical or telecommunications outages, could have a material adverse impact on our ability to continue to operate our business without interruption. Our
disaster recovery programs may not be sufficient to mitigate the harm that may result from such disasters or disruptions. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.

Changes in laws or regulations governing our operations may adversely affect our business.

Legal, tax and regulatory changes could occur that may adversely affect us. For example, from time to time the market for private equity
transactions has been (and is currently being) adversely affected by a decrease in the availability of senior and subordinated financings for transactions, in part in response to credit market disruptions and/or regulatory pressures on providers of
financing to reduce or eliminate their exposure to the risks involved in such transactions.



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In addition, as private equity firms become more influential participants in the U.S. and global
financial markets and economy generally, there recently has been pressure for greater governmental scrutiny and/or regulation of the private equity industry, in part. It is uncertain as to what form and in what jurisdictions such enhanced scrutiny
and/or regulation, if any, on the private equity industry may ultimately take. Therefore, there can be no assurance as to whether any such scrutiny or initiatives will have an adverse impact on the private equity industry, including our ability to
effect operating improvements or restructurings of its portfolio companies or otherwise achieve its objectives.

On July 21, 2010,
the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was signed into law. Many of the provisions of the Dodd-Frank Act have extended implementation periods and delayed effective dates and will require
extensive rulemaking by regulatory authorities. While the impact of the Dodd-Frank Act on us and our portfolio companies may not be known for an extended period of time, the Dodd-Frank Act, including future rules implementing its provisions and the
interpretation of those rules, along with other legislative and regulatory proposals directed at the financial services industry and the financial markets (including derivative markets) or affecting taxation that are proposed or pending in the U.S.
Congress, may negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, restrict or further regulate certain of our activities, including
derivative trading and hedging activities, intensify the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies.

In addition, the Iran Threat Reduction and Syrian Human Rights Act of 2012 (ITRA) expands the scope of U.S. sanctions against Iran
and Section 219 of the ITRA amended the Exchange Act to require companies subject to SEC reporting obligations under Section 13 of the Exchange Act to disclose in their periodic reports specified dealings or transactions involving Iran or
other individuals and entities targeted by certain sanctions promulgated by the Office Foreign Assets Control engaged in by the reporting company or any of its affiliates during the period covered by the relevant periodic report. In some cases, ITRA
requires companies to disclose transactions even if they were permissible under U.S. law. The ITRA also expanded the scope of U.S. sanctions by requiring foreign entities majority owned or controlled by a U.S. person to abide by U.S. sanctions
against Iran to the same extent as a U.S. person. Previously, foreign entities were not directly bound by U.S. sanctions against Iran even if they were subsidiaries of U.S. companies.

We are required to separately file with the SEC a notice that such activities have been disclosed in our quarterly and annual reports, and the
SEC is required to post this notice of disclosure on its website and send the report to the U.S. President and certain U.S. Congressional committees. The U.S. President thereafter is required to initiate an investigation and, within 180 days of
initiating such investigation, to determine whether sanctions should be imposed. Disclosure of such activity, even if such activity is not subject to sanctions under applicable law, and any sanctions actually imposed on us or our affiliates as a
result of these activities, could harm our reputation and have a negative impact on our business. In the past, we have disclosed such dealings and transactions and to date, we have not received notice of any investigation into such activities.

Our Investment Adviser can resign upon 60 days notice, and we may not be able to find a suitable replacement within that time, resulting in a
disruption in our operations that could adversely affect our financial condition, business and results of operations.

Our
Investment Adviser has the right, under the Investment Advisory Agreement, to resign at any time upon 60 days written notice, whether we have found a replacement or not. If our Investment Adviser resigns, we may not be able to find a new
investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to
experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our
internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the



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expertise possessed by our Investment Adviser and its affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their
lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations. Moreover, the termination by our Investment Adviser of our
Investment Advisory Agreement for any reason will be an event of default under the Revolving Credit Facility, which could result in the immediate acceleration of the amounts due under the Revolving Credit Facility. Similarly, it will be an event of
default under the Facility if our Investment Adviser or an affiliate of our Investment Adviser ceases to manage us, which could result in the immediate acceleration of the amounts due under the Facility.

Our Administrator can resign from its role as Administrator under the Administration Agreement, and a suitable replacement may not be found, resulting
in disruptions that could adversely affect our business, results of operations and financial condition.

Our Administrator has the
right to resign under the Administration Agreement upon 60 days written notice, whether a replacement has been found or not. If our Administrator resigns, it may be difficult to find a new administrator or hire internal management with similar
expertise and ability to provide the same or equivalent services on acceptable terms, or at all. If a replacement is not found quickly, our business, results of operations and financial condition are likely to be adversely affected and the value of
our common stock may decline. Even if a comparable service provider or individuals to perform such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment objective may
result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition.

Any of
our three sub-administrators can resign from their respective roles pursuant to the Carlyle Employee Co. Sub-Administration Agreement, the CELF Sub-Administration Agreement and the State Street Sub-Administration Agreement, and suitable replacements
may not be found, resulting in disruptions that could adversely affect our business, results of operations and financial condition.

Each of Carlyle Employee Co., CELF and State Street has the right to resign under their respective agreements, the Carlyle Employee Co.
Sub-Administration Agreement, the CELF Sub-Administration Agreement and the State Street Sub-Administration Agreement, upon 60 days written notice, whether a replacement has been found or not. If any of our sub-administrators resign, it may be
difficult to find a new administrator or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms, or at all. If a replacement is not found quickly, our business, results of
operations and financial condition are likely to be adversely affected and the value of our common stock may decline. Even if a comparable service provider or individuals to perform such services are retained, whether internal or external, their
integration into our business and lack of familiarity with our investment objective may result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition.

Risks Related to Our Investments

We operate in a
highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.

A number of entities compete with us to make the types of investments that we target in leveraged companies. We compete with other BDCs, public
and private funds, commercial and investment banks, commercial finance companies and, to the extent they provide an alternative form of financing, private equity funds, some of which may be affiliates of us. Many of our competitors are substantially
larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our
competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of



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our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. The competitive pressures we face may have a material adverse effect on
our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to
identify and make investments that are consistent with our investment objective.

We do not seek to compete primarily based on the
interest rates we offer, and we believe that some of our competitors may make loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors pricing,
terms and structure. However, if we match our competitors pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss.

We may not replicate the historical success of Carlyle, and our ability to enter into transactions with Carlyle and our other affiliates is restricted.

We cannot provide any assurance that we will replicate the historical success of Carlyle, and our investment returns could be
substantially lower than the returns achieved by other Carlyle managed funds.

In addition, the Investment Company Act and the Code impose
numerous constraints on the operations of BDCs and RICs that do not apply to the other types of investment vehicles. For example, under the Investment Company Act, BDCs are required to invest at least 70% of their total assets primarily in
securities of qualifying U.S. private companies or thinly traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt investments that mature in one year or less from the time of investment. The CGMSIM
Investment Teams limited experience in managing a portfolio of assets under such constraints may hinder their respective ability to take advantage of attractive investment opportunities and, as a result, achieve our investment objectives.

Further, we and certain of our controlled affiliates are prohibited under the Investment Company Act from knowingly participating in certain
transactions with our upstream affiliates, or our Investment Adviser and its affiliates, without the prior approval of our independent directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding
voting securities is our upstream affiliate for purposes of the Investment Company Act and we are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our
independent directors. The Investment Company Act also prohibits joint transactions with an upstream affiliate, or our Adviser or its affiliates, which could include investments in the same portfolio company (whether at the same or
different times), without prior approval of our independent directors. In addition, we and certain of our controlled affiliates are prohibited from buying or selling any security from or to, or entering into joint transactions with, our Adviser and
its affiliates, or any person who owns more than 25% of our voting securities or is otherwise deemed to control, be controlled by, or be under common control with us, absent the prior approval of the SEC through an exemptive order (other than in
certain limited situations pursuant to current regulatory guidance as described below). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances then existing.

In addition to co-investing pursuant to our Exemptive Relief, we may invest alongside affiliates or their affiliates in certain circumstances
where doing so is consistent with applicable law and current regulatory guidance. For example, we may invest alongside such investors consistent with guidance promulgated by the SEC staff permitting us and an affiliated person to purchase interests
in a single class of privately placed securities so long as certain conditions are met, including that we negotiate no term other than price. We may, in certain cases, also make investments in securities owned by affiliates that we acquire from
non-affiliates. In such circumstances, our ability to participate in any restructuring of such investment or other transaction involving the issuer of such investment may be limited, and as a result, we may realize a loss on such investments that
might have been prevented or reduced had we not been restricted in participating in such restructuring or other transaction.



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Our investments are risky and speculative.

We invest primarily in loans to middle market companies whose debt, if rated, is rated below investment grade. Investments rated below
investment grade are generally considered higher risk than investment grade instruments.

First Lien Senior Secured Loans. When we
make a senior secured term loan investment in a portfolio company, we generally take a security interest in substantially all of the available assets of the portfolio company, including the equity interests of its domestic subsidiaries, which we
expect to help mitigate the risk that we will not be repaid. However, there is a risk that the collateral securing our loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate
in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital, and, in some circumstances, our lien could be subordinated to claims of other
creditors. In addition, deterioration in a portfolio companys financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan.
Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loans terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our
remedies.

Unitranche Loans. Unitranche loans provide leverage levels comparable to a combination of first lien and second lien or
subordinated loans, and may rank junior to other debt instruments issued by the portfolio company. Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a heightened
risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. From the perspective of a lender, in addition to making a single loan, a unitranche loan may allow the lender to choose to participate in the
first out tranche, which will generally receive priority with respect to payments of principal, interest and any other amounts due, or to choose to participate only in the last out tranche, which is generally paid after the
first out tranche is paid. We may participate in first out or last out tranches of unitranche loans or make single unitranche loans.

Second Lien Senior Secured Loans and Junior Debt Investments. Our second lien senior secured loans are subordinated to first lien loans
and our junior debt investments, such as mezzanine loans, generally are subordinated to both first lien and second lien loans and have junior security interests or may be unsecured. As such, to the extent we hold second lien senior secured loans and
junior debt investments, holders of first lien loans may be repaid before us in the event of a bankruptcy or other insolvency proceeding. This may result in an above average amount of risk and loss of principal.

Equity Investments. When we invest in senior secured loans or mezzanine loans, we may acquire equity securities as well. In addition,
we may invest directly in the equity securities of portfolio companies. Our goal is ultimately to dispose of such equity interests and realize gains upon our disposition of such interests. However, the equity interests we receive may not appreciate
in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we
experience.

In addition, investing in middle market companies involves a number of significant risks, including:



| |  |  | these companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a
reduction in the likelihood of us realizing on any guarantees we may have obtained in connection with our investment;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors actions and market conditions, as
well as general economic downturns;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | they are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material
adverse impact on a portfolio company and, in turn, on us;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may
require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers, directors and our Investment Adviser may, in the ordinary course of business, be named
as defendants in litigation arising from our investments in the portfolio companies; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our investments in CLOs may be riskier and less transparent to us and our stockholders than direct investments in the underlying companies.

We invest in CLOs. Generally, there may be less information available to us regarding the underlying debt investments held by CLOs than if we
had invested directly in the debt of the underlying companies. As a result, our stockholders will not know the details of the underlying securities of the CLOs in which we invest. Our CLO investments are also subject to the risk of leverage
associated with the debt issued by such CLOs and the repayment priority of senior debt holders in such CLOs.

CLOs typically have no significant
assets other than their underlying loans; payments on CLO investments are and will be payable solely from the cash flows from such loans; and our investments in CLOs are subject to leverage.

CLOs typically have no significant assets other than their underlying loans. Accordingly, payments on CLO investments are and will be payable
solely from the cash flows from such loans, net of all management fees and other expenses. Payments to us as a holder of CLO investments are and will be met only after payments due on the senior notes (and, where appropriate, the junior secured
notes) from time to time have been made in full. This means that relatively small numbers of defaults of loans may adversely impact our returns.

In addition, we may be in a subordinated position with respect to realized losses on loans underlying our investments in CLOs. The leveraged
nature of CLOs, in particular, magnifies the adverse impact of loan defaults. CLO investments represent a leveraged investment with respect to the underlying loans. Therefore, changes in the market value of the CLO investments could be greater than
the change in the market value of the underlying loans, which are subject to credit, liquidity and interest rate risk.

To the extent we make
investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies.

We may make investments in restructurings that involve, or otherwise invest in the debt securities of, companies that are experiencing or are
expected to experience severe financial difficulties. These severe financial difficulties may never be overcome and may cause such companies to become subject to bankruptcy proceedings. As such, these investments could subject us to certain
additional potential liabilities that may exceed the value of our original investment therein. For instance, under certain circumstances, payments to us and our distributions to stockholders may be reclaimed if any such payment or distribution is
later determined to have been a fraudulent conveyance, preferential payment or similar transaction under applicable bankruptcy and insolvency laws. Furthermore, investments in restructurings may be adversely affected by statutes relating to, among
other things, fraudulent conveyances, voidable preferences, lender liability and the courts discretionary power to disallow, subordinate or disenfranchise particular claims. Under certain circumstances, a lender that has inappropriately
exercised control of the management and policies of a debtor may have its claims subordinated or disallowed, or may be found liable for damages suffered by parties as a result of such actions.



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The lack of liquidity in our investments may adversely affect our business.

We generally make investments in private companies. Substantially all of these investments are subject to legal and other restrictions on
resale or will otherwise be less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of
our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments. In addition, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent
that we have material non-public information regarding such portfolio company.

We have not yet identified all of the portfolio companies we will
invest in.

We have not yet identified all of the potential investments for our portfolio that we will acquire with the proceeds of
the Private Offering. Our Investment Adviser selected our initial investments prior to our past drawdowns and will select subsequent investments prior to any subsequent drawdown. Our stockholders will have no input with respect to investment
decisions. These factors increase the uncertainty, and thus the risk, of investing in our common stock.

Our portfolio may be concentrated in a
limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.

Although we do not intend to focus our investments in any specific industries, our portfolio may be concentrated in a limited
number of portfolio companies and industries. Beyond the asset diversification requirements associated with our qualification as a RIC under Subchapter M of the Code and under the Revolving Credit Facility and Facility, we do not have fixed
guidelines for diversification, and while we do not target any specific industries, our investments may be concentrated in relatively few industries. As a result, the aggregate returns we will realize may be significantly adversely affected if a
small number of investments perform poorly or if we need to write down the value of one or more investments. Additionally, a downturn in any particular industry in which we are invested could also significantly impact the aggregate returns we
realize.

To the extent we use structured financing vehicles, we could be subject to heightened risk versus holding direct investments in underlying
portfolio companies.

To finance investments, we may securitize certain of our investments, including through the formation of one
or more CLOs, while retaining all or most of the exposure to the performance of these investments. This would involve contributing a pool of assets to a special purpose entity, and selling debt interests in such entity on a non-recourse or
limited-recourse basis to purchasers. Any interest in any such CLO held by the Company may be considered a non-qualifying asset for purposes of Section 55 of the Investment Company Act.

If we create a CLO, we will depend on distributions from the CLOs assets out of its earnings and cash flows to enable us to make
distributions to our stockholders. The ability of a CLO to make distributions or pay dividends will be subject to various limitations, including the terms and covenants of the debt it issues. For example, tests (based on interest coverage or other
financial ratios or other criteria) may restrict our ability, as holder of a CLOs equity interests, to receive cash flow from these investments. There is no assurance any such performance tests will be satisfied. Also, a CLO may take actions
that delay distributions in order to preserve ratings and to keep the cost of present and future financings lower or the CLO may be obligated to retain cash or other assets to satisfy over-collateralization requirements commonly provided for holders
of the CLOs debt. As a result, there may be a lag, which could be significant, between the repayment or other realization on a loan or other assets in, and the distribution of cash out of, a CLO, or cash flow may be completely restricted for
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In addition, a decline in the credit quality of loans in a CLO due to poor operating results of
the relevant borrower, declines in the value of loan collateral or increases in defaults, among other things, may force a CLO to sell certain assets at a loss, reducing their earnings and, in turn, cash potentially available for distribution to us
for distribution to our stockholders.

To the extent that any losses are incurred by the CLO in respect of any collateral, such losses
will be borne first by us as owner of equity interests. Finally, any equity interests that we retain in a CLO will not be secured by the assets of the CLO and we will rank behind all creditors of the CLO.

Leveraged companies may enter into bankruptcy proceedings at higher rates than companies that are not leveraged and we invest in debt securities of
these companies.

Leveraged companies, such as those in which we invest, may be more prone to bankruptcy or similar financial
distress. The bankruptcy process has a number of significant inherent risks. Many events in a bankruptcy proceeding are the product of contested matters and adversary proceedings and are beyond the control of the creditors. A bankruptcy filing by an
issuer may adversely and permanently affect the issuer. If the proceeding is converted to a liquidation, the value of the issuer may not equal the liquidation value that was believed to exist at the time of the investment. The duration of a
bankruptcy proceeding is also difficult to predict, and a creditors return on investment can be adversely affected by delays until the plan of reorganization or liquidation ultimately becomes effective. The administrative costs of a bankruptcy
proceeding are frequently high and would be paid out of the debtors estate prior to any return to creditors. Because the standards for classification of claims under bankruptcy law are vague, our influence with respect to the class of
securities or other obligations we own may be lost by increases in the number and amount of claims in the same class or by different classification and treatment. In the early stages of the bankruptcy process, it is often difficult to estimate the
extent of, or even to identify, any contingent claims that might be made. In addition, certain claims that have priority by law (for example, claims for taxes) may be substantial.

In addition, lenders can be subject to lender liability claims for actions taken by them where they become too involved in the borrowers
business or exercise control over the borrower. For example, we could become subject to a lender liability claim (alleging that we misused our influence on the borrower for the benefit of its lenders), if, among other things, the borrower requests
significant managerial assistance from us and we provide that assistance.

Declines in the prices of corporate debt securities and illiquidity in
the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.

As a BDC, we are required to account for our investments at market value or, if no market value is ascertainable, at fair value as determined
in good faith by or under the direction of our Board of Directors. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. Depending on market conditions, we may face similar losses, which could
reduce our net asset value and have a material adverse impact on our business, financial condition and results of operations.

Because we generally
do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our
investments.

Although we may do so in the future, currently we do not intend to hold controlling equity positions in our portfolio
companies. Our non-controlling investments may be acquired through trading activities or through direct purchases of securities from the portfolio company. In addition, we may acquire minority equity interests in large transactions in which our
level of control over the equity investment is limited. Accordingly, we may not be able to control decisions relating to a minority equity investment, including decisions relating to the



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management and operation of the portfolio company and the timing and nature of any exit. As a result, we are subject to the risk that a portfolio company may make business decisions with which we
disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the investments that we typically hold in our portfolio
companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments. If any of the foregoing were to occur, our financial
condition, results of operations and cash flow could suffer as a result.

An investment strategy focused primarily on privately held companies
presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.

We invest primarily in privately held companies. Generally, little public information exists about these companies, and we are required to rely
on the ability of our Investment Adviser to obtain adequate information to evaluate the potential returns from investing in these companies. The due diligence process that our Investment Adviser undertakes in connection with our investments may not
reveal all the facts that may be relevant in connection with such investment. If our Investment Adviser is unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money
on our investments. Also, privately held companies frequently have less diverse product lines and smaller market presence than larger competitors. These factors could adversely affect our investment returns as compared to companies investing
primarily in the securities of public companies.

Our portfolio companies may incur debt that ranks equally with, or senior to, some of our
investments in such companies.

We invest primarily in Middle Market Senior Loans issued by our portfolio companies. To the extent
we invest in second lien, mezzanine or other instruments, our portfolio companies typically may be permitted to incur other debt that ranks equally with, or senior to, such debt instruments. By their terms, such debt instruments may provide that the
holders are entitled to receive payment of interest or principal on or before the dates on which we will be entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation,
dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in
respect of our investment. In such cases, after repaying such senior creditors, such portfolio company may not have sufficient remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in
which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies with senior debt
outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first
priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of
enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents.
We may not have the ability to control or direct such actions, even if our rights are adversely affected.

Our investments in foreign securities may
involve significant risks in addition to the risks inherent in U.S. investments.

Our investment strategy contemplates investments
in debt securities of foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and
social instability, expropriation,



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imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of
exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. As a result of investing in foreign securities, we may
be subject to withholding and other foreign taxes with respect to those securities. We do not expect to satisfy the conditions necessary to pass through to our stockholders their share of the foreign taxes paid by us. In addition, interest income
derived from loans to foreign companies is not eligible to be distributed to our non-U.S. stockholders free from U.S. withholding tax and, unless Congress extends the exemption from U.S. withholding tax for dividend distributions paid out of certain
qualified short-term capital gains, short-term capital gains derived from the sale of foreign securities is also not eligible to be distributed to our non-U.S. stockholders free from U.S. withholding tax. For further discussion of the
exemption from U.S. withholding tax for dividend distributions paid out of certain qualified short-term capital gains, see Risk FactorsRisks Related to an Investment in Our SecuritiesUnless Congress renews
certain exemptions that expired for taxable years commencing after December 31, 2014, certain dividend distributions we make to certain non-U.S. stockholders will be subject to U.S. withholding tax below.

Although most of our investments are expected to be U.S. dollar-denominated, any investments denominated in a foreign currency will be subject
to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values
of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact,
hedge currency risk, or that if we do, such strategies will be effective.

We may expose ourselves to risks if we engage in hedging transactions.

If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions. We may utilize
instruments such as forward contracts, credit default swaps, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange
rates, credit risk premiums, and market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such
positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity
for gain if the values of the underlying portfolio positions should increase. It may not be possible to hedge against an exchange rate or interest rate fluctuation at an acceptable price that is generally anticipated. Moreover, for a variety of
reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the effect of the intended hedge and expose us to risk
of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of
factors not related to currency fluctuations. Income derived from hedging transactions is generally not eligible to be distributed to non-U.S. stockholders free from U.S. withholding tax. We may determine not to hedge against particular risks,
including if we determine that available hedging transactions are not available at an appropriate price.

We are dependent upon our Investment
Advisers key investment professionals for our future success.

We depend on the diligence, skill and network of business
contacts of the CGMSIM Investment Team and the GMS platform to source appropriate investments for us. We depend on members of the CGMSIM Investment Team to appropriately analyze our investments and the CGMSIM Investment Committee to approve and
monitor our middle market portfolio investments. The CGMSIM Investment Committee, together with the other members of the CGMSIM Investment Team, evaluate, negotiate, structure, close and monitor our investments. Our future



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success will depend on the continued availability of the members of the CGMSIM Investment Committee and the other investment professionals available to CGMSIM. Neither we nor CGMSIM has
employment agreements with these individuals or other key personnel, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or her relationship with
us. The loss of Messrs. Petrick and Hart, or any of the other senior investment professionals to which CGMSIM has access, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition
and results of operations. In addition, our contract with CGMSIM is terminable by either party upon 60 days notice, and we can offer no assurance that CGMSIM will remain our Investment Adviser.

We may face other restrictions on our ability to liquidate our investment in a portfolio companies.

Management of the Company seeks investment opportunities that offer the possibility of attaining substantial capital appreciation. Certain
events particular to each industry in which the Companys investments conduct their operations, as well as general economic and political conditions, may have a significant negative impact on the investees operations and profitability. In
addition, the Company is subject to changing regulatory and tax environments. Such events are beyond the Companys control, and the likelihood that they may occur and the effect on the Company cannot be predicted. Furthermore, most of the
Companys investments are made in private companies whose shares do not trade on established exchanges. While it is expected that these companies may pursue initial public offerings, trade sales, or other liquidation events, there are generally
no public markets for these securities at the current time. The Companys ability to liquidate its private company investments and realize value is subject to significant limitations and uncertainties, including currency fluctuations.

The Companys ability to liquidate its publicly traded investments may be subject to limitations, including discounts that may be
required to be taken on quoted prices due to the number of shares being sold.

Risks Related to an Investment in Our Securities

There is a risk that our stockholders may not receive distributions or that our distributions may not grow over time.

We cannot provide any assurance that we will achieve investment results that will allow us to make a specified level of cash distributions or
year-to-year increases in cash distributions. In addition, due to the asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions.

Our stockholders may be required to pay federal income taxes in excess of the cash dividends they receive.

We may distribute taxable dividends that are payable in cash or shares of our common stock at the election of each stockholder. If too many
stockholders elect to receive cash, each stockholder electing to receive cash would receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event would any stockholder electing to receive cash receive less than
10% of his or her entire distribution in cash. For U.S. federal income tax purposes, the amount of a dividend paid in stock would be equal to the amount of cash that could have been received instead of stock.

Stockholders receiving dividends in shares of our common stock would be required to include the full amount of the dividend (including the
portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current and accumulated earnings and profits for federal income tax purposes. As a result, stockholders may be required to pay
income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in
income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in



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respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders were to determine to sell shares of our common stock in
order to pay taxes owed on dividends, it may put downward pressure on the trading price (if any) of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph.

Our taxable income is expected to differ from our income determined in accordance with US GAAP and to be a factor considered by our Board in determining
the amount and frequency of our dividends.

The character of income and gains to be distributed by us is determined in accordance
with U.S. federal income tax regulations that may differ from the determination of income in accordance with US GAAP, particularly as it relates to our CLO equity investments. Taxable income on our CLO equity investments is based upon the
distributable share or earnings as determined under tax regulations, which may be consistent with the cash flows generated by those investments, while our income for US GAAP purposes from these investments is currently based upon an effective yield
calculation. Accordingly, taxable income attributed to a CLO equity investment can be significantly different from the calculation of income on these investments for financial reporting purposes. In general, we expect our annual taxable income from
our CLO equity investments to be higher than our income from these investments determined in accordance with US GAAP on the basis of actual cash received. The minimum distribution requirements applicable to companies like us that have elected to be
treated as regulated investment companies for U.S. federal income tax purposes require us to distribute to our stockholders at least 90% of our investment company taxable income each year. We expect our Board of Directors to consider,
among other factors, these minimum distribution requirements in determining the amount and frequency of our dividends.

Unless Congress renews
certain exemptions that expired for taxable years commencing after December 31, 2014, certain dividend distributions we make to certain non-U.S. stockholders will be subject to U.S. withholding tax.

In recent years, Congress has renewed the rules under which dividend distributions by RICs paid out of certain qualified net interest
income (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we are at least a 10% stockholder, reduced by expenses that are allocable to such
income) or qualified short term capital gains (generally, the excess of our net short term capital gain over our long term capital loss for such taxable year) qualified for a generally applicable exemption from U.S. withholding tax for
non-U.S. stockholders. As a result, a non-U.S. stockholder could receive dividends paid out of qualified net interest income or qualified short term capital gains free of U.S. withholding tax if (as normally would be the
case) the stockholder would not have been subject to U.S. withholding tax if it had received the underlying interest income or short-term capital gains directly. While the exemptions expired at the end of 2013, a one year extension of the exemptions
(applicable to dividends distributed in taxable years commencing before December 31, 2014) was enacted in December 2014. There can be no assurance that Congress will extend the exemption for taxable years beginning after December 31, 2014,
or that any such extension will apply to dividends that we distribute before the date of such extension. Due to uncertainty with respect to any extension (or retroactive application to distributions before the date of any extension), our paying
agent will withhold on distributions after December 31, 2014 that would otherwise qualify as dividends paid out of qualified net interest income or qualified short term capital gains at the applicable withholding tax
rate. A failure to extend the exemption for interest-related dividends would not affect the treatment of non-U.S. stockholders that qualify for an exemption from U.S. withholding tax on dividends by reason of their special status (for example,
foreign government-related entities and certain pension funds resident in favorable treaty jurisdictions).

Item 1B.
Unresolved Staff Comments

None.



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Item 2. Properties

We maintain our principal executive office at 520 Madison Avenue, 38th Floor, New York, NY
10022. We do not own any real estate.

Item 3. Legal Proceedings

The Company may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our
rights under contracts with our portfolio companies. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 9 to the consolidated
financial statements in Part II, Item 8 of this Form 10-K.

Item 4. Mine Safety Disclosures

Not applicable.



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PART II

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (dollar
amounts in thousands, except per share data)

Market Information

Until the completion of a Qualified IPO, our outstanding common stock will be offered and sold in transactions exempt from registration under
the Securities Act under Section 4(2) and Regulation D, as well as under Regulation S under the Securities Act. There is no established public trading market for our common stock currently, nor can we give any assurance that one will
develop.

Holders

As of
March 27, 2015, there were approximately 1,511 holders of record of our common stock.

Distribution Policy

To the extent that we have taxable income available, we intend to distribute quarterly dividends to our stockholders. The amount of our
dividends, if any, will be determined by our Board of Directors. Any dividends to our stockholders will be declared out of assets legally available for distribution. We anticipate that our distributions will generally be paid from post-offering
taxable earnings, including interest and capital gains generated by our investment portfolio, and any other income, including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring,
diligence and consulting fees or other fees, that we receive from portfolio companies. However, if we do not generate sufficient taxable earnings during a year, all or part of a distribution may constitute a return of capital. The specific tax
characteristics of our dividends and other distributions will be reported to stockholders after the end of each calendar year.

We have
elected to be treated, and intend to continue to qualify annually, as a RIC. To maintain our qualification as a RIC, we must, among other things, distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of
realized net long-term capital losses, if any, to our stockholders on an annual basis. In order to avoid certain excise taxes imposed on RICs, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of
our ordinary income for the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any ordinary income and capital gain net
income (both long-term and short-term) for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. In addition, although we currently intend to distribute realized net capital gains (i.e., net
long term capital gains in excess of short term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such amounts at regular corporate tax rates, and
elect to treat such gains as deemed distributions to stockholders. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be
prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.

We intend to make distributions in cash unless a stockholder elects to receive dividends and/or long-term capital gains distributions in
additional shares of common stock. See Dividend Reinvestment Planbelow. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we
will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.



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The following table summarizes the Companys dividends declared and payable through the
quarter ended March 31, 2015:



|                   |  |                    |  |                   |  |                 |      |  |             |   |       |                             |  |  |      |  
|------------------ |  | ------------------ |  | ----------------- |  | --------------- | ---- |  | ----------- | - | ----- | --------------------------- |  |  | ---- | -
|Date Declared      |  | Record
Date        |  | Payment
Date      |  | Per ShareAmount |      |  | TotalAmount |   |       | AnnualizedDividend Yield(1) | 
|March 13, 2014     |  | March 31, 2014     |  | April 14, 2014    |  | $               | 0.19 |  |             | $ | 2,449 |                             |  |  | 4.76 | %
|June 26, 2014      |  | June 30, 2014      |  | July 14, 2014     |  | $               | 0.27 |  |             | $ | 3,481 |                             |  |  | 5.52 | %
|September 12, 2014 |  | September 18, 2014 |  | October 9, 2014   |  | $               | 0.44 |  |             | $ | 5,956 |                             |  |  | 9.23 | %
|December 19, 2014  |  | December 29, 2014  |  | January 26, 2015  |  | $               | 0.35 |  |             | $ | 6,276 |                             |  |  | 8.17 | %
|March 11, 2015     |  | March 13, 2015     |  | April 17, 2015(2) |  | $               | 0.37 |  |             | $ | 7,833 |                             |  |  | 8.58 | %



|(1) | Annualized dividend yield is calculated by dividing declared dividend by the weighted average of the net asset value for the quarter and annualizing over 4 quarterly periods.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Payable on or about April 17, 2015.
|--- | -----------------------------------

During the year ended December 31, 2013, no
dividends or distributions had been declared or paid by the Company.

Dividend Reinvestment Plan

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for
those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS Finance declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend
reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly
issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan
so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset
value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.

Recent Sales of Unregistered Securities and Use of Proceeds

Except as previously reported by the Company on its current reports on Form 8-K, we did not sell any securities during the period covered by
this Form 10-K that were not registered under the Securities Act.

Item 6. Selected Financial Data

The tables below set forth our selected consolidated historical financial data for the periods indicated. The selected consolidated historical
financial data as of and for the years ended December 31, 2014 and 2013 have been derived from our audited consolidated financial statements, which are included in Financial Statements and Supplementary Data in Part II,
Item 8 of this Form 10-K.



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The selected consolidated financial information and other data presented below should be read in
conjunction with the information contained in Part II, Item 7 of this Form 10-K Managements Discussion and Analysis of Financial Condition and Results of Operations, the audited consolidated financial statements and the
notes thereto included in Part II, Item 8 of this Form 10-K, Financial Statements and Supplementary Data.



|                                                                                                  |  |                                 |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                  |  | For the years endedDecember 31, |       
|                                                                                                  |  | 2014                            |        |   | 2013 |  
|(dollar amounts in thousands, except per share data)                                              |  |                                 |        |   |      |   |        |  
|Consolidated Statements of Operations Data                                                        |  |                                 |        |   |      |   |        |  
|Income                                                                                            |  |                                 |        |   |      |   |        |  
|Total investment income                                                                           |  | $                               | 32,984 |   |      | $ | 4,969  |  
|Expenses                                                                                          |  |                                 |        |   |      |   |        |  
|Net expenses                                                                                      |  |                                 | 18,724 |   |      |   | 6,638  |  
|Net investment income (loss)                                                                      |  |                                 | 14,260 |   |      |   | (1,669 | )
|Net realized gain (loss) on investmentsnon-controlled/non-affiliated                             |  |                                 | 72     |   |      |   | 63     |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                 | (8,718 | ) |      |   | (321   | )
|Net increase (decrease) in net asset resulting from operations                                    |  |                                 | 5,614  |   |      |   | (1,927 | )
|Basic and diluted earnings per common share                                                       |  |                                 | 0.43   |   |      |   | (0.64  | )
|Dividends declared per common share (1)                                                           |  | $                               | 1.25   |   |      | $ |       |  



|(1) | Cumulative per share dividends declared by the Companys Board of Directors for the year ended December 31, 2014. The Companys Board of Directors did not declare a dividend during the year ended
December 31, 2013.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                     |  |              |         |   |      |   |         |   
|------------------------------------------------------------------------------------ |  | ------------ | ------- | - | ---- | - | ------- | --
|                                                                                     |  | December 31, |        
|                                                                                     |  | 2014         |         |   | 2013 |  
|(dollar amounts in thousands, except per share data)                                 |  |              |         |   |      |  
|Consolidated Statements of Assets and Liabilities Data                               |  |              |         |   |      |   |         |   
|Investmentsnon-controlled/non-affiliated, at fair value                             |  | $            | 698,662 |   |      | $ | 212,807 |   
|Cash                                                                                 |  |              | 8,754   |   |      |   | 42,010  |   
|Total assets                                                                         |  |              | 716,720 |   |      |   | 260,967 |   
|Secured borrowings                                                                   |  |              | 308,441 |   |      |   | 66,822  |   
|Total liabilities                                                                    |  |              | 378,463 |   |      |   | 74,965  |   
|Total net assets                                                                     |  |              | 338,257 |   |      |   | 186,002 |   
|Net assets per share                                                                 |  | $            | 18.86   |   |      | $ | 19.42   |   
|                                                                                     |  |             
|Other Data:                                                                          |  |              |         |   |      |   |         |   
|Number of portfolio companies/structured finance obligations at year end             |  |              | 72      |   |      |   | 27      |   
|Average funded investments in new portfolio companies/structured finance obligations |  |              | 10,597  |   |      |   | 6,751   |   
|Total return based on net asset value (1)                                            |  |              | 3.55    | % |      |   | (2.90   | %)
|Weighted average yield of first lien and second lien debt at fair value
(2)          |  |              | 6.58    | % |      |   | 6.88    | % 
|Weighted average yield of first lien and second lien debt at amortized cost
(2)      |  |              | 6.51    | % |      |   | 6.85    | % 



|(1) | Total return based on net asset value equals the change in net asset value during the year plus the declared dividends for the years ended
December 31, 2014 and 2013, divided by the beginning net asset value for the year. This calculation is adjusted for additional shares issued related to dividends paid, thereby assuming reinvestment of dividends distributed in connection with
the dividend reinvestment plan. Total return based on change in net asset value for the year ended December 31, 2013 was calculated for the period from commencement of operations through December 31, 2013. Total return does not reflect
taxes paid on distributions or placement fees paid on capital drawdowns, if any. The Companys performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | Total return for the years ended December 31, 2014 and 2013 was inclusive of $0.09 and $0.32, respectively, per share increase in net asset value related to the offering price of
subscriptions. Excluding the effects of the higher offering price of subscriptions, total return would have been 3.09% and (4.50%), respectively (Refer to Note 7 in Part II, Item 8 of this Form 10-K for additional information).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Yields do not include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2014 and 2013. Actual yields earned over the life of each investment could
differ materially from the yields presented above.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations (dollar amounts in thousands, except per share data)

Managements Discussion and
Analysis should be read in conjunction with Part II, Item 8 of this Form 10-K Financial Statements and Supplementary Data. This discussion contains forward-looking statements and involves numerous risks and uncertainties,
including, but not limited to those described in Part I, Item 1A of this Form 10-K Risk Factors. Actual results may differ materially from those contained in any forward-looking statements.

Carlyle GMS Finance, Inc. (we, us, our, GMS Finance, or the Company) is a Maryland
corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, GMS Finance filed its election to be regulated as a business development company
(BDC) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the Investment Company Act). GMS Finance has elected to be treated, and intends to continue to comply
with the requirements to qualify annually, as a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended, (the Code).

GMS Finances investment objective is to generate current income and capital appreciation primarily through debt investments in U.S.
middle market companies, which we define as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (EBITDA). GMS Finance seeks to achieve its investment objective by
investing primarily in first lien (which may include unitranche loans and the first-out and last-out tranches thereof) and second lien senior secured loans (collectively, Middle Market Senior Loans). The Middle Market Senior Loans are
generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, GMS Finance expects that between 70% and 80% of the value of its assets will be invested in Middle
Market Senior Loans, with the balance invested in higher-yielding investments, which may include middle market junior loans such as corporate mezzanine loans, equity co-investments, broadly syndicated first lien senior secured loans and second lien
loans, high-yield bonds, structured finance obligations and/or other opportunistic investments. We expect that the composition of our portfolio will change over time given our Investment Advisers view on, among other things, the economic and
credit environment (including with respect to interest rates) in which we are operating.



50



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PORTFOLIO AND INVESTMENT ACTIVITY

The fair value of our investments was approximately $698,662 comprised of 72 portfolio companies/structured finance obligations as of
December 31, 2014. The fair value of our investments was approximately $212,807 comprised of 27 portfolio companies/structured finance obligations as of December 31, 2013.

The Companys investment activity for the years ended December 31, 2014 and 2013 is presented below (information presented herein is
at amortized cost unless otherwise indicated):



|                                                                  |  |                                 |          |   |      |   |         |  
|----------------------------------------------------------------- |  | ------------------------------- | -------- | - | ---- | - | ------- | -
|                                                                  |  | For the years endedDecember 31, |         
|                                                                  |  | 2014                            |          |   | 2013 |  
|Investmentsnon-controlled/non-affiliated:                        |  |                                 |          |   |      |   |         |  
|Total Investmentsnon-controlled/non-affiliated as of January 1   |  | $                               | 213,128  |   |      | $ |        |  
|New investments                                                   |  |                                 | 614,622  |   |      |   | 216,445 |  
|Net accretion of discount on securities                           |  |                                 | 1,108    |   |      |   | 65      |  
|Net realized gain (loss) on investments                           |  |                                 | 72       |   |      |   | 63      |  
|Investments sold or repaid                                        |  |                                 | (121,229 | ) |      |   | (3,445  | )
|                                                                  |  |                                 |          |   |      |   |         |  
|Total Investmentsnon-controlled/non-affiliated as of December 31 |  | $                               | 707,701  |   |      | $ | 213,128 |  
|                                                                  |  |                                 |          |   |      |   |         |  
|Principal amount of investments funded:                           |  |                                 |          |   |      |   |         |  
|First Lien Debt                                                   |  | $                               | 457,212  |   |      | $ | 143,396 |  
|Second Lien Debt                                                  |  |                                 | 80,790   |   |      |   | 41,000  |  
|Structured Finance Obligations                                    |  |                                 | 115,638  |   |      |   | 55,882  |  
|                                                                  |  |                                 |          |   |      |   |         |  
|Total                                                             |  | $                               | 653,640  |   |      | $ | 240,278 |  
|                                                                  |  |                                 |          |   |      |   |         |  
|Principal amount of investments sold or repaid:                   |  |                                 |          |   |      |   |         |  
|First Lien Debt                                                   |  | $                               | (77,040  | ) |      | $ | (485    | )
|Second Lien Debt                                                  |  |                                 | (9,500   | ) |      |   |        |  
|Structured Finance Obligations                                    |  |                                 | (31,363  | ) |      |   | (8,000  | )
|                                                                  |  |                                 |          |   |      |   |         |  
|Total                                                             |  | $                               | (117,903 | ) |      | $ | (8,485  | )
|                                                                  |  |                                 |          |   |      |   |         |  
|Number of new funded investments                                  |  |                                 | 58       |   |      |   | 32      |  
|Average new funded investment amount                              |  | $                               | 10,597   |   |      | $ | 6,751   |  
|Percentage of new funded debt investments at floating rates       |  |                                 | 98       | % |      |   | 100     | %
|Percentage of new funded debt investments at fixed rates          |  |                                 | 2        | % |      |   | 0       | %

As of December 31, 2014 and 2013, investmentsnon-controlled/non-affiliated consisted of the
following:



|                               |  |                   |         |  |                   |   |         |               |  |   |            |  |  |   |         | 
|------------------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | ------------- |  | - | ---------- |  |  | - | ------- | 
|                               |  | December 31, 2014 |         |  | December 31, 2013 |  
|                               |  | AmortizedCost     |         |  | Fair Value        |   |         | AmortizedCost |  |   | Fair Value | 
|First Lien Debt                |  | $                 | 517,450 |  |                   | $ | 514,787 |               |  | $ | 141,510    |  |  | $ | 141,676 | 
|Second Lien Debt               |  |                   | 111,261 |  |                   |   | 107,874 |               |  |   | 40,636     |  |  |   | 39,767  | 
|Structured Finance Obligations |  |                   | 78,990  |  |                   |   | 76,001  |               |  |   | 30,982     |  |  |   | 31,364  | 
|                               |  |                   |         |  |                   |   |         |               |  |   |            |  |  |   |         | 
|Total                          |  | $                 | 707,701 |  |                   | $ | 698,662 |               |  | $ | 213,128    |  |  | $ | 212,807 | 
|                               |  |                   |         |  |                   |   |         |               |  |   |            |  |  |   |         | 

The weighted average yields(1) for our first and
second lien debt, based on the amortized cost and fair value as of December 31, 2014 and 2013, were as follows:



|                 |  |                   |      |   |                   |  |      |               |  |  |            |   |  |  |      |  
|---------------- |  | ----------------- | ---- | - | ----------------- |  | ---- | ------------- |  |  | ---------- | - |  |  | ---- | -
|                 |  | December 31, 2014 |      |   | December 31, 2013 | 
|                 |  | AmortizedCost     |      |   | Fair Value        |  |      | AmortizedCost |  |  | Fair Value |  
|First Lien Debt  |  |                   | 6.01 | % |                   |  | 6.04 | %             |  |  | 6.24       | % |  |  | 6.23 | %
|Second Lien Debt |  |                   | 8.86 | % |                   |  | 9.14 | %             |  |  | 8.97       | % |  |  | 9.16 | %



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|(1) | Yields do not include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2014 and 2013. Actual yields earned over the life of each investment could
differ materially from the yields presented above.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

RESULTS OF OPERATIONS

For the years ended December 31, 2014 and 2013

The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors,
including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation.

Investment Income

Interest income for the years ended December 31, 2014 and 2013 was as follows:



|                                                                |  |                                 |        |  |      |   |       | 
|--------------------------------------------------------------- |  | ------------------------------- | ------ |  | ---- | - | ----- | 
|                                                                |  | For the years endedDecember 31, |       
|                                                                |  | 2014                            |        |  | 2013 |  
|Interest income from non-controlled/non-affiliated investments: |  |                                 |        |  |      |   |       | 
|First Lien Debt                                                 |  | $                               | 18,028 |  |      | $ | 2,837 | 
|Second Lien Debt                                                |  |                                 | 5,716  |  |      |   | 648   | 
|Structured Finance Obligations                                  |  |                                 | 9,233  |  |      |   | 1,474 | 
|Cash and cash equivalents                                       |  |                                 | 7      |  |      |   | 10    | 
|                                                                |  |                                 |        |  |      |   |       | 
|Total investment income                                         |  | $                               | 32,984 |  |      | $ | 4,969 | 
|                                                                |  |                                 |        |  |      |   |       | 

The increase in interest income for the year ended December 31, 2014 was driven by our deployment of
capital and increasing invested balance. As of December 31, 2014 and 2013, the size of our portfolio was $707,701 and $213,128, respectively, at amortized cost, with total principal amount of investments outstanding of $767,530 and $231,793,
respectively. As of December 31, 2014 and 2013, the weighted average yield of our first and second lien debt was 6.51% and 6.85%, respectively, on amortized cost.

Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally,
we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loans credit agreement. As of December 31, 2014 and 2013, all of our first and second lien debt investments were performing and
current on their interest payments. Interest income from structured finance obligations is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows. The effective yield is updated periodically based
on payments received and expected future payments. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount timing of principal payments which are impacted by prepayments, repurchases,
defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Companys estimates if the information was known at the time. As a
result, actual results may differ significantly from these estimates.



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Net investment income (loss) for the years ended December 31, 2014 and 2013, was as follows:



|                             |  |                                 |         |   |      |   |        |  
|---------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------ | -
|                             |  | For the years endedDecember 31, |        
|                             |  | 2014                            |         |   | 2013 |  
|Total investment income      |  | $                               | 32,984  |   |      | $ | 4,969  |  
|Net expenses                 |  |                                 | (18,724 | ) |      |   | (6,638 | )
|                             |  |                                 |         |   |      |   |        |  
|Net investment income (loss) |  | $                               | 14,260  |   |      | $ | (1,669 | )
|                             |  |                                 |         |   |      |   |        |  

Expenses



|                                 |  |                                 |        |   |      |   |       |  
|-------------------------------- |  | ------------------------------- | ------ | - | ---- | - | ----- | -
|                                 |  | For the years endedDecember 31, |       
|                                 |  | 2014                            |        |   | 2013 |  
|Base management fees             |  | $                               | 6,559  |   |      | $ | 937   |  
|Incentive fees                   |  |                                 | 3,578  |   |      |   |      |  
|Organization expenses            |  |                                 |       |   |      |   | 1,426 |  
|Professional fees                |  |                                 | 2,169  |   |      |   | 1,723 |  
|Administrative service fees      |  |                                 | 626    |   |      |   | 650   |  
|Interest expense                 |  |                                 | 3,648  |   |      |   | 353   |  
|Credit facility fees             |  |                                 | 3,052  |   |      |   | 1,164 |  
|Directors fees and expenses     |  |                                 | 395    |   |      |   | 322   |  
|Transfer agency fees             |  |                                 | 135    |   |      |   | 84    |  
|Other general and administrative |  |                                 | 748    |   |      |   | 291   |  
|Waiver of base management fees   |  |                                 | (2,186 | ) |      |   | (312  | )
|                                 |  |                                 |        |   |      |   |       |  
|Net expenses                     |  | $                               | 18,724 |   |      | $ | 6,638 |  
|                                 |  |                                 |        |   |      |   |       |  

Interest expense and credit facility fees for the years ended December 31, 2014 and 2013 were comprised
of the following:



|                                                |  |                                 |       |  |      |   |       | 
|----------------------------------------------- |  | ------------------------------- | ----- |  | ---- | - | ----- | 
|                                                |  | For the years endedDecember 31, |      
|                                                |  | 2014                            |       |  | 2013 |  
|Interest expense                                |  | $                               | 3,648 |  |      | $ | 353   | 
|Facility unused commitment fee                  |  |                                 | 1,129 |  |      |   | 602   | 
|Amortization of deferred financing costs        |  |                                 | 1,820 |  |      |   | 513   | 
|Other fees                                      |  |                                 | 103   |  |      |   | 49    | 
|                                                |  |                                 |       |  |      |   |       | 
|Total interest expense and credit facility fees |  | $                               | 6,700 |  |      | $ | 1,517 | 
|                                                |  |                                 |       |  |      |   |       | 
|Cash paid for interest expense                  |  | $                               | 2,882 |  |      | $ | 94    | 

The increase in interest expense for the year ended December 31, 2014 was driven by increased usage of
the facilities and increased deployment of capital to investments. For the year ended December 31, 2014, unused commitment fees and amortization of deferred financing costs increased related to fees associated with a second credit facility, the
Facility, which closed on March 21, 2014. Additionally, for the year ended December 31, 2014, $827 of the amortization of deferred financing costs represents the prorated financing costs that were immediately expensed in lieu of continuing
to amortize over the term of the Revolving Credit Facility related to the amendment that reduced commitments in the Revolving Credit Facility. For the year ended December 31, 2014, the average interest rate was 2.18% and average principal debt
outstanding was $164,980. For the period from August 8, 2013 (initial date the Company borrowed under the Revolving Credit Facility) through December 31, 2013, the average interest rate was 1.98% and average principal debt outstanding was
$44,063.



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Increased base management fees (and related waiver of base management fees) and incentive fees
related to pre-incentive fee net investment income for the year ended December 31, 2014 were driven by our deployment of capital and increasing invested balance. For the year ended December 31, 2014, base management fees were $4,373 (net
of waiver of $2,186), incentive fees related to pre-incentive fee net investment income were $3,578 and there were no incentive fees related to realized capital gains. For the year ended December 31, 2014, we recorded no accrued capital gains
incentive fees based upon our cumulative net realized and unrealized appreciation/(depreciation) as of December 31, 2014. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States
(US GAAP) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If
such cumulative amount is negative, then there is no accrual. See Note 4 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for more information on the incentive and base management fees.

Organization expenses include expenses incurred in the initial formation of the Company. Professional fees include legal, rating agencies,
audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred
by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include
insurance, filing, research, subscriptions and other costs. Professional fees and other general and administrative expenses increased for the year ended December 31, 2014 driven by the increased deployment of capital.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments

During the years ended December 31, 2014 and 2013, the Company had a change in unrealized appreciation on 25 and 16 investments,
respectively, totaling approximately $2,931 and $1,509, respectively, which was offset by a change in unrealized depreciation on 65 and 13 investments, respectively, totaling approximately $11,649 and $1,830, respectively.



|                                                                                                  |  |                                 |        |   |      |   |      |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ---- | - | ---- | -
|                                                                                                  |  | For the years endedDecember 31, |       
|                                                                                                  |  | 2014                            |        |   | 2013 |  
|Net realized gain (loss) on investmentsnon-controlled/non-affiliated                             |  | $                               | 72     |   |      | $ | 63   |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                 | (8,718 | ) |      |   | (321 | )
|                                                                                                  |  |                                 |        |   |      |   |      |  
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments  |  | $                               | (8,646 | ) |      | $ | (258 | )
|                                                                                                  |  |                                 |        |   |      |   |      |  

Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the years ended
December 31, 2014 and 2013 was as follows:



|                               |  |                                  |     |   |                                                   |   |        |                         |  |   |                                                   |  |  |   |      |  
|------------------------------ |  | -------------------------------- | --- | - | ------------------------------------------------- | - | ------ | ----------------------- |  | - | ------------------------------------------------- |  |  | - | ---- | -
|                               |  | For the years ended December 31, |    
|                               |  | 2014                             |     |   | 2013                                              |  
|Type                           |  | Net realizedgain (loss)          |     |   | Net change inunrealizedappreciation(depreciation) |   |        | Net realizedgain (loss) |  |   | Net change inunrealizedappreciation(depreciation) | 
|First Lien Debt                |  | $                                |    |   |                                                   | $ | (2,829 | )                       |  | $ | 3                                                 |  |  | $ | 166  |  
|Second Lien Debt               |  |                                  | 120 |   |                                                   |   | (2,518 | )                       |  |   |                                                  |  |  |   | (869 | )
|Structured Finance Obligations |  |                                  | (48 | ) |                                                   |   | (3,371 | )                       |  |   | 60                                                |  |  |   | 382  |  
|                               |  |                                  |     |   |                                                   |   |        |                         |  |   |                                                   |  |  |   |      |  
|Total                          |  | $                                | 72  |   |                                                   | $ | (8,718 | )                       |  | $ | 63                                                |  |  | $ | (321 | )
|                               |  |                                  |     |   |                                                   |   |        |                         |  |   |                                                   |  |  |   |      |  



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Net change in unrealized depreciation for the year ended December 31, 2014, in our
investments, was primarily due to a widening spread environment during the last six months of the year.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL
RESOURCES

The Company generates cash from the net proceeds of offerings of our common stock and through cash flows from operations,
including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Borrower Subs Revolving Credit Facility (as defined below)
and/or the Companys Facility (as defined below). The Borrower Sub closed on May 24, 2013 on a senior secured revolving credit facility (as amended, the Revolving Credit Facility), which was subsequently amended on
June 30, 2014 (the First Amendment). The Revolving Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000, the borrowing base as calculated pursuant to
the terms of the Revolving Credit Facility, and the amount of net cash proceeds and unpledged capital commitments the Company has received with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit
commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the Revolving Credit Facility, including adequate collateral to
support such borrowings. The Revolving Credit Facility imposes financial and operating covenants on us and Borrower Sub that restrict our and its business activities. Continued compliance with these covenants will depend on many factors, some of
which are beyond our control. The Company closed on March 21, 2014 on a senior secured revolving credit facility (as amended, the Facility), which was subsequently amended on January 8, 2015 (the First Facility Amendment
Effective Date). The maximum principal amount of the Facility is $150,000, subject to availability under the Facility, which is based on certain advance rates multiplied by the value of the Companys portfolio investments (subject to
certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Facility. Proceeds of the Facility may be used for general corporate purposes, including the funding of portfolio
investments. Maximum capacity under the Facility may be increased to $225,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing.
The Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. Subject to certain exceptions, the Facility is secured by a perfected first-priority security interest in substantially all of the portfolio
investments held by each of the Company and certain domestic subsidiaries of the Company (such subsidiaries collectively, the Guarantors) and the Companys unfunded investor equity capital commitments (provided that the amount of
unfunded capital commitments ultimately available to the lenders is limited to $100,000). The Company is required to cause the Guarantors to guaranty the Facility. The pledge of unfunded investor equity capital commitments shall be released once
$100,000 of incremental capital has been called and received by the Company subsequent to the First Facility Amendment Effective Date. The Facility includes customary covenants, including certain financial covenants related to asset coverage,
shareholders equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of
this nature.

Although we believe that we and the Borrower Sub will remain in compliance, there are no assurances that we or the Borrower
Sub will continue to comply with the covenants in the Facility and Revolving Credit Facility, as applicable. Failure to comply with these covenants could result in a default under the Facility and/or Revolving Credit Facility that, if we or the
Borrower Sub were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Facility and/or Revolving Credit Facility, and thereby have a material adverse impact on our business,
financial condition and results of operations.



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For more information on the Revolving Credit Facility and Facility, see Note 5 to the
consolidated financial statements in Part II, Item 8 of this Form 10-K.

The primary use of existing funds and any funds raised in
the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes.

As of December 31, 2014 and 2013, the Company had $8,754 and $42,010, respectively, in cash. The facilities of the Company and the
Borrower Sub consisted of the following as of December 31, 2014 and 2013:



|                          |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|------------------------- |  | ----------------- | ------- |  | --------------------- | - | ------- | ----------------- |  | - | ------------------- |  |  | - | ------ | 
|                          |  | December 31, 2014 |        
|                          |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | UnusedPortion (1) |  |   | AmountAvailable (2) | 
|Revolving Credit Facility |  | $                 | 400,000 |  |                       | $ | 246,441 |                   |  | $ | 153,559             |  |  | $ | 10,557 | 
|Facility                  |  |                   | 150,000 |  |                       |   | 62,000  |                   |  |   | 88,000              |  |  |   | 58,623 | 
|                          |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 550,000 |  |                       | $ | 308,441 |                   |  | $ | 241,559             |  |  | $ | 69,180 | 
|                          |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|                          | 
|                          |  | December 31, 2013 |        
|                          |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | UnusedPortion (1) |  |   | AmountAvailable (2) | 
|Revolving Credit Facility |  | $                 | 500,000 |  |                       | $ | 66,822  |                   |  | $ | 433,178             |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 500,000 |  |                       | $ | 66,822  |                   |  | $ | 433,178             |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 



|(1) | The unused portion is the amount upon which commitment fees are based.
|--- | ----------------------------------------------------------------------

|(2) | Available for borrowing based on the computation of collateral to support the borrowings.
|--- | -----------------------------------------------------------------------------------------

Equity
Activity

There were $252,114 and $877,406 of commitments made to the Company during the years ended December 31, 2014 and
2013, respectively. As of December 31, 2014 and 2013, the Company had $1,129,522 and $877,408, respectively, in total capital commitments from stockholders, of which $776,750 and $689,405, respectively, was unfunded. As of December 31,
2014 and 2013, certain directors had committed $1,750 in capital commitments to the Company.

Shares issued as of December 31, 2014
and 2013 were 17,932,697 and 9,575,990, respectively.

The following table summarizes activity in the number of shares of our common stock
outstanding during the years ended December 31, 2014 and 2013:



|                                   |  |                                 |            |  |                             |  |           | 
|---------------------------------- |  | ------------------------------- | ---------- |  | --------------------------- |  | --------- | 
|                                   |  | For the years endedDecember 31, |           
|                                   |  | 2014                            |            |  | 2013                        | 
|                                   |  | Common stockshares in issue     |            |  | Common stockshares in issue | 
|Shares in issue, beginning of year |  |                                 | 9,575,990  |  |                             |  | 100       | 
|Common stock issued                |  |                                 | 8,354,987  |  |                             |  | 9,575,890 | 
|Reinvestment of Dividends          |  |                                 | 1,720      |  |                             |  |          | 
|                                   |  |                                 |            |  |                             |  |           | 
|Shares in issue, end of year       |  |                                 | 17,932,697 |  |                             |  | 9,575,990 | 
|                                   |  |                                 |            |  |                             |  |           | 



56



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Contractual Obligations

A summary of our significant contractual payment obligations was as follows as of December 31, 2014 and 2013:



|                      |  |                    |         |  |                  |   |        | 
|--------------------- |  | ------------------ | ------- |  | ---------------- | - | ------ | 
|                      |  | Secured Borrowings |        
|Payment Due by Period |  | December 31,2014   |         |  | December 31,2013 |  
|Less than 1 Year      |  | $                  |        |  |                  | $ |       | 
|1-3 Years             |  |                    |        |  |                  |   |       | 
|3-5 Years             |  |                    | 62,000  |  |                  |   |       | 
|More than 5 Years     |  |                    | 246,441 |  |                  |   | 66,822 | 
|                      |  |                    |         |  |                  |   |        | 
|Total                 |  | $                  | 308,441 |  |                  | $ | 66,822 | 
|                      |  |                    |         |  |                  |   |        | 

For more information on the Revolving Credit Facility and Facility, see Note 5 to the consolidated financial
statements in Part II, Item 8 of this Form 10-K.

As of December 31, 2014 and 2013, $246,441 and $66,822, respectively, of
secured borrowings were outstanding under the Revolving Credit Facility, and $62,000 and $0, respectively, were outstanding under the Facility. For the years ended December 31, 2014 and 2013, we incurred $3,648 and $353, respectively, of
interest expense and $1,129 and $602, respectively, of unused commitment fees.

OFF BALANCE SHEET ARRANGEMENTS

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnifications or warranties. Future
events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these
consolidated financial statements as of December 31, 2014 and 2013, included in Part II, Item 8 of this Form 10-K, for any such exposure.

We may also enter into future funding commitments such as revolving credit facilities, bridge financing commitments, or delayed draw
commitments.

The Company had the following commitments to fund delayed draw senior secured loans, none of which were funded:



|                                        |  |                   |       |  |                   |   |       | 
|--------------------------------------- |  | ----------------- | ----- |  | ----------------- | - | ----- | 
|                                        |  | Par Value As of   |      
|                                        |  | December 31, 2014 |       |  | December 31, 2013 |  
|Total unfunded delayed draw commitments |  | $                 | 9,500 |  |                   | $ | 3,000 | 
|                                        |  |                   |       |  |                   |   |       | 

DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for
those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS Finance declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend
reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly
issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan
so long as the market value per share is equal to or greater than the net asset value per share



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as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on
the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.

The following table summarizes the Companys dividends declared and payable through the quarter ended March 31, 2015:



|                   |  |                    |  |                   |  |                 |      |  |             |   |       |                             |  |  |      |  
|------------------ |  | ------------------ |  | ----------------- |  | --------------- | ---- |  | ----------- | - | ----- | --------------------------- |  |  | ---- | -
|Date Declared      |  | RecordDate         |  | PaymentDate       |  | Per ShareAmount |      |  | TotalAmount |   |       | AnnualizedDividend Yield(1) | 
|March 13, 2014     |  | March 31, 2014     |  | April 14, 2014    |  | $               | 0.19 |  |             | $ | 2,449 |                             |  |  | 4.76 | %
|June 26, 2014      |  | June 30, 2014      |  | July 14, 2014     |  | $               | 0.27 |  |             | $ | 3,481 |                             |  |  | 5.52 | %
|September 12, 2014 |  | September 18, 2014 |  | October 9, 2014   |  | $               | 0.44 |  |             | $ | 5,956 |                             |  |  | 9.23 | %
|December 19, 2014  |  | December 29, 2014  |  | January 26, 2015  |  | $               | 0.35 |  |             | $ | 6,276 |                             |  |  | 8.17 | %
|March 11, 2015     |  | March 13, 2015     |  | April 17, 2015(2) |  | $               | 0.37 |  |             | $ | 7,833 |                             |  |  | 8.58 | %



|(1) | Annualized dividend yield is calculated by dividing declared dividend by the weighted average of the net asset value for the quarter and annualizing over 4 quarterly periods.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Payable on or about April 17, 2015.
|--- | -----------------------------------

During the year ended December 31, 2013, no
dividends or distributions had been declared or paid by the Company.

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those
relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in connection with our Risk Factors in Part I, Item 1A of this Form 10-K.

Fair Value Measurements

The
Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement(ASC 820). ASC 820 defines fair value as the amount that would be exchanged to sell
an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded
securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid
securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e. consensus pricing). When doing so, the Company determines whether the quote obtained is sufficient according to
US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation
or methodology that, in the judgment of the Investment Adviser or the Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient
data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent



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transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment
is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated
credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee
comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans portfolio each quarter (such that each non-traded
investment is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of managements preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors
(the Audit Committee) reviews the assessments of the Investment Adviser and the third-party valuation firm, and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the
portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where
applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered,
including, but not limited to the assessment of the following factors, as relevant:



| |  |  | the nature and realizable value of any collateral;
| | - |  | --------------------------------------------------



| |  |  | call features, put features and other relevant terms of debt;
| | - |  | -------------------------------------------------------------



| |  |  | the portfolio companys leverage and ability to make payments;
| | - |  | --------------------------------------------------------------



| |  |  | the portfolio companys public or private credit rating;
| | - |  | --------------------------------------------------------



| |  |  | the portfolio companys actual and expected earnings and discounted cash flow;
| | - |  | ------------------------------------------------------------------------------



| |  |  | prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the markets in which the portfolio company does business and recent economic and/or market events; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | comparisons to comparable transactions and publicly traded securities.
| | - |  | ----------------------------------------------------------------------

Investment performance
data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value
of the Companys investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the
investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment
and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial
statements as of December 31, 2014 and 2013.

US GAAP establishes a hierarchical disclosure framework which ranks the level of
observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the
marketplace, including the existence and transparency of transactions between market participants. Investments



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with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree
of judgment applied in determining fair value.

Investments measured and reported at fair value are classified and disclosed based on the
observability of inputs used in determination of fair values, as follows:



| |  |  | Level Iinputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments included in Level I include
unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact
the quoted price.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIinputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this
category includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable
inputs.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIIinputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or
estimation. Financial instruments that are included in this category include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such
cases, an investments level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Advisers assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Transfers between levels,
if any, are recognized at the beginning of the quarter in which the transfers occur.

The Company generally uses the following framework
when determining the fair value of investments that are categorized as Level III:

Investments in debt securities are initially evaluated
to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market
value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used
to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach
typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient
coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash
flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant securitys contractual interest, fees and principal payments plus the assumption of full principal recovery at the
investments expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies.



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Investments in structured finance obligations are generally valued using a discounted cash flow
and/or consensus pricing.

The significant unobservable inputs used in the fair value measurement of the Companys investments in
first and second lien debt securities are discount rates and indicative quotes. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes in isolation may result
in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the
Companys investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would
result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a
significantly lower fair value measurement.

The fair value of the secured borrowings approximates its carrying value and is categorized
as Level III within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Companys secured borrowings are discount rates.
Significant increases in discount rates would result in a significantly lower fair value measurement.

The fair value of other financial
assets and liabilities approximates their carrying value based on the short term nature of these items.

See Note 3 to the consolidated
financial statements in Part II, Item 8 of this Form 10-K for further information on fair value measurements.

Use of Estimates

The preparation of consolidated financial statements included in Part II, Item 8 of this Form 10-K in conformity with US GAAP
requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statements and the reported amounts of revenues and expenses
during the reporting period. Managements estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to
exercise judgment in the process of applying the Companys accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of
judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements included in Part II, Item 8 of this Form 10-K. Actual results could differ from these estimates and such differences could
be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from
the repayment or sale and the amortized cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized
appreciation or depreciation on investments as presented in the Consolidated Statements of Operations included in Part II, Item 8 of this Form 10-K reflects the net change in the fair value of investments, including the reversal of
previously recorded unrealized appreciation or depreciation when gains or losses are realized.



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Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and
premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of investments represents the original cost, including
origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit
using the specific identification method.

The Company may have loans in its portfolio that contain payment-in-kind (PIK)
provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity.

Interest income from investments in the equity class of collateralized loan obligation (CLO) funds, which we refer to
as structured finance obligations, is recorded based upon an estimation of an effective yeild to expected maturity utilizing assumed cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financials Assets.
We monitor the expected cash inflows from our CLO equity investments, including the expected residual payments and the effective yield is determined and updated periodically. In estimating these cash flows, there are a numberof
assumptionsthatare subjecttouncertainties,includingthe amountandtimingofprincipalpaymentswhich areimpacted by prepayments, repurchases, defaults,
delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Companys estimates if the information was known at the time. As a result,
actual results may differ significantly from these estimates. Interest income from investments in the notes of CLO funds, which are also referred to as structured finance obligations, is recorded based upon the interest rate.

Other Income

Other income may include
income such as consent, waiver and amendment fees associated with the Companys investment activities as well as any fees for managerial assistance services rendered by the Company to portfolio companies. Such fees are recognized as income when
earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees will be amortized into other income over the life of the guarantee. The unamortized amount, if any, is included
in other assets in the Consolidated Statements of Assets and Liabilities included in Part II, Item 8 of this Form 10-K.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is
reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or
applied to principal depending upon managements judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in managements judgment, are likely to remain
current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Income
Taxes

For federal income tax purposes, GMS Finance has elected to be treated as a RIC under the Code, and intends to make the required
distributions to its stockholders as specified therein. In order to qualify as a RIC, GMS Finance must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then GMS Finance is
generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.



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The minimum distribution requirements applicable to RICs require GMS Finance 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, GMS Finance may choose to carry forward ICTI in excess of current year
distributions into the next tax year. 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.

In addition, based on the excise distribution requirements, GMS Finance is subject to a 4% nondeductible federal excise tax on undistributed
income unless GMS Finance distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year
period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by GMS Finance that is subject to
corporate income tax is considered to have been distributed. GMS Finance intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to
determine whether the tax positions are more-likely than not to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.

The Borrower Sub is a disregarded entity for tax purposes and is consolidated with the tax return of GMS Finance.

Capital Calls and Dividends and Distributions to Common Stockholders

The Company records the shares issued in connection with capital calls as of the effective date, or due date, of the capital call, which is the
date shares are issued. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date.
The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least
annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment
plan that provides for reinvestment of any distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS Finance declares a cash
dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather
than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a
Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date
for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in
the open market, unless the Company instructs the plan administrator otherwise.

RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On
April 3, 2013, the Companys Board of Directors, including a majority of the directors who are not interested persons as defined in Section 2(a)(19) of the Investment Company Act (Independent Directors),



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approved the Investment Advisory Agreement between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by,
Section 15(c) of the Investment Company Act. The initial term of the Investment Advisory Agreement is two years from April 3, 2013 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for successive
annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On March 11, 2015, the Companys Board of Directors,
including a majority of the Independent Directors, approved the continuance of the Advisory Agreement for a one year period. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either
party without penalty upon at least 60 days written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these
services, the Investment Adviser receives fees from the Company consisting of two componentsa base management fee and an incentive fee.

Prior to a Qualified IPO, the base management fees are calculated and payable quarterly in arrears at an annual rate of 1.50% of the average
daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired with leverage from use of the Revolving Credit Facility and Facility (see Note 5
Borrowings in Part II, Item 8 of this Form 10-K). For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment
grade debt investments that mature in 12 months or less from the date of investment. Base management fees for any partial quarter are prorated. As such, base management fees for the year ended December 31, 2013, were calculated commencing after
May 8, 2013, the date the Company first called capital from investors. The Investment Adviser contractually waived one-third (0.50%) of the base management fees prior to a Qualified IPO. The fee waiver will terminate if and when a Qualified IPO
has been consummated.

The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the
pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees
for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses
accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred
stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with pay-in-kind interest and zero
coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Prior to any Qualified IPO of the Companys common stock, pre-incentive fee net investment income, expressed as a rate of return on the
average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a hurdle rate of 1.50% per quarter (6% annualized). Hurdle Calculation Value means, on any
given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or reinvested in us pursuant to a dividend reinvestment
plan) from the beginning of the current quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day but only to the extent such
distributions were not declared and accounted for on the books and records in a previous quarter.



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GMS Finance pays its Investment Adviser an incentive fee with respect to its pre-incentive fee
net investment income in each calendar quarter as follows:



| |  |  | no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle of 1.50%;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle but is less than 1.875% in any calendar quarter (7.50%
annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle but is less than 1.875%) as the catch-up. The catch-up is meant to provide the Investment Adviser with
approximately 20% of the Companys pre-incentive fee net investment income as if a hurdle did not apply if this net investment income exceeds 1.875% in any calendar quarter; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle is
reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the
Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis
and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of
shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.

The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar
quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, Initial Drawdown) ending on or prior to the date such payment is to be made, the sum of
(a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets
(defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately following the Initial Drawdown. These calculations are
adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods. The Investment Adviser may earn an incentive fee under the Investment Advisory Agreement on the
Companys repurchase of debt issued by the Company at a gain.

Prior to a Qualified IPO and subject to the receipt of any necessary
regulatory approvals, the Companys Investment Adviser intends to make (or require individual employees or entities in which employees own an interest to make) capital commitments to purchase shares of the Companys common stock in an
amount equal to approximately 25% of each installment of the net after tax incentive fee that the Investment Adviser receives from the Company.

Our Investment Adviser has not assumed any responsibility to us other than to render the services described in the Investment Advisory
Agreement, and it is not responsible for any action of our Board in declining to follow our Investment Advisers advice or recommendations. Pursuant to the Investment Advisory Agreement, our Investment Adviser and its managers, officers,
employees, agents, controlling persons and any other person or entity affiliated with it are not liable to us for any action taken or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under the
Investment Advisory Agreement or otherwise as an investment adviser of the Company (except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally



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determined by judicial proceedings) with respect to the receipt of compensation for services). We have agreed to the fullest extent permitted by law, to provide indemnification and the right to
the advancement of expenses, to each person who was or is made a party or is threatened to be made a party to or is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he/she is or was a member, manager, officer, employee, agent, controlling person or any other person or entity affiliated with the Adviser with respect to all damages,
liabilities, costs and expenses resulting from acts of our Investment Adviser in the performance of their duties under the Investment Advisory Agreement, other than acts not in good faith with the reasonable belief that the conduct was in, or not
opposed to, the best interest of the Company, and conduct constituting gross negligence, bad faith, reckless disregard, or willful misfeasance. These protections may lead our Investment Adviser to act in a riskier manner when acting on our behalf
than it would when acting for its own account.

On April 3, 2013, the Investment Adviser entered into a personnel agreement with
Carlyle Employee Co., pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.

Administration Agreement

On
April 3, 2013, the Companys Board of Directors approved the Administration Agreement between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements
equal to an amount that reimburses the Administrator for its costs and expenses and the Companys allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the
Companys allocable portion of the compensation paid to or compensatory distributions received by the Companys officers (including the Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to the
Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Companys Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration
Agreement occurs quarterly in arrears.

The initial term of the Administration Agreement is two years from April 3, 2013 and, unless
terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote
of the outstanding voting securities of the Company and (ii) the vote of a majority of the Companys Independent Directors. On March 11, 2015, the Companys Board of Directors, including a majority of the Independent Directors,
approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60
days written notice to the other party.

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into sub-administration agreements with Carlyle Employee Co. and CELF Advisors LLP. Pursuant
to the agreements, Carlyle Employee Co. and CELF Advisors LLP provide the Administrator with access to personnel.

On April 3, 2013,
the Administrator entered into a sub-administration agreement with State Street (as amended, the Sub-Administration Agreement). As amended, the initial term of the Sub-Administration Agreement ends on April 1, 2015 and, unless
terminated earlier, the Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a
majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Companys Independent Directors. On March 11, 2015, the Companys Board of Directors, including a majority of the Independent
Directors, approved the continuance of the Sub-Administration Agreement for a one year period. The Sub-Administration Agreement may be terminated



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upon at least 60 days written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party
to the Sub-Administration Agreement.

Placement Fees

On April 3, 2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (TCG), a licensed
broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG for TCGs services.

Board of Directors

GMS
Finances Board of Directors currently consists of seven members, four of whom are Independent Directors. On April 3, 2013, the Board of Directors also established an Audit Committee made up of its Independent Directors, and may establish
additional committees in the future.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments
may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good
faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to
the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Companys investments may fluctuate from period to period. Because of the inherent uncertainty of
valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

During the
years ended December 31, 2014 and 2013, a majority of the investments held in the Companys portfolio had floating interest rates. Interest rates on the investments held within the Companys portfolio of investments are typically
based on floating LIBOR, with many of these investments also having a LIBOR floor. Additionally, the Companys credit facilities are also subject to floating interest rates and are currently paid based on floating LIBOR rates.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no
assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.

The
following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. Interest income is calculated as revenue from interest generated from the
Companys settled portfolio of investments held as of December 31, 2014 and 2013, excluding structured finance obligations. These hypothetical calculations are based on a model of the settled investments in our portfolio, excluding
structured finance obligations, held as of December 31, 2014 and 2013, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on
outstanding secured borrowings as of December 31, 2014 and 2013 and based on the terms of the Companys credit facilities. Interest expense on the Companys credit



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facilities is calculated using the interest rate as of December 31, 2014 and 2013, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion
of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.

The
Company regularly measures exposure to interest rate risk. The Company assesses interest rate risk and manages interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities.
Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

Based on our Consolidated Statements of Assets and Liabilities as of December 31, 2014 and 2013, the following table shows the annual
impact on net investment income of base rate changes in interest rates for our settled investments (considering interest rate floors for variable rate instruments), excluding structured finance obligations, and outstanding secured borrowings
assuming no changes in our investment and borrowing structure:



|                      |  |                         |        |   |                         |   |        |                     |  |   |                |   |  |                 |       |   |                     |   |        |   |  |   |       |  
|--------------------- |  | ----------------------- | ------ | - | ----------------------- | - | ------ | ------------------- |  | - | -------------- | - |  | --------------- | ----- | - | ------------------- | - | ------ | - |  | - | ----- | -
|                      |  | As of December 31, 2014 |        |   | As of December 31, 2013 |  
|Basis Point Change    |  | InterestIncome          |        |   | InterestExpense         |   |        | NetInvestmentIncome |  |   | InterestIncome |   |  | InterestExpense |       |   | NetInvestmentIncome |  
|Up 300 basis points   |  | $                       | 12,899 |   |                         | $ | (9,253 | )                   |  | $ | 3,646          |   |  | $               | 4,089 |   |                     | $ | (2,005 | ) |  | $ | 2,084 |  
|Up 200 basis points   |  | $                       | 7,212  |   |                         | $ | (6,169 | )                   |  | $ | 1,043          |   |  | $               | 2,250 |   |                     | $ | (1,336 | ) |  | $ | 914   |  
|Up 100 basis points   |  | $                       | 1,525  |   |                         | $ | (3,084 | )                   |  | $ | (1,559         | ) |  | $               | 413   |   |                     | $ | (668   | ) |  | $ | (255  | )
|Down 100 basis points |  | $                       | (210   | ) |                         | $ | 736    |                     |  | $ | 526            |   |  | $               | (80   | ) |                     | $ | 164    |   |  | $ | 84    |  
|Down 200 basis points |  | $                       | (420   | ) |                         | $ | 736    |                     |  | $ | 316            |   |  | $               | (160  | ) |                     | $ | 164    |   |  | $ | 4     |  
|Down 300 basis points |  | $                       | (630   | ) |                         | $ | 736    |                     |  | $ | 106            |   |  | $               | (240  | ) |                     | $ | 164    |   |  | $ | (76   | )



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Item 8. Financial Statements and Supplementary Data

CARLYLE GMS FINANCE, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                |  |  |    | 
|----------------------------------------------------------------------------------------------- |  |  | -- | 
|Report of Independent Registered Public Accounting Firm                                         |  |  | 70 | 
|                                                                                                | 
|Consolidated Statements of Assets and Liabilities as of December 31, 2014 and 2013              |  |  | 71 | 
|                                                                                                | 
|Consolidated Statements of Operations for the Years Ended December 31, 2014 and 2013            |  |  | 72 | 
|                                                                                                | 
|Consolidated Statements of Changes in Net Assets for the Years Ended December 31, 2014 and
2013 |  |  | 73 | 
|                                                                                                | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013            |  |  | 74 | 
|                                                                                                | 
|Consolidated Schedules of Investments as of December 31, 2014 and 2013                          |  |  | 75 | 
|                                                                                                | 
|Notes to Consolidated Financial Statements                                                      |  |  | 84 | 



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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of

Carlyle GMS Finance,
Inc.

We have audited the accompanying consolidated statements of assets and liabilities of Carlyle GMS Finance, Inc. (the
Company), including the consolidated schedules of investments, as of December 31, 2014 and 2013, and the related consolidated statements of operations, cash flows and changes in net assets for the years ended December 31, 2014
and 2013. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Companys internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the
custodian and debt agents. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the consolidated financial position of Carlyle GMS Finance, Inc. at December 31, 2014 and 2013, and the consolidated results of its operations, its cash flows, and the
changes in its net assets for the years ended December 31, 2014 and 2013, in conformity with U.S. generally accepted accounting principles.

/s/
Ernst & Young LLP

New York, NY

March 27, 2015



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except per share data)



|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                           |  | December 31,2014 |         |   | December 31,2013 |  
|ASSETS                                                                                                                                     |  |                  |         |   |                  |   |         |  
|Investmentsnon-controlled/non-affiliated, at fair value (amortized cost of $707,701 and $213,128, respectively)                           |  | $                | 698,662 |   |                  | $ | 212,807 |  
|Cash                                                                                                                                       |  |                  | 8,754   |   |                  |   | 42,010  |  
|Deferred financing costs                                                                                                                   |  |                  | 4,635   |   |                  |   | 4,426   |  
|Interest receivable                                                                                                                        |  |                  | 4,512   |   |                  |   | 1,684   |  
|Prepaid expenses and other assets                                                                                                          |  |                  | 157     |   |                  |   | 40      |  
|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|Total assets                                                                                                                               |  | $                | 716,720 |   |                  | $ | 260,967 |  
|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|LIABILITIES                                                                                                                                |  |                  |         |   |                  |   |         |  
|Payable for investments purchased                                                                                                          |  | $                | 55,343  |   |                  | $ | 6,153   |  
|Secured borrowings (Note 5)                                                                                                                |  |                  | 308,441 |   |                  |   | 66,822  |  
|Due to Investment Adviser                                                                                                                  |  |                  | 41      |   |                  |   | 16      |  
|Interest and credit facility fees payable (Note 5)                                                                                         |  |                  | 1,192   |   |                  |   | 549     |  
|Dividend payable (Note 7)                                                                                                                  |  |                  | 6,276   |   |                  |   |        |  
|Base management and incentive fees payable (Note 4)                                                                                        |  |                  | 6,319   |   |                  |   | 625     |  
|Administrative service fees payable (Note 4)                                                                                               |  |                  | 91      |   |                  |   | 131     |  
|Other accrued expenses and liabilities                                                                                                     |  |                  | 760     |   |                  |   | 669     |  
|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|Total liabilities                                                                                                                          |  |                  | 378,463 |   |                  |   | 74,965  |  
|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|Commitments and contingencies (Notes 6 and 10)                                                                                             |  |                  |         |   |                  |   |         |  
|NET ASSETS                                                                                                                                 |  |                  |         |   |                  |   |         |  
|Common stock, $0.01 par value; 200,000,000 shares authorized; 17,932,697 shares and 9,575,990 shares, respectively, issued and
outstanding |  |                  | 179     |   |                  |   | 96      |  
|Paid-in capital in excess of par value                                                                                                     |  |                  | 351,636 |   |                  |   | 186,965 |  
|Offering costs                                                                                                                             |  |                  | (74     | ) |                  |   | (74     | )
|Accumulated net investment income (loss), net of cumulative dividends of $18,162 and $0, respectively                                      |  |                  | (4,388  | ) |                  |   | (664    | )
|Accumulated net realized gain (loss)                                                                                                       |  |                  | (57     | ) |                  |   |        |  
|Accumulated net unrealized appreciation (depreciation)                                                                                     |  |                  | (9,039  | ) |                  |   | (321    | )
|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|Total net assets                                                                                                                           |  | $                | 338,257 |   |                  | $ | 186,002 |  
|                                                                                                                                           |  |                  |         |   |                  |   |         |  
|NET ASSETS PER SHARE                                                                                                                       |  | $                | 18.86   |   |                  | $ | 19.42   |  
|                                                                                                                                           |  |                  |         |   |                  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts
in thousands, except per share data)



|                                                                                                  |  |                                 |            |   |      |   |           |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | --------- | -
|                                                                                                  |  | For the years endedDecember 31, |           
|                                                                                                  |  | 2014                            |            |   | 2013 |  
|Investment income:                                                                                |  |                                 |            |   |      |   |           |  
|Interest income from non-controlled/non-affiliated investments                                    |  | $                               | 32,984     |   |      | $ | 4,969     |  
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Total investment income                                                                           |  |                                 | 32,984     |   |      |   | 4,969     |  
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Expenses:                                                                                         |  |                                 |            |   |      |   |           |  
|Base management fees (Note 4)                                                                     |  |                                 | 6,559      |   |      |   | 937       |  
|Incentive fees (Note 4)                                                                           |  |                                 | 3,578      |   |      |   |          |  
|Organization expenses                                                                             |  |                                 |           |   |      |   | 1,426     |  
|Professional fees                                                                                 |  |                                 | 2,169      |   |      |   | 1,723     |  
|Administrative service fees (Note 4)                                                              |  |                                 | 626        |   |      |   | 650       |  
|Interest expense (Note 5)                                                                         |  |                                 | 3,648      |   |      |   | 353       |  
|Credit facility fees (Note 5)                                                                     |  |                                 | 3,052      |   |      |   | 1,164     |  
|Directors fees and expenses                                                                      |  |                                 | 395        |   |      |   | 322       |  
|Transfer agency fees                                                                              |  |                                 | 135        |   |      |   | 84        |  
|Other general and administrative                                                                  |  |                                 | 748        |   |      |   | 291       |  
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Total expenses                                                                                    |  |                                 | 20,910     |   |      |   | 6,950     |  
|Waiver of base management fees (Note 4)                                                           |  |                                 | 2,186      |   |      |   | 312       |  
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Net expenses                                                                                      |  |                                 | 18,724     |   |      |   | 6,638     |  
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Net investment income (loss)                                                                      |  |                                 | 14,260     |   |      |   | (1,669    | )
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments: |  |                                 |            |   |      |   |           |  
|Net realized gain (loss) on investmentsnon-controlled/non-affiliated                             |  |                                 | 72         |   |      |   | 63        |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                 | (8,718     | ) |      |   | (321      | )
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments  |  |                                 | (8,646     | ) |      |   | (258      | )
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Net increase (decrease) in net assets resulting from operations                                   |  | $                               | 5,614      |   |      | $ | (1,927    | )
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Basic and diluted earnings per common share (Note 7)                                              |  | $                               | 0.43       |   |      | $ | (0.64     | )
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Weighted-average shares of common stock outstandingBasic and Diluted (Note 7)                    |  |                                 | 13,091,544 |   |      |   | 3,016,298 |  
|                                                                                                  |  |                                 |            |   |      |   |           |  
|Dividends declared per common share (Note 7)                                                      |  | $                               | 1.25       |   |      |   |          |  
|                                                                                                  |  |                                 |            |   |      |   |           |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands)



|                                                                                                  |  |                                 |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                                  |  | For the years endedDecember 31, |        
|                                                                                                  |  | 2014                            |         |   | 2013 |  
|Increase (decrease) in net assets resulting from operations:                                      |  |                                 |         |   |      |   |         |  
|Net investment income (loss)                                                                      |  | $                               | 14,260  |   |      | $ | (1,669  | )
|Net realized gain (loss) on investmentsnon-controlled/non-affiliated                             |  |                                 | 72      |   |      |   | 63      |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                 | (8,718  | ) |      |   | (321    | )
|                                                                                                  |  |                                 |         |   |      |   |         |  
|Net increase (decrease) in net assets resulting from operations                                   |  |                                 | 5,614   |   |      |   | (1,927  | )
|                                                                                                  |  |                                 |         |   |      |   |         |  
|Capital transactions:                                                                             |  |                                 |         |   |      |   |         |  
|Common stock issued                                                                               |  |                                 | 164,769 |   |      |   | 188,001 |  
|Reinvestment of dividends                                                                         |  |                                 | 34      |   |      |   |        |  
|Dividends declared (Note 10)                                                                      |  |                                 | (18,162 | ) |      |   |        |  
|Less: offering costs                                                                              |  |                                 |        |   |      |   | (74     | )
|                                                                                                  |  |                                 |         |   |      |   |         |  
|Total capital share transactions                                                                  |  |                                 | 146,641 |   |      |   | 187,927 |  
|                                                                                                  |  |                                 |         |   |      |   |         |  
|Net increase (decrease) in net assets                                                             |  |                                 | 152,255 |   |      |   | 186,000 |  
|                                                                                                  |  |                                 |         |   |      |   |         |  
|Net assets at beginning of year                                                                   |  |                                 | 186,002 |   |      |   | 2       |  
|                                                                                                  |  |                                 |         |   |      |   |         |  
|Net assets at end of year                                                                         |  | $                               | 338,257 |   |      | $ | 186,002 |  
|                                                                                                  |  |                                 |         |   |      |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)



|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | -------- | - | ---- | - | -------- | -
|                                                                                                                                                 |  | For the years endedDecember 31, |         
|                                                                                                                                                 |  | 2014                            |          |   | 2013 |  
|Cash flows from operating activities:                                                                                                            |  |                                 |          |   |      |   |          |  
|Net increase (decrease) in net assets resulting from operations                                                                                  |  | $                               | 5,614    |   |      | $ | (1,927   | )
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating
activities: |  |                                 |          |  
|Amortization of deferred financing costs                                                                                                         |  |                                 | 1,820    |   |      |   | 513      |  
|Net accretion of discount on securities                                                                                                          |  |                                 | (1,108   | ) |      |   | (65      | )
|Net realized (gain) loss on investmentsnon-controlled/non-affiliated                                                                            |  |                                 | (72      | ) |      |   | (63      | )
|Net change in unrealized (appreciation) depreciation on investmentsnon-controlled/non-affiliated                                                |  |                                 | 8,718    |   |      |   | 321      |  
|Cost of investments purchased                                                                                                                    |  |                                 | (565,432 | ) |      |   | (210,292 | )
|Proceeds from sales and repayments of investments                                                                                                |  |                                 | 121,229  |   |      |   | 3,445    |  
|Changes in operating assets:                                                                                                                     |  |                                 |          |  
|Interest receivable                                                                                                                              |  |                                 | (2,828   | ) |      |   | (1,684   | )
|Prepaid expenses and other assets                                                                                                                |  |                                 | (117     | ) |      |   | (40      | )
|Changes in operating liabilities:                                                                                                                |  |                                 |          |  
|Due to Investment Adviser                                                                                                                        |  |                                 | 25       |   |      |   | 16       |  
|Interest and credit facility fees payable                                                                                                        |  |                                 | 643      |   |      |   | 549      |  
|Base management and incentive fees payable                                                                                                       |  |                                 | 5,694    |   |      |   | 625      |  
|Administrative service fees payable                                                                                                              |  |                                 | (40      | ) |      |   | 131      |  
|Other accrued expenses and liabilities                                                                                                           |  |                                 | 91       |   |      |   | 669      |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|Net cash provided by (used in) operating activities                                                                                              |  |                                 | (425,763 | ) |      |   | (207,802 | )
|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|Cash flows from financing activities:                                                                                                            |  |                                 |          |  
|Proceeds from issuance of common stock                                                                                                           |  |                                 | 164,769  |   |      |   | 188,001  |  
|Borrowings on revolving credit facility                                                                                                          |  |                                 | 420,023  |   |      |   | 66,822   |  
|Repayments of revolving credit facility                                                                                                          |  |                                 | (178,404 | ) |      |   |         |  
|Debt issuance costs                                                                                                                              |  |                                 | (2,029   | ) |      |   | (4,939   | )
|Dividends paid in cash                                                                                                                           |  |                                 | (11,852  | ) |      |   |         |  
|Offering costs from issuance of common stock                                                                                                     |  |                                 |         |   |      |   | (74      | )
|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|Net cash provided by (used in) financing activities                                                                                              |  |                                 | 392,507  |   |      |   | 249,810  |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|Net increase (decrease) in cash                                                                                                                  |  |                                 | (33,256  | ) |      |   | 42,008   |  
|Cash, beginning of year                                                                                                                          |  |                                 | 42,010   |   |      |   | 2        |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|Cash, end of year                                                                                                                                |  | $                               | 8,754    |   |      | $ | 42,010   |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |  
|Supplemental disclosures:                                                                                                                        |  |                                 |          |  
|Interest paid during the year                                                                                                                    |  | $                               | 2,882    |   |      | $ | 94       |  
|Dividends declared during the year                                                                                                               |  | $                               | 18,162   |   |      |   |         |  
|Reinvestment of dividends                                                                                                                        |  | $                               | 34       |   |      |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2014

(dollar amounts in
thousands)



|                                                                        |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |        |                         |  |   |        |  |  |  |      |  
|----------------------------------------------------------------------- |  | ---------------------------------------- |  | ------------ | ---- | - | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ------ |  | ------------- | - | ------ | ----------------------- |  | - | ------ |  |  |  | ---- | -
|Investmentsnon-controlled/non-affiliated
(1)                           |  | Industry                                 |  | InterestRate |      |   | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (6) |        |  | FairValue (7) |   |        | Percentage ofNet Assets | 
|First Lien Debt (73.68%)                                                |  |                                          |  |              |      |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |        |                         |  |   |        |  |  |  |      |  
|Access CIG, LLC (2)(3)(5)                                               |  | Business Services                        |  |              | 6.00 | % |              |  | 10/17/2021 |                 |  |  | 10/16/2014 |  |  | $                 | 15,000 |  |               | $ | 14,855 |                         |  | $ | 14,865 |  |  |  | 4.40 | %
|Accuvant Finance, LLC (2)(3)(5)                                         |  | High Tech Industries                     |  |              | 7.00 |   |              |  | 10/22/2020 |                 |  |  | 4/22/2014  |  |  |                   | 8,988  |  |               |   | 8,917  |                         |  |   | 8,988  |  |  |  | 2.66 |  
|ACP Tower Merger Sub, Inc. (Telular Corporation) (2)(3)(4)              |  | Telecommunications                       |  |              | 5.50 |   |              |  | 6/24/2019  |                 |  |  | 6/24/2013  |  |  |                   | 5,781  |  |               |   | 5,764  |                         |  |   | 5,689  |  |  |  | 1.68 |  
|AF Borrower LLC (Accuvant) (2)(3)(5)                                    |  | High Tech Industries                     |  |              | 6.25 |   |              |  | 1/28/2022  |                 |  |  | 12/15/2014 |  |  |                   | 12,000 |  |               |   | 11,762 |                         |  |   | 11,842 |  |  |  | 3.50 |  
|Alpha Packaging Holdings, Inc. (2)(3)(4)                                |  | Containers, Packaging & Glass            |  |              | 5.25 |   |              |  | 5/12/2020  |                 |  |  | 5/12/2014  |  |  |                   | 11,567 |  |               |   | 11,554 |                         |  |   | 11,301 |  |  |  | 3.34 |  
|American Tire Distributors, Inc. (2)(3)(5)                              |  | Automotive                               |  |              | 5.75 |   |              |  | 6/1/2018   |                 |  |  | 6/12/2014  |  |  |                   | 3,192  |  |               |   | 3,193  |                         |  |   | 3,116  |  |  |  | 0.92 |  
|Anaren, Inc. (2)(3)(4)                                                  |  | Telecommunications                       |  |              | 5.50 |   |              |  | 2/18/2021  |                 |  |  | 2/18/2014  |  |  |                   | 11,497 |  |               |   | 11,396 |                         |  |   | 11,363 |  |  |  | 3.36 |  
|APX Group, Inc. (5)(8)                                                  |  | Consumer Services                        |  |              | 6.38 |   |              |  | 12/1/2019  |                 |  |  | 10/15/2014 |  |  |                   | 10,000 |  |               |   | 9,688  |                         |  |   | 9,575  |  |  |  | 2.83 |  
|Blue Bird Body Company (2)(3)(4)                                        |  | Transportation: Consumer                 |  |              | 6.50 |   |              |  | 6/27/2020  |                 |  |  | 7/22/2014  |  |  |                   | 11,250 |  |               |   | 10,719 |                         |  |   | 10,940 |  |  |  | 3.24 |  
|Brooks Equipment Company, LLC (2)(3)(4)                                 |  | Construction & Building                  |  |              | 6.75 |   |              |  | 8/29/2020  |                 |  |  | 8/29/2014  |  |  |                   | 7,890  |  |               |   | 7,826  |                         |  |   | 7,766  |  |  |  | 2.30 |  
|Capstone Logistics Acquisition, Inc. (2)(3)(4)                          |  | Transportation: Cargo                    |  |              | 5.50 |   |              |  | 10/7/2021  |                 |  |  | 10/3/2014  |  |  |                   | 19,950 |  |               |   | 19,757 |                         |  |   | 19,477 |  |  |  | 5.76 |  
|Castle Management Borrower LLC (Highgate Hotels L.P.) (2)(3)(4)(9)      |  | Hotel, Gaming & Leisure                  |  |              | 5.50 |   |              |  | 9/18/2020  |                 |  |  | 10/10/2014 |  |  |                   | 8,778  |  |               |   | 8,693  |                         |  |   | 8,610  |  |  |  | 2.55 |  
|Central Security Group, Inc.(2)(3)(4)                                   |  | Consumer Services                        |  |              | 6.25 |   |              |  | 10/6/2020  |                 |  |  | 10/3/2014  |  |  |                   | 25,000 |  |               |   | 24,638 |                         |  |   | 24,780 |  |  |  | 7.33 |  
|Consolidated Aerospace Manufacturing, LLC.(2)(3)(4)                     |  | Aerospace & Defense                      |  |              | 5.00 |   |              |  | 3/27/2020  |                 |  |  | 2/28/2014  |  |  |                   | 6,730  |  |               |   | 6,708  |                         |  |   | 6,558  |  |  |  | 1.94 |  
|CRCI Holdings Inc. (CLEAResult Consulting, Inc.) (2)(3)(4)              |  | Utilities: Electric                      |  |              | 5.25 |   |              |  | 7/10/2019  |                 |  |  | 7/29/2014  |  |  |                   | 5,985  |  |               |   | 5,962  |                         |  |   | 5,858  |  |  |  | 1.73 |  
|DTZ U.S. Borrower, LLC (2)(3)(4)                                        |  | Construction & Building                  |  |              | 5.50 |   |              |  | 11/5/2021  |                 |  |  | 10/28/2014 |  |  |                   | 10,500 |  |               |   | 10,347 |                         |  |   | 10,290 |  |  |  | 3.04 |  
|EP Minerals, LLC (2)(3)(4)                                              |  | Metals & Mining                          |  |              | 5.50 |   |              |  | 8/20/2020  |                 |  |  | 8/20/2014  |  |  |                   | 10,474 |  |               |   | 10,426 |                         |  |   | 10,298 |  |  |  | 3.04 |  
|FCX Holdings Corp. (2)(3)(4)                                            |  | Capital Equipment                        |  |              | 5.50 |   |              |  | 8/4/2020   |                 |  |  | 8/4/2014   |  |  |                   | 10,149 |  |               |   | 10,141 |                         |  |   | 9,942  |  |  |  | 2.94 |  
|Genex Holdings, Inc. (2)(3)(4)                                          |  | Banking, Finance, Insurance &Real Estate |  |              | 5.25 |   |              |  | 5/30/2021  |                 |  |  | 5/22/2014  |  |  |                   | 4,286  |  |               |   | 4,268  |                         |  |   | 4,227  |  |  |  | 1.25 |  
|Green Energy Partners/Stonewall LLC (2)(3)(5)(10)                       |  | Energy: Electricity                      |  |              | 6.50 |   |              |  | 11/13/2021 |                 |  |  | 11/12/2014 |  |  |                   | 8,300  |  |               |   | 8,136  |                         |  |   | 8,338  |  |  |  | 2.46 |  
|Hercules Achievement, Inc. (Varsity Brands Holding Co.,
Inc.) (2)(3)(5) |  | Durable Consumer Goods                   |  |              | 6.00 |   |              |  | 12/11/2021 |                 |  |  | 12/10/2014 |  |  |                   | 20,000 |  |               |   | 19,803 |                         |  |   | 19,820 |  |  |  | 5.86 |  
|Indra Holdings Corp. (Totes Isotoner) (2)(3)(5)                         |  | Non-durable Consumer Goods               |  |              | 5.25 |   |              |  | 5/1/2021   |                 |  |  | 4/29/2014  |  |  |                   | 14,925 |  |               |   | 14,790 |                         |  |   | 14,701 |  |  |  | 4.35 |  
|Landslide Holdings, Inc. (LANDesk Software) (2)(3)(4)                   |  | Software                                 |  |              | 5.00 |   |              |  | 2/25/2020  |                 |  |  | 2/25/2014  |  |  |                   | 9,875  |  |               |   | 9,878  |                         |  |   | 9,705  |  |  |  | 2.87 |  
|Meritas Schools Holdings, LLC (2)(3)(4)                                 |  | Consumer Services                        |  |              | 7.00 |   |              |  | 6/25/2019  |                 |  |  | 6/21/2013  |  |  |                   | 7,080  |  |               |   | 7,025  |                         |  |   | 7,138  |  |  |  | 2.11 |  
|Miller Heiman, Inc. (2)(3)(4)                                           |  | Business Services                        |  |              | 6.75 |   |              |  | 9/30/2019  |                 |  |  | 10/1/2013  |  |  |                   | 19,719 |  |               |   | 19,479 |                         |  |   | 19,338 |  |  |  | 5.72 |  
|MRI Software LLC (2)(3)(4)                                              |  | Software                                 |  |              | 5.25 |   |              |  | 2/4/2021   |                 |  |  | 1/31/2014  |  |  |                   | 14,888 |  |               |   | 14,823 |                         |  |   | 14,560 |  |  |  | 4.30 |  
|MSX International, Inc. (2)(3)(4)                                       |  | Automotive                               |  |              | 6.00 |   |              |  | 8/21/2020  |                 |  |  | 8/18/2014  |  |  |                   | 11,176 |  |               |   | 11,072 |                         |  |   | 11,039 |  |  |  | 3.26 |  
|NES Global Talent Finance US LLC (United Kingdom) (2)(3)(4)(8)          |  | Energy: Oil & Gas                        |  |              | 6.50 |   |              |  | 10/3/2019  |                 |  |  | 10/2/2013  |  |  |                   | 12,188 |  |               |   | 11,988 |                         |  |   | 12,188 |  |  |  | 3.60 |  
|Novetta, LLC (2)(3)(4)                                                  |  | Aerospace & Defense                      |  |              | 6.00 |   |              |  | 10/2/2020  |                 |  |  | 11/19/2014 |  |  |                   | 12,220 |  |               |   | 12,112 |                         |  |   | 12,017 |  |  |  | 3.55 |  
|Pelican Products, Inc. (2)(3)(4)                                        |  | Containers, Packaging & Glass            |  |              | 5.25 |   |              |  | 4/11/2020  |                 |  |  | 4/8/2014   |  |  |                   | 7,897  |  |               |   | 7,915  |                         |  |   | 7,748  |  |  |  | 2.29 |  
|Prowler Acquisition Corp. (Pipeline Supply and Service,
LLC) (2)(3)(4)  |  | Wholesale                                |  |              | 5.50 |   |              |  | 1/28/2020  |                 |  |  | 1/24/2014  |  |  |                   | 11,024 |  |               |   | 10,933 |                         |  |   | 10,764 |  |  |  | 3.18 |  
|PSC Industrial Holdings Corp (2)(3)(4)                                  |  | Environmental Industries                 |  |              | 7.00 |   |              |  | 12/5/2020  |                 |  |  | 12/5/2014  |  |  |                   | 12,000 |  |               |   | 11,884 |                         |  |   | 11,820 |  |  |  | 3.50 |  
|QoL Meds, LLC (2)(3)(4)                                                 |  | Retail                                   |  |              | 5.50 |   |              |  | 7/15/2020  |                 |  |  | 7/14/2014  |  |  |                   | 12,988 |  |               |   | 12,929 |                         |  |   | 12,757 |  |  |  | 3.77 |  
|RCHP, Inc. (Regionalcare) (2)(3)(4)                                     |  | Healthcare & Pharmaceuticals             |  |              | 6.00 |   |              |  | 4/23/2019  |                 |  |  | 4/21/2014  |  |  |                   | 19,792 |  |               |   | 19,612 |                         |  |   | 19,630 |  |  |  | 5.80 |  
|SolAero Technologies Corp. (2)(3)(4)                                    |  | Telecommunications                       |  |              | 5.75 |   |              |  | 12/10/2020 |                 |  |  | 12/9/2014  |  |  |                   | 11,250 |  |               |   | 11,150 |                         |  |   | 10,936 |  |  |  | 3.23 |  



75



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##### Table of Contents

CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2014

(dollar amounts in thousands)



|                                                                              |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|----------------------------------------------------------------------------- |  | ---------------------------------------- |  | ------------ | ----- |  | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ------ |  | ------------- | - | ------- | ----------------------- |  | - | ------- |  |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated
(1)                                 |  | Industry                                 |  | InterestRate |       |  | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (6) |        |  | FairValue (7) |   |         | Percentage ofNet Assets | 
|First Lien Debt (73.68%) (continued)                                          |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|Stafford Logistics, Inc. (Custom Ecology, Inc.) (2)(3)(4)                     |  | Environmental Industries                 |  |              | 6.75  |  |              |  | 6/26/2019  |                 |  |  | 7/1/2013   |  |  |                   | 9,540  |  |               |   | 9,466   |                         |  |   | 9,006   |  |  |  | 2.66   |  
|Sterling Infosystems, Inc (2)(3)(4)                                           |  | Business Services                        |  |              | 5.50  |  |              |  | 5/13/2021  |                 |  |  | 5/12/2014  |  |  |                   | 8,955  |  |               |   | 8,916   |                         |  |   | 8,895   |  |  |  | 2.63   |  
|Synarc-Biocore Holdings, LLC (2)(3)(4)                                        |  | Healthcare & Pharmaceuticals             |  |              | 5.50  |  |              |  | 3/10/2021  |                 |  |  | 3/6/2014   |  |  |                   | 13,399 |  |               |   | 13,280  |                         |  |   | 12,953  |  |  |  | 3.83   |  
|Systems Maintenance Services Holding, Inc. (2)(3)(4)                          |  | High Tech Industries                     |  |              | 5.00  |  |              |  | 10/18/2019 |                 |  |  | 10/18/2013 |  |  |                   | 2,215  |  |               |   | 2,208   |                         |  |   | 2,170   |  |  |  | 0.64   |  
|TASC, Inc (2)(3)(5)(8)                                                        |  | Aerospace & Defense                      |  |              | 7.00  |  |              |  | 5/23/2020  |                 |  |  | 12/17/2014 |  |  |                   | 20,000 |  |               |   | 19,200  |                         |  |   | 19,600  |  |  |  | 5.79   |  
|The SI Organization, Inc. (2)(3)(4)                                           |  | Aerospace & Defense                      |  |              | 5.75  |  |              |  | 11/23/2019 |                 |  |  | 5/16/2014  |  |  |                   | 9,372  |  |               |   | 9,288   |                         |  |   | 9,465   |  |  |  | 2.80   |  
|The Topps Company, Inc. (2)(3)(4)                                             |  | Non-durable Consumer Goods               |  |              | 7.25  |  |              |  | 10/2/2018  |                 |  |  | 10/1/2013  |  |  |                   | 11,512 |  |               |   | 11,422  |                         |  |   | 11,363  |  |  |  | 3.36   |  
|TruckPro, LLC (2)(3)(4)                                                       |  | Automotive                               |  |              | 5.75  |  |              |  | 8/6/2018   |                 |  |  | 8/6/2013   |  |  |                   | 9,499  |  |               |   | 9,456   |                         |  |   | 9,415   |  |  |  | 2.78   |  
|Violin Finco S.A.R.L. (Alexander Mann Solutions)(United Kingdom)
(2)(3)(4)(8) |  | Business Services                        |  |              | 5.75  |  |              |  | 12/20/2019 |                 |  |  | 12/18/2013 |  |  |                   | 12,375 |  |               |   | 12,274  |                         |  |   | 12,375  |  |  |  | 3.66   |  
|Vitera Healthcare Solutions, LLC (2)(3)(4)                                    |  | Healthcare & Pharmaceuticals             |  |              | 6.00  |  |              |  | 11/4/2020  |                 |  |  | 11/1/2013  |  |  |                   | 9,533  |  |               |   | 9,453   |                         |  |   | 9,462   |  |  |  | 2.80   |  
|Zest Holdings, LLC (2)(3)(4)                                                  |  | Durable Consumer Goods                   |  |              | 5.25  |  |              |  | 8/16/2020  |                 |  |  | 8/18/2014  |  |  |                   | 12,344 |  |               |   | 12,344  |                         |  |   | 12,099  |  |  |  | 3.58   |  
|                                                                              |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|First Lien Debt Total                                                         |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               | $ | 517,450 |                         |  | $ | 514,787 |  |  |  | 152.19 | %
|                                                                              |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|Second Lien Debt (15.44%)                                                     |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|AF Borrower LLC (Accuvant) (2)(3)(5)                                          |  | High Tech Industries                     |  |              | 10.00 |  |              |  | 1/28/2023  |                 |  |  | 12/15/2014 |  |  |                   | 8,000  |  |               |   | 7,921   |                         |  |   | 7,839   |  |  |  | 2.32   |  
|Allied Security Holdings LLC (2)(3)(5)                                        |  | Business Services                        |  |              | 8.00  |  |              |  | 8/14/2021  |                 |  |  | 9/25/2014  |  |  |                   | 8,000  |  |               |   | 7,942   |                         |  |   | 7,850   |  |  |  | 2.32   |  
|Ascensus Inc. (2)(3)(4)                                                       |  | Banking, Finance, Insurance &Real Estate |  |              | 9.00  |  |              |  | 12/2/2020  |                 |  |  | 12/2/2013  |  |  |                   | 8,000  |  |               |   | 7,896   |                         |  |   | 7,983   |  |  |  | 2.36   |  
|Berlin Packaging L.L.C. (2)(3)(5)                                             |  | Containers, Packaging & Glass            |  |              | 7.75  |  |              |  | 10/1/2022  |                 |  |  | 9/24/2014  |  |  |                   | 9,200  |  |               |   | 9,132   |                         |  |   | 9,062   |  |  |  | 2.68   |  
|Creganna Finance (US) LLC (Ireland) (2)(3)(5)(8)                              |  | Healthcare & Pharmaceuticals             |  |              | 9.00  |  |              |  | 6/1/2022   |                 |  |  | 11/20/2014 |  |  |                   | 9,900  |  |               |   | 9,804   |                         |  |   | 9,402   |  |  |  | 2.78   |  
|Drew Marine Group Inc. (2)(3)(5)                                              |  | Chemicals, Plastics & Rubber             |  |              | 8.00  |  |              |  | 5/19/2021  |                 |  |  | 11/19/2013 |  |  |                   | 12,500 |  |               |   | 12,475  |                         |  |   | 11,720  |  |  |  | 3.46   |  
|Genex Services, Inc. (2)(3)(5)                                                |  | Banking, Finance, Insurance &Real Estate |  |              | 8.75  |  |              |  | 5/30/2022  |                 |  |  | 5/22/2014  |  |  |                   | 4,990  |  |               |   | 4,936   |                         |  |   | 4,740   |  |  |  | 1.40   |  
|Institutional Shareholder Services Inc. (2)(3)(5)                             |  | Banking, Finance, Insurance &Real Estate |  |              | 8.50  |  |              |  | 4/30/2022  |                 |  |  | 4/30/2014  |  |  |                   | 12,500 |  |               |   | 12,386  |                         |  |   | 11,600  |  |  |  | 3.43   |  
|Jazz Acquisition, Inc. (Wencor) (2)(3)(5)                                     |  | Aerospace & Defense                      |  |              | 7.75  |  |              |  | 6/19/2022  |                 |  |  | 6/25/2014  |  |  |                   | 6,700  |  |               |   | 6,671   |                         |  |   | 6,283   |  |  |  | 1.86   |  
|Landslide Holdings, Inc. (LANDesk Software) (2)(3)(5)                         |  | Software                                 |  |              | 8.25  |  |              |  | 2/25/2021  |                 |  |  | 2/25/2014  |  |  |                   | 3,500  |  |               |   | 3,477   |                         |  |   | 3,335   |  |  |  | 0.99   |  
|Phillips-Medisize Corporation (2)(3)(5)                                       |  | Chemicals, Plastics & Rubber             |  |              | 8.25  |  |              |  | 6/16/2022  |                 |  |  | 6/13/2014  |  |  |                   | 5,000  |  |               |   | 4,954   |                         |  |   | 4,743   |  |  |  | 1.40   |  
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC) (2)(3)(5)        |  | Wholesale                                |  |              | 9.50  |  |              |  | 7/28/2020  |                 |  |  | 1/24/2014  |  |  |                   | 3,000  |  |               |   | 2,947   |                         |  |   | 2,816   |  |  |  | 0.83   |  
|Systems Maintenance Services Holding, Inc. (2)(3)(4)                          |  | High Tech Industries                     |  |              | 9.25  |  |              |  | 10/18/2020 |                 |  |  | 10/18/2013 |  |  |                   | 6,000  |  |               |   | 5,953   |                         |  |   | 5,830   |  |  |  | 1.72   |  
|TASC, Inc (5)(8)                                                              |  | Aerospace & Defense                      |  |              | 12.00 |  |              |  | 5/23/2021  |                 |  |  | 12/17/2014 |  |  |                   | 6,000  |  |               |   | 5,880   |                         |  |   | 6,060   |  |  |  | 1.79   |  
|Vitera Healthcare Solutions, LLC (2)(3)(5)                                    |  | Healthcare & Pharmaceuticals             |  |              | 9.25  |  |              |  | 11/4/2021  |                 |  |  | 11/1/2013  |  |  |                   | 2,000  |  |               |   | 1,973   |                         |  |   | 1,929   |  |  |  | 0.57   |  
|Watchfire Enterprises, Inc. (2)(3)(5)                                         |  | Media: Advertising, Printing &Publishing |  |              | 9.00  |  |              |  | 10/2/2021  |                 |  |  | 10/2/2013  |  |  |                   | 7,000  |  |               |   | 6,914   |                         |  |   | 6,682   |  |  |  | 1.98   |  
|                                                                              |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|Second Lien Debt Total                                                        |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               | $ | 111,261 |                         |  | $ | 107,874 |  |  |  | 31.89  | %
|                                                                              |  |                                          |  |              |       |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  



76



---

##### Table of Contents

CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2014

(dollar amounts in thousands)



|                                                                        |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|----------------------------------------------------------------------- |  | -------- | ------------------ |  | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ------ |  | ------------- | - | ------- | ----------------------- |  | - | ------- |  |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated
(1)                           |  | Industry |                    |  | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (6) |        |  | FairValue (7) |   |         | Percentage ofNet Assets | 
|Structured Finance Obligations (10.88%) (5) (8)(11)                     |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|1776 CLO I, Ltd., Subordinated Notes                                    |  |          | Structured Finance |  |              |  | 5/8/2020   |                 |  |  | 2/27/2014  |  |  | $                 | 11,750 |  |               | $ | 10,106  |                         |  | $ | 8,813   |  |  |  | 2.61   | %
|AIMCO CLO, Series 2014-A, Class F, 5.47% (2)                            |  |          | Structured Finance |  |              |  | 7/20/2026  |                 |  |  | 5/12/2014  |  |  |                   | 2,700  |  |               |   | 2,350   |                         |  |   | 2,187   |  |  |  | 0.65   |  
|AIMCO CLO, Series 2014-A, Subordinated Notes                            |  |          | Structured Finance |  |              |  | 7/20/2026  |                 |  |  | 5/12/2014  |  |  |                   | 11,500 |  |               |   | 9,732   |                         |  |   | 9,832   |  |  |  | 2.91   |  
|Ares XXVIII CLO Ltd., Subordinated Notes                                |  |          | Structured Finance |  |              |  | 10/17/2024 |                 |  |  | 10/10/2013 |  |  |                   | 7,000  |  |               |   | 5,242   |                         |  |   | 5,278   |  |  |  | 1.56   |  
|Babson CLO Ltd. 2005-I, Subordinated Notes                              |  |          | Structured Finance |  |              |  | 4/15/2019  |                 |  |  | 7/16/2013  |  |  |                   | 7,632  |  |               |   | 432     |                         |  |   | 161     |  |  |  | 0.05   |  
|Blackrock Senior Income Series V, Limited, Subordinated Notes (Ireland) |  |          | Structured Finance |  |              |  | 8/13/2019  |                 |  |  | 3/11/2014  |  |  |                   | 4,600  |  |               |   | 2,592   |                         |  |   | 2,521   |  |  |  | 0.75   |  
|CIFC Funding 2007-III, Ltd., Income Notes                               |  |          | Structured Finance |  |              |  | 7/26/2021  |                 |  |  | 5/20/2014  |  |  |                   | 6,500  |  |               |   | 3,525   |                         |  |   | 3,510   |  |  |  | 1.04   |  
|Clydesdale CLO 2005, Ltd., Subordinated Notes                           |  |          | Structured Finance |  |              |  | 12/6/2017  |                 |  |  | 7/15/2013  |  |  |                   | 5,750  |  |               |   |        |                         |  |   | 10      |  |  |  | 0.00   |  
|Flagship VII Limited, Subordinated Notes                                |  |          | Structured Finance |  |              |  | 1/20/2026  |                 |  |  | 12/18/2013 |  |  |                   | 7,000  |  |               |   | 5,823   |                         |  |   | 5,628   |  |  |  | 1.66   |  
|GoldenTree Loan Opportunities V, Limited, Subordinated Notes            |  |          | Structured Finance |  |              |  | 10/18/2021 |                 |  |  | 10/11/2013 |  |  |                   | 5,000  |  |               |   | 3,136   |                         |  |   | 2,920   |  |  |  | 0.86   |  
|ING Investment Management CLO IV, Ltd., Preferred Shares                |  |          | Structured Finance |  |              |  | 6/14/2022  |                 |  |  | 5/7/2014   |  |  |                   | 8,925  |  |               |   | 5,327   |                         |  |   | 5,690   |  |  |  | 1.68   |  
|ING IM CLO 2012-1 LLC, Preferred Shares                                 |  |          | Structured Finance |  |              |  | 3/14/2022  |                 |  |  | 12/5/2014  |  |  |                   | 3,500  |  |               |   | 2,367   |                         |  |   | 2,494   |  |  |  | 0.74   |  
|ING IM CLO 2012-1 LLC, Subordinated Notes                               |  |          | Structured Finance |  |              |  | 3/14/2022  |                 |  |  | 12/5/2014  |  |  |                   | 2,500  |  |               |   | 1,691   |                         |  |   | 1,781   |  |  |  | 0.53   |  
|Landmark VIII, CLO Ltd., Income Notes                                   |  |          | Structured Finance |  |              |  | 10/19/2020 |                 |  |  | 10/22/2013 |  |  |                   | 8,600  |  |               |   | 3,603   |                         |  |   | 3,337   |  |  |  | 0.99   |  
|MSIM Peconic Bay, Ltd., Subordinated Notes                              |  |          | Structured Finance |  |              |  | 7/20/2019  |                 |  |  | 10/22/2013 |  |  |                   | 4,500  |  |               |   | 1,210   |                         |  |   | 1,018   |  |  |  | 0.30   |  
|Nautique Funding Ltd., Income Notes                                     |  |          | Structured Finance |  |              |  | 4/15/2020  |                 |  |  | 2/24/2014  |  |  |                   | 5,000  |  |               |   | 2,991   |                         |  |   | 2,980   |  |  |  | 0.88   |  
|Pacifica CDO V, Ltd., Subordinated Notes                                |  |          | Structured Finance |  |              |  | 1/26/2020  |                 |  |  | 3/28/2014  |  |  |                   | 4,700  |  |               |   | 87      |                         |  |   | 70      |  |  |  | 0.02   |  
|Steele Creek CLO 2014-I, LLC, Subordinated Notes                        |  |          | Structured Finance |  |              |  | 8/21/2026  |                 |  |  | 7/18/2014  |  |  |                   | 18,000 |  |               |   | 15,030  |                         |  |   | 14,040  |  |  |  | 4.15   |  
|Venture VI CDO Limited, Preference Shares                               |  |          | Structured Finance |  |              |  | 8/3/2020   |                 |  |  | 4/17/2014  |  |  |                   | 7,000  |  |               |   | 3,746   |                         |  |   | 3,731   |  |  |  | 1.09   |  
|                                                                        |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|Structured Finance Obligations Total                                    |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               | $ | 78,990  |                         |  | $ | 76,001  |  |  |  | 22.47  | %
|                                                                        |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  
|Total Investmentsnon-controlled/non-affiliated                         |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               | $ | 707,701 |                         |  | $ | 698,662 |  |  |  | 206.55 | %
|                                                                        |  |          |                    |  |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |        |  



|(1) | Unless otherwise indicated, issuers of debt investments of Carlyle GMS Finance, Inc. (GMS Finance or the Company) are domiciled in the United States and issuers of structured finance obligations
are domiciled in the Cayman Islands. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the Investment Company Act), the Company would be deemed to control a
portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2014, the Company does not
control any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an affiliated person of a portfolio company if the Company owns 5% or more of the portfolio companys outstanding
voting securities. As of December 31, 2014, the Company is not an affiliated person of any portfolio company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies and variable rate notes of structured finance obligations bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly
based on the Federal Funds Rate or the Prime Rate), which generally reset quarterly. For each such loan and note, the Company has provided the interest rate in effect as of December 31, 2014.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | These assets are owned by the Companys wholly owned subsidiary, Carlyle GMS Finance SPV LLC (the Borrower Sub). The Borrower Sub has a senior secured revolving credit facility (as amended, the
Revolving Credit Facility). The lenders of the Revolving Credit Facility have a first lien security interest in substantially all of the assets of the Borrower Sub (see Note 5, Borrowings) and such assets are assets of the Borrower Sub
to satisfy obligations of the Borrower Sub under the Revolving Credit Facility and are not available to creditors of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | These assets are owned by the Company. The Company has a senior secured revolving credit facility (as amended, the Facility), which was
subsequently amended on January 8, 2015 (the First Facility Amendment Effective Date). The lenders of the Facility have a perfected first-priority security interest in substantially all of the portfolio investments held by each of
the Company and certain domestic subsidiaries of the Company. The lenders of the Facility also have a perfected first-priority security interest in the unfunded investor equity
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2014

(dollar amounts in thousands)



| | capital commitments (provided that the amount of unfunded capital commitments ultimately available to the lenders is limited to $100,000) and such security interest will be released once the
Company receives equity capital contributions in an amount equal to $100,000 subsequent to the First Facility Amendment Effective Date (see Note 5, Borrowings).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. The cost of
equity tranche collateralized loan obligation (CLO) fund investments, which are referred to as structured finance obligations, are recorded at amortized cost using an effective interest method.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (Notes 2 and 3), pursuant to the Companys valuation policies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying
assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Companys total assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Castle Management Borrower LLC (Highgate Hotels L.P.) has an undrawn delayed draw term loan of $1,200 par value at LIBOR + 4.50%, 1.00% floor. An unused rate of 1.00% is charged on the principal while undrawn. The
delayed draw term loan is owned by the Company.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Green Energy Partners/Stonewall LLC has an undrawn delayed draw term loan of $8,300 par value at LIBOR + 5.50%, 1.00% floor. An unused rate of 3.00% is charged on the principal while undrawn.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | As of December 31, 2014, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing
documents that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2014

(dollar amounts in thousands)



As of December 31, 2014, investmentsnon-controlled/non-affiliated at fair value
consisted of the following:



|                               |  |               |         |  |            |   |         |                |  |  |        |  
|------------------------------ |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ------ | -
|Type                           |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|First Lien Debt                |  | $             | 517,450 |  |            | $ | 514,787 |                |  |  | 73.68  | %
|Second Lien Debt               |  |               | 111,261 |  |            |   | 107,874 |                |  |  | 15.44  |  
|Structured Finance Obligations |  |               | 78,990  |  |            |   | 76,001  |                |  |  | 10.88  |  
|                               |  |               |         |  |            |   |         |                |  |  |        |  
|Total                          |  | $             | 707,701 |  |            | $ | 698,662 |                |  |  | 100.00 | %
|                               |  |               |         |  |            |   |         |                |  |  |        |  

The industrial composition of investmentsnon-controlled/non-affiliated at fair value as of
December 31, 2014 was as follows:



|                                          |  |               |         |  |            |   |         |                |  |  |        |  
|----------------------------------------- |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ------ | -
|Industry                                  |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|Aerospace and Defense                     |  | $             | 59,859  |  |            | $ | 59,983  |                |  |  | 8.59   | %
|Automotive                                |  |               | 23,721  |  |            |   | 23,570  |                |  |  | 3.37   |  
|Banking, Finance, Insurance & Real Estate |  |               | 29,486  |  |            |   | 28,550  |                |  |  | 4.09   |  
|Business Services                         |  |               | 63,466  |  |            |   | 63,323  |                |  |  | 9.06   |  
|Capital Equipment                         |  |               | 10,141  |  |            |   | 9,942   |                |  |  | 1.42   |  
|Chemicals, Plastics & Rubber              |  |               | 17,429  |  |            |   | 16,463  |                |  |  | 2.36   |  
|Construction & Building                   |  |               | 18,173  |  |            |   | 18,056  |                |  |  | 2.58   |  
|Consumer Services                         |  |               | 41,351  |  |            |   | 41,493  |                |  |  | 5.94   |  
|Containers, Packaging & Glass             |  |               | 28,601  |  |            |   | 28,111  |                |  |  | 4.02   |  
|Durable Consumer Goods                    |  |               | 32,147  |  |            |   | 31,919  |                |  |  | 4.57   |  
|Energy: Electricity                       |  |               | 8,136   |  |            |   | 8,338   |                |  |  | 1.19   |  
|Energy: Oil & Gas                         |  |               | 11,988  |  |            |   | 12,188  |                |  |  | 1.74   |  
|Environmental Industries                  |  |               | 21,350  |  |            |   | 20,826  |                |  |  | 2.98   |  
|Healthcare & Pharmaceuticals              |  |               | 54,122  |  |            |   | 53,376  |                |  |  | 7.64   |  
|High Tech Industries                      |  |               | 36,761  |  |            |   | 36,669  |                |  |  | 5.25   |  
|Hotel, Gaming & Leisure                   |  |               | 8,693   |  |            |   | 8,610   |                |  |  | 1.23   |  
|Media: Advertising, Printing & Publishing |  |               | 6,914   |  |            |   | 6,682   |                |  |  | 0.96   |  
|Metals & Mining                           |  |               | 10,426  |  |            |   | 10,298  |                |  |  | 1.47   |  
|Non-durable Consumer Goods                |  |               | 26,212  |  |            |   | 26,064  |                |  |  | 3.73   |  
|Retail                                    |  |               | 12,929  |  |            |   | 12,757  |                |  |  | 1.83   |  
|Software                                  |  |               | 28,178  |  |            |   | 27,600  |                |  |  | 3.95   |  
|Structured Finance                        |  |               | 78,990  |  |            |   | 76,001  |                |  |  | 10.88  |  
|Telecommunications                        |  |               | 28,310  |  |            |   | 27,988  |                |  |  | 4.01   |  
|Transportation: Cargo                     |  |               | 19,757  |  |            |   | 19,477  |                |  |  | 2.79   |  
|Transportation: Consumer                  |  |               | 10,719  |  |            |   | 10,940  |                |  |  | 1.57   |  
|Utilities: Electric                       |  |               | 5,962   |  |            |   | 5,858   |                |  |  | 0.84   |  
|Wholesale                                 |  |               | 13,880  |  |            |   | 13,580  |                |  |  | 1.94   |  
|                                          |  |               |         |  |            |   |         |                |  |  |        |  
|Total                                     |  | $             | 707,701 |  |            | $ | 698,662 |                |  |  | 100.00 | %
|                                          |  |               |         |  |            |   |         |                |  |  |        |  



79



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2014

(dollar amounts in thousands)



The geographical composition of investmentsnon-controlled/non-affiliated at fair value
as of December 31, 2014 was as follows:



|               |  |               |         |  |            |   |         |                |  |  |        |  
|-------------- |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ------ | -
|Geography      |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|Cayman Islands |  | $             | 76,398  |  |            | $ | 73,480  |                |  |  | 10.52  | %
|Ireland        |  |               | 12,396  |  |            |   | 11,923  |                |  |  | 1.70   |  
|United Kingdom |  |               | 24,262  |  |            |   | 24,563  |                |  |  | 3.51   |  
|United States  |  |               | 594,645 |  |            |   | 588,696 |                |  |  | 84.27  |  
|               |  |               |         |  |            |   |         |                |  |  |        |  
|Total          |  | $             | 707,701 |  |            | $ | 698,662 |                |  |  | 100.00 | %
|               |  |               |         |  |            |   |         |                |  |  |        |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of
December 31, 2013

(dollar amounts in thousands)



|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|--------------------------------------------------------------------------------- |  | ---------------------------------------- |  | ------------ | ----- | - | ------------ |  | ---------- | --------------- |  |  | ---------- |  |  | ----------------- | ------ |  | ------------- | - | ------- | ----------------------- |  | - | ------- |  |  |  | ----- | -
|Investmentsnon-controlled/non-affiliated (1)                                     |  | Industry                                 |  | InterestRate |       |   | MaturityDate |  |            | AcquisitionDate |  |  | ParAmount  |  |  | AmortizedCost (5) |        |  | FairValue (6) |   |         | Percentage ofNet Assets | 
|First Lien Debt (66.57%)                                                          |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|ACP Tower Merger Sub, Inc. (Telular
Corporation) (2) (3) (4)                      |  | Telecommunications                       |  |              | 5.50  | % |              |  | 6/24/2019  |                 |  |  | 6/24/2013  |  |  | $                 | 6,094  |  |               | $ | 6,073   |                         |  | $ | 5,968   |  |  |  | 3.21  | %
|Dialysis Newco, Inc., d/b/a DSI Renal(2) (3) (4)                                  |  | Healthcare & Pharmaceuticals             |  |              | 5.25  |   |              |  | 8/16/2020  |                 |  |  | 8/16/2013  |  |  |                   | 9,715  |  |               |   | 9,624   |                         |  |   | 9,743   |  |  |  | 5.24  |  
|Genex Services, Inc.(2) (3) (4)                                                   |  | Banking, Finance, Insurance &Real Estate |  |              | 5.25  |   |              |  | 7/26/2018  |                 |  |  | 7/25/2013  |  |  |                   | 7,934  |  |               |   | 7,898   |                         |  |   | 7,741   |  |  |  | 4.16  |  
|Landslide Holdings, Inc. (LANDesk Software) (2) (3) (4)                           |  | High Tech Industries                     |  |              | 5.25  |   |              |  | 8/9/2019   |                 |  |  | 8/7/2013   |  |  |                   | 6,922  |  |               |   | 6,859   |                         |  |   | 6,958   |  |  |  | 3.74  |  
|Meritas Schools Holdings, LLC (2) (3) (4)                                         |  | Consumer Services                        |  |              | 7.00  |   |              |  | 6/25/2019  |                 |  |  | 6/21/2013  |  |  |                   | 8,458  |  |               |   | 8,380   |                         |  |   | 8,331   |  |  |  | 4.48  |  
|Miller Heiman, Inc. (2) (3) (4)                                                   |  | Business Services                        |  |              | 6.75  |   |              |  | 9/30/2019  |                 |  |  | 10/1/2013  |  |  |                   | 12,500 |  |               |   | 12,381  |                         |  |   | 12,584  |  |  |  | 6.76  |  
|Nellson Nutraceutical, LLC (2) (3) (4)                                            |  | Beverage, Food & Tobacco                 |  |              | 6.75  |   |              |  | 8/26/2018  |                 |  |  | 8/26/2013  |  |  |                   | 5,985  |  |               |   | 5,954   |                         |  |   | 5,908   |  |  |  | 3.18  |  
|NES Global Talent Finance US LLC (United
Kingdom) (2) (3) (4) (7)                 |  | Energy: Oil & Gas                        |  |              | 6.50  |   |              |  | 10/3/2019  |                 |  |  | 10/2/2013  |  |  |                   | 12,500 |  |               |   | 12,262  |                         |  |   | 12,531  |  |  |  | 6.74  |  
|Packaging Coordinators, Inc. (2) (3) (4) (8)                                      |  | Containers, Packaging & Glass            |  |              | 5.50  |   |              |  | 5/10/2020  |                 |  |  | 5/10/2013  |  |  |                   | 4,489  |  |               |   | 4,479   |                         |  |   | 4,516   |  |  |  | 2.43  |  
|System Maintenance Services Holding, Inc. (2) (3) (4)                             |  | High Tech Industries                     |  |              | 5.25  |   |              |  | 10/18/2019 |                 |  |  | 10/18/2013 |  |  |                   | 2,237  |  |               |   | 2,229   |                         |  |   | 2,177   |  |  |  | 1.17  |  
|Stafford Logistics, Inc. (Custom Ecology,
Inc) (2) (3) (4)                        |  | Environmental Industries                 |  |              | 6.75  |   |              |  | 6/26/2019  |                 |  |  | 7/1/2013   |  |  |                   | 9,950  |  |               |   | 9,859   |                         |  |   | 9,786   |  |  |  | 5.26  |  
|Truckpro, LLC (2) (3) (4)                                                         |  | Automotive                               |  |              | 5.75  |   |              |  | 8/6/2018   |                 |  |  | 8/6/2013   |  |  |                   | 9,900  |  |               |   | 9,844   |                         |  |   | 9,665   |  |  |  | 5.19  |  
|The Topps Company, Inc. (2) (3) (4)                                               |  | Non-durable Consumer Goods               |  |              | 7.25  |   |              |  | 10/2/2018  |                 |  |  | 10/1/2013  |  |  |                   | 11,628 |  |               |   | 11,518  |                         |  |   | 11,471  |  |  |  | 6.17  |  
|Violin Finco S.A.R.L. (Alexander Mann Solutions) (United
Kingdom) (2) (3) (4) (7) |  | Business Services                        |  |              | 5.75  |   |              |  | 12/20/2019 |                 |  |  | 12/18/2013 |  |  |                   | 12,500 |  |               |   | 12,382  |                         |  |   | 12,349  |  |  |  | 6.64  |  
|Vitera Healthcare Solutions, LLC (2) (3) (4)                                      |  | Healthcare & Pharmaceuticals             |  |              | 6.00  |   |              |  | 11/4/2020  |                 |  |  | 11/1/2013  |  |  |                   | 9,630  |  |               |   | 9,537   |                         |  |   | 9,649   |  |  |  | 5.19  |  
|Zest Holdings, LLC (2) (3) (4)                                                    |  | Durable Consumer Goods                   |  |              | 6.50  |   |              |  | 8/16/2020  |                 |  |  | 8/14/2013  |  |  |                   | 12,469 |  |               |   | 12,231  |                         |  |   | 12,299  |  |  |  | 6.61  |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|First Lien Debt Total                                                             |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   | 141,510 |                         |  |   | 141,676 |  |  |  | 76.17 |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Second Lien Debt (18.69%)                                                         |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Ascensus, Inc.(2) (3)                                                             |  | Banking, Finance, Insurance &Real Estate |  |              | 9.00  |   |              |  | 12/2/2020  |                 |  |  | 12/2/2013  |  |  |                   | 8,000  |  |               |   | 7,883   |                         |  |   | 8,033   |  |  |  | 4.32  |  
|Drew Marine Group Inc. (2) (3)                                                    |  | Chemicals, Plastics & Rubber             |  |              | 8.00  |   |              |  | 5/19/2021  |                 |  |  | 11/19/2013 |  |  |                   | 12,500 |  |               |   | 12,473  |                         |  |   | 11,741  |  |  |  | 6.31  |  
|Genex Services, Inc. (2) (3) (4)                                                  |  | Banking, Finance, Insurance &Real Estate |  |              | 9.25  |   |              |  | 1/26/2019  |                 |  |  | 7/25/2013  |  |  |                   | 3,500  |  |               |   | 3,468   |                         |  |   | 3,442   |  |  |  | 1.85  |  
|Nellson Nutraceutical, LLC (2) (3) (4)                                            |  | Beverage, Food & Tobacco                 |  |              | 11.50 |   |              |  | 2/26/2019  |                 |  |  | 8/26/2013  |  |  |                   | 2,000  |  |               |   | 1,985   |                         |  |   | 2,025   |  |  |  | 1.09  |  
|Systems Maintenance Services Holding, Inc.(2) (3) (4)                             |  | High Tech Industries                     |  |              | 9.25  |   |              |  | 10/18/2020 |                 |  |  | 10/18/2013 |  |  |                   | 6,000  |  |               |   | 5,949   |                         |  |   | 5,818   |  |  |  | 3.13  |  
|Vitera Healthcare Solutions, LLC (2) (3)                                          |  | Healthcare & Pharmaceuticals             |  |              | 9.25  |   |              |  | 11/4/2021  |                 |  |  | 11/1/2013  |  |  |                   | 2,000  |  |               |   | 1,971   |                         |  |   | 2,003   |  |  |  | 1.08  |  
|Watchfire Enterprises, Inc.(2) (3)                                                |  | Media: Advertising, Printing& Publishing |  |              | 9.00  |   |              |  | 10/2/2021  |                 |  |  | 10/2/2013  |  |  |                   | 7,000  |  |               |   | 6,907   |                         |  |   | 6,705   |  |  |  | 3.60  |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  
|Second Lien Debt Total                                                            |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               | $ | 40,636  |                         |  | $ | 39,767  |  |  |  | 21.38 |  
|                                                                                  |  |                                          |  |              |       |   |              |  |            |                 |  |  |            |  |  |                   |        |  |               |   |         |                         |  |   |         |  |  |  |       |  



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2013

(dollar amounts in thousands)



|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|------------------------------------------------------------ |  | ------------------ |  | ------------ | ---------- |  | --------------- |  | ---------- | --------- |  | - | ----------------- |  |  | ------------- | ------- |  | ----------------------- | - | ------- |  |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated (1)                |  | Industry           |  | MaturityDate |            |  | AcquisitionDate |  |            | ParAmount |  |   | AmortizedCost (5) |  |  | FairValue (6) |         |  | Percentage ofNet Assets |  
|Structured Finance Obligations (14.74%) (7)                  |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Ares XXVIII CLO Ltd., Subordinated Notes                     |  | Structured Finance |  |              | 10/17/2024 |  |                 |  | 10/10/2013 |           |  | $ | 7,000             |  |  | $             | 6,107   |  |                         | $ | 6,125   |  |  |  | 3.29   | %
|Babson CLO Ltd. 2005-I, Subordinated Notes                   |  | Structured Finance |  |              | 4/15/2019  |  |                 |  | 7/16/2013  |           |  |   | 7,632             |  |  |               | 4,364   |  |                         |   | 4,426   |  |  |  | 2.38   |  
|Clydesdale CLO 2005, Ltd., Subordinated Notes                |  | Structured Finance |  |              | 12/6/2017  |  |                 |  | 7/15/2013  |           |  |   | 5,750             |  |  |               | 3,019   |  |                         |   | 3,048   |  |  |  | 1.64   |  
|Flagship VII Limited, Subordinated Notes                     |  | Structured Finance |  |              | 1/20/2026  |  |                 |  | 12/18/2013 |           |  |   | 7,000             |  |  |               | 6,160   |  |                         |   | 6,160   |  |  |  | 3.31   |  
|GoldenTree Loan Opportunities V. Limited, Subordinated Notes |  | Structured Finance |  |              | 10/18/2021 |  |                 |  | 10/11/2013 |           |  |   | 5,000             |  |  |               | 3,430   |  |                         |   | 3,485   |  |  |  | 1.87   |  
|Kingsland III, Ltd., Subordinated Notes                      |  | Structured Finance |  |              | 8/24/2021  |  |                 |  | 11/22/2013 |           |  |   | 4,000             |  |  |               | 3,176   |  |                         |   | 3,180   |  |  |  | 1.71   |  
|Landmark VIII CLO Ltd., Income Notes                         |  | Structured Finance |  |              | 10/19/2020 |  |                 |  | 10/22/2013 |           |  |   | 7,000             |  |  |               | 3,272   |  |                         |   | 3,486   |  |  |  | 1.88   |  
|MSIM Peconic Bay, Ltd., Subordinated Notes                   |  | Structured Finance |  |              | 7/20/2019  |  |                 |  | 10/22/2013 |           |  |   | 4,500             |  |  |               | 1,454   |  |                         |   | 1,454   |  |  |  | 0.78   |  
|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Structured Finance Obligations Total                         |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  |               | 30,982  |  |                         |   | 31,364  |  |  |  | 16.86  |  
|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  
|Total Investmentsnon-controlled/non-affiliated              |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  | $             | 213,128 |  |                         | $ | 212,807 |  |  |  | 114.41 | %
|                                                             |  |                    |  |              |            |  |                 |  |            |           |  |   |                   |  |  |               |         |  |                         |   |         |  |  |  |        |  



|(1) | Unless otherwise indicated, issuers of debt investments of GMS Finance are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company
Act, the Company would be deemed to control a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company.
As of December 31, 2013, the Company does not control any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an affiliated person of a portfolio company if the Company owns 5% or
more of the portfolio companys outstanding voting securities. As of December 31, 2013, the Company is not an affiliated person of any portfolio company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), which
generally reset quarterly. For each such loan, the Company has provided the interest rate in effect as of December 31, 2013.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | These assets are owned by the Borrower Sub. The Borrower Sub has the Revolving Credit Facility. The lenders of the Revolving Credit Facility have a first lien security interest in substantially all of the assets of the
Borrower Sub (see Note 5, Borrowings) and such assets are assets of the Borrower Sub to satisfy obligations of the Borrower Sub under the Revolving Credit Facility and are not available to creditors of the Company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. The cost of
equity tranche structured finance obligations are recorded at amortized cost using an effective interest method.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (Notes 2 and 4), pursuant to the Companys valuation policies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying
assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Companys total assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Packaging Coordinators, Inc. has an undrawn delayed draw term loan of $3,000 par value at LIBOR + 4.25%, 1.25% floor. An unused rate of 2.13% is charged on the principal while undrawn.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CARLYLE GMS FINANCE, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2013

(dollar amounts in thousands)

As of December 31, 2013, investmentsnon-controlled/non-affiliated at fair value consisted of the following:



|                               |  |               |         |  |            |   |         |                |  |  |        |  
|------------------------------ |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ------ | -
|Type                           |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|First Lien Debt                |  | $             | 141,510 |  |            | $ | 141,676 |                |  |  | 66.57  | %
|Second Lien Debt               |  |               | 40,636  |  |            |   | 39,767  |                |  |  | 18.69  |  
|Structured Finance obligations |  |               | 30,982  |  |            |   | 31,364  |                |  |  | 14.74  |  
|                               |  |               |         |  |            |   |         |                |  |  |        |  
|Total                          |  | $             | 213,128 |  |            | $ | 212,807 |                |  |  | 100.00 | %
|                               |  |               |         |  |            |   |         |                |  |  |        |  

The industrial composition of investmentsnon-controlled/non-affiliated at fair value as of
December 31, 2013 was as follows:



|                                          |  |               |         |  |            |   |         |                |  |  |        |  
|----------------------------------------- |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ------ | -
|Industry                                  |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|Automotive                                |  | $             | 9,844   |  |            | $ | 9,665   |                |  |  | 4.54   | %
|Banking, Finance, Insurance & Real Estate |  |               | 19,249  |  |            |   | 19,216  |                |  |  | 9.03   |  
|Beverage, Food & Tobacco                  |  |               | 7,939   |  |            |   | 7,933   |                |  |  | 3.73   |  
|Business Services                         |  |               | 24,763  |  |            |   | 24,933  |                |  |  | 11.72  |  
|Chemicals, Plastics & Rubber              |  |               | 12,473  |  |            |   | 11,741  |                |  |  | 5.52   |  
|Consumer Services                         |  |               | 8,380   |  |            |   | 8,331   |                |  |  | 3.91   |  
|Containers, Packaging & Glass             |  |               | 4,479   |  |            |   | 4,516   |                |  |  | 2.12   |  
|Durable Consumer Goods                    |  |               | 12,231  |  |            |   | 12,299  |                |  |  | 5.78   |  
|Energy: Oil & Gas                         |  |               | 12,262  |  |            |   | 12,531  |                |  |  | 5.89   |  
|Environmental Industries                  |  |               | 9,859   |  |            |   | 9,786   |                |  |  | 4.60   |  
|Healthcare & Pharmaceuticals              |  |               | 21,132  |  |            |   | 21,395  |                |  |  | 10.05  |  
|High Tech Industries                      |  |               | 15,037  |  |            |   | 14,953  |                |  |  | 7.03   |  
|Media: Advertising, Printing & Publishing |  |               | 6,907   |  |            |   | 6,705   |                |  |  | 3.15   |  
|Non-durable Consumer Goods                |  |               | 11,518  |  |            |   | 11,471  |                |  |  | 5.39   |  
|Structured Finance                        |  |               | 30,982  |  |            |   | 31,364  |                |  |  | 14.74  |  
|Telecommunications                        |  |               | 6,073   |  |            |   | 5,968   |                |  |  | 2.80   |  
|                                          |  |               |         |  |            |   |         |                |  |  |        |  
|Total                                     |  | $             | 213,128 |  |            | $ | 212,807 |                |  |  | 100.00 | %
|                                          |  |               |         |  |            |   |         |                |  |  |        |  

The geographical composition of investmentsnon-controlled/non-affiliated at fair value as of
December 31, 2013 was as follows:



|               |  |               |         |  |            |   |         |                |  |  |        |  
|-------------- |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ------ | -
|Geography      |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|Cayman Islands |  | $             | 30,982  |  |            | $ | 31,364  |                |  |  | 14.74  | %
|United Kingdom |  |               | 24,644  |  |            |   | 24,880  |                |  |  | 11.69  |  
|United States  |  |               | 157,502 |  |            |   | 156,563 |                |  |  | 73.57  |  
|               |  |               |         |  |            |   |         |                |  |  |        |  
|Total          |  | $             | 213,128 |  |            | $ | 212,807 |                |  |  | 100.00 | %
|               |  |               |         |  |            |   |         |                |  |  |        |  

The accompanying notes are an integral part of these consolidated financial statements.



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CARLYLE GMS FINANCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2014

(dollar amounts in
thousands, except per share data)

1. ORGANIZATION

Carlyle GMS Finance, Inc. (GMS Finance or the Company) is a Maryland corporation formed on February 8, 2012, and
structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, GMS Finance filed its election to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as
amended (together with the rules and regulations promulgated thereunder, the Investment Company Act). GMS Finance has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated
investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).

GMS
Finances investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which the Company defines as companies with approximately $10 million to $100 million of
earnings before interest, taxes, depreciation and amortization (EBITDA). GMS Finance seeks to achieve its investment objective by investing primarily in first lien (which may include unitranche loans and the first-out and last-out
tranches thereof) and second lien senior secured loans (collectively, Middle Market Senior Loans). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private
equity firms. Depending on market conditions, GMS Finance expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans, with the balance invested in higher-yielding investments, which may include middle
market junior loans such as corporate mezzanine loans, equity co-investments, broadly syndicated first lien senior secured loans and second lien loans, high-yield bonds, structured finance obligations and/or other opportunistic investments. GMS
Finance expects that the composition of its portfolio will change over time given Carlyle GMS Investment Management L.L.C.s (the Investment Adviser) view on, among other things, the economic and credit environment (including with
respect to interest rates) in which the Company is operating.

On May 2, 2013, GMS Finance completed its initial closing of capital
commitments (the Initial Closing) and subsequently commenced substantial investment operations. Prior to May 2, 2013, GMS Finance had not commenced operations and was a development stage company as defined by Accounting Standards
Codification (ASC) 915, Development Stage Entity. During this time, GMS Finance focused substantially all of its efforts on establishing its business. If GMS Finance has not consummated an initial public offering of its common
stock that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the date of such initial public offering (a Qualified IPO) by May 2, 2018, then GMS Finance (subject to any
necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts to wind down and/or liquidate and dissolve.

GMS Finance is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012. GMS Finance will remain
an emerging growth company for up to five years following an initial public offering, although if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, GMS Finance would
cease to be an emerging growth company as of the following December 31.

Carlyle GMS Finance SPV LLC (the Borrower Sub)
is a Delaware limited liability company that was formed on January 3, 2013. The Borrower Sub invests in first and second lien senior secured loans. The Borrower Sub is a wholly-owned subsidiary of the Company and is consolidated in these
consolidated financial statements commencing from the date of its formation, January 3, 2013.

GMS Finance is externally managed by
its Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle GMS Finance Administration L.L.C. (the Administrator) provides the administrative services necessary for GMS Finance
to operate. Both the



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Investment Adviser and the Administrator are wholly-owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of The Carlyle Group L.P. (Carlyle), a global alternative
asset manager publicly traded on NASDAQ Global Select Market under the symbol CG. Refer to the sec.gov website for further information on The Carlyle Group L.P.

As a BDC, GMS Finance is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire
any assets other than qualifying assets specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).

GMS Finance has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a RIC under the Code,
and operates in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, GMS Finance must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its
stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, GMS Finance generally does not have to pay corporate level taxes on any income that it distributes to
stockholders, provided that GMS Finance satisfies those requirements.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The
consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (US GAAP). Management has determined that GMS Finance and the
Borrower Sub are both investment companies for the purposes of accounting and financial reporting in accordance with Accounting Standards Update (ASU) 2013-08, Financial ServicesInvestment Companies (ASU 2013-08):
Amendments to the Scope, Measurement and Disclosure Requirements and GMS Finance will consolidate the Borrower Sub. The consolidated financial statements include the accounts of GMS Finance and its wholly-owned subsidiary, the Borrower Sub.
All significant intercompany balances and transactions have been eliminated. US GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair
value.

The annual financial statements have been prepared in accordance with US GAAP for annual financial information and pursuant
to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the years presented have been
included.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make assumptions and estimates that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Managements
estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying
the Companys accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and
estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Investments

Investment
transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment



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without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation
or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation
when gains or losses are realized. See Note 3 for further information about fair value measurements.

Cash

Cash consists of demand deposits. The Companys cash is held with two large financial institutions and cash held in such financial
institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and
premiums to par value on debt securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of investments represents the original cost, including
origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit
using the specific identification method.

The Company may have loans in its portfolio that contain payment-in-kind (PIK)
provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of December 31, 2014 and
2013 and for the years then ended, no loans in the portfolio contained PIK provisions.

Interest income from investments in the
equity class of collateralized loan obligation (CLO) funds, which are referred to as structured finance obligations, is recorded based upon an estimation of an effective yield to expected maturity utilizing
assumed cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financials Assets. We monitor the expected cash inflows from our CLO equity investments, including the expected residual payments and the effective yield is
determined and updated periodically. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults,
delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Companys estimates if the information was known at the time. As a result,
actual results may differ significantly from these estimates. Interest income from investments in the notes of CLO funds, which are also referred to as structured finance obligations, is recorded based upon the interest rate.

Other Income

Other income may include
income such as consent, waiver and amendment fees associated with the Companys investment activities as well as any fees for managerial assistance services rendered by the Company to portfolio companies. Such fees are recognized as income when
earned or the services are rendered. The Company may receive a fee for guaranteeing the outstanding debt of a portfolio company. Such fee will be amortized into other income over the life of the guarantee. The unamortized amount, if any, is included
in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the years ended December 31, 2014 and 2013, there was no other income.

Non-Accrual Income

Loans are generally
placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid



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interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon
managements judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in managements judgment, are likely to remain current. Management may not place a
loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2014 and 2013 and for the years then ended, no loans in the portfolio were on non-accrual status.

Revolving Credit Facility and Facility, Related Costs, Expenses and Deferred Financing Costs (See Note 5, Borrowings)

Interest expense and unused commitment fees on the Revolving Credit Facility and Facility (as defined in Note 5) are recorded on an accrual
basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.

The
Revolving Credit Facility and Facility are recorded at carrying value, which approximates fair value.

Deferred financing costs consist of
capitalized expenses related to the closing of the Revolving Credit Facility and Facility. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility,
except for a portion that was accelerated in connection with the amendment of the Revolving Credit Facility as described in Note 5. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of
Operations.

Organization and Offering Costs

The Company agreed to reimburse the Investment Adviser for initial organization and offering costs incurred on behalf of GMS Finance up to
$1,500. As of December 31, 2014 and 2013, $1,500 of organization and offering costs had been incurred by GMS Finance and $57 of excess organization and offering costs had been incurred by the Investment Adviser. The $1,500 of incurred
organization and offering costs are allocated to all stockholders based on their respective capital commitment and are re-allocated amongst all stockholders at the time of each capital drawdown subsequent to the Initial Closing. The Companys
organization costs incurred are expensed and the offering costs are charged against equity when incurred.

Income Taxes

For federal income tax purposes, GMS Finance has elected to be treated as a RIC under the Code, and intends to make the required distributions
to its stockholders as specified therein. In order to qualify as a RIC, GMS Finance must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then GMS Finance is generally required
to pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements
applicable to RICs require GMS Finance 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, GMS Finance
may choose to carry forward ICTI in excess of current year distributions into the next tax year. 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.

In addition, based on the excise distribution requirements, GMS Finance is subject to a 4%
nondeductible federal excise tax on undistributed income unless GMS Finance distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income
(both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net
income retained by GMS Finance that is subject to corporate income tax is considered to have been distributed. GMS Finance intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.



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The Company evaluates tax positions taken or expected to be taken in the course of preparing its
consolidated financial statements to determine whether the tax positions are more-likely than not to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income
tax expense.

The Borrower Sub is a disregarded entity for tax purposes and is consolidated with the tax return of GMS Finance.

Capital Calls and Dividends and Distributions to Common Stockholders

The Company records the shares issued in connection with capital calls as of the effective date, or due date, of the capital call, which is the
date shares are issued. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date.
The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least
annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment
plan that provides for reinvestment of any distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and GMS Finance declares a cash
dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather
than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a
Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date
for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in
the open market, unless the Company instructs the plan administrator otherwise.

Functional Currency

The functional currency of the Company is the U.S. Dollar and all transactions were in U.S. Dollars.

Recent Accounting Standards Updates

On May 28, 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with
Customers(ASU 2014-09). The guidance in this ASU supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. ASU 2014-09 provides (i) comprehensive guidance on the recognition of revenue from customer
contracts arising from the transfer of goods and services, (i) guidance on accounting for certain costs, and (iii) requires new disclosures. Under ASU 2014-09, an entity should recognize revenue when the entity transfers promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the
contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize
revenue when the entity satisfies a performance obligation. The amendments in ASU 2014-09 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of adopting ASU
2014-09.

On August 27, 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15).



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ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entitys ability to continue as a going concern and to provide
certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year following the issuance date of the consolidated financial statements. The Company does not expect ASU 2014-15 to have
any impact on the Companys consolidated financial statements and is evaluating the additional disclosure requirements, if any. ASU 2014-15 is effective for annual reporting periods beginning after December 15, 2016.

3. FAIR VALUE MEASUREMENTS

The Company
applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement(ASC 820). ASC 820 defines fair value as the amount that would be exchanged to sell an asset
or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded
securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid
securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e. consensus pricing). When doing so, the Company determines whether the quote obtained is sufficient according to
US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation
or methodology that, in the judgment of the Investment Adviser or GMS Finances Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for
which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to
determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a
standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where
available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive
assurance on portions of the Middle Market Senior Loans portfolio each quarter (such that each non-traded investment is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of managements
preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the Audit Committee) reviews the assessments of the Investment Adviser and the third-party valuation firm, and provides the
Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair
value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the
following factors, as relevant:



| |  |  | the nature and realizable value of any collateral;
| | - |  | --------------------------------------------------



| |  |  | call features, put features and other relevant terms of debt;
| | - |  | -------------------------------------------------------------



| |  |  | the portfolio companys leverage and ability to make payments;
| | - |  | --------------------------------------------------------------



| |  |  | the portfolio companys public or private credit rating;
| | - |  | --------------------------------------------------------



| |  |  | the portfolio companys actual and expected earnings and discounted cash flow;
| | - |  | ------------------------------------------------------------------------------



| |  |  | prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



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| |  |  | the markets in which the portfolio company does business and recent economic and/or market events; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | comparisons to comparable transactions and publicly traded securities.
| | - |  | ----------------------------------------------------------------------

Investment performance
data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value
of the Companys investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the
investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment
and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial
statements as of December 31, 2014 and 2013.

US GAAP establishes a hierarchical disclosure framework which ranks the level of
observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the
marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher
degree of market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported
at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:



| |  |  | Level Iinputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments in Level I generally include
unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact
the quoted price.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIinputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this
category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on
observable inputs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level IIIinputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or
estimation. Financial instruments that are in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such
cases, an investments level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Advisers assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.



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Transfers between levels, if any, are recognized at the beginning of the year in which the
transfers occur. For the years ended December 31, 2014 and 2013, there were no transfers between levels.

The following tables
summarize the Companys investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2014 and 2013:



|                               |  |                   |   |  |          |   |       |           |  |   |         |  |  |   |         | 
|------------------------------ |  | ----------------- | - |  | -------- | - | ----- | --------- |  | - | ------- |  |  | - | ------- | 
|                               |  | December 31, 2014 |  
|                               |  | Level I           |   |  | Level II |   |       | Level III |  |   | Total   | 
|Assets                         |  |                   |   |  |          |   |       |           |  |   |         |  |  |   |         | 
|First Lien Debt                |  | $                 |  |  |          | $ | 9,575 |           |  | $ | 505,212 |  |  | $ | 514,787 | 
|Second Lien Debt               |  |                   |  |  |          |   |      |           |  |   | 107,874 |  |  |   | 107,874 | 
|Structured Finance Obligations |  |                   |  |  |          |   |      |           |  |   | 76,001  |  |  |   | 76,001  | 
|                               |  |                   |   |  |          |   |       |           |  |   |         |  |  |   |         | 
|Total                          |  | $                 |  |  |          | $ | 9,575 |           |  | $ | 689,087 |  |  | $ | 698,662 | 
|                               |  |                   |   |  |          |   |       |           |  |   |         |  |  |   |         | 



|                               |  |                   |   |  |          |   |   |           |  |   |         |  |  |   |         | 
|------------------------------ |  | ----------------- | - |  | -------- | - | - | --------- |  | - | ------- |  |  | - | ------- | 
|                               |  | December 31, 2013 |  
|                               |  | Level I           |   |  | Level II |   |   | Level III |  |   | Total   | 
|Assets                         |  |                   |   |  |          |   |   |           |  |   |         |  |  |   |         | 
|First Lien Debt                |  | $                 |  |  |          | $ |  |           |  | $ | 141,676 |  |  | $ | 141,676 | 
|Second Lien Debt               |  |                   |  |  |          |   |  |           |  |   | 39,767  |  |  |   | 39,767  | 
|Structured Finance Obligations |  |                   |  |  |          |   |  |           |  |   | 31,364  |  |  |   | 31,364  | 
|                               |  |                   |   |  |          |   |   |           |  |   |         |  |  |   |         | 
|Total                          |  | $                 |  |  |          | $ |  |           |  | $ | 212,807 |  |  | $ | 212,807 | 
|                               |  |                   |   |  |          |   |   |           |  |   |         |  |  |   |         | 

The changes in the Companys investments at fair value for which the Company has used Level III inputs to
determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level III investments still held are as follows:



|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |         |                              |  |   |         |   |  |   |          |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------- | - | --------------- | - | ------- | ---------------------------- |  | - | ------- | - |  | - | -------- | -
|                                                                                                                                                                                                                                                                                               |  | Financial Assets                     |        
|                                                                                                                                                                                                                                                                                               |  | For the year ended December 31, 2014 |        
|                                                                                                                                                                                                                                                                                               |  | First LienDebt                       |         |   | SecondLien Debt |   |         | StructuredFinanceObligations |  |   | Total   |  
|Balance, beginning of year                                                                                                                                                                                                                                                                     |  | $                                    | 141,676 |   |                 | $ | 39,767  |                              |  | $ | 31,364  |   |  | $ | 212,807  |  
|Purchases                                                                                                                                                                                                                                                                                      |  |                                      | 442,328 |   |                 |   | 79,993  |                              |  |   | 82,613  |   |  |   | 604,934  |  
|Sales                                                                                                                                                                                                                                                                                          |  |                                      |        |   |                 |   | (4,050  | )                            |  |   | (7,258  | ) |  |   | (11,308  | )
|Paydowns                                                                                                                                                                                                                                                                                       |  |                                      | (77,040 | ) |                 |   | (5,571  | )                            |  |   | (27,310 | ) |  |   | (109,921 | )
|Accretion of discount                                                                                                                                                                                                                                                                          |  |                                      | 964     |   |                 |   | 133     |                              |  |   | 11      |   |  |   | 1,108    |  
|Net realized gain (loss)                                                                                                                                                                                                                                                                       |  |                                      |        |   |                 |   | 120     |                              |  |   | (48     | ) |  |   | 72       |  
|Net change in unrealized appreciation (depreciation)                                                                                                                                                                                                                                           |  |                                      | (2,716  | ) |                 |   | (2,518  | )                            |  |   | (3,371  | ) |  |   | (8,605   | )
|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |         |                              |  |   |         |   |  |   |          |  
|Balance, end of year                                                                                                                                                                                                                                                                           |  | $                                    | 505,212 |   |                 | $ | 107,874 |                              |  | $ | 76,001  |   |  | $ | 689,087  |  
|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |         |                              |  |   |         |   |  |   |          |  
|Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of December 31,
2014 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statements of Operations |  | $                                    | (2,550  | ) |                 | $ | (2,544  | )                            |  | $ | (3,367  | ) |  | $ | (8,461   | )
|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |         |                              |  |   |         |   |  |   |          |  



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|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------- | - | --------------- | - | ------ | ---------------------------- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                                                                                                                                                                                               |  | Financial Assets                     |        
|                                                                                                                                                                                                                                                                                               |  | For the year ended December 31, 2013 |        
|                                                                                                                                                                                                                                                                                               |  | First LienDebt                       |         |   | SecondLien Debt |   |        | StructuredFinanceObligations |  |   | Total  |  
|Balance, beginning of year                                                                                                                                                                                                                                                                     |  | $                                    |        |   |                 | $ |       |                              |  | $ |       |   |  | $ |        |  
|Purchases                                                                                                                                                                                                                                                                                      |  |                                      | 141,934 |   |                 |   | 40,629 |                              |  |   | 33,882 |   |  |   | 216,445 |  
|Sales                                                                                                                                                                                                                                                                                          |  |                                      |        |   |                 |   |       |                              |  |   | (2,960 | ) |  |   | (2,960  | )
|Paydowns                                                                                                                                                                                                                                                                                       |  |                                      | (485    | ) |                 |   |       |                              |  |   |       |   |  |   | (485    | )
|Accretion of discount                                                                                                                                                                                                                                                                          |  |                                      | 58      |   |                 |   | 7      |                              |  |   |       |   |  |   | 65      |  
|Net realized gain (loss)                                                                                                                                                                                                                                                                       |  |                                      | 3       |   |                 |   |       |                              |  |   | 60     |   |  |   | 63      |  
|Net change in unrealized appreciation (depreciation)                                                                                                                                                                                                                                           |  |                                      | 166     |   |                 |   | (869   | )                            |  |   | 382    |   |  |   | (321    | )
|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  
|Balance, end of year                                                                                                                                                                                                                                                                           |  | $                                    | 141,676 |   |                 | $ | 39,767 |                              |  | $ | 31,364 |   |  | $ | 212,807 |  
|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  
|Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of December 31,
2013 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statements of Operations |  | $                                    | 166     |   |                 | $ | (869   | )                            |  | $ | 382    |   |  | $ | (321    | )
|                                                                                                                                                                                                                                                                                               |  |                                      |         |   |                 |   |        |                              |  |   |        |   |  |   |         |  

The Company generally uses the following framework when determining the fair value of investments that are
categorized as Level III:

Investments in debt securities are initially evaluated to determine whether the enterprise value of the
portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded
comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These
factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow
analysis of the portfolio company.

Investments in debt securities that do not have sufficient coverage through the enterprise value
analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with
sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant securitys
contractual interest, fees and principal payments plus the assumption of full principal recovery at the securitys expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies.

Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.



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The following tables summarize the quantitative information related to the significant
unobservable inputs for Level III instruments which are carried at fair value as of December 31, 2014 and 2013:



|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|--------------------------------------------- |  | -------------------------------- | -------------------- |  | -------------------- | -------------------- | ----------------------------- | ----------------- | ----- |  | ----- | --------------- |  |  | ------ | - |  |  | ----- | -
|                                              |  | Fair Value asof December 31,2014 |                      |  |                      |                      | SignificantUnobservableInputs |                   | Range |  |       | WeightedAverage | 
|                                              |  |                                  | Valuation Techniques |  |                      | Low                  |                               |                   | High  |  |      
|Investments in First Lien Debt                |  | $                                | 469,796              |  |                      | Discounted Cash Flow |                               | Discount Rate     |       |  | 5.23  | %               |  |  | 9.02   | % |  |  | 6.33  | %
|                                              |  |                                  | 35,416               |  |                      | Consensus Pricing    |                               | Indicative Quotes |       |  | 98.50 |                 |  |  | 99.33  |   |  |  | 98.71 |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total First Lien Debt                         |  |                                  | 505,212              |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Investments in Second Lien Debt               |  |                                  | 84,902               |  |                      | Discounted Cash Flow |                               | Discount Rate     |       |  | 9.15  | %               |  |  | 11.32  | % |  |  | 10.05 | %
|                                              |  |                                  | 22,972               |  |                      | Consensus Pricing    |                               | Indicative Quotes |       |  | 98.13 |                 |  |  | 101.00 |   |  |  | 99.03 |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Second Lien Debt                        |  |                                  | 107,874              |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Investments in Structured Finance Obligations |  |                                  | 59,533               |  |                      | Discounted Cash Flow |                               | Discount Rate     |       |  | 12.65 | %               |  |  | 15.80  | % |  |  | 13.87 | %
|                                              |  |                                  |                      |  |                      |                      |                               | Default Rate      |       |  |      |                 |  |  | 1.32   |   |  |  | 0.60  |  
|                                              |  |                                  |                      |  |                      |                      |                               | Prepayment Rate   |       |  | 18.78 |                 |  |  | 32.50  |   |  |  | 25.41 |  
|                                              |  |                                  |                      |  |                      |                      |                               | Recovery Rate     |       |  | 67.54 |                 |  |  | 75.00  |   |  |  | 73.28 |  
|                                              |  |                                  | 16,468               |  |                      | Consensus Pricing    |                               | Indicative Quotes |       |  | 0.18  |                 |  |  | 81.00  |   |  |  | 77.28 |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Structured Finance Obligations          |  |                                  | 76,001               |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Level III Investments                   |  | $                                | 689,087              |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                     
|                                              |  | Fair Value asof December 31,2013 |                      |  | Valuation Techniques |                      | SignificantUnobservableInputs |                   | Range |  |       | WeightedAverage | 
|                                              |  |                                  |                      |  | Low                  |                      |                               | High              |       | 
|Investments in First and Second Lien          |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Debt                                          |  | $                                | 181,443              |  |                      | Discounted Cash Flow |                               | Discount Rate     |       |  | 5.17  | %               |  |  | 10.14  | % |  |  | 7.04  | %
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Debt                                    |  |                                  | 181,443              |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Investments in Structured Finance Obligations |  |                                  | 16,031               |  |                      | Discounted Cash Flow |                               | Discount Rate     |       |  | 12.00 | %               |  |  | 14.00  | % |  |  | 12.39 | %
|                                              |  |                                  |                      |  |                      |                      |                               | Default Rate      |       |  | 0.50  |                 |  |  | 1.12   |   |  |  | 0.74  |  
|                                              |  |                                  |                      |  |                      |                      |                               | Prepayment Rate   |       |  | 28.63 |                 |  |  | 34.71  |   |  |  | 30.61 |  
|                                              |  |                                  |                      |  |                      |                      |                               | Recovery Rate     |       |  | 70.24 |                 |  |  | 75.00  |   |  |  | 73.52 |  
|                                              |  |                                  | 15,333               |  |                      | Consensus Pricing    |                               | Indicative Quotes |       |  | 53.00 |                 |  |  | 88.00  |   |  |  | 80.84 |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Structured Finance Obligations          |  |                                  | 31,364               |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Level III Investments                   |  | $                                | 212,807              |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  
|                                              |  |                                  |                      |  |                      |                      |                               |                   |       |  |       |                 |  |  |        |   |  |  |       |  

The significant unobservable inputs used in the fair value measurement of the Companys investments in
first and second lien debt securities are discount rates and indicative quotes. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes in isolation may result
in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the
Companys investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would
result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a
significantly lower fair value measurement.



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Financial instruments disclosed but not carried at fair value:

The following table presents the carrying value and fair value of the Companys secured borrowings disclosed but not carried at fair value
as of December 31, 2014 and 2013.



|                   |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |        | 
|------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | -------------- |  | - | ---------- |  |  | - | ------ | 
|                   |  | December 31, 2014 |         |  | December 31, 2013 |  
|                   |  | Carrying Value    |         |  | Fair Value        |   |         | Carrying Value |  |   | Fair Value | 
|Secured borrowings |  | $                 | 308,441 |  |                   | $ | 308,441 |                |  | $ | 66,822     |  |  | $ | 66,822 | 
|                   |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |        | 
|Total              |  | $                 | 308,441 |  |                   | $ | 308,441 |                |  | $ | 66,822     |  |  | $ | 66,822 | 
|                   |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |        | 

The carrying value of the secured borrowings approximates its fair value and is categorized as Level III
within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Companys secured borrowings are discount rates. Significant
increases in discount rates would result in a significantly lower fair value measurement.

The carrying value of other financial assets
and liabilities approximates their fair value based on the short term nature of these items.

4. RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On
April 3, 2013, the Companys Board of Directors, including a majority of the directors who are not interested persons as defined in Section 2(a)(19) of the Investment Company Act (Independent Directors),
approved an investment advisory and management agreement (the Investment Advisory Agreement) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required
by, Section 15(c) of the Investment Company Act. The initial term of the Investment Advisory Agreement is two years from April 3, 2013 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for
successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. The Investment Advisory Agreement will
automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment
Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two componentsa base management fee and an incentive fee.

Prior to a Qualified IPO, the base management fees are calculated and payable quarterly in arrears at an annual rate of 1.50% of the average
daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired with leverage from use of the Revolving Credit Facility and Facility (see Note 5,
Borrowings). For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from
the date of investment. Base management fees for any partial quarter are prorated. The Investment Adviser contractually waived one-third (0.50%) of the base management fees prior to a Qualified IPO. The fee waiver will terminate if and when a
Qualified IPO has been consummated.

The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based
on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees
for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies)



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accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest
expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of investments
with a deferred interest feature (such as original issue discount, debt instruments with pay-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not
include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Prior to any Qualified
IPO of the Companys common stock, pre-incentive fee net investment income, expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a
hurdle rate of 1.50% per quarter (6% annualized). Hurdle Calculation Value means, on any given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus
(y) the aggregate amount of capital drawn from investors (or reinvested in the Company pursuant to a dividend reinvestment plan) from the beginning of the current quarter to such day minus (z) the aggregate amount of distributions
(including share repurchases) made by the Company from the beginning of the current quarter to such day but only to the extent such distributions were not declared and accounted for on the books and records in a previous quarter.

GMS Finance pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter
as follows:



| |  |  | no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle of 1.50%;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle but is less than 1.875% in any calendar quarter (7.50%
annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle but is less than 1.875%) as the catch-up. The catch-up is meant to provide the Investment Adviser with
approximately 20% of the Companys pre-incentive fee net investment income as if a hurdle did not apply if this net investment income exceeds 1.875% in any calendar quarter; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle is
reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the
Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis
and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of
shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.

The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar
quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, Initial Drawdown) ending on or prior to the date such payment is to be made, the sum of
(a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets
(defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately



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following the Initial Drawdown. These calculations are adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods.
The Investment Adviser may earn an incentive fee under the Investment Advisory Agreement on the Companys repurchase of debt issued by the Company at a gain.

Prior to a Qualified IPO and subject to the receipt of any necessary regulatory approvals, the Companys Investment Adviser intends to
make (or require individual employees or entities in which employees own an interest to make) capital commitments to purchase shares of the Companys common stock in an amount equal to approximately 25% of each installment of the net after tax
incentive fee that the Investment Adviser receives from the Company. For the years ended December 31, 2014 and 2013, there was no incentive fee paid on pre-incentive fee net investment income or realized capital gains, therefore, no commitments
were made and no shares were issued to the Investment Adviser related to the after tax incentive.

For the years ended December 31,
2014 and 2013, base management fees were $4,373 and $625, respectively (net of waiver of $2,186 and $312, respectively), incentive fees related to pre-incentive fee net investment income were $3,578 and $0, respectively, and there were no incentive
fees related to realized capital gains. For the years ended December 31, 2014 and 2013, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation/(depreciation) as of December 31,
2014 and 2013, respectively. The accrual for any capital gains incentive fee under US GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded
expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.

As
of December 31, 2014 and 2013, $6,319 and $625, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (Carlyle
Employee Co.), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.

Administration Agreement

On
April 3, 2013, the Companys Board of Directors approved an administration agreement (the Administration Agreement) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides
services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Companys allocable portion of overhead incurred by the Administrator in performing its obligations under the
Administration Agreement, including the Companys allocable portion of the compensation paid to or compensatory distributions received by the Companys officers (including the Chief Compliance Officer and Chief Financial Officer) and
respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Companys Sarbanes-Oxley Act internal control
assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.

The initial term of the Administration
Agreement is two years from April 3, 2013 and, unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by
(i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Companys Independent Directors. The Administration Agreement may not be assigned
by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days written notice to the other party.

For the years ended December 31, 2014 and 2013, GMS Finance incurred $626 and $650, respectively, in fees under the Administrative
Agreement, which were included in administrative service fees in the



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accompanying Consolidated Statements of Operations. As of December 31, 2014 and 2013, $91 and $131, respectively, was unpaid and included in administrative service fees payable in the
accompanying Consolidated Statements of Assets and Liabilities

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into sub-administration agreements with Carlyle Employee Co. and CELF Advisors LLP. Pursuant
to the agreements, Carlyle Employee Co. and CELF Advisors LLP provide the Administrator with access to personnel.

On April 3, 2013,
the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (as amended, the Sub-Administration Agreement). As amended, the initial term of the Sub-Administration Agreement ends on April 1,
2015 and, unless terminated earlier, the Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or
by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Companys Independent Directors. The Sub-Administration Agreement may be terminated upon at least 60 days written
notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the Sub-Administration Agreement.

For the years ended December 31, 2014 and 2013, fees incurred in connection with the sub-administration agreement, which amounted to $222
and $50, respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of December 31, 2014 and 2013, $80 and $50, respectively, was unpaid and included in other accrued expenses
and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

Placement Fees

On April 3, 2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (TCG), a licensed
broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG for TCGs services.

For the years ended December 31, 2014 and 2013, TCG earned placement fees of $1 and $0, respectively, from GMS Finance stockholders in
connection with the issuance or sale of the Companys common stock.

Board of Directors

GMS Finances Board of Directors currently consists of seven members, four of whom are Independent Directors. On April 3, 2013, the
Board of Directors also established an Audit Committee consisting of its Independent Directors, and may establish additional committees in the future. For the years ended December 31, 2014 and 2013, GMS Finance incurred $395 and $322,
respectively, in fees and expenses associated with its Independent Directors and Audit Committee. As of December 31, 2014 and 2013, $5 and $28, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying
Consolidated Statements of Assets and Liabilities. As of December 31, 2014 and 2013, certain directors had committed $1,750 in capital commitments to the Company.

5. BORROWINGS

In accordance with the
Investment Company Act, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 200% after such borrowing. As of December 31, 2014 and 2013, asset coverage was 209.67%
and 378.35%, respectively. During the years ended December 31, 2014 and 2013, there were net secured borrowings of $179,619 and $66,822, respectively, under the Revolving Credit Facility and $62,000 and $0, respectively, under the Facility. As
of December 31, 2014 and 2013, there was $308,441 and $66,822, respectively, in secured borrowings outstanding.



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Revolving Credit Facility

The Borrower Sub closed on May 24, 2013 on the Revolving Credit Facility, which was subsequently amended on June 30, 2014 (the
First Amendment). The First Amendment, among other things (a) reduced the maximum commitments from $500,000 to $400,000, (b) extended the revolving period from May 24, 2016 to May 24, 2017, (c) extended the
maturity date from May 24, 2019 to May 22, 2020, (d) increased the per annum revolving period rate from the applicable base rate (based on LIBOR, the commercial paper rate, prime rate or the federal funds rate) plus 1.75% to the
applicable base rate plus 1.85%, (e) added covenant-lite loans (subject to certain limitations) to the types of assets eligible to be purchased by the Borrower Sub, and (f) modified certain other restrictions and requirements set forth in
the Revolving Credit Facility. Advances under the Revolving Credit Facility first became available once the Borrower Sub held at least $30,000 of minimum equity in its assets. The Revolving Credit Facility provides for secured borrowings during the
applicable revolving period up to an amount equal to the lesser of $400,000, the borrowing base as calculated pursuant to the terms of the Revolving Credit Facility, and the amount of net cash proceeds and unpledged capital commitments the Company
has received with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act
and certain restrictions and conditions set forth in the Revolving Credit Facility, including adequate collateral to support such borrowings. The Revolving Credit Facility has a revolving period through May 24, 2017 (with two one-year extension
options, subject to the Borrower Subs and the lenders consent) and a maturity date of May 22, 2020 (extendable in connection with an extension of the revolving period). Borrowings under the Revolving Credit Facility bear interest
initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 1.85% per year during the revolving period, with pre-determined future
interest rate increases of 1.00%-1.90% over the three years following the end of the revolving period. The Borrower Sub is also required to pay an undrawn commitment fee of between 0.25% and 1.00% per year depending on the usage of the
Revolving Credit Facility. Payments under the Revolving Credit Facility are made quarterly. The lenders have a first lien security interest on substantially all of the assets of the Borrower Sub.

As part of the Revolving Credit Facility, the Borrower Sub is subject to limitations as to how borrowed funds may be used and the types of
loans that are eligible to be acquired by the Borrower Sub including, but not limited to, restrictions on sector and geographic concentrations, loan size, payment frequency, tenor and minimum investment ratings (or estimated ratings). In addition,
borrowed funds are intended to be used primarily to purchase first lien loan assets, and the Borrower Sub is limited in its ability to purchase certain other assets (including, but not limited to, second lien loans, covenant-lite loans, revolving
and delayed draw loans and discount loans) and other assets are not permitted to be purchased (including, but not limited to paid-in-kind loans and structured finance obligations). The Revolving Credit Facility has certain requirements relating to
interest coverage, collateral quality and portfolio performance, including limitations on delinquencies and charge offs, certain violations of which could result in the acceleration of the amounts due under the Revolving Credit Facility. The
Revolving Credit Facility is also subject to a borrowing base that applies different advance rates to assets held by the Borrower Sub based generally on the fair market value of such assets. Under certain circumstances as set forth in the Revolving
Credit Facility, the Company could be obliged to repurchase loans from the Borrower Sub.

Related to the First Amendment, which reduced
the maximum commitments under the Revolving Credit Facility, $827 of deferred financing costs (representing the prorated financing costs related to the reduction in commitments) were immediately expensed in lieu of continuing to amortize over the
term of the Revolving Credit Facility.

As of December 31, 2014 and 2013, the Borrower Sub was in compliance with all covenants and
other requirements of the Revolving Credit Facility.



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Facility

The Company closed on March 21, 2014 on the Facility, which was subsequently amended on January 8, 2015 (the First Facility
Amendment Effective Date). The First Facility Amendment modified the release of the $100,000 pledge of unfunded investor equity capital commitments to occur once $100,000 of incremental capital has been called and received by the Company
subsequent to the First Facility Amendment Effective Date (as opposed to subsequent to the original March 21, 2014 closing date of the Facility). The maximum principal amount of the Facility is $150,000, subject to availability under the
Facility, which is based on certain advance rates multiplied by the value of the Companys portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the
terms of the Facility. Proceeds of the Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Facility may be increased to $225,000 through the exercise by the Company of an
uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. The Company may
borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Facility, including amounts drawn in respect of letters of credit, will bear interest at either LIBOR plus an applicable spread of 2.25%, or an
alternative base rate (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the alternative
base rate at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Facility and, in respect of each undrawn
letter of credit, a fee and interest rate equal to the then-applicable margin under the Facility while the letter of credit is outstanding. The availability period under the Facility will terminate on March 21, 2018 (the Commitment
Termination Date) and the Facility will mature on March 21, 2019 (the Maturity Date). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make mandatory prepayments
under the Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.

Subject to certain
exceptions, the Facility is secured by a perfected first-priority security interest in substantially all of the portfolio investments held by each of the Company and certain domestic subsidiaries of the Company (such subsidiaries collectively, the
Guarantors) and the Companys unfunded investor equity capital commitments (provided that the amount of unfunded capital commitments ultimately available to the lenders is limited to $100,000). The Company is required to cause the
Guarantors to guaranty the Facility. The pledge of unfunded investor equity capital commitments shall be released once $100,000 of incremental capital has been called and received by the Company subsequent to the First Facility Amendment Effective
Date. Such capital call commitment has not been satisfied as of December 31, 2014. The Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders equity and liquidity, certain
limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

As of December 31, 2014, the Company was in compliance with all covenants and other requirements of the Facility.

Summary of Facilities

The
facilities of the Company and the Borrower Sub consisted of the following as of December 31, 2014 and 2013:



|                          |  |                   |         |  |                       |   |         |                    |  |   |                     |  |  |   |        | 
|------------------------- |  | ----------------- | ------- |  | --------------------- | - | ------- | ------------------ |  | - | ------------------- |  |  | - | ------ | 
|                          |  | December 31, 2014 |        
|                          |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | Unused Portion (1) |  |   | AmountAvailable (2) | 
|Revolving Credit Facility |  | $                 | 400,000 |  |                       | $ | 246,441 |                    |  | $ | 153,559             |  |  | $ | 10,557 | 
|Facility                  |  |                   | 150,000 |  |                       |   | 62,000  |                    |  |   | 88,000              |  |  |   | 58,623 | 
|                          |  |                   |         |  |                       |   |         |                    |  |   |                     |  |  |   |        | 
|Total                     |  | $                 | 550,000 |  |                       | $ | 308,441 |                    |  | $ | 241,559             |  |  | $ | 69,180 | 
|                          |  |                   |         |  |                       |   |         |                    |  |   |                     |  |  |   |        | 



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|                          |  |                   |         |  |                       |   |        |                   |  |   |                    |  |  |   |        | 
|------------------------- |  | ----------------- | ------- |  | --------------------- | - | ------ | ----------------- |  | - | ------------------ |  |  | - | ------ | 
|                          |  | December 31, 2013 |        
|                          |  | Total Facility    |         |  | BorrowingsOutstanding |   |        | Unused Portion(1) |  |   | AmountAvailable(2) | 
|Revolving Credit Facility |  | $                 | 500,000 |  |                       | $ | 66,822 |                   |  | $ | 433,178            |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |        |                   |  |   |                    |  |  |   |        | 
|Total                     |  | $                 | 500,000 |  |                       | $ | 66,822 |                   |  | $ | 433,178            |  |  | $ | 18,616 | 
|                          |  |                   |         |  |                       |   |        |                   |  |   |                    |  |  |   |        | 



|(1) | The unused portion is the amount upon which commitment fees are based.
|--- | ----------------------------------------------------------------------

|(2) | Available for borrowing based on the computation of collateral to support the borrowings.
|--- | -----------------------------------------------------------------------------------------

As
of December 31, 2014 and 2013, $1,025 and $259, respectively, of interest expense, $139 and $266, respectively, of unused commitment fees and $28 and $24, respectively, of other fees were included in interest and credit facility fees payable.
For the year ended December 31, 2014, the average interest rate was 2.18% and average principal debt outstanding was $164,980. For the period from August 8, 2013 (initial date the Company borrowed under the Revolving Credit Facility)
through December 31, 2013, the average interest rate was 1.98% and average principal debt outstanding was $44,063. As of December 31, 2014 and 2013, the interest rate was 2.17% and 1.97%, respectively, based on floating LIBOR rates.

For the years ended December 31, 2014 and 2013, the components of interest expense and credit facility fees were as follows:



|                                                |  |                                 |       |  |      |   |       | 
|----------------------------------------------- |  | ------------------------------- | ----- |  | ---- | - | ----- | 
|                                                |  | For the years endedDecember 31, |      
|                                                |  | 2014                            |       |  | 2013 |  
|Interest expense                                |  | $                               | 3,648 |  |      | $ | 353   | 
|Facility unused commitment fee                  |  |                                 | 1,129 |  |      |   | 602   | 
|Amortization of deferred financing costs        |  |                                 | 1,820 |  |      |   | 513   | 
|Other fees                                      |  |                                 | 103   |  |      |   | 49    | 
|                                                |  |                                 |       |  |      |   |       | 
|Total interest expense and credit facility fees |  | $                               | 6,700 |  |      | $ | 1,517 | 
|                                                |  |                                 |       |  |      |   |       | 
|Cash paid for interest expense                  |  | $                               | 2,882 |  |      | $ | 94    | 

For the year ended December 31, 2014, $827 of the amortization of deferred financing costs represents the
prorated financing costs that were immediately expensed in lieu of continuing to amortize over the term of the Revolving Credit Facility related to the First Amendment which reduced the maximum commitments under the Revolving Credit Facility.

6. COMMITMENTS AND CONTINGENCIES

A
summary of significant contractual payment obligations was as follows as of December 31, 2014 and 2013:



|                      |  |                    |         |  |                  |   |        | 
|--------------------- |  | ------------------ | ------- |  | ---------------- | - | ------ | 
|                      |  | Secured Borrowings |        
|Payment Due by Period |  | December 31,2014   |         |  | December 31,2013 |  
|Less than 1 Year      |  | $                  |        |  |                  | $ |       | 
|1-3 Years             |  |                    |        |  |                  |   |       | 
|3-5 Years             |  |                    | 62,000  |  |                  |   |       | 
|More than 5 Years     |  |                    | 246,441 |  |                  |   | 66,822 | 
|                      |  |                    |         |  |                  |   |        | 
|Total                 |  | $                  | 308,441 |  |                  | $ | 66,822 | 
|                      |  |                    |         |  |                  |   |        | 

In the ordinary course of its business, the Company enters into contracts or agreements that contain
indemnifications or warranties. Future events could occur that lead to the execution of these provisions against



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the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial
statements as of December 31, 2014 and 2013 for any such exposure.

As of December 31, 2014 and 2013, the Company had $1,129,522
and $877,408, respectively, in total capital commitments from stockholders, of which $776,750 and $689,405, respectively, was unfunded. As of December 31, 2014 and 2013, certain directors had committed $1,750 in capital commitments to the
Company.

As of December 31, 2014, there was a $100,000 pledge of unfunded investor equity capital commitments to the lenders of the
Facility, which shall be released once $100,000 of incremental capital has been called and received by the Company subsequent to the effective date of the First Facility Amendment. Such capital call commitment has not been satisfied as of
December 31, 2014.

The Company had the following commitments to fund delayed draw senior secured loans, none of which were funded:



|                                        |  |                   |       |  |                   |   |       | 
|--------------------------------------- |  | ----------------- | ----- |  | ----------------- | - | ----- | 
|                                        |  | Par Value as of   |      
|                                        |  | December 31, 2014 |       |  | December 31, 2013 |  
|Total unfunded delayed draw commitments |  | $                 | 9,500 |  |                   | $ | 3,000 | 
|                                        |  |                   |       |  |                   |   |       | 

7. NET ASSETS

In connection with its formation, the Company has the authority to issue 200,000,000 shares of common stock, $0.01 per share par value.

During the year ended December 31, 2014, the Company issued 8,356,707 shares for $164,803. The following table summarizes capital
activity during the year ended December 31, 2014:



|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                      |     |   |                                                       |   |         |                |  |   |      |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------- | ------ | ------------ | ---------- | ------ | --------------------------- | - | --- | ------------- |  | - | -------------------------------------- | - |  | ------------------------------------ | --- | - | ----------------------------------------------------- | - | ------- | -------------- |  | - | ---- | - |  | - | ------ | - |  | - | ------- | -
|                                                                                                   |        | Common Stock |            |        | Capitalin Excessof ParValue |   |     | OfferingCosts |  |   | AccumulatedNet InvestmentIncome (Loss) |   |  | Net RealizedGain (Loss)onInvestments |     |   | NetUnrealizedAppreciation(Depreciation) onInvestments |   |         | TotalNetAssets | 
|                                                                                                   |        |              |            |        |                             |  
|                                                                                                   | Shares |              |            | Amount |                             |   |     |               |  |   |                                       
|Balance, beginning of year                                                                         |        |              | 9,575,990  |        |                             | $ | 96  |               |  | $ | 186,965                                |   |  | $                                    | (74 | ) |                                                       | $ | (664    | )              |  | $ |     |   |  | $ | (321   | ) |  | $ | 186,002 |  
|Common stock issued                                                                                |        |              | 8,354,987  |        |                             |   | 83  |               |  |   | 164,686                                |   |  |                                      |    |   |                                                       |   |        |                |  |   |     |   |  |   |       |   |  |   | 164,769 |  
|Reinvestment of dividends                                                                          |        |              | 1,720      |        |                             |   |    |               |  |   | 34                                     |   |  |                                      |    |   |                                                       |   |        |                |  |   |     |   |  |   |       |   |  |   | 34      |  
|Net investment income (loss)                                                                       |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                      |    |   |                                                       |   | 14,260  |                |  |   |     |   |  |   |       |   |  |   | 14,260  |  
|Net realized gain (loss) on investmentsnon-controlled/ non-affiliated                             |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                      |    |   |                                                       |   |        |                |  |   | 72   |   |  |   |       |   |  |   | 72      |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/ non-affiliated |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                      |    |   |                                                       |   |        |                |  |   |     |   |  |   | (8,718 | ) |  |   | (8,718  | )
|Dividends declared                                                                                 |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                      |    |   |                                                       |   | (18,162 | )              |  |   |     |   |  |   |       |   |  |   | (18,162 | )
|Tax reclassification of stockholders equity in accordance with US GAAP                            |        |              |           |        |                             |   |    |               |  |   | (49                                    | ) |  |                                      |    |   |                                                       |   | 178     |                |  |   | (129 | ) |  |   |       |   |  |   |        |  
|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                      |     |   |                                                       |   |         |                |  |   |      |   |  |   |        |   |  |   |         |  
|Balance, end of year                                                                               |        |              | 17,932,697 |        |                             | $ | 179 |               |  | $ | 351,636                                |   |  | $                                    | (74 | ) |                                                       | $ | (4,388  | )              |  | $ | (57  | ) |  | $ | (9,039 | ) |  | $ | 338,257 |  
|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                      |     |   |                                                       |   |         |                |  |   |      |   |  |   |        |   |  |   |         |  



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During the year ended December 31, 2013, the Company issued 9,575,890 shares for $188,001.
The following table summarizes capital activity during the year ended December 31, 2013:



|                                                                                                   |        |              |           |        |                             |   |    |               |  |   |                                        |   |  |                                      |     |   |                                                       |   |        |                |  |   |     |   |  |   |      |   |  |   |         |  
|-------------------------------------------------------------------------------------------------- | ------ | ------------ | --------- | ------ | --------------------------- | - | -- | ------------- |  | - | -------------------------------------- | - |  | ------------------------------------ | --- | - | ----------------------------------------------------- | - | ------ | -------------- |  | - | --- | - |  | - | ---- | - |  | - | ------- | -
|                                                                                                   |        | Common Stock |           |        | Capitalin Excessof ParValue |   |    | OfferingCosts |  |   | AccumulatedNet InvestmentIncome (Loss) |   |  | Net RealizedGain (Loss)onInvestments |     |   | NetUnrealizedAppreciation(Depreciation) onInvestments |   |        | TotalNetAssets | 
|                                                                                                   |        |              |           |        |                             |  
|                                                                                                   | Shares |              |           | Amount |                             |   |    |               |  |   |                                       
|Balance, beginning of year                                                                         |        |              | 100       |        |                             | $ |   |               |  | $ | 2                                      |   |  | $                                    |    |   |                                                       | $ |       |                |  | $ |    |   |  | $ |     |   |  | $ | 2       |  
|Common stock issued                                                                                |        |              | 9,575,890 |        |                             |   | 96 |               |  |   | 187,905                                |   |  |                                      |    |   |                                                       |   |       |                |  |   |    |   |  |   |     |   |  |   | 188,001 |  
|Offering costs                                                                                     |        |              |          |        |                             |   |   |               |  |   |                                       |   |  |                                      | (74 | ) |                                                       |   |       |                |  |   |    |   |  |   |     |   |  |   | (74     | )
|Net investment income (loss)                                                                       |        |              |          |        |                             |   |   |               |  |   |                                       |   |  |                                      |    |   |                                                       |   | (1,669 | )              |  |   |    |   |  |   |     |   |  |   | (1,669  | )
|Net realized gain (loss) on investmentsnon-controlled/ non-affiliated                             |        |              |          |        |                             |   |   |               |  |   |                                       |   |  |                                      |    |   |                                                       |   |       |                |  |   | 63  |   |  |   |     |   |  |   | 63      |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/ non-affiliated |        |              |          |        |                             |   |   |               |  |   |                                       |   |  |                                      |    |   |                                                       |   |       |                |  |   |    |   |  |   | (321 | ) |  |   | (321    | )
|Tax reclassification of stockholders equity in accordance with US GAAP                            |        |              |          |        |                             |   |   |               |  |   | (942                                   | ) |  |                                      |    |   |                                                       |   | 1,005  |                |  |   | (63 | ) |  |   |     |   |  |   |        |  
|                                                                                                   |        |              |           |        |                             |   |    |               |  |   |                                        |   |  |                                      |     |   |                                                       |   |        |                |  |   |     |   |  |   |      |   |  |   |         |  
|Balance, end of year                                                                               |        |              | 9,575,990 |        |                             | $ | 96 |               |  | $ | 186,965                                |   |  | $                                    | (74 | ) |                                                       | $ | (664   | )              |  | $ |    |   |  | $ | (321 | ) |  | $ | 186,002 |  
|                                                                                                   |        |              |           |        |                             |   |    |               |  |   |                                        |   |  |                                      |     |   |                                                       |   |        |                |  |   |     |   |  |   |      |   |  |   |         |  

The following table summarizes total shares issued and proceeds received related to capital drawdowns
delivered pursuant to subscriptions for the Companys common stock during the year ended December 31, 2014:



|                   |  |               |           |  |                   |   |         | 
|------------------ |  | ------------- | --------- |  | ----------------- | - | ------- | 
|                   |  | Shares Issued |           |  | Proceeds Received |  
|January 27, 2014   |  |               | 1,020,810 |  |                   | $ | 19,998  | 
|February 21, 2014  |  |               | 491,849   |  |                   |   | 9,689   | 
|March 21, 2014     |  |               | 1,802,772 |  |                   |   | 35,785  | 
|April 14, 2014**   |  |               | 148       |  |                   |   | 3       | 
|July 14, 2014**    |  |               | 586       |  |                   |   | 12      | 
|September 17, 2014 |  |               | 643,060   |  |                   |   | 12,790  | 
|October 9, 2014**  |  |               | 986       |  |                   |   | 19      | 
|October 16, 2014   |  |               | 1,134,723 |  |                   |   | 22,502  | 
|November 3, 2014   |  |               | 1,008,570 |  |                   |   | 20,000  | 
|December 9, 2014   |  |               | 2,253,203 |  |                   |   | 44,005  | 
|                   |  |               |           |  |                   |   |         | 
|Total              |  |               | 8,356,707 |  |                   | $ | 164,803 | 
|                   |  |               |           |  |                   |   |         | 



|** | Represents shares issued upon the reinvestment of dividends
|-- | -----------------------------------------------------------



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The following table summarizes total shares issued and proceeds received related to capital
drawdowns delivered pursuant to subscriptions for the Companys common stock during the year ended December 31, 2013:



|                   |  |               |           |  |                   |   |         | 
|------------------ |  | ------------- | --------- |  | ----------------- | - | ------- | 
|                   |  | Shares Issued |           |  | Proceeds Received |  
|June 5, 2013       |  |               | 555,352   |  |                   | $ | 11,107  | 
|June 10, 2013      |  |               | 371,918   |  |                   |   | 7,438   | 
|June 25, 2013      |  |               | 1,100,000 |  |                   |   | 22,000  | 
|July 31, 2013      |  |               | 750,000   |  |                   |   | 15,000  | 
|August 22, 2013    |  |               | 2,569,373 |  |                   |   | 50,000  | 
|September 23, 2013 |  |               | 1,130,526 |  |                   |   | 22,000  | 
|November 4, 2013   |  |               | 899,155   |  |                   |   | 17,498  | 
|November 26, 2013  |  |               | 2,199,566 |  |                   |   | 42,958  | 
|                   |  |               |           |  |                   |   |         | 
|Total              |  |               | 9,575,890 |  |                   | $ | 188,001 | 
|                   |  |               |           |  |                   |   |         | 

Subscribed but unissued shares are presented in equity with a deduction of subscriptions receivable until cash
is received for a subscription. There were no subscribed but unissued shares as of December 31, 2014 and 2013.

Subscription
transactions during the years ended December 31, 2014 and 2013 were executed at an offering price at a premium to net asset value due to the requirement to use prior quarter net asset value as offering price unless it would result in the
Company selling shares of its common stock at a price below the current net asset value and also in order to effect a reallocation of organizational costs to subsequent investors. Such subscription transactions increased net asset value by $719 or
$0.09 per share and $1,136 or $0.32 per share, respectively, for the years ended December 31, 2014 and 2013, respectively.

The
Company computes earnings per common share in accordance with ASC 260, Earnings Per Share.Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company
by the weighted-average number of common shares outstanding for the year.

Basic and diluted earnings per common share were as follows:



|                                                                |  |                                 |            |  |      |   |           |  
|--------------------------------------------------------------- |  | ------------------------------- | ---------- |  | ---- | - | --------- | -
|                                                                |  | For the years endedDecember 31, |           
|                                                                |  | 2014                            |            |  | 2013 |  
|Net increase (decrease) in net assets resulting from operations |  | $                               | 5,614      |  |      | $ | (1,927    | )
|Weighted-average common shares outstanding                      |  |                                 | 13,091,544 |  |      |   | 3,016,298 |  
|                                                                |  |                                 |            |  |      |   |           |  
|Basic and diluted earnings per common share                     |  | $                               | 0.43       |  |      | $ | (0.64     | )
|                                                                |  |                                 |            |  |      |   |           |  

The following table summarizes the Companys dividends declared and payable during the year ended
December 31, 2014:



|                   |  |                    |  |                  |  |                 |      |  |             |   |       | 
|------------------ |  | ------------------ |  | ---------------- |  | --------------- | ---- |  | ----------- | - | ----- | 
|Date Declared      |  | Record Date        |  | Payment Date     |  | Per ShareAmount |      |  | TotalAmount |  
|March 13, 2014     |  | March 31, 2014     |  | April 14, 2014   |  | $               | 0.19 |  |             | $ | 2,449 | 
|June 26, 2014      |  | June 30, 2014      |  | July 14, 2014    |  | $               | 0.27 |  |             | $ | 3,481 | 
|September 12, 2014 |  | September 18, 2014 |  | October 9, 2014  |  | $               | 0.44 |  |             | $ | 5,956 | 
|December 19, 2014  |  | December 29, 2014  |  | January 26, 2015 |  | $               | 0.35 |  |             | $ | 6,276 | 

During the year ended December 31, 2013, no dividends or distributions had been declared or paid by the
Company.



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8. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the years ended December 31, 2014 and 2013:



|                                                                                                 |  |                                  |            |   |      |   |           |   
|------------------------------------------------------------------------------------------------ |  | -------------------------------- | ---------- | - | ---- | - | --------- | --
|                                                                                                 |  | For the years ended December 31, |           
|                                                                                                 |  | 2014                             |            |   | 2013 |  
|Per Share Data:                                                                                  |  |                                  |            |   |      |   |           |   
|Net asset value per share, beginning of year                                                     |  | $                                | 19.42      |   |      | $ | 20.00     |   
|Net investment income (loss) (1)                                                                 |  |                                  | 1.09       |   |      |   | (0.55     | ) 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments |  |                                  | (0.49      | ) |      |   | (0.34     | ) 
|                                                                                                 |  |                                  |            |   |      |   |           |   
|Net increase (decrease) in net assets resulting from operations                                  |  |                                  | 0.60       |   |      |   | (0.89     | ) 
|                                                                                                 |  |                                  |            |   |      |   |           |   
|Dividends declared (2)                                                                           |  |                                  | (1.25      | ) |      |   |          |   
|Effect of subscription offering price (3)                                                        |  |                                  | 0.09       |   |      |   | 0.32      |   
|Offering costs                                                                                   |  |                                  |           |   |      |   | (0.01     | ) 
|                                                                                                 |  |                                  |            |   |      |   |           |   
|Net asset value per share, end of year                                                           |  | $                                | 18.86      |   |      | $ | 19.42     |   
|                                                                                                 |  |                                  |            |   |      |   |           |   
|Number of shares outstanding, end of year                                                        |  |                                  | 17,932,697 |   |      |   | 9,575,990 |   
|Total return (4)                                                                                 |  |                                  | 3.55       | % |      |   | (2.90     | )%
|Net assets, end of year                                                                          |  | $                                | 338,257    |   |      | $ | 186,002   |   
|Ratio to average net assets (5):                                                                 |  |                                  |            |   |      |   |           |   
|Expenses net of waiver, before incentive fees                                                    |  |                                  | 5.78       | % |      |   | 9.75      | % 
|Expenses net of waiver, after incentive fees                                                     |  |                                  | 7.15       | % |      |   | 9.75      | % 
|Expenses gross of waiver, after incentive fees                                                   |  |                                  | 7.98       | % |      |   | 10.21     | % 
|Net investment income (loss) (6)                                                                 |  |                                  | 5.45       | % |      |   | (2.45     | )%
|Interest expense and credit facility fees                                                        |  |                                  | 2.56       | % |      |   | 2.23      | % 
|Ratios/Supplemental Data:                                                                        |  |                                  |            |   |      |   |           |   
|Asset coverage                                                                                   |  |                                  | 209.67     | % |      |   | 378.35    | % 
|Portfolio turnover (5)                                                                           |  |                                  | 28.06      | % |      |   | 6.43      | % 
|Total committed capital, end of year                                                             |  | $                                | 1,129,522  |   |      | $ | 877,408   |   
|Ratio of total contributed capital to total committed capital, end of year                       |  |                                  | 31.23      | % |      |   | 21.43     | % 
|Weighted-average shares outstanding                                                              |  |                                  | 13,091,544 |   |      |   | 3,016,298 |   



|(1) | For the year ended December 31, 2014, net investment income (loss) per share was calculated as net investment income (loss) for the year divided by the weighted-average number of shares outstanding for the year.
For the year ended December 31, 2013, net investment income (loss) per share was calculated as net investment income (loss) for the period divided by the weighted average number of shares outstanding for the period June 5, 2013 (date of
issuance of shares related to the first capital drawdown) through December 31, 2013.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For the year ended December 31, 2014, dividends declared per share was calculated as the sum of dividends declared on each quarter-end date during the year divided by the number of shares outstanding at each
respective quarter-end date (refer to Note 7).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Increase is due to offering price of subscriptions during the year (refer to Note 7).
|--- | -------------------------------------------------------------------------------------

|(4) | Total return based on net asset value equals the change in net asset value during the year plus the declared dividends for the years ended
December 31, 2014 and 2013, divided by the beginning net asset value for the year. This calculation is adjusted for additional shares issued related to dividends paid, thereby assuming reinvestment of dividends distributed in connection with
the dividend reinvestment plan. Total return based on change in net asset value for the year ended December 31, 2013 was calculated for the period from commencement of operations through December 31, 2013. Total return does not reflect
taxes paid on distributions or placement fees paid on capital drawdowns, if any. The Companys performance changes
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | over time and currently may be different than that shown. Past performance is no guarantee of future results. Total return for the years ended December 31, 2014 and 2013 was inclusive of
$0.09 and $0.32, respectively, per share increase in net asset value related to the offering price of subscriptions. Excluding the effects of the higher offering price of subscriptions, total return would have been 3.09% and (4.50%),
respectively (refer to Note 7).
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The Company commenced operations on May 2, 2013; therefore, ratios to average net assets and portfolio turnover for the year ended December 31, 2013 may have been different had there been a full year of
operations.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The net investment income ratio is net of the waiver of base management fees.
|--- | -----------------------------------------------------------------------------

9. LITIGATION

The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current
matters, if any, will materially impact the Company or its consolidated financial statements. As of December 31, 2014 and 2013 and for the years then ended, the Company was not subject to any material legal proceedings, nor, to the
Companys knowledge, is any material legal proceeding threatened against the Company.

In addition, portfolio investments of the
Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially
affect the Company or these consolidated financial statements.

10. TAX

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of
December 31, 2014 and 2013.

In the normal course of business, the Company is subject to examination by federal and certain state,
local and foreign tax regulators. As of December 31, 2014, the Company had filed tax returns and therefore is subject to examination. As of December 31, 2013, the Company had not yet filed any tax returns and therefore was not yet subject
to examination.

Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax
differences are reclassified among the Companys capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from US GAAP. As of December 31,
2014 and 2013, permanent differences primarily due to net operating loss, the tax treatment of passive foreign investment companies and non-deductible excise tax resulted in a net decrease in accumulated net investment loss by $178 and $1,005,
respectively, net decrease in accumulated net realized gain by $129 and $63, respectively, and net decrease in additional paid-in capital in excess of par by $49 and $942, respectively, on the Consolidated Statements of Assets and Liabilities. Total
earnings and net asset value were not affected.

The tax character of the distributions paid for the fiscal years ended December 31,
2014 and 2013 was as follows:



|                      |  |                                 |        |  |      |   |   | 
|--------------------- |  | ------------------------------- | ------ |  | ---- | - | - | 
|                      |  | For the years endedDecember 31, |       
|                      |  | 2014                            |        |  | 2013 |  
|Ordinary income       |  | $                               | 18,162 |  |      | $ |  | 
|Tax return of capital |  | $                               |       |  |      | $ |  | 



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Income Tax Information and Distributions to Stockholders

As of December 31, 2014 and 2013, the components of accumulated earnings (deficit) on a tax basis were as follows:



|                                                                                            |  |      |         |   |      |   |      |  
|------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ---- | -
|                                                                                            |  | 2014 |         |   | 2013 |  
|Undistributed ordinary income                                                               |  | $    | 1,547   |   |      | $ |     |  
|Other book/tax temporary differences(1)                                                     |  |      | (2,009  | ) |      |   | (284 | )
|Capital loss carryforwards                                                                  |  |      | (56     | ) |      |   |     |  
|Net unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated (2) |  |      | (12,965 | ) |      |   | (701 | )
|                                                                                            |  |      |         |   |      |   |      |  
|Total accumulated earnings (deficit)                                                        |  | $    | (13,483 | ) |      | $ | (985 | )
|                                                                                            |  |      |         |   |      |   |      |  



|(1) | Consists of the unamortized portion of organization costs as of December 31, 2014 and 2013, respectively. Also, consists of the unamortized portion of the prorated financing costs that were immediately expensed in
lieu of continuing to amortize over the term of the Revolving Credit Facility related to the amendment that reduced commitments in the Revolving Credit Facility as of December 31, 2014.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of passive foreign investment companies, which include the
structured finance obligations. Also, consists of book to tax difference on interest income on CLO equity investments recognized using the effective yield method for financial statement purposes.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2014 and 2013, the cost of investments for federal income tax purposes and gross unrealized appreciation and
depreciation on investments were as follows:



|                                                                                        |  |      |         |   |      |   |         |  
|--------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                        |  | 2014 |         |   | 2013 |  
|Cost of investmentsnon-controlled/non-affiliated                                       |  | $    | 711,628 |   |      | $ | 213,507 |  
|Gross unrealized appreciation on investmentsnon-controlled/non-affiliated              |  |      | 2,752   |   |      |   | 1,509   |  
|Gross unrealized depreciation on investmentsnon-controlled/non-affiliated              |  |      | (15,717 | ) |      |   | (2,210  | )
|                                                                                        |  |      |         |   |      |   |         |  
|Net unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  | $    | (12,965 | ) |      | $ | (701    | )
|                                                                                        |  |      |         |   |      |   |         |  

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the RIC
Modernization Act) was enacted which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. Under the RIC Modernization Act, the fund
will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the
losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are
carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law. As of December 31, 2014 and 2013, the Company did not have any pre-enactment capital loss
carryforwards, and had $56 and $0, respectively, of post enactment short-term capital loss carryforwards.



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11. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)



|                                                                                                 |  |      |        |   |    |   |        |    |  |   |       |  |  |   |       | 
|------------------------------------------------------------------------------------------------ |  | ---- | ------ | - | -- | - | ------ | -- |  | - | ----- |  |  | - | ----- | 
|                                                                                                 |  | 2014 |       
|                                                                                                 |  | Q4   |        |   | Q3 |   |        | Q2 |  |   | Q1    | 
|Total investment income                                                                          |  | $    | 5,885  |   |    | $ | 10,522 |    |  | $ | 9,944 |  |  | $ | 6,633 | 
|Net expenses                                                                                     |  |      | 4,906  |   |    |   | 4,816  |    |  |   | 5,408 |  |  |   | 3,594 | 
|Net investment income (loss)                                                                     |  |      | 979    |   |    |   | 5,706  |    |  |   | 4,536 |  |  |   | 3,039 | 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments |  |      | (4,910 | ) |    |   | (4,769 | )  |  |   | 56    |  |  |   | 977   | 
|Net increase (decrease) in net assets resulting from operations                                  |  |      | (3,931 | ) |    |   | 937    |    |  |   | 4,592 |  |  |   | 4,016 | 
|Net asset value per share                                                                        |  |      | 18.86  |   |    |   | 19.35  |    |  |   | 19.71 |  |  |   | 19.63 | 
|Basic and diluted earnings per common share                                                      |  | $    | (0.25  | ) |    | $ | 0.07   |    |  | $ | 0.36  |  |  | $ | 0.37  | 



|                                                                                                 |  |      |       |  |    |   |        |    |  |   |        |   |  |   |   | 
|------------------------------------------------------------------------------------------------ |  | ---- | ----- |  | -- | - | ------ | -- |  | - | ------ | - |  | - | - | 
|                                                                                                 |  | 2013 |      
|                                                                                                 |  | Q4   |       |  | Q3 |   |        | Q2 |  |   | Q1     |  
|Total investment income                                                                          |  | $    | 3,804 |  |    | $ | 1,145  |    |  | $ | 20     |   |  | $ |  | 
|Net expenses                                                                                     |  |      | 2,092 |  |    |   | 1,951  |    |  |   | 2,595  |   |  |   |  | 
|Net investment income (loss)                                                                     |  |      | 1,712 |  |    |   | (806   | )  |  |   | (2,575 | ) |  |   |  | 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments |  |      | 43    |  |    |   | (365   | )  |  |   | 64     |   |  |   |  | 
|Net increase (decrease) in net assets resulting from operations                                  |  |      | 1,755 |  |    |   | (1,171 | )  |  |   | (2,511 | ) |  |   |  | 
|Net asset value per share                                                                        |  |      | 19.42 |  |    |   | 19.11  |    |  |   | 18.72  |   |  |   |  | 
|Basic and diluted earnings per common share                                                      |  | $    | 0.22  |  |    | $ | (0.29  | )  |  | $ | (7.92  | ) |  | $ |  | 

13. SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events
that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.

On
January 2, 2015, the Company issued a capital call and delivered capital drawdown notices totaling $18,000. Proceeds from the capital call were due and the related issuance of 924,977 shares occurred on January 27, 2015. On
February 11, 2015, the Company issued a capital call and delivered capital drawdown notices totaling $45,004. Proceeds from the capital call were due and the related issuance of 2,312,659 shares occurred on February 26, 2015.

Subsequent to December 31, 2014, the Company borrowed $33,700 under the Revolving Credit Facility and $72,000 under the Facility to fund
investment acquisitions. The Company also voluntarily repaid $51,000 under the Facility.

On March 11, 2015, the Companys Board
of Directors, including a majority of the Independent Directors, approved the renewal of the Companys Investment Advisory Agreement with the Adviser, the Companys Administration Agreement with the Administrator and the Companys
Sub-Administration Agreement with State Street Bank and Trust Company, each for an additional one year term.

On March 11, 2015, the
Companys Board of Directors declared a dividend of $0.37 per share, which is payable on or about April 17, 2015 to holders of record of the Companys common stock at the close of business on March 13, 2015.



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Item 9. Changes and Disagreements with Accountants on Accounting and Financial
Disclosure

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our
management, including our President (Principal Executive Officer) and our interim Chief Financial Officer and Treasurer (performing the functions of Principal Financial Officer), of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934). Based on that evaluation, our President and our interim Chief Financial Officer and Treasurer have concluded that our current disclosure controls and
procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended.

Managements Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act). The Companys internal control over financial reporting is a process designed under the supervision of its President (Principal Executive Officer) and interim Chief Financial Officer and Treasurer
(performing the functions of Principal Financial Officer) and effected by the Companys Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

The Companys internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect transactions and dispositions of the Companys assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in
accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on its consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the Companys internal control over financial reporting as of
December 31, 2014 based on the framework established in Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded
that the Companys internal control over financial reporting as of December 31, 2014 was effective.

This annual report does not
include an attestation report of the Companys registered public accounting firm due to an exemption for emerging growth companies under the JOBS Act.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2014 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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Item 9B. Other Information

None



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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2015 annual meeting of stockholders.
The Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Exchange Act.

We have adopted a Code of Ethics for Principal Executive and Senior Financial Officers under the Sarbanes-Oxley Act of 2002 (the SOX
Code of Ethics), which applies to, among others, our principal executive officer and principal financial officer. There have been no material changes to our SOX Code of Ethics or material waivers of the code that apply to our Chief Executive
Officer or interim Chief Financial Officer. We hereby undertake to provide a copy of this code to any person, without charge, upon request. Requests for a copy of this code may be made in writing addressed to the Secretary of the Company, Matthew
Cottrell, Carlyle GMS Finance, Inc., 520 Madison Avenue, 38th Floor, New York, NY.

Item 11. Executive Compensation

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2015 annual meeting of stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2015 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2015 annual meeting of stockholders.

Item 14. Principal Accountant Fees and Services

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2015 annual meeting of stockholders.



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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this annual report:

(1) Financial StatementsRefer to Part II, Item 8 of this Form 10-K, which are incorporated herein by reference:



|                                                                                                |  |  |    | 
|----------------------------------------------------------------------------------------------- |  |  | -- | 
|Report of Independent Registered Public Accounting Firm                                         |  |  | 70 | 
|                                                                                                | 
|Consolidated Statements of Assets and Liabilities as of December 31, 2014 and 2013              |  |  | 71 | 
|                                                                                                | 
|Consolidated Statements of Operations for the Years Ended December 31, 2014 and 2013            |  |  | 72 | 
|                                                                                                | 
|Consolidated Statements of Changes in Net Assets for the Years Ended December 31, 2014 and
2013 |  |  | 73 | 
|                                                                                                | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013            |  |  | 74 | 
|                                                                                                | 
|Consolidated Schedules of Investments as of December 31, 2014 and 2013                          |  |  | 75 | 
|                                                                                                | 
|Notes to Consolidated Financial Statements                                                      |  |  | 84 | 

(2) Financial Statement Schedules required to be filed by Part II, Item 8 of this Form 10-KNone are
required and therefore all financial statement schedules have been omitted.

(3) Exhibits



|     |  |                                                                                                                                                                                                                      
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|3.1  |  | Articles of Amendment and Restatement(1)                                                                                                                                                                             
|     | 
|3.2  |  | Amended and Restated Bylaws(1)                                                                                                                                                                                       
|     | 
|4.1  |  | Form of Subscription Agreement(1)                                                                                                                                                                                    
|     | 
|10.1 |  | Advisory Agreement(1)                                                                                                                                                                                                
|     | 
|10.2 |  | Administration Agreement(1)                                                                                                                                                                                          
|     | 
|10.3 |  | Form of Indemnification Agreement(1)                                                                                                                                                                                 
|     | 
|10.4 |  | Loan and Servicing Agreement(2)                                                                                                                                                                                      
|     | 
|10.5 |  | Senior Secured Revolving Credit Agreement, dated as of March 21, 2014(4)                                                                                                                                             
|     | 
|10.6 |  | First Amendment, dated as of June 30, 2014, to the Loan and Servicing Agreement, dated as of May 24, 2013(5)                                                                                                         
|     | 
|10.7 |  | First Amendment, dated as of January 8, 2015, to the Senior Secured Revolving Credit Agreement, dated as of March 21, 2014 *                                                                                         
|     | 
|21.1 |  | List of Subsidiaries(3)                                                                                                                                                                                              
|     | 
|31.1 |  | Certification of President (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*                                                                             
|     | 
|31.2 |  | Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*                                                                  
|     | 
|32.1 |  | Certification of President (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                  
|     | 
|32.2 |  | Certification of interim Chief Financial Officer (performing the functions of Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.*



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|(1) | Incorporated by reference to Form 10-12G/A filed by GMS Finance on April 11, 2013 (File No. 000-54899)
|--- | ------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Form 10-Q filed by GMS Finance on July 31, 2013 (File No. 814-00995)
|--- | -------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Form 10-12G filed by GMS Finance on February 11, 2013 (File No. 000-54899)
|--- | -------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Form 10-Q filed by GMS Finance on May 9, 2014 (File No. 814-00995)
|--- | -----------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to Form 10-Q filed by GMS Finance on August 13, 2014 (File No. 814-00995)
|--- | ---------------------------------------------------------------------------------------------------

|* | Filed herewith
|- | --------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.



|                      |  |  |  |                           |  |                                                                                           
|--------------------- |  |  |  | ------------------------- |  | ------------------------------------------------------------------------------------------
|                      |  |  |  | CARLYLE GMS FINANCE, INC.
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ Michael Hart                                                                          
|                      |  |  |  |                           |  | Michael Hart Director and President
(principal executive officer)                         
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ Orit Mizrachi                                                                         
|                      |  |  |  |                           |  | Orit Mizrachi Interim Chief Financial
Officer (principal financial and accounting officer)
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ Michael J. Petrick                                                                    
|                      |  |  |  |                           |  | Michael J. Petrick Chairman of the Board of
Directors                                     
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ Nigel D.T. Andrews                                                                    
|                      |  |  |  |                           |  | Nigel D.T. Andrews Director                                                               
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ William P. Hendry                                                                     
|                      |  |  |  |                           |  | William P. Hendry Director                                                                
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ Eliot P.S. Merrill                                                                    
|                      |  |  |  |                           |  | Eliot P.S. Merrill Director                                                               
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ John G. Nestor                                                                        
|                      |  |  |  |                           |  | John G. Nestor Director                                                                   
|                      |  |  | 
|Dated: March 27, 2015 |  |  |  | By                        |  | /s/ Michael L. Rankowitz                                                                  
|                      |  |  |  |                           |  | Michael L. Rankowitz Director                                                             



113